This project can be considered a relatively small investment. The project involves the production of polyvinyl acetate dispersion and PVA-based adhesives.
The business plan of the project was developed in collaboration with the Plastopolymer Research Institute in Yerevan, Armenia. The organization has successfully implemented many large projects in the CIS region. Currently, Georgia imports all its polymer glues.
The uniformity of the product, the relatively simple production technology, and the significant water content in the imported goods underline its advantages. The investment required for this project is 0.6 million USD, with a 42% IRR over ten years period.
PVA dispersion market size (2014): 40 million USD
Glue market size (2014): 570 million USD
PVA dispersion market size (2014): 0.6 million USD
Glue market size (2014): 7 million USD
The import share: 100%
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 and water;
- Favorable geographical location – easily accessible European and Asian markets through the Black Sea ports of Poti and Batumi.
Plant location: Western Georgia
Contribution to production: 50% imported raw materials
Business activity: PVA dispersion, PVA glues
Annual volume: 3,000 tons
Estimated annual production: 1,000 tons
Total investment: 670,000 USD
The expected income per year: 1,580,000 USD
EBITDA: 550,000 USD
10 year IRR: 42%
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);
- Capital co-financing through Partnership Fund (www.fund.ge);
- Technical assistance through Georgian Industrial Development Group;