AJARA BUSINESS WEEK #15 by Caucasian Business Week

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BUSINESS WEEK November 16, 2015 #15

November 16, 2015, Issue 15

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AJARA TO FUND TOURISM MARKETING CAMPAIGNS BY NEARLY 4 MILLION GEL IN 2016

Ajara Tourism and Resorts Department Grows Regional Tourism Advertising Budget Pg. 3

Georgian Ajara Government Cuts Funding Mandarin to Small and Medium Tourism Leave for Russian Business Support Program by 80% The Ajara Government plans to cut funding the Small and Medium Tourism Business Support Program by 80%. According to the 2015 budget of the autonomous republic, the program was ﬁnanced by 598 000 GEL, but the funding slips to 119.4 thousand GEL in the 2016 budget bill. Liberty Bank issues loans for arranging tourism infrastructure in the small and medium tourism sectors as part of the Small and Medium Tourism Business Support Program. Taking into consideration the existing busi-

ness risks, Liberty Bank is liable to funding small and medium business companies. According to the Program, the tourism business is called an activity that is related to arranging (constructing, reconstruction, repairs) public food assets (café, restaurant, bistro, bar, canteen and so on), hotels (with no more than 50 suites, guesthouses), entertainment assets (nightclubs, disco clubs, pool clubs, bungalow and so on) and other tourism activities.

Market from BatumiSeaport

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URAL AIRLINES MAY PERFORM FLIGHTS FROM BATUMI STARTING 2016

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Ednar Tsivadze: Beer Batumuri Oﬀers Serious Competition to other Famous Beer Brands in Ajara! Beer Batumuri– Batumi’s Vivid Spirit Pg. 7

After a break of several years, Georgian mandarin will be transported to the Russian market from Batumi Seaport. The ship called as Megobroba (Friendship) will sail from the Batumi waters to the seaport of Novorossiysk Tuesdays, the chamber of commerce and industry of Ajara told the ABW. The forecast crop accounts for 80-90 thousand tons of citrus fruits. On Season about 30 packing enterprises will operate. The meeting was attended by Deputy Agriculture Minister of Ajara, representatives of the chamber of commerce and industry of Ajara, Batumi Seaport, customs house and citrus sorting enterprises.

Ural Airlines may return to the Georgian market and perform flights from Batumi starting 2016. The issue of restoring flights to Georgia was discussed at the working meeting at the Pulkovo Airport’s business center in St. Petersburg. The meeting was organized by Ural-Airlines. Representatives of the national tourism administration of Georgia and the Tourism and Resorts Department of Ajara attended the meeting. The parties also discussed availability of appointing flights to Batumi by summer 2016. Business meetings were also held between Georgian and Russian tour operators. It is worth noting Ural-Airlines is reported among Russia’s five top airlines in terms of passenger transportation volume. Semiramide Gardens Holiday Complex to Open in Batumi by New Year Semiramide Gardens, a five-star holiday complex built by Azeri investments, will open in Batumi by the New Year.

MAIN EVENTS ajara business week

ANOTHER REHABILITATED KINDERGARTEN IN BATUMI

THE VILLAGES, WHERE THE INTERNET CONNECTION WILL SOON REACH

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hairman of Ajara AR Government Archil Khabadze opened the rehabilitated kindergarten on Sulaberidze Street. Works have been carrying out for 6 month. The building is designed for 280 kids. Children have been distributed to different kindergartens until now. Nurses and kids will be returned to the rehabilitated kindergarten today. Works have been implemented by the com-

pany that won the competition Ltd Amagi. 666 726 Gel was allocated for this project. Three new kindergartens have been constructed in Batumi during this year, eight kindergartens have been rehabilitated. Ten new buildings were constructed in Ajara during last three years, nine are being constructed, more that forty kindergartens were rehabilitated. Six are under construction.

DIMITRI QUMSISHVILI: OVERPASS WILL APPEAR IN BATUMI SEAPORT

he Ministry of Economy and Sustainable Development of Georgia has launched implementing the universal internetization project worth 150 million USD. Ex Prime Minister Bidzina Ivanishvili provides financial support for the project implementation that calls for putting optical-fiber cables in all villages and regions of Georgia. At the first phase of the project, the internet connection will be accessible in about 500 villages of the regions of Ajara, Guria, Imereti, Kakheti, Kvemo Kartli, Mtskheta-Mtianeti, Racha-Lechkhumi, Samegrelo-Zemo Svaneti, Samtskhe-Javakheti, Shida Kartli, including 44 villages in the Ajara Region (Migazeuli, Sachino, Kokhi, Qeda, Mnatobi, Akhalsopeli, Zeda Akhalsheni), 30 villages in the Guria Region (including Nigvziani, Qviani, Lesa, Bokhvauri, Gvimralauri, Atsana), more than 100 villages in the Imereti Region (in-

three various projects concerning the land plot. We have elaborated a single vision jointly with Batumi City Hall and the Ajara Government. We think that the overpass must be constructed and the site must be transmitted to the investor under a long-term usufruct agreement for implementing the project”, Qumsishvili noted.

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cluding Zeda Vani, Sulouri, Shuamta, Mukhura, Zeda Sazano, Chkhari, Ivantsminda, Chala, Gorida), more than 20 villages in the Kakheti Region (including Zemo Bodbe, Mukuzani, Chalaubani, TsitelTskaro, Gamarjveba, Zemo Khodasheni), more than 50 villages of the Kvemo Kartli Region (including Beshtasheni, Samshvilde, Qvemo Sarali, Mukhati, Tsintskaro, Tsalka, Aiazmi), in the Samegrelo-Zemo Svaneti Region (Sujuna, Tsilori, Samikao, Qolobani, Sagvazavo, Gaghma Zanati, Mukhuri, Saraqoni, Kirtskhi), the Shida Kartli Region (Karaleti, Qvemo Rekha, Berbuki, Kavtiskhevi, Didi Sative, Zemo Osiauri) and so on. At the ﬁnal stage, the internet connection will be accessible in 2000 villages of Georgia and 90% of the Georgian population will have access to the global connection.

AJARA GOVERNMENT CUTS FUNDING SMALL AND MEDIUM TOURISM BUSINESS SUPPORT PROGRAM BY 80%

T n overpass must be constructed in the Batumi seaport, Dimitri Qumsishvili, Minister of Economy and Sustainable Development of Georgia, noted. “The commercial part is to be negotiated. This is not easy. Besides the land under the overpass, there is an additional 7 hectare space that is also a part of the commercial negotiations. We have drawn three various investors that have

November 16, 2015 #15

he Ajara Government plans to cut funding the Small and Medium Tourism Business Support Program by 80%. According to the 2015 budget of the autonomous republic, the program was ﬁnanced by 598 000 GEL, but the funding slips to 119.4 thousand GEL in the 2016 budget bill. Liberty Bank issues loans for arranging tourism infrastructure in the small and medium tourism sectors as part of the Small and Medium Tourism Business Support Program. Taking into consideration the existing business risks, Liberty Bank is liable to funding small and medium business companies. According to the Program, the tourism business is called an activity that is related to arranging (constructing, reconstruction, repairs) public food assets (café, restaurant, bistro, bar, canteen

and so on), hotels (with no more than 50 suites, guesthouses), entertainment assets (nightclubs, disco clubs, pool clubs, bungalow and so on) and other tourism activities. The credit resource of the program accounts for 6 million GEL, of which Liberty Bank has already issued 1.4 million GEL loans. It should be noted the loans’ annualized interest rate is 15% as part of the program. The loan’s top margin per borrower is about 200 000 GEL and the maturity period is about 7 years. Under the program, the business company pays only 3% annual interest rate of the determined loan for the initial 3 years. The difference between the repayable and designated interest rate makes up 12% that will be covered for three years by the Finance and Economy Ministry of Ajara based on the bank’s request.

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

TOURISM November 16, 2015 #15

ajara business week

AJARA TO FUND TOURISM MARKETING CAMPAIGNS BY NEARLY 4 MILLION GEL IN 2016 Ajara Tourism and Resorts Department Grows Regional Tourism Advertising Budget

TOURISM ASSETS TO ACQUIRE NEW STATUS IN AJARA Mamuka Berdzenishvili: Engagement in the Project is Optional for All Assets

allocates 369 000 GEL for advertising the Region’s tourism potential within the whole territory of Georgia. In 2015, the Department carried out advertising and marketing campaigns at 9 international target markets. Moreover, along with the growing inﬂow of tourists to Georgia and the Ajara Region, the department has added the Russian Federation as the 10th target market to carry out various marketing and advertising campaigns for the Region’s promotion.

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According to the 2016 autonomous republic’s budget bill, the funding of marketing campaigns will increase by additional 1 million GEL.

AJARA TO INTRODUCE CONSOLIDATED CALENDAR OF PLANNED EVENTS

he consolidated calendar will collect information on 300-400 events throughout the year. In 2016 by the initiative of the Ajara Tourism and Resorts Department, a consolidated calendar of the Region’s planned events will be composed to collect information on various events planned by the state and the private sectors. As a result, tourists will more comfortably plan their vacation periods in Ajara, Mamuka Berdzenishvili said. “The idea of developing a joint calendar of events was proposed by the Department and we have introduced this initiative to the Government. The executive body has issued a respective resolution obliging all government departments to forward information on all planned events to our department. All this information will be consoli-

dated into one calendar. And we will carry out the positioning of the calendar through our website and advertising campaigns. Having assembled all information into a single calendar, we will introduce this information to the private sector. There are certain problems in Georgia in terms of planning and awareness. We receive information on planned events after the event and we cannot receive due information in advance. Therefore, it is difﬁcult to deliver similar information to tourists. As a result, tourists also cannot take into account these offers and opportunities and naturally, they fail to match their vacation periods with the planned events. Besides the consolidated calendar, we will also offer the budget for ﬁnancing marketing and advertising campaigns to the private sector. As a result, we expect that their interest in our initiatives will increase”, the Ajara

Tourism Department’s Head Mamuka Berdzenishvili noted. The Department’s head expects the consolidated calendar to collect information on 300-400 events throughout the year.

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The 2016 autonomous republic’s budget bill allocates 369 000 GEL for advertising the Region’s tourism potential within the whole territory of Georgia.

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GEL. The program calls for collecting statistical and analytical information through new methodology. We have introduced a new methodology for recording statistics and additional funds are required to valuably apply this methodology. The recently established tourism products agency will receive additional 100 000 GEL for developing new tourism products. The department’s allocations will increase by 1.4 million GEL, according to the 2016 autonomous republic’s budget bill. Naturally, intensiﬁed marketing campaigns require higher allocations. The increased budget also reﬂects our plans for 2016. The next year we will enter a new target market”, Mamuka Berdzenishvili said and added the Department will also intensify online activities and PR campaigns in 2016. The increased budget will enable to host more press tours in 2016, compared to 2015. Advertising budget will also grow for the internal tourism directions to further enhance positioning efforts”, Berdzenishvili said. The 2016 autonomous republic’s budget bill

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n 2016, the Ajara Government will finance the regions’ tourism marketing campaigns by 3.702 million GEL. The mentioned amount will be allocated to the Ajara Tourism and Resorts Department to carry out marketing campaigns on the domestic and international markets. According to the Ajara’s budget bill, the department’s allocations will increase by 21.5% to 5 823 300 GEL in 2016, up from 4 582 000 GEL in 2015. The funding of the region’s marketing campaigns will increase by additional 1 million GEL, Mamuka Berdzenishvili, a head of the Ajara Tourism and Resorts Department, said. The Department will spend 854 800 GEL on developing tourism products and services in 2016 and 1 266 500 GEL will fund an efficient development of the field and improving the management of the tourism and resorts direction. According to the 2016 autonomous republic’s budget bill, the funding of marketing campaigns will increase by additional 1 million GEL. The part for management and efficient development of the field will increase by about 300 000

The new status of “Recommended by the Tourism and Resorts Department of Ajara” will make Ajara-based tourism assets more competitive. The Tourism and Resorts Department of Ajara has developed new standards. If tourism assets satisfy these standards, they will be granted a suitable status, the Department’s Head Mamuka Berdzenishvili said. Engagement in the project is optional for all assets. The new standards are based on the European experience and cover three directions such as obligatory, additional and desirable criteria that are also divided in the following topics: security, technical part, booking, interior compliance standards, payments, management. Each criteria is determined by scores that are summarized to calculate the due percentage to grant or not the status of “Recommended by the Tourism and Resorts Department of Ajara”. All assets will be given a reasonable period to eradicate all exposed correctable shortcomings. “We plan to inaugurate the program of “Recommended by the Tourism and Resorts Department of Ajara” that calls for introducing minimum standards. If tourism assets satisfy these standards, they will receive the suitable status. Then we will involve these assets in online and various advertising campaigns that we will carry out on both domestic and international markets”, Mamuka Berdzenishvili noted. The project’s monitoring group will be staffed by the Tourism Department ofﬁcials. We have also invited the tourism sector expert Ulrich Trosien from Germany. The project will be also promoted by the executive board staffed by members of the Ajara regional board of tourism advisors that functions at the Tourism and Resorts Department of Ajara. The project also calls for involving various state ofﬁces. As part of the project, cooperation agreements will be concluded with Batumi City Hall, the Food Safety Agency, the Interior Ministry’s Emergency Assistance Service, Batumi University and so on. All these efforts will increase the perception of Ajara-based tourism assets and tourists will consider these assets more creditworthy. Boosting the market competition is the project’s additional important component, Mamuka Berdzenishvili said.

BUSINESS

November 16, 2015 #15

ajara business week

GEORGIA TO RECEIVE FIRST VIKING TRAIN IN 2016

GEORGIAN MANDARIN TO LEAVE FOR RUSSIAN MARKET FROM BATUMI SEAPORT

CASTELLO MARE HOTEL TO OPEN IN TSIKHISDZIRI IN SUMMER 2016 Castello Mare Hotel, Tsikhisdziri

eorgia will handle a doubled volume of consignments after the transit corridors of VIKING and TRASECA reach full-scale operation, Georgian Railway director general Mamuka Bakhtadze noted. ”Georgian joined the VIKING’s initiative in 2015. The project calls for connecting northern European and Baltic countries to the Black Sea basin countries. The project has already united eight countries. We expect Azerbaijan to join the project in 2016. This signiﬁes the project will connect the Central Asia countries with the northern European and Baltic countries. The project is of strategic importance for all countries engaged in. Transportation services are of multimodal character and this factor comparatively complicates a planning of transportation operation. On the other hand, the distance is twice shorter compared to the classical sea route. Therefore, clients express much interest and the coming years will record a doubled growth in cargo transportation volume”, Mamuka Bakhtadze

noted and added Georgia will handle 15% of the total consignment turnover between northern European and Central Asia countries, between the Baltic and Central Asia countries. “At this stage, the Central Asia countries have not joined the project. Therefore, we expect the ﬁrst train to enter Georgia in 2016 as part of the project”, Mamuka Bakhtadze told the ABW. “Georgia has recently joined the project, but this fact is very important for all participant countries. We expect Azerbaijan to join the project. This is our main goal. The more countries participate in the project, the higher the transportation volume and intensity will be. On the other hand, the project provides a direct access to the Black Sea”, Saulius Girdauskas, the Deputy Transport Minister of Lithuania, said. It is worth noting the EU Transportation Commission has named the combined transportation train of VIKING as the best one in the Europe’s cargo transportation sector.

fter a break of several years, Georgian mandarin will be transported to the Russian market from Batumi Seaport. The ship called as Megobroba (Friendship) will sail from the Batumi waters to the seaport of Novorossiysk Tuesdays, the chamber of commerce and industry of Ajara told the ABW. The forecast crop accounts for 80-90 thousand tons of citrus fruits. On Season about 30 packing enterprises will operate. The meeting was attended by Deputy Agriculture Minister of Ajara, representatives of the chamber of commerce and industry of Ajara, Batumi Seaport, customs house and citrus sorting enterprises.

URAL AIRLINES MAY PERFORM FLIGHTS FROM BATUMI STARTING 2016 complex built by Azeri investments, will open in Batumi by the New Year. The project’s investment value makes up 35 million USD, of which 27 million USD has been already spent, Gloria, the project developer company, told the ABW. Construction works were completed and internal works are underway. A 12-storied building will consist of 159 suites. Three swimming pools, a spa centre and a casino will also open at the hotel, as well as the Winter Gardenswill. The five-star hotel is designated for the middle and upper segments. Te complex managing brand has not been selected yet. Azerbaijani company Gloria holds “Tiflis Palace” hotel and the restaurant of “Tiflis Veranda” in Tbilisi. The construction of Semiramide Gardens holiday complex began in 2010.

ral Airlines may return to the Georgian market and perform ﬂights from Batumi starting 2016. The issue of restoring ﬂights to Georgia was discussed at the working meeting at the Pulkovo Airport’s business center in St. Petersburg. The meeting was organized by UralAirlines. Representatives of the national tourism administration of Georgia and the Tourism and Resorts Department of Ajara attended the meet-

ing. The parties also discussed availability of appointing flights to Batumi by summer 2016. Business meetings were also held between Georgian and Russian tour operators. It is worth noting Ural-Airlines is reported among Russia’s five top airlines in terms of passenger transportation volume. Semiramide Gardens Holiday Complex to Open in Batumi by New Year Semiramide Gardens, a five-star holiday

sikhisdziri-based hotel of Castello Mare will launch operation in summer 2016, Paata Jibladze, a head of the Green Cap development company, told the Commersant. It is useless to inaugurate the hotel in winter period, because on this season the Region lacks for visitors, while the company will have to take considerable expenditures, Paata Jibladze noted. The construction and repair works were finished and the building is ready for inauguration. A new building with 20 suites will be also constructed on the territory. The hotel is expected to open in summer 2016, Paata Jibladze said. The hotel is designed for the upper consumer segment. The price for a night stay per person starts from 200 USD and the top margin price reaches 20 000 USD, the hotel management reports. The penthouse will be located on 500 square meters with reception hall, two bedrooms and two bathrooms with gilded mosaic, fireplace and so on. The five-star hotel will contain 125 suites, 4 conference halls, a restaurant for 250 persons, a parking place for 100 vehicles, a sauna, medical spa centers and other services. The project’s investment value made up around 30 million USD. The construction works were ordered by Georgian-Austrian company Qarapi.

INTERVIEW

November 16, 2015 #15

ajara business week

TCF GEORGIA TO PROCESS 15 000 TONS OF CITRUS FRUITS

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Georgia has successfully completed negotiations with Russia on admitting Georgian mandarin to the Russian market.

This year, after a 7-year break, Georgian mandarin was exported to the Russian market. - Where do you export natural juices of citrus fruits? - The enterprise manufactures sugared and sugar-free concentrates that are exported to Ukraine in the form of semi-ﬁnished products. One liter concentrate gives 5 liters of juice. The Government subsidizes one kilogram of nonstandard citrus fruits by 0.10 GEL. Moreover, the cannery also pays 0.10 GEL to farmers per kilogram of nonstandard citrus. This cannery is equipped with modern technologies that carry out mandarin waxing process in compliance with EU standards. Mandarin waxing technology enables to extend the product storage period for about 2 months.

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This year we expect to reap about 110 000 tons of crop. Initially Russia requested for special standard citrus, but the issue was settled and we have exported ordinary sort of mandarin.

In 2014 we have loaded several ships with Georgian citrus for exports. This year we plan to export our products through a 1000 ton ship. - How many persons do you employ at the cannery? - The enterprise works at full capacity and we suppose to process twice more mandarin (about 20 00 tons) this year. The enterprise makes focus on processing nonstandard mandarin. The cannery employs 100 local residents. Citrus basically grows in the Khelvachauri and Kobuleti municipalities. Regretfully, only 6 packing enterprises of 17 ones function currently.

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operate in 2014). After negotiations with the Kobuleti cannery, this year the enterprise will buy twice more nonstandard mandarin (about 20 000 tons). The Agriculture Ministry has conducted negotiations with all parties of the exports markets and achieved agreements on lowering customs tariffs.

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n 2014 Georgia exported 24 439 tons of citrus fruits to foreign markets. According to the Ajara Agriculture Ministry’s reports, this year the region will pick 73 000 tons of citrus crop, including 67 145 tons of mandarin, 4 678 tons of orange and 1 177 tons of lemon. Russia ranks first among Georgia’s citrus exports markets with 11 346 tons. Azerbaijan and Armenia ranks second with 6 870 tons, Ukraine is third with 5 022 tons. Georgia exports citrus products to Uzbekistan, Belarus and Kazakhstan. As to nonstandard citrus, the Kobuleti Cannery of the Assets Management Georgian Industrial Group and TCF Georgia ltd will process nonstandard citrus fruits. TCF Georgia ltd launched nonstandard mandarin cannery in the village of Akhalsopeli, the Kobuleti Municipality, in 2014. The cannery will receive about 13 000 tons of nonstandard mandarin on season to sort, pack and wax the raw material. Osman Gogitidze, a director for the Kobuleti Citrus Cannery: - What volume of nonstandard mandarin will the plant buy this year? -Besides Georgia, redundant citrus harvest is reported in mandarin exporter countries such as Spain, Morocco and Turkey. This factor has significantly affected the price. As a result, the price of better-quality and international standard citrus fruits has declined. This year the enterprise will buy 15 000 tons of nonstandard mandarin to manufacture citrus concentrates for juice production. The final product will be supplied to the region’s consumer market and exported to foreign markets. The cannery will buy one kilogram of nonstandard mandarin at 0.20 GEL, of which 0.10 GEL will be subsidized by the Ajara Government. The Government has fostered creating reception and processing centers by transmitting land plot to them at 1 GEL. Currently, 36 pavilions for mandarin reception operate (18 ones used to

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Our citrus is mainly exported to Ukraine and Belarus, but Armenia., Uzbekistan, Azerbaijan, Kazakhstan and Austria are also recorded in our exports markets.

This year we have imported a small volume of Georgian mandarin to Austria, only 18 tons. A month ago I visited Ukraine and Belarus and met with heads of customs departments of Ukraine and Belarus and conducted very useful negotiations. - What kind of methodology is used for citrus sorting and packing? - TCF Georgia ltd is a citrus sorting-packing and container-producing enterprise that buys, sorts and waxes 100 tons of citrus fruits a day. In this season the enterprise will buy and process 15 000 tons of citrus fruits that will be exported to the Russian, Ukrainian and Central Asia markets. The enterprise packs citrus in pallets with 12-16 kilogram capacity. The pallets are made of wood, plastics and cardboard. The enterprise plans to buy 5000 tons of nonstandard mandarin at 0.20 GEL, of which the government will

subsidize 0.10 GEL per kilogram. The company also holds a refrigerator complex for storing 3 000 tons of citrus and other fruits. The enterprise employs about 5000 local residents.

INTERVIEW

November 16, 2015 #15

ajara business week

WHO CONTROLS THE ASSIGNMENT OF STAR CATEGORY TO THE HOTELS IN GEORGIA?

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At present several large hotels are under construction, and by 2017 their number will grow

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Construction of the hotel meant for 5060 rooms costs approximately $ 5 mln - this amount includes everything - the cost of land, infrastructure, construction, etc.

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The biggest problems are faced by domestic

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standards, and their implementation is mandatory. Hotels of this class protect their reputation. However, in Georgia this market is not yet fully developed, respectively, great competition is not observed there.

significantly. Many large investors intend to enter into Georgia and find their niche in the market. - How profitable are hotels in terms of financial gain, and what is the average payback period? - The hotel business is quite lucrative, it pays back in the initial stage. According to international practice, the average payback period of large hotels is 7-8 years, sometimes 10. The larger hotel, the higher income. By pessimistic estimates, the profitability reaches 12-13% per year. Construction of the hotel meant for 5060 rooms costs approximately $ 5 mln - this amount includes everything - the cost of land, infrastructure, construction, etc. The average construction cost is about $ 1 000 per square meter , including arrangement of rooms, connection to utilities, etc.

- What type of hotels is currently in the greatest demand in Georgia? - Georgia as a tourist country must be focused on the middle segment, respectively, threestar hotels are most needed, but unfortunately, there is a deﬁcit of just these hotels. In recent years the number of hostels has signiﬁcantly increased, which to some extent satisfy the demand of the average tourist and are

mostly located in old Tbilisi. In general, throughout the world the price of one night in the hostel starts at $ 8, but in Georgia it varies from $ 10 to 15. However, the market in Georgia is liberal, and prices will be regulated within a few years. - Who controls the assignment of star category to the hotels? - In developed countries, certain standards are introduced to assign the stars, with regard to Georgia, it remains a subjective decision and clearly deﬁned rules do not exist. Some time ago, the organization was established to monitor this issue, but it has not become popular in Georgia.

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he history of the modern hotel business began with the doss houses and taverns, which had little to do with modern sophisticated hotels. In general, the hotel business is a very interesting topic, especially from a financial point of view. It is associated with high risks and a number of factors are necessary to be considered for a successful business. One of them is this assignment of “stars” that determine the prestige and the profitability of hotels. Classification starts with one star (economy class) to 5 (deluxe class). In Georgia, the hotel business is gradually being developed and improved, but according to experts, the industry still has a lot of problems, and often demand does not correspond to the supply, and the price to services quality.

hotels, which operate on a seasonal proﬁts and are entirely dependent on the limited ﬁnancial possibilities of the owners. According to the Ministry of Economy of Georgia, in 2014 the turnover of the hotel sector in the country amounted to GEL 730 million, which is 1, 6% of the total business turnover of the country. The hotel industry employs more than 30 000 people, their average salary is GEL 604 per month. Ketevan Meladze, the head of the Hotels and Restaurants Association, talks about the problems of the hospitality industry. - Which hotel categories are most developed in Georgia, and how competitive is the market? - High class hotels operating on the principle of franchising are best developed in Georgia, these are hotels like Radisson, Marriott, etc. They have their own requirements relating to international standards, and their implementation is mandatory. standards, and their implementation is mandatory. Hotels of this class protect their reputation. However, in Georgia this market is not yet fully developed, respectively, great competition is not observed there.

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However, the market in Georgia is liberal, and prices will be regulated within a few years.

In general, both the state and private organizations should be involved in solving this problem. In Georgia, many hotels call themselves four-star, but they don’t meet the stsndards, although they have big ambitions. - The representatives of a seasonal hotel business say they have to pay taxes on a seasonal basis and not during the whole year. Are any changes planned in this regard? - Seasonal hotels should have tax beneﬁts. We had discussions on this issue with the Ministry of Economy, the decision is likely to be made during the year and will give the hotel business to breathe easier.

POTI MEGA SEAPORT CONSTRUCTION PROJECT TO DRAW 250 MILLION USD INVESTMENT in Anaklia, naturally, will make their assessments and determine the Anaklia seaport construction perspectives amid the current market realities. The project worth 1 billion USD may justify or fail on the new location”, the Poti Seaport owner company answered. GBC also inquired reasons for cargo turnover contraction, as well as the planned measures to be taken for improving the situation. The Poti Seaport management answered that the cargo transportation reduction is recorded at all Georgia-based seaports this year because of worsened economic situation in the country. “Oil prices have declined, money transfers from abroad have also narrowed. Sanctions against Iran will be removed soon. Sanctions were introduced against Russia, hostilities and unrest in Ukraine – All these factors have declined cargo turnover at Georgian seaports. Naturally, only the new seaport construction cannot tackle the mentioned factors. In this period, the Poti Seaport that controls 85% of container transits through Georgian seaports has managed to renovate the existing infrastructure and equipment to become the most efﬁcient and safest seaport in the country and to maintain its positions as a crucial gateway to the Caucasus and Central Asia”, the company management noted. As reported, the public hearing on the environmental impact assessment report and exploitation of the new deepwater harbor in Poti is scheduled for November 20.

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he first stage of the project will be financed by 250 million USD investment to boost the Poti Seaport’s workload, APM Terminals Poti, the owner of the Poti Seaport, told the GBC. If the Environment Protection Ministry positively appraises the project’s environmental impact assessment report, the proposal will be submitted to the Economy Ministry at the first stage of the construction works. After the company obtains a license, construction work stages of the Poti Mega Seaport project will be submitted and introduced. The first stage calls for constructing two berths with 300 meters in length and 14 meters in depth. As a result, the Poti Seaport will be capable for handling consignments of more than 1 million TEU containers. The project implementation will end in 30 months after the inception, the management reports. The GBC has also inquired the opinion of APM Terminals Poti about the Anaklia deepwater seaport construction and whether the new project will restrict the Poti Seaport operating range. -Today Georgia owns four seaports that handle about 20 million tons of consignments a year, but their consolidated capacity is twice higher. APM Terminals owns 63 terminals in 39 countries and the company is responsible for the Poti Seaport development based on the market dynamics and analysis. Serious investors that consider the availability of making investments

“Oil prices have declined, money transfers from abroad have also narrowed. Sanctions against Iran will be removed soon. Sanctions were introduced against Russia, hostilities and unrest in Ukraine – All these factors have declined cargo turnover at Georgian seaports. Naturally, only the new seaport construction cannot tackle the mentioned factors. In this period, the Poti Seaport that controls 85% of container transits through Georgian seaports has managed to renovate the existing infrastructure and equipment to become the most efﬁcient and safest seaport in the country and to maintain its positions as a crucial gateway to the Caucasus and Central Asia”,

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BRAND November 16, 2015 #15

ajara business week

Ednar Tsivadze: Beer Batumuri Offers Serious Competition to other Famous Beer Brands in Ajara!

Beer Batumuri – Batumi’s Vivid Spirit

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According to the history, the brewery used to bottle 40 000 tons of beer a day.

The Batumi Brewery launched operation in 1951. According to the history, the brewery used to bottle 40 000 tons of beer a day. Initially, the enterprise used to employ about

300 persons. Today, the brewery employs 120 persons, but this figure grows on season. Previously, in the Soviet Period, the Batumi brewery supplied Batumuri Beer to the Ajara region and whole Georgia. Moreover, I remember, earlier, one day Beer Betumuri was not delivered to Tkvarcheli and coalminers ceased working in protest. The first head of Georgia’s oldest brewery was Datiko Eliava, who was later replaced by Grisha Shotidi. Then, for many years, the enterprise was led by Rostom Tavdgiridze. Since 1995, I have been leading the brewery. - What makes the Beer Betumuri a brand? - It is vivid! Thanks to this feature the product has won 9 international golden medals. In the Soviet period, the Beer Batumuri won the second award twice in the USSR contest. As to Georgia, our brewery share two leading positions jointly with Tbilisi Brewery N1. - How is a beer brand created? - At first sight, this question seems difficult. The good beer must satisfy three main characteristics – ice, malt and conscience. The Batumi brewery fully satisfies all three components of the good beer. Anyway, if nothing to say about ice and malt, Batumi residents will confirm we definitely preserve the conscience. That’s why Beer Batumuri offers serious competition to other famous beer brands in the Ajara Region! - In one word, Beer Batumuri is the spirit of Batumi. Therefore, everybody who appreciates Beer and the taste of Beer Batumuri, frequently visit the PivZavodi (the local nickname that Ba

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eer Batumuri bears one simple secret – the beer is vivid and alive! And the “Vivid Beer” signifies the beer is free of all chemical supplements. By the way, in due time, Batumi Brewery used to apply its own malt, that is the complex included a malt processing enterprise that was led by famous technologist Leo Tsulaia for over 50 years. Today the Malt Enterprise does not function. Its outdated building has ruined, while significant finances are required to construct a new one. Therefore, today, the Batumi Brewery imports malt from France, Germany and Ukraine. Georgia grows a redundant volume of malt and Georgia-based breweries should not have to import malt from abroad, the brewery manager says. The Ajara Business Week (ABW) has interviewed Mr. Ednar Tsivadze, who has a 40-year experience of working on various top management positions.

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In the Soviet period, the Beer Batumuri won the second award twice in the USSR contest.

tumi residents call the Batumi brewery). - By the way, a famous singer has recently visited our brewery and drunk 14 mugs of Beer Batumuri! This is not surprising at all, Beer Batumuri is a vivid Georgian brand!

MARKET ajara business week

November 16, 2015 #15

HEALTHCARE ajara business week

ANTIMICROBIAL THERAPY TO BE IMPLEMENTED IN GEORGIA’S PRIMARY HEALTHCARE

Georgian Doctors Will Take Instructions From Sanford’s Guide to Antimicrobial Therapy

eorgian practitioners were given instructions from Sanford University Guide to Antimicrobial therapy. National Center for Disease Control and Public Health of Georgia (NCDC), hosted a conference on introduction of rational application of Antimicrobial Therapy in the country. The Georgian version of 45th edition of the Sanford guide to Antimicrobial therapy was presented on the event. The guide is an internationally acclaimed publication and is daily used by every American practitioner. Starting now Georgian therapists as well, will take instructions from this book, which holds many years of medical experience. The presentation by Dr.Elizabeth Bouvet and Dr.Malvina Javakhadze addressed the European perspective on then use of antimicrobial therapy, as well as the instruction for implementation of the Sanford guide for Georgian practitioners. The event was organized by the Ministry of Health, National Center for Disease Control and Public Health in collaboration with GAHSC. Representatives of the Ministry of Health, NCDC, Global Alliance and Georgia’s regional hospital practitioners attended the event.

Jean-Elie Malkin: Antimicrobial Resistance Rationalizes The Use of Antibiotics

President of the international consulting company, Global Alliance Jean-Elie Malkin discussed the overall healthcare condition in Georgia and outlined Antimicrobial resistance as the way to rationalize the use of antibiotics. “As the president of the Global Alliance, I would like to say we are supporting authorities of Georgia and the Ministry of Health and the Minister himself on the ongoing process of improving the whole health care system. This initiative taken by the Ministry and NCDC of translating the Sanford Guide on the use of antibiotics is fully in line with what we are doing. Why? Because we are aiming to improve the whole health care system, to improve quality of services, to improve efﬁciency of services, and – what is the most signiﬁcant – to improve the cost effectiveness of these services,” Malkin said.

By better rationalizing the use of Antibiotics – which I am sure this guide will allow all the practitioners to do – it will also allow doctors in the ﬁeld of infectious diseases, to be more effective, to provide better quality of services and to save money. Saving money is important because the misuse of antibiotics increases the overall cost of health, so not only it will be beneﬁciary for patients and doctors but also for the whole country.

ZAZA SOPROMADZE deputy Minister of Healthcare considers Antimicrobial resistance a global issue: “We are trying to share the European experience to our practitioners, and give them adequate recommendations and instructions. We have translated Sanford University’s guide to Antimicrobial Therapy. National coordination council of Antimicrobial resistance has been created in Georgia. A national strategy has been prepared, which, ﬁrst of all, implies rational pharmaceutical therapy. This is very important because such infections are difﬁcult to treat and are related to certain costs”.

General Director of NCDC AMIRAN GAMKRELIDZE Conference covering Antimicrobial resistance is organized with the support of “Global Alliance”, as you know the company consulates the Ministry of Health and shares recommendations during the process of reforms, their involvement in Antimicrobial theory is highly important. Last 70 years antibiotics have rescued millions of people, but at the same time one of the world’s big challenges is Antimicrobial resistance, which is getting more and more actual nowadays. Choosing antibiotics is hard and new drugs are created slowly. After implementation of C hepatitis, infection control is increased in medical and non-medical institutions.

Elizabeth Bouve: Antimicrobial Resistance is a Worldwide Issue and Georgia Can Solve It With the invitation of Global Alliance, Professor Elizabeth Bouve attended the conference and discussed the ways of improving use of Antibiotics by practitioners. French professor spoke at the conference how to make rational use of antibiotics in the country, what primary health care practitioners need to know, and on the society that has a certain inﬂuence on the development of the health sector: “Antimicrobial resistance is a worldwide issue. The main theme of my presentation was this problem. Georgian doctors were given a very important guide, and I would like to recommend all the practitioners, to apply and implement these guidelines and habits outlined in the book. The rational use of antibiotics is an important issue. I support the government and the Ministry of Health in undertaking this initiative for the country.

With such support, appropriate practices and speciﬁc actions, I think this problem will be solved. “Global Alliance” is the organization that can consult the Ministry of Health appropriately.

Malvina Javakhadze: Doctors Should Avoid Antibiotics if the Patient Does Not Require Hospitalization According to Prof. Malvina Javakhadze Antimicrobial resistance exists since an antibiotic has been created, but today due to many problems taking antibiotics is not proﬁtable for pharmaceutical companies: “If we continue with such pace, in a few years even a light infection will be incurable and deadly to humans. If we use antibiotics often and unintentionally, future generations will be affected. With regard to primary healthcare – in cases where the patient does not require hospitalization, the choice shouldn’t be made on anti-

microbials. International Week of Antimicrobial resistance is celebrated throughout the world, starting November 16. Prescribing antibiotics has been a major step forward and will prevent lots of problems. “ Antimicrobial resistance is the global challenge of 21st century, which has surpassed state boundaries, expanded to all parts of the world and became a pandemic. The rational therapy is on one hand an important intervention to treat infectious diseases, and on the other, it is a major instrument to tackle antibiotic resistance.

PUBLICITY ajara business week

November 16, 2015 #15

EVENTS ajara business week

FOODPANDA CAMPAIGN “YOU SAY, WE GIVE” IS A SUCCESS 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

Foodpanda saw to 875kg of products being equally distributed between 5 socially unprotected families. October 16th marked the Earth’s celebration of World Food Day. This annual day unites peoples from around the world for one common goal: to contribute in fighting and eventually defeating hunger. This year, Georgia has joined the efforts the second time with a campaign. On this day, online food ordering service foodpanda celebrated World Food Day by carrying out a campaign named “You Say, We Give” through joint efforts with the Charity Fund “Liberal Footprint”. The campaign, which carried on throughout a week up to October 22nd, joined global efforts to end hunger. Users voted for one of five types of food via Facebook comments, and foodpanda then accumulated all this input. They then equally distributed the according weight in kg of each product to five families suffering from poverty. Giving had never been this easy. Hundreds of people engaged in the global movement aimed at eradicating this persistent issue. Every single person who left a comment for the campaign became a part of that movement and facilitated real, tangible change with foodpanda. And the results are now in! 875kg in total were accumulated; 150kg of pasta, 100kg of rice, 250kg of beans, 250kg of potatoes, and 125kg of buckwheat. All five of these products were equally divided by five and gifted to the same number of socially unprotected families with large numbers of children. Taking part was quite easy, all it took was to visit foodpanda’s Facebook page (www.facebook.com/foodpandage) and leave a comment under the according post. Every comment equaled a kilogram of the product in question, and every shared post doubled the amount. The point was to not just create a one-off moment of charity, but to bind it to a system of discussion. Hence the more people that were engaged in talking about the problem, the more products foodpanda ended up giving out. User activity in this case was crucial, as they shared and commented under the charity post. They chose between buckwheat, beans, potatoes, rice, and pasta. “The engagement of our userbase allowed us to aid five families beyond the poverty line. Their activity defined everything! We got 875kg of products overall, and I wish to extend my sincerest thanks to all those who left comments and partook in the event,” – stated foodpanda’s director at Georgia, Giga Kerkadze. “With the help of its users, foodpanda came to the aid of the Fund’s beneficiaries, five families, who each got five types of products. The amount was quite substantial, they got enough pasta, rice, beans, potatoes, and buckwheat to last them the coming winter. I offer my thanks to foodpanda for such a charitable move,” – noted Keti Sichinava, the president of the Charity Fund “Liberal Footprint”, in her thanks to the company. The efforts to combat poverty and undernour-

ishment specifically take root in 1945, Quebec, with the foundation of the Food and Agriculture Organization of the United Nations (FAO). Its aim was to showcase the issue of hunger to the world and spark a charity movement towards it. According to research data from FAO, 805 million individuals, as in one in every nine residents of Earth, are living in chronic hunger. 60% of them are women. Annually, almost five million children under the age of five tragically die from causes connected to malnourishment and hunger. The World Food Day is an annual event against hunger. It takes place on October 16th, having been founded in Quebec along with the Food and Agriculture Organization of the United Nations (FAO). It yielded significant results for the past 15 years, having halved the number of hungering people in 40 countries. The death rate of children under the age of five has also been cut down to half, equating to approximately 17,000 child lives saved per day. http://www.worldfooddayusa.org/ The foodpanda group is the leading global online food delivery marketplace, active in 40 countries on five continents. The company enables restaurants to become visible in the online and mobile world and provides them with a constantly evolving online technology. For consumers, foodpanda offers the convenience to order food online and the widest gastronomic range, from which they can choose their favorite meal on the web or via the app. foodpanda operates in India, Thailand, Indonesia, Pakistan, Singapore, Malaysia, Brunei, Vietnam, Taiwan, Bangladesh, Kazakhstan, Azerbaijan, Hong Kong, Philippines, Russia, Hungary, Romania, Bulgaria and Georgia. hellofood operates in Brazil, Mexico, Saudi Arabia, Jordan, Egypt, Nigeria, Morocco, Kenya, Ghana, Senegal, Ivory Coast, Rwanda, Tanzania, Uganda and Algeria. Delivery Club operates in Russia. NetPincer in Hungary, Donesi in Serbia, Bosnia & Herzegovina and Montenegro, and Pauza in Croatia, Room Service in Malaysia and Singapore, City Delivery in Philippines, Food By Phone in Thailand, Koziness and Dial-a-Dinner in Hong Kong, Eatoye in Pakistan, and 24h in UAE. www.foodpanda.ge

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

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

PUBLICITY ajara business week

November 16, 2015 #15