Ferroalloy materials

Project profile:

The investment project provides a unique opportunity to restore and resume production of ferroalloy products in Georgia. The last surviving enterprise from the Soviet period is still functional in Zestaponi, the former industrial center of Georgia. The enterprise needs a small amount of funding to carry out major repairs. The demand for these materials is important, because there are many factories of different sizes in Georgia that need to be supplied with these products. The enterprise holds mining licenses for two factories. The plant can also produce Portland cement and other building materials: bricks and roof tiles. In addition, the factory produces the famous traditional Georgian pitcher for export purposes.

The total investment of the project is $ 600,000, with a 5 year IRR of 200%.

World market of ferroalloy products:

Volume (in 2015 year): 30 billion USD;

Annual growth rate (for 2015 year): 5%;

Import value throughout the whole region in 2014 (Georgia,Azerbaijan, Armenia, Ukraine, Russia and Turkey): 250 million USD;

Local market volume in 2014: 18 million USD;

Advantages of Georgia:

  • A unique factory with experienced staff;
  • Tax-free export to the EU, the US, the CIS and other regions with a population of 2 billion;
  • Existing infrastructure and communication;
  • Low-cost resource  (labor force, electricity, water);
  • Favorable geographical location: Easily accessible European and Asian markets through Poti and Batumi Black Sea ports;

Project description:

Location of the plant: Western Georgia;

Production input: 80% Local raw materials;

Local partner: Zestaponi Ferroalloy Plant Ltd.;

Business activity: Refractory bricks and powders, building bricks, roof tiles, Portland cement;

Annual volume: 15,000 tonnes combined;

Financial indicators:

Selling price: 240 USD per tonne;

Competitor price: 1,000 USD;

Total investment: 600,000 USD;

Expected income per year: 3,500,000 USD

EBITDA: 1,500,000 USD;

5 year IRR: 200%;

Government resources

The Government of Georgia offers the following financial incentives:

  • The nominal price of the land;
  • Borrowing / leasing within the framework of the initiative „Enterprise Georgia” (qartuli.ge);
  • Co-financing of capital through Partnership Fund (fund.ge);
  • Technical assistance through the Georgian Industrial Development Group;