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Will Chinese Investments Rescue Abandoned Tea Industry in Georgia

China plans to invest 0.5 billion USD in the development of the Georgian tea-growing industry. The plan involves rehabilitating 11-15 hectare, tea-growing plantations and territories that are left unmanaged.

The 15-year project calls for introducing new tea plantation breeds and equipment. Chinese investors pledge to put about 0.5 billion USD in the industry development.

The Caucasus Business Week (CBW) has explored perspectives of this project for the rehabilitation of tea plantations and whether this project will prosper.

Partnership Fund

Several days ago, major Chinese companies visited the Partnership Fund and submitted an investment proposal for the restoration and development of tea plantations in Georgia. These companies are as follows: Beijing Jinfenghengye Agricultural Development Co., Ltd and China Agricultural Science and Technology Entrepreneurship and Innovation League, and The International Committee. The mentioned companies have proposed to implement the tea industrial-commercial and the culture-tourism complex projects as part of the memorandum signed with the Partnership Fund.

“The project consists of several parts and calls for panting tea plantations, processing tea leaves, strengthening tea production and developing eco-tourism,” Partnership Fund reports.

Partnership Fund director, David Saganelidze, noted that this is only a project and that Georgia has more than a century of experience in developing tea plantations. The mentioned project is aimed to change the social problems that have led the field to the current grave situation in western Georgia.

Association of Tea growers

Tengiz Svanidze, head of Association of Georgian Tea-Growers, positively appraises the tea plantations’ rehabilitation project. Moreover, he explains that the Chinese party has been examining features and perspectives of Georgian tea for a long period. The Beijing Agriculture Development Fund has cooperated with Lazi holding company, founded in Martviil, as part of a pilot project.

“State structures are participating in this process and we will only welcome it if this bilateral cooperation is expanded further,” Svanidze said.

«I hope something will change as this project was inaugurated. When the Chinese show interest and see respective results, they will not give up. I hope this will work in that way», Svanidze said.

“This project will incentivize Georgian tea-growers and set future cooperation perspectives. Chinese investors plan to buy high-quality tea leaves from domestic tea-growers too,” Svanidze said.

“The rehabilitation of tea plantations will develop eco-tourism too, because people who are interested in high-quality ecologically clean products, will visit this region, where this type of culture grows,” Svanidze added.

Ternali Tea

“The tea plantations’ rehabilitation project that Georgia will implement jointly with Chinese investors is a very good undertaking. However, it would be better to announce the abandoned tea industry as a priority direction and rehabilitate the tea-growing field through joint efforts of business and state sectors,” Ternali, Tea founder of Alu Gamakharia, said.

“This was not the best method, although, it provides solutions today. The space for tea plantations decrease annually,” Gamakharia noted.

“In this situation, it does not matter whether Chinese or Indian investors invest money into the recovery of the industry. They will not lead tea plantations anywhere. The main thing is that the investment will recover tea plantations and employ people. As a result, Georgia will maintain the tea plantations fund. For several years, our people earned a living only from this for several years”, Gamakharia noted.

The founder of Ternali Tea also mentioned the possible risks and noted that the kind of agreement signed with investors is of crucial importance.

“One of the main risks is that Georgian small tea companies will disappear from the market. Therefore, the coming agreement should comprise guarantees for domestic companies,” he said.

«Investors should promote domestic companies, establish partnership relations with them and arrange production chains. All these guarantees should be embodied in the coming agreement», Gamakharia pointed out.

Martvili Tea Company

“We will only welcome the investors if the abandoned tea industry will be rescued and recovered,” Martvii Tea company founder Iuri Bechvaia said. “The lack of financial resources has led Georgian tea to the edge of extinction,” he added.  “Our company has suspended serial production 2 years ago and continues tea manufacturing in small volumes,” Bechvaia said.

«I never had resources to put investments in my production and rescue my business, while the authorities have never supported the tea industry. This Chinese investment may eject small companies like us from the market, but this is not the main problem. The main thing is that the field be recovered and people be employed», Bechvaia noted.