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Georgia: Doing business in an emerging greenhouse market
In Georgia, Imereti Greenery LLC’s new greenhouse officially opened recently. Dutch FoodVentures entrepreneurs are involved in the project, including Dick de Jong, and the greenhouse has been built under the supervision of Arno Volkering. FoodVentures' partner Dirk Aleven describes the market around the Black Sea. "You can’t just be a producer here."
The greenhouse was expanded by 1.6 hectares to 2.5 hectares. In the greenhouse Philips LED and SON-T lighting will be mounted. "This makes us the first in Georgia. The lettuce here is already under LED," Dirk Aleven says proudly. He is a partner at FoodVentures. The company invests in greenhouse projects in emerging economies. This greenhouse was built in Georgia for lettuce cultivation in 2014. Now the company has expanded. "Three compartments of half a hectare," Aleven shows. "We're starting with three types of cucumber. After the summer the lamps will be mounted and we'll probably put tomato in one of the compartments."
That choice is not certain yet, it depends on what the other producers in Georgia do. "Well, producers,” Aleven tones it down. "We have another greenhouse – a 5,000 meter cucumber greenhouse – and there is one other serious grower in the country, but with 5 million people it is a small market. If you grow the same thing, you'll get in each other's way. So we determine who does what. That’s how we keep things varied." If after the summer tomatoes will in fact be grown, they will be specialties. "We don’t have the volume to produce for the masses. We want to market the product as Georgian, for the Georgian market." Export to, for example, Russia, is not yet on the agenda. "We do see the opportunities for it – but you need to get your local market in order first. We’ve seen in other cases that it’s not good to be dependent on Russia. Georgia has also been boycotted once. First we need to have our local sales in order."
Producer and trader
Contact with the market is therefore of great importance. The company also trades itself. "You can’t just be a producer here. There is no trade and we don’t want to become dependent on it, anyway. We sell directly to supermarkets and restaurants. This way we keep in touch with customers." He does note an increased interest in greenhouses in Georgia. "We expect that there will be more competitors, but the market is also growing. The number of dual income households increases every year. They are willing to pay higher prices for greenhouse products at the supermarket. That gap is not so easily filled." Still, Aleven is cautious when it comes to expansion plans. "You could add 20 more hectares, but that's a waste of market potential. We don’t want to shoot ourselves in the foot."
Production and competition
What now? Will Aleven return to the Netherlands? The goal - to set up a Dutch greenhouse the Dutch way - seems to have been achieved. However, there’s still much to be done. "In any case it is important to be here a lot. We must show that we can produce more with the same resources every year." According to Aleven there’s still much ground to be made in this regard. "We’re doing everything for the first time. We’re still nowhere near Dutch production." So he will be staying in Georgia till the end of the year in any case. "In the meantime we’re looking for similar cases. We do this worldwide but our attention is specifically on the region around the Black Sea. We see a future for fresh produce and distribution here." A personal preference for Aleven is Kazakhstan. "They have a good domestic market and good export opportunities to Russia. And cheap gas. That could be interesting."