Cement market in Georgia - October 2008

Georgia, a country of 69,700 km2 and 4.6 million people, is situated in Southern Caucasus, bordered by Turkey, Armenia, Azerbaijan, Russia and the Black Sea. As a consequence of its location, Georgia is considered to be a strategically important country in the region. Economic and legal reforms undertaken by the Georgian government during the last few years have turned the country into a fast growing economy, with an average growth rate of 10% per annum. Real GDP growth was 12.4% in 2007, mainly driven by FDI (19.8% of 2007 GDP) and domestic consumption. Areas of recent improvement also include growth in the construction, banking services and mining sectors.
The Georgian construction industry grew at an average annual pace of 30% during 2003-2007 and contributed 6.7% of the country’s GDP in 2007, stipulating growth in demand for construction materials, especially for cement.
While the residential construction industry expanded mainly as a result of higher household earnings, easier access to mortgage loans, changing lifestyles and preferences of the population, development of infrastructure has been initiated by the government and financed from local and foreign sources.