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.

 

Print
Other Stories
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
Biblusi opens first shop for tourists - Georgian
The largest book shop in Georgia Biblusi opens the first shop specially designated to the needs and interests of tourists and named it Georgian.
Georgia improves by five ranks in the Prosperity Index
In the overall Prosperity Index rankings, Georgia has climbed by 5 positions from 85 to 80 when compared to last year. As such, Georgia is the best performing country in the CIS zone.
The future is bright for electric cars in Georgia
The numerous hybrid cars in the streets of Tbilisi cannot be overlooked. Entrepreneur Sulkhan Gvalia calls them “pagers”, referring to the predecessor of mobile phones.
Georgia’s fight against the big tiny enemy – Asian Parosana
It’s a tiny creature, but the harm it did to the Georgian agriculture sector was and still is immense.
New cable route: from Kobi to Gudauri in 15 minutes
On the 15th of December, cable transport is scheduled to be opened connecting Kobi and Gudauri.
Tourist boom in Gudauri – majority of hotels are booked by foreigners
Gudauri is among the most popular winter resorts in Georgia.
Medical tourism increases in Georgia
In the last 9 months, Georgia was visited by 19 500 foreigners for medical and recovery purposes.
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
21.02.2019
22.02.2019
USD
1
USD
2.6574
2.6570
EUR
1
EUR
3.0146
3.0128
GBP
1
GBP
3.4629
3.4714
RUB
100
RUB
4.0421
4.0560
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6570
EUR
1
EUR
3.0128
GBP
1
GBP
3.4714
RUB
100
RUB
4.0560