Association of fruit and vegetable enterprises (AFVE) is a largest professional union of processing industry of Kyrgyzstan. Association was established in 2003 and at this time unites, in its ranks, the leaders of the industry such as stock-company "Dessert", stock-company "Kuntuu", "Monada" Ltd., sizeable enterprise "Kirbi", "Rahmonberdi" Ltd., "Numen Service" Ltd., private enterprise Panasenko, private enterprise Sokoev, closed type stock-company "EUM", "Tokmok fruit and vegetables" Ltd., stock-company "Yntymak", "PSV LTD" Ltd., sizeable enterprise "Elena", PA "Kooppromservice" Ltd., "MKA Retard" Ltd., "OSKO" Ltd., private enterprise Kudaibergenov, private enterprise "Borisov", "Oregon" Ltd.. Today AFVE - is a highly organized professional organization, counting 19 production and trade enterprises in its ranks, which temporarily and permanently employ about 2000 people with a total turnover of approximately 53 million soms. Enterprises of the Association produce more than 20 different name products made from vegetables and fruits, and the range and quality of products is rising every year.
Project of the Association on development of a product brand name for fruit and vegetable products, produced by members of AFVE, is completely unique and innovational for Kyrgyzstan as of experience acquired by enterprises and of future objectives reached and results obtained. Result of this work is trademark "Vkus Solnca", which at present time is widely spread in retail trade of Bishkek. Within this project 8 enterprises - members of AFVE, produce and deliver to stores of the capital a range of vegetable and fruit and berry products, which townspeople already had time to recognize and fall in love with. In the last year total volume of products sold under this trademark rose more than twice and amount to 19 million soms. Activities promoting products of "Vkus Solnca" are regularly carried out in Bishkek. Other than that, a system of quality control of products produced under this trademark is developed and being successfully introduced with participation of AFVE. As of other achievements of AFVE we would like to point out few more facts:
- AFVE releases an annual guide of fruit and vegetable enterprises of Kyrgyzstan.
At present time, the Association is set to publishing the fourth edition of the Directory of Fruit and Vegetable Enterprises of Kyrgyzstan, where products of "Vkus Solnca" trademark are listed; and also of other processing enterprises of Kyrgyzstan. The Directory contains detailed information on products and volumes of production, and also general information on Kyrgyzstan. Information on 28 enterprises is gathered for the new edition. Last edition listed 19 enterprises. If in case of Directory 2003 and 2005 it was needed to convince enterprises to not be afraid to apply and announce oneself, than for Directory 2006 there was no need to convince, enterprises themselves want to be listed and return filled forms in short time. As for organizations providing different services for processing enterprises, they are ready to pay for the advertisement space. The Directory is distributed among potential partners and investors.
- Relations of AFVE are strengthening with suppliers of raw fruit and vegetables - farming communities and cooperatives. At this time an application of a group of farmers on entering the AFVE is being considered.
- AFVE by becoming a member of Congress of Business Associations and Public Council under the prime-minister of Kyrgyz Republic is participating in social support programs, lawmaking processes, regional government programs, assisting in improving business climate and increasing competitiveness of enterprises, cooperating with authorities. In 2005, the Congress of Business Associations already developed a "Program for business" which includes questions on improving business environment, connected with enterprises lobbying positive changes in the legislation and improvements in the government administration. International Business Council and the Congress of Business Associations, at this time, are in close cooperation with the Chamber of tax consultants considering issues of the new Tax Code.
- AFVE represents interests of fruit and vegetable industry in developing the new Tax Code of Kyrgyz Republic. Because of last changes to tax code regarding VAT a problem has arisen - discrimination of processing industries, first when threshold on VAT was increased for agricultural producers and now when they are completely exempt from VAT. And that's where co-operation of CTC (Chamber of Tax Consultants) with the Association of Fruit and Vegetable Enterprises originated from. The objectives of this co-operation - to conduct a research, prove that processing industries are put in unequal positions as a result of exemption of agricultural producers from VAT and to work out suggestions on changes and annexes to Tax Code, which will allow to level consequences of this exemption. In whole, within this work of CTC this problem was put out in the process of work of the conciliation commission, we need to say, that the Prime-minister and his administration admitted existence of the problem, supported the opinion of CTC, that the problem needs immediate solution. Ministry of Finance also couldn't find any arguments against it, what was reflected in Protocols of the commission. Following options of possible solution were considered:
- experience of Germany - invoices on VAT from agricultural producers;
- exemption of processors from VAT also;
- fixed offset;
From the point of view of CTC first two options would have been more preferable, but with the Ministry of Finance insisting, a solution of fixed tax was chosen. Right now, a 3% rate is indicated in the project. However, CTC insisted the rate to be economically justified, based on the factual structure of formation of production costs of products of the industry. This was also reflected in the Protocol of the committee and in the Protocol of the editors committee. A fixed tax of 3% does not solve the problem for enterprises of the processing industry, it moves the tax burden from agricultural producers to processors, what does not make the industry competitive. CTC suggests another option: to accept gross revenue as the tax base for charging VAT (value added in the processing process) for enterprises of processing industry buying produce from agricultural producers. Solution of this problem will depend on the Association and on enterprises, and from how actively and positively we will act.
- The Association participated in a series of exhibitions in Kyrgyzstan and abroad. In example, "Bishkek 2003", "Bishkek 2005", "InterAgro 2004", "Kyrgyzstan-Siberia 2004", "Agroprodexpo 2005", was awarded with diplomas and letters of commendation. Last participation of the Association in the VIII international exhibition-fair "Kyrgyzstan - 2006" had a big importance in promoting of products of "Vkus Solnca" trademark. Over 70 companies participated in the exhibition. 35000 people attended the exhibition. Participation in the exhibition helped in promoting of Kyrgyz products in the domestic market of Kyrgyzstan and outside, in creating a positive image of fruit and vegetable processing industry.
The main objective of participating of AFVE in the exhibition was achieved, it is increasing awareness and interest of consumers to products of "Vkus Solnca" trademark. Product degustation was organized in course of the exhibition with representatives of enterprises producing under "Vkus Solnca" trademark taking active part. Advertisement prospects and price lists were distributed. Products of the following enterprises were displayed on the exhibition stands: stock-company "Kuntuu", stock-company "Dessert", "Tokmok fruit and vegetable" Ltd., private enterprise "Ponasenko" and others. Products of the south branch of the Assocation were presented by: "PSV LTD" Ltd., "Rahmonberdi" Ltd. Another positive side was that enterprises got more interested in producing of the most part of their range of products under "Vkus Solnca" trademark. Thus, in the last season, stock company "Dessert" produced only 4 products under "Vkus Solnca" (total volume of 40 thousand reference unit jars). In 2006 the enterprise is planning to widen their range of products produced under "Vkus Solnca" to 15 positions and the volume of production will rise to 103 thousand reference unit jars. Private entrepreneur Djanybek Sokoev is planning to increase production of his products under "Vkus Solnca" to 90 thousand reference unit jars this season (compared to 46 thousand reference unit jars last season) by producing his baked pepper, made with Bulgarian technology, and lecho under "Vkus Solnca" trademark. Products under "Vkus Solnca" trademark presented by AFVE were awarded with a Gold medal of the VIII international exhibition-fair "KYRGYZSTAN - 2006". Gold medal awarded to "Vkus Solnca" trademark is a result of the whole preceding work, starting from trademark development and its further promotion, carried out by a united team sharing same ideas - members of AFVE.
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In July 2004 the Association applied for registering "Vkus Solnca" trademark and for its examination. In May 2006 a Certificate № 7523 was received on being registered in the Public register of trademarks of Kyrgyz Republic. The Certificate certifies sole rights of the owner, AFVE, for ownership, use, control, and also prohibition of use of "Vkus Solnca" trademark by any other parties. We need to mention, that a great deal of help is provided to the Association, in organizing and carrying out of different events, by international organizations, such as Project "Local market development" /Helvetas-ICCO/, Project of Regional development of Agriculture /ADB/, "Promotion of Regional Trade in Central Asia" /ITC/. Without their technical and financial help many of the projects and initiatives of the Association would have been impossible.
