Monday, 17 May 2010
It is reported that GeoSteel is hoping to spearhead the rejuvenation of Georgia's metallurgical industry and boost its economy by using local scrap metal to produce construction materials.

Mr Bipin Sharma president of GeoSteel said that "By using the locally available steel scrap that was being exported and was contributing very little towards the budget of the country and converting it into steel bars for construction, a great amount of foreign currency that is presently flowing out from the country can be retained."

Mr Sharma said that "This steel plant in Rustavi is a step towards the revival of the steel industry of Georgia and towards improving the economic and social conditions of the residents of Rustavi."

GeoSteel wants to sell the bulk of its output in Georgia, and also to export to Armenia and Azerbaijan. It has already sold some material in Armenia, but has so far come up against bureaucratic hurdles when trying to deal with Azerbaijan.

It's also facing competition from Ukrainian reinforcing bar producers, and suffering because the Georgian government, keen to promote its free market credentials, does not impose any import quotas to protect domestic producers, a practice which is widespread in other steel producing countries.

GeoSteel was opened by President Mr Mikheil Saakashvili in November 2009 and has the capacity to produce 175,000 tonnes of material a year. The new mill employs 500 people, and a further 1,000 in spin off services. It is 49% owned by JSW and 51% by UK registered Georgian Steel Holding Group. The European Bank for Reconstruction and Development contributed USD 28 million to its financing.