Georgian launched ferroalloy production and manganese mining in the previous century. This field was contributed by such public figures as Akaki Tsereteli, Niko and Giorgi Nikoladzes.
Akaki Tsereteli’s active efforts raised international interest in Georgian manganese. In 1879 large-scale manganese extraction and exports activities started in Georgia. For quick and cheap transportation of manganese from Chiatura, Niko Nikoladze initiated
and led the construction of Shorapani-Chiatura railroad. Thanks to his efforts, the first American investor Averill Harriman made the first American investment in Georgia. Giorgi Nikoladze has also contributed to laying a foundation of ferroalloy production in Zestaponi, as well as creating the first enterprise. The 80s are considered a golden age in the field development. The 90s developments have almost completely destructed the field and the industry restoration works started at the beginning of the 21st century. Currently, about 30 ferroalloy products manufacturers operate in Georgia.
Several days ago Radisson Hotel hosted a presentation of the Association of Ferroalloy Products Manufacturers and Manganese Miners.
Sulkhan Khvedelidze, a head of the association talks about the purpose of creation of the association and the field’s development perspectives and other interesting issues.
– Several days ago, the Association of Ferroalloy Product Manufacturers and Manganese Miners was founded. How many companies does the association unite?
– Currently, the association unites about 20 companies. Five major Georgia-based companies such as Georgian American Alloys, ChiaturManganum Georgia, RusMetal, GTM group and Georgian Manganese are founders of the association.
– How was the association foundation idea born? What has actualized the union of these companies and how will the association contribute to the field development?
– Only several companies used to operate in the ferroalloy production and manganese mining field for many years. The field development has increased the number of the companies.
Today about 30 companies operate in this field, I believe a joint vision will further promote the field and this need has led us to establishing the association.
The foundation of the association will enhance communication with the government and the parliament to discuss the field’s important issues and refine the legislative basis. We also plan to cooperate with the education sector to popularize the field-related trades and professions. I believe jointly with the government, the parliament, international institutions, civil and education sectors we will overcome the existing challenges, develop the field, create new job places, increase the exports volume and grow the Georgian economy.
– What is the contribution the ferroalloy production business makes to the Georgian economy and how important is the field development in terms of exports?
– Ferroalloy production makes one of the major contributions to the Georgian economy.
The country produces about 300 000 tons of ferroalloy products every year. The annual exports of ferroalloy products exceeds 700 million GEL. The field is one of the major bodies to draw foreign currency to Georgia.
In whole, the field’s total contribution to the economy exceeds 1.1 billion GEL.
Currently, the field employs 15 000 persons, but there is also a growth potential. International reports suggest that each employee in our industry creates additional 4.7 job places.
– How competitive are Georgian ferroalloy products on the global market and what are the challenges before the field?
– Naturally, the business is a live process with achievements and challenges. Price downturn continues for many years in the global ferroalloy products market after the demand for iron is declining. Despite this tendency, Georgia is able to make more achievements on the global market and the government should provide efficient support in this respect.
Georgia’s interstate agreement with the USA is one of the good examples of similar support. Under this agreement, Georgian ferroalloy products are exempted from imports tax on the US market.
The US Authorities have imposed additional tax to such major manufacturers as India, Australia, African countries and all these circumstances enable Georgian manufacturers to be more competitive and to deeper penetrate the US market, as well as to seek alternative markets too. Competitive capacity on the global market is determined by prices and prices are determined by the prime cost.
Reasonable steps will maintain the already attained niche and enhance our positions on the market.
– Who will you cooperate with and are respective negotiations underway?
– The association will determine specific goals and visions to cooperate with the Government and nongovernmental sector. Identification of joint goals and compromises will enable us to achieve joint objectives. Moreover, similar associations operate worldwide and we plan to keep close cooperation with them and to take their experience with the aim to establish modern standards in the industry.
On the very first day of the association foundation, we received a proposal for cooperation from a Ukrainian similar association. We hope the number of similar offers will further increase.
– Employment as a corporate social responsibility – How does the business association handle this direction?
– All Georgia-based ferroalloy product manufacturers have already established world standard technologies to care for the health of the employed.
Currently, the field employs about 15 000 persons. The important thing is that factories are situated in regions and local residents in regions are mainly employed, where unemployment problems are sharper compard to the capital city.
I reaffirm the field contains higher development potential and this factor implies higher employment potential too.
– Not only technologies, but also human resources are necessary for the field development. How popular is this industry in young generation and what are the association’s plans to popularize this sector?
– The field popularization is one of the main tasks. The field is being developed and it requires qualified staff to avoid staff deficiency. To this end we plan to cooperate with education institutions and conclude memorandums to foster implementation of special education programs. For example, we can invite the field’s leading specialists to hold workshops and master classes for students. We can also organize probation periods for our students in domestic and foreign manufacturers. The field development naturally creates new job places and successful students will be employed in both domestic and foreign manufacturers.