Milk Powder

Milk Powder

Project Profile:

This investment opportunity takes advantage of the available diary resources in Georgia’s Samtskhe-Javakheti region where traditional cattle husbandry has long been a driving force of the economy. Recently completed infrastructure projects in the region provide a strong foundation for the creation of a local milk processing plant that could produce organic milk powder, butter and cheese. The estimated investment for the diary processing plant is USD 12.5 million with an IRR of 17%.

Background:

Local market:

• Imported milk powder for 7 months of 2015 – USD 16 million
• Imported butter and milk fat for 7 months of 2015 – USD 6.3 million
• Milk production in Georgia in 2013 – 604.7 million liters
• Per capita production of milk in 2013 – 135 liters
Advantages of Georgia:
• Duty free export to the EU, US, CIS and other regions with a total population of 2 billion
• Existing infrastructure and communications
• Inexpensive resources – electricity, labor and water
• Advantageous geographical location: easily accessible European and Asian markets via the Black Sea ports of Poti and Batumi
• Lack of local production gives a great potential for import-substitution
• Deep and Comprehensive Free Trade Area (DCFTA) between Georgia and the EU
Project Description
• Company location – Tsalka, South Georgia
• Products – milk powder, butter and three types of cheese (Sulguni, European cheese, dry cheese)
• Business activity – production, distribution of milk, dairy products, to local market
• Employment – 40 employees

• price per unit (kg)
Milk (1 kg) $ 3.22
Butter (1 kg) $ 4.72
Sulguni (1 kg) $ 3.43
European cheese (1 kg) $ 6.44
Dry cheese (1 kg) $ 3.00
• Production capacity
Milk (tons) 2,043
Butter (tons) 1,022
Sulguni (tons) 365
European cheese (tons) 365
Dry cheese (tons) 365

• A detailed business plan and any other information will be provided upon request. Feel free to email us at GIDG@economy.ge or see the contact information below

Financial Highlights

• Total Investment: USD 12.5 million
• Revenue 3rd year: USD 12.8 million
• EBITDA 3rd year: USD 5 million
• IRR: 17%

Governmental Resources

The Government of Georgia provides the following financial incentives:

• Nominal price for land
• Loan/leasing subsidy through the “Produce in Georgia Initiative” (qartuli.ge)
• Equity co-financing through the Partnership Fund (fund.ge)
• Technical assistance through the Georgia Industrial Development Group

In Summary: Got Milk?

Got milk? Despite Georgia’s significant and consistent demand for milk powder, no local milk processing facilities have yet been established. Furthermore, organic diary products are a global scarcity. In such conditions there is great potential for this business in the remote highland region of southern Georgia.

phone:

551176470 ENG

phone:

577772203 GEO

phone:

595655655 RUS

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