Why the Georgian Construction Materials Cluster is Beneficial for the Development of the Sector

May 19, 2021 Latest News

Support for the development of small and medium-sized enterprises is one of the key priorities of the European Union in Georgia. This support includes the promotion of business clusters across various sectors of the Georgian economy. Business clustering gives SMEs opportunities to become more competitive and create additional jobs by establishing partnerships with other industry representatives. This is the focus of the “Clusters4Development” project, which is funded by the EU and the German Government and implemented by GIZ. The project helps to create sustainable business clusters in construction, apparel, and tourism sectors and its efforts in the construction sector have already led to the establishment of the Georgian Construction Materials Cluster (GCMC).

The cluster development programme expert (GIZ) Salome Arghvliani, Dio founder and chairman of the GCMC Board of Directors Tamaz Daushvili, and GCMC Manager Lika Kardava appeared on the Business Morning programme (BMG) to discuss the construction cluster in detail.

According to Salome Arghvliani, the main component of the project is providing technical support for the sustainable development of the cluster and its member companies. International experts help identify the existing problems and challenges in the sector and achieve strategic development of the cluster in order to strengthen the industry. The role of the project is also to help develop communications and contacts. It is crucial for construction material manufacturers to strengthen their connections – whether it is with architects or developers – in order to sell their products.

"Manufacturers encounter numerous problems in Georgia and on the Georgian market. There is an increased competition in the import segment. A lot of work also needs to be done to raise the level of trust towards Georgian products. It is therefore important for us to increase trust and strengthen cooperation between business representatives. To this end, we will help companies become sustainable, quality-oriented and innovative,” Ms Arghvliani stated.

The construction sector is developing rapidly and is now a significant driving force of the country’s economy. Naturally, the development of the sector creates significant opportunities. However, it also means that local construction firms and sub-contractors have to deal with new types of buildings, more refined approaches towards project planning, and the need to purchase larger quantities of diverse construction materials. As Tamaz Daushvili points out, the whole idea of a cluster is to unite the whole sector around common interests: “This is not just unity for unity’s sake. The cluster has brought together some very interesting companies with an interesting background. We have internal communication, we share experiences with each other, we create new ideas on a daily basis, and that is how our cluster is gathering strength. The construction sector is quite large today, meaning that there are numerous problems. The main goal is, therefore, to develop the sector and establish companies that are oriented towards quality.”

The main criteria for selecting companies for the cluster are local ownership, economic potential, and commitment towards manufacturing innovative, high-quality, eco-friendly, and energy efficient products and taking smart solutions on board. One of the main advantages of the cluster is the readiness of its members to work with other players in the industry to create added value. GCMC emphasises innovation and quality, digitalisation of manufacturing processes, adoption of smart technologies, implementation of quality control systems, and strong cooperation with local and international laboratories.

According to Lika Kardava, the pandemic showed us how important it is to have strong local manufacturing. Such strength requires higher awareness and trust towards Georgian construction materials, a focus on quality, and healthy competition.

“It is important to implement innovative and eco-friendly features in the construction sector. Our programme gives the industry players such an opportunity with the help of its international expert resources. The project also involves activities aimed at increasing quality,” Lika Kardava stated. According to her, there is a deficit of qualified personnel on the market. The involvement of international experts and active cooperation with professional colleges, state organisations and donors will enable the development of business-oriented educational programmes that will strengthen human capital in the construction sector and help companies with the long-term development of their staff resources by employing the latest practices.

“We can see the rapid technological progress in the global construction sector. We must ensure that these innovations can soon be adopted by the Georgian companies. This can be enabled by the involvement of our highly qualified international experts and our diverse database of members,” Ms Kardava stated.

To summarise, the mission of the Georgian Construction Materials Cluster is to create synergy by uniting the Georgian SMEs involved in construction material production, improving the legal environment, and effectively cooperating with associations from the construction sector. Through the involvement of local and international experts, the cluster helps improve the quality of manufacturing, raise awareness about Georgian manufacturers of construction materials, and increase their share on the local market. All of this, in turn, constitutes an important prerequisite for the development of the sector.

Ani Kakuria

Journalist

Property Georgia