BDO reports on efficiency of the ‘Produce in Georgia’ program

19 February 2019

Today at Holiday Inn hotel BDO presented the results of an Assessment Survey conducted for and on behalf of the ‘Produce in Georgia’ agency at the Ministry of Economy and Sustainable Development of Georgia. The purpose of the Assessment was to evaluate the efficiency of the technical assistance and access to finance components of the industrial part of the ‘Produce in Georgia’ Program.

BDO’s Maia Khachidze, Partner, Head of Corporate Finance, provided extended information on the project and its outcomes.

85 beneficiaries were surveyed for the project - 30 startups and 55 business expansions. Results of the assessment rely on their responses directly, along with BDO analysis and general review of relevant markets.

Assessment highlights discussed in detail in the full report are as follows:

  • From 2014 to 2018 Gross Domestic Product (GDP) created by the beneficiaries exceeded GEL164 million, 54% of which comes from expanding businesses and 46% from startups. Also about 79% of GDP is the share of Tbilisi based beneficiaries, only to mean that 60% of the surveyed entities are located in Tbilisi
  • Income generated by beneficiaries - gross income received by 85 surveyed entities between 2014 and  2018 amounts to GEL390 million
  • The share of loans received within the Program and other loans and investments made by the Beneficiaries from 2014 to 2018 in total domestic investments, for the relevant period, equals approximately 0.38% and amounts to over GEL247 million
  • After the Beneficiaries engagement in the ‘Produce in Georgia' Program, the net growth of employees has reached 3,033. The total salary fund paid to the new employees by the Beneficiaries within the Program amounted to GEL25.6 mln excluding personal income tax
  • Total collected taxes from the Beneficiaries as the Program merit, exceeds GEL42.5 million in 2014-2017 period and constitutes 0.13% of total taxes paid to the state budget
  • Exports - the survey also demonstrates increase in exports of produced goods. Currently 28 out of the 85 entities is an exporter. Income by export exceeded GEL309 mln from 2014 to 2018 for the beneficiaries
  • Competition - the Program allowed the beneficiaries to increase the scales, quality and diversity of production to achieve competitive advantage.

Presentation was attended by Giorgi Kobulia, Minister of Economy and Sustainable Development of Georgia, representatives of the Ministry of Finance, Tbilisi City Hall, Chamber of Trade and Industry, Innovation &Technology Agency, as well as the program beneificiaries.