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Cement Exports Suspended from Georgia

Cement Exports Suspended from Georgia

Cement exports from Georgia made up 14.5 thousand USD in 2015 and only 400 USD in the first quarter of 2016. Such an unprecedented low indicator was not registered even in 1995. In 2008 the exports volume marked 80 million USD.

Previously, Georgia-manufactured cement was exported mainly to Azerbaijan. The company cannot export cement to foreign countries and the company loses positions on the Georgian market too, Heidelberg Cement Georgia told the EUGeorgia.

„Two years ago only two cement plants existed in Azerbaijan. The demand for cement was huge amid major construction projects, but the economic crisis reduced the inflow of oil dollars. At the same time, they constructed a new cement plant in the Kazakh District, near the state border with Georgia. Therefore, Azerbaijan has created excessive cement production and they are oriented on exports now”, the company director general Michael Hampel noted.

Because of Azerbaijani Manat devaluation, Azerbaijani cement price is 3-10% lower compared to Georgian product. As a result, Azerbaijani cement narrows Heidelberg’s positions in the Georgian market too. “We compete with them thanks to our quality”, the German businessman noted.

The EuGeorgia also inquired the management’s considerations about the company future.

As compared to other developing countries, Georgia records considerable cement consumption: averaged indicator per capita makes up 400-500 kg worldwide, while the  figure in Georgia makes up 550 kg. Moreover, the Anaklia seaport construction works will also increase cement consumption. Moreover, the company is seeking new exports markets.

“Russia may become our new exports market, namely, Vladikavkaz and its neighboring region that are located in the vicinity of Georgia. We also think of Abkhazia. Naturally, the market is very small and the current legislation bans business activities there, but Russian companies import their products to this Region and why should not Georgian products be represented there”, Michael Hampel said.

We have already discussed the issue with the Georgian Prime Minister and he promised to raise the issue at the government meeting, the company director general noted.

Heidelberg Cement Georgia entered Georgia 10 years ago and invested about 300 million EUR in the country. Currently, the company owns two plants in Georgia and produces 2 million tons of cement a year.

“Before, Heidelberg had plants in Kazakhstan, Russia and Turkey, as to the Caucasus, the company is represented only in Georgia, because Georgia is considered the most stable country”, the German businessman said.