The history of Kalanda began in 2009, when a Georgian businessman living in Kazakhstan, Shalva Jakhutashvili, together with his partners, decided to invest in the construction and development of a piggery complex.

 

At the initial stage, market research was carried out, followed by the search for foreign suppliers of technology and genetics. Soon, negotiations with the relevant structures for the purchase of a plot of land from the state with an investment commitment near Tbilisi began. After their successful completion, with the agreement and co-investment with the Partnership Fund and the Bank of Georgia, in the village of Koda of Tetritskaro municipality, with the support of the state, the acquisition of 588 hectares of land was carried out under investment obligation.

 

At the same time, as a result of research conducted among suppliers of technology and genetics, the choice stopped on the German company Big Dutchman, which was among the top five in the world in terms of livestock farm equipment, technology implementation and management criteria. Together with the planning of the construction of the pig farming complex, the company Geo-Agro was created, which owned the plots of land and agricultural equipment purchased from the state. Geo-Agro was supposed to produce fodder for the pig farm with its own equipment on these lands and supply it to the complex.

 

Implementation of the project
The construction works of the farm started in May 2012. A detailed project was prepared and approved. Also, an agreement was signed with the German company Big Dutchman and the foundation was laid for the initiative, which involved the provision of appropriate equipment and construction materials.

At that time, there was no such pig farming enterprise in Georgia, so it was decided that Big Dutchman, along with providing the technology, would also take part in its management. The production was fully controlled by representatives of the German company. At the same time, during the whole cycle, a permanent manager and a supervisor were involved locally, who periodically visited the complex on site. At the next stage of project implementation, on December 25, 2012, the farm imported four-legged cattle, 800 head of breeding colts - Landrace and Yorkshire, as well as production colt - hybrid F1 and synthetic terminal Kerat from Great Britain. By that time, a space with the function of a quarantine zone was already completed, where compliance with biosafety and hygiene rules of employees was thoroughly controlled. Imported goods were placed there.

 

The farm used in-house feed, the main ingredients of which were barley, wheat, corn, soybean stalk, sunflower stalk, sunflower oil and premix. A large part of them was produced by Geo-Agro on the plots of land owned by it. It is significant that the capacity of the food production plant was 5 t/h, the raw material base was 360 tons, and the finished food base was 80 tons.

 

At each stage of meat preparation for sale, all standards were meticulously observed: as a result of consultations with German specialists, no slaughterhouse was organized in the pig farming territory. Kalanda hired a nearby slaughterhouse, which exclusively served pigs. The truck that transported the animals was specially washed and disinfected before returning to the farm, the sale itself took place in the form of half a carcass (body-meat), and the product, an average of 400 animals per week, was sold in the form of "chilled pork". Kalanda started selling pork from mid-November 2013. The distribution of the farm ensured the supply of meat to the large supermarkets, while the distributors of the small markets took the products themselves from the rented refrigerator space in Tbilisi.

 

2 months after the start of selling pork meat, at the beginning of January 2014, clinical signs of an unknown disease were detected on the farm. There was no pig falling in the nearby population. It was determined that the disease was classical swine fever. The farm was completely depopulated within 2 weeks after the fact was recorded. Under the supervision of the tax authorities and the National Food Agency, more than 11,200 animals were eliminated following special procedures. At that time, there was no relevant insurance practice in Georgia, therefore the compensation of the received losses was fully borne by the partners.

 

Crisis management
Despite the significant losses, in 2014-2018 the rehabilitation of the farm and raising the biosecurity standards to an even higher level were considered. In the summer of 2018, negotiations began with the partnership fund, and its investment committee even approved the rehabilitation project, which involved the financial participation of the fund in the amount of 1.9 million USD. For the rest of the budget, Kalanda would attract at least 1.9 million US dollars.

It is worth noting that Kalanda successfully conducted and concluded negotiations with an insurance company regarding animal mortality insurance. He was willing to insure Kalanda against business interruption risks and animals against death for $2 million. The National Food Agency was also involved in the process, with the help of which the rehabilitation technical regulations and the farm repopulation plan were developed.
At the same time, there were financial obligations with the Bank of Georgia, so the parties agreed that the farm would be temporarily transferred to the bank and interest on the obligations would be suspended. In addition, the Bank of Georgia expressed readiness to allocate a loan of 3.5 million USD for the rehabilitation of the farm.

At the same time, Kalanda's team was negotiating with a new investor, to whom the bank's real estate division sold the farm in the process. Based on the confidentiality agreement between the parties, technological and financial information was shared with the investor. After this fact, a legal dispute was going on for several years, which ended with the partial satisfaction of Kalanda's claim, namely, the assets in the last possession of the defendant.

It is significant that as a result of the bankruptcy of the project, the farm was left with a bank credit of approximately 10 million USD and 7 million USD invested by the partners. Shalva Jakhutashvili fully assumed the risk, potential loss and profit of rehabilitation. Despite the fact that his attempt was unsuccessful, the Georgian side clearly fulfilled its partnership and financial obligations to the investors and the bank and fully justified their trust.