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BUSINESS WEEK September 14, 2015 #10
September 14, 2015, Issue 10
Partner News Agency ajara business week WWW.ABW.GE
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Ajara to Cooperate with Dalian in Different Directions I would like to say that new phase of relationship is starting between our countries. We are becoming friends that involves cooperation in different directions: education, culture, sports, tourism. Trade relations will be important, as well as cooperation in agriculture. This is the memorandum, which provides a number of specific issues,” – Archil Khabadze said after signing the Memorandum. Several visits of Dalian heads are planned to
Ajara in October. Commissions cooperating in different directions will be created in Dalian and Ajara regions. New projects will be raised based on fruitful and effective cooperation. „Georgia will be one of the first countries in region, not only in Caucasus, but also in Europe, having free trade with China. This will bring great benefits. It will support wine export first. The entrepreneurs will find it easy to export products in
China. The above decision will improve relations between two countries contributing to our country’s development,” – Irakli Gharibashvili said. The Prime Minister of Georgia talked about the importance of decision with journalists. As the Head of Dalian Municipality noted, mutual projects will continue in future as well. “Signing memorandum between two countries is a confirmation of a new, dynamic cooperation,” - he said.
Ajara to Record Influx of 374.020 million USD Investments in 2015 Investments of 374.020 million USD will be made in the Ajara Region in 2015. Ajara Finance and Economy Minister David Baladze noted in the 2015-2020 period the Region will draw 1.342 400 billion USD investments through the planned projects. The Ajara region’s total investments portfolio makes up 1.845 100 billion USD, Baladze noted
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and added the total investments value of the hotels under construction makes up 704.5 million USD. To be precise, currently one of the major projects is being implemented in Ajara. The Metro City project in the new boulevard is an estimated 90 million USD investment. The project is being implemented by Metro Atlas Georgia. The project calls for employing 1500 individuals.
“Besides the Metro City project, two new projects of 50million USD are being implemented in the New Boulevard. LLC Metro Atlas Georgia and LLC AR Meridians will build hotels and apartments with 220 and 200 suites respectively. Finished hotels will be managed by the world brands. Both projects will employ more than 800 local residents”, David Baladze noted. Pg. 7
Batumi Hosts International Art-House Film Festival Georgia’s seaside city of Batumi is being transformed into a film festival celebrating local and foreign cinematography. Filmmakers and guests are invited to enjoy an eight-day celebration at the Batumi International Art-House Film Festival this month. Pg. 6
Ad Black Sea In Batumi Is A New Place For Inspiration And Education Of Creators On September 24-27 in BatumiAssociation of Communication Agencies of Georgia together with All-Ukrainian Advertising Coalition present a new international advertising festival – Ad Black Sea, adblacksea.com. In interview Maxim Lazebnik, producer of the festival and CEO of the AllUkrainian Advertising Coalition, told about the main idea of festival and its’ features, jury team, seminar and cultural entertainment programs, and shared with other festival secrets. Pg. 6
Kenan Ildirim: Georgia should Provide InvestmentFriendlier Environment in Power Sector
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Irma Qamadadze: We Provide Environment that is Tailored and Acceptable to All of Clients
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Levan Kidzinadze New Fruit Processing Enterprise in Batumi Manufactures Ecologically Clean Fruits Jams and Juices Pg. 8
Real Inflation Indicator Surpasses Target Point The annual inflation rate has surpassed the target point. In August the annual inflation indicator made up 5.4% and exceeded the planned target by 0.4%. A major rise in prices was recorded in the sector of alcoholic beverages and tobacco. The inflation rate marked 13.1% in this sector. A 9.3% upturn was registered in the category of furniture, household appliances and housekeeping services. A 9.1% rise was marked in the healthcare field. Food products and nonalcoholic beverages have risen in price by 6.3%. Prices have shrunk in a certain category of products as compared to August 2014. A 0.9% downturn was registered in the segment of clothes and shoes. Transportation expenses have decreased 1.6%. Prices of all other products have slightly increased. Pg. 5
Foreign Investments in Georgian Power Sector Shrink to 9 Million USD The last three years have recorded a plunge in foreign direct investments (FDI) into the Georgian power sector. FDI inflows to the energy sector marked 9 million USD in the second quarter of 2015, the lowest figure for the last 10 quarters. The FDI inflows to the energy sector made up 11 million USD in the first quarter of 2015, 37 million USD – in the fourth quarter of 2014, 51million USD in the third quarter of 2014, 79 million USD in the second quarter of 2014 and 23 million USD in the first quarter of 2014. As to the year of 2013, the FDI influx to the Georgian power sector constituted 52million USD in the first quarter, 71 million USD in the second quarter, 79 million USD in the third quarter. Pg. 7
MAIN EVENTS
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September 14, 2015 #10
ajara business week
“Georgia Is First Country In Region To Begin Free Trade Tourism statistics Negotiations With China” of Ajara NEWS
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ccording to statistics provided by the registered accommodation facilities of Ajara, 2% increase in tourists was recorded in August 2015 compared to the same period last year. According to statistics provided by the Department of Tourism of Ajara, from January to August 2015( 8 months) compared to the same period last year, accommodation facilities recorded an increase of tourists by 3%. The following target countries are among leaders in the number of incoming tourists: Turkey (1%), Azerbaijan (1.6%), Russia (1.1%), Ukraine (1.2%), Armenia (0.1%) , Poland (2.7%), Israel (1.3%), Belarus (2.8%), Kazakhstan (7.1%), Lithuania (3.2%). It should be noted that this year, in comparison with the same period last year, the number of accommodation facilities has been increased significantly. Particularly, in the period of JanuaryAugust 2015, 16 new hotels (686 rooms, 1200 beds) were built in the region. At this stage, a complete list of the registered accommodation facilities and market research of foreign tourists is being prepared. As for the national statistics, according to the analytical department of the Ministry of Internal Affairs, the state border of Georgia was crossed by 852,337 foreign tourists, which is 10% more than the same period last year. Among the tourists visiting the country, the number of those who stayed in the country for more than 24 hours, increased by 2% compared with August last year.
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eorgia will be the first country in the region to launch negotiations with China about free trade, said Georgia’s Prime Minister Irakli Garibashvili after meeting his Chinese counterpart Li Keqiang on September 10. The Georgian official was on a working visit to China attending the World Economic Forum in Dalian last week. Many future economic opportunities between Georgia and China were discussed extensively at the forum. The major topics discussed between Garibashvili and Keqiang were the New Silk Road Project initiated by the Chinese government, Georgia’s role in the route that envisaged connecting of Europe and Asia and future investments of the Asian Infrastructure Investment Bank (AIIB) to Georgia.
Garibashvili stressed Georgia had already been the part of the Silk Road in the past and if the route was reinstated Georgia could again play “a crucial role” in connecting Asia with Europe on a more direct route. “We are definitely ready to become the part of the New Silk Road route. Our aim is to use Georgia’s strategic location as best we can,” said Garibashvili. “We want Georgia to be a place of peace, reconciliation and cooperation and not confrontation. This has been a historical mission of Georgia,” he added. The Georgian official noted the New Silk Road Project would be discussed in detail by officials in Tbilisi as well as at the Tbilisi Silk Road Forum, scheduled for September 15-16, where 200 Chinese guests were invited.
Georgia’s Role in New Silk Road Project
eorgia has proven that we are a reliable transit country. Georgia’s economy is growing, we are building and strengthening the democratic institutions, and providing
for the business and media freedom,” Georgia’s PM stated at the “New Silk Road” Session held within the World Economic Forum in Dalian. The leader of the Georgian Government actively participated in the discussion of New Silk Road concept. Irakli Garibashvili explained that Georgia is strongly supporting the idea of the New Silk Road. In addition, he spoke with the discussion participants about Georgia’s crucial role as a transit hub in the Silk Road concept. “When it comes to the New Silk Road and Georgia’s role as a transit country, it can be interesting in many senses. One aspect I would like to underline is that we have proven that we are reliable transit country for the energy and transport. We have an ambition to transform our country into a
logistics hub in the entire region. We would like to build a new port, the new deep-sea water port with 100 million tons per year. This port will be built in seven phases. There is a strong interest from the Chinese companies, who want to be part of this project. We have launched the negotiations about the infrastructural projects: construction of roads, bridges, etc. We are talking about a several billion dollar investment in Georgia,” the PM noted. According to Irakli Garibashvili’s information, there is a great interest from both, American and Chinese companies in the new deep water port. The Prime Minister believes that Georgia will be the major transit country for the transportation of Chinese products.
ne of the world’s leading independent software manufacturers is ready to be represented in the Georgia to help the country’s businesses operate more effectively. Georgian officials met with officials from the China branch of SAP – a German multinational software corporation that makes enterprise software to allow businesses to operate seamlessly and reach more clients – at the World Economic
Forum in China today. SAP is regarded as the world’s third largest independent software manufacturer. The deal was solidified at the World Economic Forum in China’s main port city Dalian today, after Georgia’s Minister of Economy Dimitri Kumsishvili met with corporation leadership of the China branch. Opening the [SAP Labs China] representation in Georgia will be beneficial for both sides,” Kum-
sishvili said, implying the deal will greatly benefit Georgia’s business environment. SAP has more than 293,500 customers in 190 countries. The company employed 74,400 employees in braches in 130 nations and earns an annual revenue (IFRS) of about €17.56 billion (46 billion GEL). The company is listed under the symbol SAP on global stock exchanges, including the Frankfurt Exchange and the New York Stock Exchange.
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EU funds new water monitoring stations in Adjara Global Software Manufacturing Giant SAP to Open in Region Georgia, Stimulate Business Environment
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eorgia’s western seaside Adjara region is enjoying the benefits of six automated monitoring stations that are helping the region meet European environmental and water standards in a €55,000 (145,000 GEL) project funded by the European Union (EU). The Environmental Protection of International Rivers Basins (EPIRB) project officially launched on Friday, September 4 – the same day the six new monitoring stations began operating. The stations aimed to carry out hydrological monitoring. The pilot project envisaged installing six fully automated hydrological monitoring stations in the Chorokhi-Adjaristskali Basin, two of which are located in the upper Adjaristskali River that leads to Keda and Shuakhevi towns. The facilities will measure water and rain levels, necessary to forecast potential flood risk assessments, noted a press release by the EU. On Friday officials gathered in the coastal city of Batumi to celebrating the opening and handing over of the stations from the EU to the local government. The project was implemented within the EU River Basin Management Plan (RBMP) development process and aimed to assist the Ministry of Environment Protection and Natural Resources and other Georgian environmental agencies to strengthen their capacity for data collection, analysis and processing in the Chorokhi-Adjaristskali Basin district of Georgia. The EPIRB project is an EU-funded project managed by the European Commission and implemented by a consortium led by Austrian consulting firm Human Dynamics. The project focussed on the wider Black Sea region and aimed to support the beneficiary countries of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.
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Georgian-Chinese Locomotive and its Manufacturing Plant to be Built in Georgia
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he Georgian-Chinese venture to manufacture the locomotives with asynchronous engines and their spare parts will be built in Georgia, according to the Memorandum of Cooperation signed in Dalian. From the Georgian side, the Memorandum was signed by the Director of JSC “Vagonmshenebeli,” Badri Tsilosani, whereas, the signatory from the Chinese side was the President of Dalian Locomotive and Carriage Building Plan, Min Xing. Before the signing ceremony, the Prime Minister of Georgia had met with the leadership of Dalian Locomotive and Carriage Building Plant. The Head of Government had expressed his hope that the cooperation will develop in the future. Min Xing took Irakli Garibashvili for a tour around the Carriage Building Plant. The Memorandum of Cooperation is intended to establish a joint company in Georgia, which will manufacture not only the electric locomotives with asynchronous engine, but also the diesel en-
BUSINESS WEEK
The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Director: Levan Beglarishvili Address: Aleksidze Street #12 Editor-in-chief: Zura Kukuladze. Tel: 599 00 82 12 Mobile phone: +995 591 013936 WWW.ABW.GE Email: ajarabusiness@gmail.com
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gine locomotives, subway trains, electric trains, diesel engines, diesel generators, as well as serve and repair the mentioned products, according to the market demand. The joint company will be focused not only on the Georgian market, but also the markets outside Georgia, including the post-soviet states, Iran, Turkey, European market, etc. Dalian Locomotive & Rolling Stock Co., Ltd. CRRC Group is the biggest producer of locomo-
tives in China. The products manufactured by DLoco include: the diesel locomotives, electric locomotives and diesel engines of urban railway and subway trains. The company’s annual turnover exceeded 1.7 billion dollars in the last 5 years. The company had produced 3,000 units of HXD3 AC-AC asynchronous motor locomotives, which is 50% of the Chinese market. The company has vast experience and has established advanced technologies in the production.
The English-language weekly is distributed to over 1000 assets in Ajara, including, major companies, commercial banks, international organizations, state offices, high-class hotels, shopping malls, Batumi airport, Kobuleti, Sarpi. Businessmen and Managers Read ABW.
Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge
INTERVIEW September 14, 2015 #10
ajara business week
Kenan Ildirim: Georgia should Provide InvestmentFriendlier Environment in Power Sector
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The Association of Georgian and Turkish Businessmen has been operating in Georgia since the independence announcement. The association chairman KENAN ILDIRIM has been providing tireless efforts to draw Turkish businessmen to our country since the early 1990s. Mr. Ildirim has achieved significant results in deepening the Georgia-Turkey economic relations. In his interview with the Ajara Business Week (ABW) Kenan Ildirim talks about Georgia’s business environment, its strong and weak sides.
Georgia Ensures Very Favorable Business Milieu - You have been long operating in Georgia. What is your opinion on the Georgian business sector? How favorable business climate is provided in Georgia? - I arrived in Georgia almost in the first days of the independence announcement. I have got Georgian roots and I was interested in this country that was closed for Turkish citizens before. As to business interests, they arose after Eduard Shevardnadze returned to Georgia and I met his advisor Suliko Khabeishvili. This business interests referrred to a hotel construction in Gudauri. All of us remember this period very well. Internal civil confrontation, tensions in foreign relations, wars. All these factors were hindering our advancement. However, I was foreseeing Georgia’s real potential and the Turkish business development perspectives here. Therefore, in 1993 we founded the association of Georgian and Turkish Businessmen with only 7 members, including 4 Turkish businessmen. Currently, our association unites about 80 members from various sectors, including textile, transportation and other industries. Our members have recently built a modern residential complex with 400 apartments, several business centers and several major and famous assets. As to economic relations, Turkey is Georgia’s major trade partner with 1.5 billion USD imports to Georgia in 2015. At the same time, Georgia’s exports to Turkey are unimportant. I will rely on this indicator to assess the Georgian economy. Small and medium business sectors should be developed to increase exports and production, in general. Our countries have set up free trade regime with each other and the Georgian party should enjoy these preferences. I believe heavy industry development will be difficult in Georgia, because the country lacks for raw materials, as the exports revenues are almost neutralized by imports of raw materials. Georgia has huge potential for the tourism
sector development, but not the sea resort direction. Ski resorts, recreation tourism, culture and tradition tourism, including hunting tourism have got excellent perspectives in Georgia. But there is a specific situation here too. Without the production development Georgia will have nothing to sell. New hotels were built in Batumi and this is wonderful, but when tourists visit Turkey, they leave 1000 USD on average, while in Georgia only bedroom fees remain in Georgia. All other products are imported from abroad. This signifies foreign currency leaves Georgia. Positive changes are reported in the transportation and logistics field, but higher paces are required. Georgia has got much potential, including in terms of Baku-Tbilisi-Karsi railroad project, Baku-Tbilisi-Ceyhan oil pipeline and the Shah-Deniz gas pipeline. All these projects bring not only economic welfare, but these projects are also of global importance that ensure Georgia’s political security. As to the investments, the recent crisis in the Russian Federation has affected the Georgian economy in combination with the Azerbaijani factor, where the national currency dropped by 35%. Despite these obstacles, Georgia maintains serious potential, first of all, in the power sector. Georgia should provide investment-friendlier environment in the power sector, because these investments are oriented on employment. On the other hand, the investor buys its own product. This signifies the country acquires guaranteed taxes and employment. - You have interestingly outlined places and fields where problems are recorded. This signifies these directions and fields are free and unused. Does the Turkish party plan to make investments in these directions? - The agriculture field is a very serous direction for the Turkish business, but there are problems with land ownership. There are no
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Georgia has got much potential, including in terms of BakuTbilisi-Karsi railroad project, Baku-Tbilisi-Ceyhan oil pipeline and the Shah-Deniz gas pipeline
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As to economic relations, Turkey is Georgia’s major trade partner with 1.5 billion USD imports to Georgia in 2015. At the same time, Georgia’s exports to Turkey are unimportant
large land plots in Georgia. A major part of them was sold at low prices earlier. As to the remaining land, the state does not sell them. Naturally, this factor seriously hinders the investment-making process. We are waiting that the Georgian government will alter its policy. We are interesting in ski resort tourism that will bring serious revenues and profits to the country. Naturally, the power sector again, this is a very serious field and the interest will be huge in case of respective support. - You have mentioned support. What do you mean in this support? What problems and shortcomings should be overcome? - First of all, Georgia provides very favorable business environment. Georgia is a safe country in terms of doing business. After the change in power, the state sector has diametrically altered its attitude to the business sector. The communication with the state sector was simplified and it became more efficient. But there are certain details that create problems to the ongoing activities and their resolution needs more effectiveness. These problems may seem unimportant, but they genuinely complicate our efforts. For example, we can refer to the problems with constructing HPPs. We know the construction company provides the employed workforce with food products. The company spends daily 25 GEL on a worker on average. This is a ordinary spending for business companies, but the government taxes these expenses in the form of revenues. This may
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be perceived an insignificant problem, but when you employ 25 000 workers, the company has to take serious expenditures. The national currency volatility has also brought serious problems, especially in terms of state procurement. For instance, we have won one of the tenders, but the exchange rate fluctuation has brought serious losses to us. In general, currency instability makes business plans unforeseeable. Therefore, we should make immediate reaction to tackle the problems as soon as possible.
The national currency volatility has also brought serious problems, especially in terms of state procurement
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INTERVIEW ajara business week
September 14, 2015 #10
Record Sales of Metro City Project
Irma Qamadadze: We Provide Environment that is Tailored and Acceptable to All of Clients genuinely record figure. What factors have preconditioned such a success? - Several financial proposals and the best contractual terms have boosted this process. The document provides detailed description of rights and duties of customers and this factor rules out any misunderstanding in the deal. We provide maximally open and transparent relations with our clients. Our schedules are optimal and real and the project is a unique and major one. - How competitive prices do you offer to your clients? Have you introduced an internal installment payment scheme? If so, which commercial bank have you chosen for cooperation and what are specific offers in this respect? - We offer an internal installment payment scheme to our clients. In case of a 10% deposit, the maturity period is 36 months, a 25% deposit ensures a 60 month maturity period. - What are future plans of Metro Holding, a founder of Metro Atlas Georgia? - We plan to implement other projects that will be introduced to the society in the near future.
IRMA QAMADADZE Metro Atlas Georgia Sales Department Head
- Metro Atlas Georgia appeared on the market in 2012. This is a small while for the company. Nevertheless, the company is a success. Our society has got thorough information on your project of Metro City. What factors have provided respect and confidence in your company? - Transparency of our performance has brought confidence and respect to our company. The main objective is to provide high-level construction works, high-quality services thanks to skilful and experienced employees. Each of our clients are confident that all their requirements and needs are taken into account completely. We provide the environment that is tailored and acceptable to all categories of our clients. The construction works started in February 2015 and the major part of these works has been almost finished. We build
quickly and valuably in line with all modern and international standards. Our company applies high-quality and ecologically clean construction materials. - What are the Metro City advantages? Would you provide more details on the project implementation? - Metro City is a special project. Customers are able to buy apartments for recreation purposes nearby the coastline. We offer a full infrastructure on a footstep way from the beach, a conference hall for 1500 persons, an outdoor swimming pool for the complex clients, closed coastline with golden sands, casino and shopping mall. Metro city is a small city in the city. - We know 50% of the apartments, that is, over 300 apartments have been already sold. This is a
- How would you appraise the current situation in Georgia’s housing and hotel sectors? How intense competition is recorded in these directions? - The competition is quite intense. You know many foreign companies launch business activities in Georgia. Our company appeared in Georgia only 3 years ago, but I can openly say we have provided sharp competition on the market to other companies. - What is your opinion on Georgia’s business environment? - Georgia provides very favorable environment. The current stable situation in the country fosters the economic development and an influx of investments. - What is your opinion on Georgia’s tourism sector development? What potential and preconditions exist in Georgia to further boost this field? - The tourism business a priority direction in our region. The region’s tourism potential should be more promoted. The infrastructure should be arranged and the ski resort tourism should be also boosted.
September 14, 2015 #10
ECONOMY ajara business week
Real Inflation Indicator Surpasses Target Point
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he annual inflation rate has surpassed the target point. In August the annual inflation indicator made up 5.4% and exceeded the planned target by 0.4%. A major rise in prices was recorded in the sector of alcoholic beverages and tobacco. The inflation rate marked 13.1% in this sector. A 9.3% upturn was registered in the category of furniture, household appliances and housekeeping services. A 9.1% rise was marked in the healthcare field. Food products and nonalcoholic beverages have risen in price by 6.3%. Prices have shrunk in a certain category of products as compared to August 2014. A 0.9% downturn was registered in the segment of clothes and shoes. Transportation expenses have decreased 1.6%. Prices of all other products have slightly increased. A rise in prices of food products and alcoholic beverages has essentially influenced the general inflation indicator. The sector’s ratio marked 1.86% in the reported 5.4% general inflation rate. The official inflation indicator is based on assessment of 295 products and services. The price growth pace in August 2015 was as follows: -Prices increased on 237 products and services; -Prices have not changed on 13 items; -Prices shrank on 43 products and services; -Prices increased on 67 items of 80 food products, including an over 10% growth was registered on 30 items and an 15% upturn was recorded on 20 items; -Prices decreased on 45 products and services, including less than 5% downturn was recorded on 31items, 5-10% contraction was registered on 9 items and 5 items cheapened by over 10%’ -Over 5% growth in prices was recorded on 148 items and services; -Over 10% rise in prices was registered on 85 products and services. -Over 20% rise in prices was marked on 24 products;
CONTROL OF PRICES – HOW EFFICIENTLY THE NATIONAL BANK ACTS Every time when criticism is staged on the National Bank of Georgia (NBG) regarding the GEL exchange rate, it is stressed the NBG’s objective is to control the inflation process and to this end it applies various instruments. Therefore, it is interesting how efficiently the NBG controls the inflation process. Low-level inflation was reported in Georgia since December 2011. Sometimes, the statistics has recorded even deflation process. In this situation the NBG was smoothing the monetary policy. The Georgian central bank used to carry out the smoothest monetary policy in the history of independent Georgia. The NBG continues the same policy till today. -Refinancing rate is one of the lowest one; -The volume of certificate deposits is also very low; -The volume of refinancing loans sees historical maximum; - Indebtedness of commercial banks to the NBG sees the historical maximum and the figure reaches 800 million GEL, while the situation was always opposite. Similar monetary policy is absolutely appropriate amid the low inflation indicator, but amid the GEL rate volatility similar approaches will additionally affect the national currency. The NBG seems to have shown less attention to the GEL devaluation process and deepened the currency crisis through referring to only the inflation control mechanism. However, the GEL depreciation has affected the inflation process too and in August the real inflation indicators surpassed the target point. We remember the NBG statements that the inflation rate would equalize to the target indicator by the end of 2015, but this prognosis has failed 4 months earlier before 2016. Moreover, currently there are no grounds to expect the inflation rate return to the target 5% point. There are several
factors for the worse prognosis: -The GEL depreciation has raised tariffs on energy carriers. As a result, prices will increase on many other products and services; - The GEL exchange rate has dropped 35%. The excessive imports ratio in the economy will raise prices on imported products; Thus, as a result of the smooth monetary policy the NBG has failed to curb the inflation process within the target level and struck a blow to the GEL exchange rate. The missed target inflation indicator and the GEL depreciation have brought the following outcomes: -80% of business companies have to pay 35% higher interest rates on bank loans. The dollarization coefficient in corporate business sector exceeds 80%; -A half part of physical bodies have to pay 35% higher interest rates for bank loans -Energy carriers have risen in price; -Imports tariffs have increased; -Companies have increased prices on their products and services as a result of increased payments on bank loans; -Aggravated burden of bank loans have led borrowers to cut demand for other products and services and this additionally hits the economy. In this situation it is ridiculous to talk about positive effects of the GEL depreciation. Negative outcomes have fully neutralized all available positive effects that the GEL depreciation could bring. Domestic production and exports are developed when the output level is high and the dollarization coefficient is low. Georgia satisfies neither of these criteria. Consequently, the GEL devaluation process has brought only negative results to the economy. Thus, all arguments have been neutralized. The NBG’s smooth monetary policy was justified by only the low inflation rate before August. The issue whether the inflation rate is low or not is a separate aspect and it generates many questions.
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INVESTING ajara business week
September 14, 2015 #10
Ad Black Sea In Batumi Is A New Place For Inspiration And Education Of Creators Maxim Lazebnik On September 24-27 in BatumiAssociation of Communication Agencies of Georgia together with All-Ukrainian Advertising Coalition present a new international advertising festival – Ad Black Sea, adblacksea.com. In interview Maxim Lazebnik, producer of the festival and CEO of the All-Ukrainian Advertising Coalition, told about the main idea of festival and its’ features, jury team, seminar and cultural entertainment programs, and shared with other festival secrets.
About the idea of Ad Black Sea festival
things make an ideal place for Batumi creative event. It is the best place for creative people to recharge their minds.
This is a new international advertising festival, which aims to inspire all its participants – advertisers and creative people – with bold, unusual ideas and nontrivial solutions. This is a real competition, but not only. It is a platform of social interaction with colleagues for sharing ideas and planning ahead, the opportunity to meet people not only online, to discuss all the charm and challenges of advertising profession. Batumi is a new meeting point for creative world. The festival brings together creators and other representatives of advertising agencies from the Black Sea countries – Georgia, Ukraine, Russia, Turkey, Romania, Bulgaria and other “friendly” countries – the Baltic states, Kazakhstan, Moldova, Armenia, Azerbaijan, the other countries of Europe and Asia. The motto of festival is «It’s all about inspiration! Welcome to recharge». We should remember about important role of inspiration in advertising and communications industry. Ad Black Sea will becomethe main place for inspiration and new knowledge for creators. Especially it can be proved by festival location – Batumi. Ancient history and modern architecture, the beautiful Black Sea, amazing sunsets and sunrises, Georgian hospitality and excellent Georgian cuisine – all those
About festival jury It is well known that the essence of the advertising business is in ideas. Advertising is a business of ideas. We want on Ad Black Sea to talk about ideas. Of course, everything else is important but on the second plan —mechanics, customers, results, etc. We want to see on this festival an assessment of the ideas – how idea of project is fresh and new. To be honest, it even doesn’t matter what the budget was, how many beds were sold or how much blood was donated. Leave this question for other festivals, jury members will evaluate creativity. The festival that aims to bring together creators and other representatives of advertising agencies from the Black Sea countries be added by jury members from Europe and Latin America. International judges with great experience and numerous awards will evaluate entries in threecategories: Best Video Content & Other branded content; Best Design, Print & Poster; Best Idea. The Jury Chairmen of Ad Black Sea areoutstanding contributors in advertising industry – Michael Conrad, President of Berlin School of Creative Leadership (Germany), FaridChehab, Honorary Chairman and Advisor to the Board of Leo Bur-
Batumi hosts International ArtHouse Film Festival
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eorgia’s seaside city of Batumi is being transformed into a film festival celebrating local and foreign cinematography. Filmmakers and guests are invited to enjoy an eight-day celebration at the Batumi International Art-House Film Festival this month. From September 13-20 renowned filmmakers will gather to exchange ideas, practices and experiences by introducing and presenting not only the work they have done but also to discuss future plans for the industry. The festival was first established in 2006 with a goal to popularise local cinema, develop a cultural relationship and exchange experience between Georgian and foreign cinematographers. From next week master classes will be open to all interested guests, enriching them with professional knowledge and practice of experienced filmmakers in the field.
The festival will include an awards ceremony, where an international jury will be divided into groups to assess a range of international films across three categories: • Feature Film; • Documentary Film; and • Short Film A winner will be selected from each category, while additional prizes will be awarded, including the Lifetime Achievement award for a Georgian cinematographer and Lifetime Achievement award for a Foreign cinematographer. Guests are also encouraged to attend the noncompetition section of Georgian Panorama where five Georgian films will be screened. At the festival guests will have an opportunity to meet some the most highly regarded film industry experts including Georgian actor Merab Ninidze, German actress Nastassya Aglaia Kinski, Georgian film director Lana Gogoberidze, GeorgianFrench film maker Otar Iosseliani and others.
nett MENA (Lebanon), Joao Daniel Tikhomiroff, Executive Chairman and Founder of Mixer (Brazil). Names of all jury members can be found on festival website adblacksea.com.
Aboutthe seminarsprogram The leading international experts of advertising and communication market from 10 countries will share their experiences and inspire creators from the whole Black Sea region with new creative ideas. We are a preparing very intensive program, which will cover various areas of advertising – creative leadership, creative storytelling, branding paradigm, branding in economy of impressions, from national pride to national brand, from storytelling to storysharing, evolution of the brand communication, importance of breaking rules, team accomplishment, impact of technology on creativity, polar marketing and etc. The leading experts – creators and top managers of communication agencies – will discuss the major trends and new things that will wait for industry in future. Special guests of the program are the Jury Chairmen of Ad Black Sea. Also the experience and ideas within the seminar program Ad Black Sea will be shared by:RavidKuperberg, Partner and Trainer of Mindscapes (Israel), Leonid Feigin, Co-owner and Creative Director of Direct De-
sign Visual Branding agency (Russia), Indrek Viiderfeld, Creative Director of Tabasco (Estonia), Erik Heisholt, Executive Creative Director and Founder of Heisholt Inc. (Norway), Marko Edfelt, CEO and Partner of Satumaa Family Business (Finland), EvgenyPrimachenko,Copywriter of Wieden + Kennedy (Netherlands), LevanLepsveridze, Creative Director and Co-Founder of Leavingstone (Georgia) and etc.
About cultural entertainment event and evening program Ad Black Sea is not only international advertising festival, but also a cultural celebration in Batumi. Participants of the first international advertising festival of Ad Black Sea will wait for an unforgettable, rich cultural and evening entertainmentprogram with many activities. Each day, participants will visit the most interesting and inspiring sights and places in Batumi. On evenings Ad Black Sea will surprise, inspire and charge its participants with a bright Opening Gala, a performance of Georgian jazz diva Nino Katamadze, GEORGIAN PARTY and the Awards Ceremony of the festival celebrating the most creative ideas. Welcome to recharge and see you in Batumi!
Radisson Blu Hotel, Batumi snatches another Tourism “Oscar”
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adisson Blu Hotel, Batumi is named “Georgia’s Leading Hotel” by the prestigious international World Tourism Awards. In the environment of rising competition, this news carries special importance for the hotel, as it becomes the winner for the 3rd year in the row. “Considering that tourism is one of the fastest growing industries in Georgia, the local market is becoming increasingly competitive. It is with great pride that we receive this award granted by World Travel Awards, since it underscores our team’s professionalism and quality experience delivered to our guests,” says Pierre E. Fares, Hotel Manager of Radisson Blu Batumi. Radisson Blu Hotel, Batumi was nominated among the famous and high-class hotels as Le Bristol and Hotel Ritz, France or even Hotel Adlon Kempinski, Germany. The Ceremony was held on September 6, in “Porto Village Resort” Sardinia, Italy.
World Travel Awards was established in 1933 to acknowledge, reward and celebrate excellence across all sectors of the tourism industry. Today, the World Travel Awards brand is recognised globally as the ultimate hallmark of quality. It is the most prestigious awards programme, rewarding leaders in the tourism, airline, hotel and hospitality sectors around the world. The Wall Street Journal is among the many media that have heralded WTA as “The Oscar’s of the travel industry”. The Radisson Blu Hotel, Batumi features a beautiful glass exterior and a sleek contemporary design with customer- oriented service. The diversity of 168 rooms of different categories, gives the guests opportunity to enjoy the breath-taking views of the Black Sea, mountains or the city. Savour a delicious meal in one of the hotel’s spectacular venues including the 19th-floor bar with views of Batumi. The hotel offers premier services such as exclusive Anne Semonin Spa & Wellness Centre and indoor and outdoor swimming pools.
INVESTING September 14, 2015 #10
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ajara business week
Asian Infrastructure Investment Bank will Start Operating in Georgia
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nother subject raised at the Forum was the Asian Infrastructure Investment Bank (AIIB) – at the September 11 meeting the AIIB president Jin Liqun stated that Georgia will be among the first countries that the newly established AIIB will start making operations. Jin Liqun said he had visited Georgia twice. According to him, the country has made a significant progress in the past period. “The Asian Infrastructure Investment Bank is interested in Georgia’s transport, logistics and energy sectors,” he said. Irakli Garibashvili in his turn stressed Georgia’s strategic geographic location, its amicable business environment, and the Free Trade Agreement with Europe.
It was noted at the meeting that Georgia has many attractive aspects to offer to China economically. These include but are not limited to the logistics, renewable energy opportunities, entrepreneurship, tourism and healthcare. Georgia represents one of the founder countries of the Asian Infrastructure and Investment Bank, having signed the agreement in advance on June 29, 2015, in Beijing. Georgia is the 45th country that joined the Bank and the first country to have made the Bank’s ratification in advance. It is expected for the AIIB to start operating by the end of 2015. Obtaining membership of the Asian Investment and Infrastructure Bank will help Georgia in raising finances and implementing its infrastructure projects, such as the new port that the PM stressed at the Dalian Forum.
Foreign Investments in Georgian Power Sector Shrink to 9 million USD Second Quarter Records Influx of 89 million USD Private Direct Investments to Ajara
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he last three years have recorded a plunge in foreign direct investments (FDI) into the Georgian power sector. FDI inflows to the energy sector marked 9 million USD in the second quarter of 2015, the lowest figure for the last 10 quarters. The FDI inflows to the energy sector made up 11 million USD in the first quarter of 2015, 37 million USD – in the fourth quarter of 2014, 51million USD in the third quarter of 2014, 79 million USD in the second quarter of 2014 and 23 million USD in the first quarter of 2014. As to the year of 2013, the FDI influx to the Georgian power sector constituted 52million USD in the first quarter, 71 million USD in the second quarter, 79 million USD in the third quar-
ter and 48 million USD in the fourth quarter. The Georgian power sector ranks seventh in the FDI portfolio in the second quarter of 2015. The sectors of hotels, restaurants, real estate, housing, processing industry, as well as financial sector, transportation and communications fields are ahead of the power sector. All these directions recorded a growing tendency in terms of FDI inflow in the second quarter of 2015. The ratio of three major sectors made up 78% in the reporting period. A bulk of FDI inflows was directed to the transportation and communications sector and the figure made up 207 million USD, a 58% ratio in total FDI portfolio. The financial sector is second with 41million USD and the processing industry is third with 30 million USD. According to a preliminary report, total FDI inflows in the reporting period made up 355million USD, up 81% compared to the official report for the second quarter of 2014. According to GeoStat, the national statistics office of Georgia, the diagram N2 mirrors a percentage structure of FDI donor countries. Azerbaijan ranks first with a 45% ratio, the Netherlands is second with 19% and Turkey is third with 12%.
Japanese Companies Will Build Waste Recycling Plants for Georgia
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wo leading Japanese environmental companies are pledging to help Georgia address its rubbish and recycling problem. Japanese firms Carbon Free Consulting and Global System Co Ltd confirmed they planned to launch new project in Georgia concerning waste management, initially in capital Tbilisi and in nearby Rustavi. In the first stage of the project, waste recycling factories will be constructed in the two cities. Representatives from the two Japanese companies were part of a Japanese delegation who are currently in Georgia to meet local officials and
explore ways to develop the projects. Today the delegation met with Georgia’s Minister of Environment Protection Gigla Agulashvili and other agency officials. While here the Japanese sides have been conducting a survey about the waste management situation in Georgia, and the results will be finalised by April 2016, the Ministry stated after the meeting. In particular the Japanese side was interested in Georgia’s legal procedures regarding waste management and the current strategy and planned reforms of the Ministry of Environment Protection.
BP – the Biggest Investor in Georgia in 2Q 2015
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ccording to preliminary data, foreign direct investment increased by 81% in the second quarter of 2015, compared to the same period of the previous year and amounted to $ 355 million. Which companies invested the biggest investment in Georgia in April-June? Data provided by the statistics agency shows that among the top five biggest investors are BP, Black Sea Terminal, Geocell, CBD Development, IDS Borjomi, however, the amount of implemented investments is not specified. British BP is one of the largest energy companies in the world. In Georgia, it has been working since 1996. Its core business is safe transportation and delivery of energy. The company oper-
ates the three major oil and gas pipelines passing through Georgia. Purpose of Kulevi Black Sea Terminal owned by “SOCAR” is designated for transhipment and storage of oil and oil products to the West. “Geocell” is a member of the Swedish TeliaSonera Group. In the second quarter the largest FDI investor countries are: Azerbaijan ($160 million) , the Netherlands ($ 68 million), Turkey ($ 41 million), followed by the United Kingdom, Luxembourg, Cyprus, France. China, Kazakhstan. The distribution of FDI in sectors is as follows: Transport and communications -207 million, the financial sector - 41 million , manufacturing- 30 million, the construction- 25 million, real estate - 20 million , energy- 9 million , agriculture, fishing- 7 million , mining - one million.
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n influx of private direct investments (FDI) to the Ajara Region has increased by 47%. Private direct investments of 89 million USD were made in Ajara in the second quarter of 2015, including 73.7 million USD foreign direct investments (FDI) and 15.3 million USD domestic private direct investments, Ajara Finance and Economy Minister David Baladze noted. “The second quarter of 2015 recorded a 47% surge in private direct investments to the Ajara Region compared to the same period of 2014. The upturn marked 17% compared to the first quarter of 2014. In the second quarter of 2015 the total invest-
ments in Ajara were distributed to the municipalities as follows: Batumi – 65%, Shuakhevi – 12%, Khulo -10%, Khelvachauri – 6%, Kobuleti – 5% and Keda - 2%. The investments ratios due to economic sectors are as follows: tourism – 43%, power sector – 29%, construction business – 20% and other sectors – 8%. “An influx of private foreign direct investments to the Ajara region made up 73.7 million USD. A major part of the FDI was made in the tourism sector (48%), power sector (36%) and housing sector (9%)”, David Baladze noted. According to the second quarter report, Georgia’s major FDI donor countries are: Turkey (42%), Norway and India (28%).
Private Direct Investments in Ajara Rose by 44% in January to June
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n January to June the private direct investments in the Ajara Region rose by 44% compared to the same period of 2014. The Ajara Finance and Economy Ministry reports, private direct investments of 165.3 million USD were made in Ajara, including private foreign direct investments of 134.4 million USD and 30.9 million USD domestic private direct investments. In the first half of 2015 investments were distributed to the Ajara municipalities with the following portions: Batumi – 61%, Shuakhevi – 13%,
Khulo – 12%, Khelvachauri – 9%, Kobuelti – 4%, Keda – 1%. As to the economic sector, private direct investments were distributed to the following sectors: tourism (41%), power sector (34%) and housing (19%) and other fields (6%). Private foreign direct investments in the Ajara Region marked 134.4 million USD, including the tourism sector’s ratio made up 46%, the power sector -42% and housing sector – 8%. In 1H15 Turkey emerged as a major investor with a 44% ratio. Norway and India share the second place with 30% ratio.
Ajara to Record Influx of 374.020 million USD Investments in 2015
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nvestments of 374.020 million USD will be made in the Ajara Region in 2015. Ajara Finance and Economy Minister David Baladze noted in the 2015-2020 period the Region will draw 1.342 400 billion USD investments through the planned projects. The Ajara region’s total investments portfolio makes up 1.845 100 billion USD, Baladze noted and added the total investments value of the hotels under construction makes up 704.5 million USD. To be precise, currently one of the major projects is being implemented in Ajara. The Metro City project in the new boulevard is an estimated 90 million USD investment. The project is being implemented by Metro Atlas Georgia. The project calls for employing 1500 individuals. “Besides the Metro City project, two new projects of 50million USD are being implemented in the New Boulevard. LLC Metro Atlas Georgia and LLC AR Meridians will build hotels and apartments with 220 and 200 suites respectively. Finished hotels will be managed by the world brands. Both projects will employ more than 800
local residents”, David Baladze noted. The construction of a new 40 million USD hotel of Orbi Beach Tower has recently started in Batumi. Moreover, Alliance Company will implement 30 million USD project in the Region and construct a 100-suite hotel, the Minister noted. “In the near future a new investment project will be inaugurated. The brand of Marriot will enter Batumi. At the same time, in the Hero Alley three new investment projects were inaugurated: LLC Dar Building will carry out a 22 million USD project, LLC House in Alley is implementing a 9 million USD project”, David Baladze noted. Moreover, Mega Palace company is developing a 6 million USD project. As reported, in the second quarter of 2015 private direct investments in Ajara rose by 47% year on year and the figure marked 89 million USD. The Ajara Finance and Economy Ministry reports many major projects have been implemented since 2012. The construction of 16 big hotels was inaugurated in the Region with total investments value of 566 million USD.
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INTERVIEW ajara business week
September 14, 2015 #10
New Fruit Processing Enterprise in Batumi Manufactures Ecologically Clean Fruits Jams and Juices A fruits reception-processing enterprise has launched operation in Batumi, the Ajara Region. The project’s investment value marked about 5 million GEL. LLC Euro Capital Invest has inaugurated a fruits reception-processing enterprise in Batumi. The company has invested about 5 million USD in the project implementation. Currently LLC Euro Capital Invest has no competitor in the Ajara Region. The company plans to introduce many interesting and vital innovations in the near future. LEVAN KIDZINADZE, one of the managers of the enterprise, widely overviews the details related to the new enterprise. - Mr. Levan, when was the enterprise put into exploitation? - We have imported fruit processing modern machineries from Germany. The equipment was partly put into exploitation in Batumi in August 2015 (Lermontov Street 110). The enterprise buys about 7 tons of peach, apple, fig, plum, cornel, quince, feijoa, lemon, mandarin, orange, kiwi and other nonstandard fruits from local residents. The company pays in cash. The raw material is processed and the company manufactures about 15 000 jars of ecologically clean jams and juices during one shift. We manufacture competitive products for the domestic and global markets. - In the food industry the quality of vital importance. How ecologically clean products do you manufacture? - It should be noted we abstain from adding any supplements, color additives or concentrates to our products. We apply natural apple instead of pectin. We pack the manufactured product at a high temperature and then cover them. This signifies the product is pasteurized and is close to the sterilized condition. The finished product can be preserved for several years. It is so clean and natural that our products are eatable to babies. - What volume of raw materials can the enterprise accept and what kind of products do you manufacture? - Our enterprise processes about 7.5 tons of fruits during one shift (8 hours) and packs in 50-1000 gram jars. We have already received orders from Russia, Ukraine, Belarus, Kazakhstan. In the near future we will start exports of our products. - Will you sell your products in the domestic retail chain? If so, which networks will trade in your products? - In Georgia we supply our products to only Willmart (LLC Tarieli) and Fourchette. We consider these networks to be perfect and valuable ones and they have offered acceptable cooperation terms. We do not supply our products to other chains, because they offer unacceptable terms. They set barriers and you cannot penetrate the network. Even if you manage to get established in the network, it is impossible to raise the cost of the product. Therefore, similar forms of cooperation are useless and impossible. Regretfully, no antitrust office operates in the country to provide adequate reaction against the illegal monopolies. Therefore, Georgian enterprises are facing seri-
ous hedges on the market. - How many citizens have you employed? Do you have expansion plans? - Currently we have concluded labor agreements with 72 persons of which 43 ones work on permanent basis and 29 ones remain in reserve. We are implementing construction works to launch another shop, after which the enterprise will move to full-scale operation and the number of employees will increase to 115 persons. - What volume of raw materials can the enterprise accept? - I have noted above during one shift we are able to purchase and process about 7.5 tons of fruits, including nonstandard fruits and we pay in cash immediately. At the same time, we buy fig and bilberry in a huge volume at market prices and make payments on the spot. Thus, local residents are able to receive incomes thanks to our business, save the time and sell their products without staying at fairs. As a result, local residents will improve their financial condition. - What products do you manufacture? - Assortment depends on real harvest. At this stage, we have produced 16 varieties of products, including several new varieties that had been never manufactured before. Therefore, we will register the patent soon. By 2016 we will have 37 varieties of ecologically clean natural bio products with a full complex of fruits fraction, aroma and taste. Our products are competitive for any market worldwide. - What would you suggest that part of our citizens who cannot reach the Willmart network to buy your products? - This issue should be resolved by the Government and the antitrust services and they should care for extirpating illegal monopolies. We face no difficulties with sales of our products. We provide full-scale cooperation with Willmart, because this network shows honest and healthy attitude to partners and they do not encroach on partners’ rights. Other trading networks do not enable to conclude equal agreements. Naturally, we cannot cooperate with similar networks. Hence, our customers are also restricted to have real option and buy our ecologically clean products at affordable tariffs… In the future we plan to unveil brand stores in Batumi, Tbilisi, Kutaisi and the situation will be improved in this way. -The agriculture sector development is a strate-
gic direction for the Government. Today farmers frequently express their discontent with low selling tariffs. At what prices do you buy fruits from local residents? -We prioritize the state programs, because the strong economy is one of the ways for restoring the territorial integrity… And the state is strong, when it promotes the entrepreneurship and employment. In this respect I would like to express my deep gratitude to Batumi city Hall, the Ajara chamber of commerce and industry, the Agriculture Ministry and other instances that tackle all relevant problems immediately and remove all bureaucratic barriers. The results are impressive and our enterprise enables farmers to sell their crops by favorable terms. Under the state programs, we do our best that local residents fully sell the crops. We buy unsorted fruits at the price of market resellers and we pay cash on the spot. As a result, we contribute to partly tackling problems with sales of harvest. I would like to use this opportunity and ask our citizens to contact us in advance at +995422247189 mobile phone number to agree the fruits delivery time and volume to prevent transportation jams. - How reliable is a glass jar to preserve the product characteristics for a long period? -Glass is the cleanest container that after a special radiation maintains sterility, it does not require antacid supplements and preserves the product reliably. Moreover, a glass jar is fine, transparent and the most required container. - How difficult and peculiar is the food products manufacturing? What difficulties do you face in the working process? - Naturally, the food production is a complicated process… It requires ideal cleanness, standards, strict protection of sanitary and safety norms, appropriate technical basis, permanent supervision over hygienic condition of the staff, exploration of fruits ecological cleanness, maintaining nutrition values in the production process…It is not accidental the enterprise is equipped with a modern laboratory. In the production process our chief technologist Mrs. Madona Zoidze, the shift’s technologist-assistant managers Eka Arveladze and Nino Surmanidze make tests every 15 minutes to control due parameters. Several patterns of every manufactured consignment is stored in a special incubator and for 18 days they supervise these patterns at 37% degree. Moreover, the mar-
keting director Mrs. Keti Kakhaberidze examines the color, aroma, quality, taste, appearance and other parameters of our products several times a day. After all these procedures we deliver our products to the trade networks and abroad. We do not belong to the category of businessmen who think of only earning money… We do our best to make fortune for the whole country and our people. We are interested that our employees be content and delighted, because the production cycle is related to all workers and failure of any chain will destabilize the production process. We pay much attention to the social condition of our employees. We have already chosen an insurance company that will provide 100% insurance services to all the staff. If necessary any employee will be able to choose any desirable hospitals for treatments… - Does the government promote the business sector and how would you appraise the current business environment in Georgia? - Our government is led by very good Prime Minister Irakli Gharibashvili. Nevertheless, the economic team fails to provide appropriate support to the business sector, create new job places, boost the solvency of our population, and promote economic recovery. Television PR campaigns cannot recover the economy. Regretfully, the government suffers from pressure from some big countries that interfere in our internal affairs, the IMF and the international bank ban issuing loans to the enterprises that do not have profitable balance for the last 11 months. This signifies an international program for bankrupting the country openly runs and in this situation I have no idea how the country can create new job places and how the country will employ our citizens. It is also unclear how the economy may be recovered, when commercial banks remain closed, enterprises cannot receive consumer, commercial or mortgage loans and the Georgian business relies on pawnshops. Naturally, similar approaches shake the confidence and respect to the government and the public discontent grows. Indifference and illegal monopolies reign. I do not see the entrepreneurship is promoted and I hope the new Economy Minister will work on the issue, losing agreements with trade networks will be revised, corresponding normative acts will be developed, enterprisers will be allowed to genuinely do business and enter the Georgian networks without obstacles. - But a part of our population backs that foreign forces administer our country, does not it? -That part of our population, who has sold souls for foreign grants, taken money and served the interest of weaponry sellers that make focus on destroying the undeveloped countries and removing competitors, do not represent a majority part of the Georgian nation and our country will not follow their moods. If Europe and America are our friends, they should by our products, give us the same preferences they give to their enterprises, buy our manufactured products, give the same long-term loans, help in creating new job places and restoring the territorial integrity. I know no other meaning of Friendship. The fact is they set sanctions against Russia to ruin Russian Ruble and Euro equally, to depreciate the Euro and recover USD in this way, this is not a friendship. It is a mistake we have not diplomatic and trade relations with Russia. We should keep friendly relations with them, who will contribute to the economic development of Georgia and enable the Georgian people to receive revenues. Foreign ambassadors must not interfere in the performance of the Georgian bank sector and must not issue instructions which enterprisers will receive loans and to which not.
September 14, 2015 #10
REGION ajara business week
Alioni – Magnificent Honey from Ajara
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Europe Shows Growing Demand for Georgian Honey
The Ajara highland honey becomes a sought-after product. Local beekeepers assert the Georgian honey is capable for competing with the European products. The Ajara Business Week (ABW) has taped an interview with the Alioni cooperative chief AVTANDIL TSINTSKILADZE.
- The cooperative of Alioni is located in the Khelvachauri District, Ajara and it unites 6 members. The cooperative strengthened its capability and output after the EU allocated a financial support and the UNDP Ajara rendered assistance in November 2014. Thanks to the ENPARD support, we have bought 100 units of Dadan-blatt polystyrene hives jointly with bee families, as well as a spinning machine for honey extraction, all other necessary beekeeping equipment and bio preparations. As a result, our cooperative has increased the output and today we keep about 300 bee families, Avtandil Tsintskiladze said. - What volume of honey do you produce? - Each hiver leaves 15-30 kilograms of honey. This autumn we will produce about 2 tons. We pack the product and put into the distribution network. Honey is an only agriculture product that is examined for 20 standards. The developed
countries make focus on the primary production and processing of this product. The EU’s 0.5 billion market is very interesting, but before we should satisfy all requirements. The primary production of honey must be carried out through modern technologies and safety norms; beekeepers should upgrade their skills and knowledge; Regretfully, when treating bees, beekeepers often use preparations that must not be applied, as they are outdated or beekeepers have no knowledge to apply them. According to our information, there are about 50 000 beekeepers and 380 000 bee families in Georgia. Valuable treatment enables to yield not 11.8 kilogram, but 15-30 kilograms of honey and we have recorded similar cases. The production will not be competitive without introducing technologies. - Your honey differs from other regions’ honey by taste and quality. Your product is sweeter.
- We make main accent on receiving natural bee families. We apply special standards for winter period. We leave nutrition reserves to bees in hives for winter period. We do not relocate our hives somewhere in winter. In early spring I give them Qandi, a mixture of sugar powder and honey. Beekeepers must know how to care for bees, when to give this or that preparation to prevent their extinction. Contagious infections are very frequent cases. Therefore, we should show much caution. Bee collects honey from about 70 varieties of flowers. Bee mainly prefers the flower with over 40% of sugar content. Mountain and plan honey differ in taste and color too. - How much does your honey cost? - The price of one kilogram ranges from 15 GEL to 20 GEL. The price of mountain and plain honey products are different. Chestnut honey is in great demand and it is well sold in Turkey
too. The price of Chestnut honey starts from 45 GEL and reaches 150 GEL, due to quality. The developed countries process honey on sugar. I do believe our honey will prevail all competitors; we should just legalize the imports. - The EU pays attention to not only the quality. Do you expect your product to withstand the EU market competition? - Besides the quality, the EU requests a supply of homogenous products. This is available in case of only factory production. Our honey has already found its special niche. Our honey is natural and organic product. There is the rich flora in Georgia. ¾ of the Georgian plants are unique and they do not grow in other countries. The phenomenon of Georgian bee should be also taken into account that has obtained three golden medals. We are able to produce and export six varieties of honey to the EU market: Alpine, Subalpine, Spring plain honey, acacia honey, chestnut and linden honey.
Gravity Chill Out Terrace & Gravity Batumi Cafe Bar “This is the first cafe in Batumi designed in the Spanish style. We do our best to make our guests content with our services. We welcome any guest to our restaurant. We make focus on the Spanish cuisine, but our guests are also able to order both Georgian and European dishes. Currently, we employ about 20 local residents. Customers have accepted the Spanish cuisine with much pleasure, as well as Georgian dishes. Wishing to taste genuine Georgian and Spanish dishes in Batumi, you should visit the Gravity
Wishing to Taste Genuine Georgian and Spanish Dishes, Visit Gravity Chill Out Terrace & Gravity Batumi Cafe Bar Batumi has acquired a new space for meetings and entertainment. The Gravity Chill Out Terrace & Gravity Batumi Cafe Bar invites Batumi residents and guests to the Alphabet Tower territory. The Alphabet Tower will become Batumi’s most appropriate location for vacation and new acquaintances, representatives of the Boost Spain Spanish company told the Ajara Business Week (ABW). The Gravity Chill Out Terrace & Gravity Batumi Cafe Bar opened with flamenco dance and songs performed by the famous Spanish band of Color
Moreno. Professional Andalusian dancer and choreograph Jose Candela and soloist Manuel Carmona jointly with other members of the band staged traditional Spanish dances for the Georgian audience. The restaurant manager told the Ajara Business Week (ABW), thanks to the renewed interior, top services, yummy dishes and joyful environment the restaurant attracts many visitors. Eduardo Juarez divulged one secret and noted delicious dishes are made of high-quality and healthy products.
Chill Out Terrace & Gravity Batumi Cafe Bar. The management of all restaurants that cares for the asset’s image try to host guests with yummy dishes and pleasant environment. We also follow this strategy. Starting this week the restaurant will hold life music evenings. I would like to note all dishes are made of high-quality and good products. Delicious dishes are made of healthy products, aren’t they?” the Boost Spain company representative in Georgia Eduardo Juarez told the ABW.
WORLD NEWS
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September 14, 2015 #10
ajara business week
Tim Cook unveils new iPhone 6S, Apple TV and iPad Pro
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pple CEO Tim Cook has unveiled two new iPhones as well as the new Apple TV, iPad Pro and Apple Watches. The new iGadgets were unveiled during a press event Wednesday at San Francisco’s Bill Graham Civic Auditorium. “While they may look familiar, we have changed everything about these new iPhones,” said Tim Cook. Apple has updated its two smartphones. The new iPhone 6S and iPhone 6S Plus are available in four colors: silver, gold, space gray and rose gold. The devices are now made from 7000 series aluminum, which is an aircraft-grade material. It’s stronger than the previous phone aluminum and is unlikely to bend. The devices’ biggest addition is a 3D touch screen, a feature introduced on Apple trackpads and the Apple Watch, that was previously known as Force Touch. The technology recognizes new gestures like pressing and holding. It vibrates slightly to let you know it’s been pressed. The new iPhones also come with a 12 megapixel iSight rear camera, with 50% more pixels than the iPhone 6. The front-facing camera is now 5 megapixels (for sharper selfies). A kooky new photography feature called “Live Photos” combines photos and videos. When you take a photo with the Live Photo setting on, it records a second-and-a-half video before and after the clip to make a tiny little video. Press and hold on your photo and it will play. The phones also have the new A9 processor and faster fingerprint sensors. There are new charging docks to match the colors of the iPhones as well as new covers. The phones will cost the same as the last version (starting at $650 and $750 for the 6S Plus). The previous versions (iPhone 6 and 6 Plus) will each drop $100. A new iPhone Upgrade program lets you lease an iPhone for $32 a month and get a new version every year. The new iPhones will go on pre-sale on September 12 and will hit stores on September 25. IOS 9 will be available on September 16 for anyone with an iPhone as old as an iPhone 4S.
iPad Pro
As expected, Apple is making a bigger, faster iPad. The iPad Pro is 12.9 inches. It’s the same height as the iPad Air, so you can run iPad Air apps side by side. The screen has 5.6 million pixels -- more than a 15-inch MacBook Pro with a Retina display. The iPad Pro starts at $799. Inside it’s much faster. The iPad Pro has a new A9X 64-bit chip. It’s 1.8 times faster than the previous iPad’s CPU (“desktop class” according to Apple executive Phil Schiller). It is powerful enough to edit three streams of 4K video at a time. It has a 10-hour battery life, is super thin and weighs just over 1.5 pounds. “Why make an iPad with a bigger display?” asked Schiller. Good question! Games and movies look better on a bigger screen, he said. It’s big enough to have a full-size keyboard on the screen. If you don’t want to type on the screen, Apple has made a new smart keyboard that doubles as a cover, Microsoft (MSFT, Tech30) Surface-style. The keyboard is coated with a thin fabric. The company is also making its own stylus, but with the usual over-the-top design and marketing. Yes, it’s the Apple Pencil, a low latency stylus that feels like a real pencil. It even got its own Jony Ive narrated videos. It “feels like a true writing or drawing instrument,” said Ive. As the name implies, the iPad Pro’s real target audience is business users. To show that it’s serious, Apple brought out a very unexpected partner to demo the iPad Pro: Microsoft’s Kirk Konenigs-
bauer. He demonstrated Microsoft Office for iPad Pro using the Apple Pencil. Adobe (ADBE) also demoed its iPad Pro apps including a new product called Photoshop Fix, a retouching tool. Using the iPad Pro and new stylus, Adobe’s Eric Snowden did some realtime edits including the odd choice of changing a photo of a model to make her smile more. (It was the first woman on stage during the presentation.) For the final demo, Irene Walsh from 3D4Medical showed off her startup’s 3D medical app that shows 3D interactive anatomy images for medical students and patients. The company also announced a new iPad Mini 4.
Curtis in it.” If you miss something, say, “Siri, what did she say?” and the episode will rewind a few seconds and turn on captions. Don’t know what you want to watch, Siri can make movie and TV suggestions based on things like genre. Siri searches across all apps, so you don’t have to jump between HBO Go and Netflix to find something specific. The biggest boost for the device is opening it up to third-party developers. You can use the device to play multiplayer games. Apple demoed a few examples, including Harmonix’s Beat Sports and Hipster Whale’s Crossy Road. Another app by Gilt lets you shop directly from the Apple TV. MLB has an Apple TV app for watching multiple live games at a time with pop-up notifications and interactive stats.
Apple TV “We believe the future of television is apps,” said Tim Cook before introducing the expected new Apple TV. The latest Apple TV features a third-party App Store, a new remote, Siri controls and a completely overhauled operating system. The TV now runs on tvOS, which is based on iOS and “built for the living room,” according to Apple’s Eddie Cue. The device will start shipping in October and cost $149 for the 32 GB version and $199 for 64 GB. The new black remote features a glass touch surface on the top half, so you can navigate the Apple TV with swipes and other gestures. The Bluetooth remote has volume controls for the TV and a built-in accelerometer and gyroscope. It can last three months on one charge. It recharges using a Lightning connector. Too lazy to swipe? Tell Siri what you want, like, “Siri, show me a New Girl episode with Jamie Lee
Apple Watch The company kicked off the event with an update about the Apple Watch. Fashionistas now have more band options. The biggest addition is a wrap-around brown leather Hermés band, which will be available in October. The watch itself now comes in gold and rose gold, and there are new sports band options as well. The smart device was released in April. There are now more than 10,000 watch apps, including a few new important additions. Facebook Messenger’s app will let you send text, audio and location messages. GoPro’s app acts as a viewfinder for your camera. iTranslate lets you speak a word and get a translation and AirStrip is a tool for medical professionals. It’s also adding transit directions to the included Maps app.
Singapore Votes
Brazil’s Credit Downgrade
UKRAIN’s Ceasefire Holds: Now What?
Downward Spiral: Yemen’s War
pposition parties scent blood in Singapore’s general election last friday. The People’s Action Party has governed without interruption since the island became independent 50 years ago. But its grip on power is not what it was. Its performance at the last election, in 2011, was the PAP’s worst since independence. Popular discontent about immigration and concerns over living costs and income inequality remain high. For the first time opposition parties will contest all 89 seats. The prime minister, Lee Hsien Loong, sounds worried: he warned a crowd on Tuesday that if the next government were to be led by the opposition, Singapore would be “finished”. There is little chance of that. Its record aside, the PAP is favoured by the electoral map: last time it won 93% of the elected seats with just 60% of the vote. And opposition parties aspire less to government (for now) than to entrench themselves in parliament as a check on the PAP’s power.
tandard & Poor’s demotion of Brazil to junk status last Wednesday was largely priced in. The São Paulo stockmarket fell by just 0.3% yesterday and the real—already down by 30% this year—by 1.8% against the dollar. The rating agency follows the presentation by Dilma Rousseff, Brazil’s president, of a budget for 2016 with a primary deficit (before interest payments). She has tried, unsuccessfully, to pick a path between fiscal orthodoxy, championed by her finance chief, and stimulus, demanded by her planning minister. The government has been quick to insist it will balance the books. But some in the administration, not to mention congressmen who control the 90% of spending that is ring-fenced, may think that the downgrade makes further austerity pointless. Brazil could sink deeper into speculative territory. “I’m in a Confucian phase,” Ms Rousseff told Valor, a newspaper, this week. Confusion, some would say.
n unfamiliar sound fills the air over eastern Ukraine: silence. A Ukrainian soldier killed in combat yesterday was only the first since the start of September, in a war that has claimed nearly 8,000 lives since last April. The lull in fighting, and the purging of Andrei Purgin, a hardline separatist leader, suggests the Kremlin may be pressing its proxies to follow the Minsk peace plan. Yet the deal’s political elements can still blow up: far-right Ukrainian protesters killed three national guardsmen outside parliament in Kiev after a vote last week to grant greater autonomy to separatist-held regions. And as the war cools, public attention will turn to the unfulfilled promises of the Maidan revolution: fighting corruption, righting the economy and ending the oligarchs’ grip on power. A mere 3% of Ukrainians are satisfied with the pace of reforms. Politicians in Kiev, take note.
emen is descending into a prolonged, uncontrollable war. The Saudi-led coalition fighting the country’s Houthi rebels has intensified its campaign since 60 of its soldiers were killed in a single attack on September 4th. Their bombs have rained on the capital, Sana’a. Qatar has sent 1,000 troops. Bahrain’s king has said his two sons will join the battle. Not that any of this guarantees success. Though their coalition has routed the Houthis from the port city of Aden, its progress has slowed around Taiz and the oil-rich province of Marib, scene of Friday’s attack. And the escalation puts paid to the latest attempt at negotiating peace. The Gulf states, where a generation of young, ambitious royals is coming to the fore, seem bent on annihilating the Houthis—whatever the cost. Nearly 5,000 people have died already. Many more deaths may follow.
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September 14, 2015 #10
EVENTS ajara business week
DIPLOMATIC MISSIONS IN BATUMI: • Azerbaijan - 14 Dumbadze street; t.: 0 422 27 67 00 • Estonia - 60 Gorgasali street; t.: 0 422 27 09 10 • Turkey - 9 Ninoshvili street; t.: 0 422 25 58 00 • Iran - 83 Parnavaz Mepe street; t.: 0 422 22 86 01, 0 422 22 86 02 • Armenia - 32 Gogebashvili street; t.: 0 422 21 63 02
Coastal City Celebrates “Batumoba” During September 5-6
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uests were given the opportunity to travel to mountainous Adjara without leaving the city The Batumoba celebration took place in the coastal city on September 5 and 6. This year’s Batumoba stood out with its interesting events and overall diversity, tailored to people of all ages and tastes from both Batumi and beyond. The Dumbadze and Memed Abashidze streets were decorated to celebrate Batumoba taking place during September 5-6, and various events took place there including a trumpet orchestra march, pantomime and finger theater shows, ballroom dancing and local business exhibitions. The Department of Tourism and Resorts of Adjara organized the “Gandagana” festival at the Europe Square, the main theme of which was Adjarian villages in all their colorful and attractive charm. Street entrances had a layout makeover to make them more similar to Adjarian villages, while the rest of the territory was redecorated into one big village yard in its entirety, complete with wooden fences and various props associated with the theme – like hay
covering the ground in some places. A house model was also placed at the Europe Square. The festival was musically enriched by local folklore groups, and ethno-jazz, ethno-rock and pop bands joined in the fun during the evening. Games and thematic contests took place, like for example a competition determining who was fastest at cleaning corn, or a tug-of-war. Master classes took place: participants managed to culture cheese, make Tatara and dipped Churchkhela. In short, visitors were able to travel to mountainous Adjara without leaving the city. Batumoba didn’t leave children unattended either; they were treated to a fun musical “Party in the Magic Palace” on the colonnades stage. City Mayor Giorgi Ermakov announced honorary Batumi residents: musician Lasha Ghlonti, Doctor Avtandil Diasamidze, athlete Gia Jorbenadze, teacher Dali Chilidze, architect Elguja Tsivadze and archeologist Amiran Kakhidze. After the awards ceremony, which took place at the musical center, the national symphonic orchestra presented the “World Cinematic Masterpieces” project conducted by Nika Rachveli. The project was presented for the first time in Batumi and several songs were co-performed with singer Anita Rachvelishvili. The program included pieces from Charlie Chaplin, Nino Rota, Gia Kancheli and others. A special show was presented throughout two days near the Alphabet Tower territory by flamenco’s famous Andalusian dancer and choreographer, Jose Candela. The tower whereabouts also paid host to numerous free concerts in the evening from Batumi bands like “Black Sea”, “Strawberry Fields”, “The Nemo”, “Sound Lab”, “Rene Band”, and Mebo Nutsubidze and the “Bearfox”. Batumoba ended with a gala concert, with the “Nota” quartet, Kvicha Maghlakelidze’s quartet, the “Batumi” ensemble, Achiko Beridze’s quartet, Nana Meskhi, Lasha Ghlonti, the Theatrical Quartet, Karolina Chernetska, and the band “Prani” all participating in the show.
AJARA TOURIST INFORMATION CENTRES: • Batumi boulevard information centre - 2, Ninoshvili str.; m.: 577 90 90 91; t.: 0 422 29 44 12; w.h.: 09:00-22:00 (Everyday) • Batumi cable-way information centre Gogebashvili street; m.: 577 90 90 93; t.: 0 422 29 44 10; w.h.: 24/7 • Batumi airport information centre - 220, Airport highway; t.: 0 422 29 44 14; w.h.: according to flights schedule • Sarpi information centre - Sarpi Customs; mob: 577 90 90 72; w.h.: 09:00-21:00 (Everyday) • Kobuleti information centre - 642 Aghmashenebeli street; tel: 0 422 29 44 13; w.h.: 09:00-20:00 (Everyday) • Keda information centre - Aghmashenebeli street; w.h.: 09:00-19:00 (In summer) • Shuakhevi information centre - 22 Rustaveli street; w.h.: 09:00-19:00 (In summer) • Khulo information centre 29 M. Abashidze street; w.h.: 09:00-19:00 (In summer) SIGHTSEEING AND CULTURE BATUMI CIRCUS - 13 Services: Parking, Toilet The staff speaks: Georgian, English, Russian Prices; Discounts are available CONTACT • Mob.: 599 68 02 23 PUPPET AND YOUTH STATE THEATRE - 13 Working hours: 10:00-17:00 Services: Parking, Toilet The staff speaks: Georgian, English, Russian Prices; Ticket: 2 Gel Discounts are available CONTACT • Tel.: 0 422 27 62 34 • Mob.: 599 40 45 38 • E-Mail: info@puppet-show.org • CINEMA APOLLO - 13 • Working hours: 12:00-00:00 • Services: Credit cards accepted, Free Wi-Fi, Exhibitions, Cafe, Toilet • The staff speaks: Georgian, English, Russian • Prices • Ticket: 6-10 Gel • Tel.: 0 422 22 72 27 BATUMI BOTANICAL GARDEN - 13 Working hours: 09:30-18:00 Services: Credit cards accepted, Free Wi-Fi, Exhibitions, Guide service, Cafe, Information board, Parking, Toilet The staff speaks: Georgian, English, Russian, German Prices Ticket: 8 Gel Guide service: 30 Gel Discounts are available • Tel.: 0 422 29 49 29 • Mob.: 577 10 16 07 • E-Mail: info@bbg.ge AJARA KHARITON AKHVLEDIANI STATE MUSEUM - 13 Working hours: 10:00-17:00 Services: Free Wi-Fi, Exhibitions, Guide service, Information board, Parking, Toilet The staff speaks: Georgian, Russian Prices Ticket: 2 Gel Guide service: 5 Gel Discounts are available • Tel.: 0 422 27 11 75 AJARA STATE ART MUSEUM - 13 Working hours: 10:00-18:00
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Services: Exhibitions, Guide service, Information board The staff speaks: Georgian, English, Russian Prices Ticket: 2 Gel Guide service: Free Discounts are available • Tel.: 0 422 27 38 94 BATUMI ARCHEOLOGICAL MUSEUM Working hours: 10:00-18:00 Services: Exhibitions, Guide service, Information board The staff speaks: Georgian, Russian Prices Discounts are available • Tel.: 0 422 27 65 64 • Mob.: 599 15 41 50 THE NOBEL BROTHERS BATUMI TECHNOLOGICAL MUSEUM Working hours: 10:00-18:00 Services: Exhibitions, Guide service, Information board, Parking The staff speaks: Georgian, Russian Prices Ticket: 3 Gel Guide service: 5 Gel Discounts are available • Mob.: 599 43 03 68 DANCING FOUNTAINS Working hours: 20:00-00:00 Services: Parking • PricesTel.: 0 422 27 88 08 • E-Mail: info@boulevard.ge Ticket: Free BATUMI ILIA CHAVCHAVADZE STATE DRAMA THEATRE Working hours: CLOSED until late June / early July 2015 Services: Parking for around 15 cars. Accessible for disabled people with 10 wheelchair spaces. Toilets (but not accessible). No theatre bar or restaurant but plenty of bars and restaurants nearby. The staff speaks: Georgian, Russian, English, Turkish • Tel.: 0 422 27 06 14 • Mob.: 555 36 63 99 • E-Mail: info@batumitheatre.ge BATUMI SUMMER THEATRE Batumi Summer Theatre is located in a central part of Batumi Boulevard and is designed for concerts and other entertainment events. An architecturallyunique wooden building is adorned with wooden ornaments and features a ceiling painted in imitation of the sky. The Summer Theatre has a long history. It was renovated in 2013 and has operated since then. • Tel.: 0 422 29 45 24 Adress: Batumi boulevard BATUMI ART CENTER Working hours: 10:30-22:00 Services: Exhibitions, Parking, Toilet, Café, Concerts, Performances, Opera, Traditional Georgian Folk Song and Dance, Orchestra Performances The staff speaks: Georgian, English, Russian, Turkish, French Tel.: 0 422 27 62 40 • Mob.: 555 37 75 99 • E-Mail: info@muscenter.ge ZOO Working hours: 11:00-19:00 (Except for Monday) Services: Parking, Toilet The staff speaks: Georgian, English, Russian el.: 0 422 22 17 30 • E-Mail: office@parkbatumi.ge CONTEMPORARY ART SPACE Working hours: 11:00-19:00 (Except Monday) The staff speaks: Georgian, English, Russian • E-Mail: batumiartspace@gmail.com Working hours: 11:00-20:00 The staff speaks: Georgian, English, Russian Prices:Free entrance • Tel.: 0 422 27 97 00 RUSUDAN PETVIASHVILI ART CAFE-GALLERY Working hours: 11:00-24:00 The staff speaks: Georgian, English, Russian • Mob.: 599 74 52 23
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PUBLICITY
September 14, 2015 #10
ajara business week
vhvmTfnbuljwsfU!tbrbsUwfmpt!fspwovm!oblsfct!sbhcTj!ijmupoUbo!fsUbe SUPPORT GEORGIAN NATIONAL RUGBY TEAM TOGETHER WITH HILTON BATUMI
damatebiTi informaciis misaRebad, gTovT mimarToT sastumro hilton baTums: +995422 222299
For further information please contact hotel Hilton Batumi: +995422 222299
• 247 guest rooms and suites • Nephele Sky Bar on 20th top floor with open terrace and best views • Pelion Restaurant, Lobby Café and Bar Tandila • Eforea spa, fitness room, indoor swimming pool and open sun terrace • 7 meeting rooms and ballroom • Complimetary Internet access throughout the hotel • Smoking rooms available • 181 car parking spaces