Project profile:
This opportunity – to make a profitable investment – involves the construction of a factory for the production of white and red ceramic tiles; It is also possible to produce porcelain tiles in case of investor’s desire.
This project is based on the abundant raw materials of Georgia, which allows the production of the ceramic tiles. The tiles will be intended for export as well as for Georgia, where there is a rapidly growing market of ceramics: at this stage, there is an 11% promotion, which gives the ceramic tile factory an instant market and domestic profit potential.
It should be noted that currently all Georgian ceramic products occupy a place in the international commercial arena. There is a great demand for exported ceramics in the whole region.
The investment required for the project is $ 13-24 million, depending on the equipment supplier, with 10-year IRR – 28% – 33%.
The global market of ceramic tiles:
Market size (2014): 65 billion USD
Annual growth rate: 6%
Local market:
Market size (2014): 55 million USD
Annual growth rate: 11%
The import share: 100%
Origin of import: Iran – 32%, Turkey – 26%, China – 16%.
Advantages of Georgia:
Georgia has a favorable investment environment, as evidenced by:
- Tax-free export to the EU, the US, the CIS, and other regions with a total population of 2 billion;
- Availability of the suitable raw material ores;
- The government’s priority project;
- Low-cost resource – for example, electricity, labor force and water;
- Favorable geographical location – easily accessible European and Asian markets through the Black Sea ports of Poti and Batumi;
Project description:
3 versions of the business plan (depending on the supplier of the different equipment)
Plant location: Western Georgia
Local production: 85%
Imported raw materials: 15%
Business activity: wall tiles, floor tiles, porcelain tiles
Annual volume according to the business plan versions: 2, 3, 3 million m2
Detailed business plan and any other information are available upon request. Contact us by email – GIDG@economy.ge or see the contact information.
Financial indicators:
Total investment: 13-24 million USD (depending on the suppliers of different installations);
Expected income per year: 11-17 million USD;
EBITDA: 6-11 million USD;
10 year IRR: 28% -33%
Government resources
The Government of Georgia offers the following financial incentives:
- The nominal price of the land;
- Disbursement of the loan/lease within the framework of the initiative – “Enterprise Georgia” (www.qartuli.ge);
- Co-financing of capital through Partnership Fund (www.fund.ge);
- Technical assistance through Georgian Industrial Development Group;
The advantage of local raw materials is at least 80% composition of the ceramic body. The same parameter is observed in Azerbaijan by only 50%. Unlike other Caucasian countries, Georgia imports 100% of GDP.