Davit Jughashvili Director of Building Materials at HeidelbergCement Georgia speaks to The FINANCIAL

Davit Jughashvili Director of Building Materials at HeidelbergCement Georgia speaks to The FINANCIAL

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Davit Jughashvili Director of Building Materials at HeidelbergCement Georgia speaks to The FINANCIAL

2015 was a very successful year for all the business activities of HeidelbergCement. The company has improved its results considerably in comparison to the previous year. 

Although, the recent economic changes and devaluation of the national currency have influenced the construction market in Georgia, causing certain risks for the market players, however, HeidelbergCement managed to overcome these difficulties, and has maintained the stable growth, due to its customer oriented approach on one side and offering high quality products and services on a stable basis, on another. 

In spite of its negative effects, the crisis had less severe influence on the Georgian economy compared to its neighbor countries. 

As a leading building products producer in Georgia, HeidelbergCement has a huge positive effect on the Georgian economy, due to the following reasons: HeidelbergCement has set the highest standards of quality in building materials production, and it is one of the largest investors and employers in Georgia. The company expects that the prices of its cement and concrete products will remain stable in the future.

In 2015 HeidelbergCement Georgia had the record sales of 1.63 million tons of cement and clinker, which was 19% more than the previous year’s result, ensuring 60% share on the Georgian cement market. Last year the company produced more than 650 thousand cubic meters of concrete, continuing to supply its products to the vast majority of large-scale projects in Georgia. As a result, the number of customers in a single year has significantly increased up to 1,200 companies in 2015, featuring major development companies, as well as contractors, private builders and investors. 

One of the highlights of 2015 was completion of 19km Agara – Ruisi section of E60 highway. HeidelbergBeton has produced 120 thousand cubic meters of concrete for the project from 2 high capacity concrete batching plants. Among other important projects we shall mention are, Millennium Hotel in Tbilisi – the 150m skyscraper, East Point – The biggest shopping mall in the Caucasus, APM Port Terminal in Poti, commencement of BP’s South Caucasus Pipeline Expansion project that implies installation of 3 mobile concrete plants.

Important investment decisions were made in 2015. HeidelbergBeton purchased concrete and aggregates related activities of the two big companies. This further strengthened the company’s positions on building products market in Tbilisi.

HeidelbergCement continues its further expansion in the region and due to the growth of cement market in Georgia, together with The Georgian Co-Investment Fund and Hunnewell Partners, plans to jointly invest USD 120 million to upgrade its existing cement and concrete facilities in Georgia. Final closing of the agreement is scheduled in June, 2016. 

USD 100 million will be spent on a new cement production line in Kaspi using the dry process that will push down production costs substantially. Preparation works in Kaspi have already started at the end of 2015. The main works will begin in July 2016. 

In order to reach a strong vertically integrated business setup, additional USD 20 million will be invested in upgrading and developing the network of ready-mixed concrete and aggregates plants. 

Throughout its presence in Georgia HeidelbergCement has overall invested 275mln USD in the Georgian cement and concrete markets. Adding up the new investments will result in up to totally 400mln USD investment.

HeidelbergCement started business in Georgia in 2006. After ten years of continuous development of the business the Georgian subsidiary HC Caucasus currently operates three integrated cement plants (Kaspi and Rustavi), a cement grinding facility in Poti and a cement terminal at the Black Sea coast. The cement production capacity exceeds 2 million tons of high quality cement.

The cement business is supported by a strong network of 12 ready-mixed concrete plants that produce more than 700 thousand cubic meters of concrete per year. 

HeidelbergCement Georgia meets European standards in all its fields of management and production activities. The company is working according to 3 pillars on sustainable development: Economy, Ecology and social responsibility. New filters installation, scientific project “Quarry Life Award”, charitable event “TbilisiMarathon”, waste management – all these are in response to HeidelbergCement mission and sustainable development guideline. 

HeidelbergCement Georgia is the Georgian subsidiary of HeidelbergCement Group and the market leader for cement, employing more than 1200 people in Georgia. The company’s income in Georgia represents 2% of the Group’s overall revenue. HeidelbergCement Group is one of the world’s largest integrated manufacturers of building materials with leading market positions in aggregates, cement, and ready-mixed concrete as well as other downstream activities. The company employs some 45,000 people at 2,400 locations in more than 40 countries.