Textile and Apparel Industry in Georgia: A History of Growth and Potential

Georgia, a country located at the crossroads of Eastern Europe and Western Asia, boasts a rich history in the textile and apparel industry. Over the years, it has emerged as a hub for textile production, attracting international brands and investors. In this article, we will delve into the history, production, market analysis, and growth potential of Georgia’s textile and apparel sector.

History of Textile and Apparel in Georgia

Georgia’s textile and apparel sectors boast a heritage dating back to Soviet times, where the nation excelled in manufacturing high-quality silk and wool blend fabrics. However, the collapse of the Soviet Union plunged these sectors into economic hardship. It wasn’t until 2004 that a resurgence occurred, largely driven by Turkish investors. These investors were attracted by Georgia’s skilled and competitive labor force, affordable land, low energy costs, and favorable business climate.

The textile products produced in Georgia encompass both natural and synthetic fibers. Georgia’s strong tradition in silk manufacturing and ample wool production opportunities position the country favorably in these sectors.
Apparel is an industry with concrete export potential for Georgia, building on four comparative advantages:

1. Low labor and energy costs
2. Qualification and skills of workers and management in the industry
3. Favorable Business Environment
4. Logistics and transport network

Production in Georgia: A Testament to Skilled Labor

One of the key factors contributing to the success of Georgia’s textile and apparel sector is its abundance of young and skilled labor. The efficiency of labor has a significant impact on the overall productivity and profits of any organization. Georgia’s labor force has been instrumental in fulfilling the market demand and driving continuous growth.

Georgia’s low cost of production, absence of minimum wage regulations, political stability, and strong legal framework create a favorable environment for textile investments. The World Bank’s Doing Business Survey has recognized the country for its ease of hiring and firing, making it an attractive destination for investors.

Government Support for the Georgian Textile Industry:

The Georgian government plays a pivotal role in supporting and nurturing the growth of the textile industry in the country. Recognizing the industry’s potential to contribute to economic development, the government has implemented various policies and initiatives to foster its expansion. These efforts encompass financial incentives, infrastructural development, and regulatory frameworks that encourage investment and innovation in the sector.

The Georgian government invests in vocational education and training centers across the country, providing professional courses in textile production, design, and related practical subjects. These programs, partially funded by the government, ensure the availability of skilled labor. Furthermore, customized training programs cater to the specific needs of new companies, further bolstering the industry’s workforce.

Government Incentive Programs

Initiatives like “Produce in Georgia” aim to bolster the manufacturing sector by offering subsidies for loan interest payments and providing free lands and buildings for factory construction. Additionally, the presence of Free Industrial Zones (FIZs) in key locations offers tax exemptions for companies engaged in export activities, providing further incentives for investment and growth.

Cooperation between Türkiye and Georgia in the Textile Industry

Turkey emerges as a significant investor in Georgia’s textile industry, leveraging Georgia as an export base for accessing the markets of the EU, CIS, and the USA. The market comprises seven large Turkish manufacturers, ten major Georgian manufacturers, and over 200 microenterprises, indicating a diverse and robust landscape.

Georgia’s reputation for producing high-quality textiles has attracted investments from neighboring countries, particularly Turkey. Turkish firms view Georgia as an export base that provides access to markets like the European Union, the Commonwealth of Independent States (CIS), and the United States. This collaboration has brought significant investments into Georgia’s textile industry.

Close ties between Georgia and Türkiye have fostered collaboration in various sectors, including textiles. Türkiye’s robust textile industry has provided valuable insights and support to its Georgian counterparts. This partnership has facilitated knowledge exchange, technology transfer, and joint ventures, strengthening the textile ecosystem in both nations.

Market Analysis: Textile Exports and Imports

Georgia benefits from its Generalized System of Preferences (GSP+) status with the European Union, allowing duty-free exports of apparel and textile products to the EU market. The country’s free trade agreements with CIS countries, including Russia and Turkey, further contribute to its textile exports. Moreover, Georgia’s strategic location makes it an ideal transit point for textile exports to various regions.

The Government of Georgia (GoG) has established advantageous trade agreements to ensure that producers in Georgia have preferential market access to key export markets, such as the EU and Turkey. Specifically, Georgia has free trade agreements with several countries representing about 900 million people’s market. This includes a FTA with Turkey and CIS countries, a DCFTA (Deep and Comprehensive Free Trade Agreement) with the EU, and GSP with the US, Norway, Switzerland, Canada, and Japan. Finally, Georgia has been a member of the WTO since 2000.

Georgia’s textile and apparel products find their way to prominent markets such as the United Kingdom, Germany, and Ukraine. Notably, Georgian producers supply garments to internationally recognized brands like Tommy Hilfiger, Zara, and Puma, underscoring the industry’s global competitiveness and success.

The primary market for sales by the subsidiaries of Turkish firms producing apparel in Georgia is Turkey, with all sales directed to the parent company for subsequent distribution. The key brands produced by these firms are Puma, Nike, Lotto, Zara, Marks & Spencer, Tommy Hilfiger, Erima, Adidas, Ted Baker, Howes & Curtis
The main three distribution networks that the Georgian producers are working with (aside of the big Turkish ones) are: Government, the German buyer Lebek and the French-Italian brand Moncler. In the first line orders for the GoG are military, police, security & uniforms. In terms of export, currently producing for Moncler and Lebek mainly. One produces for Zara, Waikiki and Gina Laura as well. Local designers produce for Georgian customers, but some are focused on export to CIS, EU and US markets.

Market Size and Capacity

Description of Georgia’s Apparel Market
During the fact-finding mission in Georgia, the consultants conducted over twenty stakeholder interviews in six days, including twelve apparel factories (ten Georgian factories and the two largest Turkish-owned factories). The primary respondents were Georgian entrepreneurs, who own and operate their production sites and want to extend their size of their facilities and workforce by around 750 employees in total. Two of these factories have finalize the planning stage for constructing new buildings, with a total workforce of 300.

Currently the apparel industry is comprised of approximately 200 enterprises, with the majority being micro- enterprises, which have a workforce between 5-10 employees each. In total the apparel industry employs about 6,536 people. The main players of the industry can be divided into two categories: Georgian producers and Turkish-owned producers. The seven largest companies are Georgian-based subsidiaries of Turkish companies. These Turkish apparel producers should be analysed independently of other Georgian companies, as their business model is significantly different from the rest of the industry (e.g., since they receive orders directly from, and are fully dependent on, their Turkish parent companies). In addition, these companies demonstrate minimum involvement with other players in the Georgian industry;

In terms of investments made, the largest is Adjara Textile, which has over 2,100 employees. Specifically, it employs over 1,100 employees in Batumi and another 1,000 employees in Kobuleti. During the interview with Adjara Textile’s representatives, they confirmed that they produce apparel for brands like Nike and Puma and belong to the Miltex Group with has over 20 factories throughout Turkey, which allows the receipt of order from international buyers in Istanbul and production in Georgia. Adjara Textile intends to open a third factory in Poti with an additional 1,500 employees; however, company representatives stated that they are having difficulties in hiring employees.

Geoteks, the Italian-Georgian joint venture, actually employs 180 employees and works exclusively for Moncler in Italy, and will have a total of 700 employees in 2017. Company representatives claimed that they have substantial opportunity to expand production within their current facility, where an additional 520 positions could be added. In addition to their current contracts, they are eager to receive additional orders from international brands.

Currently all apparel producers in Georgia are at the CMT (Cut, Make, Trim) stage. It is noteworthy, that two major buyers for the local producers use Outward-Processing Trade (OPT) practice (i.e., buyers export fabrics, or parts of garments, to be further processed in a third country, which are then re-imported and then sold as finished garments in an EU country).

Investment Opportunities and Trade Agreements

Georgia presents a compelling destination for investors due to its political stability, efficient and pro-business government, and absence of corruption. Additionally, the country benefits from Free Trade Agreements (FTAs) with Turkey and CIS countries, as well as the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU signed in 2014. Moreover, Georgia’s membership in the World Trade Organization (WTO) and other trade agreements with countries like the USA, Norway, Switzerland, Canada, and Japan enhance its attractiveness. The competitive cost of labor and energy further sweetens the deal for investors.

Diversified Product Range and Employment Growth

Georgia’s textile industry offers a wide array of products, including denims, jackets, sportswear, and uniforms for various organizations. This diversification not only meets international demand but also contributes to job creation within the sector. Recent years have witnessed a positive trend in employment within the Georgian textile industry.

Realizing Potential: Georgia’s Shift in Perception

Georgia’s status as a small country has evolved, and it is now recognized as a major trade target. The country’s openness to Foreign Direct Investment in textile and apparel, coupled with its adherence to technical standards set by the EU and other trading partners, has led to the sector’s overall growth.

Top Manufacturers in Georgian Textile Industry

• 0711

0711 was founded in 2012 by Nino Eliava and Ana Mokia. The idea of 0711 creation appeared in parallel with an online project MORE is LOVE. Each 0711 handwoven product is created manually by artisans in Georgia. The artisans are elderly women for whom knitting is a favorite craftsmanship passed from ancestors. Innovative knitting technique in organic glass and plywood frames were adopted in 2015 for the most popular style “Copacabana”.

Improvising with traditional weaving and shapes, 0711 introduced pearl beaded bags with various models from bucket to tote bags, mixing it with the brand’s multicolor plywood and plexiglass frames, now also with the French calfskin, vegan leather and other eco fabrics. In order to expand the production and product variety, 0711 started to test the RTW production launching the clothing styles only on Farfetch and MORE is LOVE at this stage

• Colors of Caucasus

Colors of Caucasus is a Georgian start up which focuses on coloring natural silk, cotton, linen and wool with natural minerals and plants.

Colors of Caucasus is an environmentally and socially conscious project founded with one mission: we no longer need to damage in the name of fashion.

We have created a business model which is producing an ecotextile for the global market. Fashionable products can be created without damaging the environment and creating jobs in rural areas. Our goal is to support an industry that will produce products demanded from the new generation and conserving the world for them. At the same time, it is profitable and sustainable in the long term.

• Comode

Comode is a concept store and online platform that brings together dozens of Georgian designers. Comode also represents its own fashion line that produces clothing and footwear. With the help of our platform (www.comode.ge), delivery of products is available all over the world, and today we have branches of two local stores in Tbilisi.

Comode supports designers from all over the world. Before COVID-19, Comode participated in showrooms and shows in various countries. We had a show at Fashion Weeks in Almaty and Baku. In 2019 we also were presented in London with our pop-up store.

In addition, Comode was a member of the largest independent design platform in the United States Flying Solo, where we had our show on the schedule of the official fashion weeks in New York and Paris. Comode – “Collect more desires” – is a purposeful woman who always tries to fulfill her desires. What she wants, with the help of her own style and aesthetics, will definitely work out. Her story is unconditionally eternal, after one achievement she will definitely strive for something new

• Dalood

Founded in 2002, the fashion brand Dalood was re-established in 2013 after Maka Kvitsiani gradually started taking over the reins of the company and was appointed as a Creative Director in 2015. Successfully leveraging the brand’s strongest sides – masterful tailoring, impeccable needlework, boundless creativity and product diversity, over the years, Dalood has evolved into the quality and esthetic-driven brand, aspired to empower and support women in their day to day lives. The company’s team-oriented, positive corporate culture combined with an excessively experienced and devoted team of professionals allowed the brand to become one of the leading Georgian brands in the global fashion scene.

• Dots

Dots is known for its trendy and sophisticated yet functional style and affordable pricing. Merchandise found in Dots, ranging from jewelry pieces and kids apparel to women’s clothing, are made by Georgian designers.

Protecting the environment at each stage of the activity, sustainability and social compliance are the fundamental aspects of the brand’s activities. That is why DOTS’s main task is to create a product that is environmentally friendly; 75% of the raw materials used in production are upcycled and biodegradable.

As for the international achievements, DOTS constantly interacts with foreign markets and consumers from all around the world. Designers’ seasonal collections can be found at DOTS concept store in multiple locations in Tbilisi and online shopping platform.

• Fashion House Materia

Fashion House Materia is a leading manufacturer of custom sewn goods in Georgia with more than 24 years of experience with delivering the highest quality in apparel
manufacturing for governmental organizations, business companies, fashion buyers and end-users.

Since 2003 the company also specializes in sample and pattern making, grading, marking, cutting, sewing, embroidering, and fabric sourcing.

Materia has built factory according to modern European standards and today more than 250 persons are employed at the company.

Since 2017 Fashion House Matera has hold ISO 9001-2015 Certification, which means that company quality management system operates according to ISO standard.Recently, Fashion House Materia founded Non-Entrepreneurial (Non-Commercial) Legal Entity Georgian Professional Clothing Association and became the member of International Textile and Apparel Association.

• Eshvi Kids

We created our collections based on five components: happy colors, natural fabrics, beautiful designs, unisex and simple lines. We managed to combine fashion with eco-friendly materials. The pieces are all organic and use only eco-conscious fabrics. The quality and aesthetics are both in full harmony with what parents would choose for their child.

We strive to make our products the best quality. Each piece of Eshvi kids’ clothing is produced in small Georgian sewing atelier, by two Georgian women. We want our customers to know that behind every item we create is high-quality fabric and a well-paid seamstress.

We aim to give you a product that can be worn proudly with a sense of valuable ideas. Eshvi kids’ clothes could be used as long as possible, not only for the third or fifth wash. With our small but eco-friendly collection, we do take care of the environment. We believe that the world and fashion are at a turning point, towards a sustainable, ecological, and local (r)evolution. We want to be part of this movement.

• Ingorokva

Aspiration and creativity of the brand Ingorokva are directed towards creating the final product. Based on longtime experience, we use high-quality and environmentally friendly fabrics. The highest priority of the brand is quality and customer service. The colors and hue of the clothes are subtle. The shape and model are always elegant and fresh. The final clothes focuses on detail and high quality, which is expressed in elegant simplicity

• Liya

Combining evening wear with office look, to create everyday look with quality materials and exceptional craftsmanship. Developing ready to wear, accessories and jewelry with particular attention to details and always with Love.The mission is to bring your visions through our designs. We hope to become part of your unique style. Every piece by Liya is made to last for a lifetime.

The main driving force behind is not just about creating for strong women, but it is about first and foremost creating for every woman. For complimenting the amazing human! We are not here to push any boundaries but we are here to enhance and compliment the harmony within one’s self.

• Flying Painter

Flying Painter was founded in 2016 as a collaborative project between three Georgian artists – Eka Ketsbaia, Natuka Vatsadze and Bobo Mkhitar. Focused on translating our shared aesthetic vision into fashion, we create wearable art for people on the hunt for more daring attire.

Named after a famous work of a Georgian avant-garde designer Petre Otskheli, Flying Painter is dedicated to the creation of clothing that has a sense of timelessness. Every design born in Flying Painter’s atelier is beyond trends and with an attention to detail, texture and silhouette stays true to the brand’s core values of high quality and sustainability. Mostly without striking masculine or feminine elements, all pieces are designed to emphasize individuality.

At Flying Painter the fashion is regarded as an art form itself. Throughout each collection we offer our customers to express themselves instead of being shadowed by clothing itself.

• Makratelli

The history of Atelier Makratelli began in the year of 2014, when the founder of LTD Makratelli, Maya Machavariani, thought of the idea to create a high-quality atelier that would not only work for big corporations, but also individual clients.Unique and comfortable service, high-quality product and fast growing team of professional employee – the objective of the founder was reached in just six years better than expected. Today, Atelier Makratelli has two production spaces, one of which works on custom and TV orders, while the other one is for mass-production and new projects.

With the projects is “Random” – a brand that creates free, modern, unisex clothing Makratelli started a new chapter, designing their own products. Customers are the main source of ideas for Makratelli, also during this challenging period. Inspired by talented artists, Makratelli announced a social project – an unprecedented platform, which will give local artists a chance to create their products and identify new selling channels and showcase their talent widely.

• Rko

Three young moms founded RKO to create beautiful apparel for the most important people in our lives – our children. We all want the best for our kids. This is the attitude that guides us as we create each and every garment with love and care.We are nostalgic of the times our moms and grannies knitted and sewed clothes for us when we were kids so we try to include this warmth and homey touch in all our collections. RKO wishes to make clothes that you’d like to keep your grandchildren

• Situationist

Irakli Rusadze is a self-taught designer and a founder of SITUATIONIST. As a Creative Director, he often combines two different perspectives – Georgian historic heritage and avantgarde design. The concept of SITUATIONIST relies on the notion that clothes are created for character rather than body.

SITUATIONIST’s unique design aesthetic lies in the idea that each item is cut and sewn from beginning to end by one person, after leaving a signature on a special label, this is Irakli’s way of appreciating the craftsmanship of the skillful staff members who spend hours to make it happen.

The main idea of the brand has always been sustainable fashion, the ability to use clothing for a long time. With this resource and creativity, SITUATIONIST is forming a brand that will be a bridge between fashion and art

• Spilow

Six spirited, naughty children inspired their three moms – Sopho, Taso and Marinka – to launch children’s clothing brand Spilow in 2016. Designed and produced in Tbilisi, Georgia, all products are made with colourful, natural materials for girls and boys between the ages of 2 and 13.

The distinctive yet simple silhouettes of the garments complement children’s playful nature. Each Spilow product has its own concept and story. Our clothing stimulates role play to help children use their creativity, develop their imagination and improve their dexterity. Our style is what defines us. At Spilow, we aim to create clothing that will become the go-to style of free, independent and happy human beings who love adventure and endless play. Just like us, other mothers want their kids to be confident, make friends, enjoy playing freely and still look cool at all times.

As a matter of fact, it’s the curiosity of the little ones that inspires us to create new outfits that are equally admired by kids and their parents. Spilow dresses and skirts, shirts and t-shirts, sweatshirts and hoodies are not just pieces of clothing. Spilow-wear is part of your kid’s great adventure.

• Zoma

64% of global customers are belief-driven: they buy a brand because of its social stance. At Zoma we understand that the value of greatest brands lies in becoming part of the identity of a person and of how they see and think of themselves. As such, we have paid uttermost care toposition Zoma as a youthful, vibrant brand with a strong social message which matches character the youth, millennials strive for.

• Nikolli

The company Nikolli was established in 2017. The brand has managed to become successful on the market and attract loyal customers over the last 3 years. The brand has been represented by three branches throughout Georgia: 2 branches in Tbilisi and 1 – in Batumi.

The objective of the brand is to produce of clothes that can compete not only with the locally produced goods but also with the foreign brands. Due to good quality, reasonable prices and good customer service the brand has an ambition to occupy more segments of the market.

Naturally, the aim of the brand is not to be present only on the Georgian market. The company works actively on export. Nikolli already made the first export in Saudi Arabia and continues to identify international partners all over the world.

• Boldi

BOLDI has been producing branded uniforms and special clothes for Georgian companies since 2012. It also cooperates with other Georgian brands and offers different services: pattern and sample making and manufacturing full collection. The company has 20 years of experience in the production of men’s and women’s hats and has competitive advantage in this field in Georgia (it is a family business).

In 2020, the company created a new brand NEWTORSO, which launches women’s clothing. For the moment, there is only an online store www.newtorso.com with worldwide delivery service. NEWTORSO cooperates also with Georgian brands (designers) and their items are also sold at www.newtorso.com.

• Elselema‘

Company Elselema Ltd was founded in 2002. Main directions of work are:

• Apparel production

• Sewing products

• Knitting products

• Embroidery products

• Printing on fabric

Elselema LTD operates in both local and international markets. Elselema has experience working with international brands such as: “Damat/Tween” and MONCLER.Elselema successfully

• Anabechdi

Sewing factory Anabechdi was founded in 2013. Since its foundation the company has been oriented to innovative development and high quality standards.

In addition to sewing, the company deals with printing on cloth and embroidering. All the works are carried out on the newest machines and with high-quality and eco-friendly materials. The image of the company can be clearly observed by high standards and uniqueness of our production as well as by satisfaction of our multiple partners. Our highly qualified stuff which possesses many years of experience is the key of our success. The working method of our company is based on team work. This method gives us no limitation and full rights to maintain our motto with pride: ”We create the best”.

Conclusion

Georgia’s journey in the textile and apparel industry is marked by historical significance, skilled labor, and strategic collaborations with international brands. The country’s remarkable progress in the sector showcases its potential for continued growth and success on the global stage.