EPI Analysis: Construction Materials – Analysis of Potential Value Chains

This document briefly analyzes Georgia’s potential to manufacturer a small range of construction materials based on a range of factors. These include local growth potential, contribution to narrowing the trade deficit, ease of entry into the industry, production intensity, availability of inputs, technology needs and regional competition.

Rather than indicate specific construction materials Georgia has the potential to excel at, it does give a prioritization with which construction materials could be studied in greater detail.


Insulated cables, plastic construction materials, gypsum and metal mountings/fittings (furniture accessories could be focused on depending on the growth of the furniture industry as it supplies inputs to furniture companies) could be industries with possible growth potential in Georgia in addition to timber, perlite and basalt and could be analyzed in further value chain assessments.

The growth in insulated cables, plastic construction materials (i.e. window/door profiles, plastic pipes) and gypsum in Georgia can very much be triggered by new construction and renovation projects that are expected in the local and to some extent regional market. Thus, the attractiveness of these sub-industries also depends on domestic market growth potential.

Insulated cables are raw material intensive but local copper could be used in production. Plastic construction materials, on the other hand, are also raw material intensive and the raw materials will mostly be imported as they are based on petrochemicals. However, this industry does not require significant upfront investment and will also create employment opportunities by creating an installation and assembly sector together with it (i.e. plastic window/door profiles installation and assembly) (although labor is minimal during production).

Gypsum mainly uses local materials and does not require significant investment. Metal mountings and fittings for furniture accessories could be focused upon if the furniture industry grows in Georgia.

Apart from these, if Georgia can have competitive energy costs (natural gas) as well as invest in development of local labor skills, then the ceramic tiles/ceramic sanitary ware industries could be good to focus on as most of the materials can be procured locally and would create employment opportunities (labor represents a critical percentage in production). However, these industries should be focused on mostly for the local market due to difficulty in competing regionally, as there is excess capacity and strong players in the region.