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Prepared based on 2018 data
Textile and Clothing Manufacturing Industry
Benchmark Survey
2020
Reason of Research
The present study serves to identify trends in the textile and clothing
manufacturing industry, based on the 2018 and financial statements of
the second and third size companies.
The report presents the average financial indicators of the sector, which
forms the "benchmark" of the sector and provides information on its
financial situation.
ContentPage 3 - Methodology
Page 4 - Research Results
Page 6 - Overview of the market
Page 10 - Basic Players
Page 11 - Financial ratios
2
Methodology
3
The data used in the study are taken from the website of the ReportingPortal, where the annual financial reports are published by the legislation ofGeorgia.These companies belong to the second and third categories, of which only2 companies are audited.This information is based on the data of 2018, focusing on market leaders,the number of which is 8.The study focuses on the textile and clothing market review, specificallyproduction and export-import data from the International Trade Centerwebsite.
The study reviews textile and clothing companies with a total turnover of morethan 110 million GEL and total assets of 92 million GEL.The study identified industry-leading companies in terms of revenue, assets,and profits.The analysis of the data revealed that Georgian companies have the followingfinancial indicators in the textile and clothing industry: profit on assetsaveraged 6% (ROA) and profit on capital (ROE) 9%.Also, the financial ratios of the industry’s average liquidity, efficiency, andsolvency were determined.
Research Results
4
The study also revealed the average data for 2018 companies by category. Ofthe 9 companies listed, two companies are in the second category, while theremaining 7 companies are in the third category.
Research Results
5
Average Sales
81,305
29,306
II Category III Category
Average Total Assets
73,426
19,105
II Category III Category
A thousand, Gel
A thousand, Gel
Average Pro�t Before Tax
-6,121
2,114
II Category III Category
A thousand, Gel
According to the Reporting Portal website, in2018, the number of textile manufacturingcompanies was 4, and the number of clothingmanufacturing companies was 5.According to the National Statistics Office ofGeorgia, in 2018, textile production in Georgiaamounted to 33 million GEL, and theproduction of clothing is 206 million.The gel made up. Below is a diagram showingthe cost of producing textiles and clothing byyears.
The textile and clothing industry in Georgia isgrowing steadily, in 2015 textile productionincreased significantly compared to the previousyear and amounted to 21 million GEL. There is asimilar trend in clothing production. However,problems have been observed in the industry, andsuch a young company as Emjiemtex has startedinsolvency proceedings on May 5, 2020.Nevertheless, the country has the opportunity toproduce much more than meets the requirementsand standards of both the country and the world.
General Overview of The Textile and Clothing Manufacturing Market
6
Million. Gel
As can be seen from the graph, clothing is produced at a much higher cost than textiles. In the lastfive years, the maximum value of clothing garments was recorded in 2018, 206 million GEL, and inthe case of textile production in 2017, 33.3 million Gel.
Textile and Clothing Production in Georgia
13.9
95.6
21
125.1
28.7
128.5
33.3
168.8
33
206
2014 2015 2016 2017 2018
Textile Production Clothing Production
0
50
100
150
200
250
Source:geostat.ge
According to the National Statistics Office of Georgia, in 2018 the number of employees in the textileand clothing industry was 8,507 people, below is the number of employees and employees in thetextile and clothing industry in the last five years.
General Overview of The Textile and Clothing Manufacturing Market
7
Man
As can be seen from the graph, the number of employees slightly exceeds the number of employees,the maximum number in the last five years was recorded in 2018.The diagram below shows the volume of labor costs in the textile and clothing manufacturingindustry for years.
Source:geostat.ge
Number of People Employed and Hired in The Production of Clothing and Textiles in Georgia
344 634 498 587 681
5,259 5,982 6,764 6,861 7,416
358 700 558 691 740
5,391 6,021 6,785 7,022 7,767
Number of hired people in textile production Number of hired people in the production of clothing Number of employees in textile productionNumber of employees in the production of clothing
2014 2015 2016 2017 2018
The Volume of Labor Costs in The Production of Textiles and Clothing
2.2
29.4
3.5
32.9
4.8
40.5
5.1
45.4
6.3
53.2
2014 2015 2016 2017 2018
Textiles Clothes
Million GEL
Source:geostat.ge
The diagram shows that the bulk of labor costs come from the production of clothing, which islogically caused by a large amount of production compared to textiles. In the last five years in 2018,the maximum volume of labor costs was recorded.
According to the National Statistics Office of Georgia, the volume of turnover in the industry in 2018by textile production is 30.2 million. GEL, and according to the production of clothes 203.6 millionGEL, below is the turnover in the industry according to the types of economic activities, statistics forthe last five years.
General Overview of The Textile and Clothing Manufacturing Market
8
Million GEL
The graph shows that in the last five years, the maximum turnover in textile production was 33.8million GEL in 2017 and 203.6 million GEL in clothing production in 2018.The diagram below shows the investments made in the industry in fixed assets by textile andclothing production.
Source:geostat.ge
The Volume of Turnover in The Industry According to The Production of Textiles and Clothing
13.9 19.8 24.7 33.8 30.2
98.6130.1 131.4
169.8203.6
Textile Production Clothing Production
2014 2015 2016 2017 2018
Industry Investments in Fixed Assets in Textile and Clothing Manufacturing
0.5
16.6
1.25
0.7
14.9
0.9
23
3
17.9
2014 2015 2016 2017 2018
Textiles Clothes
Million GEL
Source:geostat.ge
As can be seen from the diagram, the production of clothing with the investments made is muchhigher than the production of textiles. In the last five years, in 2017, the maximum investment cost inthe production of clothing was recorded and amounted to 23 million GEL.
Export-Import of Textiles and Clothing
Cost of Textile Imports by Country
China Turkey Russian Federation Ukraine Germany
2015 2016 2017 2018 2019
0
4,000
According to the International Trade Center, the total value of textiles imported in 2019 has decreasedcompared to the previous year, indicating a decrease in demand, or an increase in local production.The total value of textiles imported in 2018 amounted to 6,691 thousand USD, while in 2019 itdecreased to 5,626 thousand USD.The top five countries from which major textile imports come are China, Turkey, the Russian Federation,Ukraine, and Germany. Below is a diagram of the cost of imports by country, statistics for the last fiveyears:
9
A thousand GEL
As can be seen from the graph, China and Turkey are the main importers in the last five years, fromwhich the main part of the textile industry comes. The highest rate in the case of China was recordedin 2018, the value of imports amounted to 3,397 thousand US dollars, while in the case of Turkey in2015 it exceeded 2,000 US dollars.As for the cost of importing clothes, the following are:
Source:International Trade Center
Cost of Importing Clothes by Country
25,121
31,846
34,149
34,789
43,907
9,820
11,847
15,373
19,691
15,773
6,008
7,949
9,687
9,101
9,839
6,378
6,766
7,396
6,359
8,028
2,170
2,316
3,187
2,715
3,586
Turkey China Italy Spain Germany
2015
2016
2017
2018
2019
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
A thousand, dollars
Source:International Trade Center
Turkey has been a major importer of clothing for the past five years.
Export-Import of Textiles and Clothing
Cost of Textile Exports by Country
0 11
10570
9662
95
13 34
Netherlands Armenia Azerbaijan
20172018
2019
0
125
According to the International Trade Center, the total value of textiles exported in 2019 increasedcompared to the previous year and amounted to 203 thousand US dollars, while in 2018 it exceeded190 thousand US dollars.The top three countries where major textile exports take place are the Netherlands, Armenia, andAzerbaijan.Below, in the form of a diagram, is the value of exports by country, statistics for the last three years:
10
A thousand dollars
As can be seen from the graph, the bulk of textiles have been exported to Armenia in the last threeyears, although in 2019 textiles worth $ 105,000 were exported to the Netherlands.As for the cost of exporting clothes, the following are:
Source:International Trade Center
A thousand dollars
Source:International Trade Center
Over the past five years, major clothing exports have taken place in Turkey.
Cost of Clothing Exports by Country
54,95950,414 54,405
62272 3,568
145626 2,970
Turkey Azerbaijan Italy
20172018
2019
0
60,000
Export-Import of Textiles and ClothingWhile China is a leader in textile importing countries, it is interesting to see how top countrieshave changed in the last four years.Below is a diagram of the top five importing countries by years:
11
A thousand dollars
As can be seen from the graph, the top countries importing textiles and the value of the goodsimported by them are quite variable.
Source:International Trade Center
Importing Countries in 2016
1,986966
474 315 288
Turkey China Ukraine Italy Russian Federation
Importing Countries in 2017
1,6841,286
331 193 160
Turkey China Ukraine Netherlands Italy
Importing Countries in 2018
3,397 1,534704
260 171
China Turkey Ukraine Netherlands Russian Federation
Importing Countries in 2019
1,7391,409 551 371 286
China Turkey Russian Federation Ukraine Germany
Source:International Trade Center
Source:International Trade Center
Source:International Trade Center
A thousand dollars
A thousand dollars
A thousand dollars
According to Total Assets, Top 3 Companies in The Textile and Clothing Manufacturing Industry (2018)
Top 3 Textile and Clothing Manufacturing Company by Income (2018)
Profit Before Tax, Top 3 Companies in The Textile and Clothing Industry (2018)
67,861
13,444 13,352
The total income of
these companies
represents 86% of the
total income of other
textile and clothing
companies.
54,658
18,769
4,224
978
733685
12
A thousand, GEL
A thousand, GEL
A thousand, GEL
Average Financial Ratios of The Industry (2018)
13
Manufacture of Textiles and Clothing
2.43
0.72
Current RatioQuick Ratio
Liquidity Ratios
The study found liquidity ratios for the
textile and clothing manufacturing
companies industry. Current and quick
liquidity ratios are 2.43 and 0.72,
when the liquidity ratio is more than 1,
the indicator is considered
satisfactory.
Profit Ratios
The profit ratios of textile and clothing manufacturers accounted for 60% of the gross profit
margin, the return on assets for producers (ROA) was 6%, and the return on equity ROE was 9%.
Attention is drawn to the gross profit margin, which is quite high, at 60%, an indicator of how
much the company sells its product compared to the cost. For the most part, it is this rate that
determines the profitability of an industry. However, there are also quite high costs in the
industry, which is why the net profit margin is 12%.
Manufacture of Textiles and Clothing
60%
6% 9% 12%
Gross MarginROA
ROENet pro�t Margin
Average Financial Ratios of The Industry (2018)
Efficiency Ratios
The inventory turnover ratio is equal to 1.94,
which is not a very high rate. In general, the
higher this ratio, the higher the number of sales,
and the less time it takes to store the product.
The asset turnover ratio in the industry is equal
to 1.33. The higher this ratio, the more efficiently
the company can use its assets in terms of sales
volume.
Debt Ratios
Debts to assets ratio show the total
assets and liabilities to textile and
clothing manufacturers. This figure is
equal to 0.53, which does not indicate a
particularly large number of liabilities.
The lower this ratio, the lower the risks
of solvency.
It is also noteworthy that the debt to
capital ratio is 0.83. The higher this
ratio, the higher the company’s risk.
14
Solvency Ratios for Clothing and Textile ManufacturingCompanies
0.53
0.83
Debts to Assets Ratio Debts to Capital Ratio
0
0.5
1
E�ciency Ratios
1.94
1.33
Inventory Turnover RatioAsset Turnover Ratio
The report was prepared by AGIC, a consulting firm that has been operating since2007 and provides the highest quality services in the areas of auditing, accounting,business consulting and marketing.The company team consists of more than 40 highly qualified, experienced andprofessional employees who are focused on development and customer success.Auditing and consulting company "AGIC" is a member of "PrimeGlobal" in Georgia,which allows to implement global, complex and complex projects with partners inmore than 85 countries around the world.
15
0171, P. Kavtaradze #10, I Turn,
Floor 4, Tbilisi, Georgia
(995 322) 500 130
(995 599) 34 33 48
