HeidelbergCement Georgia is a major cement manufacturing company in Georgia, which owns 3 cement integrated plants, 13 concrete plants, 2 inert materials aggregates, 1 cement terminal and 1 cement-grinding plant.
According to spread information, previously, the company was owned by businessman David Bezhuashvili, but he sold 50% stake to Co-Investment Fund and Honeywell Partners. The deal is said to be 115 million EUR.
Co-investment Fund and Irakli Rukhadze — New Owners of Heidelberg
Here we submit interesting information about new owners of the company. Co-investment Fund is one of the well-known companies for everybody, which was founded by Bidzina Ivanishvili in 2013. The Fund’s capital is 6 billion USD. Today, its investment portfolio is 2.1 billion USD. As to Honeywell Partners, it is an international company for private capital and assets management, which, along with properties of other investors, manages the Patarkatsishvilis’ assets mainly.
In Georgia, Honeywell holds stakes in several major companies, including Liberty Bank, Magticom, Borjomi, TV Imedi, Rustavi Metallurgical Plant. It is evident that Irakli Rukhadze, manager of the Patarkatsishvili’s business, stands behind it.
«Invasion» of Kaspi Mountains
Clinker is a necessary component for cement production. Clinker is received through lime processing in Kaspi mountains. It should be noted that only Heidelberg manufactures clinker in Georgia in its own plant. All other volumes are imported from other countries, mostly from Azerbaijan. As to Kaspi mountains, they are fully owned by Heidelberg, despite the company does not mine limestone from all mountains. The company has taken these mountains in leasing for a period of several years to prevent appearance of competitors on the market.
Owner of 70% Market Ratio against Competitors
Heidelberg Cement holds 70% market ratio. In 2017, about 2.2 million tons of cement was sold in Georgia, including HeidelbergCement sold 1.6 million tons. Besides the company is an evident market leader, other small competitors also buy clinker from Heidelberg for cement production, because this product is imported in small volumes from abroad. As to the situation in Georgia, we have already described it above.
There is almost no solution, because Kaspi mountains are owned by Heidelberg, despite the company does not need to fully possess them. Government policy should be also mentioned, because the company pays unimportant amount for unused resources, while clinker is produced only by Heidelberg and it sells the product to competitors for much higher price.
Clinker is imported in small volumes and these volumes cannot satisfy the domestic demand. The worst thing is that small cement manufacturing companies say that the financial police frequently deliberately audits them and imposes unreal fines. If we recall who own HeidelbergCement, it is not ruled out that the Government provides much more support to the company and this factor will deteriorate situation on Georgian cement market, as it will be fully monopolized.