Georgian Apparel Industry Lacks Brands
29 February, 2012
Georgian Apparel Industry Lacks Brands


Georgian apparel industry badly lacks local brands for apparel companies and clothes designers prefer to work separately.



The underway changes at the global market, namely China, the major bulk supplier of garment and fabrics globe over, is losing its exporting positions [due to upward-climbing wage rates, fuel prices and local market demand], which gives a chance to Georgia with good apparel-making skills and low-cost labor force plus preferential trade regimes and geographic location, to have its portion in the pie.

Experts have

researched Georgian apparel industry in frames of the USAID supported Economic Prosperity Initiate (EPI) in 2011 and came to the said conclusion. They believe that Georgia is advantageously located on the shortest route between Europe and Asia, and thanks to the liberal business climate, low costs on electricity and labor force; it enjoys preferential trade regimes GSP+ with the EU and GSP with the USA as well as free trade with neighboring Turkey and all post-Soviet countries including Russia, Georgia  has a full potential to attract both foreign and local investments in apparel and textile industry and hit both local and oversea markets, specifically the EU and post-Soviet market.

Moreover, free trade prospects with the EU and the USA are already on the priority agenda. Negotiations on Deep and Comprehensive Free Trade (DCFTA) with the EU officially were announced launched by end-December of 2011 and are supposed to enter in active phase this year.

Georgian share in apparel industry of the Soviet Union equaled 60% but with the collapse of the Soviet Union Georgia‘s apparel sector also collapsed.

Recently, Georgian firms have been re-entering the apparel sector, some by upgrading out-dated machinery and others by importing modern machines/new technologies for the purposes of supplying the local market (mainly tenders in the government and private sectors) and export markets. Mostly, these investments and subsequent outputs have been small. Besdies all the apparel-industry related material including cloths, thread, button, every trifle is imported from China and Turkey mainly.

However, coupled with Turkish investments, and an apparent skills base (albeit aging) to draw from, Georgia has a unique opportunity to increase overall investment in the sector, upgrade skills, increase production, expand end-market linkages, and over time, substitute imported inputs from Turkey.

Turkish investors interested in cheaper labor and energy costs and looking to outsource production, have already spotted Georgia and turned to the Adjara region [bordering with Turkey at the Black Sea littoral] to set up plants there.

To date Georgia has more than 200 apparel manufacturing companies [about 95% of which are micro-enterprises] and four of which are Turkish investments. The remainder part is smaller private Georgian investments.

Turkish firms view Georgia not only as a low-cost producer, but also as an export base that can provide access to consumer markets such as Russia, the US, and the EU. About 95% of their production is exported to their parent companies in Turkey and then from Turkey to the EU markets. It is an open secret that China and Turkey are top two appeal suppliers to Europe through franchising companies affiliated with the international brands.

Through this scheme the end buyer list of Georgian companies include Marks & Spencer, Puma, Zara, Lotto, and others that means that Georgian apparel-makers are valuable not only because the labor-force is cheap but skilful too.

EPI experts believe the money-deficient Georgian companies should use Turkish companies as a mediator to get in contact with famous EU brands till they get stronger and bigger enough to go on direct contacts with the international brands and implement bigger and diversified orders that they cannot afford at the moment since they are small and need state of the art equipment for insurance due quality standards. Finally, Georgia should work on creation of local Georgian brands too.

The strong point of Georgian cloth-makers are uniforms at the moment thanks to state demand.

“We are very skilful in uniforms of police, army, fire service etc,” Elguja Mamasakhlisi, General Director of Elselema Ltd, apparel company, said in the interview with Georgian Journal. His company makes apparel for Turkish-based Cotton brand, however after participating in the Munich exhibition in this past January [Georgian companies’ participation was funded by EPI] new prospects unfolded at the EU market and he hopes to contract European brands bypassing Turk mediators. Elselema has negotiations with Armani house, Swiss Kraft [for ski uniforms], Norwegian HH, Porsche, Sonia Bonner etc that gives chance to Georgian producers depending on Turkish companies up to date to go on direct partnership with European brands.

“All are quite interested in contracting us, and I think to learn a lot form them if I cooperate with them, Charles Personal and Tomas Parzinger are every day sending mails so as not to miss the chance to start production in Georgia, for they know we also had negotiations with others,” Mamasakhlisi said.

Irrespective skills of Georgian apparel companies and designers no Georgian brand of mass production was created as of yet. There is a growing fashion market in Georgia consisting mostly of local designers who have their own boutique shops. Their target customers are people with high incomes and they cannot find common language with local apparel producing companies on mass production of Georgian branded product.

Mamasakhlisi complains that there is a deficit of cloth-constructors for no high school prepares such cadres in Georgia since the collapse of soviet regime and brand creation is impossible without them.

According to the Georgian designers, the main barrier to starting mass production of their fashion apparel is a lack of people with professional skills in the field. Mass production of everyday apparel requires competency in visual merchandise, quality control management, production process management, and marketing. According to Tamuna Ingorokva and Avtandil Tskvitinidze, Georgian fashion designers, there are 10 to 15 state-owned professional colleges in the country in apparel manufacturing companies they provide with modern know-how and skills that Georgian fashion designers need to manufacture clothes in large quantities.

Mamasakhlisi plans to restore silk production, ancient manufacturing tradition of Georgia, and produce own branded product of Georgian silk. He has already undertaken works to this end and expects about 3 tons of silk in three years to start with.


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