Georgian hazelnut plant operational again amid the pandemic with EU and EIB Group support
Passion, precision and dedication to work to satisfy customer needs – this is the moto of the Georgian company GTG Plus, which has been supplying the food industry with finest quality products for the past five years.
GTG Plus Ltd is a hazelnut manufacturer and exporter that appeared on the market in 2015. The enterprise is located in Kvareli and Zugdidi and employs a total of 100 people. Before recruiting experienced workers and starting to deliver high quality products and services, the founders spent almost 20 years in the hazelnut production industry, working as quality managers, nut collectors, assistants and more.
The accumulated knowledge and expertise had a direct impact on their business development, making GTG Plus a company that enjoys an enviable reputation both in the country and abroad. Today, the company manufactures a variety of products such as hazelnuts, roasted hazelnut kernels, chopped roasted hazelnuts, etc. In the future, GTG Plus is going to also produce hazelnut paste. The manufactured products are exported to the EU countries.
Despite many years of experience and the managerial efforts, the COVID-19 pandemic affected the GTG Plus’s operations, changing the company’s agenda, forcing the employees to work remotely and making it difficult to sell the product.
“In order not to stop the production, we decided to keep the employees working remotely, and we had to cut down the staff, but we tried as much as possible to leave no one unpaid. There were also transportation and customs restrictions. Our drivers had to follow the rules of self-isolation, which directly led to delays in deliveries to customers, and in return, they were late in paying. At the same time, we had to buy raw materials from local farmers, so it became necessary to hire additional staff to keep the business going. Altogether eventually led to a temporary lack of finances,”– says the company director, Bachuk Tamliani.
In order for the company to purchase raw materials in the domestic market and continue working as a result, the GTG Plus founders decided to apply to the InnovFin SME Guarantee Facility.
InnovFin, EU Finance for Innovators, is a joint initiative by the EIB Group (European Investment Bank – EIB and European Investment Fund – EIF) in cooperation with the European Commission under the EU Research and Innovation Programme Horizon 2020. It consists of financing tools and advisory services offered by the EIB Group, covering the entire value chain of research and innovation to support investments by micro, small and medium size enterprises (MSMEs).
The programme covers 50% of every loan disbursed by the local banks in Georgia and targets small and medium-sized enterprises and mid-caps that require investment and working capital to finance research, innovation and digitalisation activities. As a response to the COVID-19 pandemic, the guarantee has been increased to cover 80% of loans provided by the local banks to SMEs and mid-caps impacted by the coronavirus crisis for their working capital needs.
The InnovFin SME Guarantee Facility allows for offering more favourable lending terms to Georgian enterprises than otherwise available on the market. In particular, loans to SMEs provided under the facility are offered at reduced interest rates, but often also for a longer or more flexible repayment schedules, reduced collateral requirements and to high risk companies which would not be supported otherwise. The banks participating in the programme, ProCredit, TBC Bank, and Bank of Georgia, evaluate projects on the basis of their standard credit policies, taking into account the InnovFin eligibility criteria and in conformity with respective EU standards.
Under the InnovFin programme, GTG Plus used the short-term loan required for the company’s capital turnover and purchase of raw materials. Because of this assistance, the company could re-open the enterprise that had been closed down for almost two months.
“With their support, we were able to continue our activities, and we timely bought raw materials, paid the farmers without delay, and delivered the product to the customers as usual. In addition, and most importantly, we managed to timely pay the employees. We can confidently say that involvement in this program was vital for the company’s operations,” Bachuk underlines.
Today, GTG Plus fully complies with the existing pandemic regulations. The company continues to operate despite the obstacles, thus ensuring the well-being of its employees and local farmers, as well as all the people and enterprises that are directly or indirectly involved in the company’s activities.
“Although we continue to do business with the EU and EIB Group’s support, we still need involvement in the InnovFin programme to cope with the existing challenges. Now that we have achieved some results, I should admit that our operations would have been very different without the involvement in the InnovFin guarantee programme. I would like to take this opportunity to thank the EU and the EIB Group on behalf of our company,” notes Bachuk Tamliani.
The EIB Group activities supporting Georgian MSMEs reinforce EU and Team Europe support for the recovery of Georgia’s private sector from the COVID-19 pandemic, as well as sustain jobs, maintain liquidity and operations, and fuel the economic recovery of Georgia. In 2020 alone, EIB Group provided EUR 70 million loans for MSMEs with leading banks and the new InnovFin SME Guarantee Facilities can cover up to EUR 250 million of MSME loan portfolio to boost recovery of Georgian businesses from the pandemic. Another EUR 100 million loan is supporting the reinforcement of the national healthcare sector’s ability to deal with the COVID-19 crisis.
Overall, the EU and Team Europe have mobilised around GEL 1.5 billion of new and reallocated assistance to help Georgia deal with the COVID-19 pandemic. Almost 2/3 of this amount is grants, the remaining are loans at favourable interest rates. That is one of the highest levels of EU assistance per capita to any country in the world and demonstrates the EU’s strong solidarity with Georgia at this time of unprecedented crisis.