The idea of ​​creating a mill appeared in 2006: at that time, Russia imposed an embargo on the export of local wheat, so Shalva Jakhutashvili, a Georgian businessman living in Kazakhstan, decided to compensate the stock of wheat in Georgia by importing it from Kazakhstan. Soon, he, together with other business groups, ensured the import of Kazakh wheat into the country.

 

The businessman was engaged in the production of wheat in Kazakhstan, so a plan appeared to make the delivery of wheat from Kazakhstan to Georgia more systematic and regular.

 

Implementation of the project

To fulfill the plan, in 2008, Shalva Jakhutashvili bought a 70% share of TBT LLC, which owned mills in Senaki and Tbilisi. Both mills were to process and sell wheat imported from Kazakhstan, and their total output was about 9,000 tons.

In 2009, the post-war financial crisis changed the economic environment in Kazakhstan and Georgia, which had a significant impact on the capabilities and plans of both partners and the Georgian investor. Shalva Jakhutashvili decided to buy the remaining 30% of the share and carry out the rehabilitation of the complicated business independently.

 

Crisis Management

Capitol Management took over Baraka's distressed portfolio in 2014. At that time, the turnover and capitalization of the company did not match each other: compared to the assets and values, the turnover and its margins were meager. In the process of finding a solution, two directions were identified: increasing turnover by finding additional financial resources, or reducing capitalization and selling certain assets. The specifics of the market in 2012-2014 were different, there were no adequate return norms in accordance with the market, so investing additional money was losing its meaning. The Capitol management team decided to sell the assets in Tbilisi, move the entire process to the Senaki and produce a certain margin product in a smaller volume. Production was reduced to 2,000 tons, but a small market niche and jobs were maintained.

 

Currently, the Senaki factory is located on 4.7 hectares. The production buildings are dedicated to the mill and the administrative building. The company is represented in the market with three product names: "Begheli", "Tone" and "Baraka".

 

The quality of the flour is monitored daily. Since 2019, the Chopin - Infraneo Junior, a modern equipment has been used in this process, which checks 8 wheat and flour data according to international standards. Along with accurate results, the device significantly reduces control time and simplifies procedures.

 

Flour production in Georgia depends on the import of Russian wheat, which makes the development of the industry less attractive, however, the team of Capitol Management is actively considering various mechanisms to maintain the enterprise, and its staff to become a new point of development.