The FINANCIAL — Bank of Georgia, a leading Georgian bank listed on the London Stock Exchange, is supporting the development of the local leather manufacturing business.
The FINANCIAL — Bank of Georgia, a leading Georgian bank listed on the London Stock Exchange, is supporting the development of the local leather manufacturing business.
BOG provided a solid loan amount to the Georgian-Italian company Philimaska, one of the biggest manufacturing plants in the whole of the Caucasus.
Philimaska was co-founded in the year 2010 with Italian leather company THIMECO SRL. The company employs up to 120 workers and the amount of their processed material exceeds 450 tons. According to Irakli Kotia, the Financial Director of Philimaksa, the company will soon start producing “Finished” leather.
“The first product of our company was launched in June 2010. The company had a very successful start, despite the difficulty of the manufacturing process. Our company is Georgian-Italian and we provide the highest quality products. At the moment we are manufacturing and processing cow, bull and buffalo “Wet Blue” leather, which are mostly exported to Turkey and Italy. 80% of our products are exported to Turkey and 20% to the Italian market,” Kotia said.
“Most recently, since the opening of butcheries in Georgia, we have exclusive contracts with Natakhtari and Teleti butcheries. They supply us with leather. We also cooperate with other butcheries existing in Georgia and sometimes independent farmers provide us with leather too,” Kotia said.
“Our plant can process about 500 tons of leather. We import products from different countries, including Armenia. The prices of imported products are a bit higher. Georgian leather costs 1-1.30 GEL while the price of imported leather is about 50% higher,” Kotia said.
According to Kotia, the company decided to contact BOG as it had the best loan conditions on the market. About 3,000,000 USD of Italian investments were put in the company as a result.
“We decided to contact Bank of Georgia at the beginning of the year 2010 when our plant was still in the process of construction. In the first stage, in February 2010, Bank of Georgia allocated us a 500,000 USD loan, then a further 350,000 USD in May. This loan went to the plant’s construction expenses. Our company covered the loan fully in 2011.
“We started the second stage of our relationship with Bank of Georgia when it became necessary to expand our production; we decided to produce finished leather. From Spring 2011 until March 2012 we assimilated a credit line of about 1,700,000 USD, which was used for importing goods. We expanded the amount of production by about 300 tons a month,” Kotia said.
“The 300,000 USD loan was used to buy different equipment and machinery for within the plant. At the moment these machines are in the process of being assembled. And in one month’s time we will start the manufacturing of finished leather,” Kotia said.
As Kotia says, there are three stages of leather manufacturing. The first stage is producing Wet Blue, the second Crast, and the last stage is Finished leather. Philimaska Wet Blue leather is used for making shoes. The company plans to enter the Asian market after it starts producing finished leather.
“We are the biggest leather manufacturing company on the Georgian market. There are some small plants which produce only about 50 tons of leather a month. At the moment we have 120 employees and about 30 personnel will be added after the launch of the new Italian machinery. Our main aim is to replace imported products in the country with those that are sourced and created locally,” Kotia said.
“Our Italian partners and stakeholder, General Director of Philimaska Vakhtang Nikolaihvili, have quite good experience in the leather manufacturing business. Georgia did not have such a large-scale plant before now, so the niche has been successfully filled by us,” Kotia said.
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