A SERIOUS ATTEMPT OF DEVELOPING GEORGIAN COMPANIES

By Dr. Shota Sagirashvili

The Centre for Enterprise Restructuring and Management Assistance (CERMA), which has been functioning in Georgia since 1997, is one of the most serious Georgian consulting companies today promoting the restoration of enterprises.

CERMA provides marketing research for Georgian enterprises, creates financial models corresponding recent standards, in case of need, invites foreign specialists and solves concrete problems of enterprises with their help, carrying out practical works based on modern business theories etc. CERMA also bears close relations with well-known consulting companies. Experienced Georgian and foreign consultants solve numbers of problems together. There is not a single organisation in Georgia that is beyond CERMA’s view and studies. Unfortunately, it should be mentioned that the number of companies liable to rehabilitation is too small in Georgia. It is caused by the fact that during last years, due to certain reasons, Georgian enterprises broke off with old partners. Since then there were no rehabilitation processes – no introduction of new technologies, no changes in management mentality, new economic sciences became alien, etc. West has already passed through it all years ago. Foreign organisations introduced new technologies in their business and then, well armed with modern equipment, entered markets of post-soviet countries. Georgian enterprises had to bring their economies into line with those of Soviet Union for years and finally, in the healthy competition conditions, became weak and powerless. Hence, it is clear what kind of power and work is needed to restructure and rehabilitate Georgian enterprises.
That’s why CERMA is welcomed to consult and assist as many companies as possible.
One of such companies is the factory “Dikhashbedi” in Vani that processes nut. The company was founded in early October 2000 and asked CERMA for assistant in December. In the second part of December CERMA completed the four-member group of consultants that began carrying out the first two-month period of diagnostic works. Diagnostic works revealed that company’s supply system is not formulated, which is very important for business. It should also be mentioned that this is the problem each nut-processing company faces in Georgia, as there is no organisational institute in industry that would work on problems of nut supply. This question is important as far as there are number of high quality nut sorts in Georgia. However, because of superficial knowledge of storage and looking after them, this product can cover only the least part of international market. Therefor, it’s clear what difficulties company has to overcome to form perfect system of nut supply. Besides, “Dikhashbegi” had no marketing department that would have constantly studied market. The abovementioned business is seasonal and the company could have lost the whole year because of these problems and this fact could have caused budget debt. Actually, the company was on the brink of bankruptcy. Consulting group has drawn up a plan for solving the above problems and effective use if remained passive period. According to plan, consulting group started to create the system that would not only overcome the crisis, but also make it profitable. The process began in three main directions: supply, quality and market. The group started to attract the stock of goods revealed in diagnostic period. March-April of 2001 was the period of selling produced nut. The same will be done next year.
As to company “Dina” producing details of steel and rubber, it is one of the companies, number of which is very small in Georgia. “Dina” has huge prospects of development, as it has high technical level. It responds to standards of many European companies. Consulting group introduced the new software based system of accounting as well as new financial patterns for the most demanded products and marketing department that will regularly work on market research. It should be mentioned that customers are state organisations, which negatively influences the financial management of the company – one of the most important criteria for existence of company with modern standards. From this point of view, consulting group intends to introduce company’s product on domestic market that will increase incomes of the company. The Group also plans to help “Dina” in searching for a new industrial market and in export. The final goal is to make “Dina” stronger and bring it in correspondence with European standards.
Now the Group is working on the quality control system.