Even a well-established business will eventually aspire to expand beyond its home market. However, exporting takes more than ambition: you have to understand market trends and have access to capital.
Giorgi Melua, an entrepreneur from Guria Province in western Georgia, clearly saw the gap that needed to be breached to increase his business capabilities. He had been running a family business processing and supplying raw materials to the local fruit and medical plant processor for years. After a careful study of emerging international market needs, Melua established his own bay leaf production company called Black Sea Laurus. With support from the EU4Business-EBRD Credit Line, the Georgian entrepreneur managed to expand both production capacity and space, to acquire modern equipment, and to establish food safety standards in line with EU practice. As a result, Black Sea Laurus generated 8 new permanent and some 100 seasonal local jobs, and launched exports to European markets, doubling production and income both.
Bay leaves from the Black Sea coast of western Georgia are recognized for their consistent quality, remarkable flavor and intense aroma. In addition to being a rich source of vitamin A, vitamin C, iron, potassium, calcium, and magnesium, the bay leaf contains enzymes that help to break down proteins and digest food better, helping to avoid indigestion.
Not just Guria, but the entire Black Sea coast of Georgia has been growing bay leaves for centuries. Local growers sell their harvest to the big producers. Having monitored rising market demand for bay leaves, Melua saw an opportunity to join this supply chain himself.
“As my whole family had an experience in processing raw fruit, I decided to try my luck in this area as well,” recalls Giorgi Melua, founder of Black Sea Laurus.
A platform between growers and exporters
The Georgian entrepreneur was lucky enough to quickly receive financial support for his business development plans, an aspect that often hinders the expansion of many SMEs around the world. Together with his own investments and a bank loan, the “Young Entrepreneurs” programme funded under APMA supported Melua’s development of the Black Sea Laurus bay leaf production factory back in 2017, in Nigvziani, Guria Province. The initial equipment for collecting, sorting and drying bay leaves enabled the company become an intermediary platform between farmers and exporters.
“Soon more and more farmers from the Black Sea coast got interested in selling their produce to a factory operating in the neighboring village of Nigvziani, simplifying transportation closer to their settlements,” says Giorgi Melua. “Our high-quality bay leaves grown in plantations or family gardens also drew the attention of bigger producers who were exporting internationally. Black Sea Laurus found it hard to deal with the growing demand because of the lack of space and limited production capacities.”
Transformation into a direct exporter
At this critical stage, the EU4Business-EBRD Credit Line helped the company expand with €31,250 in financial support in 2019. This enabled Black Sea Laurus to build additional premises of 70 sq m and purchase equipment, transforming the company from an intermediary supplier into a direct exporter.
“We acquired additional drying facilities, which enabled us to improve product quality to export requirements, launch direct negotiations with international partners, and become their suppliers,“ notes Mikheil Melua, General Director of Black Sea Laurus. “With free technical support, we instituted HACCP practices, learned more about EU standards, and trained a staff member in quality control of both products and processes.”
Black Sea Laurus grows production, jobs and income
After successfully implementing the project, Black Sea Laurus received a 15% EU-funded cash-back, which the company reinvested in business development. As production capacities grew, the number of permanent local employees increased from 16 to 24, the majority of them women. With technical re-equipment, the number of seasonal employees, including suppliers of raw materials, is expected to double, from 100 to 200. Mikheil Melua predicts that production capacity will be doubled by the end of the upcoming bay season in April 2021, to 400 t of processed and 80 t of dried high-quality leaves—and will double income as well.
Black Sea Laurus’s 100% natural bay leaves are completely free of chemicals and additives. Performing equally well in processed foods, medicinal supplements, cosmetics and aromatherapy supplies, they have already drawn international attention. Black Sea Laurus has opened the door to European markets and exported 10 t of packaged bay leaves to Ukraine. The company further plans to grow its own bay plantations and is looking for more international partners.