According to National Forestry Agency, the total area of Georgian forest fund as of April 2015 is 2.8 million hectares, or 40% of the territory of the country. This is quite a high figure as the world average is 27% and for Georgia neighboring countries it equals to 15%.
From 6500 different varieties of barked trees in the world, 4100 can be found in Georgia, half of which are endemic (for example Eastern Spruce, Georgian elm, Megrelian Birch, etc.). 153 from them is only characteristic for Georgia (average number for European countries is 63). The biggest part of the whole forest fund (43%) consists of Beech trees.
As it can be seen, import amount grows annually since 2015 on average of 15% per year. Main imported wood products are particle board (HS code 4410) and wood fibreboard “MDF” (HS code 4411) used for furniture manufacture, Plywood (HS code 4412) and wood in the rough condition (HS code 4403) for construction purposes. There is no import or excise tax on wood in Georgia and to reduce legal and illegal wood cutting in the country and to stimulate import processes, the government also plans to implement a new regulation and release imported wood from VAT.
The main destinations for exported wood are Iran, Italy, Turkey, Austria, Russia and Saudi Arabia.
A Short term and long term license to forest use for wood processing works on the territory of Georgian government is issued by the State Forest Agency of the country. It is issued to the tender or auction winner person/company by the Chairman of the Agency or by the person authorized by him.
To export wood products from Georgia, a person/company shall provide the document proving the origin of the product to the customs. It can be a document proving a purchase or a license, if a company already owns one for wood cutting and processing works. No additional permission is required. All other documents are general ones for all kinds of products going for export.
Wood processing and the amount of furniture produces grows annually in the country. However, the imported furniture products still take about 50% of the local market.
Furniture is mostly imported from Turkey and China and wooden products are the most demanded among them.
The most popular material for furniture production in Georgia is MDF which is mostly imported from Turkey. It is cheap, easy to process and more affordable for local customers than natural wood, but still, wooden furniture is widely demanded by middle and upper class locals.
There are more than 700 wood processing plants and more than 200 furniture producer companies in Georgia. Most of them are local micro and small enterprises but there are foreign companies from China, Iran and other countries too who are actively operating in this sector.
Wood Processing Plants
Hualing Group – was founded in 1988 in China entering Georgia in 2007 and since then worked in many different sectors. They are significantly contributing in development of Georgian wood industry. In 2008 company obtained wood processing license for 20 years with the right to annually process 88 000 cubic meters of wood. At present, annual harvesting volume is 30 000 cubic meters. Timber is exported from Poti port which is located near the free industrial zone. 95% of timber is exported to Central Asia, Egypt, Iran, Iraq and the United Arab Emirates and the remaining 5% is sold on domestic market. Furthermore, the end product of timber is exported to Turkey, Armenia, China and Dubai.
Kazbegi-Pshaveli – The company was founded in 2003, the main direction of activity is wood processing and realization and after restoration of forest area. In 2005, company opened a wood processing plant in village Pshaveli. The capacity of the plant is 10 thousand cubic meters per year.
Crp Wood – a wood processing factory was established in 2009 in Kutaisi by Caucasus Road Project. Company produces wood products for local as well as for international markets. The company offers panels and sip panels, doors, cottages, bridges and other wood solutions for different projects.
Furniture Producer Companies
Georgian Furniture Cluster – unites around 30 furniture producers, self-employed artisans and small enterprises. The agglomeration covers an area of 3,5 ha, employing 1,200 people. Annual output of the cluster reaches USD 20 million, almost half of the recorded industry output. The main task of Georgian Furniture Cluster is to increase the competitiveness among cluster members and to enter into the international markets.
Embawood – was founded in 1996 in Azerbaijan. The company produces furniture in Georgia since 2007. In 2008, Embawood opened the second factory in Georgia, which produces semi-finished furniture. Currently, the company has owns 7 factories in total located in Georgia, Ukraine and Kazakhstan. 31 stores are located in Georgia employing 1 200 people in total. Embawood owns chain shops of furniture with different names, such as: Embawood, Ideal Dizain, Madeyra and Dolche Noche.
Randi – is a local furniture producer established in 1995. The main area of the company’s activities is the production and realization of different profile furniture and doors. The company employees about 150 people.
Trade Center Saba – is operating in Georgia since 2005. Currently there are 5 furniture salons with total shopping space of 49000 square meters uniting hundreds of small Georgian furniture producers together. The trade center is projecting imported products as well but mainly locally produced products ranging from low to upper class product quality.
Furniture Importer Companies
Belux – operates in Georgia since 1997. Company’s main activity is importing and retailing all kinds of furniture and home accessories from 277 manufacturers from seven different European and Asian countries. Currently there are 4 furniture salons in Georgia with total shopping space of 23,500 m2.
Belhouse – the company imports furniture from 4 countries of Europe: Belarus, Italy, Poland and Ukraine. The company represents a lot of different brands in Georgia, such as: Fameg, Gamma, Paged, Dommino, Maridex, Molodechnomebel, Szynaka, Rondo, Mayerline, Bydgoskie, Swarzedzhome, Klose, Brw, Kler, Vileykamebel, Korsak, Vero, Laguna, Zov, Zlatamebel. There are three branches in Tbilisi and one branch in Batumi.
Pantsilion – was established in 2002 and was initially focused only on furniture import in the country from Europe. In 2007 they opened a new factory in Georgia and started their own production. For the moment company provides both products, the imported and the local ones too to the market.
Opportunities exist in several directions of wood processing and furniture production market. Country lacks high quality raw materials for an affordable price as the local production doesn’t always meet international quality standards. As many Post-Soviet countries, Georgia needs modern equipment to offer better quality products to local and international market. Only certain companies with big foreign investment are able to profit from modern wood processing machinery. Government movement to simplify the import processes, exclusion of wood products from VAT will make this sector more attractive for local and foreign investors to invest in.
Giga Goliadze, Experto Consulting