EBRD President Visits Fashion House Materia – One of the first beneficiaries of EU4Business EBRD Credit Line

As part of his South Caucasus tour EBRD’s President Sir Suma Chakrabarti visited Georgia. The visit included high-level meetings with local authorities and private sector representatives to discuss EBRD’s future engagement in Georgia. The very first stop on the trip was Fashion House Materia, where he was joined by the EU Ambassador Janos Herman for the unveiling ceremony of a project plaque, certifying the support of EBRD and EU4Business to Materia’s investment project.

“Fashion House Materia” was established in 1949 and to this day remains one of the oldest apparel manufacturers and fashion retailers in Georgia. Until very recently the company operated out of leased premises, with outdated facilities that were less suitable for sound manufacturing process and safe working standards.  As one of the first beneficiaries of the EU4Business-EBRD Credit Line, the company managed to upgrade their building, modernize their equipment and machinery and introduce the best workplace health and safety practices at their newly built factory.

As part of the visit, project consultants from “Rina Consulting SpA” and “GFA Consulting Group GmbH” presented EBRD President and the EU Ambassador to Georgia with facts and figures about the EU4Business-EBRD Credit Line, which Materia has so greatly benefited from. The credit and advisory programme that is designed for supporting SMEs has already financed as many as 47 projects with approximately 25.6 million euros, and additional at least 19 additional projects with an estimated total value of 13.9 million Euros are currently under assessment.

EBRD’s President Sir Suma Chakrabarti commented: “Access to finance is crucial for businesses to become more competitive and to be able to access European markets. The credit line (EU4Business-EBRD Credit Line) allows the local SMEs to have easier access to finance with the help of which they can upgrade their production lines, improve their product quality and have easier export potential to EU markets.”

The presentation was followed by a tour through the factory, hosted by the Director of Fashion House Materia – Lado Giorgadze. From the very beginning, the company’s operating strategy has been based on “in houses” principles, without any outsourcing, allowing the company to fully control the production and quality of its goods. Fashion House Materia prides itself for having everything made in-house and each and every item being carefully crafted in Tbilisi, Georgia. The Director emphasized that the continuation of this ‘made in-house’ strategy is only possibly with modern manufacturing technologies, high production capabilities and a motivated and extremely competent workforce. The loan, the grant and the free-of-charge technical assistance provided by the EU4Business-EBRD Credit Line enabled the company to address all three aspects and develop an investment plan that that fully supports the company strategy. Mr. Giorgadze commented: “Apart from the considerable financial benefits in form of the loan and grant combination, the technical support received from the EU4business-EBRD Credit Line engineers was very important.  With the help of their expertise we managed to vastly improve our product quality. The new building and production layout enhanced the health and safety aspects for our employees, which had a great impact on their motivation and our work culture and we are planning to build on this through further team development efforts.  The combined effects will help us to reach the EU markets.”

The visit to Fashion House Materia was concluded by a joint media interview with Sir Suma Chakrabarti, President of the EBRD and Jonas Herman, the EU Ambassador to Georgia. During the press conference they both stressed the continuous support of EBRD and EU to the development of Georgia.

The EU4Business-EBRD Credit Line is a joint initiative of EU and EBRD to help Georgian SMEs finance investments, which enable them to seize the opportunities presented by the Deep and Comprehensive Free Trade Agreement (DCFTA).

Through loans provided by EBRD via participating Partner Banks (Bank of Georgia and TBC) and grants and free-of charge technical assistance provided by EU, the joint facility allows Georgian SMEs to gain better access to the EU market for their goods and services and also sets a path for further reforms in trade-related policies, such as hygiene standards for agricultural products and the approximation of regulations for industrial products. This will not only boost access for Georgian goods and services to the EU market but it will also increasing consumer safety in Georgia.

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