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September 28, 2015 #115

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September 28, 2015, Issue 115

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Govt Targets 3% Economic Growth in 2016

GEORGIAN REGIONS WITH DOMINATING AGRICULTURE PRODUCTS

he recent research has showed the Shida Kartli Region is famous for apple and cherry production, while the Kvemo Kartli produces a plenty of onion, tomato and cuPg. 5 cumber.

Pg. 2

Zura Japaridze Proposes to Fix GEL Exchange Rate

GEORGIA UPS GAS IMPORT FROM AZERBAIJAN

eorgia’s natural gas imports from Azerbaijan increased by 14.1 percent in January-August 2015, the Georgian National Statistics Service reported. Pg. 5

“PARTNERSHIP FUND” WILL STUDY TOURISM OPPORTUNITIES IN RACHA

artnership Fund” starts studding of tourism opportunities in Racha region jointly with consulting company BDO. However, basic concept of regional development should be prepared on this base. Pg. 6

ADB APPROVES 75 MILLION USD CREDIT LINE TO GEORGIA

BUSINESS REDUCED PRODUCTS STOCKS BY 30%

eorgian importers reduced the amount of the available stocks of goods in warehouses by 30% – it also concerns food products. Pg. 10

Pg. 4 Pg. 7

Kakheti Reaps Record Volume of Grapes in 2015 Vintage According to National Wine Agency, a record quantity of 6,722 tones of wine was produced in Kakheti in a single day on September 23rd. In total 50, 000 tones of wine was produced by 12.00 pm of September 24th. Out of the amount

produced, up to 21,000 is Rka Tsiteli; 22, 000 is Saperavi; up to 1,600 Kakhetian Mtsvane and 6,200 tones of other types of wine. 30 million GEL was the total amount accumulated after selling the wine in Kakheti region.

Georgia’s Eight Top Exports Items As it turned out, the country mostly exports medicine, ferroalloys, cars, nuts, wine, mineral water. The ﬁve largest importers of Georgian products are Armenia, Azerbaijan, Turkey, Russia, Ukraine. As of January-July 2015, exports from Georgia amounted to $ 1.268 billion. 11.7% of exports fall on copper and copper concentrates - $ 148, 8 million, followed by fer-

roalloys - $ 129, 5 million and 10, 2%- fall on passenger cars ($ 110, 8 million) and 8.7% - on medication ($ 76, 5 million), 6% - on nuts ($ 75.3 million) and 5.9% - on nitrogen fertilizers ($ 62, 5 million), and 4, 9% - on mineral and fresh water ($ 54 million) , 4, 3% - on wine ($ 47. 9 million), 3, 8%- on oil products ($ 46.8 million) , 3.7% - on gold ($ 34, 4 million) and 2, 7% - fall on other products Pg. 6

Anna Jalagonia: Housing Prices Fell by 15% Pg. 4

EU SURPASSES CIS IN GEORGIA’S FOREIGN TRADE TURNOVER TbilisiTrade turnover with the EU is increased by 2% year-over-year in January-August, while drop of 23% has been ﬁxed with the CIS countries. According to “Sakstat”, foreign trade turnover with the EU countries has made up 1,982 billion USD through 8 months of this year. However, Georgia made export of 413 million USD in the EU countries, which is increased by 1% i.e. 8 million USD. Pg. 6

Abandoned Geocell with Misty Future Corruption scandal in Uzbekistan has made TeliaSonera withdraw from Georgia and the CIS markets by alienating its own operators and shifting a focus on the EU market. Pg. 5

WITH THE SUPPORT OF “GLOBAL ALLIANCE” NATIONAL CENTER OF DISEASE CONTROL HOSTED AN INTERNATIONAL CONFERENCE A key component of the overall quality of care, aims to encourage Georgia’s Association Agreement with the EU in 2014. This agreement foresees adoption of new regulations. With particular focus on medicinal products, Georgia is expected to adopt amendments to its national law on drugs and medicinal products and other regulations in terms of registering and licensing these products. Pg. 8

France Conﬁdent in Big Potential of Cooperation with Georgia France is aware of the big potential of deep economic relations with Georgia, France’s Foreign Minister Laurent Fabius said yesterday while meeting his Georgian counterpart Giorgi Kvirikashvili. The idea to create a Georgia branch of the Development Agency of France (AFD) was discussed in the context of developing Georgian-French economic ties, stated Georgia’s Foreign Ministry.

AFD is a ﬁnancial institution and the main agency that implements France’s ofﬁcial development assistance to developing countries and overseas territories. With Fabius, Georgia’s Foreign Minister touched upon a wide range of topics including Georgia’s visa liberation goals and EuroAtlantic aspiration, Russia’s provocative actions and the ongoing issue ofcreeping occupation of Georgian soil. Pg. 2

TBC BANK OFFERS CONTACTLESS STICKERS CREATED JOINTLY WITH GEORGIAN PAINTERS TBC Bank offers exclusive contactless stickers created jointly with Georgian painters. According to TBC Bank, Tatu Kiladze, Levan Amashukeli, Iura Berishvili and Maia Sumbadze – these are those painters, whose paintings are expressed on the contactless cards of TBC Bank. TBC Bank explains that they have ofﬁcially acquired the right to place the painting on the card. The aim of the project is promotion of Georgian painters. Pg. 9

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GOVERNMENT NEWS

2 MAIN EVENTS

GOVT TARGETS 3% ECONOMIC GROWTH IN 2016

he Georgian government proposed state budget for 2016 will set next year’s economic growth forecast at 3%, PM Irakli Garibashvili said at a government session on September

GEORGIAN SOLDIER’S BODY DELIVERED TO HOMELAND FROM AFGHANISTAN

plane carrying the body of Georgian soldier Vasil Kuljanishvili has touched down on Georgian soil. Kuljanishvili’s body was met by members of his family and several ofﬁcials at Tbilisi International Airport this afternoon. Georgia’s President Giorgi Margvelashvili and the new United States Ambassador to Georgia Ian Kelly were among those gathered as to pay tribute to Kuljanishvili, who was killed while on a peacekeeping mission in Afghanistan. Margvelashvili noted the “great service” of the Georgian Armed Forces (GAF) personnel serving in Afghanistan while the US Ambassador said he was “impressed” by the fallen soldier’s bravery while on duty.

EX FINANCE MINISTER REPORTEDLY TO BECOME ASSISTANT TO MP SAGANELIDZE

irian Gogiashvili, Finance Minister of Shevardnadze’s government, supposedly will be appointed as a deputy of executive director of Partnership Fund. As conﬁdential source declared to GBC, Gogiashvili, head of Anti-Corruption Council in the period of Shevardnadze’s government, will come within a month after ﬁnishing of restructuring in Partnership Fund.

AJARA GOVERNMENT TO FINANCE TOURISM SECTOR PROMOTION CAMPAIGNS BY 6 MILLION GEL

he Ajara Region’s tourism infrastructure is growing and the budget of the Ajara Tourism and Resorts Department is increasing too. The department will reportedly spend 1.326 million GEL on implementing tourism and resorts management development projects. The regional budget will spend 3.777 million GEL on the Ajara tourism sector marketing projects on domestic and international level. A total of 864 800 GEL will develop tourism products and services. The information was unveiled at the public discussion of the Ajara tourism Department’s 2016 program budget.

AIR POLLUTION CONTROL DEVICES TO BE INSTALLED IN GEORGIA

s of the Ministry of Environment Protection, the devices will be installed in 60 areas throughout Georgia (Tbilisi, Rustavi, Batumi, Kuataisi, Zugdidi, Zestaponi, Akhaltsikhe, Gori and Telavi). 26 points have been selected in Tbilisi. After several times, the indicators should be collected and placed in the containers. The containers will be send in line of appropriate conditions to the UK for laboratory analysis. According to the Ministry, National Environment Agency will be able to determine in details air pollution conditions in Tbilisi and other cities.

23. The government was initially expecting 5% growth this year, but it had to cut it to 2%. Real GDP growth stood at 3.2% y/y in the ﬁrst quarter of 2015 and at 2.5% y/y in the second

hich envisages research of antibiotics and pesticides in the content, that is demanded by the EU Food Safety Legislation. Laboratory received ISO 17 025 international accreditation from ANAB (ANSI-ASQ National Accreditation Board) in March, 2014. The existence of the laboratory has been an obligation of DCFTA as well. Of the Ministry’s decision, the laboratory will offer research of 1 sample of honey to BeeKeeping Cooperatives free of charge (including December 31, 2015).

quarter. Georgia’s economy grew 4.8% in 2014. Next year’s budget deficit will be 3%, Finance Minister Nodar Khaduri said. PM Garibashvili also said that inflation forecast will be set at 4.5% in the draft of 2016 state budget, which has yet to be submitted to the Parliament for consideration. Georgia’s annual inflation accelerated to its highest rate in four years at 5.4% in August from 4.9% in July, according to the state statistics office.

GEORGIA’S BUDGET FOR NEXT YEAR WILL REACH ABOUT GEL 10 BILLION, SAYS FINANCE MINISTER

ext year’s state budget will be about GEL 10 billion, - Minister of Finance Nodar Khaduri told reporters after the Cabinet meeting today. Nodar Khaduri presented main parameters of the 2016 state budget to the media. “Next year’s parameters will be the following – 3% economic growth, 3% budget deﬁcit and

inﬂation of around 4-4,5 %, as provided by the central bank’s monetary policy”, - he said. As for a question about the next year’s exchange rate, the Minister of Finance said that the rate did not affect the budget very much. “The exchange rate affects only two factors – the taking of a foreign debt and its repayment”, said the Minister of Finance.

PUBLIC TENDER PRICES MAY HIKE

he Ministry of Infrastructure is planning to introduce a new system of granting advances to companies that won the tender - in particular, no more than 10% of the total amount of the tender will be issued and in the case of justiﬁed need - additional 10%. According to Minister of Infrastructure Nodar Javakhishvili, currently many companies get 20-30% of the advance, and this vicious practice must be stopped. In the words of Paata Trapaidze, Director of “Caucasus Road Project” company which often takes part in public tenders, this initiative by the

Minister can be only hailed. “Many companies that have financial problems are trying to patch up their black holes with advances from the state, many are trying to work on the principle of the pyramid, where the obligations under the first tender are carried out on the money received from the second. It finally hit both the state and the companies themselves. Under the new conditions, it will be impossible. The new model will create serious problems for these companies, “- the businessman notes. He notes that the Minister of Infrastructure is trying to get away from the practice of self-decep-

tion, which ultimately will bring nothing good. At the same time, in the words of Paata Trapaidze, the new system has its drawbacks - in particular, tender prices may hike. “The new system may slightly increase tender prices f, but probably slightly. This is due to the fact that companies tend to buy materials for dollars, often buy them in advance. In the current situation, the exchange rate of the lari is so unstable that it is impossible to buy anything in advance without advances. However, if the exchange rate is stabilized, the new system in general will not have any noticeable ﬂaws, “- Paata Trapaidze explains.

FINANCE MINISTER AGAINST BELT-TIGHTENING MEASURES IN STATE SECTOR

ery worthy people work in the public service, and their work should also be adequately paid – Georgian Minister of Finance Nodar Khaduri commented the initiative of one of the deputies of the parliamentary majority concerning the reduction or abolition of bonuses for civil servants. According to the Minister, the initiative is an attempt to force an open door. “The system of bonuses has already been ordered

at the ministerial level. As for wages in general, I have repeatedly said that very worthy people work in the public service, and their work should also be adequately paid, “- said the Minister of Finance. “Of course, we are ready to discuss this issue with everyone, but it should be understood that the “streamlining” and “abolition “- is not the same thing. And it does not mean that we do not need to give bonuses to anyone. If anyone deserves the award for his work, he should get it “- the Minister of Finance believes.

The new initiative provides for restrictions on the bonuses received by large state ofﬁcials. We are talking about the deputies, the heads of administration of the government, the presidential administration, their deputies, heads of the Security Council and Crisis Management, ministers, prosecutors, etc. As the initiator of the project states, an MP from the ruling majority Zakaria Kutsnashvili savings on premiums only for this group of persons will release about GEL 4.5 million per year.

FRANCE CONFIDENT IN BIG POTENTIAL OF COOPERATION WITH GEORGIA

AGRICULTURE MINISTRY TO INTRODUCE EU STANDARDS IN HONEY PRODUCTION

September 28, 2015 #115

caucasus business week

rance is aware of the big potential of deep economic relations with Georgia, France’s Foreign Minister Laurent Fabius said yesterday while meeting his Georgian counterpart Giorgi Kvirikashvili. The idea to create a Georgia branch of the Development Agency of France (AFD) was discussed in the context of developing Georgian-French economic ties, stated Georgia’s Foreign Ministry.

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AFD is a ﬁnancial institution and the main agency that implements France’s ofﬁcial development assistance to developing countries and overseas territories. With Fabius, Georgia’s Foreign Minister touched upon a wide range of topics including Georgia’s visa liberation goals and Euro-Atlantic aspiration, Russia’s provocative actions and the ongoing issue ofcreeping occupation of Georgian soil. We have provided a major message - that Geor-

gia has already fulfilled all its homework over visa liberation with European Union countries (EU). [And] The current migration problem in Europe should not hinder Georgia’s pace to gaining visa free travel with the EU,” Kvirikashvili said, adding the French side praised Georgia’s reform efforts as it strived to achieve its visa free travel goals. The Georgian Minister also stressed that France appreciated Georgia’s role in international peacekeeping missions. Kvirikashvili’s meeting yesterday was one of his final high level meetings during a two-day business trip to France, which ended last night. On the first day of the trip the Georgian delegation, led by Kviriashvili, participated in a business forum organised by MEDEF, the French Business Confederation’s international organisation and the Georgian National Investment Agency. Within the event the Georgian National Investment Agency and MEDEF signed a Memorandum of Understanding that envisaged regular bilateral exchange of information and participation in each other’s business meetings and events.

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PUBLICITY September 28, 2015 #115

caucasus business week

4 HEADLINES NUMBER OF SOCAR GAS SUBSCRIBERS IN GEORGIA INCREASES BY OVER 10%

he number of SOCAR Georgia Gas subscribers for eight months of 2015 increased by 10.27 percent and amounted to 475,737 people. The company rendered service to 378,778 subscribers in 2014, according to the agency. In comparison with January-August 2014, the number of subscribers increased by 14.39 percent. The highest growth was recorded in 2013. During the reporting period, the number of subscribers increased by 218.3 percent (by 215, 261 subscribers). The number of potential and existing subscribers of SOCAR Georgia Gas has increased by 439.4 percent (from 83,449 to 430,304 subscribers) in 2010-2015.

INTERVIEW

ZURA JAPARIDZE PROPOSES TO FIX GEL EXCHANGE RATE An Interview with MP Zurab Japaridze, the New Political Center founder

“WHITE SAILS” COMPLEX TO BE BUILT IN BATUMI

new complex “White sails” worth $ 30 million will be built in Batumi. According to the government of Adjara, the project is being carried out by Armeridans company. The complex will be located on 120 thousand square meters and will include two ﬁve-star hotels and six apart-hotels as well as outdoor and indoor pools, entertainment and shopping centers, restaurants and lounge bars.

GEORGIA RANKS THE 11TH IN THE ROBIN HOOD INDEX AT THE EXPENSE OF IVANISHVILI

he Robin Hood Index created by Bloomberg envisages what if the richest billionaire in every country were to equally distribute his wealth among everyone living in poverty in that nation. However, Georgia ranks the 11th at the expense of the sole Georgian billionaire Bidzina Ivanishvili.

“ZEDAZENI” STARTS PRODUCTION OF NATURAL JUICES

eer and lemonade manufacturer “Zedazeni” starts production of natural juices. According to the company’s founder Cesar Chocheli, work on a new project was launched some time ago, but due to the difficult financial situation in the country, it has been delayed. In his words, the contracts for the supply of equipment are partly signed, negotiations are underway and will soon be completed. The enterprise will be opened on the basis of an operating factory, and drinks are expected to be made from local products. “At the first stage investment will amount to 7.5 million euro,” - the businessman notes.

BUSINESS EXPECTATIONS INDEX INCREASED BY 30 POINTS IN Q3 AND IT REACHED UP TO 34

- What is your opinion on reasons and grounds that have inspired the GEL exchange rate devaluation for the last year? - The government refers to external factors. Naturally, the government is responsible for this failure, because they consider Georgia to be a country frozen in a static state around which changes are taking place: if these changes around us turn out positive ones, the country will live better, but if these factors turn out negative, the problems will shake the whole country. This is an absurd approach and archaic thought about economic policy. I have personally talked about the necessary measures and steps for 3 years. We have met the crisis phase unprepared and we are carrying out the inappropriate policy opposite to the real needs. The government made the ﬁrst mistake when it abolished the planned taxes instead of their reduction. We could use our economy in positive mood in this crisis period. This is possible by carrying out a reasonable policy. What do I mean? Amid the surrounding crisis, capital leaves the space around us. We could create good conditions to drag this capital to our country. - Do you think a separation of the bank sector supervision functions from the National Bank will bring positive effects? - I hope everybody realizes the separation of the bank sector supervision functions from the na-

tional bank has no relation to the GEL exchange rate. This is an absurd decision. From the very beginning, this was clear that the Authorities have taken a politically motivated decision that has already brought its effect. Negative signals were sent to all due destinations. There is a way out and this way out is of vital importance. What should we do to tackle this problem? I have introduced an initiative to the Georgian Parliament regarding this issue. We are facing problems and many risks that hinder an inflow of investments to the country, whilst investments represent an only way to quickly grow the economy and get rid of the current poverty. There is no alternative way, because Georgia is a poor country and the domestic investments are unimportant. There are many risks for making investments in Georgia. The main risk comes from Russia. Our lands have been invaded and no one knows how Russia will conduct in the near future. The second challenge is related to the government’s unreasonable policy for the last 3 years. All investors guess this government is unforeseeable and unpredictable. The third risk is related to currency risks for the last 2 years. In this period, the Georgian GEL has become a fully unreliable currency. Our ordinary citizens do not trust the national currency. Neither I nor my neighbors nor my family members trust GEL, because no one knows what will happen tomorrow. And how investors will be confident in GEL? Therefore, first of all, we need a reliable currency and the solution consists in fixing the GEL exchange rate in relation to USD or EUR or other reliable currencies. GEL should be fixed and neither investors nor our citizens should be afraid of whether the GEL exchange rate is 2.5 or 2.37. Moreover, we should introduce a free currency regime and Georgian citizens should be entitled to take salaries in any currency, not in only GEL obligatorily, including they should be able to receive pensions in USD. Our citizens should be able to buy products and all sorts of goods in USD and EUR in the same way as bank deposits are saved in USD and vehicles are sold in USD. This is an only instrument to neutralize currency-related risks and there is no other alternative. After February the National Bank administration will be reshuffled by the parliament’s majority

that has staffed this useless government. So, you can imagine all the turmoil after that. - What is your prognosis about the 2016 coming election period in terms of economic situation? - I am not sure something reasonable may take place under the ruling of this government. I cannot imagine this government will take reasonable steps tomorrow. Moreover, a Georgian proverb says: Better to Have the Head Broken than the Name Ashamed. These Authorities have already disgraced their name. Neither investors nor Georgian citizens trust them. Expectations as if investments will be drawn to Georgia and the economy will start working, USD inflows will grow and the GEL rate will strengthen are vain illusions and somebody may dream of these fortunes, but I think these expectations are unrealistic. What is the solution to this situation? The solution is clear and specific: First of all, expenditures should be cut, expenditures should be cut in billions. The state budget should fundamentally shrink. The government should cease wasting money. For example, the Economy Ministry spends 200 million GEL, the Energy Ministry spends 125 million GEL. And are there any results of the performance of the Economy Ministry and the Energy Ministry while investments inflow to the power sector catastrophically falls? We waste 325 million GEL every year in this way. Secondly, investors should have a reliable and strong currency in Georgia. Currently we are facing the currency crisis, turmoil and the solution consists in the above-mentioned – the GEL rate should be fixed in relation to EUR or USD and the country should introduce a free currency regime. Kakha Bendukidze has lobbied these approaches. Regretfully, a different position was prioritized by the then Authorities and Kakha could not implement this policy. Seemingly, Kakha was foreseeing the country could enter similar crisis period. Today we should take these steps immediately if we genuinely want to somehow liven up the economy. I expect the situation to go worse. Regretfully I expect the current currency crisis will turn into a credit crisis and this will bring catastrophic outcomes to the country. The Choice, a Rustavi 2 TV Channel’s Program

ASSOCIATION OF REALTORS: HOUSING PRICES FELL BY 15%

ccording to ISET Research Centre, business disposition is improved in Q3 after the sharp drop in Q2, 2015, expectation growth has become the basic reason. Index of business expectations is increased by 30 points through a quarter, which has fully compensated decline of Q2. As the research notes, April, May and June has not been revealed proﬁtable period for Georgian business.

An interview with the head of the Georgian Association of Realtors Anna Jalagonia

REGISTRATION INDEX OF NEW COMPANIES REDUCED IN AUGUST

egistration index of new companies reduced in August. According to Public Registry Agency, registration number of legal entities has amounted to 2 843 units in the country in August, at that 97.5% are entrepreneur entities, while 2.5% - non- entrepreneur entities. Registration index of new companies is declined by 32% comparing to July, while reduction totals to 7,8% year-over-year. It worth mentioning that 50,4% of business entities are registered individual entrepreneurs and 43,8% - Limited Liability Companies. To note, 72 non-entrepreneur entities, 71 cooperatives, 12 branches of foreign entrepreneur entities, 10 Joint Stock Companies and 1 Limited Partnership are registered in this month in the country.

September 28, 2015 #115

caucasus business week

- How did the lari devaluation affect the real estate market? - An impact is certainly great, but mostly it was not caused by the lari depreciation , but by the current instability in the country. The currency rate is a problem that has a very negative effect on the mood of investors and buyers. But the instability of the rate is even worse which means the impossibility of a more or less long-term

planning. This prevents an investor who can’t plan his costs during the next month, and it prevents the buyer who does not know at what rate he will have to pay for the purchased property in a couple of weeks. This process has already seriously affected the real estate market. The demand has fallen sharply. Although the construction companies have chosen the right strategy - despite the crisis, they do not deteriorate quality, despite the fact that the situation has a negative impact on expenditure of construction companies and the prices. - In which segment a decline in demand is most noticeable - for housing or commercial space? - The decline in demand is more pronounced for housing, apartments are purchased by the middle class, which mainly acquires real estate on credit. Сommercial space is bought by a completely different category - despite the crisis, they can calculate all the pros and cons, and still buy a property. The statistics also conﬁrm a decrease in demand for housing; as for commercial space, a situation in this segment is more or less stable. - What are the property prices in a new reality? - Construction companies have to declare discounts. Developers prefer discount actions in or-

der to return prices to their previous level in the event of the lari strengthening. - Did investment in construction decrease? - If you look at the statistics, the construction sector is mainly ﬁnanced by domestic resources. There are very few foreign investors who invest in the construction and it is quite clear - investors prefer to wait due to the unstable situation in the country. - What can we expect in the property market by the end of the year? - By the end of the year we can get a very unpleasant situation due to both the national currency rate and seasonal factors. Winter and autumn are the most passive in terms of real estate acquisition. If we add the lari devaluation, the situation can be very unfavorable. However, given the high-quality proposals of our construction companies and their ability to adapt to the interests of consumers, we don’t eventually expect the catastrophic results. - What will be the prices? - In the primary market discounts are announced for new apartments while in the secondary market prices have already fallen, and perhaps the decline will continue due to the lack of demand. In general, prices for residential real estate fell by about 15% and continue to decline.

September 28, 2015 #115

ECONO-MIX

caucasus business week

ABANDONED GEOCELL WITH MISTY FUTURE Corruption scandal in Uzbekistan has made TeliaSonera withdraw from Georgia and the CIS markets by alienating its own operators and shifting a focus on the EU market. FAREWELL TO EURASIA Swedish-Finnish TeliaSonera has decided to withdraw from the Eurasian small market that mainly unites the CIS member countries. The company’s board of directors has preferred to shift a focus onto the Swedish and other European markets. Jointly with Turkish Turkcell and Fintur holdings, Finnish Sonera launched expansion to the CIS countries at the beginning of the 2000s. The Turkish company transmitted the following controlling packages to Sonera: Azercell (Azerbaijan), Geocell (Georgia), Moldcell (Moldova), Kcell (Kazakhstan). In 2011 Sonera merged with Swedish Telia and set up TeliaSonera. In 2003 TeliaSonera acquired a controlling interest in Fintur Holdings. In 2007 the company bought operators in the former Soviet counties: Coscom (Uzbekistan with trademark of Ucell) and Tcell holding (Tajikistan). In 2008 TeliaSonera acquired Kazakh holding Visor, a mobile operator from Nepal and Cambodia, but sold the Cambodian company soon. SALES LEADERS TeliaSonera is saying a goodbye to mobile operator markets in seven countries, including ﬁve countries in the CIS space, Georgia and Nepal. The cell operators that are owned by TeliaSonera are market leaders in Tajikistan, Azerbaijan, Nepal and Kazakhstan and rank second in Moldova, Azerbaijan and Georgia due to the quantity of subscribers.

The Scandinavian company has not yet divulged schedules for alienating these operators. The Eurasia-based operators earned 20.5 billion Crones in 2014, 2.5 billion USD, that is a 20% ratio in total revenues of TeliaSonera Group that served 45 million subscribers at the end of the year, that is, 60% in total number of its subscribers. The corruption scandal has led TeliaSonera leave the CIS countries and Georgia, but the company maintains a stake in Russian Megafon. For the last 2 years, the company has performed worthy job for improving service quality in the Eurasia space, including in terms of transparency and reliability, TeliaSonera director general Johan Dennelind said. “We believe other bodies will ensure long-term development of these assets. We will beneﬁt our stakeholders and subscribers by making focus on the European market”, Dennelind pointed out. Having left the Eurasian markets, TeliaSonera will maintain cell operators in Scandinavian countries (Sweden, Finland, Norway, Denmark), Spain and Baltic Countries (Lithuania, Latvia, Estonia). Moreover, the company will maintain stakes in Russian Megafon and Turkcell and there are no plans for sales of these assets, the Scandinavian corporation representatives Henrik Westman noted. CORRUPTION TRAILS An entrance of TeliaSonera to Kazakhstan triggered counter-corruption scandal. According to

the spread information, with the aim to purchasing the domestic operator Coscom the Scandinavian company paid 250 million USD to designer Gaiane Avakian and Gulnara Karimov, a daughter of Uzbek President Islam Karimov. After this scandal, TeliaSonera President Lars Nyberg and financial director Per-Arne Blomquist lost their positions in the company. “Doing business may be beneficial in Asia, but the situation with entering market should be improved”, TeliaSonera director general Johan Dennelind said. Geocell has no information on the issue and abstained to make comments. As reported, TeliaSonera holds Geocell mobile communications operator in Georgia. We have contacted the company to receive information on availability of sales of the company. The company representatives noted they had no specific information and suggested us to apply to TeliaSonera with additional questions.

TeliaSonera has taken no real steps for withdrawing from the Georgian market. Only a statement was made on this decision. Only TeliaSonera representatives are able to provide speciﬁc answers to the future plans and the market withdrawal reasons, Geocell representatives noted. TURKCELL PLANS Meanwhile, Turkcell plans to negotiate a purchase of TeliaSonera’s assets in Azerbaijan, the Trend news agency reports referring to comments from Turkcell. The negotiations will be supposedly held in Baku this week. In this situation, the issue about who will purchase the Georgian asset of TeliaSonera becomes more relevant. The company representative says the company plans to sell its stake in Geocell, but cannot name a potential client. “The process will take certain time and we should not accelerate this process”, the letter reads.

GEORGIA UPS GAS IMPORT FROM AZERBAIJAN

eorgia’s natural gas imports from Azerbaijan increased by 14.1 percent in January-August 2015, the Georgian National Statistics Service reported. Georgia imported some 967,670 metric tons of natural gas of oil equivalent worth $201.76 million from Azerbaijan, the service’s foreign trade report for the aforementioned period said. In terms of quantity, the supply increased by 109,160 metric tons of oil equivalent or by 12.7 percent. For comparison, Georgia imported some 858,520 metric tons of gas of oil equivalent worth $176.77 million from Azerbaijan in January-August 2014. The share of gas in Georgia’s total imports from Azerbaijan over the period was 56.4 percent. Roughly 77.1 percent of Georgia’s oil imports originate from Azerbaijan, making it Georgia’s main oil supplier. Georgia imported about $261.75 million worth of goods from Azerbaijan in January-August 2015. Azerbaijan exports its gas to Georgia via a pipeline linking the two countries in the Gazakh region of Azerbaijan. The pipeline’s capacity exceeds 2.5 billion cubic meters per year. The service also reported that Georgia imported 186,100 tons of oil and petroleum products worth $96.4 million from Azerbaijan in January-August 2015, increasing in volume by about 6.6 percent, while total costs dropped by 39.2 percent [due to the decrease in oil prices] from the same period of 2014.

The report said that oil and petroleum products from Azerbaijan accounted for 21.75 percent of the total volume of imports to Georgia in the reported period. In total, Georgia has imported $443.13 million worth oil and petroleum products since early 2015, according to the report. For comparison, the country imported 174,610 tons of oil and petroleum products worth $158.55 million in January-August 2014. Azerbaijan and Georgia established diplomatic relations in 1992, a year after gaining independence from the Soviet Union. In October 1997, Azerbaijan and Georgia became two of the four founding members of GUAM, an organization that also includes Ukraine and Moldova. Along with broad cooperation in regional development, transport, and other important economic projects, Azerbaijan and Georgia have long-standing and successful cooperation in the energy sector. Azerbaijan’s state oil company SOCAR is deeply involved in the energy market of the neighboring South Caucasus republic. Azerbaijan has long been one of Georgia’s largest trade partners. The trade turnover between the two countries amounted to $1.35 billion in 2014. Azerbaijan mainly exports petroleum, petroleum oils and gases, gypsum, anhydrite, plaster and other products to Georgia, while the motor cars, live bovine animals, bars and rods of iron, and cement are the most imported goods from Georgia to Azerbaijan.

GEORGIAN REGIONS WITH DOMINATING AGRICULTURE PRODUCTS

he recent research has showed the Shida Kartli Region is famous for apple and cherry production, while the Kvemo Kartli produces a plenty of onion, tomato and cucumber. The Kakheti Region is a leader in peach production and viticulture. The Imereti Region is famous for dairy products and greenery. The Samegrelo Region also produces a huge volume of greenery, but the Region is leader in term of tea and ﬁlbert production. The Guria Region also produces a huge volume of ﬁlbert. As to Ajara, the Region produces a big volume of mandarin, while the Samtskhe-Javakheti Region makes accent on growing carrot. The ratio of products in total output due to the Regions is as follows: 1. Kvemo Kartli: The apple production constitutes 4% in Georgia’s total output, while the cherry production makes up 7%. Cucumber production makes up 40%, tomato production is 65%. As noted, the Kvemo Kartli Region is a leader in terms of onion production (31%), beef (17%),

poultry meat (19%), dairy products (17%) and grains (13%). 2. Shida Kartli: Apple (64%), Cherry (57%), Peach (21%), Tomato (25%), Onion (15%), Grain (6%), River Fish. 3. Kakheti: Cherry (7%), Peach (70%), Cucumber (40%), Tomato (4%), Onion (10%), Beef (15%), Pork (21%), Poultry Meat (13%), Honey (15%), River Fish. 4. Imereti: Filbert (14%), Apple (6%), Cherry (9%), Mandarin (1%), Peach (25%), Cucumber (10%), Tomato (4%), Greenery, Beef (18%), Pork (20%), Poultry Meat (19%), River Fish, Dairy Products (21%), Persimmon. 5. Samegrelo: Filbert (52%), Apple (9%), Mandarin (5%), Peach (2%), Persimmon, Greenery, Beef (15%), Pork (23%), Poultry Meat (21%), Dairy Products (15%), Honey (33%), Tea (55%). 6. Guria: Filbert (23%), Mandarin (17%), Persimmon, Tea (12%). 7. Ajara: Mandarin (77%), Persimmon, Potato (4%), River Fish, Honey (15%), Tea (33%). 8. Samtskhe-Javakheti: Carrot (70%), Potato (55%), River Fish.

ECONOMY caucasus business week

September 28, 2015 #115

EXPERT: EXPENSIVE MONEY ROUGHLY AFFECTS STATE ECONOMY

EU SURPASSES CIS IN GEORGIA’S FOREIGN TRADE TURNOVER

bilisiTrade turnover with the EU is increased by 2% year-over-year in January-August, while drop of 23% has been ﬁxed with the CIS countries. According to “Sakstat”, foreign trade turnover with the EU countries has made up 1,982 billion USD through 8 months of this year. However, Georgia made export of 413 million USD in the EU countries, which is increased by 1% i.e. 8 million USD. As for import, its volume has been 1,569 billion USD, the ﬁgure exceeds by 2% comparing to the same period of the previous period. The share of this country in Georgia’s foreign trade turnover is 31%, at that 28% in export and 32% in import. (Respectively, 26,21 and 28% in January-August, 2014).

Whereas, trade turnover is decreased with the CIS countries. Both, export and import are declined. Namely, foreign trade turnover has made up 1,791 billion USD in January - August, 2015, while turnover is decreased by 23% year-overyear. Export is dropped by 45% due to the hard economic-political conditions in these countries and the ﬁgure made up 556 million USD. Import is reduced by 6%, which is 1,235 billion USD as of total data of 8 months. The share of the CIS countries in Georgia’s foreign trade turnover has been 28%, including 38% in export and 25% - in import (respectably 31,52 and 24% in January-August, 2014). To note, 20% of trade deﬁcit has accounted for the CIS countries in January - August, 2015 (9% - January – August, 2015).

REVENUES FROM EXPORTS SHRINK 455 MILLION USD IN JANUARY TO AUGUST

xport of top-3 leading commodity groups is reduced by 304 million USD comparing to the previous year. According to ofﬁcial statistics, copper ores and concentrates ranked the 1st in the export basket in January-August, 2015, the product cost of 172 million USD has been exported abroad, which is 12% of total export. Export of copper ores and concentrates has made up 185,6 million USD in the previous year. Export of ferroalloy ranks the 2nd – 149 million USD, decline exceeds 52 million year-over-year. Car export is on the 3rd position, which export is decreased by 2,9 times and the ﬁgure amounts to 125 million USD. Positive trend is noticed in the export of nut and walnut, treating means. Export of these products is increased and respectively amounts to 92 mil-

lion and 84,5 million. Then comes nitrogen fertilizers – 77,68 million and crude oil – 65,3 million. Export of mineral waters is decreased from 99,7 to 58,2 million. Wine export is sharply declined 2 times, which volume totals to 55,3 million USD. The final position is occupied by raw or semiprocessed gold, which is grown from 24 to 40 million. It should be noted, that alcoholic drinks and socalled “fittings” are not included in the top-10. To remind, foreign trade turnover with commodity (without unorganized trade) has totaled to 6,395 billion USD in January - August, 2015, which is less by 14% comparing to the same period of the previous year. Export is decreased by 24% and the figure amounts to 1,459 million USD, while import – by 10%, the rate totals to 4,937 billion USD.

oney is not increased in price in such conditions”, - expert Levan Surguladze declares about the probable tightening of monetary policy by NBG. Levan Surguladze, chairman of Supervisory Board of “Caucasus Business Group” says, that expensive money is a significant pressure for the country’s economy in the condition of low pace of GDP growth”. The expert notes, that in the condition of low pace of GDP growth, deflationary pressures caused by reduced purchasing power of the population is more threatening than inflation, which yet slightly exceeds 5%. According to him, annual inflation might be con-

sidered normal at the level of 8-9% in those countries, which have similar economy to Georgia. Deflation pressure means that business is obliged to reduce prices on the products or services due to the low purchasing ability of the population. In addition, Surguladze makes a focus on the deterioration of borrowers’ benchmark (refinancing) rate. However, risk profile of the borrower should be taken into the account as well, which basically determines interest rate of the loan issued for the borrower. Accordingly, the rising price of money will be the determined by two factors: benchmark (refinancing) rate and premium, which is in line of the risk profile of the borrower (impaired), that is the arithmetic sum of the loans’ interest rate.

GEORGIA’S EIGHT TOP EXPORTS ITEMS What products does Georgia export and what is the country’s export potential?

s it turned out, the country mostly exports medicine, ferroalloys, cars, nuts, wine, mineral water. The ﬁve largest importers of Georgian products are Armenia, Azerbaijan, Turkey, Russia, Ukraine. As of January-July 2015, exports from Georgia amounted to $ 1.268 billion. 11.7% of exports fall on copper and copper concentrates - $ 148, 8 million, followed by ferroalloys - $ 129, 5 million and 10, 2%- fall on passenger cars ($ 110, 8 million) and 8.7% - on medication ($ 76, 5 million), 6% - on nuts ($ 75.3 million) and 5.9% - on nitrogen fertilizers ($ 62, 5 million), and 4, 9% - on mineral and fresh water ($ 54 million) , 4, 3% - on wine ($ 47. 9 million), 3, 8%- on oil products ($ 46.8 million) , 3.7% - on gold ($ 34, 4 million) and 2, 7% - fall on other products - ($ 482 million) and 38% of total exports. According to the expert Soso Archvadze, ferroalloys, which are produced at two large factories in Zestafoni and Rustavi, are in the greatest demand among Georgian products. “Ferroalloys are widely used in agriculture and metallurgy. The demand for them is very high not only in the neighboring countries, but also, for example, in the United States. The advantage of Georgia is that it produces manganese- based

ferroalloys which is also produced here, “- says the expert. He notes it is possible to improve performance of certain export products. “In Soviet times, the demand for the Georgian mineral water was very high and more than 450 million bottles were shipped outside the country. Now the growth of production depends on technology. It is possible to increase the production of nuts, vegetables and fruits that go back to the postSoviet markets ,”- Soso Archvadze explains. In his words, the volume of export of cars has signiﬁcantly decreased in recent years. “In fact, Georgia played the role of mediator between the producing countries and buyers from Azerbaijan, Armenia, Kazakhstan, Russia. After Azerbaijan tightened the requirements for quality of vehicles and Armenia joined the Eurasian Union, exports has fallen sharply. Now car sales are mainly focused on local customers,”- Soso Archvadze adds.

TRADE TURNOVER WITH MAJOR TRADE PARTNER SLIPS 21.5%

ccording to “Sakstat”, trade turnover with Turkey has been 987,97 million USD through 8 months and holds 15,4% in the total turnover. Export amounts to 133 million USD. Decline totals to 25 million year-over-year. At the same time, 9,1% of export made from Georgia accounts for Turkey. As for the import, it is declined more sharply by 248 million and the ﬁgure amounts to 855 million USD. Georgia get 17,3% of imported products from this country. The share of knitted products, electricity, as well

as the so-called “fittings” and copper ore is increased in the export basket. Namely, export of knitted products has totaled to 28,4 million in January-August, electricity export – 14,5 million, “fittings” – 6,3 million, cooper ore – 5,6 million. Decline has been fixed in semi-metal group, where export is reduced from 23,9 million to 18,4 million. As for import, the leading commodity groups were: medicinal products - 52.97 million, plastic pipes and tubes - 25.89 million, black metal constructions - 23.56 million, sanitary-hygiene products - 22.58 million and ferrous metal pipes and tubes - 21.68 million.

“PARTNERSHIP FUND” WILL STUDY TOURISM OPPORTUNITIES IN RACHA

artnership Fund” starts studding of tourism opportunities in Racha region jointly with consulting company BDO. However, basic concept of regional development should be prepared on this base. According to the Fund, the research includes Racha in general, as well as Utsera, Shovi, Shaora and development opportunities of other tourism areas. Feasibility study and market research should be carried out. General plan on the de-

velopment of stately or privately owned assets should be prepared. The Fund regards, that development of modern, international-class resorts will become possible under this research. It should be noted, that Racha is reach with resort areas, which are famous with their spa and mineral water baths. The region has been extremely poplar in the countries of the Soviet Union. Finishing of the research is planned late in 2015.

THE SILK ROAD FORUM TBILISI 2015

etween October 15-16, Tbilisi will host the Silk Road Forum 2015. For many these words are associated with the caravans loaded with silk and spices from China traveling over the deserts, steppes, forests, and mountains all the way to Europe and the British Isles. Caravans are gone, but the Silk Road persists. The camel trains have been replaced by modern highways, railways, pipelines through which modern “silk and spices”: energy, natural resources, manufactured goods, peoples and ideas travel. This new Silk Road can become an inexhaustible resource for economic development and political stability for many countries spreading its beneﬁts from economic and trade to cultural and social factors. Tbilisi Silk Road Forum is an initiative launched by the Prime Minister of Georgia and organized by the Ministry of Economy and Sustainable Development of Georgia and the Ministry of Foreign Affairs of Georgia, supported by the Government of People’s Republic of China and the

Asian Development Bank. This event aims to establish a platform for annual high-level meetings of all interested states and international organizations in order to explore opportunities, align visions and enhance partnership in four main areas of cooperation: transport, energy, trade and business-to-business contacts. The Forum will feature addresses by distinguished keynote speakers and will provide a platform for business executives and policymakers to share their views, experiences and expertise. Forum aims: • To raise awareness and brief the investment community of the scale and range of potential cooperation across the Region • To facilitate regional cooperation and trade • To enhance partnership in transport, energy, trade and people-to-people contacts • To reﬂect Georgia’s drive for foreign direct investment and economic growth For more information please visit: www.tbilisisilkroad.ge

September 28, 2015 #115

HARVEST 2015

caucasus business week

Kakheti Reaps Record Volume of Grapes in 2015 Vintage

ccording to National Wine Agency, a record quantity of 6,722 tones of wine was produced in Kakheti in a single day on September 23rd. In total 50, 000 tones of wine was pro-

duced by 12.00 pm of September 24th. Out of the amount produced, up to 21,000 is Rka Tsiteli; 22, 000 is Saperavi; up to 1,600 Kakhetian Mtsvane and 6,200 tones of other types of wine. 30 million GEL was the total amount accumulated after selling the wine in

WHO SHOULD INSURE WINE GROWERS’ RISKS IN GEORGIA?

eorgian Authorities have to take a decisive step to either finally succumb to the subsidization policy that for many years make Kakhetian farmers and peasants live in economic illusions or show their position strictly by explaining that the Authorities cannot nourish unprofitable business endlessly and wine growers have to find a way out themselves. The confrontation and protests related to the grapes price is an old Georgian story. For the 2015 vintage, the government has set subsidies of 0.35 GEL for a kilogram of Rka Tsiteli and Kakhetian Green grapes and 0.15 GEL for a kilogram of Separavi grapes – the same tariffs of 2014. However, this year the government is issuing subsidies immediately to vinedressers and not to the winemaking companies, contrary to the last 2 years’ practice. Farmers and peasants are able to receive the price of their harvest without a delay in 15 days at Liberty Bank service centers and branches through submitting only ID cards. In 2014 the country processed about 124 000 tons of grapes and the revenues from sold grapes exceeded 174 million GEL (for comparison: the 2013 revenues marked 100 million GEL). Last year the grapes price recorded unprecedented high figures. However, unlike the previous year, when the drought badly shrank the vinedressers’ revenues, this year is recording higher harvest, but the demand is lower as a result of a contradiction in exports and the fact the country still remains dependent on two major markets – Ukraine and Russia. According to the official statistics, in January to July 2015 Georgia exported 16,810,187 bottles of wine to 35 countries, down 46% compared to the same period of 2014. The contraction in wines exports came after two major markets of Russia and

Ukraine recorded a downturn in sales. Georgian wine exports fell by 59% to Russia and by 62% to Ukraine. As a result, Georgian winemakers have accumulated huge reserves of wine and some of them could not even return the costs, especially the category, that had supplied wines to the Russian and Ukrainian supermarkets at fixed prices. Meanwhile, a catastrophic fall in Russian Rubles and Ukrainian Hryvnia has considerably shrunk revenues in foreign currency. Therefore, wineries have neither money nor business motivation to buy the higher harvest at high tariffs, while farmers demand that the existing business risks be resolved by the government. This unhealthy and nonmarket approach was even poured out in proclamations for integrating into the Russian Federation. All these tendencies clearly prove farmers are a less-informed part of our society and no one has explained to them “tight” integration with Russia will further deepen the existing problems. And the problem consists in erroneous expectations created by the Authorities in relation to the Russian market, while farmers were not warned about expected and potential risks. In this situation chopping down vineyards is a provocative move, while the way out implies an expansion of the sales markets, local processing cycle (pressure, family wines), making vodka. This is not the best way out. This year cannot repeat the previous year’s “maximum” – the people involved in this business of the agriculture sector, who earned considerably profits last year, will bear losses in 2015. Unfortunately, similar risks arise in any business time by time and we should realize the winemaking is a business too. Finally, only one figure: in 2013-2014 the government spent more than 250 million GEL (subsidies, agro loans and so on) to alleviate the business risks to vinedressers.

Kakheti region. The harvest is successfully on-going in Kakheti’s every municipality. 74 wine producing companies are involved in the wine production process. Among these companies, 18 are paid by the state. National Wine Agency notes that for the

successful production of wine it is necessary for grapes to be fully ripe. The Agency advises Kakheti’s wine growers to wait for the grapes to enter the right stage and only then sell them to the wine companies.

Revenues from Realization of Grape in Georgia Reach 35 million GEL 57 thousand tones of grape was processed in Kakheti by 12.00 on September 25. The generated income by selling this yield, reached 35 million GEL, The National Wine Agency reports. According to the state institution, vintage is carried out without hamper in all municipalities of Kakaheti – 8 thousand farmers have already delivered grape to wine companies. On September 24, daily processing rate has been ﬁxed the highest index of the last 25 years – 7 100 t. On September 23, this index was 6 722 t. As of September 25, 12.00 p.m., 24 thousand tones of Rka Tsiteli is processed, 25 thousand tones of Saperavi, 1,7 thousand tones of Kakhuri Mtsvane and 6,7 thousand tons was mix of other grape varieties. Georgia’s National Wine Agency announced that most grapes were picked in Gurjaani – about 20 thousand tonnes; in Kvareli – about 11,2 tonnes; in Telavi -- about 10,5 tonnes; In Signagi about 6,5 thousand tones; Lagodekhi – 4,6 thousand tonnes; Dedoplistskaro – 1,8 thousand tonnes; Akhmeta – 1,3 thousand tonnes; And in Sagarejo – 1,2 thousand tones.

CHAIRMAN OF NATIONAL WINE AGENCY CONSIDERS THE NEED OF SUBSIDIZING VINTAGE WINE IN RACHA

ccording to George Samanishvili, based on preliminary analysis, demand is merely on 30% of the harvest, as wine makers still have reserves of previous 2 years. The biggest wine exporter companies declare, that realization of Khvanchkara is reduced so, that existed reserves of Tbilgvino will fully meet the demand of 2016. George Margvelashvili, the President of Georgia declares, that he excludes export and respectively demand growth before the improvement of situation on the key markets. However, farmers actively started growing of Aleksandrouli and Mujuretuli in Racha due to the high prices. However, vintage is not started yet and wine makers have difﬁculties to predict the price, but they know that the price will be less than 8 GEL.

Agricultural Cooperatives Launch Wine Production in Kutaisi

wo cooperatives, Terjola Wine and Sazano, recently received co-ﬁnancing and technical support from the EU-funded European Neighbourhood Programme for Agriculture and Rural Development (ENPARD) through its implementing partner People in Need-Czech Republic in order to increase wine production and improve the quality of the bottles and labelling system. The Ambassador of the Czech Republic to Georgia, Tomáš PERNICKÝ will be present at the launch together with representatives from the local Governor’s ofﬁce.

Cooperative Winery Sazano will use the cofinancing from the ENPARD programme to produce local wines prepared in accordance with European Standards. The total volume of the production for the first year is expected to be 600 litres. Cooperative Terjola wine received technical equipment for the production, bottling and labelling of high quality wine through ENPARD valued at 68,200 GEL. Terjola wine will produce three different types of Georgian wines with a total volume of 2,850 litres for the first year with sales expected to reach 72,456 GEL.

HEALTHCARE

September 28, 2015 #115

caucasus business week

WITH THE SUPPORT OF “GLOBAL ALLIANCE” NATIONAL CENTER OF DISEASE CONTROL HOSTED AN INTERNATIONAL CONFERENCE

nternational conference – Quality of Medical Products: A key component of the overall quality of care, aims to encourage Georgia’s Association Agreement with the European Union in 2014. This agreement foresees adoption of new regulations. With particular focus on medicinal products, Georgia is expected to adopt amendments to its national law on drugs and medicinal products and other regulations in terms of registering and licensing these products. The event was organized by the Ministry of Labor, Health and Social Affairs of Georgia, National Center of Disease Control and Public Health of Georgia in collaboration with international consulting company Global Alliance. David Sergeenko, Minister of Health opened the conference and noted: “This meeting is just one part of the long working cycle we are involved in, with the ultimate goal to implement such regulations that will provide affordable drugs to Georgian pharmaceutical market”. Minister also said, that component of quality control was not available in Georgia’s health care system. To create such system, country should have strong healthcare, I think that quality of medicine is one of the vital factors in healthcare.

Jean-Elie Malkin: Georgia Should Put Few Regulations on Pharmaceutical Issues

Caroline Mascret: Drug registration and licensing should be carried out in accordance with EU standards

aking account these issues president of Global Alliance, Jean-Elie Malkin talked with media. The situation of the pharmaceutical market in Georgia could and should be improved and I know that the authorities, especially Ministry of Health is intensively working for implementing this project properly. Global Alliance supports the Ministry in improving pharmaceutical procedures and regulations. The main issues that were discussed at the conference were the quality, affordable prices of drugs and interconnections between doctor and right prescribed medicines. If you don’t have a good doctor who prescribes right drugs, quality of the drug won’t be efﬁcient. If a medical facility is not good, result won’t be efﬁcient. Quality of drug is vital and quality of the health care service delivery is important as well, we have to interconnect all of these elements.” noted Jean-Elie Malkin. What Georgia could do in order to improve the situation is once again to put little bit more regulations on pharmaceutical issues.

lobal Alliance expert, Dr. Carolie Mascret noted: “If there is will from Georgia’s government to implement EU regulations in order to increase health care quality in the country, I think the process will not be complicated.” Mascaret made this statement at the conference that was held at National center of disease, that was devoted to pharma-regulation issue. Minister David Sergeenko, Dr. Jean-Elie Malkin, Dr. Caroline Mascret, Deputy minister Valeri Kvaratskhelia and other members of regulation agency attended the conference. Her presentation highlighted the tools that will help Georgia to improve drug quality control. “The content of the active ingredients in drugs should be actively checked. There are also other instruments that will allow to check how well a drug works and whether or not it is falsiﬁed,” Carolie Mascret said. The conference and the presentations addressed issues connected to the registration and distribution of medicinal products, adopting EU and other stringent regulator countries standards in terms of registering, licensing pharmacovigilance, GMP, quality control and other issues that will ensure Georgia’s adherence to the commitments undertaken in frames of the relevant agreements.

T “This meeting is just one part of the long working cycle we are involved in, with the ultimate goal to implement such regulations that will provide affordable drugs to Georgian pharmaceutical market”

September 28, 2015 #115

BANKING NEWS

caucasus business week

TOTAL PROFITS OF 18 COMMERCIAL BANKS MARK 292 MILLION GEL

TBC BANK OFFERS CONTACTLESS STICKERS CREATED JOINTLY WITH GEORGIAN PAINTERS

BC Bank offers exclusive contactless stickers created jointly with Georgian painters. According to TBC Bank, Tatu Kiladze, Levan Amashukeli, Iura Berishvili and Maia Sumbadze – these are those painters, whose paintings are expressed on the contactless cards of TBC Bank. TBC Bank explains that they have ofﬁcially acquired the right to place the painting on the card. The aim of the project is promotion of Georgian painters. According to the management, the consumers can demand samples of contactless stickers and

choose one from 4 offered designs. Stickers can be fastened at any thing. However, merely sticker must be used during the payment. Experimental project is carried out by TBC Bank jointly with international payment system “VISA”. “We tried to choose paintings with different style and character in order consumers to choose them in accordance to their taste. We want them to introduce modern art more closely. They can wear them in a conformable form and take pleasure during the payment. Payments can be already made by our cards”, - Tamar Kirvalidze, director of TBC Bank External Affairs and Media Communications declares.

18 out of 19 operating banks are profitable . Merely one bank finished January-August with a loss. Total net profit of 18 banks totals to 293,7 million GEL by September 1 (01.09.14 – total profit of 14 banks – 282,4 million). Consolidated net profit amounts to 291,8 million GEL through 8 months (January-August – 258,7 million). To note, 58% of total profit accounts for 2 largest banks (Bank of Georgia, TBC Bank). Asset share of the banks amounts to 62%. TOP-6 by net profit (million GEL) :

NATIONAL BANK INCREASED THE REFINANCING RATE FROM 6% TO 7%

onetary Policy Committee (MPC) of the National Bank on September 23, 2015, decided to increase the refinancing rate from 6% to 7%. A statement released by the National Bank reads that the decision was based on a macroeconomic evaluation showing that inflation expectations increased sharply against the background of the devaluation of the lari exchange rate against the dollar. “In August, the annual growth of consumer prices amounted to 5,4%. According to the current forecast, after a temporary deviation from the target, the inflation rate for the end of 2015 will go down to the projected level,” it is said in the statement. The National Bank also stressed that the devaluation of lari led to an increase in intermediate costs and a rise in prices of the imported goods.

“The rate of inflation was greatly influenced by the growth in electricity tariffs. Rising inflation limits the drop in world prices for oil and food. A difficult economic situation in the region impedes the economic growth which also had a negative impact on exports from Georgia, as well as the inflow of remittances from abroad. With regard to the positive trends, they are expressed in the fact that the impact of the imbalance on the exchange rate is exhausted and import adjustment, which declined 20%, respectively, the pressure on the national currency has reduced,” the National Bank’s a statement reads. The reason that prompted the National Bank to increase the refinancing rate was the desire to deflate the negative expectations. “In order for the negative expectations not to turn into inflation, the National Bank uses all available tools,” the Bank’s statement reads.

NEW WORLD BANK REPORT POINTS TO MAJOR DEVELOPMENTS IN GEORGIA’S ACCOUNTING AND AUDITING ENVIRONMENT ADB APPROVES 75 MILLION USD he World Bank Centre for Financial “Improvement of the auditing and ﬁnancial acReporting Reform (CFRR) launched counting and reporting is one of the key priority CREDIT LINE TO GEORGIA today an updated assessment of the areas for the Government of Georgia. The con-

“health” of corporate reporting systems in Georgia. The officials of the Ministry of Finance, representatives of the National Bank of Georgia, Georgian Federation of Professional Accountants and Auditors, International Federation of Accountants (IFAC), International Accounting Standards Board (IASB) accountants, representatives of Georgian academia and business leaders took part in the event. Good financial reporting promotes investment, develops capital markets, helps businesses access credit and can improve tax compliance. Strong systems of audit, quality assurance and oversight help ensure financial stability and avoid economic shocks. In 2007, the CFRR made an initial assessment of the accounting and auditing environment in Georgia which revealed some weaknesses and inconsistencies and made a number of recommendations and suggestions to improve the country’s business environment and investment climate. The updated report launched today assesses the progress since then. The participants of the dissemination event welcomed the report’s findings of improvements in the accounting and auditing profession, the adoption of an effective new legal framework, and obvious commitment of all those involved in implementing Georgia’s strategic plan to improve the local business climate and work towards harmonization with the European Union (EU). It was acknowledged that there is a need for further work in this direction. In focussed and engaged discussions, participants assessed the future strategy and priorities. The new legislation needs to be fully implemented and gaps and inconsistencies eliminated. Improving the governance of state owned enterprises is important. The availability of accurate and timely information is key for the Government’s decision making and monitoring. It was noted that more work could be done to further help Small and Medium-Sized Enterprises. There was an agreement on the need to simplify the existing financial reporting requirements and to promote the benefits of good bookkeeping to small businesses, enabling greater access to loans and investment based on business cash flows and less on collateral.

cept aiming at fulfillment of the contractual obligations of the Association Agreement and harmonization of the Georgian legislation with that of the EU has already been prepared by the interagency group working on the mentioned reform,” said Giorgi Tabuashvili, First Deputy Minister of Finance. “We appreciate the support provided by the Centre for Financial Reporting Reform under the World Bank, which has prepared a special report and recommendations. We hope that the open discussion during today’s workshop, and planning of the future strategies will help respective experts, government officials and business representatives to develop the united approach, which will ultimately be reflected in the law amendment package.” “The vision of the World Bank is to reduce extreme poverty and to boost shared prosperity. Effective Accounting and Auditing practices are contributors to these twin goals. The World Bank’s Governance Global Practice puts all efforts toward building economies that are citizen centric, and our roles as accountants and auditors is important in producing reliable information and ensuring that the rights of citizens for getting accurate and timely information are secured,” said Samia Msadek, World Bank Governance Global Practice Director. “With Georgia signing the Association Agreement with the EU last year, all stakeholders involved in financial reporting agenda should use this unique opportunity and position the country, where transparency helps local businesses to go beyond border, and external investors to arrive and become part of the local business environment.” Reports on the Observance of Standards and Codes on Accounting and Auditing (A&A ROSC), compiled by the World Bank Centre for Financial Reporting Reform, analyze the comparability of national accounting and auditing standards with international standards, determine compliance with national standards, and assess the institutional framework supporting financial reporting. They are designed to assist in developing and implementing a country action plan for improving institutional capacity with a view to strengthening the country’s corporate financial reporting regime.

he Asian Development Bank (ADB) has approved a $75 million loan to Georgia. The funding will be spent on government reforms aimed at increasing savings and domestic resources and creating investment opportunities to address inequality of income. “The program will be supporting the government’s agenda to make more money available for social protection programs and small businesses in the face of economic contraction caused by economic slowdown in the region”, said Tariq Niazi, Principal Public Management Specialist in ADB’s Central and West Asia Department. According to ADB’s press-release, Georgia’s economy grew at an annual average rate of 5.8% in 2004-2014, but the slowdown in the Russian Federation led the government to cut its growth projection for 2015 by more than half to 2%. Kathie Julian, ADB’s Country Director in Georgia declares, that the program will further improve the government’s debt management capacity. This will help develop the domestic debt

market to facilitate expansion of Georgian bond and capital markets. To generate more domestic savings, the program introduces a supplementary pensions system based on deﬁned contributions. The bank regards, that this will streamline the existing pension system—which currently accounts for almost 20% of public expenditure. Finally, the program will enhance access to ﬁnance for micro, small, and medium-sized enterprises, especially those run and managed by women. To remind, as of 2014, ADB assistance to Georgia totaled more than $1.6 billion, including approved loans and technical assistance grants.

BUSINESS OMBUDSMAN: FORMATION OF “PARTNERSHIP FUND” INTO STATE BANK IS NOT DISCUSSED

atia Turnava is an acting executing director of “Partnership Fund”. The new executive director of the Fund is not ofﬁcially named yet. George Gakharia, Business Ombudsman and secretary of Government Economic Council declared to GBC, that formation of “Partnership Fund” into state bank is not discussed in the government. Gakharia declares that he does not know who will occupy position of executive director of the fund. However, the media actively considers candidacy of Davit Saganelidze, leader of parliament majority, but none of the ofﬁcial sources have con-

ﬁrmed the fact. To remind, position of executive director of the Partnership Fund has become vacant, after Irakli Kovzanadze is approved as the chairman of Financial Supervisory Agency by the parliament. It should be noted, that Irakli Kovzanadze is a banker. His 22-year experience goes back in finance-banking sector. He has been appointed as an executive director of JSC “Partnership Fund” from November, 2012. 20-year working experience in the banking system of former Soviet Union countries and European preceded his appointment at the mentioned position.

BUSINESS

caucasus business week

September 28, 2015 #115

ACCORDING TO BUSINESSMEN, THE PARLIAMENT DOES NOTHING TO FOSTER BUSINESS BITCOIN INDUSTRY GROWS IN GEORGIA, ATTRACTS $100M INVESTMENT

eorgia is developing a special technology zone to attract international technology players; soon the country will feature on the international map thanks to the construction of a new data centre by the BitFury Group. BitFury Group, a Bitcoin Blockchain infrastructure provider and transaction processing company, is building its second data centre in Georgia’s capital Tbilisi and the ﬁrst Technology Park, in which the company will invest $100 million USD. BitFurry produced Bitcoins in Georgia; an innovative payment network using virtual money. Bitcoins are an online cash and payment system - a form of digital currency - created and held electronically. BitFury privatised 185,000 m2 of land in Tbilisi’s Gldani district from the Georgian National Agency of State Property to develop the Georgian Technology Park project. There BitFury will build a mega-data centre with up to 100 MW energy capacity to process transactions using its latest generation 28 nm and the upcoming 16 nm ASIC chips. The company has developed its third generation immersion cooling system to create energy-saving data centre cooling systems for high performance computing applications. To cool the systems the company needed to use a large amount of electricity, and as the price of electricity was

cheap in Georgia, BitFury selected this country as a preferential place to operate. Georgia will have three main benefits – a $100 million USD investment, to bring modern information technologies into the country and to be added to the innovative technologies world map,” said BitFury official representative in Georgia Eprem Urumashvili. BitFurry currently has one data centre located in Gori, which was jointly developed with the Georgian Co-Investment Fund. The 20 MW data centre served bitcoin transactions with about 6,000 servers every day. It was confidential to announce the number of bitcoins the centre issued each day however BitFurry’s profit sometimes reached $300,000 USD per, revealed Blockchain statistics. Company representatives said the Gori data centre, which opened in July 2014, had proven to be “a major success” and as a result, they “saw further potential in continuing doing business and investing in this country”. BitFury officials said Georgia was selected for its attractive investment climate and ease of conducting business. Low energy cost and competitive labour market also played a big part in the decision-making. BitFury has management offices in San Francisco in the United States and Amsterdam in the Netherlands, as well as data centres in Iceland, in addition to the new site in Georgia.

DEMAND FOR GEORGIAN GOLD INCREASES WORLDWIDE

emand for Georgian gold increases in export markets. Over a year export of unprocessed or semi-processed gold increased by 70%. According to Sakstat, unprocessed or semi-processed gold worth $ 40.3 was exported in January-August 2015, while in 2014 – this ﬁgure amounted to $ 23.64 million. In the reporting period, the share of unprocessed or semi-processed gold in the total export increased from 1.2% to 2.8% that is included in the top ten export products.

COMPETITION AGENCY MAY EXAMINE A PHARMA MARKET

he Georgian Competition Agency may launch a research of the pharmaceutical market. When asked by “Commersant” whether the Agency will become interested in activity of the pharmaceutical market, the Agency’s Director George Barabadze says that the Competition Agency is interested in any commodity market, which is a subject of growing public interest. The Agency examined the oil products market based on the high public interest and imposed a fine of GEl 55 million on the companies among which are “SOCAR”, “company”, “Rompetrol”, “Lukoil”, etc. As for other markets research, in Barabadze’s words, the coffee market is currently being monitored and if it is necessary, a formal investigation will be launched. The CA carried out a flour market survey; however, Barabadze does not discuss the details. He notes that to reveal cartel agreements is quite difficult not only in Georgia, but in the world, but the Agency is actively working on these issues, which resulted in the conclusion made about the violations in the oil market. Answering a question of how he assesses his work, Barabadze says that his activity must be

estimated by the public. Experts believe that the pharmaceutical market will be primary examined by the Competition Agency which has already published the results of the fuel market research. In particular, they say that in a civilized world a constant and vigorous activity of the Competition Agency enables to prevent the emergence of monopolies and cartels. In Georgia the companies operating in many business sectors are seriously suspected in collusion during the formation of prices enabling them to obtain very high proﬁts. The experts unanimously mention the pharmaceutical market among the sectors with respect to which reasonable suspicion exists. However, representatives of the pharmaceutical business refute accusations of cartel transactions denying the existence of monopolies in this market as well. According to the founder of the company “PSP” Kakha Okriashvili, he does not expect that the Competition Agency will examine the pharmaceutical market. And if such a study is conducted, he will regard it as an attempt to free up the market for other players, the authorities intend to bring into the Georgian market.

nlike MPs, the businessmen interviewed by CBW do not remember a law recently adopted by the Parliament, which has facilitated the flow of investments into the country or helped their business development. Beso Tkhelidze, a founder of the construction company Atori, cannot recall a law or a change adopted by the Parliament that benefited his business. They say that the changes in the Tax Code that envisage a 40 percent reduction in fines can be only welcomed, however, it didn’t touch his company. Tkhelidze claims that this change will mainly affect offender companies; his company has paid and pays the taxes within the legal terms. Tkhelidze notes that the government is working and it will be good if the law under which the reinvestment will be exempted from the income tax is adopted. He believes that as a result, the business will further develop and will be able to carry out such projects, which previously could not be implemented. “It would be very supportive for the business,” says Tkhelidze. Director of Mukhrani chicken Elguja Nozadze

did not remember any recent law, which had a positive impact on the company, noting that the government does not act as a partner to the country’s business. In Nozadze’s words, the number of the cases when computer system shows gaps at the customs has become more frequent, as a result the company had to pay a ﬁne and if within one month a violation is not proved, the state will return the money back. However, he metioned bureaucratic barriers. “What kind of improvement are we talking about, everything is much more complicated,” Nozadze says. Irakli Lomtatidze, Director-General of the coffee company Cherie, has the same position and states that in the last period not a single law has been adopted that supported his production. Lomtatitdze notes neither positive nor negative change is being observed. According to him, the only positive change concerns development companies. We are talking about a tax amnesty, according to which, the constructions started before 2008 will be exempt from VAT and K2 fee if the companies manage to complete the construction within 3 years.

BUSINESS REDUCED PRODUCTS STOCKS BY 30%

eorgian importers reduced the amount of the available stocks of goods in warehouses by 30% – it also concerns food products. Importers say about a possible rise in price of products, but cannot specify how much the prices will increase. Businessmen also fear that a decline in inventories may lead to a shortage of some types of products, and this, along with the devaluation of the lari, could lead to price hikes. These are only assumptions, but they demonstrate the problems the importers are facing due to fluctuations in the national currency. LLC Barn imports flour from Russia. According to the company’s Director Koba Dokaidze, the tendency to reduce stocks lasted all summer, and the situation has not improved. “It’s hard to find a sector of the economy, which is not suffering similar problems, particularly among importers. The situation is so uncontrollable that it is impossible to predict anything. Seasonal factors might play its role in reducing reserves, but the main reason is still the devaluation of the lari. Due to the decline in purchasing power, sales fell by at least 20%, and this trend will continue in the future. Demand has reduced even for the flour despite the fact that it is a product of daily consumption. This shows the

seriousness of the situation in the country ,”- Director of the company notes. A sugar importing company Gepak reduced stocks of products by 30%. According to Luka Khizanishvili, the main reason for this is the devaluation of the national currency, and confirms that if the situation does not improve, the business will face serious losses. “We’ve seriously reduced an import that in the current reality is inevitable. Because of the dollar rate, we have reduced stocks of products by 30%. This is a very bad trend which creates a problem to the business. When we look at the actions of our government, we have no hope that the situation will improve. If the situation does not improve, then we cannot continue to work. Now we do not even think about any profits, we have to protect themselves against losses, “- he explains. Technoboom company which owns a network of consumer electronics stores also talks about reduced stocks of products. In the words of Anzor Kokoladze, stocks reduction is part of the costs optimization. This is reflected, for example, in a more precise and detailed calculation of stocks of goods, as well as reduction of their number. If earlier we had a stock of goods for 2.5 months, now – only for 1.5,” Kokoladze explains.

GEORGIAN WINEMAKERS’ FEARFUL EXPECTATIONS IN KAZAKH MARKET UNGROUNDED

he devaluation of the Kazakh tenge has not led to a decrease in sales of Georgian wine, but reduced the profit margins of manufacturers. Expectations of Georgian winemakers regarding serious negative consequences due to the currency crisis in the country have justiﬁed only partially. According to “Teliani Valley”, within a month its sales grew by 20%. A founder of the company Zurab Ramazashvili says that compared with last year sales are up, and there are no problems with the payment for the products. “The devaluation of the Kazakh tenge was planned, and the public was informed that this. Accordingly, the market was ready for such an eventuality, and the negative impact of the devaluation was minimal. In any case, the company’s sales allow us to do this conclusion, “- says the businessman. In his words, this year the company plans to export to Kazakhstan 400 000 bottles of wine.

“Shuhman Wines” company is also satisfied with the sales in the Kazakh market and although, the devaluation of the tengereduced the sales of wine in Kazakhstan by 10%. Nutsa Abramishvili, the CEO of the company, notes that due to the devaluation of the Kazakh currency, the company was forced to reduce the prices of products, and consequently, reduce profit margins. “We went to the decline in prices, as Kazakhstan is very important, big and strategic market for us. We have a small decline in sales, the margin fell by 10%, but sales in general are still high. We hope that the currency will stabilize and the situation in Kazakhstan will improve that will lead to increase in our sales. Anyway, we do not expect deterioration, “- she explains. According to data for 2014, Kazakhstan is among the five largest importers of Georgian wines, along with Russia, Ukraine, Belarus, and Poland. In general, exports of Georgian wine in JanuaryJuly fell by 46% compared to the same period in 2015 mainly due to a sharp decline in sales in Russia and Ukraine.

September 28, 2015 #115

COMPANY NEWS

caucasus business week

RED-CO TO UNVEIL RADISSON HOTEL IN GUDAURI RESORT

5-star Radisson hotel will be built in Gudauri by a real estate development company “Red-co”. The company’s lawyer Malkhaz Kunelauri states to “Commersant” that the company replaces the state, particularly the City Hall, in the project. He says that during the previous government, the City Hall and Gudauri Development Fund planned to jointly carry out the project, they built a 5-storey building, however, after the City Hall came out of the Foundation, the project was suspended. Kunelauri explains that the building belongs to

the City Hall. In his words, about a month ago “Red-co” purchased this property for $ 5 million at the auction , including 4 000 square meters of land and the buildings on it. “Radisson” brand will enter into the hotel management. Kunelauri says the negotiations are currently underway with the brand. The project completion is scheduled within 1 year. “Red-co” is involved in major projects carried out throughout Georgia. “Radisson” hotels have been operating in Tbilisi and Batumi Tsinandali. Another hotel of this brand is scheduled to open in Tbilisi.

ARCHI GROUP TO OPEN BOUTIQUE HOTEL ON VERTSKHLI STREET

boutique hotel “Silver 39” owned by “Archi Group” in Old Tbilisi will be opened in September next year. “Commersant” was told by the company’s CEO Ilya Tsulaia. According to him, the hotel is being built on Silver Street. The frame has been built and the work will be completed in the near future. The boutique hotel will consist of 21 rooms. The company has invested $ 40 thousand in the project. “Archi Group” also plans to build a four-star hotel in the capital. In Tsulaia’s words, they are having talks with the international brand, the process

will be completed in the coming months and a new 150-room hotel will be opened in Tbilisi. As for the investment cost of the project, Tsulaia says that “Archi Group” will spend $ 15 million on the high-class hotel. “Archi Group” was founded in 2006. Initially the company was engaged in investment and advisory activities, in 2008 it entered the development market. The company owns a chain of hotels “Sunset”: “Sunset Kvariati” - a kind of elite apartments in Kvariati and “Sunset Shovi” - the ﬁrst four-star hotel in the resort of Racha - Shovi.

ALDAGI REFUNDS HAIL LOSSES TO GURJAANI FARMERS

nsurance company “Aldagi” has refunded the loss, caused by the hail, to farmer Davit Khutsishvili, living in the village Kalauri, Gurjaani Municipality. According to the company, July hail has damaged 72% of peach harvest to Davit Khutsishvili. Insurance refund has made up 16 500 GEL. The farmer took the money with the simpliﬁed procedures. The company declares, that the farmer was engaged in the agriculture insurance program of Project Management Agency from September 30,2014. He insured three peach gardens, locating on 1,8

ha, with the assistance of the project. Insurance premium has amounted to 2 295 GEL, at that 2 160 GEL is a sum which should be paid by the Agency, while George Davit Kutsishvili has to pay 160 GEL. To remind, agriculture insurance program is implemented by Agriculture Project Management Agency. The program is aiming to support development of agriculture in the country and introduction of agriculture insurance market in the agriculture sector. To note, government funds major part of insurance premiums (from 40% to 60%) within the second stage of the program.

FATE OF MULTI-MILLION PROJECT IN THE CENTER OF TBILISI UNCLEAR

he issue of the “Intercontinental” hotel project implementation in the former Agricultural Ministry building is still unclear. “Georgian Property” has been going to build a 5-star hotel in the building for years asking to postpone investment commitments due to the suspension of the project for a few years because of the 2008 war and the crisis. CBW was told at “Georgian Property” that the negotiations with the Ministry of Economy regarding the project are underway in which the company is represented by the law ﬁrm “Mgaloblishvili, Kipi-

ani, Dzidziguri”. Ministry of Economy conﬁrms a fact of negotiations with “Georgian Property” but says the details are not public. Back at the end of 2011, CBW reported about the resumption of “Intercontinental” construction after several years of suspension. In October, a tender had to be announced to reveal a company to carry out the project and invest additional investment of $ 40-45. The organization “Transparency International Georgia” named this project among the unsuccessful investment projects along with Kempinski Hotel Tbilisi in the former Imeli building.

FLOWER BUSINESSES SUFFERING CRISIS DUE TO DEPRECIATION OF LARI

utch flowers and plants greenhouse Grato Greenhouse is suffering a crisis due to the devaluation of the national currency. According to Grato co-founder Vako Togonidze, the company can no longer balance the costs and revenue, which led to a crisis situation. In Togonidze’s words, the products are imported from the Netherlands, their cost has dramatically increased in parallel with the lari depreciation. The company doesn’t hike prices on the local market, which is why Grato greenhouse faces financial problems. Vako Togonidze notes that the number of users has reduced as well as the purchasing power of the population has decreased, therefore, the company sees 15% reduction in sales. “Depreciation of lari has caused a significant

harm. If the gas price rises, Grato Greenhouse, in fact, will be closed,” says Vako Togonidze and believes that to rectify the situation, it is necessary to attract more investments into the country and stabilize the lari. “Due to the crisis and the unstable situation, we abstain from all kinds of projects. I do not hope that by the end of the year our government will be able to change the situation for the better. I cannot say what will happen next year,” Vako Togonidze adds. Grato Greenhouse is the first high-tech VENLO- type greenhouse in Georgia and the South Caucasus. Grato greenhouse brings the pot plants to Georgia. The company’s main customers are flower shops. “Grato greenhouse” products are sold in several shopping centers in Tbilisi. Prices of pot flowers range within GEL 30-600.

CHERIE TO RELEASE A NEW LINE OF COFFEE TELIASONERA MANAGER MEETS WITH ECONOMY MINISTER

egional mangers of “TeliaSonera”, holder of leading cellular operator in Georgia “Geocell” has approved to Minister of Economy, that the company will leave Georgian market, but Geocell will continue development and make investments. Dimitri Kumsishvili, minister of Georgian Economy and Sustainable Development met Eric Halberg, “Telia Sonera’s” President of the Eurasian Region and Emil Nilsson, company’s vice-president of the Eurasia Region. The meeting was also attended by Pavel Smalinsk, Director General of “Geocell” and Vakhtang Abashidze, chairman of National Communications Commission. According to the information of Minister of Economy, the matter concerned to the activity of “TeliaSonera” on the Georgian market. However, “TeliaSonera” has talked , that the company will leave Eurasia Region (Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan). This decision will not have an impact on the operation of the company. “Geocell’s” ac-

tivity, initiatives and projects related to the operation of the company are still continued in the ordinary mode. “Geocell” successfully led long term activity within the frame of “TeliaSonera” group and carried out responsible business practices, which should be continued in the same direction. According to the respective of the company, “Geocell” will actively operate in Georgia for the future, moreover the company plans implementation of new projects. Regional Manager of “TeliaSonera” expressed content in term of investment climate in Georgia and notes, that “Geocell” plans to expand it activity in Georgia. Namely, investment of several billion will be made in the development of company’s infrastructure. Both managers of “TeliaSonera” and “Geocell” declare, that the company has a full ambition that Geocell has strong ﬁnancial side and wellformed business, which will still remain important accomplice of Georgian economic development process.

eorgian coffee company Cherie plans to release soluble coffee. They say in the company that demand exists mainly on cheap coffee. According to the company’s Director Irakli Lomtatidze, the company has been working in the cheap segment since the beginning of the year and it turned out that cheap coffee accounts for 60 percent of total sales. In his words, due to this trend, in parallel with packaged coffee, the company also produces relatively cheap coffee sold by weight .When asked by CBW whether the company plans to withdraw from the expensive segment, Lomtatidze notes the company aims to cover all price segments. The company’s coffee Cherie is exported to Turkmenistan, where 1 ton of products has been exported, one week ago about the same amount of coffee entered the Russian market. It is also

planned to enter the Asian market, for this purpose active negotiations are underway with Kazakhstan. In the words of Director of the company, the lari falling had no impact either on sales or price. Cherie is going to release a new line of soluble coffee by the end of the year. Cherie factory located in Lilo settlement is the largest coffee company in Georgia in which 4.5 million worth investments were made. Cherie at this stage produces 4 types of coffee.

SVANETI HYDRO TO BUILD MESTIACHALA HPP

ompany “Svaneti Hydro” will build “Mestiachala 1”. The company was revealed the winner in the interest expression of HES construction. The government will sign a memo-

randum of co-understanding in the nearest future. The installed capacity of the “Mestiachala HES” is 23.7 MW and annual generation is 103.5 million KW/h. The estimated investment cost of the project is 34,200,000 US Dollars.

PUBLICITY caucasus business week

FOODPANDA FACTS: THE STRANGE CASE OF AIRPLANE FOOD

lthough smell is a dominant sense in flavor appreciation, taste is without a doubt a synesthetic (amalgamated) experience. It begins with the smell, as it naturally reaches us first. Then comes sight, the way food is presented; besides, it’s not a coincidence chefs are considered artists. Last come the taste and the texture. But all this time we were missing out on a sense, thinking it doesn’t affect the way food tastes: Hearing If we think about it, there are many occasions we hear someone complain about the loud noises in restaurants, or just bad music. How do you eat when at home? What kind of music do you -subconsciouslychoose? Still, the loudest example for advocating this theory is airplanes. Food delivery app foodpanda (www.foodpanda.ge) is curious to find out more on this mystery. Everyone whines about how much they hate airplane food, but everyone secretly anticipates the moment the cart will arrive at your row and ultimately, everyone actually ends up eating it (or at least parts of it).

So what’s really putting us off when it comes to airplane food? The smell when they heat it up that by the way, is identical regardless of the food or airline? The warm, perfectly round bread that once it cools off it you can use it as a tennis ball? The plastic containers that remind us of the 1960’s ‘TV dinners’? The unidentifiable meat served in a science-fiction-looking-sauce? Well, surely all these play a role; but these are just the obvious reasons. Because, it is not really that airplane food doesn’t taste good; it actually tastes different. As a matter of fact, when your taste buds are way above the clouds, your normal sense of taste has -in contrast- stayed on the ground. Taste buds and sense of smell are the first things to go at 30,000 feet as our perception of saltiness and sweetness drop when inside a pressurized cabin, mainly due to lack of humidity, lower air pressure, and last but not least, the background noise. Many taste experiments have been made and the most surprising finding is that the 85db cabin noise does not affect all 5 tastes equally: Bitter, salty, sour, sweet, and umami, react differently when flying. The most striking results were that saltiness and sweetness declined while umami increased under cabin noise conditions. The experiments suggest that using ingredients or foods with a lot of umami –soy or fish sauce, cheeses, seared or cured meats, tomatoes– can make meals taste better in an airline cabin. Haven’t you noticed how many people order tomato juice (or Bloody Mary) in an airplane? That’s because tomatoes are very rich in umami. Tomato juice, having a strong umami taste, could be more appealing at 30,000 feet because your ears tell you so. Yes, it all comes down to loud noise. So better go for the umami option: go for anything with tomatoes, beef, pork, chicken, mushrooms, carrots, and parmesan. Or perhaps there’s another way to address the bad airplane food problem: earplugs.

September 28, 2015 #115

THE HEALTH BENEFITS OF BEER: 12 REASONS WHY YOU SHOULD DRINK IT!

he 12 benefits of drinking beer: 1. Beer keeps your kidneys healthy A Finnish study singled out beer among other alcoholic beverages, finding that it was better for your kidneys. In fact, each bottle of beer you drink reduces the risk of developing kidney stones by 40%. 2. Beer for better digestion Beer, and especially dark beer, contains up to one gram of soluble fibre* in each 30 cl glass - unlike wine, which doesn’t contain any fibre at all. Fibre plays an important role in intestinal transit (a fibre deficiency can cause gastric and intestinal disorders such as constipation or diarrhoea). 3. Beer to lower your bad cholesterol The fibre in beer can also help reduce your levels of LDL cholesterol, i.e. the “bad” type of cholesterol. 4. Beer can increase your vitamin B levels Beer contains several B vitamins (B1, B2, B6 and B12). A Dutch study found that beer drinkers had 30 percent higher levels of vitamin B6 than their non-drinking counterparts, and levels that were twice as high as those of wine drinkers. Beer is also a generous source of vitamin B12, an antianaemic factor not found in many foods. 5. Beer for stronger bones! A 2009 study concluded that the elevated levels of silicon in beer can contribute to higher bone density. 6. Beer as a cure for insomnia Lactoflavin and nicotinic acid, which are both present in beer, can promote sleep! 7. Beer reduces your risk of a heart attack Beer drinkers have a 40 to 60 percent reduced risk of suffering a heart attack compared with non-beer drinkers. 8. Beer helps prevent blood clots The ingredients in beer help prevent blood clots from forming. 9. Beer boosts your memory According to studies, beer drinkers are less likely to suffer from Alzheimer’s disease and dementia than non-beer drinkers. 10. Beer helps combat stress Researchers at the

University of Montreal found that two glasses of beer a day can reduce work-related stress or anxiety. 11. Beer as a cold remedy Drinking warm beer is an excellent cold remedy! When barley is warmed up it improves blood circulation and helps you breathe when you feel congested. It also provides relief for joint pain and boosts your immunity. So, how do you prepare it? Heat a bottle of beer in a double boiler and then add four small teaspoons of honey. 12. Beer makes skin more beautiful Good news for women! Certain vitamins in beer can regenerate the skin and have a positive impact on pigmentation. Your skin becomes smoother and suppler. Convinced? Then let’s go! Two beers for memory, two for better digestion, another for better bone density, one for your kidneys and the rest as a cold remedy… Normally this should guarantee good health, right? (smiley). Of course, Doctor “GoodFood” is joking. The idea is not to get drunk every night, but instead to enjoy a nice refreshing beer now and then, without any excess!

WORLD NEWS

September 28, 2015 #115

caucasus business week

VOLKSWAGEN EMISSION SCANDAL AL

The Volkswagen emissions scandal has rocked Germany’s business and political establishment and analysts warn the crisis at the car maker could develop into the biggest threat to Europe’s largest economy. Volkswagen is the biggest of Germany’s car makers and one of the country’s largest employers, with more than 270,000 jobs in its home country and even more working for suppliers. Volkswagen Chief Executive MARTIN WINTERKORN paid the price for the scandal over rigged emissions tests when he resigned on Wednesday and economists are now assessing its impact on a previously healthy economy.

Carsten Brzeski ING chief economist

“All of a sudden, Volkswagen has become a bigger downside risk for the German economy than the Greek debt crisis”

Joerg Kraemer Commerzbank chief economist

“I don’t think that the German automobile industry will be lumped altogether”

ll of a sudden, Volkswagen has become a bigger downside risk for the German economy than the Greek debt crisis,” ING chief economist Carsten Brzeski told Reuters. “If Volkswagen’s sales were to plunge in North America in the coming months, this would not only have an impact on the company, but on the German economy as a whole,” he added. Volkswagen sold nearly 600,000 cars in the United States last year, around 6 percent of its 9.5 million global sales. The U.S. Environmental Protection Agency said the company could face penalties of up to $18 billion, more than its entire operating proﬁt for last year. Although such a ﬁne would be more than covered by the 21 billion euros ($24 billion) the company now holds in cash, the scandal has raised fears of major job cuts. The broader concern for the German government is that other car makers such as Daimler and BMW could suffer fallout from the Volkswagen disaster. There is no indication of wrongdoing on the part of either company and some analysts said the wider impact would be limited. The German government said on Wednesday that the auto industry would remain an “important pillar” for the economy despite the deepening crisis surrounding Volkswagen. “It is a highly innovative and very successful industry for Germany, with lots of jobs,” a spokes-

woman for the economy ministry said. But analysts warn that it is exactly this dependency on the automobile sector that could become a threat to an economy forecast to grow at 1.8 percent this year. Germany is already having to face up to the slowdown in the Chinese economy. “Should automobile sales go down, this could also hit suppliers and with them the whole economy,” industry expert Martin Gornig from the Berlin-based DIW think tank told Reuters. In 2014, roughly 775,000 people worked in the

German automobile sector. This is nearly two percent of the whole workforce. In addition, automobiles and car parts are Germany’s most successful export -- the sector sold goods worth more than 200 billion euros ($225 billion) to customers abroad in 2014, accounting for nearly a ﬁfth of total German exports. “That’s why this scandal is not a triﬂe. The German economy has been hit at its core,” said Michael Huether, head of Germany’s IW economic institute.

“Made In Germany”

here are also voices, however, that say the impact on the economy as a whole should not be exaggerated. “I don’t think that the German automobile industry will be lumped altogether,” Commerzbank chief economist Joerg Kraemer told Reuters. “There won’t be a recession just because of a single company,” Kraemer added. The German BGA trade association also tried to calm the public by saying there were no signs that customers abroad were starting to doubt quality and reliability of German companies. “There isn’t a general suspicion against goods labeled ‘Made in Germany’,” BGA managing director Andre Schwarz told Reuters.

But he acknowledges there is a degree of concern among German companies that the scandal over cheating on U.S. diesel emission could have a domino effect on their businesses, eroding the cherished ‘Made in Germany’ label. Some observers also see some irony in the scandal. While the German economy deﬁed the euro zone debt crisis and, so far, the economic slowdown in

China, it could now be facing the biggest downside risk in a long while from one of its companies. “The irony of all of this is that the threat could now come from the inside, rather than from the outside,” Brzeski said.

PUBLICITY caucasus business week

September 28, 2015 #115

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi ;Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: +995 32 2 75 21 11, Fax: +995 32 2 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia; tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16 Kingdom of Spain Embassy Rustaveli Ave. 24, I ﬂoor, Tbilisi Tel: 230-54-64 E-mail: emb.tiﬂis@maec.es Romania Embassy

TBILISI GUIDE

caucasus business week

7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Ofﬁce Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Ofﬁce Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia ; Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge Embassy of the Slovak Republic Address: Chancery: 85 Irakli Abashidze St. Tbilisi, 0162 Georgia Consular Office: 38 Nino Chkheidze St. Tbilisi, 0102 Georgia Phone: 2 222 4437, 2 296 1913 e-mail: emb.tbilisi@mzv.sk

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CORNER HOUSE Tbilisi, I. Chavchavadze ave. 10, Tel: 0322 47 00 49; Email: contact@cornerhouse.ge RESTAURANT BARAKONI Restaurant with healthy food. Georgian-European Cuisine Agmashenebeli Alley 13th Phone: 555 77 33 77 www.barakoni.com CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CAFE 78 Best of the East and the West Lado Asatiani 33, SOLOLAKI 032 2305785; 574736290 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi; Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89

Real Estate International Real Estate Company (IREC) Tbilisi. 9 P. Aslanidi St. Tel: +995 32 238 058 Mob: 599 95 76 71 Email: Info@irec.ge www.irec.ge

GSS Car rental offers a convenient service for those who are interested in renting car in Georgia. Rental ﬂeet mainly consist of Japanese made SUV’s, the company has various models of cars including sedans and minivans which are in good technical condition. Contact information: Email: info@gsservices.ge. Address: Shalva Dadiani 10

Akhvledianis Khevi N13, Tbilisi, GE. +995322958377; +995599265432

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL, NIKORA AND SMART

PUBLICITY

caucasus business week

Two residential complexes include 464 apartments with parking, green area, outdoor swimming pool and playground for children. ”Metrocity” is unique with its special maintenance services. “Metrocity” integrates two ﬁve star hotels, private school and residences with private swimming pool, panoramic terrace restaurants, casinos, Spa, shopping center including 100 brand stores, sport club, cinema, bowling center, playground for children, gold sand beach and the biggest conference hall in Transcaucasia for 1500 guests.”MetroCity” can be found just 2 km from Batumi International Airport and 500m from the city center. The complex with its location is harmoniously mixed with mountains and sea views. The project implementation has begun in February 2015 and will be successfully completed in April 2017. Residences from 38 m2 to 300 m2 are available.

10% Deposit 36 MONTH INTERNAL CREDIT 25% Deposit 60 MONTH INTERNAL CREDIT

STARTING PRICE IS FROM 1425 $ Address: Leh and Maria Kachinsky Str.1, Batumi Tel: +995 577 14 17 14 sales@metrocity.ge www.facebook.com/MetroCity.GE

www.metrocity.ge

September 28, 2015 #115