Background

The “EU Innovative Action for Private Sector Competitiveness in Georgia” is a joint initiative of the European Union and four UN Agencies – United Nation Development Programme (UNDP), the Food and Agriculture Organization (FAO), United Nations Industrial Development Organization (UNIDO) and the International Organization for Migration (IOM).

This project responds to the objectives set out in the Annual Action Programme 2017 “for Economic and Business Development in Georgia”. In particular, the project will support Component 3: Enhancing Greater Business Sophistication.

Main goal of the project is to enhance entrepreneurship and business sophistication by strengthening the capacities of government and local entities to develop and operate clusters and supporting companies directly with strategic investments while also demonstrating the effectiveness of these strategies to businesses.

The objective of the project will be achieved through support to a range of entities in developing specific clusters in packaging sectors for the benefit of enhancing geographically constrained value chains for improving cluster coordination, marketing, innovation, public private dialogue and more. It will also be done through strategic investments in companies that are deemed necessary to facilitate improvements in the cluster. This will also be enhanced by a sustained effort to consolidate evidence-base, clustering-related policy and implementation capacities and connect local businesses to diaspora communities, for the purpose of knowledge and technology transfer and financing.

Georgia’s economic competitiveness has changed dramatically in the last 15 years under both governments. Starting in 2004 corruption has reduced substantively; opening a business and paying taxes were made simpler, cheaper and quicker and access to local markets and international markets has improved.

Perhaps most importantly, through signing the Association Agreement with the EU, Georgia has made EU-alignment the most important trajectory of public policy reform, and this has brought with it a strong westernization agenda to every facet of market reforms. 

These reforms have created dramatic improvements in rankings like World Bank Doing Business Indicator, the Fraser Indicator of Economic Freedom, the Corruption Perception Index and the Global Competitiveness Index.

Nonetheless, the economic and social development of Georgia is hampered by a stubbornly low performance in innovation and sophistication. The Global Competitiveness Report (GCI) clearly shows Georgia’s weak performance in business sophistication (ranked 99 out of 137) and innovation (ranked 118). Correspondingly, Georgia has an Economic Complexity Indicator of - 0.25, which is about at par with Dominican Republic and Jamaica. This has translated into Georgia failing in business sophistication, value-added activity and technology transfer and absorption.

This low level of sophistication is particularly problematic given that Georgia aims to expand its exports to the EU under the DCFTA, and the EU is a highly sophisticated market requiring complex, consistent and high-quality products. The need for improvement of quality management systems was revealed by the “South Caucasus Trade Study”.

Georgian weakness in this area results from a range of factors at an individual company and sector level. At an individual level, given the ease of starting a business, the business start-up rate in Georgia is a disappointing 8.6%. This is compounded because, facing a small local market and limited experience exporting, local companies have historically lacked the incentives or the experience to innovate and grow.

At the same time Georgia ranks particularly poorly in inter-firm cooperation. ‘Clusters’ of businesses in developed countries, often coordinate their activities, to share risk, enhance technological uptake and reduce cost. Lack of cluster development in Georgia has limited provision of inputs and skills, downstream service development, product certification and quality control, export facilitation, transport and logistics, international branding and marketing.

This project will therefore use cluster development to help enhance inter-firm cooperation, to overcome coordination externalities, improve technological uptake and new market penetration.  It will also use strategic investments to support individual companies and overcome cluster bottlenecks in technology upgrade and innovation, increased design input, certification, environmental standard uptake (particularly Extended Producer Responsibility and recycling), foreign market understanding and access and much more.

This will therefore align with the EUs goal to support Greater Business Sophistication and will align with government goals of entrepreneurship and cluster support. In particular, the Georgian Government have already committed to the development of a Cluster Development Strategy. The project also aligns with the UN commitment to support Private Sector Development and innovation in the United Nations Partnership for Sustainable Development: Georgia (2016-2020) as well as with the numerous activities of UN agencies in this area.

The packaging sector was identified as a priority sector on the basis of its size, opportunities for growth and its broader significance for the Georgian economy through its impact on other sectors and on recycling. From the point of view of size, there seems opportunity for growth, particularly through import substitution and growth of the domestic market as a whole as a result of shifts in production and buying patterns. There may also be opportunities for niche exports. The sector also brings potential benefits for the wider economy, since absence of quality packaging provided in a flexible manner, is a bottleneck for some sectors, particularly food. In addition, improvements in local packaging may be necessary for the fulfilment of EU phytosanitary standards, and improvements in the packaging sector would be useful for environmental reforms, particularly recycling.

Duties and Responsibilities

The primary objective of the consultancy is to provide to the UNDP Project, framework, based on international and local best practice, in identifying relevant and practical approaches in designing, establishing and running effective Cluster Management Organization and cluster development supporting schemes in packaging sector value chain.

The consultant will work under the direct supervision of the Project Manager in close collaboration with UNDP Economic Development Team Leader.

Major tasks of the consultant include, but not limited to:

• Stakeholders analysis and mapping in Packaging Value Chain (Main product value chain extends one level beyond the manufacturers of the packaging (supply side, e.g. paper production) and extends to the companies that use the packaging for goods and services.) (hereafter Packaging Sector) cluster and sector
• Developing data base of companies operating in packaging sector, including valid address and contact details;
• Developing data base and contacts of Cluster Management and/or similar Organizations and similar organizations in EU and Associate states;
• Summarizing different business models of CMO in Packaging Sector in mentioned states;
• Description of products and services offered by above mentioned CMOs;
• Analysis of possibilities of implementation of mentioned CMO products and services in Georgia
• Illustrating an analysis of comparable CMOs, including a description of the major lines of business and the impact the CMOs have on the economic environment and sectorial development.
• Developing options of inter firm linkages to the members and stakeholders and governance principles
• Evaluating diagnostic studies and need assessments of packaging sector;
• Developing CMO member attraction and membership growth strategy;
• Developing value proposition for perspective local companies for CMO membership
• Provide support to CMO on institution building including in the areas of finances, HR, marketing and communication
• Capacity development of CMOs to provide business advisory and coaching services
• Support CMO in supply chain issues (like marketing and technology adoption), in HR development and CMO members’ employee’s skills development
• Develop strategy for CMO in Public Private Dialogue and advocacy, e.g. in recycling
• Develop strategy for compliance with quality standards and new regulations in the packaging cluster
• Contribute to capacity development of packaging CMO to provide business diagnostics and coaching
• Contribute to capacity development of CMOs on sectoral service provision
• Providing inputs and support to UNDP Team of consultant(s) in development of the Paper with the outline of (inter alia):
  • Description of Major Components of CMO (such as governance, formation stages, operating procedures, members (producer and other companies) and others based on good practice.  The paper inter-alia should contain:
    • Steps for CMO creation, risks analysis and quality criteria for CMO.
    • International best practices on comparable CMO (one example for each different model set up), their activities, policies, products, principles and legal status;
    • Products and Services to be provided by comparable CMOs.
    • Provide Methodology of packaging sector value chain’s need assessment for identification of constrains and opportunities and enhancement of inter-firm linkages to unleash sector’s potential.
  • Formation of CMO in packaging sector (with focus on Kakheti and Imereti regions). The paper inter-alia should include:
    • Operating rules of the CMOs and business model, including institutional and financial sustainability
    • Options of Corporate Governance and relation with the members and stakeholders;
    • Recommendations the legal status, the relation with the stakeholders, members and subsequent governance principles;
    • Interpret packaging sector value chain’s need assessment studies and provide with effective recommendations to overcome constraints, make use of opportunities and key leverage points where the Cluster Management Organization can intervene for development of sector and enhancement of inter firm cooperation;
    • Typical business lines in CMOs and the general principles of operations;
    • Identified Products and services to be rendered immediately operational and present them to potential members and the stakeholders;
    • Revenue generation sources;
  • Developing Packaging CMO Strategy inter-alia including:
    • Organizational development
    • Finances
    • HR
    • Marketing and communication
    • Business development and other service packages and other components
    • Action plan
    • KPIs and other tools for the strategy implementation
    • Options of the CMOs vision and mission;
    • List of potential strategic goals for the CMO for the first 3 year
    • Approximation of Impact of CMO will have on members
      • Job creation
      • Revenue increase
      • Cost reduction
      • Improvement of standards
      • Increase of product range
• Developing business plan defining CMO’s targets and the required level of capital/financing necessary to operate efficiently, including:
  • a list of possible requirements for the financial model, operating scenarios;
  • Subject to the CMO strategy define the CMO's targets;
  • Proposals and scenarios of the Project on key impact outcomes;
  • Draft template for the business plan, providing an analysis of cost figures (staff costs, administrative costs, fixed costs, tc.), pricing strategy and revenues;
  • CMO’s required level of capital/financing based on the forecasts of business volumes;
  • Develop a sensitivity analysis for the Business Plan.
• Develop Organizational structure for the CMO and roles of its members, including;
  • Identification of the qualification requirements, job descriptions and functions of the Personnel
  • Potential structure of management for the CMO's main operations
  • Principles of organizational delegation of authorities and internal allocation of responsibilities within CMO and among its members
  • Develop the qualification requirements for the CMO's key staff and management.
  • Management rotation plan
• Develop criteria for support measure in packaging sector companies for implementing matching grant support schemes, including SOPs and monitoring procedures using focus groups, desk studies of available diagnostics and other studies and resources
• Support major stakeholders in implementing the CMO development strategy
• Support the CMO in developing inter-firm cooperation
• Support CMO in inter-cluster linkages and the internationalization of the packaging cluster;
• Support UNDP in assessment of CMO capacity development measures and identification of new needs for CMO support;
• Support CMO in revision of the CMO strategy. 

Deliverables:

The Consultant is expected to deliver the following main deliverables:

Deliverable 1:

Deliverable 1.1 – due by the end of December 2019:

• Stakeholders analysis and map in packaging cluster and sector;
• Written report on inputs and supporting UNDP team of consultants in collecting and analysis of information and data for developing paper with the outline of (inter alia):

• Major Components of CMO and steps for its creation;
• Summarizing the different business models of CMOs;
• Illustrating an analysis of comparable CMOs, including a description of the major lines of business and the impact the CMOs have on the economic environment and sectorial development;
• Methodology of packaging sector value chain’s need assessment for identification of constrains and opportunities and enhancement of inter-firm linkages to unleash sector’s potential.

Deliverable 1.2 – due by the end of January 2020:

• Data base of companies operating in packaging sector, including valid address and contact details of CEOs;
• Data base of Cluster Management Organizations in EU and Associate states with established contacts;
• Summary of the different business models of CMO in Packaging Sector in mentioned states;
• Description of products and services offered by above mentioned CMOs;
• Possibilities of implementation of mentioned CMO products and services in Georgia
• Value proposition for perspective companies for CMO membership         

Deliverable 2 – due by the end of February 2020:

• Written report on inputs and supporting UNDP team of consultants in collecting and analysis of information and data for developing paper inter alia on:
• Formation of CMO in packaging sector (with focus on Kakheti and Imereti regions), including, inter alia:
  • Options linkages to the members and stakeholders and governance principles
  • Overview on the typical business lines for CMOs;
  • Products and Services to be developed in the near term by the CMO;
  • Recommendations to overcome constraints, make use of opportunities with key leverage points where the Cluster Management Organization can intervene for development of sector and enhancement of inter firm cooperation
• Written report on evaluation diagnostic studies and need assessments of packaging sector;
• Written report on CMO member attraction and membership growth strategy;    

Deliverable 3 – due by the end of March 2020:

• Written report on inputs and supporting UNDP team of consultants in collecting and analysis of information and data for developing inter alia Packaging CMO Strategy, with CMOs vision and mission options, potential strategic goals of the CMO for the first 3 year, including strategic objectives and Key Performance Indicators (KPIs)
• Written report on inputs and supporting UNDP team of consultants in collecting and analysis of information and data for developing inter alia Packaging CMO Business Plan, Job descriptions and others including, inter alia:
  • Requirements for the financial model, business plan and input data required for a Business Plan;
  • Financial model in MS Excel;
  • Business Plan of the CMO for the first 3 year;
  • Actions / decisions to be adopted in order to support the CMO's operations.
• Written report on inputs and supporting UNDP team of consultants in collecting and analysis of information and data for developing inter alia CMO's organizational structure options, allocation of responsibilities and functions / delegation of authorities and corporate governance system, with:
  • Description of the qualification requirements for the CMO’s key staff and management;
  • Job descriptions and functions of the Personnel of the CMO;
  • Roles of members within CMO.
• Written report on support to CMO on institution building including in the areas of finances, HR, marketing and communication
• Written report on capacity development of CMO to provide business advisory services
• Written report on support to CMO in supply chain issues (like marketing and technology adoption), in HR development and CMO members’ employees skills development.

Deliverable 4:

Deliverable 4.1 – due by the end of April 2020:

• Written report on identified investment requirements and potentials with evaluation of impact
• Written report on inputs and supporting UNDP team of consultants in collecting and analysis of information and data for developing Paper with criteria for support measure in packaging sector companies for implementing matching grant support schemes, including ToR for grants provision, SOPs and monitoring procedures using focus groups, desk studies of available diagnostics and other studies and resources
• Written report on capacity development to CMO to provide business advisory services
• Written report on support to CMO in supply chain issues (like marketing and technology adoption), in HR development and CMO members’ employee’s skills development
• Written report on contribution to capacity development of packaging CMO to provide business diagnostics and coaching
• Written report on Contribution to capacity development of CMOs on sectoral service provision          

Deliverable 4.2 – due by the end of May 2020:

• Written report on CMO performance related data and information, evaluation of outcomes and impacts
• Written report on CMO strategy in Public Private Dialogue and advocacy, e.g. in recycling
• Written report on support measures for compliance with quality standards and new regulations in the packaging cluster         

Deliverable 5:

Deliverable 5.1 – due by the end of June 2020:

• Written report on inputs and supporting the team of UNDP Consultants for elaborating paper with recommendation on the CMO Strategy implementation improvement           

Deliverable 5.2  - due by the end of July 2020:

• Written report on inputs and supporting the stakeholders inter alia in implementing the recommendations on the CMO Strategy implementation improvement             

Deliverable 6:

Deliverable 6.1 – due by the end of August 2020:

• Written report on inputs and supporting the team of UNDP Consultants inter alia on recommendations on inter-firm cooperation;    

Deliverable 6.2 – due by the end of September 2020:

• Written report on supporting the stakeholders on implementing of inter-firm cooperation;   

Deliverable 7 – due by the end of October 2020:

• Written report on inputs and supporting the team of UNDP Consultants on recommendations on inter-cluster linkages and the internationalization of the packaging cluster              

Deliverable 8 – due by the end of November 2020:

• Written report on inputs and supporting the team of UNDP Consultants on recommendations on the assessment of CMO capacity development measures and identification of new needs for CMO support;  

Deliverable 9 – due by the end of December 2020:           

• Written report on inputs and supporting the team of UNDP Consultants on recommendation on CMO strategy revision

The Consultant will be requested to provide Mission Reports on the tasks accomplished and deliverables elaborated. She/he will also be requested to elaborate inputs to the Project Progress Reports.

Payment modality:

Payments will be processed according to the below mentioned percentage per deliverable. Payments will be subject to satisfactory quality of deliverables:

• 1st Report on the tasks accomplished and deliverable 1.1 (by the end of December 2019) – 10%;
• 2nd Report on the tasks accomplished and deliverable 1.2 (by the end of January 2020) – 10%;
• 3rd Report on the tasks accomplished and deliverable 2 (by the end of February 2020) – 10%;
• 4th Report on the tasks accomplished and deliverable 3 (by the end of March 2020) – 10%;
• 5th Report on the tasks accomplished and deliverable 4.1 (by the end of April 2020) – 10%;
• 6th Report on the tasks accomplished and deliverable 4.2. (by the end of May 2020) – 10%;
• 7th Report on the tasks accomplished and deliverable 5.1. (by the end of June 2020) – 5%;
• 8th Report on the tasks accomplished and deliverable 5.2. (by the end of July 2020) – 5%;
• 9th Report on the tasks accomplished and deliverable 6.1. (by the end of August 2020) – 5%;
• 10th Report on the tasks accomplished and deliverable 6.2. (by the end of September 2020) – 5%;
• 11th Report on the tasks accomplished and deliverable 7 (by the end of October 2020) – 10%;
• 12th Report on the tasks accomplished and deliverable 8 (by the end of November 2020) – 10%;
• 13th Report on the tasks accomplished and deliverable 9 (by the end of December 2020) – 10%

The consultant will report to the Project Manager of the “EU Innovative Action for Private Sector Competitiveness in Georgia” Project in consultation with the UNDP Economic Development Team Leader. The payments will be produced upon the confirmation by UNDP of high-quality performance.

Competencies

Corporate competencies:

• Demonstrates integrity by modeling the UN's values and ethical standards;
• Promotes the vision, mission, and strategic goals of UNDP
• Displays cultural, gender, religion, race, nationality and age sensitivity and adaptability;
• Treats all people fairly without favoritism.

Functional competencies:

Knowledge management and learning:

• Actively works towards continuing personal learning and development in one or more Practice Areas, acts on learning plan and applies newly acquired skills.

Development and operational effectiveness:

• Ability to lead strategic planning, results-based management and reporting;
• Ability to lead formulation, implementation, monitoring and evaluation of development programmes and projects, mobilize resources;
• Strong IT skills, particularly with MS Office;
• Excellent written and oral presentation skills.

Management and leadership:

• Focuses on impact and result for the client and responds positively to feedback;
• Leads teams effectively and shows conflict resolution skills;
• Consistently approaches work with energy and a positive, constructive attitude;
• Demonstrates strong oral and written communication skills;
• Builds strong relationships with clients and external actors;
• Remains calm, in control and good humored even under pressure;
• Demonstrates openness to change and ability to manage complexities

Required Skills and Experience

Education:

• At least Bachelor’s Degree in Economics and/or Business Administration or related field (minimum requirement: Bachelor's degree - 10 points, higher - additional 4 points)

Experience:

• During last 8 years 5-year Hands-on experience in business development, investment management in industrial sector (desirably in packaging sector) (minimum requirement: 5 years - 10 points);
• During last 8 years 5-year experience in providing advisory services to the public and/or private and/or non-government organizations on business/economic development (desirably in packaging sector) (minimum requirement: 5 years - 8 points; more than 5 years - additional 4 points);
• Experience in establishment of new complex organization with multiple stakeholders (desirably in packaging sector) will be an additional asset (4 points). 

Language requirements: 

• Fluency in English and Georgian.

Evaluation:

Individual consultants will be evaluated based on the Cumulative analysis: Individual consultants will be evaluated against combination of technical and financial criteria. Technical evaluation stage encompasses desk review and interview of applications. Experts not meeting any of minimum technical qualification requirements will be automatically excluded from the list of candidates for further technical evaluation. Maximum obtainable score is 100, out of which the total score for technical criteria equals to 70 points (70%) and for financial criteria 30 (30%). Technical criteria composed of desk review (40 points) and interview (30 points). Offerors who pass 70% of maximum obtainable scores of the desk review (i.e. 40 x 70% = 28 points as a result of a desk review of applications will be invited for the interview. Those offerors who pass 70% of maximum obtainable scores for interviews (i.e. 30x 70% = 21 points) will be considered as short-listed offerors and requested to provide financial proposals. 

Financial proposal:

The financial proposal shall specify a total lump sum. Payments are based upon delivery of the services specified in the TOR.  All envisaged travel costs must be included in the financial proposal. In order, to assist the requesting unit in the comparison of financial proposals, the financial proposal will include a breakdown of this lump sum amount.