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Undertaking Business by Agroloan Leads to Bankruptcy – Paster Company Faces Development Problems

Paster poultry company, financed as part of preferential agroloan program, is facing difficulties with development. The company is specialized in production of chickens and their sales to restaurants.

The company founder Mirian Chitadze told the Commersant that the company launched production in small volumes at the end of 2016. Currently, the company supplies the product to the domestic market. Paster chicks fit for slaughtering in 3 months, while other poultry companies grow that species of chicken that fit for slaughtering in 1.5 month. I prefer to wait three months and produce top quality chicks, than low-quality product, Chitadze said.

The company intends to enlarge business and boost output, but this is impossible without government support. High interest rates of commercial bank loans also aggravate the situation, he said.

«Neither government nor commercial banks provide assistance. Initially, Government provided support, but now this assistance has weakened. We stay hopeful and continue production», Chitadze said.

The company needs new buildings in addition to increase output, but these plans require huge investments, the Paster company founder said.
«We obtained preferential agroloan in May 2015, while our second application was rejected. No reasons were named. Initially, we started production on 100 square meter land and they financed our business, but now they refused to finance the same business on 1200 square meter space. There is no logics. And commercial banks have set so high interest rates, they we prefer to stay away from bank credits, because bank loans are identified with bankruptcy from the very beginning», Chitadze said.
Paster company is located in the village of Chala, Sachkhere District, Imereti Region. The company obtained 66 000 USD financial support component as part of agroloan programs in May 2015. The company supplies the product to such big restaurant networks as Taglaura, Tsiskvili and so on. The company also distributes egg and chicken in Sachkhere and Chiatura.