Ferrero to boost investment in Georgian hazelnut production
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An Italian company intends to expand its business for processing nuts in Georgia.
Ferrero S.p.A. purchased land to build the plants at an open auction and plans to buy even more in the future. Georgian officials expect that the new factories will provide work to 30-40 percent of the population living near the area.
Through its subsidiaries, Ferrero manufactures confectionary products in Italy and around the world. The company offers various brands of sweets and chocolates.
The company was founded in 1946 and is based in Pino Torinese, Italy.
Experts consider the climate in Georgia’s western regions as perfect for hazelnuts. The nuts from this region are characterized by a fatty composition suitable for confectionery production.
According to Reuters, the famous Italian company bought 1,240 hectares of land in Zugdidi and paid $1.2 million to the state budget.
Georgia Today met with Ferrero Hazelnut Business Development Manager Maurizio Cortese to talk about future perspectives of the business in the country.
Cortese said the amount of investment in these lands will be “many millions of dollars.”
Georgia Today: What is the purpose of your visit to Georgia?
Maurizio Cortese: Ferrero is the world’s biggest producer of hazelnuts because most of our products, such as Nutella and Ferrero Rocher, are based on hazelnuts.
So normally, we buy 120,000 tons of hazelnuts a year. The biggest producer in the world is Turkey with 70-80 percent of our production. And this creates a very strong position for us with such a big demand.
So more or less three years ago, we decided to start this hazelnut development program. The objective is to diversify the Ferrero’s opportunities.
So we started businesses related to hazelnuts in different countries.
We knew from past experience that Georgia is already a big producer of hazelnuts. We came here in late 2006. Three months later we founded the Agri Georgia LTD, which is a 100-percent Ferrero trading company.
Two months later, we purchased 1,200 hectares of land in the Samegrelo region thanks to the Georgian government that started a land privatization and started planting hazelnuts here.
Now we do more or less 3,000 hectares in different locations in the region. So this normally increases the number of our employees. We are planning to hire 600 workers on average in the Samegrelo region. We do invest on our own and we do everything on our own, including machines and structures, and we also intend to build guesthouses, roads and bridges, etc.
So about Georgia, we see the further possibility of expanding our operations despite the global financial crisis. Plus, because of the crisis, it is a very interesting time. There is nothing safer than land during a crisis period, and people eat more chocolate.
Q: How competitive is the Georgian market and the Georgian hazelnut business?
A: This does not compete with the quality that we find in Turkey, so for last two years we normally did not buy any nuts from Georgia. They do not meet our quality requirements and there is a huge supply and good market prices in Turkey.
However, one of the advantages of our project is to go to farmers and raise the quality of Georgian hazelnuts for the future and to buy the products from Georgia as well.
We think Georgia is a country where it is very easy to work, and the government and business communities are very welcoming.
Q: From your own perspective, how long may it take to reach this higher quality level?
A: There is strong determination and a market for hazelnuts in Georgia. Ferrero is putting its knowledge, experience and expertise in the process, so it depends on the will and attitude of Georgian farmers because on our side – we are already here.
Q: What is the company’s investment?
A: We spend many millions here.
Q: How does the political and economic situation affect the business you are involved in?
A: Honestly, we do not feel any direct influence. We are in agriculture, and we are operating in some rural areas.
We do not face social, economic or political effectiveness that much.
Sure, it is hard when you have to invest in a country that is politically unstable, but this is a general commonsense consideration. Last year, there was a war 30 kilometers from the capital.
Q: From an outsider’s point of view, what are the country’s chances for a stable economic situation?
A: It depends on lots of factors that are not easily evaluated, such as relationships with Russia, entrance into NATO and the EU. You make good profit by fighting corruption and having a stable political situation. Georgia will continue to be a very competitive place for building business.
Natalie Mchedlishvili
26.06.2009 |
