Caucasus Business Week #201 by Caucasian Business Week

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July 17, 2017 #201

July 17, 2017, Issue 201 - www.cbw.ge

Medical Tourism Medical Tourism Perspectives Turkey Plans to Intensify Activities Pg. 11

DCFTA Nine Sectors with Investment Potential under DCFTA Pg. 9

PR Person Ninia Apkhazava: This field never lets you stop developing yourself Pg. 8

Georgia’s Investment Policy Fails to Justify Public Expectations

Safety Regulations -Higher Prices In 7 months after enactment of new technical regulations in the housing sector, private sector is talking about specific results. As reported, starting January 1, 2017, technical regulations were introduced and architects are obliged to design projects, when the size of a door will be determined due to room space and so on. It is also necessary to protect exit corridor space standards to ensure evacuation during conflagration. A part of developers states that the mentioned regulations have increased construction costs. Tornike Abuladze, Arci development company executive director and Georgian Developers Association representative, explained that introduction and enactment of this 600-page document is a right decision, despite a certain part of materials may rise in value. «This 600-page document comprises articles that genuinely raise real estate value, but there are also articles that do not aﬀect prices. For example, there are some elements, when, for example, a door must open outward in movie theaters or theaters or public places, not inward, to prevent its blockage during conflagration or panic. Pg. 7

Business Ethics in Georgia

Pg. 4

2 GOVERNMENT

NEWSROOM EIB Will Activate Financing of Private Sector in Georgia Georgian Prime Minister and Vazil Hudak, Vice President of EIB talked about the ongoing projects funded by EIB in Georgia and the four-point plan of government reforms at the meeting held in Batumi.

Gambling Issue Requires Political Consensus In his words, the Ministry of Finance has already established a department on gambling policy, which will advise on all issues related to this sector. At this stage, the collection of taxes from the gaming industry grew by 400% and amounted to GEL 108 mln a year.

ECONOMY

Georgia’s Foreign Trade Turnover Rose in January-June In January-June 2017 Georgia’s foreign trade turnover (excluding undeclared trade) constituted 4829.9 million USD, up 13.8% as compared to the same period of 2016.

Foreign Debt Increased Over 0.5 mln Through a Year Georgian foreign debt sharply increased by more than 451 million through the last year and has achieved 4.856 billion USD late in June. The state foreign liabilities are grown by 109.9 million USD through the last month.

BANKING

Banking Sector’s Demand for Liquidity Grows The 100% coeﬃcient has been determined and commercial banks are obliged to protect it starting September 1. Modified prudence norm calls for maintaining corresponding liquid assets on short-term obligations.

Cost of TBC Bank Shares has set a New Record According to Bloomberg, per share value has made up 19.04 GBP and the increase is 4.73%. Previous week’s trade has turned out successful for TBC Bank. The price of bank shares has sustained growing trend and exceeded new point by 18 GBP.

BUSINESS

Export is Increased by 32 Percent from Georgia External Merchandise Trade (excluding non-declared trade) of Georgia amounted to USD 4829.9 million in January-June 2017 (preliminary data), grew by 13.8 percent from the same period of the previous year.

Import of Automobile Oils from Iran has Signiﬁcantly Reduced The largest volume of import of automobile oils has been made from Russia - 1,6 thousand t by the first six months of 2017, Turkey 1,2 thousand t, Germany - 1,0 thousand t, Netherlands - 0,5 thousand t , Ukraine - 0,5 thousand t.

COMPANY

July 17, 2017 #201

SOCAR Increases Share in its Georgian Subsidiary SOCAR increased its share in the authorized capital of SOCAR Energy Georgia Ltd. from 51 percent to 67.34 percent, according to the SOCAR’s consolidated financial statements.

Georgia, Turkey look to widen free trade agreement

eorgia and Turkey are taking actions to widen the existing free trade agreement between them and enable Georgian producers to increase export volume to Turkey. These issues were the main topics of discussion at the meeting between Georgia’s Economy Minister Giorgi Gakharia and his Turkish counterpart Nihat Zeybekçi. The meeting was held in Istanbul, Turkey where Gakharia arrived yesterday to attend the 22nd World Petroleum Congress (WPC) which is being be held between

July 9-13. Gakharia has already met the Prime Minister of Turkey Binali Yıldırım. The meeting was held yesterday, where the oﬃcials talked about the trade-economic relations between the countries. The same topic was discussed today at the meeting with Turkish Economy Minister. Gakharia highlighted the potential to increase exports and imports and further liberalise trade within the free trade agreement. The Georgian Minister also emphasised the importance of the declaration on the establishment

of the Joint Economic and Trade Commission (JETCO), which was signed in May 2017 during PM Yıldırım’s visit to Tbilisi, Georgia. Gakharia stated the declaration was another step forward for further developing economic relations with Turkey. Turkey is Georgia’s top trade partner, statistics show. From January-May of 2017, Turkey was responsible for 15 percent of Georgia’s trade turnover. During the same period, the export of Georgian products to Turkey increased by 17 percent and generated $97.1 million.

European Investment Bank Signed €250m Loan Agreement to Upgrade Georgia’s Road Infrastructure

he European Investment Bank (EIB) marked the tenth anniversary of its activities in Georgia on Thursday with major new loans and a keynote speech by VicePresident Vazil Hudák at the 14th Batumi International Conference. A EUR 250m loan, signed by EIB Vice-President Vazil Hudák in the presence of Georgian Prime Minister Girogi Kvirikashvili and European Commission Vice-President Maroš Šefčovič, will be used to upgrade Georgia’s priority road infrastructure. In addition, the EU bank increased its support by EUR 3.5m to finance the completion of rehabilitation works at Georgia’s largest hydropower complex, the Vardnili-Enguri HPP cascade. In the framework of the Eastern Partnership Technical Assistance Trust Fund (EPTATF), an EIB expert based in Tbilisi and paid by the EPTATF will work with the Ministry of Regional Development and Infrastructure (Road Department) towards enhancement of the preparation and implementation of the large scale and technologically complex road sector investments financed by EIB in Georgia. Delivering a keynote speech at the 14th Batumi International Conference entitled “Georgia’s European Way – Ensuring Regional Stability”, Vice-President Hudák highlighted the successful cooperation between the EIB and Georgia, where the Bank has so far supported 21 projects with a total loan volume of over EUR 1.5bn. A regional EIB office was opened in Tbilisi in 2015. “In Georgia, we are marking ten years of activity this year – ten successful years since we signed our Framework Agreement with

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the government and started looking for projects in which we could invest”, noted Mr. Hudák in his speech at the conference. “Our ultimate goal is job creation, economic growth and improved living standards and the loans that we signed today go firmly in that direction.” Maroš Šefčovič, Vice-President of the European Commission, stated: “The European Union and Georgia are closely linked, notably through the Association Agreement and its economic pillar, the Deep and Comprehensive Free Trade Agreement. The European Union’s commitment to economic development, sustainability, and energy transition does not end at our borders. That is why the Energy Union is also an outward looking project which involves Georgia, an important partner of our Neighbourhood Policy. Investment loans into transport infrastructure and clean energies such as that signed today are instrumental for Georgia and the whole the region.” First Vice-Prime Minister, Minister of Finance, Dimitry Kumsishvili: stated: “Ten years after entering Georgia, the EIB is set to become the country’s leading public sector financer and we strongly appreciate the existing cooperation with the EIB. The EIB’s activities/ actions are country-tailored and we believe that the EIB-financed projects will yield significant results. At the same time, as we all know, the private sector is a key driver for growth, employment and innovation and we are looking for the EIB to increase the volume of operations in the private sector. The EIB has a lot to share with us – the DCFTA initiative and InnovFin

being other examples.” The EUR 250m loan is the second and last tranche of a EUR 500m framework loan for the construction and rehabilitation of approximately 253km of priority primary and secondary roads identified by Georgia’s Government for the 2017-2020 period. The project, which will include road safety elements, will enhance both international connectivity – notably on the East West Highway, part of the extended Trans-European Transport Network – and domestic mobility. This will strengthen vital links between Georgia, Ukraine and Europe through the Black Sea ports, and also to Armenia, Azerbaijan and Turkey. The project is significant particularly in the context of the EU-Georgia Association Agreement, which includes a Deep and Comprehensive Free Trade Area Agreement, helping develop more eﬃcient, reliable and safe transport connections for the benefit of Georgian citizens. The extension of the EIB’s support for the Vardnili-Enguri HPP cascade follows the EUR 20m loan provided by the Bank in 2010 in line with EU policy guidelines for EIB activities in the Eastern Partnership and supported by a EUR 5m grant from the European Commission. The additional EUR 3.5m in funding from the EIB will help to finalise a rehabilitation programme concerning civil works as well as electrical and hydro mechanical works. This additional loan will provide assistance to secure the completion of a project that is expected to have a significant impact on Georgia’s hydroelectricity supply.

Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili Technical Assistant: Giorgi Kheladze;

Source: www.commersant.ge, www.bpi.ge, www.gbc.ge, www.agenda.ge, www.civil.ge

July 17, 2017 #201

PUBLICITY

ECONO-MIX

July 17, 2017 #201

Georgia’s Investment Policy Fails to Justify Public Expectations

Giorgi Gakharia Minister of Economy

Water Export Tendencies

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Merab Janiashvili Economic Analyst

In 2006-2016 Georgia’s economic growth constituted 4.4% on average. In this period the highest indicator was registered in finance sector (Indirect evaluation of financial mediation service + financial activity). Finance sector was growing by annual 25%. Mining industry is second with 8.2% and real estate operations, leasing and consumer services grew by annual 8.1%.

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According to oﬃcial data, in 2016, mineral and fresh water export decreased by USD 2 million as compared to 2015. Exports in USD as the most converted currency have decreased in Kazakhstan (USD 4.1 million), Azerbaijan (USD 0.93 million), Belarus (USD 0.25 million) and Turkmenistan (USD 0.35 million). If we exclude Kazakhstan, export increased by about USD 2 million in 2016. Moreover, there has been a sharp increase in new markets in a number of countries and regions. A logical question then arises. How can a quantitative decline in water exports in the monetary index be explained? A decrease in exports may be associated with the sharp devaluation of the currencies in these countries in 2016 as well as the US - GEL exchange rate. For example, KZT (Kazakhstani tenge) suffered a sharp decline at the end of August 2015 which would have made for a negative impact on the country’s export in 2016. The devaluation of the Kazakhstani currency also continued in 2016. As well, AZN (Azerbaijani manat) also devalued by 31% in December 2015 against GEL. Additionally, BYR (Belarusian ruble) was devalued by 16% in 2016 as compare to 2015. All of the above mentioned comprise the main reasons for the decrease in water export (fresh and mineral) in the monetary indicator (in USD). Notably, a decline is not observed in the quantity indicator. For example, in 2016, 116 thousand tons of water were exported. In 2015,101 thousand tons were exported. Of course, the main importance is export estimated in cash. There is no decline if water exports are expressed in the national currency. USD is an intermediate currency between Georgia and a number of major exporting countries. In 2016, USD devalued by 3.5% against GEL as compared to 2015 whereas water exports estimated in cash declined by just 3.0%. Finally, analysis shows that water export has in fact been more positive than negative. There is nothing alarming about the situation of water export. The production and export of drinking water need more private investment, more private capital, more private assets, promotion from the state and, most importantl, a market and access to an appropriate niche market, in particular. According this, we can firmly proclaim our facilitating civil-national initiative - which can be called “Be Your country’s economic emissary” - all citizens who are abroad easily can ask/request water from Georgia (possibly a specific brand) in hotels; Market etc. Therefore, there needs to be campaigns targeting the export of Georgian water to many new markets and increasing the demand or demand expectation in these markets. Of course, this may alsobe the case for other domestically produced items but water is easier to export, as it is a primary product, while at the same time Georgian waters meet modern market demands with their unique quality. This means that we can easily launch a campaign “Be Your Country’s Economic emissary “ Water, as an export product, is growing in Georgia and our analysis shows that the growth trends will most certainly be maintained in the future.

ccording to preliminary report, foreign direct investment inflows to Georgia made up 403.3 million USD in the first quarter of 2017, up 3.7% as compared to the first quarter of 2016. It should be noted that in January-March FDI inflows are lower as compared to the January-March indicators in 2007-2008. Over the past decade annual FDI inflows exceeded 1 billion USD. However, our citizens are waiting for promised economic growth and welfare in vain. In 2003, the Rose Revolution government commenced aggressive privatization policy with the aim to draw as much FDI as possible. It is worth noting that starting 2004-2005 FDI inflows considerably increased in Georgia. Since then the Authorities have been actively talking about key role of FDI inflows in economic upturn. In 2007-2016 FDI inflows marked 12.990 billion USD, while major volume of FDI inflows was registered in 2007, when the inflows exceeded 2 billion USD (2.014 billion USD). The lowest volume was recorded in 2009 – 658 million USD, when global economic crisis broke out. In 2007-2008 the ratio of privatization program in FDI inflows made up 17%. In other years FDI inflows declined and over the past years the ratio remains under 1%. In 20062007 FDI dynamics was in full correlation with GDP, when in this period the averaged annual growth totaled 11%. The situation started changing in 2011, despite over the past 3 years, in 2014-2016 FDI inflows slightly exceeded indicators of all other years. However, Georgia’s economic growth in 2014-2016 totaled 3.4% on average. Ratio of transportation and communication sectors in 2007-2016 FDI inflows (12.9 billion USD) totaled 24% (3.155 billion USD). The lowest figure of 134 million USD was recorded in agriculture sector (1% in total FDI inflows). If we analyze GDP growth structure, the finance sector has recorded the highest growth pace over the past 10 years, that exceeds transport and communication sectors twice, where twice more FDI inflows were recorded. In 2006-2016 Georgia’s economic growth constituted 4.4% on average. In this period the highest indicator was registered in finance sector (Indirect evaluation of financial mediation service + financial activity). Finance sector was growing by annual 25%. Mining industry is second with 8.2% and real estate operations, leasing and consumer services grew by annual 8.1%. As to the least growing sectors over the past 10 years, Agriculture sector is leader with 1% annual growth. In 20062016 annual upturn in Agriculture, Fishing and Forestry made up 0.7%. According to the 2015 indicators, ratio of agriculture in total employment made up 48%, where averaged salary totaled 578 GEL, while averaged salary accounted for 900 GEL in the country, including the highest salary of 1691 GEL was registered in finance sector, while the finance sector’s ratio in total number of employees was 4.95%. If we compare FDI inflow dynamics and poverty, then the unemployment, poverty and GINI coeﬃcient recorded highest upturn in 2006-2008, when Georgia recorded a major inflow of FDI and highest GDP growth. For example, in 2007 GINI index rose to 0.40 from 0.38 and this indicator was maintained in the following years. Inequality (GINI) reduction started in 2011, when Georgia did not record high economic upturn and huge foreign investments.

At the same time, in 2007-2008 unemployment index grew to 16.5% from 13.3%, while poverty indicator worsened in 2006-2007 to 37.4% from 34.7%. Over the past three years, when economic growth dropped to one of the lowest points (annual 3.4%), employment, poverty and inequality reduction indicators got improved. It is interesting what benefits went to regions with major FDI inflows. Ratio of Tbilisi in total FDI inflows over the past 8 years (9.4 billion USD) made up 73.6% (¾ of total FDI). In 2009-2016 the second and third places went to Ajara and Samegrelo-Zemo Svaneti and Guria Regions with 875 million USD (9%) and 500 million USD (5%) respectively. This signifies the ratio of all other regions in total FDI amounted to only 12%. Despite Tbilisi absorbs ¾ of total FDI inflows, the capital city registers highest unemployment level (22% in 2016 according to Geostat). After Tbilisi, employment problem is sharpest in Ajara with 13%. It is worth noting that in these two regions, which are the most attractive directions for investors, unemployment records highest figure and exceeds Kakheti Region twice and three times, where the lowest FDI inflows was registered after Shida Kartli Region (52 million USD), that is 0.5% in total FDI. The 2016 tendency is met in the previous years too in terms of employment indicator. If we analyze economies that are analogical to Georgian economy in terms of FDI inflows, our country has better FDI indicators, but results are less eﬃcient. For example, FDI inflows to Armenia marked 5.8 billion USD in 2006-2016. In this period, FDI ratio in GDP was around 1%-9%. Armenia’s economic growth totaled 3.9% on average. In 2006-2007 Georgia drew a major volume of FDI and GDP growth hit historical figure (11% on average). Armenia’s economic growth in 2006-2007 rose by 13.5% on average, while in those years FDI inflows made up only 1.15 billion USD, while Georgia drew 3.2 billion USD in the same period. Research works prove that FDI make positive aﬀect on economic development, but our experience over the past 10 years shows that FDI results have not justified public expectations. Georgia has not developed investment policy and fragmented steps are taken for mobilizing investments. For example, government puts out property for auction when GEL exchange rate drops and plans to mobilize USD resources. In this case absolutely unclear steps are taken, like the case with building of Economy Ministry. Two years have passed since the building privatization and Ministry of Economy has to hire working space. Foreign investors are able to choose any place if they promise to make investments. For example, in Anaklia the Authorities seized land plots from several private entrepreneurs for transmitting the territory to bigger business and the investor had promised to put major investment. This signifies state policy makes focus on drawing as many foreign investments as possible and the Authorities is ready to take any action for the mentioned purpose. Similar policy frequently makes the Government lose more as compared to real value of FDI inflows. Today, the country has not determined what sort of investments we need, which field would bring more profits, whether it is worth to provide additional support into some sectors to arrange domestic production and strengthen exports. The fact is that today Georgia lacks for investment policy. Therefore, the country cannot receive the potential benefits that a country should receive from FDI inflows.

“Cars are products imported in Georgia in a very large scale, we are talking about 300 million a year. But at the same time, the task of the state cannot be the growth of car imports. The task is to grow the economy, and if import of cars slows it, then the growth of excises is the right decision. In general, we have 18% tax on bread, and only 4% on cars. That is, even if excise taxes on cars increase, the taxation of cars will not even come close to the size of the tax on bread”.

Dimitry Kumsishvili Georgian Finance Minister

July 17, 2017 #201

PUBLICITY

OPINION

July 17, 2017 #201

BUSINESS ETHICS IN GEORGIA We cannot examine successful business without a due consideration of business ethics. None of the civilized countries of the West developed without business ethics.

GIVI MAKALATIA PhD Candidate at Tbilisi State University

We can note words of the former American President, John F. Kennedy: “ask not what your country can do for you, ask what you can do for your country”. Business ethics stands for general moral principles and is closely connected to people’s religious, philosophic and cultural visions of as well as their national traditions and modern views. Because Georgia is quite young in terms of its experience with the principles of a market economy, business ethics, is a new challenge for us. For us, we have a non-traditional economics, because moral principles are unknown for traditional economics. The role of the state is important in order to help the development of business ethics in Georgia. Let us consider a decision made by the National Bank when it charged commercial banks with an important mission to inform customers about eﬀective interest rates. A decision such as this is one of the important factors assisting the creation of a competitive environment and the development of business ethics. Georgia undertook the obligation to harmonize its own legislation with European legislation when it signed the EU-Georgia Association Agreement. One of the most important packages of harmonized legislation concerns the protection of consumer rights vis-àvis damage caused by “asymmetric information”. In particular, Georgia must bring its legislation in compliance with the European Directive (2011/83) on Consumer Rights. The directive provides for the introduction of an obligatory norm such as the right of a consumer to refuse a contract within several days from the transferring of goods into his ownership or receiving a service (seven or 14 days). Today, 90% of companies operating in Georgia have no policy of return with a total amount of returns at only 7%. It is obvious that after this regulation is implemented, transactional expenses from the part of business subjects will increase even more and the cost of returned goods will be significantly reduced. In the document of estimation of influence of regulation of the Great Britain on the protection of consumer rights, it is noted that business expenses are on average 50% of the cost of returned goods. In 2016, part of sales with the cost of GEL 85,770,000

were lacked as a result of a return policy and expenses connected to the termination of contracts amounted to GEL 4,268,000. For comparison, the amount of terminated contracts Germany is 1.8%. Such a low index speaks to their production of highquality goods. Therefore, we can say that state regulation within the short term will cause important losses but it will assist simplification and increase economic activity in the long term as a result of market improvement. This will increase the trust and eﬃciency of the “invisible hand.” The following is a rule in business: Systematically take care of your employees and consumers and the market will take care of you. The following violations of ethical principles are evidenced in business activity: incorrect financial statements, avoiding paying taxes, production of low-quality, goods harmful for health, ignoring safety norms in production processes, the use of dumping, discrediting of competitors, pollution of the environment, etc. In comparison to the last years, we can say that a shadow economy no longer exists in Georgia and this indisputably points to the formation of a business culture even though many questions remain as concerns the production of good quality products. The development of local business ethics essentially influences the attraction of foreign direct investments which are a necessary condition as for economic growth and a familiarization with foreign business ethics. It should be noted that a business’s social liability also increases during the period of economic transformation. Social liability takes the form of sponsorship and charity, among others, on the part of business actors. There are many examples of this in Georgia although regular participation in various social programs causes raise in demand from beneficiaries. This is why the first social liability for business is to increase employment and not increase the frequency of its social projects (here, financing of force-majeure situations are not considered). Therefore, the development of business ethics is wishful in parallel to economic growth which, of course, excludes many social expenses from the state budget.

REAL ESTATE

July 17, 2017 #201

In 7 months after enactment of new technical regulations in the housing sector, private sector is talking about specific results. As reported, starting January 1, 2017, technical regulations were introduced and architects are obliged to design projects, when the size of a door will be determined due to room space and so on. It is also necessary to protect exit corridor space standards to ensure evacuation during conflagration. A part of developers states that the mentioned regulations have increased construction costs. Tornike Abuladze, Arci development company executive director and Georgian Developers Association representative, explained that introduction and enactment of this 600-page document is a right decision, despite a certain part of materials may rise in value. «This 600-page document comprises articles that genuinely raise real estate value, but there are also articles that do not aﬀect prices. For exam-

“Consequently, we have not received any oﬀer from developers about what to change and what to simplify. After this, Ministry of Economy approved the document in December 2015 and the document came into force on January 1, 2017. After the regulations were enacted, development companies received the current reality”, Abuladze noted. Regarding the issue, Ministry of Economy invited developers and asked recommendations in February 2017, he added.

sive. Consequently, this factor raises value of property. As a result, real estate sales process goes heavier. At this stage, designing works are being carried out under new standards. Consequently, calculations are prepared now. We expect real estate prices to rise, but we do not know how much», Kunelauri said. Archil Jakeli, founder of Iveroni development company explains that introduced technical regulations have not made eﬀect yet. However, in the future real estate value may slightly rise. Firefighting materials

prepared, based on International building Code (IBC) (as part of USAID economic prosperity initiative (EPI)), on the ground of best international experience for planning, building and maintaining of building and structures. «Objective of safety regulations is to ensure minimum requirements for attaining public health, safety and general welfare thanks to exit means, sanitation conditions, due illumination and air-conditioning, protect life and property from fire and other threats, provide safety

SAFETY REGULATIONS

HIGHER PRICES ple, there are some elements, when, for example, a door must open outward in movie theaters or theaters or public places, not inward, to prevent its blockage during conflagration or panic. There are various things that are very expensive, but other things are not expensive», Abuladze noted. If we want to follow the European course in this respect, then this document should be adopted, he said. Ministry of Economy finished working on safety technical details in autumn 2015. In that period the department invited all developers and discussed the issue jointly with them. None of the developers read the document in that period, Abuladze pointed out.

«We are trying to correct this problem, when we have encountered it. At this moment, several meetings have been held at Ministry of Economy with specific recommendations that are under discussion currently», Abuladze said. Malkhaz Kunelauri, projects manager for RedCo development company, noted that the introduced safety norms comprise many such regulations that did not exist previously and this fact has raised expenditures in development sector. The issue is of installation of highquality and top-standard firefighting systems, including at residential blocks. «Such materials as extinguishing systems are very expen-

are of comparatively higher value here, while their imports will considerably increase real estate prices. «Currently, we are developing new projects. Consequently, calculations are being prepared now. We do not know precisely how much real estate will rise in value», Jakeli noted. As reported, in 2016 Ministry of Economy explained that technical regulations were developed, because in Georgia Soviet-period outdated norms and regulations were used for planning and building structures and those regulations could not satisfy the modern requirements and safety standards. Therefore, Safety Regulations of Buildings and Structures were

of firefighters and rescuers during emergency situations. In that period Ministry representatives used to say that Safety Regulations of Buildings enabled to replace a major part of Soviet-period norms and regulations and technical regulations of other countries. “Technical regulations in Georgian language will promote improvement of operation of architects, engineers, licensing and supervision administrative bodies and experts”, Ministry of Economy representatives noted. Georgian Government approved technical regulations for Safety of Buildings on January 28, 2016 by resolution N41.

PR PERSON

July 17, 2017 #201

This field never lets you stop developing yourself’’

Interview with Public Relations Manager of the Axis Company Ninia Apkhazava - Which media outlets do you follow? - I like the profession that I chose and I think it’s very important to stay updated daily. Every morning starts with looking through news, trying to be aware of current events and planned activities. - How would you explain a diﬀerence between PR and Advertising? - There are numerous explanations; however, each Public Relations Manager has their own way to define. To my opinion, Public Relations is a constant and purposeful bilateral communication between the organization and its target audience, aiming to satisfy the interests of both parties. There is a common sense that Advertising and PR is the same, which is wrong. Even though these two fields are closely related to each other, there are quite number of diﬀerences: • Most importantly, Advertising is one-sided process and as I already mentioned PR has the bilateral communication process. • Advertising supports one specific product, while PR creates a uniform look for the internal and external audience. • Advertising aims at increasing sales. PR creates an image to support sales. • Advertisement emphasizes customer requirements and sells ‘’touchable’’ product, as for PR, it appeals values. - How do you integrate Social Media with PR? - Social Media made simplified communication process with target audience. Social Media is an additional instrument that makes PR stronger. We might say that this the most important part of campaigns.

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Social Media made simpliﬁed communication process with target audience. Social Media is an additional instrument that makes PR stronger. We might say that this the most important part of campaigns.

- How would you present the results of your work? - You will get the desired result if you love your profession, the job you are doing is a great pleasure and you’re oriented to implement any project perfectly. Even though you might have too busy regime sometimes, you start over with fresh enthusiasm towards new goal. - How would you react if a client or manager disagreed with your PR strategy? - Even though, I never had any radical experience with a client, I still think I will try to convince him that strategy is right for the company, as in most cases a client can’t see the circumstances from outside. If PR specialist can’t persuade a client then she won’t be able to bring the product to public. - Describe a time you had to manage negative media attention. - I don’t have any experience in that direction, there has been some misunderstandings, which was solved easily. Still I would not say it was a negative media attack. - Describe a time your PR communications were misunderstood by your target audience. How did you handle it? - Fortunately, there was no misunderstandings with the target audience during my career path. - How do you work with a team to handle PR crisis? - Acceleration of life pace and technological development increased likelihood of a crisis. Any organization may be facing the crisis at any time. This field is getting more diﬃcult in the epoch of information and simultaneously driving crisis takes decisive

importance. Eﬀective management of crisis communications is a process that involves predicting crises, assessing and reducing the crisis. Also, minimizing the consequences of the crisis and restoring reputation. It’s important to react quickly and provide uninterrupted information on time to all interested parties. - Who are the current members of your team? What are their respective roles? - All the success in this field is a result of teamwork. Nowadays, I’m working in a team where the members are hardworking and the priority is loyalty to profession. Every project we’re working on, is very delightful for us, but at the same time very responsible. I can say it boldly that I’m very lucky to be a part of the team where everyone tries to develop themselves. - What’s interesting about our current PR work? What would you improve? - I honestly don’t know which another profession would be more interesting for me. It never lets you stop; you are constantly searching for something new, developing yourself and learning every day; It gives you opportunity to hold a dialogue with a customer and to be the circle which will help a company and a customer communicate with one another ethically. Nowadays, this area is developing, and the competition becomes even healthier. They all agree about the importance of this field step by step, so that the demand of highly qualified specialists increases. I wish the number of professionals to grow in order to break the stereotypes I mentioned above.

July 17, 2017 #201

Nine Sectors with Investment Potential under DCFTA KETI MELKADZE, eugeorgia.info

Deep and Comprehensive Free Space Agreement (DCFTA) provides good opportunity for not only Georgian entrepreneurs for penetrating new markets, but they are interesting for foreign investors too. Developing communication channels acquires special importance to introduce Georgia’s investments and new exports market opportunities to global investors. In this respect, communications strategy is an important document, because strengthening correct communication channels enables to raise the interest of foreign investors.

As part of DCFTA outer communication strategy PricewaterhouseCoopers Georgia (PwC) conducted a research and outlined 9 sectors that have potential as part of DCFTA agreement. The project was implemented with the financial support of Great Britain Good Management Fund. The project consultants determined the following sectors after agreement with Ministry of Economy and Sustainable Development of Georgia. 1. Berry cultures: strawberry, raspberry. 2. Honey; 3. Household chemicals; 4. Processed fruits and vegetables; 5. Wine; 6. Construction Materials; 7. Electricity cables; 8. Jackets, coats; 9. Silk, Silk thread and fabric. PwC consultant Nino Eliashvili pointed out that, initially, meetings were held with various oﬃces and business associations as part of the project. All named sectors were analyzed thanks to these meetings. Initially, 32 sectors were named and they were discussed using the example of 20 countries. Finally, 9 sectors were left and no comprehensive research was conducted on these 9 sectors. According to the project executors, finally, 3 products will be selected and the so-called Follow up will be carried out on these chosen products and deep analysis will be prepared on each of these products that will be decided

by consent of Ministry of Economy. Final report on determined 9 sectors has been transmitted to Ministry of Economy and Sustainable Development, however, Ministry of Economy does not unveil this document. Mariam Gabunia, head of foreign trade policy department of the Ministry, noted that the document will not be publicized until completion of detailed research of the sectors, while research of specific sectors will start after attracting additional funds. Currently, administrative procedures are being agreed. “After completion of final research and issuance of specific recommendations, we will take them into account in our activity and plan future activities”, Mariam Gabunia said. Consultant Eka Gadzadze explained research methodology in details, as well as factors that were taken into account for selecting these 9 sectors ultimately. Initially, interviews were conducted with representatives of all state and nongovernmental sectors, including Food Safety National Agency, Ministry of Economy and Sustainable Development, Invest in Georgia, Partnership Fund, Co-investment Fund and so on, about 15 institutions. Moreover, sectors were analyzed using examples of various countries. In this direction EU nonmember countries were selected to outline which countries could be involved in making investments in Georgia and exports opportunities for EU’; There is analysis of international markets due to the named sectors.

Honey Honey is one of the products of animal origin that was admitted to EU market. Now we should maximally use this opportunity. EU ranks first in terms of honey consumption. Because of increased consumption and reduction of internal production, EU cannot satisfy domestic demand and consumers have to buy about 40% form other countries. Honey production countries are as follows: China, Turkey, USA, Iran and Russia. This sector may be attractive for investors, because Georgian honey, especially Alpine zone honey, is of higher value on EU market as compared to Chinese honey, while production costs are low in our country. Antibiotics existing in honey structure and other supplements represent a problem, as they exceed the norm in most cases. In case we ensure production of high-quality and ecologically clean honey, we can easily establish our honey in the segment of top-level honey.

Household Chemicals According to Transparency Market Research, the global market of household chemicals totaled US$27,468.6 million in 2015. According to their prognosis, the market will rise to US$27,468.6 million by 2024. Global market of household products comprises the following groups: air cleaning aerosols, dish washing products, cleaning and laundry powders, furniture and floor cleaners, toilet cleaning products. Germany, France and Canada are leaders in terms of use of household products. At the same time, Germany and the USA are main manufactures of the mentioned products. According to Cleaning and Laundry Products research published by National Investment Agency in 2015, global sales of clothes washing products made up 55.053 million USD in 2013, while sales of dish washing products marked 12.840 million USD, aerosol sales totaled 7.327 million USD. Europe ranks first with 34% on global household chemicals market.

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Processed Fruits and Vegetables Europe plays leading role on global market of processed fruits and vegetables. Germany, France and United Kingdom, Belgium and Netherlands are biggest importers of processed fruits and vegetables, quickly-growing markets are located in central and Eastern European countries. Imports of processed fruits and vegetable from developing countries made up about 25% in 2014, while in the same year total consumption slightly declined, because consumption of fresh fruit and vegetable increased over the past period.

DCFTA

Berry cultures: strawberry, raspberry Global market of berry cultures is growing and demand for this product, as one of the useful products, grows year to year. Over the past 10 years, demand for berry in Europe doubled and consumers spent 1.3 billion EUR on this product; Top five countries producing raspberry are as follows: Russia, Poland, USA, Serbia, Ukraine. As to strawberry production countries, according to the 2013 indicators, they are: China, USA, Mexico, Turkey, Spain. Germans and Polish citizens are leaders in berry consumption. This product is popular in Scandinavian countries too. Top five countries producing raspberry are as follows: Russia, Poland, USA, Serbia, Ukraine. As to strawberry production countries, according to the 2013 indicators, they are: China, USA, Mexico, Turkey, Spain. Germans and Polish citizens are leaders in berry consumption. This product is popular in Scandinavian countries too.

Wine In winemaking countries, the socalled old world countries are leaders and they are traditional winemaking countries such as: France, Italy, Spain, USA and Argentina. Major wine consumption countries are as follows: the USA, France, Italy, Germany, China, Great Britain, Argentina, Spain, Russia and Australia. In 2015 wine consumption rose by only 0.9 million hectoliters. Over the past 10 years the world consumption records almost the same volume, however, wine consumption has changed due to countries. If previously the major wine consumption was recorded in traditional winemaking countries, now new winemaking countries appear, where wine consumption is growing at high paces over the past year. These countries are the USA and China. Diverse natural conditions of Georgia create ideal environment for rich harvest and production of high-quality wines. 525 domestic and foreign grape varieties grow in Georgia and domestic wines are famous for unique and rich aroma.

Construction Materials According to one of the research works (Global construction 2025), total output of construction materials will rise by more than 70% and reach 15 trillion USD as of 2025. Three countries occupy 60% of the market: China, India and the USA. However, under the report, 5% contraction is expected on western European markets by 2025. In 2010 China surpassed the USA and created a major market of construction materials. It is expected that by 2025 China’s ratio on global market will rise to 26% from 18%. The so-called Green Construction represents one of the quickly growing sectors on the market of construction materials. Various governments make focus on this segment when planning construction projects.

Electricity Cables According to BCC Research, global market of cables and wires will rise to 297.4 billion USD by 2019. This market is divided in two parts: electricity cables and cables, which are used in telecommunication industry. A major part of total market is recorded for electricity cables and according to the same research, this segment will rise to 219.7 billion USD by 2019. Averaged annual growth pace will be 7.5%. Electricity cables constitute 73% of total market that is preconditioned mainly by global economy growth, growing demand for electricity and increased consumption in developing markets. According to CBI research, in 2015-2020 the importance of Asian countries (excluding China) and other developing countries will surpass such countries as Japan and European countries in terms of production, because European production is moving to comparatively low-cost regions, over the past years (2009-2014), exports considerably increased from such countries as Costa-Rica and Tunis. Because of lower expenditures, the US manufacturers removed production to Costa-Rica, while European manufacturers translocated production to Tunis.

Jackets, Coats According to indicators of Textile Plant, a project of Georgian Industrial Development Group (GIDG), the world clothes market volume constitutes 1.100 billion USD with trading value of 700 billion USD and makes up 1.8% of the global GDP. Clothes consumer market of EU countries marked 350 billion USD and it is considered the biggest market today, while China is considered the major exporter with 288 billion USD exports. Leading countries are as follows: EU, USA and Japan, which make focus on highest profitability stages of chain of textile and clothes price, such as design, marketing and distribution, while production activities are mainly concentrated on China and other developing countries such as Bangladesh, Vietnam, Pakistan, Indonesia and Turkey.

Silk: Silk Thread and Fabric Silk House business model prepared by Georgian Industrial Development Group overviews Silk global market. According to the research, silk market is huge on global level and it continues growing. Several giant countries are outlined in terms of production of silk cocoon and silk thread. These countries occupy 80% on global market, while the remaining part is shared by smaller countries. On International silk market, main trading product is silk cocoon, silk thread and silk cocoon wastes. China is the world’s major silk manufacturer and important trading chain with huge volume of exports and imports. As to tendency on international silk market, the global demand for silk products is growing, along with growth in prices and output. It should be also noted that in all countries of the world volume of exported silk cocoon and thread declines and this points to growing domestic demand in manufacturing countries.

BUSINESS

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Vineyards Cadastral Program Implementation has Started for Regulation of Viticulturewinemaking Field The cadastral system eﬃciently functions in all countries of EU, where viticulture-winemaking is developed: Expected results of the program. simplified vintage; wine quality improvement; registration of winegrowers; prognosis of crops; specified space; united database; preparation of vineyards maps and so on. 2. Analogical system did not exist in Georgia so far 3. National Wine Agency launched vineyards cadastral program form Racha-Lechkhumi Region in 2014. The program was implemented in Telavi and Kvareli municipalities in 20152016. 4. Otho photos of vineyards are taken from drones to prepare cadastral maps, as well as alphanumeric information on winegrowers and vineyards, grape varieties and other characteristics.

Georgian Architect Awarded for Winning the Eco– Bridge Competition in Seoul Georgian architect, who is a member of Lithuanian team called KILD, was awarded for winning the Eco-Bridge competition. KILD proposed a structure evoking the “pictorial passage through the southern slopes of the two discontinued mountain peaks of Mt. Umyeon and Maljukgeori Parks”, which was in response to the Yangjaegogae Eco Bridge Design Competition commissioned by the Seoul Metropolitan Government. The landscape of the bridge is referential to the natural, informal, simplistic and unforced nature of Korean gardens, explained the team. The architectural language of the structure of the intervention is tender to the rhythmic nature of the traditional Korean garden pavilions traditionally used to invite for the enjoyment of the surrounding garden sceneries.

Allinace Group to Invest $130mln in 3 Projects Georgian development company Alliance Group, which is famous for invitation of international brands onto real estate market of Georgia, is implementing three development projects and plans to invest 130 million USD in them. One of the projects Alliance Highline is being built in the center of Tbilisi, while two ones are being constructed in Ajara Region: Alliance Palace in Batumi and Alliance Resort on Goderdzi Pass. “Future without innovations is unimaginable and we oﬀer this to residents of Alliance Highline, unique multifunctional complex that is being built in Vake, as well as to owners of Wyndham Garden apartments and hotel visitors”, Alliance Group director general Akaki Sogulia said.

Hugo Boss Celebrates the Opening of Renewed Store in Tbilisi Classic and trendy brand ”Hugo Boss” celebrated grand opening of renewed store in Tbilisi,on 29th of June. Around 250 guests from the world of fashion, celebrities as well as press attended event. Attendees enjoyed getting familiar with the ”Boss” Mens/Womens collection 2017. 205-square-meter store renewed in December,2016,which stocks Spring/Summer 2017 latest collection,”Above the Earth”headlines ”Boss”.Freestyle clothing is a blend of dark gray and silky blue that is decorated with warm color tones. the new Store also provides showcase for the Menswear green collection and Womenswear last Autumn selection. ”Boss” first opened on Rustaveli Avenue in historical building 12 years ago and serves locals as well as country visitors.

All-Terrain Vehicle Tours-Extreme Startup Extreme tourism becomes more popular in Georgia due to the country’s natural resources and market requirements. ”Freeriders” is a two Georgian friends’ startup,first company in Georgia which oﬀers ATV tours nearby Lisi Lake. Marketer had an interview with one of the founder- Zuka Nabelishvili. What was the motive to found Freeriders and what experience and knowledge did you have in this field? It had always been my hobby extreme sport, I decided to make it as a commercial activity. I was 15 years old when I got a summer job and bought my desired motorbike-Yamaha DT-50 with saving. Here it starts my Motorbike career and traveled all Georgia, especially to the places where it’s hard to get by an automobile. We wanted to share our experience to people and that’s how we founded company Freeriders, which gives you opportunity to travel around in Georgia and get an adrenaline. We have oﬀer tours for beginners, medium and extreme customers. Every tour provides

a guide. Our main area is around Lisi Lake, where short tours are held everyday from 10AM to 8PM. Short tours aim is people to try their abilities and simply to have fun with their friends or even by themselves. We also offer half-day tours on Chili lake, 1day adventure trips towards Didgori or David Gareji Desert. In addition to that, extreme lovers can choose a bit more difficult destinations in mountainous regions like Tusheti, Stepantsminda, Svaneti and Khevsureti. What are the requirements that costumer should meet in order to participate in tours? Anyone who 18+ can take a tour. Our instructors will easily teach you how to ride ATV if you’ve never tried to. We give you all the necessary accessories that are needed for your safety on a ATV. Our every guide is professional and they’ll help you to overcome any difficulty during a tour. Our Segment is quite large: from young extremist to families. We even have had wedding photo shoot.

”Bluebell”-Diverse Desserts for Celebrations ”Bluebell” is a product which makes celebrations more festive by its creatively designed sweets. Two Georgian sisters founded this business starting from designing cupcakes,whilst customer’s demand was so high that the assortment is constantly growing and they moved from social network to their newly opened store. CBW had an interview with co-founder-Rusa Matkava: Describe your business.What made you decide to start entrepreneurship? We create distinguished designed sweets for celebrations. Bluebell also sets festive tables: birthday,wedding,corporate party,etc. Our relative does the same business abroad, which inspired us to try the same on Georgian market. It didn’t take us too long to start expanding. Tell us about your new shop. We were selling goods through internet during first 6 months. It’s been 1 month that we opened a small shop/workshop. Here we create and design our sweets and where customers can visit the

store to order the desired one. What was it like when you first started? Our business started with decorated biscuits. Increasing consumers aﬀected on our products range which we constantly expand to meet the requirements. What has surprised you most when owning a business? Interest from people exceeded all our expectations. When beginning, we couldn’t imagine we’d receive such positive attitude and compliments in short period of time. Nowadays, Bluebell has 20k likes in social network and numerous loyal customers. Do you have any exciting plans for the future that you want customers to know about? We try to innovate continuously, to oﬀer more diversity in assortment. How did you maintain customer’s loyalty? Our loyal customers know that Bluebell is a high quality product and is made with all heart.

July 17, 2017 #201

Medical Tourism Perspectives Turkey Plans to Intensify Activities

Medical market of Turkey becomes more attractive for Georgia. Our country has huge potential for medical tourism development, but investment inflows remain unimportant anyway. Mainly dental clinics are active in this direction. According to specialists, Georgia has potential to use the experience of neighboring Turkey and achieve certain success on medical tourism market. Over the past period, Turkey has intensified efforts on global medical tourism market. The country plans to occupy leading positions. This is not an only objective. State governance and corresponding organizations take important steps in this respect. Along with private organizations and companies, three key state offices — healthcare, tourism and economy ministries are involved in implementing these plans. Over the past 5 years, Turkey has made important investments in this direction and built both new and modern clinics with campuses and carried out important technological re-equipment of medical clinics. Turkish Healthcare Tourism Council (THTC) is one the offices that is oriented on medical tourism. THTC was founded in 2005 and it is one of the major organizations in the world health sector. It carries out important marketing projects worldwide. Along with marketing, the organization invites heath workers to workshops, holds tours for them and introduce medical tourism offers of Turkey. Medical tourism became particularly popular in Turkey over the past 6-7 years. During this period the country has managed to occupy the third place among world countries in terms of medical tourism. Annual market growth totaled 40%. In 2016, 750 000 tourists arrived in Turkey from 144 countries for medical services and total revenues amounted to 5.8 billion USD. The organization registers 375 members and owns 151 offices in 90 countries. It has representations in 3 cities of Georgia — Tbilisi, Kutaisi and Batumi. The organization founder Emin Cakmak told CBW that Georgia has got good potential for medical tourism development and Turkey gives a good sample in this respect, even more so the world has becomes opener and customers makes choice in not only Europe and the USA. They seek alternative. «Turkey is one of the most important tourism directions for Georgians, who have health problems and seek countries for treatment. Turkey is the country that will offer best services to them. The statistics is growing. Over the past years, number of those seeking medical services from Georgia grows, because Turkey has several important advantages as compared to Georgia: It is a neighboring country with visa-free regime. Governments have good neighborhood relations and Turkey providers comparatively cheaper and easier opportunity for top-quality medical services. Air communication between Turkey and Georgia enables to ensure easy and comfortable transportation», Cakmak said. Georgia is an important market for Turkey. Besides attracting Georgian patients, joint business and investment projects may be also implemented. A lot of Turkish companies operate in Georgia and there are genuine samples, when Turkish businessmen make investments in Georgia’s medical sector, he said. «Georgia provides open market, in not only specific direction, and it is important that Georgian government is interested in health sector development».

Turkey is one of the most important tourism directions for Georgians, who have health problems and seek countries for treatment. Turkey is the country that will oﬀer best services to them. The statistics is growing

Several years ago people were leaving for Europe and the USA. Now this tendency has changed. Over the past years, revolutionary decisions in Turkey have advanced our country considerably. Today even in the USA patients seek the same category medical services for low prices

There is huge competition on medical tourism global market. «If you do not make investments in re-equipment of technologies, they change very quickly and you will retard and will not be able to succeed. At the same time, qualified health workers and their training are necessary. Over the past 5 years, medical sector of Turkey drew 30 billion USD investments», Cakmak said and added that President of Turkey Recep Tayyip Erdogan has the ambition that Turkey have the best medical offers worldwide. The country makes focus on 2 special directions — healthcare and education, Cakmak said. Turkey has genuinely ambitious plans. Under the current plan, by 2023, new modern standard clinics will open in 22 cities in addition, while medical service tourists will reach 2 million persons. Investments volume will hit 20 billion USD. Projects are being implemented under public-private partnership (PPP) model. «Several years ago people were leaving for Europe and the USA. Now this tendency has changed. Over the past years, revolutionary decisions in Turkey have advanced our country considerably. Today even in the USA patients seek the same category medical services for low prices», the THTC founder noted. The organization is open for everybody, who wants information exchange and strives for wider knowledge. To this end, THTC provides active workshops for them and tours for sharing experience. The organization has hosted Georgian doctors and clinic managers in Tbilisi. Medical tourism workshop in Tbilisi was held under B2B format. The Georgian medical sector representatives managed to use experience of Turkish companies. Several Georgian companies received invitation from Turkish companies to the clinic, where they will be able to receive information about activity and plans of the Turkish clinic. Be Free company is an exclusive partner of Turkish Healthcare Travel Council, which offers preferential tariffs to Georgian patients in Turkey. Be Free travel company opened 6 months ago, as a subsidiary of Wonderland travel company in Georgia, which, at the same time, represents Turkish Healthcare Travel Council in Georgia. BE FREE is oriented on medical tourism and its objective is to refer patients to various leading clinics of Turkey. Turkish Healthcare Travel Council operation is based on online regime. Documentation is filled out in online regime and we receive answers in 7 days. Documents uploaded in online regime are sent in automatic regime to corresponding clinics of Turkey and this process is carried out by the system itself. Patients’ documents are sent to at least 15-20 clinics in Turkey and this fact points to top-quality services. After reception of answers and offers from Turkish clinics, patients take decisions themselves. Patients have to pay 10% of total treatment costs in Georgia, while 90% must be paid in Turkey, in due clinic. It should be noted that in April 2017, Antalia hosted Hestourex, international world congress in healthcare, sports and tourism. Turkey notified the world about its success through this exhibition. Georgian doctors and companies have taken part in the event. A major part of similar tours are mainly financed by Turkish government with the aim to expand the ratio of Turkey on medical tourism market.

July 17, 2017 #201

Brand History

– LLC Aisi - Gurjaani Ice-Cream LLC Aisi - Gurjaani Ice-cream has been producing ice-cream for several years. Currently, the company produces about 30 varieties of ice-cream such as Saamo, Joker, Kebuli, Super Kebuli, Tavaduri, Sandwhich and Family ice creams. «Thanks to our tireless job and natural ingredients, Gurjaani ice-cream is associated with tasteful, reliable, family product. We always treat this business like our family and this is our slogan: Produce for the Whole Family», the company representatives noted. Company Foundation Idea – After the Soviet Order collapsed and the country moved to market economy, we decided to found the company in that period. Several persons purchased the company and re-equipped it. Initially, the company started production of 3 varieties of ice-cream. Over the past years, the company has achieved considerable success in terms of production expansion. New technological lines have been installed in the plant and now it offers a wider range of assortment to customers. Gurjaani Ice-Cream has been estab-

lished on consumer market as a topquality, delicious product of natural ingredients. Gurjaani Ice-cream oﬀers aﬀordable and top-quality products. Despite low prices and current economic problems in the country, the company management maintains market positions anyway – the cleanest and most tasteful products for the lowest price. Thus, Gurjaani Ice-cream has become a popular product and obtained general recognition. In 2005 at the Georgian brand awarding event, Gurjaani Ice-cream won the nomination: Reputation and

Trust. In 2008 Gurjaani Ice-cream brand obtained leadership and maintains the leading position till today. Main Obstacles in Brand Establishment Process -The company founder and director Guram Berikashvili said that the Soviet Union collapse brought hard times. In that period, everything was deficient, including professional staff and ignorance of working process was creating problems. Despite similar difficulties, the new company overcome all barriers and

became one of the market leader companies. History that Made Serious Influence on Brand Success - We have performed huge job. As a result, the company attained success in 4-5 years after foundation, Guram Berikashvili noted. History of Logo and Brand -Logo was developed by joint eﬀorts of our designers and our management. As to the brand history, the name derives from the location of the plant.

July 17, 2017 #201

WORLD Japan, South Korea Face ‘Tipping Point’: Philip Morris CEO

What’s the Future for Migration Management in the Caucasus? Young people from Azerbaijan and Georgia work with global experts to consider challenges and opportunities. An important exchange of information between Azerbaijani and Georgian young people on the issue of migration has been taking place in the Kakheti region of Georgia, at the end of a major project that has helped secure visa-free travel for Georgians in Europe. Experts, academics and lawyers from around the world travelled to the International Centre for Migration Policy Development (ICMPD) summer school in Kvareli to work with the young professionals and researchers to develop regional expertise on migration – one of the most important political issues of modern times. The team included migration experts from Oxford University in the UK, Maastricht University in the Netherlands, the Sorbonne in as well as practitioners in international human rights law. The summer school, which dealt with media, economics, international development, human rights law and research methods was part of the EU-funded ENIGMMA project in Georgia – which ends today (Friday July 7th) and ongoing MOBILAZE project in Azerbaijan. Both projects focus on eﬀective migration management. Violeta Wagner, Project Coordinator at ICMPD for both projects said: “Migration is a hot-topic in global debates, and it is vital that the young people of Georgia and Azerbaijan – who represent the future of these countries – have a clear and nuanced understanding of this complex issue. ICMPD’s work on migration in these countries has helped bring them together and closer to the EU.”

Southern Gas Corridor Opening New Chapter in Energy Supply – BP The Southern Gas Corridor is opening a new chapter in the way energy is supplied, and Turkey is helping to write that story as one of the great transport hubs of the world, said BP CEO Bob Dudley. He made the remarks during the 22nd World Petroleum Congress in Istanbul, Turkey. “One of BP’s largest partnership projects, the Southern Gas Corridor, will bring a further 6 billion cubic meters a year of gas from [Azerbaijan’s] giant Shah Deniz field in the Caspian to industrial customers across Turkey, as well as supplying an extra 10 billion cubic meters a year to EU markets,” said Dudley. He pointed out that of the 3,500 kilometers of pipeline, 1,850 – more than half – are being laid in Turkey. “The advantages of natural gas are clear and at BP we are evolving our production portfolio to contain a larger proportion of gas,” said the CEO. “Six out of the seven major projects coming on-stream this year will produce gas.” The Southern Gas Corridor is one of the priority energy projects for the EU. It envisages the transportation of gas from the Caspian region to the European countries through Georgia and Turkey.

SEOUL – Due to the rapid take-up of alternative tobacco devices in Japan and South Korea, Philip Morris International, the world’s most valuable cigarette company, is looking to begin talks with governments within five years on phasing out cigarettes. The time frame is based on projections of when users of new smoke-free devices could overtake traditional smokers in number in those two countries. “If you extrapolate the figures, then logically we could reach the tipping point in five years,” Chief Executive Andre Calantzopoulos told Nikkei Asian Review in a recent interview in Seoul. “That is when we could start talking to governments about phasing out combustible cigarettes entirely.” Calantzopoulos, who became chief executive in 2013, has staked his company’s future on next-generation devices it claims can reduce toxicity by as much as 90%. These include the IQOS device, which heats, rather than burns, tobacco packed into what resemble mini cigarettes.Asia is extremely important to the

U.S.-based company as it implements its strategy of phasing out conventional cigarettes, Calantzopoulos said. The region is home to 60% of the world’s 1 billion-some smokers and Japan was the first and still most successful market for IQOS. Consumer takeup in South Korea, where sales began on a limited basis in late May, has also been encouraging. “Korea has benefited from the product awareness generated by Japan, so it has been a faster start than Japan and I hope it will continue that way,” Calantzopoulos said. “They are [both] countries which are open to innovation and trying new products, and have a culture of considering people around them.” The key outlet for IQOS in South Korea has been the CU convenience store chain. Calantzopoulos said the company is struggling to keep the stores stocked with enough of the special mini cigarettes used in IQOS, which are sold under the brand HEETS in South Korea and HeatSticks in Japan.

SOFA Strives to Strengthen Movie Biz Infrastructure in Central, Eastern Europe Uber Cedes Russia to Yandex With $3.7 Billion Merger Agreement Uber Technologies Inc. is handing over the keys to its business in Russia. The San Francisco-based company and Yandex NV are merging their ride-hailing businesses in Russia. Uber will invest $225 million and take a 36.6 percent stake in a new, yet-to-be named venture that will be valued at $3.73 billion, the companies said in a statement Thursday. Shares of Yandex, which will invest $100 million and own 59.3 percent of the new enterprise, jumped as much as 19 percent in early trading in New York to $32.44, their highest level in three years. The deal with Yandex is Uber’s second retreat from a major market. Last year, Uber left China in exchange for a 17.5 percent stake in rival Didi Chuxing, after losing more than $2 billion battling its competitor. While Uber remains the dominant ride-hailing operator in the U.S., it has been on the defensive, beset by scandals that led to Travis Kalanick’s ouster as chief executive oﬃcer. The agreement with Yandex is part of Uber’s renewed eﬀort to improve revenue, narrow losses and resolve its legal issues. “This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business,” Pierre-Dimitri GoreCoty, Uber’s chief for Europe, Middle East and Africa, said in the statement.

Tigran Khudaverdyan, head of Yandex. Taxi in Russia, will become CEO of the combined enterprise, Uber and Yandex said. Together, their businesses handle 35 million rides a month, and will also operate in Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia. The deal is expected to close in the last three months of 2017. Uber’s exit from Russia could be a precursor to more deals in other big, fiercely competitive ride-hailing markets. Investors have raised questions as recently as this month about Uber’s continued losses in India and Southeast Asia, asking privately whether the company would be better served by cutting deals with market leaders Ola and Grab, two people familiar with the matter said. Kalanick and his longtime deputy Emil Michael both helped negotiate the deal in Russia before they were pushed out of Uber last month, people familiar with the matter said. They were key deal-makers for Uber. Under their watch, the company inked an armistice with Didi last year, partnerships with automakers Daimler AG and Toyota Motor Corp., and with credit card companies including American Express Co. Cameron Poetzscher, Uber’s vice president of corporate development, and Fraser Robinson, the head of business in the region, also played major roles in negotiating the deal with Yandex.

Four years ago Nikolaj Nikitin launched his innovative training program the School of Film Agents (SOFA), which provides tutoring and mentoring for movie biz professionals outside the production sector. Next month, its latest edition opens in Warsaw, Poland, following its recent edition in Tbilisi, Georgia. Variety caught up with Nikitin, who also helps select films for the Berlinale, at the Karlovy Vary Film Festival. It is a pan-European think-tank for the future of cinema… It provides training for culture managers in the field of cinema, but we call them “film agents” for short (not to be confused with sales agents and talent agents). There are already great training programs for the people who create films — producers, directors, scriptwriters and actors — but our target audience are those in the film industry who don’t work in production: someone who wants to set up a film fund, a film festival, a film magazine, a video-on-demand platform, or a film school – any kind of film institution or company; even a physical place like a movie theater or a film studio. We also have a geographical focus: on Central and Eastern Europe, Central Asia, the Caucuses, Germany, Greece, and Israel. Film is a very expensive commodity. It’s not like writing a novel or a piece of music. You can’t sit alone at home. You need someone to fund your film, a place to shoot, and a crew, but you also need exhibitors, distributors, film archives, and so on. To keep cinema alive you need institutions.

PUBLICITY

July 17, 2017 #201

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 76-g Chavchavadze Ave., Tbilisi Tel: 231-11-61, 231-14-54 E-mail: 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 Ave., Tbilisi Tel: 225-20-72/73/74/76 embassy.tbilisi@mfa.gov.tr Consulate General in Batumi 9 Ninoshvili Street, Batumi Tel: 422 25 58 00 consulate.batumi@mfa.gov.tr 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.esRomania Embassy

TBILISI GUIDE 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

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

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,

LIMELIGHTTRAVELINFOCENTER Address: 13 Sioni Street, 0105, Tbilisi (at the end of Shardeni Street) Phone: +995 322 999 123 E-mail: info@limelight.ge Web-page: www.limelight.ge Facebook page: www.facebook.com/limelight.ge

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

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July 17, 2017 #201