FURNITURE INDUSTRY IN GEORGIA

FURNITURE INDUSTRY IN GEORGIA

georgian furniture market

  • Georgia imports $95M and exports $27M worth wood materials and wooden furniture parts (HS44)
  • Georgia imports $127M and exports $2M worth ready-made furniture (HS95)
  • Exports are dominated by large Azeri company Embawood
  • Export of pet-furniture to Europe is reaching several million dollar volume, but spread in various product categories. Also only one dominant exporter – Georgian Products Ltd.

WOOD IMPORT

$95M

Turkey, China, Russia, Ukraine, Germany, Belarus

PET FURNITURE EXPORT

$7M

Germany, Netherlands, Belgium

WOOD EXPORT

$20M

Iran, Armenia

FURNITURE EXPORT

$2M

Azerbaijan, Turkey

industry review

Over the last 5 years, average annual growth of furniture production in Georgia made 16.5%
Industry employs 3000 people on $220 monthly salary on average; the data does not include self-employed industry workers/artisans
More Workers and Less Salaries means availability of labor market for growth
Increased value added since 2012
Similar indicator for turnover reached 18.9%

SWOT of Georgian Furniture on EU Market

strenghts

Significant number of furniture producer companies to pull off export scale
Export success case of contract manufacturing on pet furniture
DCFTA allowance of foreign materials in production (40-50%), which removes limits on mass production
Abundance of recyclable wood resources
DCFTA allowance tariffs don’t provide significant difference in entry costs due to relatively low rates for third countries
Georgian Furniture Cluster – producers working together for scale
Availability of locally produced foam for upholstery furniture
Cheap labor and electricity costs compared to main furniture exporters (EU, China), which brings major share of competitiveness even if raw materials are imported

opportunities

Niche market for small number of talented furniture designers to retail in EU though e-commerce
Possible competitive advantage on Contract Furniture market in EU (on-demand custom furniture)
Possible demand for contract manufacturing and private labeling in certain furniture products or accessories (due diligence needed)

industry potentials

Short Term
Gain experience through competition with importers on local market by:
Achieving professional contract furniture services to satisfy growing hospitality and real estate market furnishing needs in Georgia
Piloting retail furniture production with local design
Medium Term
Attract contract manufacturing and private labeling contracts from EU
Attract contract furniture deals via EU tenders (custom furniture), partner with established EU players (Eastern Europe)
Attract FDI with knowhow, especially for furniture fittings and accessories production for export
long Term
Develop Georgian furniture brands

strategy

Assimilate local market
Develop know-how and experience
Build brands