Tbilvino

completed

Tbilvino is the largest Georgian wine exporter by volume and procures from more than 300 small grape farmers located in the Kakheti Region. Tbilvino exclusively focuses on wine production and does not engage in any production or distribution of hard alcohol, which is an exception among Georgian wine producers. The Company is the result of privatization of a state wine company from the former Soviet Union period. The Company has gone through needed modernization over the course of the years. The Company is now ready to undergo a new investment of around $3.0 million investment program in FY 2011-12 to improve product quality and safety standards and gain significant cost savings in order to improve its competitiveness and enter into new markets. IFC has been asked to provide $1.5 million A loan to support the Company’s investment program. The planned investment program includes:1.) Developing grape collecting and crushing facilities, which will cost around $1.5 million. Currently the Company is renting primary facilities for grape collecting and crushing. Tbilvino’s main winery (bottling lines, wine cellar,) is located in Tbilisi, where grape juice is transported from regions and wine is processed, bottled and preserved. Proposed investment in own primary production facilities will help to i) improve product quality; ii) strengthen internal control processes through each link of the supply chain; and iii) enhance the food safety management systems in order to penetrate new markets. 2.) Providing around $1.0 million incremental working capital. The company plans to increase sales by 40% next year and enter into new markets, which will require additional working capital. Incremental working capital will be mostly used to purchase grapes during the harvest season, which will transfer income to approximately 300 Georgian farmers.3.) Providing around $0.5 million for maintenance CAPEX for existing fixed assets including increasing capacity of wine holding refrigeration tanks.