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Regional Logistics Hub

Georgia is in a highly strategic location in that it serves as an entry gate to the Caucasus and Central Asia. Georgia is a reliable corridor for addressable flows between Caucasus and Europe and between Central Asia and Europe. This concept is being based on historical Silk Road for centuries that gives Georgia a significant geopolitical role.

Georgian transport economy is transit oriented. From 65% to 95% of cargo flow in Georgia is transit. Transport corridors are breathing new life into the ancient trade route between east and west and could reinvigorate Georgian transportation.

Georgia is developing a new deep sea port, which is intended to have 100 mln tons capacity; Also, Baku-Tbilisi-Kars railway project with the 5-15 mln t/year capacity is completed, integration is planned no later than 2017. This railway has a significant importance for the region, because it is intended to connect Georgian and Azerbaijan railways to the Turkish one. 

These projects are aimed to increase the main geopolitical asset of Georgia – transit potential.

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Why Invest in Regional Logistics Hub

Access point for the landlocked countries

Georgia serves as an entry gate for the Central Asian landlocked countries, so the oil, gas, coal, zinc, copper and other resources can be transferred to the Europe though Georgia.

Reliable transit route

Out of the three main roads from Europe to Asia, the road through Georgia is the most stable and secure. Due to the stable political and economic climate, Caucasian corridor is becoming more and more attractive for businesses.
Additionally, the Suez channel has reached its maximum capacity. Thus there is clearly an opportunity to open North-South land-transport.

Fast Growing Region

The infrastructure of the whole region is being upgraded rapidly.

The orchestra of key projects, like as Anaklia deep sea port and Baku-Tbilisi-Kars railway projects in Georgia, construction of Alyat port in Azerbaijan, new 1,5 bln USD port in Turkmenistan, 10 new tanker in Caspian Sea, construction of connecting railway between Turkmenistan, Afghanistan and Tajikistan, as well as construction of linking railway between China, Kyrgyzstan and Uzbekistan promises a new development of the Silk Road and the whole regions, in addition, increases the importance of the involving countries.

Customs Clearance is Transparent, Fast and Efficient

Transit if free of tax.
Customs is one of the less corrupted body globally, according transparency international 2014 report.
Average time for import clearance is just 15 minutes.  Up to 15 days deferred payment of Customs tax/VAT for importers is possible.
There is a network of modern Customs Clearance Terminals and Cargo inspection/Cross-Dock modern equipment and facilities.
The services you can get here is a Preliminary Customs Declaration, Serf-service for customs clearance of cars and Online Services for remote clearance (including tax returns).

Growing flows from the East

The western part of China is in a process of rapid development, 53.87 BLN USD is already invested in these regions in airports, roads and energy plants, in next 2 years investments in these regions will reach minimum 114 BLN USD. This is an opportunity for Georgia, as it is a part of Eurasian corridor and the historical Silk Road. The first railway freight transportation from China in the direction of Georgia was carried out. Loading of the transported freight was carried out in China on January 29, 2015 and unloading – on February 6, 2015 in Georgia. The project was carried out by means of close cooperation with the railways of Georgia, Kazakhstan and Azerbaijan and the province of China - Xinjiang. Georgia remains the position of crucial transit corridor for the north and south countries in Caucasian Region.


 
Baku-Tbilisi-Kars Project

 

The project of Baku-Tbilisi-Kars railroad mainline was initiated in 2007 by the governments of Georgia, Azerbaijan and Turkey. The project is a new transport corridor which unifies Georgian, Turkish and Azerbaijan railways. Realization of this project will open railway corridor from Caspian Sea to the Europe through Turkey, which is intended to support connection between natural resources reach countries and consumer countries.
The project envisages the rehabilitation, reconstruction and construction of 180 km length Marabda-Kartsakhi railway section consisting of:  Marabda-Akhalkalaki reconstruction-rehabilitation section – useful length 153 km and Akhalkalaki-Kartsakhi (Turkish border) new construction section – length 27 km.
Rehabilitation, reconstruction and construction process is executed within the framework of the project envisaged for 5-15 mln tons cargo flow per year. Main part of construction works are already completed on theterritory of Georgia.
At the end of the first phase, the railway will be capable to carry 1 mln passenger per year. The project will fully integrated by the end of 2016.  

Investment Opportunities

Deep-sea Port

Georgia is an attractive country for international investments with open market and liberal economy, strategically located between Europe, Asia, and the Middle East. It is considered to be a key platform for the revitalizing the Silk Road and a bridge between East and West.

In order to utilize natural potential and facilitate the economic growth Government of Georgia is carrying out large-scale infrastructural projects. For this purpose, particular importance is attached to the construction of the New Deep Sea port in Anaklia, which will be gateway for Central Asia and Caucasus countries in the world.

In August, 2014 the Government of Georgia announced the Invitation for the Expression of Interest (“EOI”) for the construction and development of the Anaklia New Deep Water Black Sea Port. 12 companies from various countries have filed EOIs. On February 8, 2016 LTD Anaklia Development Consortium was selected as winner by the Governmental Commission. LTD Anaklia Development Consortium is a joint venture, established by reputable Georgian and US companies – TBC Holdings and Conti Group.

The Port shall be constructed in 9 phases and gradually reach the capacity of handling 100 mln tonnes of cargo annually. The total cost of the project is 2,5 bln. USD, from which around 586 mln. USD will be invested during the phase one. The Government of Georgia will significantly contribute to the development of the project by providing 1000 hectares of land for the port and Free Industrial Zone and by constructing railway and road connections to the port. The total cost of the Governmental input shall exceed 100 million USD.

Construction of the Anaklia Port shall create favorable conditions for the development of logistics services and industrial zone in the adjacent area. Construction of the new port also gives opportunity for development of value added services and shall result in significant increase in cargo turnover through Georgia.

Containerization & Logistical Centres

Georgia provides significant investment opportunities in the manufacturing sector, which already contributes up to 12% to gross domestic product of the country and, since 2007, has attracted more than $ 1.2 billion in investments. This is an opportunity for export oriented manufacturing sectors, for which access to the European market would be attractive. Therefore, together with international and local experts, the Government of Georgia is undertaking a deep analysis of competitive sectors in order to find ways of stimulating investment inflows, attracting new technology and knowhow and creating high value-added production in the country. Georgia is uniquely positioned to capitalize on increasing trade flows between Europe, the Caspian Region, Central Asia and China in the foreseeable future. The country offers the shortest route between the Black Sea and the Caspian Sea. Georgia’s transport system is a key link in the historic “Silk Road.”

Foreseeing the above mentioned, there is a significant opportunity of development of warehouses, containerization and logistical centers. The total volume of warehouse space in Georgia amounts to around 1.8 million sqm, of which around 1.2 million sqm is owner-occupied and the remainder is leasable. The largest share of total leasable space is located in Tbilisi - 61%, with 23% -in Batumi 10%-in Poti and 6%- in Rustavi. From the 627,000 sqm of leasable warehouse supply, 89% is dry storage and 11% cold storage. The total capacity of cold storage amounts to 243,700 tons. A significant proportion of total leasable warehouse floorspace is classified as Class B (59%) and Class C (39%). Only 2% of total leasable warehouse supply in Georgia can be classified as A class space. The broad categories with the highest occupied space are food and beverage, representing 42% of occupied space in listed warehouses and building materials - occupying 14% of stock. Distribution companies take up to 13% of space. The average rent for dry storage A class warehouses in Georgia stands at around USD 11 per sqm net of VAT; the same figure for B class warehouses varies between USD 2.3- 4.7 per sqm and for C class warehouses USD 0.5-2.4 per sqm. The average rent for cold storage facilities in Georgia usually varies between USD 14-17 per ton net of VAT, depending on location and warehouse quality.

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