The FINANCIAL_Golden Brand Edition by The FINANCIAL

17 May, 2012

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golden brand 2011

15 Years

Your Own Network

Geocell CEO, OSMAN TURAN

eliaSonera has been present in Georgia through its consolidated subsidiary Geocell for over a decade, building trust in its mobile communication brand, having always performed through its fair and ethical business practices, striving to be a clean company and an ethical investment for all its shareholders, as well as a good corporate citizen operating in Georgia. During the past 15 years of Geocell's operation on the Georgian telecommunication market the company has established its leading position in terms of the number of subscriptions, network quality, innovation and technologies. Geocell continues strengthening the market leadership in Georgia and fairly supports its reputation of an open, transparent and socially responsible company by contributing to the development of Georgia's economy and infrastructure, educating a new generation of business professionals and connecting the country to the global information highway through its services. By delivering its latest technolo-

gies to the most distant places, now internet service has become available in schools in mountainous regions of Georgia. Geocell is an indispensible part of all the country’s important initiatives directed to improving people’s everyday needs saving their time and resources. Through its services over two million subscribers can use the most attractive, the lowest roaming tariffs on voice and data with all the brands under TeliaSonera operations. A long list of charitable, sponsorship and support actions and campaigns are in stock of the company’s history including such initiatives as caring for environment, performing green actions in places suffered with drought, helping the victims of earthquake, supporting the houses for elderly people, installing its base stations without any commercial expectation in locations experiencing a total absence of communication and thus solving the biggest problems for people and making their lives easier. Every Geocell subscriber has a possibility to participate in such important proj-

ects of the country as the biggest charitable project of “Iavnana” fund, “You Go Back Home” that supports returning homeless children to their homes. A century project for rehabilitation the country’s one of the most important cultural heritage – Ikalto, an ancient monastery complex is also one of those projects, that involved every subscriber of Geocell with a spirit of pride for being able to participate and contribute to the project of the century preserving the most valuable historic heritage for future generation. By the above mentioned activities and initiatives Geocell became the first business company showcasing how to promote to the country’s life starting from preservation of historical heritage heading towards promoting to modern life rhythm by creating the latest technology based classes in public schools of Georgia under the concept of “bringing the future to the present”, introducing the most important project for integration of people with limited abilities by creating working places for them and thus becoming an example

for other businesses in order to become part of the big success, which paves the way to the country’s global progress and the steady course chosen by Georgia, which serves the goal of the country: to be the worthy member of the progressive and democratic part of the world. The proof to it can be the words of the mayor of Tbilisi, Mr. Gigi Ugulava from his speech made recently during the celebration of the company’s 15th anniversary. He mentioned the hard times of the country, when Geocell started its operations in Georgia and made a very obvious parallel between those times and the present, when the whole country is overwhelmed in this celebration of the first mobile operator’s anniversary and the words he said clearly speaks for it: “Let me mention one phrase: whatever is good for General Motors is good for America. The same I can say about Geocell, that is: what is good for Geocell is equally good for our country. You are the ones creating working places and developing the business and all we can do for you is create the best atmosphere for you to continue so”.

15 YEARS

ago, the history of Geocell was just about to take its start in a small office in Tbilisi…

15 YEARS

ago Geocell originated the first mobile call, thus notifying, that from that moment on Georgian population had became part of a global network of GSM communication.

15 YEARS

ago, Geocell set its goal to make a mobile phone an everyday indispensible part of people’s lives and not a luxury item. Today, a mobile phone connected to Geocell network has become an integral part of communication.

15 YEARS

ago, making a phone call was the only possibility Geocell network could provide, while today its customers enjoy a wide range of 3G services.

15 YEARS

ago the words “Your Own Network” were chosen by Geocell as a slogan. During these years this message managed to gain a foothold in peoples’ perception as a symbol of comfortable mobile communication.

15 YEARS

ago the first office of Geocell was opened in Tbilisi. Today customers are offered simple, direct and comfortable services in company offices throughout Georgia.

15 YEARS

ago it was possible to talk through Geocell network only in the capital city, while today the company coverage area includes 98% of the country.

15 YEARS

ago the first subscriber visited Geocell office. Later, Geocell started visiting consumers throughout Georgia on its own. Today number of regional projects aiming at direct communication with the consumers reaches 5000.

15 YEARS

ago Geocell crossed the Georgian borders. A mobile phone connected to Geocell network started traveling to another country, together with a subscriber. Today over 130 countries of the world are co-participants of Geocell international communication.

15 YEARS

ago the outlines of Geocell brand were in the process of establishment. After successful passing through various stages of development, today the company has united under a common brand, incorporating 18 member companies of an international communication holding, TeliaSonera Group.

15 YEARS

ago Geocell was taking its first steps on the Georgia market. Gaining the positions on the market was made by stages. Today Geocell is a leader of mobile communication market.

15 YEARS

ago Geocell started to implement the first charity project. A strategy was created, which covered diverse activities. During these years Geocell has initiated hundreds of projects aimed at saving and preserving cultural heritage, supporting the spheres of education and sport, promoting the integration of people with disabilities into the society as well as environmental protection.

15 YEARS

of mobile communication have successfully passed. Inexhaustible opportunities of communication are still ahead.

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THE SECRET OF TOYOTA IS ITS HARMONY, QUALITY AND PRICE

IRAKLI GURCHIANI, owner of Toyota Center Tbilisi

Toyota: Beat Record High Fuel Prices with a Hybrid The FINANCIAL By MADONA GASANOVA

ybrid vehicles that have recently become best selling cars around the world allow their owners to save an average of 15,000 USD over three years. These fuel efficient cars are now being offered to Georgians by Toyota Center Tbilisi. Once again Toyota has become the favourite car brand of Georgian customers, adding one more Golden Brand award to the company’s list of achievements in the country. Irakli Gurchiani, owner of Toyota Center Tbilisi, in an interview with The FINANCIAL explained why Georgians remain loyal towards Toyota and discussed the future plans of the company. Toyota Center Tbilisi sold 847 cars in 2011. In 2012 the company plans to import 1,500 units. The Land Cruiser 200 will be an exclusive new brand which Toyota Center

Tbilisi will be offering to its customers this year. With 280 units, Land Cruiser Prado made up the largest number of sales of Toyota Centre Tbilisi in 2011. The company sold 147 Corollas, 135 Camrys, 120 Land Cruiser 200s, and 106 RAV 4s. In 2011 Toyota Center Tbilisi sold 847 units. That was 188 cars less than in 2010. “We expect just a small increase in 2012. We have not fully emerged from the 2008 global recession, and therefore we are still in the recovery process. Actually, the situation is the same all over the world,” Gurchiani said. In 2011 out of total sales 15% of cars at Toyota Center Tbilisi were bought by females. “We stably import cars. We do not distinguish cars by gender and have not recorded any significant increase in the number of females purchasing cars,” Gurchiani told. “Women usually buy small and medium sized jeeps. Black and silver are the most popular colours. We have re-

cently witnessed a change in people’s choice of car colour actually,” he added. Land Cruiser Prado was the best selling car at Toyota Center Tbilisi in 2011. “Prado is the car with the strongest features characterized for a jeep. Prado is the best synthe-

he explained. The Land Cruiser Prado was also a dominant car in 2010. The price for it is 70,000 GEL. According to Gurchiani, Toyota Center Tbilisi is not offering customers cars that run on gas. “I, personally, am afraid of gas. This is a global

ITS PRICES AND QUALITY ARE THE MAIN ADVANTAGES OF TOYOTA sis of size, technical features and price. The conditions of Georgia’s roads are what cause the popularity of jeeps among Georgian customers,”

tendency. Toyota does not produce such cars”. Fuel efficient models of Toyota sharply increased the company’s portfolio in the

USA. As for the situation in Georgia, Gurchiani told that the desire to save money is already a widespread trend in Georgia. “Fuel efficient cars are hybrid vehicles which we started importing a long time ago. The fact is that their popularity is low because of the high prices. In comparison with cars of the same dimension hybrid cars allow one to save as much as 15,000 USD in three years. Georgian customers are not used to counting in this way while in the USA it is a bestselling car because of people’s expenditure reduction tendencies,” Gurchiani told The FINANCIAL. Japanese cars have become dominant in Georgia. However the frequency of the Toyota brand is still obvious in the streets. “The secret of Toyota is its harmony, quality and price,” Gurchiani explained. By volume of sales Hyundai is nearest competitor of Toyota in Georgia. “In terms of exact price and quality though we do not have any competi-

tors,” Gurchiani noted. Irakli Gurchiani owns a LEXUS LX 570. As he said, he changes his cars every year. The majority of auto dealers blame banks for sales drops as they have decreased their issuance of auto loans. Gurchiani confessed that auto loans encouraged their sales but at present they are quite expensive and complicated. “The increase of sales volume will be our major challenge this year,” Gurchiani told The FINANCIAL. Toyota Center Tbilisi has two brands in Georgia, those of Toyota and Lexus, although Toyota has other brands like Hyno, Daihatsu and Scion which are offered on American markets. When a new Toyota model is issued it is instantly presented on the Georgian market. “It’s only transportation which prolongs the process, taking from 3-5 weeks to travel from Japan to Tbilisi,” Gurchiani said. In 2011 annual turnover of the company was more than 100 million GEL.

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NINO GIORGOBIANI, PR Manager of Georgian Airways

Georgian Airways to Add Charter Flights to Antalya and Hurghada this Summer The FINANCIAL By TAKO KHELAIA

eading Georgian air carrier Georgian AirwaysAirzena is going to add direct charter flights to Turkish Antalya and Hurghada, Egypt, this summer. According to Nino Giorgobiani, PR Manager of Georgian Airways, despite the hard economic situation, the company managed to increase the number of its flown passengers by 10% last year. “The year 2011 was quite difficult for Airzena. The world economic crisis had a substantial impact on the company. Unequal conditions and unfair competition practices on the Georgian aviation market have hampered our business. During the last five years fuel price has significantly increased and has been risingalmost every day. In general the world economic crisis has had a significant effect on aviation business develop-

ment. All around the world and particularly in Georgia, the number of carriers has been reduced quite significantly,” Giorgobiani said. “However, despite the economic problems, last year the number of Airzena customers increased by 10%. We have flights to Europe as well as to CIS countries. We have direct regular flights to 12 foreign and domestic destinations, including Moscow, Kiev, Donetsk, Amsterdam, Paris, Athens, Tel-Aviv, Viena, Kharkiv and Batumi. We have flights from Batumi to Moscow, Kiev, Odessa and Donetsk. The company operates nine flights a day,” Giorgobiani noted. “Airzena’s fleet consists of 12 airplanes. We have BOEING as well as CRJ type aircrafts. Airzena has provided flights to Batumi since 2004. Batumi has seasonal demand flights, however the route is not very profitable. Domestic flights are not profitable for air companies as a general rule,” Giorgobiani said. According to Giorgobiani, aviation business is quite dif-

We are aiming to maintain our operations and carry on during this hard and quite tense situation. Years of hard and professional work of our management have brought about those results that we have now. This hard work has led us to become a winner of Golden Brand awards several times already

ficult to manage. Stakeholders work hard in order to run this difficult business. “In 2011 the revenues of air carriers worldwide totalled 520 billion USD, net profit was only 19 billion USD, which is about 3%.. These numbers prove how difficult and low-yield the

aviation business is,” Giorgobiani said. “Most recently Airzena has cancelled flights to several destinations including Frankfurt and Minsk, and we are also cancelling our operations to Dubai. Reduced operations is the result of unfair competition on the

market and unreasonable Government policies governing liberalisation of the aviation market,” Giorgobiani said. “Georgia is a small country and the absences of fair competition laws, as well as the lack of specific safeguards ensuring orderly development of the market and sustainability of the local carriers, make the existence of even one extra carrier impossible. Soon Airzena might even have to ceaseoperating, if the existing incorrect policies in respect of aviation in the country aren’t reviewed,” Giorgobiani said. Airzena was founded in 1994 and since then the company has worked very hard in order to reach the position it holds today. “Our company satisfies all the safety demands and operational standards of western markets and therefore we fully deserve recognition for that, in the form of IATA membership. Georgian Airways is a company of modern standards. We have the advantage of confirming

the high quality of our fleet. We are working daily on increasing our service quality and satisfying our customers’ demands,” Giorgobiani said. “Our company’s priorities are permanent and include strict observance of flight safety standards and continuous renewal of service. In addition to this we have a strong staff of highly qualified and experienced pilots. Our company has introduced the Safety Management System and I personally lead the monitoring of aviation safety complianace. Before each takeoff every aircraft is comprehensively checked and prepared for the journey it is about to undertake,” Giorgobiani said. Airzena trains its pilots in Germany and the USA, where they undergo rigorous and comprehensive training and receive their licenses. Georgian Airways is a member of the International Air Transport Association (IATA). This year Airzena was again named a winner of the Golden Brand Awards.

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TGL Group Opening New Sports Shops in Georgia TGL Group, which processes its own distribution network consisting of 20 luxury shops, is going to open new sports brand stores in Tbilisi and Batumi. The presentation of a Nike store will be held in autumn of this year in Tbilisi Mall. As for Batumi, a new Giordano store will soon be opened there. It is also planned to bring Reebok to Batumi as well. The reason for the expansion is that the world-famous sports brand collections have become more in demand in Georgia.

GRIGOL LEKVEISHVILI, one of the founders of TGL Group

The FINANCIAL By MARIAM PAPIDZE “I remember when we opened the first Nike store in Tbilisi in 2000. Looking back I can say that the result exceeded all of our expectations from the very beginning,” Grigol Lekveishvili, one of the founders of TGL Group, told The FINANCIAL. “Of course we do need to take into consideration the lighter economic conditions that characterized that period. Since then demand for sporty style clothes has been increasing every year. There is nothing surprising about that really as today’s people are constantly seeking comfort,” he added. TGL Group was founded in 2000 in Tbilisi. Its stores are located in the central part of Tbilisi and Batumi. TGL Group is the authorized dealers of such well-known sports brands as Nike, Adidas, Giordano and Reebok. Q. What is the most popular sports brand in Georgia? A. It is always difficult to name the most popular and in demand sports brand in Georgia. The reason is that there are two equally strong players in the market which are each other’s direct competitors. Georgia is the only country where one company is a dealer of the two largest sports brands - Nike and Adidas. That does not mean however that they act like mutual brands. It simply would not be

allowed by either of the sides. The situation here is the same as around the world as teams of professionals manage the brands in Georgia. They have to work under conditions of severe competition. There is almost equal demand for Nike and Adidas in Georgia. Both of these brands have their own loyal customers. Q. In general do Georgians like wearing sportswear? A. Sportswear is definitely in demand in Georgia. This means that people like sporty style clothing. Healthy lifestyles and sport have even become fashionable in recent times. It should be noted nowadays, sports brands use modern fashion trends, to create new models and except the specific line of sportswear (football, tennis, etc...) They also, offer casual collections. The share of such clothing in new collections is increasing more and more. As an example I would single out Stella McCartney, whose recent collections made for Adidas has caused a great stir in Georgia. Q. So are such sports brands competing with Giordano as well in terms of their casual lines? A. Giordano is absolutely different from Nike and Adidas. This is a brand which is totally oriented at casual clothes. Giordano is focusing on its five corporate business values of Quality, Knowledge, Innovation, Service and Simplicity. This policy helped the brand to develop its own style, its own vision, which means that Gior-

Sportswear is definitely in demand in Georgia. This means that people like sporty style clothing. Healthy lifestyles and sport have even become fashionable in recent times.

dano clothes are casual, fashionable and satisfy customers of all ages and tastes. Q. Please can you provide us with your Group’s sales statistics? A. In terms of clothes, the sales dynamic depends on different factors. These factors are climate conditions and entering of a new competitor to the local market. Sales increase before New Year and the start of the academic year. The sales of the transitional season are relatively slow, because spring and autumn are relatively short in duration in Georgia. If a new competitor enters the market, sales decrease by 1020 percent and it’s normally. Attention and interest towards the new brand is always high. But after one or maximum two months everything returns to its previous position. Q. Are you going to bring any new brands to the market? A. A few months ago we tried to add a new segment, a

restaurant business, to our activities. “XYTOPOK city” is a Ukrainian restaurant which is located on Vaja-Pshavela Avenue. Despite the brief period of its existence, the restaurant has already become very popular in Georgia. We work hard and systematically in this direction, but nothing is planned yet for the near future. That said though we are going to open new stores. There will be a presentation of a Nike store in Tbilisi Mall in the autumn. Q. Are you going to expand your business to the other cities of Georgia as well? A. Our experience has shown us that there are only two cities in Georgia which can be considered real merchant centres. These are Tbilisi and Batumi. We tried to open a store in Rustavi but it was simply not profitable for us so we closed it a month ago. We do plan to open a Giordano store in Kutaisi because, as we believe, the city has great potential.

Q. What are your plans for Batumi? A. TGL Group entered the Batumi market in 2005. I can say that all three brands are becoming more popular and selling better every year. To some extent we need to expand and need to have innovations. In several days Giordano’s new store will be opened in Batumi. We also plan to open a Reebok store there as well. Q. From which countries do you import your collections? A. Each brand has its franchisor in Europe whom we have common long-term business relationships with. Showrooms are held several times a year where our representatives choose the next season’s collections based on contemporary demand and innovations. The world-famous brand’s collections are made in Europe or America, sewn in Asian countries and then distributed to different countries. Q. Where does the greater demand exist - in Tbilisi or in Batumi? A. There is unprecedented demand in Batumi during the summer. This is caused by the holiday season and by the large number of tourists coming there from Georgia’s neighbouring countries. There are often better sales statistics in Batumi than in Tbilisi in this period. Sales figures in the capital city are more or less stable. It does not depend on a specific season. Demand is generally much higher in Tbilisi though. Q. What are the brands

that consumers rely on the most? A. We have been working on the consumer market for twelve years and we have gained some confidence. Each brand has its own group of loyal customers. We care about our relationships with our customers very much. Q. How often do you update your collections? A. In terms of sports brands, the collections are divided in to two seasons - spring-summer and autumn-winter. We renew the collections eight times per year. As for Giordano, we have new collections every month. Q. It is said that the prices of famous brand’s collections increase by 10-15 percent every year. What are the prices of sports clothes in Georgia and do you expect a price increase here? A. There are some exclusive models which really do have high prices. These are so called conceptual models which have no analogue. Nike, Adidas, Reebok and Giordano prices are in full compliance with international prices. Moreover, we periodically offer certain benefits to our customers. I am not referring to seasonal discounts but about different kinds of activities. We have accumulative cards too which allow for additional discounts. On top of that an outlet store in Karvasla shopping centre has been operating since April, where consumers can buy the production of Nike, Adidas and Reebok at 50-70 percent off.

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golden brand 2011

“TO MAKE PEOPLE FEEL GOOD AND LOOK GREAT”

“IMPOSSIBLE IS NOTHING”

“JUST DO IT”

Advertiser: TGL Group. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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SAMSON PKHAKADZE, Chairman of the Wissol Board of Directors

Annual turnover of Wissol Group was over USD 400 000 000 last year The FINANCIAL by TAKO KHELAIA

ne of the leading Georgian company Wissol, invested about GEL 42 200 000 in different fields last year. According to company officials the year 2011 has been quite successful for the company, with plenty of novelties. Annual turnover of Wissol in 2011 was over USD 400 000 000. It is already third time that Wissol Petroleum Georgia was awarded in the nomination of Favorite Brand on Golden Brand ceremony. Golden Brand reveals and awards companies that have achieved utmost success in the branding business of Georgian market. “The major goal of the survey was to identify the most creative decisions of the companies involved in the branding business. Experts were assessing the awareness of brand, company trademark and advertising projects. Receiving this award is a recognition and big stimulus for us. The reward proves that the customers and experts recognize you as a golden brand and it’s a big pleasure for the company. Such kind of rewards, underline the successfulness of the company.” According to Samson Pkhakadze, Chairman of the Wissol Board of Directors, the capacity of imported petrol,

diesel and gas has increased in 2011. While summing up the results of 2011, Pkhakadze said that one of the most successful project last year has been the development of the Smart supermarket chain. Entering the Georgian supermarket business in the beginning of 2011 Smart is a daughter brand of Wissol Group. “In the year 2011 we received two very important awards. Wissol Group was named as the Best Employer of the Year by National Business Award Mercury 2011 and Chairman of Wissol Group Samson Pkhakadze received an award of The Best Entrepreneur of 2011 at National Business Award Mercury 2011. Wissol Group participated in the European Business Awards and was awarded as one of the top ten successful European brands.. 2011 was overall much better than the last,” Pkhakadze said. “One of the most notable outcomes of 2011 was that Wissol Group was joined by two strong daughter companies - Smart and Wissol Auto Express, One of the most outstanding projects of Wissol Group was the launch of a multifunctional recreation and service complex on a section of the Gori highway,”Pkhakadze said. “In 2011 we added, more gas stations to our network. Last year world famous AS 24 became our partner. We had successfully cooperated with French brand Total and

they started a second project with us. AS 24 stations have already started function in different regions of Georgia. Every driver who has an AS 24 plastic card has an opportunity to pump gas and do not care about currency exchange or loosing time,” Pkhakadze said. Wissol believes that young people in Georgia should be engaged in studying and sports, as a healthy lifestyle is a key to success on both personal and professional levels. “Supporting Georgian Sports has become one of the top priorities among Wissol CSR activities. Our company has invested 25 million GEL for sport infrastructure development in total. Wissol Group is the owner of a legendary Georgian football Club Torpedo Kutaisi and the company invests millions for its development every year,” Pkhakadze said. “Wissol has participated in many charity projects. Wissol Group takes part in Iavnana charity actions and we have helped many poor and needy families. When a big company has solid income, as a commercial organization it should return an amount of the money to society asides from just paying its bills. That’s the ‘social responsibility’ side of business. Society gives you the opportunity to be successful, so you should help them in return therefore,” Pkhakadze said. Wissol Petroleum Georgia is one of the first companies to provide the top quality Com-

pressed Natural Gas (CNG) products. CNG is an environmentally clean alternative to fuels. It reduces harmful pollutants and exhaust emissions. At the moment Wissol has about 8 Gas Stations, but company plans to develop it’s network further. “The sharp rise of oil prices in Georgia has increased demand for CNG. The number of CNG customers has increased by 50% at our stations in recent times. When oil prices on the international market increase, the cost of all fuel products rise. We have to adapt our prices corresponding to international demands. We are providing six products at Wissol stations. We offer our customers mostly Italian products. Api fuel is one of the most demanded among our clients. We also have products which aren’t imported from Europe, specially for those customers with lower incomes,” Pkhakadze said. “Wissol has a Gas Distribution company which has been supplying Telavi Region with natural gas since March 2008. Consequently, up to 15,000 subscribers are already supplied with natural gas in the Telavi region. Gas supply of the area contributes to local industry development and is very important in an ecological respect. Wissol Gas Distribution is quite a successful and profitable company and we will support its further development with great pleasure,” Pkhakadze said.

Wissol Group owns another successful company Air Wissol.which is progressive and fast growing company. “Air Wissol imports and distributes high qualify aviation fuel on the territory of Georgia. Company offers European JET A1 type fuel as well as TS1 fuel with most modern and technologically advanced hydrant system infrastructure created on the territory of the airport with the aim to provide aircrafts with jet fuel using a special cascade of pipelines. Qatar Airlines, Air Astana, BelaviaBelarusian Airlines, China Southern Airlines, Polish Airlines LOT, Pegasus Airlines and Turkish Airlines are among Air Wissol clients,” Wissol Group notes. Wissol Group started the year 2012 quite actively. One of the biggest challenges for the company this year was bringing the world famous brand Wendy’s to the Georgian market. “This year we have many novelties. From the beginning of the year we have been working intensively on those new directions. In April 2012 we reported on our new business direction. We presented new company Wendy’s Georgia to society. Wendy’s will be successfully placed among its competitors in Georgia. As the time passes demand for Wendy’s products will increase. People will definitely visit Wendy’s often as this restaurant offers the

highest quality products to customers,”Pkhakadze states. “We are also spending much time and energy on the further development of the Smart supermarket chain. This year we are planning to open several new supermarkets. This work demands a lot of resources, effective work, energy and time. We are doing our best to create an effective network of Smart supermarkets,” Pkhakadze said. “We are the representatives and official distributors of one of the widest French oil companies - Total. We offer people Total products which are aimed at the upper middle class segment. Now we have started importing FINA brand products from Total Group, which is focused at the middle classes. We are going to import Italian oils and lubricants to our chain in the nearest future. We will add several Auto Express service centers in different regions of Georgia this year,” Pkhakadze said. Recently, Wissol started an incentive action for its customers. “From May 1 to June 30, all those customers who purchase fuel above Gel 100 at any of Wissol stations, will receive a special voucher with 10% discount on French Total and FINA oils at Auto Express network.. Loyal customers of Wissol will enjoy this discount action till December 31, 2012, after they submit their vouchers at Auto Express stations,” Wissol representatives note.

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WISSOL W ISSO L RECREATION RE C RE ATI ON AND A ND SERVICE CENTER IN GORI

Advertiser: Wissol Petrolium Georgia. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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GIORGI MSHVILDADZE, General Director of Tegeta Motors

Tegeta Motors Becoming Official Dealer of Mazda The FINANCIAL By NANA MGHEBRISHVILI

egeta Motors will start official sales of Mazda cars at the beginning of June. Models including the Mazda 2, Mazda 3, Mazda 6, CX7 and CX9 will be on sale. The Mazda CX5 will be added by the end of 2012. Models will be presented in the price range of 17,000 USD up to 44,000 USD according to the model size and engine capacity. “We plan to sell up to 200 autos in the first year,” Giorgi Mshvildadze, General Director of Tegeta Motors, told The FINANCIAL in an exclusive interview. “We are sure that this number will grow rapidly. By our calculations Mazda Crossovers (CX7 and CX9) will gain special popularity as family cars. In spite of their large dimensions, these models are distinguished by their excellent dynamics and fuel efficiency. Mazda Sedans usually tend to be popular with younger drivers and corporate customers.” Tegeta Motors added a new direction in 2011 - the trading in of motor cars. Tegeta Motors is already an official dealer of Porsche in Georgia. Sales of Porsche are very successful and therefore the company decided to start the trading of a middle class of cars as well. “It was tough to choose a middle class car brand which would work strongly alongside Porsche,” Mshvildadze explained. “Mazda always

drew our attention. This is a slightly smaller automaker which has been working for more than 80 years. Such long experience and shortage of annual production give Mazda the opportunity to pay more attention to quality control and improvement of models.” Mazda models are only produced in Japan. This improves their quality and indicator of reliability as well. Mazda is the only Japanese producer to have won Le Man 24 hour Race on durability, where technical reliability and economy are the main criteria. “There is strict competition in the middle segment of car sales among officially presented brands as well as among used cars. Fortunately more and more customers are making the choice to go for new cars. “It’s Time to Choose Quality” is our motto and we provide the best products in each segment according to market demand. Mazda is the most popular in terms of technologies of engine production.” The competition is quite strict among both new and used tires. The share of used tires is 75 percent. Secondhand parts are widely used as well. The price difference is quite big and therefore a big amount of car-owners still don’t use new parts. “Georgians are gradually learning that used tires are quite risky and therefore more and more people prefer to buy new ones. New cars are quite fast and the streets aren’t so good in Georgia, therefore used cars can result in some dramatic outcomes. The prices are different but new tires

can be used 3-4 times longer than used ones. We have tires for all price segments.” Tegeta Motors is establishing the Georgian-Austrian Transport-Logistic Company in cooperation with the largest Austrian Company Gebrüder Weiss. The centre will serve Georgian, Azerbaijani and Armenian customers. The company will be offering customers full storage and transport service. The total project value is estimated at 22 million GEL and will enter into operation in 2013. The project is unique in Transcaucasia due to its size as well as this being the first one in the region.” “In general Georgia has a good logistic function due to its geographical location. The Georgian Government cited this as one of the main priorities of the country. So we are glad that Tegeta Motors is contributing to the development of the logistic function of Georgia’s auto sector,” Mshvildadze stated. Tegeta is expanding in Armenia. They will open an office there in 2012. The company plans to expand to other countries as well, aiming to share their experience with them. Tegeta Motors aims to open branches in its neighbour countries first. First will be a service centre and then Tegeta will start vehicle trading as well. Tegeta Motors currently has sixteen branches in total; ten in Tbilisi and six in the regions. New branches in Poti and Batumi were opened in 2011. They have a service centre for trucks in Kutaisi. The

building of another service centre, specifically for motor cars this time, has already been started in Kutaisi. “The biggest service centre is the central one, which serves 350 cars on a daily basis. This year we are going to reconstruct several branches. We will be adding new service centres in 2013,” Mshvildadze said. “The sales of Tegeta Motors increased by about 25% in 2011 compared to in 2010,” claims Giorgi Mshvildadze. “Turnover of the whole holding was more than 100 million USD. We have experienced 25 percent growth in the first four months of 2012 in comparison with the same period of 2011. This is quite significant growth for the Georgian economy.” Corporate sales, retail and wholesale hold almost equal shares in the sales of Tegeta Motors. All three directions are very important for the company and are developing stably. “We have invested 30 million GEL during the last 5-6 years. We have had significant growth since 2008. We invested 2.5 million GEL in 2011 and plan to have the same amount of investments in 2012. Investments will increase in 2013 and amount to 4-5 million GEL.” Tegeta has recently become an official member of Groupauto International. Groupauto International is a network of distribution of spare parts and service at the international automobile network which unites suppliers and members of numerous countries included in the group. At the

moment the group includes 4,000 auto service centres located in 23 countries around the world. “By becoming a member of Groupauto, Tegeta Motors has made a significant step towards creating a sound environment for spare parts and got equipped reliably for future challenges,” the General Director explained. “It is noteworthy that great importance is attached to the quality of goods and services within the group. Tegeta Motors is a company focused on quality. “This gives us the possibility to get discounts for some products as well. “Being a member of Groupauto ensures lower prices and high quality service for us,” he added. Tegeta Motors has a café in its central service centre, something unprecedented in this sector. As a result customers will be able to relax in comfort while their car is being seen to. They can use the free Wi-Fi service that is available and drink coffee in a comfortable environment. This is especially comfortable for female customers. “Tegeta has outstandingly high quality of both service and products. We as the leading company are creating a new standard of auto service in Georgia. We try to meet European standards in all directions. We invest a lot in creating premium standards and new trends in our sector. Our aim is to implement western experience, knowledge and quality in Georgia as well,” Mshvildadze said. “In spite of it being the highest quality, Tegeta Motors is

aimed at all income-segments of the population. Lots of taxi drivers who move across the city and know all the different service centre choose to come here to change their oil or filter. This is real proof that the prices and quality are reasonable here,” he added. “We try not to stop at our recent achievements but instead strive to achieve more and more success. This is the key factor to being successful. Our strong staff play a significant role in this.” Tegeta Motors employs 800 individuals at present. The company plans to increase that number to 1,000 in the nearest future. Starting a job at Tegeta Motors is quite difficult due to the high standards and requirements of the company. The company arranges open days for students to spread information about the company and starting work there. Students can get huge practical knowledge at Tegeta Motors. “We have high requirements for new employees, but we get good results in the long run. Strong employees work well in an environment such as ours. We are constantly caring about the development of their careers. They have systematic trainings. We bring prominent trainers here for all our directions and sometimes send our employees abroad to trainings and seminars.” In addition Tegeta Motors has an English language teacher at its office and offers free lessons to any company employee who has the desire to learn.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

It s Time to Choose Quality...

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golden brand 2011

Eristavi Law Group - First Georgian Law Firm with Own Headquarters Building The FINANCIAL By MARIAM PAPIDZE

o better accommodate customers’ needs in literal and figurative sense, Eristavi Law Group is building a new headquarters office making the Group the first and only law firm in Georgia to do so. The 14 storey modern A-class office will be opened on Chavchavadze Avenue in 2013. Eristavi Law Group offers unparalleled legal representation across a comprehensive range of practice areas for both individuals and business entities with its lawyers having over 15 years of professional experience. The company has already expanded its practice to Batumi and plans to open offices in Kutaisi and other cities in Georgia. By the end of the year ELG office is planned to be opened in London, UK. Eristavi Law Group seeks to see an increase in numbers of individual clients by the last quarter of 2012. Q. You opened an office in Batumi and planned to enter Kutaisi and other cities in Georgia, have there been any developments in regards to this? A. We opened our office in Batumi and we are satisfied with the growing workload and increased spectrum of clients both in Batumi and Poti. Opening the Kutaisi office is on our agenda by the end of 2012. We have started construction of a new headquarters building on Chavchavadze Avenue - it will be a 14 storey modern A class office building making us the only law firm in Georgia with such an impressive office building. One more thing which will once again underline our achievements and plans for expansion is that we plan to open representative office in London, UK. We are currently in the process of solving technicalities. As it is already known, the Lon-

Eristavi Law Group offers unparalleled legal representation across a comprehensive range of practice areas for both individuals and business entities with its lawyers having over 15 years of professional experience. The company has already expanded its practice to Batumi and plans to open offices in Kutaisi and other cities in Georgia. By the end of the year ELG office is planned to be opened in London, UK. Eristavi Law Group seeks to see an increase in numbers of individual clients by the last quarter of 2012.

don Stock Exchange and World News Media named ELG the Best Banking and Finance Law Firm of the Year and Mr. David Eristavi the Best Lawyer. Official granting of the award and interview at the London Stock Exchange took place at the end of February. We are proud to be the first Georgian Law Firm to receive such a prestigious award. Soon after that we received the Golden Brand Award as the Year’s Law Firm. Q. What is the proportion of corporate and physical entities out of your clients? A. I would say that the proportion is 80-20 for corporate entities and individuals respectively. But we have worked out an action plan of how to reach out to the wider public and inform individuals that the qualified legal services of our law firm are as affordable for them as for companies. We seek to see an increase in the numbers of our individual clients by the last quarter of 2012. Q. Have the service fees at ELG changed compared to last year’s? How affordable are your services for individuals? A. We are very flexible in terms of decision-making and we im-

mediately react to the business environment. Our approach of fixed monthly fees has proved to be a very effective tool in relation to clients. We shall continue with the existing pricing schemes but in parallel we shall offer our clients innovative approaches which will make relations with us 100 percent beneficial for them. Our sales team, and we are proud to be pioneers here as well, is working on the creation of new products which we shall offer our potential clients. Our services are affordable for everybody but as I mentioned already we are working on raising public awareness on this issue. It is widely practiced in our firm to give consultations to individuals free of charge, but just for your readers to have an idea about our pricing, an individual can get a basic consultation for as little as 10-20 GEL. Q. What do you offer your potential clients - why choose ELG? A. I can simply say that it is our philosophy - ethics, efficiency, dedication, strategy, innovation and achievement. We act in our client’s best interests with the highest standards of professionalism.

Q. How often do you represent a client in court proceedings and what needs to be done to avoid litigation? A. We are quite heavily involved in litigation; we have the best litigators in Georgia. Having said so I would like to point out that our litigation practices are lead by our Partner Mr. Mikheil Sulakvelidze. A big numbers of litigations in our opinion mean that commercial entities are using all available legal tools to protect their interests. This also means that trust in the Judiciary as a result of reforms has notably increased. I am probably repeating myself but I believe that qualified legal advice from the very beginning can save time and resources by reducing the chances of a problem’s occurrence. Q. What sectors of the economy are most represented among your clients? We know you were actively involved in the construction sector last year, what is the situation now? What industries are the runners-up? A. The construction industry is giving very strong signs of reviving and considering our huge experience in this field we continue to be in the leading positions in

this area. We are seeing a very significant increase in the numbers of foreign investors. The most active spheres are the manufacturing, energy and mining sectors. We are currently in the final phase of negotiating deals with two big European brands in consulting and entertainment areas. We plan to finalize all the details by the autumn of 2012. Of course the entrance of big foreign investors to the Georgian market is a vivid indication that the business climate is investor friendly and that the country obeys the rule of law. Q. You mentioned that one of the main tools for you to keep up with the increasing pace of business is the enlargement of your team. What does one require to be part of ELG? A. First of all we look at a person’s qualifications. Knowledgeable and experienced lawyers are a guarantee of a satisfied client. On the other hand we pay very big attention to the new generation - and here we look at diligence and desire to learn and grow. We have agreements with the leading law schools in Georgia, their students do internships at our firm and some of them are now part of our team and work as full time employees. Q. Please summarize what has changed in your company since the beginning of 2012, what is new and what novelties we should expect from Eristavi Law Group in the coming months? A. Having given due analysis of the year 2011 we have elaborated a strategic development plan for 2012 which as we foresaw is more intensive in terms of business activities. We are keeping up with the increasing pace of business with new approaches, a multitude of services and increased team. As always we shall continue to strive for the satisfaction of our clients by providing the highest quality legal services. Believe in success - we do!

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

First Georgian Law Firm Constructing Own Headquarter Building On Chavchavadze Avenue Opening in 2013

Eristavi Law w Group - Best Bankin Banking ng and Finance Law Firm Mr. David Eristavi Best Lawyer tavi - Bes st La Law wyer Med Me dia (UK) dia by World News Media and London Stock ckk Exchange Exchange (UK)

Eristavi Law Group – Law Firm – Favorite Brand By Global Idea (Georgia)

Advertiser: Eristavi Law Group. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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GPI Holding Builds 10 New Hospitals across Georgia

GPI Holding, one of the leading insurance companies in Georgia, has built and renovated ten hospitals in twelve regions across the country. The modern style in-patient and out-patient clinics offer high quality medical services to insured as well as non-insured patients.

The FINANCIAL By MARIAM PAPIDZE

rao, another insurance company involved in the hospital development project built six hospitals. Today these hospitals are functioning at full capacity and serving thousands of patients every day. “Since 2007 GPI Holding is actively involved in the hospital development project. The project is being implemented under the Government health insurance project involving socially vulnerable persons,” said Paata Lomadze, General Director of GPI Holding. “Currently more than 150,000 people use the GPI policies of this programme. The changes which have been taking place in the insurance sector since 2005 had a big influence on improving the social background of the country. They have also resulted in the development of the insurance industry. We are contributing to developing the sector as well. This became our motivation when our shareholders approved a total of 47 million GEL investment packages for the hospital development project. According to our vision, this is an investment in Georgia’s future and very important for our business as well,” he added. GPI Holding was established in 2001 as the first private pension fund in Georgia. Development of social insurance lines is one of the highest priorities of the company. GPI Holding maintains the leading position in this direction, namely health and pension insurance. At the same time GPI Holding is among the leading companies in other lines of insurance: auto, property etc. GPI Hold-

PAATA LOMADZE, General Director of GPI Holding

ing is a member of Vienna Insurance Group - one of Europe’s leading insurance companies. Q. What is the investment amount of the hospital development project? A. Vienna Insurance Group in Georgia is represented by GPI Holding and Irao. In 2010-2011 the Group implemented one of the largest investment projects in Georgia. It has attracted direct foreign investments of 11 million EUR for both companies. With the local funds of Irao and GPI Holding as well the investment amounted to GEL 46 million in total. Q. As you mentioned, two Georgian companies are members or Vienna Insurance Group. What are the advan-

tages of this membership compared to other insurance companies on the market? A. We have been members of Vienna Insurance Group since 2006. This is a historic fact not only for our company, but for the whole insurance market in Georgia because it was the first precedent of the entrance of an insurance company of this level and rating. Vienna Insurance Group is the highest ranked company in the Austrian Stock Exchange. The Group is one of the leading insurance companies in Central and Eastern Europe. Besides Austria the Group is represented in 23 European countries through 50 companies. The fact that Georgia appeared on the Vienna Insurance Group’s European map

did not happen arbitrarily: Georgia’s attractive investment environment and our success on the local market contributed to this decision. Joining the Vienna Insurance Group created more stable foundation for the future development of our company. 180 years of experience of one of the oldest European companies became accessible for us. As a result GPI Holding became more active in the retail market and gained stronger positiosn in the corporate market as well. At our company today there are attractive insurance products for families of all incomes. For our customers it is very important that we are part of the most experienced and financially strong company. Q. GPI Holding has just become a Golden Brand

winner for the second time. Golden Brand reveals and awards companies which have achieved the utmost success in their brand’s business. What was the key to your success? A. Our customer’s confidence was what brought this award to us. Whenever our customers need help they know that they have a reliable and financially strong partner in us - this is the only reason why our activity has been so successful so far. The clients invest in getting financial benefit when they have difficult moments of their lives. Exactly this is the main point of insurance. For us the Golden Brand Award means that we always keep our promises and that our clients appreciate it.

Q. In the first 6 months of 2011, GPI Holding was the leader of the insurance market in Georgia. In your opinion will your company maintain its position this year as well? A. By the end of this year we will have delivered a lot of news to our existing and potential clients. Our core principle is constant innovation. We are always thinking about how to make our service more affordable and attractive. This is what determines our leading position on the market. Therefore we are sure that we will improve our results this year as well. Q. What strategy has your management chosen and which strategic direction will be chosen this year? A. Our strategy is to make insurance affordable for all classes of the population. I do not mean only financial affordability, but the conditions as well. We want insurance to become easier to understand, easier to use, improve claims handling process and reimbursement procedures, introduce wider choice for our customers. Q. Last year your company was paying attention to the educational campaign of the need for insurance. What has your contribution to developing a culture of insurance in Georgia been? A. We, as market leader, have tried to explain to society why insurance is important and what the potential benefits are. Many people do not realize how much easier their lives could be if they were financially strong in moments of difficulty in their lives. Insurance means that they will not be alone in such situations. That is why we not only introduced our service to people but also talked about the benefit of insurance in general. Much more needs to be done to promote and establish a culture of insurance in our country. We will continue supporting and financing educational campaigns about insurance. We know that other players will benefit from this as well, but the more customers know about insurance, the more reliable, useful and honest insurance companies will be selected. Much more needs to be done to promote and establish a culture of insurance in our country. We will continue supporting and financing educational campaigns about insurance. And we will strive to avoid this therefore through educating people as much as possible. Q. How many people are insured by GPI Holding? A. More than 250,000 people use GPI Holding’s services. Our branches are located in every large city of Georgia. Accordingly we cover all the regions of Georgia. In insurance claims we pay 100,000 GEL in average every day. In addition thousands of people are receiving high quality medical services in our newly opened clinics.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

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Ici Paris Promising to Add More New Brands and Perfumes in 2012

his year Ici Paris once again became a winner of the most influential annual business awards in the country - the Golden Brand Awards 2011. As Levan Margvelashvili, the Managing Partner of Ici Paris, said, “Taking part in the Golden Brand awards and being named a winner several times already is a great honour for the company”

LEVAN MARGVELASHVILI, the Managing Partner of Ici Paris

The FINANCIAL By TAKO KHELAIA “The success of our company is determined by our hard work. We try to stay in touch with the newest tendencies in the world. We try to correspond to modern demands and standards and we try to make each of our customers content by meeting their needs,” Margvelashvili said. “The year 2011 was quite successful for Ici Paris. We opened four new stores and brought many new products to our network. In general 2011 was a productive year. We added some new brands last year, specifically the entrance of LVMH group, which unites such famous brands as Dior, Kenzo, Guerlain and Givenchy. Professional makeup brand Make-up Studio also entered the Ici Paris network. Make-up Studio cosmetics are useful for TV, theatre, cinema and other different types of professional make-up use. It’s one of the leading brands in Europe in its sphere,” Margvelashvili stated. In 2012 Ici Paris has already managed to add several

new brands to its network, including Roberto Cavalli. The company has also started offering Vera Wang perfumes to its customers. “In 2011, Mont Blanc returned to Ici Paris and we added a new line of D&G therefore. We have about 160 brands represented in our network. We have almost all of the most popular brands that exist worldwide. We are always trying to offer the best novelties to our clients,” Margvelashvili said. “We have official distribution. We correspond to the standards of all of the new products that are being launched in different parts of the world. All such products appear in the Ici Paris network almost as soon as they appear on foreign markets. There have even been cases of us offering new products earlier than other countries manage to. For example the new line of Chanel perfume was launched in Georgia earlier than it was in many other European countries,” Margvelashvili said. The most popular perfume brand at Ici Paris in 2011 with Georgian women was Chanel. The Chanel Chance line was

The most popular perfume brand at Ici Paris in 2011 with Georgian women was Chanel. The Chanel Chance line was one of the most in demand. Bleu De Chanel was also one of the favourite perfumes of Georgian men

one of the most in demand. Bleu De Chanel was also one of the favourite perfumes of Georgian men. “Demand for different cosmetic facilities and perfumes has increased by about 8-10% in comparison with last year. More than 60-70% of our company’s sales consist of perfume sales. The remaining percent belongs to cosmetics and other different body and skin care products. In the cosmetics business, the general index of perfume sales in the world amounts to 50%, make-up - 20-27% while the remaining percent belongs to skin care products. As time passes we are getting closer to this index. Make-up and skin care product sales

are increasing at our stores. Men’s lines of skin and body care products are also becoming more popular with time,” Margvelashvili said. “At the moment the most popular brands at Ici Paris are Chanel, Elie Saab, Narciso Rodriguez, Issey Miyake and the new Roberto Cavalli perfume which was only recently launched in Georgia. Versace, Hermes and Carolina Herrera are also quite popular,” Margvelashvili told The FINANCIAL. “Prices of products at Ici Paris start from 3 GEL and go up from there. The most expensive brands are Chanel, Sisley, Shiseido and Prada. These brands have quite expensive perfumes. We also

have two unique Bugatti perfumes for men in golden bottles which cost 6,000 GEL,” Margvelashvili said. According to Margvelashvili the higher priced products sell quite well at Ici Paris. As he says, the highest share of Ici Paris products consists of luxe and premium class perfumes, body and skin care products. “Our key products are of premium class. That said we do try to offer flexible prices and products to meet everyone’s budgets. For example we do sell affordable German high quality products based on natural ingredients. These products are accessible for every segment. They are quite safe and are produced in Europe. The price is also quite attractive for most of our clients and they actually sell quite well,” Margvelashvili said. “Summer is coming. Therefore we are offering people a wide variety of sun line, body care and body correction products. We offer people Chanel, Guerlain, Dior, Yves Saint Laurent, Lancome, Jean Piaubert, Sisley, Decleor, Harem, Lancaster and Galenic products. Lancaster is the

leading brand in sun protection and body care products. We offer the highest quality products for all skin types. The number of such products is increasing as demand rises throughout the world. Even those brands which didn’t offer such products previously, have now started launching sun lines and such skin care products,” Margvelashvili said. “In one of our beauty centres we have a special spa where your body can be prepared for the summer season to the utmost. There is special body and weight correction therapy available; different types of massages, special hydro massages, photo and aroma therapies. People who visit us and undergo pour special body correction and weight loss therapy, will look simply gorgeous when summer arrives,” he added. Training its staff is among Ici Paris’ top priorities. The company pays much attention to the education and professionalism of its staff. “We frequently hold special trainings for our staff. We have our own training centres and training managers. Our employees are constantly being trained in different fields. We have our partner brand representative trainers act as local training managers. We also send our employees abroad for various training purposes,” Margvelashvili said. “We have one of the most successful beauty academies where we have a group of professional and experienced staff. The high level of education, VIP service for different clients, modern technologies and high class products makes our centre the leading one in the city. Our beauty academy actively cooperates with leading Georgian TV channels. We have the best brands suitable for TV makeup. Leading model agencies, photo studios, theatres and cinema groups in the country all work with our academy. This is the only beauty academy where all the needed facilities are united under one roof and is quite unique therefore in terms of the range of its service,” Margvelashvili said. “90 percent of the equipment at our beauty salons is imported from France. We use Jean Piaubert and Decleor education methods at our beauty salons. These world famous brands recommend which equipment we should use. Ergoline is a world-leading solarium company. At Ici Paris beauty salons we offer people a modern-standard Ergoline solarium of the highest quality,” Margvelashvili said. Although our solarium is very popular at the Ici Paris beauty centre and has plenty of customers, Ici Paris representatives do recommend spending less time in solariums and instead using special fake tan products to give one’s skin a darker tone. “People can use our fake tan products which give them a nice skin tone and are completely safe to use. We offer plenty of fake tan products from the lines of different brands,” Margvelashvili said.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

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Tbilvino: Sales Doubled since Russian Embargo The FINANCIAL

By MADONA GASANOVA

bilvino, the largest Georgian wine exporter, reported 40% increase in sales in 2011. Export amounted to 95% of total sales. In 2012 the company plans to realize 3 million bottles of Georgian wine, twice bigger sales than in the period before the Russian embargo on Georgian products. The majority of Tbilvino wine products are sold in post Soviet countries, meanwhile Asian markets are giving new perspectives for expansion. In March 2012 Tbilvino won the Golden Brand 2011 award in the category of Favourite Georgian Wine Brand. In 2012 the company signed a partnership agreement with International Finance Corporation (IFC). Company will build the largest grape processing factory and increase sales. “We plan to sell 3 million bottles this year. As for new markets we are negotiating with several new companies in China, Korea and the USA. We will add new markets and try to enhance our share on traditional markets,” Giorgi Margvelashvili, President of Tbilvino, told The FINANCIAL. “The Georgian wine sector has not managed to replace the Russian market, even though we are still being excluded. Presently we sell twice more than we did before 2006 when the Russian market was still open to Georgian products. In 2005, the final year that the Russian market was still totally open to us, Tbilvino sold about 1,300,000 bottles. Last year we sold 2,700,000 bottles. If Georgian wine producers focus on Asian markets they have the capacity to totally replace the Russian market,” Margvelashvili said. In an interview with The FINANCIAL Margvelashvili said that if the Russian market were entirely open to Georgian wine companies, they would not miss the opportunity. However, the political problem remains a reality. “Interest and demand for Georgian wine in Russia remains as high as ever. We have contact with Russian importers who we share information with. At present we are in a process of waiting. Georgian wine cannot be exported to Russia in the same way as it was ten years ago. Exporters need to pass numerous procedures,” Margvelashvili said. According to Margvelashvili, if Georgian wine were to totally return to the Russian market it would take companies a long time to reach the same volume in sales as they had previously. “As I know Azeri wine has become very popular in Russia. As well as this, many European producers have started making semi-sweet, mid-priced wines. Georgian wine has therefore been partially replaced in that market,” Margvelashvili told The FINANCIAL. “2011 was very successful for us compared to the previous year. Total volume of realization increased by 40%, reaching 2,700,000 bottles. Total share of export was 95%. We enhanced our shares on traditional markets and added new ones at the same time. At present we count 28 export

ZURAB AND GIORGI MARGVELASHVILI

markets. Q. What are the main problems that Georgian companies face on foreign markets? A. Tbilvino has been the best selling wine on the export market for the past three years. Our product has successfully entered every market which has a tradition of drinking Georgian wine. The main obstacle for us when entering a new market is a lack of information about Georgian winemaking and absence of culture of drinking Georgian wine. So our main goal is to spread information about Georgian traditions of wine-making. Every new market has several steps for each new enterer. The first is collecting information about wine consumption, production, and statistics of import and the best selling wines. Gathering information about competitors is the next step in any of our target market. Q. In which European countries are you increasing export to the quickest? A. Tbilvino is present in almost every European country. In the Baltic States our wines are most popular. We are operating in Eastern and central Europe. The popularity of our product is increasing annually in Poland. Out of Western European countries we are present in the markets of France, Belgium, Ireland, the UK, Austria, Germany, Netherland, Cyprus and also Scandinavian countries: Sweden and Finland. We are having stable growth year by year in all of these markets. As previous members of the Soviet Union the Baltic States have sufficient information about Georgian wine-making.

This is the main reason for our popularity in these countries. Q. We frequently talk about the great culture and history of Georgian wine. Despite this however, in Europe and the USA Georgian wine is still not very popular. What is your standpoint on this subject? A. Today in the professional wine community you will hardly find one person who doesn’t know that Georgia has a huge tradition of wine-making. This fact is recognized by everyone. Almost every literature about wine-making starts with the preface that Georgia is the homeland of wine. There is no need to prove it anymore. That said, it is not well known to the masses around the world. Popularization of Georgian wine among the masses is another step that needs to be undertaken. One that requires great financial and human resources; it will take a lot of time and effort. Q. Quality is very important but not the sole thing needed for the commercialisation of products. How is it possible to boost the popularization of Georgian wine abroad? A. Financial resources are most necessary for the popularization of Georgian wine. The pure quality of our wine is not enough to become widely presented on world markets. Georgian wine-making has a long history, but more important is what we offer today. Our traditions cannot encourage consumers to become loyal. We should find the right way to present our wine which already meets high standards and occupies a respected place because of its quality.

Individual companies cannot easily increase the popularization of Georgian wine abroad. It is a complex work. All the companies involved in this business and also the Government should participate in it. Inviting foreign reporters to info tours and introducing ourselves is an approbated method for us. Q. What are the best selling wines in Georgia and abroad? A. The most popular white wine in Georgia is Tsinandali and the most popular red wine - Saperavi. In Western Europe the most popular wines are dry, red wines like Saperavi and Mukuzani. In post Soviet countries such as Ukraine, Belorussia, Kazakhstan and Baltic States, the best selling wines are semi-sweet wines like Alaznis Veli. Semi-sweet wines make up 50-60% of total realization. Q. What distinguishes Georgian wine and Tbilvino in particular? A. The historical traditions of Georgian wine-making are important. However, its main advantages are the unique sorts of grape. The variety of our soil and landscape gives us the possibility to have 18 different types of appellation controlled wine. All of them are so distinctive in their geographical micro zones that they should be separated. The same sort of grape can vary according to the soil it grows in. The sorts of grape and climate are the main things that distinguish the uniqueness of Georgian wine. Quality is important but more significant is maintaining it. This is the key factor in increasing sales. When a person tries a wine once, it is

vital that from then on they are always offered the same quality. The stability of quality is very important. In winemaking it is not easy, though we successfully handle this task. Adequate prices are also an advantage of ours. We have adequate, meted and competitive prices. In the markets we export to we occupy the middle and high price segment. Most Georgian wines are generally in this segment. Georgian wines are not the sort for mass consumption. And at the same time they do not occupy the super premium price segment. Global wine-making is divided into old and new world countries. France, Italy and Spain are representatives of the old world and Australia, Chile and South Africa - the new world. The dominant country from the old world is France. Leaders from the new world vary year by year. So we have to compete with the wine-making of the whole world which is in the same price segment as us. Modern consumers, including people of the Baltic States, are cosseted with various assortments. Q. What is your share on the local market? A. I do not have exact figures but Tbilvino is one of the best selling brands in Georgia. We are among the three best selling Georgian wines. 5% from our total realization is made up by the local market. In Georgia the market of bottled wines is limited. The culture of drinking wine varies in Georgia and Europe. House wines are also popular in Europe but in Georgia they are dominating. Consumption of bottle wine is increasing in Georgia year by year however.

In Europe wine is a lifestyle, a hobby. In Georgia it has a different meaning, including religious. Q. Which Asian markets are you increasing export to? What is the position of Tbilvino in Turkey? A. Asia is very interesting for us. We are succeeding in China. We are entering the Indian market at present. Japan is in the list of our target countries and Korea too. We have experience of working on the Turkish market, however I cannot see any basis for sharp expansion there. Turkey itself is a large producer. China, Japan, Hong Kong, Korea, Singapore and India are the most attractive markets for Georgian wine-makers. Georgian wine has huge potential in these markets. If an industry will focus on them, it will easily replace the Russian market in the nearest future. Q. What is your share on the Ukrainian market? A. Ukraine is one of the most prioritized markets for us. In general it is the number one market for Georgian wine. The popularity of Georgian wine in Ukraine is high and customers are loyal not just towards the wine but towards Georgia as a whole. However the Ukrainian market is replete and therefore it is unrealistic to have expectations of doubling or tripling sales. Almost every Georgian wine company is presented there. The level of competition is high. Besides this the Ukrainian market is sensitive towards prices. Economical turmoil has had its effect on it. Whereas in other countries we are consistent regarding prices, in Ukraine we have to be more flexible. Ukraine is our second largest exporting country after Kazakhstan. Q. Foreign experts consider BRIC member states to be some of the fastestgrowing markets. What is your opinion in regards to these markets? A. We have not been considering Brazil. Although during a recent business forum of the two countries that was held we did host some Brazilians. They adored our wine and expressed willingness to start exporting wine to Brazil. They see this as an opportunity. We do not have sufficient information about Brazil’s market however. Although then again five years ago no one thought about the Chinese market as a possible export market. First we loaded three containers to export to there, the next year six and then last year - ten. It is increasing with geometric progression. The Chinese market has other nuances. It is important to find an honest partner. There is risk in protecting trademarks. Protecting intellectual property is important there. Still, this market offers huge opportunities. Q. Please tell us what your favourite wine is and how frequently you drink it? A. I drink wine from our assortment on a frequent basis. Out of the white wines I drink most often are Tsinandali, Rkatsiteli and Qvevri wine, which we first produced last year. And out of our red wines: Saperavi, Mukuzani and Kindzmarauli. I like showing off our wines and toasting with them in front of guests and friends. I have to taste and drink wine several times per week.

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golden brand 2011

Favourite Wine Brands

GOLDEN BRAND 2011 Advertiser: Tbilvino. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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golden brand 2011

New Hospitals Bringing German Management

The biggest and most important investment of 2011 was in our ‘New Hospitals’. We invested 24 million EUR in this project. One of the main reasons for our success is that we reinvest all profit in the business

Child and personal care products make up about 25 percent of total sales GOCHA GOGILASHVILI, General Director of PSP

The FINANCIAL By NANA MGHEBRISHVILI

ew Hospitals one of the projects of PSP plans to bring highly-qualified doctors from Germany. This will give them the possibility to do all kinds of surgeries locally that were previously unavailable. New Hospitals and Rainer Resh, CEO and founder of one of the biggest hospital networks in Germany have signed a memorandum of cooperation as well. “By entering German management, all medical service will be offered by protecting all kinds of European standards in the hospital,” said Gocha Gogilashvili, General Director of PSP. “And what is most important; this memorandum ensures Georgian doctors and medical staff’s trainings in Germany. The Georgian population won’t have to travel to Europe for the purpose of getting good quality healthcare anymore. All kinds of medical service meeting Western European standards will be available for Georgian as well as neighbouring countries’ populations.” One of the new projects of PSP is PSP Insurance, which started corporate health insurance in October 2010. Is spite of the relatively short period of its existence the company has already insured more than 60,000 individuals from 100 companies. This year they plan to offer new insurance products including retail health insurance, car and real estate insurance. “PSP Pharma is looking for new medicines. PSP pharmacy is working to offer new services and expand the chain. We also plan to hold lotteries, he said. GMP is looking for new export

countries. It is very likely that medicines may soon be Georgia’s biggest export.” Q. PSP was awarded by Golden Brand for the seventh time. What does that win mean for the company? A. PSP is the company that has been oriented at customers’ interests since it was first founded. Therefore any award, especially from the competent jury of Golden Brand, is a pleasant success for us. At the same time this is motivation for our company and its growing staff. This award is the result of the hard work of each of our employees. Q. There are several leading companies in the sector. How can PSP maintain its position of leadership? A. Each of our employees knows the values of the company. A team of professionals is one of the key factors of being leader. Georgian medicine production that meets international standards, international standard certification of quality management in the whole pharmacy network and distribution warehouse, and building a hospital of European standards are the main reasons for our success. Q. What kind of medicines are most in demand in Georgia? A. Painkillers and anti-flu medicines are in most demand in Georgia. As for prescription medicines, antibiotics and medicines for cardiologic diseases are the medicines that we sell the most. Q. How many drug shops does PSP have in Georgia? Do you plan to expand the chain? A. PSP has 172 pharmacies in all the districts of Tbilisi and regional centres of Georgia. Optimization of the network is a permanent process. We try to make drug shops geographically available for each customer.

More than 2 million customers choose PSP as their family pharmacy every month

Q. How many medicines does GMP produce? A. GMP currently produces 138 types of medicines. GMP shares 39 percent of the local producers’ market. 4,269,883 boxes of GMP medicines were sold in 2010. This gives us proof that GMP has gained great the trust of Georgian doctors and consumers. Millions of patients are getting treated by our medicines successfully. Q. Which GMP medicines are exported? And to which countries? A. At present the company exports 65 types of medicines to thirteen countries including Armenia, Azerbaijan, Uzbekistan, Kirgizstan, Turkmenistan, Tajikistan, Ukraine, Moldova, Kazakhstan, Belorussia, Libya, Sierra Leone and Vietnam. Medicines Lacto G, Azimak and Trimekor are especially popular abroad. 250,000 boxes of Azimak, 770,000 boxes of Lacto G, 150,000 boxes of Aler G, and 100,000 boxes of Trimekor were sold abroad in 2010. More than a million foreigners are treated by Georgian medicines. We have started the process of registering our medicines in Europe. One of the prioritized directions of the factory is export. 35 percent of the turnover of the company is from export. Export has grown by 137 percent com-

pared to 2010. The main aim of the company is to make the label ‘Made in Georgia’ a trusted sign of quality. This will support an increase of popularity of Georgian brands in general. Q. You renewed export to Libya after the recent unrest in the country. Why did you decide to do this? A. We have been exporting medicines to Libya for 3 years. When the attention of the whole world was directed on its political affairs and there was war in the country, GMP continued export of its medicines to there. After finishing the civil war GMP sent medicines of 200,000 USD worth to Libya. The company also supported the country with humanitarian aid and gave them several types of medicines. It is remarkable that Georgian medicines are in high demand in Libya and are associated with European and high quality medicines. Libya is a kind of preserving centre of medicines for Africa. So Georgian medicines are widely spread in African countries and are associated there with high quality. Q. You have imported sensor thermometers in Georgia. Are they popular? A. Sensor thermometers are very popular compared to mercury thermometers. There are several types including for the forehead, mouth or armpit. They are totally safe for infants as well. Especially popular is the ‘Mother’s Touch’, which has the form of a ring and enables a mother to take the temperature of her child as though she is caressing it in just six seconds. While having their temperatures taken the children don’t experience discomfort, which is so important. Q. Prices of medicines are quite high in Georgia, which often causes dissatisfaction

amongst society. How much is added to the self-cost of the medicines and for what is this extra charge? A. The regulations of importing and registering medicines have simplified significantly in Georgia since October 15, 2009. According to the new regulation medicines can be imported not only from the providers, but from EU countries. This has greatly simplified the process. This is down to not only parallel import, but the fact that many multi-companies had lower prices in Europe. The European market is big and due to the quantity, they had lower prices on many medicines compared to in CIS countries. As we had the possibility to import medicines directly from Europe, we demanded that our partners equalise our prices to European ones. Lots of them agreed and that has thus directly affected the prices in Georgia. When import prices decrease, of course we also decrease selling prices. The addition to the self-cost of medicines is minimal. We are constantly conducting price surveys in our neighbouring countries and Georgian consumers are getting medicines for the lowest prices in the region. Q. Do you plan to reduce the prices of medicines at any time in the near future? What would cause that? A. We are constantly negotiating with our providers to lower prices. Decreasing export prices will directly affect the selling prices. At the same time we are looking for producers of new quality analogues in the world market. Q. NGOs often complain that the quality of medicines produced in Georgia is low. How does GMP guarantee high quality? A. Our factory has international quality standard Good Manufacturing Practice. We have the whole manufacturing circle here. All prominent global companies work with this standard. Producing with this standard is a guarantee itself of the highest quality. GMP has owned an ISO 9011-2000 certificate since 2004. Our quality is constantly being examined by local and foreign auditors. We are cooperating with European companies and this also means that we are good quality otherwise they wouldn’t work with GMP. Q. New Hospitals has 150 beds. What is the occupancy rate of the hospital? A. New Hospitals started functioning in September 2011 when we started offering full ambulatory service. Every day New Hospitals can receive 1,000 ambulatory patients. The stationery part, which started functioning at the end of 2011, has seen 20 percent increase of occupancy every month. Q. New Hospitals is equipped with modern and expensive equipment. Because of your experience on the market can you successfully evaluate this format? A. New Hospitals is equipped with the newest Japanese, German and American equipment of 2011. In spite of this the costs for patients are affordable and are competitive to the prices of other hospitals in Tbilisi. Q. How many employees does the company have at present and how much attention do you pay to their professional development? A. In total we employ 3,056 individuals. 2,068 of them are employed at PSP Pharma, 247 - at GMP, and 83 - insurance. The company constantly cares about the career development of our staff. PSP Group has its own training centre where new employees are trained as well as there being constant professional development of existing staff. Motivating and professionallydeveloping our staff is one of the key factors of our success. Therefore the company does its best for the development of its staff’s careers.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Advertiser: PSP Group. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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golden brand 2011

Tsiskvili Planning Diversification of its Brand The FINANCIAL By NANA MGHEBRISHVILI

siskvili will soon be celebrating its 10th anniversary. The company plans to diversify its brand and there will be a presentation about it on the anniversary. At the event novelties for local as well as foreign customers will be presented. “We will be holding evenings with ethnographical elements and master classes for tourists where they will have the chance to learn Georgian dancing and how to cook certain Georgian meals,” said Zurab Bakradze, the Senior Manager of Tsiskvili. “All of this will be a kind of show. We are working intensively on this direction with local and foreign tourism agencies to include our programme in their tours.” The new menu of our Beer Square is already complete. It will be more diversified than before. The restaurant is adding exclusive meals to the beer menu. “We are also working to create a VIP menu of Georgian meals. This means that we will be serving Georgian meals according to European serving culture, but with the same traditional taste. Football enthusiasts will have the chance to come to the Beer Square and enjoy the Euro 2012 football championship.” As well as this Tsikvili plans to offer ten other new projects. Q. Tsiskvili was recently awarded by Golden Brand. What does this mean for the company and what will it change? A. Golden Brand is the biggest business award in Georgia. Tsiskvili has been awarded by Golden Brand seven years in a row and this is evidence of our great success. Being awarded by Golden Brand proves that the direction that Tsikvili chose to take towards its development was correct. Such an award is important for the purpose of stimulating business in the country. The seven year period of receiving Golden Brand awards has made Tsiskvili one of the most famous and reliable brands in Georgia, and also famed abroad. Q. What other awards does Tsiskvili own? A. Tsiskvili got its first award just a year after its opening. In 2003 the restaurant received the award Gran-Pre and was also given the title of ‘Restaurant-Museum’. In addition we have five golden medals. Tsikvili received the ‘Georgian Quality’ sign in 2009 after four months of observation. Q. Do your various awards help you attract clients? A. Of course, each award strengthens customers’ interest in our restaurant. Being the owner of seven Golden Brands and many other awards means that the company is ready to serve and satisfy the requirements of any type of customer. As a result of these awards clients are often overly critical of us in the initial stage, which is actually more than fair. Being first is an ambitious announcement and we have to satisfy all the criteria of those that visit us. The main aim of the company is to show great attention to each individual customer and

ZURAB BAKRADZE, the Senior Manager of Tsiskvili

we do our best to adhere to this. Q. The restaurant market is quite diverse. Tsikvili is ten years old. How has the restaurant managed to maintain its success? A. Our team considers that managing relations with customers is the main concept of the modern restaurant business. Building two-sided profitable relations with customers is essential for maintaining success. This includes hardwork and permanent focus on detail. Taking decisions according to clients’ interests and the strategy of the company is important for strengthening its position in the market. In my opinion, as a result of its strong teamwork Tsikvili has become a successful brand and therefore proudly holds its position on the market. What’s more we plan to maintain such success in the future as well. Q. What was your main aim ten years ago when the restaurant was founded and have you achieved those goals? A. These past ten years have been full of interesting achievements. Each year of our growth has been different from the other. The aims of the business and the main direction of its operating were strictly determined when the business was founded. We aimed to always satisfy customers as they then become more faithful. This has been the main reason for our success. Business doesn’t experience degradation if it is always working toward its development. According to this principal we trained our staff to fully meet international standards. Our final and main aim was to effectively communicate with our customers, maintain them and increase their number. In my opinion, the main aim of Tsiskvili, to have a big amount of loyal customers, has already been achieved. But we aren’t going to stop now. We are

working on new programmes and projects which are to be presented at the 10th anniversary of Tsiskvili. Q. What are the main reasons for your success? A. The main reason for our success is the attitude that we have always observed and adequately estimated our competitors on the market. To be honest I wish them luck. Numerous things which we have offered our customers including business lunches, diplomatic receptions, buffets, events, presentations, constantly updated menus and high quality music have also resulted in our success. All these factors combined have meant that we have already got a traditional reputation and great popularity amongst society. Q. Tsiskvili often arranges outside events. How popular are they? How many events do you arrange a month? A. Yes, we offer the service “Tsikvili at your Home” as there are many cases of families wanting to host guests but not having the possibility to prepare the meals themselves. So they can order meals online or directly in the restaurant instead and we then deliver them to the address according to the specified programme. During the event our staff then ensure high quality service. They also take care of clearing up the place afterwards. After the event is over, the house will look exactly as it did before the event. We think that this service gives the opportunity to more women to enjoy events and not have to worry about preparing meals or cleaning up the house afterwards. This offer has really been successful and popular with our customers. I can say that we have even had cases where demand has been higher than supply. We have definitely had a deficit of staff in regards to demand for this service.

Business lunches are also very popular with working people. This service runs on working-days from 12 to 4 pm. The restaurant frequently looks like an office during these hours as clients continue to work via the internet during their lunches. Q. Do you have a delivery service? Is it popular? A. Yes we do have a delivery service. This programme was implemented as a result of the intensive demand of our customers. Nowadays lots of people use this service and you can see a Tsikvili order menu in many families’ homes. Observation of the market has shown that customers often have a deficit of free time. So we have implemented several programmes which give our customers the chance to save time. Therefore we provide business lunches and also a delivery service which are mainly aimed at companies and organizations. This gives people the chance to get their lunch at their workplace and use their time practically instead of spending it on travelling. Q. Which segment is Tsikvili mainly oriented at? A. Tsiskvili, because of its character, is more oriented at the middle-aged and slightly more elderly segments of the population. As for the opinion of society that Tsiskvili is an expensive restaurant which is only for people with high incomes, that simply isn’t true. People of any income or segment can relax and enjoy supper with their family, friends or partners. Our menu and prices are so diversified that any person can choose meals according to their individual budgets. Q. In Tbilisi traditional eating places are more popular than cafes and lounge bars. What do you think about this? A. I think that there are lots of European style eating places

in Tbilisi which work better than many traditional ones. As for those which don’t work well, I can simply say that foreign menus have to be chosen very carefully for Georgian customers because we have a diverse cuisine and Georgians are surprisingly picky. If they have proper management though then attracting Georgian customers will be easier. Q. What is the share of local and foreign visitors at Tsiskvili? A. Tsiskvili has been in the market since 2002. We don’t know the exact tourist numbers for the years 2011-2012. Actually each third visitor is foreign. Lots of the tourists that visit Georgia come to Tsiskvili. We know that they are often recommended to visit Tsikvili not just when they come to Georgia, but when in their home countries as well. This is probably as a result of the marvellous architecture and diverse musical programme we offer. Q. As a general rule do Georgians spend more than foreigners? A. I’ve been in this sector for 13 years. During this time Georgians have got used to spending a truly reasonable amount of money at our restaurant, whereas in the past they were used to spending more money than they had to. The majority of Europeans are the same as well. Q. Is the restaurant mainly oriented at Georgians or foreigners? A. We are oriented at the popularization of Georgian culture, folklore, cuisine, traditions and hospitality. We offer all of this to our customers without change, which is really Georgian. Foreigners definitely like this and Georgians show off because of it. Q. Tsikvili has a totally traditional design. Has this helped you to gain success and recognition? A. The main character of

Tsikvili is its architecture and design. Thanks to the architect Mamuka Chkhaidze, the structure of our restaurant perfectly fits in with the local landscape. Its design is also perfect. We rejected the fake fanfare and artificially created festival atmosphere which is so common in other Georgian restaurants. Tsiskvili is outstanding as there are many historical artefacts kept in its interior as well as exterior. The beautiful waterfall, natural rock and real water mill give the best impression of Georgia’s history and culture to our visitors. Q. How would you evaluate Georgia’s restaurant market? How competitive is it? A. I’d like the market to be more competitive actually. That would be the best way for the restaurant market’s development and improvement of service quality. Q. What are the main problems of the Georgian restaurant market? A. Service! This is the most painful issue of the Georgian restaurant market. First of all, we representatives of the sector have to assimilate the direction of our government which aims to develop tourism. We have a huge role in the long term. Offering high quality service is essential for the development of tourism. It’s not acceptable that all restaurants set their standards themselves. We have to work on a common concept; on how to work with tourists and serve local and foreign visitors according to international norms. Service provider companies have to be oriented at visitors as well as serving people. The chain of profit includes increasing the quality of internal service, which means choosing and training high quality staff, creating a quality working environment, which ensures a more satisfied and loyal working force. As a result service is more qualitative and this affects gaining the satisfaction and loyalty of our customers. Satisfied customers later tell of their experience to others. All this results in high profitability and a constantly increasing number of visitors. This is a formula and without this raising the quality of service in Georgia is impossible. It would be good if a special service were created which would monitor the service quality in the country and train local managers as they could then train their staff. This would support raising service quality and the approach to Euro standards. I’m ready to participate in such a project without fee. Q. How many employees does the restaurant have and how do you care about the development of their careers? A. We currently employ up to 80 individuals. Successful operation of the restaurant depends on the qualifications of the staff. They are in constant communication with customers. For that reason we looked at the standards of other countries and chose the Shief and Rang Standard, which is a French model of service, as it was the most acceptable for Georgian customers’ mentality. We created a School of Service where all employees undergo special courses and trainings. This helps us to be competitive in the market.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Restaurant

www.tsiskvili.ge

Tsiskvili

Advertiser: Tsiskvili. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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golden brand 2011

Holiday in Egypt

Special Offer from Unicard The FINANCIAL By NANA MGHEBRISHVILI

n all-inclusive trip to Egypt for only 2,888 bonus points is one of the latest offers from Unicard. Unicard will be offering such tours in partnership with Intercontinental every season. These tours will be very cheap. Unicard will also be offering tours inside Georgia which will be supporting the development of internal tourism. “These tours will be available to every Unicard user,” said Beso Abuladze, CEO of Unicard. “The average Unicard holder collects 150-300 points every month. So people will have the possibility to collect points for the trip in just a few months. These are all-inclusive trips. The trip to Egypt includes flights, plus stay at a 5 star hotel with meals.” “We will be offering 2 day trips to Kvareli Lake for 997 points in June and July. Thereby we are supporting the development of internal tourism while providing exclusive offers to our customers,” he claims. Unicard is continuing to grow rapidly and the number of cards already exceeds 1 million. The total number of gifts issued amounts to almost one million as well. They have around a million transactions per month. The company is expanding its chain all across Georgia and adding new regions to its chain as well.

Unicard is currently available at 1,000 places in Tbilisi, Adjara, Rustavi, Marneuli, Gori and Kareli. Unicard will soon be available in other cities including Akhaltsikhe, Poti and Zugdidi. “There is still big potential for new customers in Tbilisi,” explained Abuladze. We issue several thousand new cards a week and this proves that there are still many people who aren’t yet Unicard users. We are working to grant Unicard to as many people as possible.” “At present we have 200 partner companies. Our customers have the possibility to collect points in many sectors including pharmacies, groceries and filling stations. The range of places to collect points at is quite vast in all the regions where we are present.” We are still working to cooperate with new companies to spread Unicard into new sectors. For example we will soon be presented in the sectors of money transfer and gas filling stations. And we are also expanding our network into other sectors including cafes and restaurants etc.” Unicard plans to have special discounts and deals regularly and offer them on weekly bases. They will be arranging special shopping festivals and discounts every week. Such offers are very popular with Unicard customers. Some of the recent deals included ones with Tegeta Motors, Voulez Vous and Elit Electronics. Small companies tend not to be partners of Unicard. But

BESO ABULADZE, CEO of Unicard

this is a strategy of the company and hasn’t negatively affected its activities. Unicard is mainly oriented at and cooperates with everyday sectors like petrol filling stations, pharmacies and supermarkets. “Small companies can’t achieve significant results for Unicard customers and therefore the company always chooses bigger ones,” Abuladze explained. “We are oriented on long-term exclusive contracts with big companies. All our big partner companies are still cooperating with us. Only Goodwill isn’t our partner anymore, but instead we replaced Goodwill with the supermarket chain Smart.” Unicard always chooses its partner companies with care. GMC Group recently joined the company with its three restaurant brands: Shemoikhede Genatsvale, Kalakuri

and Dzveli Sakhli. “Hundreds of companies contact us every month wishing to join the Unicard chain, but we have our requirements and criteria,” said the CEO. “We prefer companies which have a chain where the quality of service is high, and which value the loyalty of their clients. It’s not easy to become our partner company. We have the right to cancel cooperation with companies if they don’t meet our requirements. But being our member company is in the companies’ interests first of all, therefore they try to satisfy all our requirements.” “We support organized shopping. Unicard is a good stimulus for companies to offer high quality service,” he added. “Being a member of the Unicard program is important for companies. It’s a very good way of attracting clients for them. When you complement your own service with the Unicard loyalty programme, it positively influences sales. It means that our partner companies make gifts to their customers in addition to their own service.” How many points will accumulate on 10 GEL is calculated based on the terms negotiated with each partner company. Each partner themselves decides what number of bonus points should be granted per 10 GEL, while the number of points accumulated in each case by the customers depends on the amount of their purchase. The bonus points vary among the 200 partner companies.

“We have our lowest threshold of bonus points and companies can’t set a lower number of points,” the CEO said. “We always give them advice about the size of the bonus points and try to suggest to them the optimal value. But it usually depends on the financial situation of the partner companies. Of course it would be good if we recommend more points to our clients, but in most cases it’s impossible. We try to compensate for that therefore with the diversity of places available to accumulate the bonus points. I can say the same for the gifts. We try to make them as cheap and affordable as possible.” Maybe the points aren’t high but our customers can collect them in every sector and this balances out the amount of points. So overall one can collect quite a good amount. “Compared to other loyalty cards, Unicard holders gather the most because it is the only coalition bonus card in Georgia. Such analogues exist only in a couple of countries around the world. The core business of our company is to offer the loyalty programme to our customers. As opposed to us this is not the core business for other companies offering loyalty programmes. We have a unique service in regards to the range of gifts available including services like paying utility bills. We will soon be adding the possibility to pay CT-Park taxes by Unicard points. We are constantly offering novelties

to our customers,” Abuladze said. Home appliances, cell phones, books and jewellery are some of the most popular redeemable gifts. The company also issues high value gifts including travel and large appliances including laptops, TV sets, refrigerators, gas ovens etc. “Our customers have different requirements and we try to meet them. We currently offer about 2,000 different gifts. Paying utility bills is one of the most frequently used ones. Buying an item at Smart by Unicard points is very popular as well. We recently added the option of financing educational courses by Unicard points. By doing this, by constantly adding different options to redeem the points that have been collected, we are ensuring that all the different needs of our individual customers can be met.” Unicard opened its showroom several months ago which has now become very popular. The company plans to expand its showroom and add some other locations as well. Unicard uses social networks for successful communication with its customers. “We know about their wants and requirements via social networks. We get notes and comments as well. We offer novelties via social networks. We constantly have lotteries and prize-draws. I think that this is a very good medium for communication between us and our customers,” he said.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

EGYPT, HURGHADA DEPARTURE ON JUNE 8 11 DAY STAY IN 5 STAR HOTEL (ALL INCLUSIVE), AIR TICKET INCLUDED

BE ACTIVE, COLLECT UNICARD POINTS AND FIND OUT MORE EXLUSIVE OFFERS FROM UNICARD. Information Center (032) 2 555 222 www.unicard.ge / www.facebook.com/unicard.ge Advertiser: Unicard. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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golden brand 2011

Intercontinental to Offer 3 New Destinations in 2012 The FINANCIAL By TAKO KHELAIA

ntercontinental, one of the leading tour operators in Georgia, introduces three contrasting holiday destinations to Georgian customers. According to Nino Makhvilazde, founder and the General Director of Intercontinental, this summer the company is going to promote Spain as one of the best place to spend the holidays. “If a company works and operates in the right way, it will definitely see an increase in sales every year. The sales of our company increased during the last year. A company which remains active in different directions should have around 15-20% increase every year. We are among those companies who always offer novelties to their clients and work harder every year,” Makhviladze said. “It’s 21 years already that we have been present on the Georgian market. Before Intercontinental started charter flights the company was oriented at quite a different segment. We served mostly VIP clients. When we started charter tours our audinece diversified and we started working for the middle class segment as well as for the higher class,” makhviladze stated. “As time passes the number of people wanting to holiday abroad is increasing. Over the years, Intercontinental’s non-stop flight to Egypt has achieved quite good results. Now we have consistently high demand for holidays in every season. Whereas 20 years ago we had significantly less tourists in winter, now this season is quite active and popular in terms of booking holidays abroad. There used to be no culture of visiting warm countries in winter. Our permanent operations however have brought about this result,” Makhviladze said. According to Makhviladze, European countries are very popular destinations in every season. “Intercontinental is actively working on European country packages. I can’t say that during winter demand for European holidays decreases. Companies mostly promote those countries which they have charter flights to. Charter destinations are connected with bigger risks and in order not to have financial losses, this

NINO MAKHVILAZDE, founder and the General Director of Intercontinental

Intercontinental has been on the Georgian market for 21 years already. It is one of the most successful companies in the tourism sector. The company is famous for offering and advertising exclusive tours to Egypt. This year Intercontinental for the 5 th time received the most influential business award Golden Brand. According to Makhviladze, 2011 was overall a successful year for the company

product is therefore more prioritized and advertised,” Makhviladze said. “Sea resorts remain the most popular holiday destinations. Turkey has been the top destination for Georgia as it’s a neighbour country and we have had charter flights to there for 12 years already. During the last four years however Egypt has become a much more popular destination on the Georgian market. We are actively working on promoting Egypt,” Makhviladze said. “Egypt is the best place to spend a holiday. It has a winning combination of famous history, a pleasant climate, beautiful Red Sea resorts and competitive prices in comparison with the world’s other sea resorts.

Demand for Egypt in Georgia increased from the year 2009. Hurghada and Sharm El-Sheikh were the most popular resorts. From 2010 we offered our clients a new Egyptian resort, named the oasis and pearl of the Red Sea - Taba.”Makhviladze stated. Intercontinental is trying its best to add some new charter destinations to its list of packages every year. The company will offer new products to its customers this winter. As Intercontinental representatives say, people will be able to enjoy unforgettable holidays in Goa this year. “We were the first to offer Georgian people the chance to spend their holidays in Cuba, Thailand, the Maldives and resorts all over the Caribbean. Three years ago we

offered people a new product - Hurghada. This summer we plan to actively advertise Spain,” Makhviladze said. “Business which works on a principle of development is always successful. We pay much attention to price politics. Our prices are always competitive and this determines our position of leadership on the market. Permanent care of service quality and being oriented at novelties, has given us the opportunity to gain and maintain the trust of our customers and become so competitive on the market,” Makhviladze said. “Most of all our clients appreciate the individual service quality we offer and the high sense of care we demonstrate for our customers. Intercontinental has quite

a different, and actually the highest, level of service quality. Service is one of the most important aspects for Intercontinental. Our high quality service has been maintaining our high number of loyal clients for many years already,” Makhviladze stated. Due to increased demand Intercontinental has increased the number of its staff recently. “Intercontinental has opened branches in four new offices of Rico Credit. Our operators have started working in new offices located in Vake, Saburtalo, Rustavi and Gldani. Rico Credit has 13 offices in Georgia and we are going to start operating in all of those offices,” Makhviladze said. “Intercontinental pays

much attention to its staff. We never bring employees over from other tour operators. I prefer for people to learn how to work with us. We mostly employ young staff and I am quite pleased to work with them,” Makhviladze said. “Our ethos is that clients should start their holidays from the moment they walk in our door. We have quite an original office manned by highly qualified staff. We make people feel as comfortable as possible,” Makhviladze added. According to Makhviladze the top destinations at the moment are France, Italy, Prague, Cuba, Egypt, Turkey and Spain. Spending the weekend in Istanbul is also quite a popular trip for Georgians. “We offer different prices to our customers; it depends on their budget and how much they aim to spend. The price of a holiday depends on different factors, including the category of the hotel room’s cost and many others. The cost of a holiday in Prague starts from 650 EUR per person, in France - 750800 EUR. The cost of a holiday in Egypt starts from 600 USD. Turkey is a bit more expensive in summer but we offer people some trips to Turkey for 700 USD,” Makhviladze said. “We have special packages for honeymooners which are also popular. We specifically choose those hotels which have a special service for newlyweds. We try to decorate the hotel rooms, or arrange a gift for our clients which is always a welcome surprise to them,” Makhviladze said. “In my opinion one of the main determiners of our company’s success is our quality of service. The service field isn’t developed in Georgia and there are problems in many spheres. Honesty is also very important. Intercontinental has an individual approach towards each of its customers. We try to find out what the priorities of the customers are, what kind of holiday they would prefer, what kind of environment they need. We do not just sell the packages; we make our clients feel fully satisfied with their purchase,” Makhviladze said. “Our service begins as soon as the client enters our office and doesn’t end when the price of the holiday has been paid, rather when the client returns from their holiday. We always pay great attention to our tourists during their holidays. In Egypt we even have Georgian guides who serve our clients. It’s a pleasant feeling when there is someone there looking after you,” Makhviladze said. Intercontinental pays a lot of attention to advertising. The company has been actively cooperating with different TV channels for 10-11 years already. “Despite the fact that it’s quite expensive, TV promotion is the most effective means of advertising and is partly responsible for us remaining successful,” Makhviladze added.

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

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FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

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golden brand 2011

“Georgia Itself as a Country is Already a Brand,” David Lee The FINANCIAL By KOKA KALANDADZE “All over the world with the rise of globalization branding is a key issue. On the international level of branding, Georgia itself as a country is already a brand. Democracy, lack of corruption, rich culture, friendly business environment etc are shaping Georgia as a brand,’’ said David Lee, the current President of AmCham. “Alongside the local brands present in Georgia there are very well-known international brands too - hotels like the Marriot, Radisson, and restaurants like McDonald’s for example. In addition in Georgia we have several well established brands such as Borjomi, Nabeghlavi and most Georgian wine companies which was previously very popular (in the Soviet Union) but we are now seeing people talk about in London, in Europe etc. We see that the Georgian public love brands. Some Georgian companies are doing a great job expanding overseas such as Bank of Georgia, which is already listed in the prime list of the London Stock Exchange.” David Lee is the General Director of the American company Magticom, the largest telecommunication operator in Georgia. Mr. Lee was named Director of AmCham in 2008 and also serves as Chairman of the Board of Trustees at Eurasia Partnership Foundation Georgia. Q. How would you evaluate the general business environment in Georgia, has it been progressing from year to year? A. Before moving to the Georgian environment, the general outlook of the economies outside of Georgia is very dismal. The vast majority of countries in Europe are experiencing economic crises except for Germany. Thus Georgia has suffered from all of that in terms of FDI flow, but the economy still continues to grow.

We should remember that we are not in a recession but the thing is how quickly we are getting better. As well as foreign FDI, local investments are of huge importance too. For example Magti has invested its millions of earned capital back in to new service developments, we see new Radisson hotels appearing in places around Georgia. The Government has done a great job building infrastructure within the last decade, it has built new airports, ports, all of which drives investors’ interest towards Georgia. So it is now high time to invest in Georgia rather than several years ago because of the above-mentioned changes done within the last few years. The thing is that Georgia can’t have double digit growth of its economy unless big inflows of FDI are ensured. Batumi is gaining momentum in terms of tourism development and foreign investors see that very well, building their presence there. Q. You are involved in various agro activities what are the challenges you see in this sector, what are the opportunities? A. Georgia is in a perfect position because it has fertile soil, a good climate and water, and those three factors are not often found together in the world now, even in the Caucasus region. Georgia has a good environment and it is actually known as an agriculture producer because of its rich history. If we look at the bigger picture we see that the world is getting bigger all the time, consumption is also running up in line with that. Thus globally the demand for land is rising. Although average yields, let’s say of wheat, have doubled within the last 20 years, most of that progress was made very long ago and a lot of developments which have been done now are incremental, you are not going to double the yield but you are going to be a bit more efficient. Most of this change can

come from high tech equipment which minimizes waste. Georgia is in a very strange position in terms of agriculture. Then when there is huge local and international demand for agro goods the country is not producing anything substantial. Most Georgian farmers are living in the regions of the country with limited amounts of land, the latter could be solved by cooperatives and with modern equipment. To put that aside, the way to improve the overall picture is to have foreign investors and large local companies start to produce on the land which has not yet been used. The amount of such land is huge, there is almost no flat land which cannot be farmed with access to water. Q. Will free trade agreements with Europe and the US further accelerate growth of the Georgian economy in the coming years when achieved? A. The free trade agreements which are now in the process of negotiations with the EU and US are giving an additional stimulus for businesses in Georgia. But one thing to remember is that FTAs do not create businesses but do give incentives for established businesses to grow and export. So now the lack of food export from Georgia is not due

to lack of FTAs but is due to lack of producers, which is a different problem. The problem is not only exporting food but also satisfying local demand, which has not yet been done. We see a whole bunch of agro good imports from Turkey. If we look at tomato growers for example in Georgia they are still using wooden framed structures and non-specialized materials for greenhouses, often without heat and proper irrigation. After all such techniques do not maximize the use of land and revenue per se. Thus what needs to be done is coordinated efforts to make the yields way higher than they are today. Q. Do you consider the Turkish-Georgian FTA to be hindering Georgian production of agro products? A. I have heard the argument that the Turkish-Georgian FTA could be hindering local production but I generally believe that this is not the core of the problem but what needs to be done is to increase the level of production first and get equipped with the latest technologies. It is obvious that Georgians prefer locally produced tomatoes but the thing is that there is not much available on the market. People are even prepared to pay twice the price that Turkish tomatoes cost because of the latter’s bad quality and taste. Q. How does AmCham support boosting investments in the country? A. Every investor who comes to us first asks whether there is a market, an opportunity to make money and our answer is always “YES!”. Almost all sectors of the Georgian economy are underinvested and used. Some are quite mature, for example the banking sector as well as mobile telecommunications, which there is huge competition in and new products and services being offered almost every day. In the hotel services sector there is a big deficit of small and medium level hotels/

hostels. If we look at agriculture we see nothing being done and in fact there is a huge opportunity in the sector. As half of the Georgian population is believed to be running agro activities there is a need for education and technology. Q. What businesses in Georgia do Americans mostly take an interest in? A. I think that there are many but the most visible is franchising, as you see many brands like McDonald’s, and Wendy’s is coming soon too. I think that there are certain American brands which have an opportunity to make franchise deals here. The thing is, franchises not only bring brands but also trainings and high level services which are sorely needed in Georgia. AmCham is frustrated with the fact that there are opportunities in Georgia but we still do not see enough US investment coming in. Q. How many companies joined last year and what’s the purpose of the organization? A. In 2010-11 we had 30 new companies join AmCham. The number of companies joining the organization has never got smaller in fact we are seeing some other developments like the magazine investor.ge which used to be subsidized and is now a profitable entity. AmCham’s purpose is to find new investors and make them take an interest in Georgia. We also assist the US Embassy when they have trade missions. But mainly we act as a first point of call, so when American people and companies come to Georgia they first go to the American Embassy and secondly to AmCham. We put them into contact with whom they need to know. We act almost like a “social network” where almost twice a month people come together, learning larger business opportunities, meeting with officials from the US Embassy, other businesses and NGOs. That really helps them

understand the general situation in Georgia. Q. With regards to the upcoming elections, a hot topic in Georgia - how do you see the political transition to be having an impact on investors’ views of the country? A. Political transition is an issue in every country. Things like low corruption, business friendly environment and democracy (which Georgia certainly has) are not enjoyed by many countries in the world, but that does not mean that the economies do not thrive there. Let’s take for example China, Russia, Libya etc where the regimes are more or less corrupt but the investors who go there understand the risks and have big gains too. Georgia has set itself on a democratic path and the upcoming elections will be very important in terms of how they are held. If there will be free and fair competition, which will certainly be getting observed, then the results will put Georgia at much higher standards and that will be evidence of its successful democratic changes and its brand as a country. Q. Is there any preference towards certain opposition or government parties from investors’ sides in Georgia? A. I have never met an investor who has said that they prefer one party or the other. If Georgian Dream was for example a communist party, then I am sure that people would say they do not want it, but it is not. When we are talking about investors I don’t think that they are concerned with certain political groups but rather what they are concerned with is having a stable political process. And if the elections are held in a transparent and fair way, it will be a huge boost for the country and proof of its democratic principles and all of this will finally put confidence in all people including investors.

New Opportunities for Foreign Investments in Georgia The FINANCIAL By MARIAM PAPIDZE

conomic development, new investments, incentives for the business sector and the creation of new jobs are the top priorities for the Georgian Chamber of Commerce and Industry’s activities this year. GCCI has held a number of business forums both locally and abroad recently. Sector meetings were arranged with the participation of businessmen from different sectors. The president of GCCI, Kakha Baindurashvili, visited Lebanon, Germany, Iran, Italy, Qatar, and the United Arab Emirates where memorandums of understanding were signed with local chambers of commerce. Local businessmen were informed about Georgia’s investment opportunities. Germany, the leading country within the EU, is also interested in putting more investments in the Georgian market. “GCCI is committed to establishing business contacts with countries with which Georgia has had years of diplomatic relations and with whom it is now time to activate economic partnerships,” Baindurashvili said. Q. Georgian investment forums have been held in Qatar and Dubai. Can you

summarize the resolutions made at the ends of the meetings? A. The meetings were successful as these are countries where lots of international companies operate and more importantly, where Georgia is considered an interesting market. The first meeting was held in Qatar. It was an introductory meeting as it was the first time it had been held between the two countries. During the business forums, held with local business sector representatives, we spoke about the attractive conditions that Georgia offers foreign investors. There were two Qatari companies which have already had business in Georgia. I am referring to a trading company who exported Georgian sheep to Qatar. Qatar sovereign fund representatives have been in Georgia as well. They are working on some projects now in fact. Several companies at the business forum expressed interest in mineral water and lemonade. The Chamber of Qatar will visit Georgia on May 27. We plan to sign an agreement of cooperation and we hope it might be possible to implement some of the projects this year. As for Dubai, 150 companies represented the Dubai side at this forum. This UAE is an interesting country for us as not only Arabic but other international companies’ regional offices are

located there too. After the forum, 2-hour individual meetings were held. As a result of these meetings about 20 companies will visit Tbilisi. We do not interfere in the relationships between private entities. We just connect foreign companies to the relevant companies here. How the business relationships develop between the companies is up to them. Q. How useful is cooperation with Persian Gulf countries for Georgia? A. If the country has many trade partners it means that more investments will be made from both local and foreign investors. In terms of investments Persian Gulf countries have no competitors. The Gulf remains one of the

most important centres in terms of wealth concentration. That is why we need to do our best to make these countries interested in investing in Georgia. Q. Establishment of a Georgian-Italian Chamber of Commerce is also planned. Have you reached any progress in this respect? A. We signed the contract in Rome opening the GeorgianItalian Business Council. This council will help us to give information to Italian businessmen about Georgia’s business opportunities. 2-3 weeks since creating the Counci, we have already been offered the opportunity to implement two projects. One of these projects is about the agricultural processing-canning industry. And the other one is about rapeseed oil production. Q. Italy is ready to allocate 30 million EUR to finance trade-investment projects in Georgia. Can you tell us more details about this project? A. This project is about financing the Italian export-import promotion agency. Within this framework Italy’s promotion agency can finance trade-investment projects which are connected to Georgia. The purpose of this project is to simplify Italian businessmen’s entrance to the Georgian market. The 30 million EUR will ensure the Italian busi-

nessmen are protected against risks while entering Georgia. Q. How would you assess trade-economic relations between Georgia and Iran’s business community? A. Despite the fact that Iran is a huge consumer market, trade turnover does not go up to 80 million. There used to be some hampering factors such as no direct flights between the two countries, no relationship between the chambers and that the chambers could not share information with each other. Now these problems have been solved. We hope to increase the penetration of Georgian products on the Iranian market. Iran, where I also was on an official visit, could become one of the most important export markets for Georgia. Q. The activation of German business in Georgia is also planned. Which fields are interesting for German businessmen in Georgia? A. German business is interested in the construction and industry sector. I could name several German companies which already operate in this sector such as HeidelbergCement, Knauf, Caparol and others. It is possible to get more investment benefits from Germany as it has a strong economy. Germany is the nearest country for Georgia with such a strong economy. That is why we are focused on Germany. We visited the country in Febru-

ary. German businessmen visited Georgia as well. An exhibition of German production will be held on May 16. The number of German companies in Georgia will be increased by the end of this year. Q. Is the number of your partners increasing and with whom do you plan to cooperate in the future? A. The number of our partners changes very rapidly. In 2012 we established legal frameworks with Lebanon, Germany, Iran, Italy, South Korea and the Czech Republic. We intend to sign agreements with Qatar, Dubai, Sharjah and Bahrain in the coming weeks. We have arranged meetings in Oman, Shanghai and Hong-Kong. Q. In Georgia the number of registered businesses has increased. Did this fact contribute to the development of the business environment? A. I would say that the increased number of registered businesses is a result of the improved business environment. Asides from the very developed countries which are oriented on doing business traditionally, Georgia really has the best business environment. This has been proven by much research and rates provided by all international organizations. We need to work hard to maintain these rates as lots of countries are developing and the competition is increasing.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: DHL. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

DHL Georgia Recaps 20% Growth a Year

MALKHAZ PAPELASHVILI, General Manager at DHL

Annual turnover at DHL Georgia is more than 10 Million GEL

The FINANCIAL By KOKA KALANDADZE

fter the global recession of 2008 DHL Georgia has got back on track, planning to realize 1520% growth this year. The company’s annual turnover is 10 million GEL. 95% of the service is done on business to business (B2B) bases with the most popular delivery service being DHL Express. Malkhaz Papelashvili, General Manager at DHL, claims that despite people’s complaints about the high prices of DHL in Georgia, “In fact it’s the cheapest operator if we compare it to the rest of the “Big 4” companies, namely UPS, FedEx and TNT”. In an exclusive interview with The FINANCIAL Papelashvili underlines the advantages of DHL that supported them in winning the loyalty of customers and the annual Golden Brand awards. DHL Georgia is on the list of the best four branches in post soviet countries. Still Papelashvili says that the company has a lot of work to do. Q. What kinds of services are offered by DHL Georgia and how have they been progressing from year to year? A. Our main services currently are DHL Express, from global forwarding - Air Freight, Ocean Freight and Euro Connect, the latter which is done by car. Initially DHL Georgia when it entered the market in 1995 had only DHL express service - capable of carrying a maximum 250 kg. Q. How about the growth of the company from year to year?

A. Our company has very dynamic growth, namely 20-25% each year. The only exception was during the 2008 financial crisis when revenues decreased slightly although by 2010 the figure had recovered to what it was before the events of the crisis. In 2011 we regained growth similar to that which we had experienced earlier. This year will be no exception for us thus we are planning a minimum of 15-20% growth. Q. What types of services are the most popular with Georgian customers? A. Traditionally, and even now, DHL Express is the leading service in Georgia and not only in Georgia but it’s also a driver of global trade worldwide. Then comes Air Freight followed by Euro Connect and Container Freight. Georgian Express, which is the partner company of DHL in Georgia, has for three years already been running a local delivery service, meaning within the borders of Georgia. Q. Who are your competitors locally as well as globally? A. Well, locally there are many companies that provide such s service although most of them are specialized in a certain type of logistics and that’s how we are different - offering a variety of services. Globally, there are mainly 3-4 companies including Georgian Post, which focuses on mailing service rather than freight. Other global competitors are UPS, FedEx and TNT. 90-95% of our service is done within two working days. Q. What is the share of individual and B2B clients and are the prices different for the two?

A. Firstly I will note that 95% of our service is business to business and the prices depend. There are sales for our corporate clients for example but generally the prices are higher of course for B2B than individual clientele. Q. Where are your logistics centres located in Georgia and are you planning some new initiatives with regards to logistics development in Georgia? A. The main logistics centre is in Tbilisi. Tbilisi is actually perceived as a hub for the region by international DHL. The second logistics centre, a smaller one, is located in Kutaisi. We are also receiving some offers to become operators at Tbilisi Logistics Centre which is located in Avchala, West of Tbilisi. It is 2-3 years already that we have been negotiating with them and hopefully it will come to a deal soon before going in to full swing operation in 2013. Q. How about the ratio of export and import in Georgia - which is done more through DHL? A. As Georgia is mostly an importing country DHL can do nothing about it, that’s why we’re having more imports in the country rather than exports. Namely through DHL Express the ratio of export-import is 1-3 respectively. Most of the imports through Euro Connect come from the EU. As for container freight - China, Thailand and the US are leading. Q. There are often complaints from customers that DHL’s service is too expensive. What do you make of that? Is that only the case in Georgia? A. I don’t think it’s expensive. In-

deed, if you look at the other Big 4 companies (UPS, FedEx, TNT) and the amount they charge then DHL is the cheapest one. I understand that the prices may seem high but if you look into the financial documents of DHL Express for example, you will find that the margin of profit is not more than 2-3%. The costs that DHL incurs during transportation of freight are huge. Sending from the EU to Georgia is much more expensive than from Georgia to the EU. Q. You became one of the winners in the Favourite Brand nomination at the 2011 Golden Brand ceremony, what does that mean for you? And has it helped in doing your business? A. First of all I want to note that it’s the seventh time that we’ve taken part in the annual Golden Brand ceremony. We are devoted supporters of this awards ceremony and will continue to be in the future. I remember once one delegation from Europe was visiting Georgia and we had negotiations with them. Finally we had to make a deal but the thing was the probability that they would cooperate with us was 50/50 as they also had offers from other companies in Georgia. It was then, when they were returning to Europe that in the airport they found an edition of The FINANCIAL newspaper and read that we were the winners of Golden Brand. They wrote to us instantly saying that they had made the choice due to the reliability of the brand in Georgia. What I want to say by this is that branding is of huge importance for us and we will do our best to continue providing top-quality service to our customers all over the world.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Entree. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

French Bakery Chain Entrée to Add Sixth Shop in Old Tbilisi Entrée, the French bakery chain in Tbilisi known as a ‘French island’ among Georgians, will open its sixth shop on Marjanishvili Street in late May. The company is also in negotiations with the Uptown Tbilisi complex by Rakeen in regards to securing a place in Tbilisi Mall. Entrée had 27% sales increase in 2011 and 15% EBITDA increase compared with the previous year.

The FINANCIAL

cookery in a very interesting way, we consider food the same as art; we consider those who cook artists. There are so many ways to prepare any dish that it just depends on your creativity and inspiration. This attitude makes our cuisine one of the most sophisticated in the world. Q. The new trend for healthy living has healthy food at its core. While it is hardly con-

nected to great finances the majority of Georgians do not manage to follow such a lifestyle. In your opinion has the culture of healthy food improved during recent years in Tbilisi? A. I think that Georgians love healthy food, every family seems to have relatives in villages around the country that send them various fruits and vegetables that have grown in their gardens. What’s more you can find many open marketplaces and stalls dotted around Tbilisi where people go to buy lovely healthy ingredients; it is a habit and therefore part of the Georgian way of life already. That’s why fresh and healthy food is something that Georgians are used too. And I don’t think that Georgia is an example of somewhere where people have unhealthy diets, believe me Europe has worse situations. Q. What are the bestsellers at Entree? A. Definitely our bread and confectionery. We are proud of our varieties of bread. Our French baker starts the baking process at 03:00 am every day so that by morning our customers have fresh, warm bread to start the day with. We produce bread with rye flour, bread without yeast, bread with cereals etc. Therefore people with stomach problems, diabetics or simply those who want to stay in shape can conveniently find the right type of bread for them here. We have a wonderful selection of confectionery products too, sandwiches, fresh salads, hot and cold beverages. Q. Which coffee products do you offer? How popular is coffee in Georgia? A. We offer ‘illy’ coffee. This Italian brand is an icon of high quality coffee throughout the world. We have various types of hot and cold coffee including Cappuccino, Espresso, Latte and others. Q. What is the number of your employees? A. At present we number more than 100.

Entrée also has our own take out packaging for all of our products including hot drinks, soups and salads which allows you to taste all of our delicious and healthy products any-

where…..at home, on a picnic, in the office as well as our coffee bar a smoke and alcohol free environment. When the Entrée network was under development consideration of the human factor was our primary focus. From the elaborate selection of our products to the ambiance of our smoke and alcohol free café, every feature was taken into consideration. Our principal is that every element of our baked goods, our fresh baguettes, croissants and pastries has certain significance along with the traditional symbols associated with France such as the vineyards of Bordeaux, “Gitanes” smokes, perfumeries and the Eiffel Tower. We are open everyday from 8:00AM till 10:00PM

By MADONA GASANOVA

ntrée is a totally French bakery chain born in Tbilisi in December 2008. The coffee bars of Entrée are an original concept with a solid image of a smoke and alcohol free establishment for the whole family to enjoy due to its high international standards. Entrée currently is in negotiations with its partners in order to bring the French bakery to Baku, Yerevan and Kiev, Jean Michel Charles, co-founder of Entrée, said in interview with The FINANCIAL. Entrée also has its own takeout packaging for all products including hot drinks, soups and salads which allow you to taste all of Entrée’s delicious and healthy products anywhere: at home, on a picnic, in the office as well as at an Entrée coffee bar. Annual turnover of the company in 2011 was 4.4 million GEL. Mr. Charles shared the company’s future plans with us and explained what makes French cuisine special. “French culinary and gastronomy is known all over the world as the most sophisticated, that’s why bringing this icon to Georgia was not an easy step. During the three years of operation on the local market we have been proving to our customers the following: that our product is always fresh, if we produce something it must be the best on the market, otherwise we will not produce it. Our cafés are great places for business or personal meetings. We serve fresh breakfast from 8:00 am and provide take-away service; all Entrée shops are smoke free and provide free wifi access.” Q. Batumi is called the second capital of Georgia in terms of having the largest number of foreign tourists. When can we expect to see Entrée in Batumi?

JEAN MICHEL CHARLES, co-founder of Entrée

A. Batumi is definitely a place for Entrée, and we will open there. It is like the French Riviera - amazing with its combination of seaside and mountains. The potential of this city to attract foreign tourists is huge, which is why we want to be a part of it. We are working in this direction, maybe next summer we will already be there. Q. What kind of investments and obstacles are

connected with new markets? A. The main goal for now is to find a reliable partner there, to build trust and have common views; the rest is the financial part which varies according to market and place. Q. French culture is well-known for its traditional cuisine. What makes French cuisine so special? A. French people treat

n December 2nd 2008 we created a new network of coffee bars and the “ENTRÉE” in Tbilisi was born. Currently we have five locations of our Café: On Rusataveli Avenue, in Vake on the corner of Taktakishvili Street and Abashidze Street as well as in bagebi – chavchavadze avenue #78 on Ts. Petriashvili Street and on Pekini Street. The coffee bars of Entrée are an original concept having a solid image of a smoke and alcohol free establishment for the whole family to enjoy and drawing attention due to our high international standards. Together with our French partner we are focused on turning the Entrée

brands into the “islands” of French cookery and fine cuisine, according to the wide assortment of products, diverse menu, ambiance and exemplary customer service.

All Entrée products are cooked under the direct supervision of our staff of highly trained French Chefs and Cooks. In addition to French bakery prod-

ucts, pastries, croissants, soups, salads and our home made Italian ice creams, we offer European, American, British and other breakfast classics every morning from 8:00am-11:00am.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Healthy Water. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition

FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Healthy Water: We Can’t Trust the Russian Market The FINANCIAL By MADONA GASANOVA SC Healthy Water (Tskali Margebeli), the leading Georgian water producer in the country, produced about 60 million litres in 2011. After two years of negotiations the company finally entered the Turkish market. The list of the top five bestselling markets for Tskali Margebeli include: Azerbaijan, Ukraine, the Baltic States and the USA. As for the Russian market, Georgia’s Northern neighbours lost their attractiveness for the company after Russia imposed its embargo on Georgian products. “Our attitude has not changed - we still can’t trust the Russian market; we prefer to concentrate on existing partnerships, in countries with stable economic relations,” Avtandil Svimonishvili, General Director of Healthy Water, told The FINANCIAL. In 2012 the company will work on developing export in the EU and central Asia and do its best to maintain the trust of Georgian consumers and even exceed their expectations. “They say that Nabeghlavi is better than any other mineral water and that it is not just another statement; the superiority of Nabeghlavi is evident in its volume of sales,” Svimonishvili said. “As a Golden Brand Award winner for the 6th time in a row, I dare say that Nabeghlavi is a gold standard for mineral water - in equal parts tasty and healthy,” he said. Q. Please could you summarize the year 2011 for your company, regarding production, realization and export? A. 2011 was quite an important year as we made some significant modifications in the bottling plant and designed innovative plans for the year 2012. As for sales: statistically every other year is marked by total sales growth and 2011 was no exception. It was the same with export: we entered several new and strategically important markets, as well as of course maintaining our leadership on the local mineral water market. Q. Nabeghlavi is present in the markets of twenty countries. Why are the Turkish, Azerbaijani and Ukrainian markets considered a priority for the company? A. All three of them are close to Georgia and logistic convenience greatly determines our interests. Azerbaijan and Ukraine have the longest history of importing Nabeghlavi and we have a good background for intensifying a trade relationship with them. As for Turkey - it is rather a big market and a good challenge for Nabeghlavi. Though at the same time we consider all the other markets we export to important too. Q. What are the main challenges that Georgian companies face abroad? A. To get permission to enter a new market, water quality is the most important factor. For example the EU has very strict quality requirements which change quite frequently. It usually takes quite a lot of time to pass all the procedures and acquire permission to export there. That can be a serious obstacle for some non-EU products but not for us, as we meet all the requirements. Another issue is gaining wide recognition - as the world water

AVTANDIL SVIMONISHVILI, General Director of Healthy Water

WE ARE WITHOUT A DOUBT STILL LEADING ON THE LOCAL MINERAL WATER MARKET ACCORDING TO RECENT STUDIES. market grows so does the competition and for lesser-known brands it is hard enough to establish a place among world famous brands. Q. What are the financial expenditures when entering foreign markets? A. The expenses depend on the market size, which directly determines marketing activity costs: initial market research, planning and

promotion are crucial when a new product is introduced. So one has to evaluate how cost-effective it will be to make a step towards entering a new market. Q. Tskali Margebeli previously stated that it planned to enter Iranian, US and Canadian markets. Have you progressed any further in this direction?

A. We have quite a successful export relationship with the US, and Canada is also catching up. Iran is one of the markets which sets a lot of requirements and formalities before granting permission to enter it. It is nothing that cannot be handled but it does take a lot of time. That said we are progressing steadily in this direction. So far we are doing well and the delay is not down to

anything on our side. Q. Which foreign countries does Nabeghlavi sell the best in and how did you achieve that? A. Nabeghlavi is most in demand on CIS markets, as they are already well-acquainted with Georgian mineral waters. The key to success is the water’s unique taste and its high quality. Any success greatly depends on our foreign partners who manage local distribution in the different respective countries. Thus a good partnership and joint efforts are very important for us and we highly value that. Q. What are your plans for 2012? Which new markets do you plan to enter? A. We have some great plans for this year, including further modernization of the bottling plant, applying an eco-friendly approach to the production process in order to minimize our environmental footprint. The list goes on but I don’t want to disclose everything quite yet. We will work on developing export to the EU and central Asia and do our best to maintain the trust of our Georgian customers and even exceed their expectations. Q. What is the advantage of Nabeghlavi compared to its competitors? A. It’s all about the perfect combination of tasty and healthy. The delicate taste and moderate sparkling of the natural mineral water, along with its beneficial effects on the human body, are major assets which make Nabeghlavi Georgia’s favourite sparkling mineral water. Q. What is the potential of Nabeghlavi in Georgia? By how many percent can you expand its consumption? A. It is not that easy to predict but it’s obvious that the Georgian culture of bottled water consumption has changed greatly and we are consuming more and more packaged water. But on the other hand new competitors are also emerging, nevertheless we believe we can maintain our position of leadership. Nabeghlavi has always had its own niche which cannot be taken away from it, and the growth of the Georgian mineral water market therefore merely encourages us to think about our own growth as well. Q. Are Georgians aware of all the health benefits of Nabeghlavi? A. Absolutely, otherwise they wouldn’t be so loyal to our water. Most people may not be familiar with the officially stated curative or preventive properties of Nabeghlavi concluded by clinical study, but consumers acknowledge its benefits based on their own experience. For some of them Nabeghlavi is just a refreshing sparkling water, pleasant to drink, while for others it is more a remedy soothing their health problems or minor ailments. Q. What is the main message of Nabeghlavi that you want to deliver to your customers? A. Everyone, including you, must have noticed that Nabeghlavi is never overexposed in the media proclaiming its merits. Our recent TV spots which scarcely aired were intended to just deliver a good message and a sense of the joy of life with Nabeghlavi. So, you’d do well to join us and refresh yourselves with a sip of the wonderfully sparkling Nabeghlavi water - trust them when they say it’s better than the rest.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Marneuli Food Factory. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Marneuli Sales Increased by 60% THE RETAIL CHAINS THAT BEST SELL MARNEULI PRODUCTS ARE POPULI AND GOODWILL

SHALVA TODRIA, Director at Marneuli Food Factory

The FINANCIAL By MADONA GASANOVA

arneuli Food Factory (MFF) had 60% increase of turnover in 2011 compared to the previous year. The growing demand for natural and ecologically clean products helped raise the company’s share on the local market. This year Marneuli was named a winner of the Golden Brand 2011 awards. “Agriculture is a difficult field that requires a huge amount of effort and investments. By our work we are developing this industry and serving the interests of the Georgian consumer,” Shalva Todria, Director at Marneuli Food Factory, told The FINANCIAL. “2011 was a successful year for our company. Marneuli is increasing its popularity on the Georgian market. In terms of the results of the past few years the company had the largest volume of production and sales in 2011. The reason for it is the brand’s increased popularity with customers,” Tordia said. Established in 2007 (incorporated to “Margebeli” Holding) MFF already occupies the largest share of the Georgian market in the production of over 30 types of “M” brand food, ranging from marinades to jams. Marneuli Food Factory is located 40 kilometres from Tbilisi. The region of Kvemo Kartli, where Marneuli is situated, is a traditional

centre of agriculture. Thanks to its favourable geographical location the factory is well-connected to the sources of raw materials which reduce the journey time from the field to the end product. The idea of establishing such a company implied reviving the huge potential of Georgian rural industry; efficient usage of raw materials by applying advanced technologies and offering the finest national products to consumers; and finally, replacing import with national production. In his interview Todria shares the experience of his company’s success and gives advice to young entrepreneurs. He also talks us about the future plans of the company. Q. Which foreign markets are you exporting your products to? A. Presently we are operating only on the internal market. We are focused on fully occupying the local market. That is why we have not yet started exporting our products. We do plan to extend the area of our distribution in the future. We are actually in the process of negotiating with foreign companies although the negotiations are not in an active stage. Exporting forms a large part of our plans for the future. Q. Demand for Marneuli products varies in different countries. Demand in the USA is mainly for pickled cucumber. Meanwhile Israel is more interested in jams. What determines the demand that different countries have for certain products?

A. Advance determination of what the best selling products on different markets will be is difficult. Various factors decide the variation of demand for products. Market analyses therefore are an important factor. It is important to observe consumer behaviour in the respective markets. After that it will be possible to make accurate prognoses regarding the best products to sell there. Q. Marneuli products are slightly more expensive in comparison to those of its competitors. The high quality explains it. In your opinion is there increased demand for ecologically clean products? A. The subject of ecologically clean products has become a major topic in today’s reality. We frequently receive consumer feedback on this issue. It is one of the key factors determining our success. Marneuli products are ecologically clean, harvested on Georgian ground. We use high technology to supply our customers with products of the highest quality. The difference in quality is reflected slightly in the prices. However the prices of our products remain really fairly accessible. In 2011 we had 60% growth compared to the previous year. Georgian consumers are loyal towards national products and specifically towards our products. The growth of our sales volume is proof of that. The number of our constant employees is 300. We hire more than 1,000 extra workers though during peak season. Q. As well as local crop ca-

pacity Georgia still imports agri products, mainly from Turkey. What is the reason for that? A. Georgia’s agri potential is not fully assimilated. Accordingly we find that many products are imported from Asia. Agriculture is a difficult field that demands a huge amount of investments and effort. We accepted this challenge and are doing our bit for our country. Through our work we are developing this industry and serving Georgian consumers’ interests. Q. Tell us about Marneuli’s household. Which cultures do you harvest and in what amount? A. 100% Georgian produce from the field to the jar - this is the main principle of Marneuli Food Factory. Our factory has its own plural raw materials base. The products that we produce are grown on our land by us. The factory is located in the region of Kvemo Kartli, Marneuli, a traditional centre of agriculture. Thanks to its favourable geographical location the factory is wellconnected to the source of raw materials and shortens the distance from the field to the end product. Our greenhouses are spread over 2 ha and open fields occupy 500 ha – this is the area, where we take care of entire cycle of plant cultivation: from growing seedlings to harvesting crops. We are also purchasing some from local peasants and farmers. Tomato, cucumber, carrot, pepper and other vegetables that we harvest are worth mentioning. For instance, we

harvested 10,000 tons of tomato in 2011. Mostly we purchase fruit from local farmers. Q. Could Georgian vegetables totally replace the need for imported products some day? A. Theoretically it is possible. However it requires time. The prime cost of locally harvested products is high and cannot compete with imported products in that respect. Q. What is the amount of sugar that you use annually? According to recent tendencies in Europe, are you planning to reduce the amount of sugar in your products? A. We use 300 tons of sugar annually at this time. Considering modern tendencies we do plan to reduce this number and are discussing alternatives. One of the ways of substituting sugar is fruit concentrate. Q. Last year Georgia started developing a blueberry culture. Are you planning to add blueberry products? A. In general we are interested in berry cultures, so naturally also blueberry. We do not plan to cultivate it but would likely purchase it from farmers. Q. What is your advice for young entrepreneurs? How they can succeed in the agricultural business? A. Starting with small sized business would be the best option for beginners. They should find their niche, gain experience and after that start thinking about further growth and large investments.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Driving Company. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Driving Company Diversified its Product Assortment in 2011

TINATIN ASISTASHVILI, vice president of Driving Company

The FINANCIAL By TAKO KHELAIA “When customers see that we have been awarded by Golden Brand, they automatically become more interested in our products,” says Paata Gigauri, Founder of Driving Company. “Being a Golden Brand winner is an honour for us. It’s a serious factor in terms of increasing awareness of the company. We were named a winner along with such large companies that we were really proud to be named among them. We are a small and relatively new company which is still on the path of its development,” Gigauri added. “Last year was quite a good year for our company. The year 2011 was a bit tense however as some of the effects of the economic crisis were still being felt last year. On the basis of product diversification, we managed to keep the

same level of turnover in accordance with the previous year. The company’s turnover even increased by 1.8% last year. Keeping the same index of turnover during a tight economic situation really stimulates and encourages us,” Gigauri said. “We have different brands represented in our network including Cervin, Simone Perele, Chantelle, Erborian, Sigvaris, Heliabrine, Saforelle, Feminic, Ecrinal, Akileine, Vitacitral, Oxens, Oligobs, Ultimepil, Netline, Wolford, Passionata, Nicole Olivier, Bruno Banani, Banana Moon, Eminence, Steffy, Valege, Cotonella, Cette and Bonnie Doon,” Gigauri said. “In 2011, new body and skin care products were added to our stores. One of the most important of those products was the import of Ecrinal hair care facilities. Ecrinal hair care products are created with horse mane extract (ANP). It’s an extract which

has a regenerative effect on the roots. This product consists of Tricholipids which strengthen, repair, restore shine and give volume to the hair. It’s the only brand that exclusively uses horse mane extract as part of a hair care product,” Gigauri stated. Driving Company offers its clients Akileine foot care and Vitacitral hand care brands as well. “I should also mention Sigvaris compression therapy. Sigvaris is a global brand which is available at our stores. Sigvaris is the leader and expert in prevention and management of venous diseases. This treatment is prescribed to treat phlebitis, thrombosis and aftercare following surgery, sclerotherapy and any other forms of varicose vein treatment, and also to relieve all conditions of chronic venous disease,” Gigauri told The FINANCIAL. Driving Company offers a multi-brand network to its

customers. Although expensive products are quite popular, the cheaper ones sell the best. “Cheaper products sell the best at our stores. Our customers are always motivated to buy high quality brand products, but sometimes due to economic problems clients try to save money and buy cheaper ones. Despite that I can’t say that expensive products don’t sell well. People are quite interested in our brands. We will continue working and attracting visitors through advertising and promoting our products,” Gigauri said. “Our suppliers include Italian company Cotonella, French company Chantelle which includes Passionata, Simone Perele, Austrian company Wolford, American company BrazaBra (bra accessories) and many more solid European and US companies,” Gigauri said. “The underwear business is quite hard. It needs a great

amount of energy and time to make it popular and in demand. First of all the mentality of a people needs to be changed. Wearing high quality underwear should become a priority for people. Saving money on underwear is a big mistake in my view,” Gigauri stated. At the beginning of 2012 Driving Company opened one more store of Bruno Banani and Cervin at Karvasla trade centre. “We have loyal clients who visit us often. Our brands are very popular with them. I can’t single out a particular age that represents the average customer as young people as well as more elderly people are our clients. Our products are accessible for everyone who likes to shop. Men and women shop at our stores in almost equal numbers. Women tend to buy different body and skin care products,” Gigauri said. “Together with underwear, we offer wallets, belts, socks and leg-wear. We have hair, foot, hand, face, body and intimate hygiene products. Now we are offering people the fascinating face care brand Erborian, which is created on the bases of Korean medicine and French technologies. It’s a dynamically developing brand which uses traditional, Korean plant extracts. I would recommend that everyone uses this product as it is very effective,” Gigauri said. “Cervin has become a health and beauty brand. It’s not just an underwear brand anymore. We decided to add different products to our network due to economic conditions, but it was a great decision and ended up being very successful. We have diversified our assortments and are looking forward to our future success,” Gigauri said. “Each segment has the possibility to visit our stores. People can buy underwear for 15-20 GEL. Of course we have more expensive brands which cost about 150-200 GEL, though we offer lower priced products at the same time. All of the products at our company are of high quality,” Gigauri said. According to Gigauri the company competes with other companies on the market with its wide-ranging assortment and diversification. “Marketing and advertising give us the ability to remain competitive on the market. The existence of competition is very important. If business isn’t stimulated it will start to regress. The more competitors I have the more successful I will be,” Gigauri said. “For this summer we plan to add some swimsuits to our network. We are still waiting for the time when our business will become more profitable. We started our business back in 2008 just after the August War, during a relatively unstable situation in the country. We have managed to overcome these problems and we do hope that the situation will improve greatly as time passes. In the nearest future we will develop different care product lines,” Gigauri said.

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FINANCIAL & Global Idea Special Edition

golden brand 2011

17 MAY, 2012 | FINCHANNEL.COM

soflis nobaTi - rZis saukeTeso produqcia TqvenTvis da Tqveni patarebisTvis

Advertiser: Wimm Bill Dann Georgia. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition

FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

GIORGI BAKHTADZE, CEO of Wimm Bill Dann Georgia

Wimm Bill Dann Georgia Starts Export to Azerbaijan and Armenia

imm Bill Dann Georgia ltd (brand Soplis Nobati) plans to start export of its products to Azerbaijan and Armenia in 2012. WBD is among the few dairy producers that offer natural milk products to Georgian customers. Wimm Bill Dann invested about 15 million USD in reconstruction of a dairy production factory in Georgia purchased from a local producer. The Wimm Bill Dann company that was founded in Russia is today one of Europe’s biggest dairy product companies. WBD produces yoghurt, milk, flavoured milk, fruit juices, other soft drinks and baby food products. The company’s management is international. On December 2, 2010, Pepsico agreed to buy 66 percent of Wimm Bill Dann for 3.8 billion USD.

The FINANCIAL By MARIAM PAPIDZE Wimm Bill Dan Georgia ltd entered the Georgian market in 2009 with the brand Soplis Nobati. Wimm Bill Dann operates special milk collection centres throughout Georgia. The company has installed tank fridges to which people from small individual farms can bring their milk for sale. From these centres the company delivers milk to the WBD factory on a daily basis. This is done with the help of milk carrier trucks. Matsoni, sour cream, Kefir and Milk are the most popular products of Soplis Nobati on the Georgian market. “As far as exports are concerned, dairy products are very time sensitive when it comes to transportation, taking into account their short shelf life,” Giorgi Bakhtadze, CEO of Wimm Bill Dann Georgia, told The FINANCIAL. “There are certain categories that are able to cope with transportation over longer distances and we plan to start exports to Azerbaijan and Armenia of such categories of products in 2012. In total we are producing 24 types of products,” he added. Q. Can you describe to us the results of 2011 compared to those of previous years. Was there growth? Are you happy with the results?

A. 2011 was a fantastic year for the company. We implemented a number of strategic initiatives that have driven great results both in terms of volume and revenue growth. Total volume growth in 2011 vs. 2010 was 59 percent: 71 percent growth was recorded for locally produced products driven by our flagship brand Soplis Nobati, while imports grew by 38 percent - with Chudo as the main driver. In revenue, growth was 59 percent: 107 percent for locally produced products, while the revenue of imported products grew by 56 percent. Q. What is the amount of investments that WBD has put in to Georgia since 2007? A. WBD has invested 28 million GEL in Georgia since 2007. In 2008 a brand new factory was built from scratch, new equipment and production lines were installed. Our own distribution was built which significantly helps with the control of complex supply chain issues. Q. Do you use locally sourced food like milk or farm products to process and make the final product (what is the share)? And is there a challenge in obtaining a consistent and high quality supply? If yes then how do you handle this; and what would be your advice to local farmers, suppliers? A. WBD is deeply interested in having a sustainable raw milk

base in every country we operate in. Unfortunately in Georgia we currently cover only about 50 percent of the annual raw milk necessities. Our key suppliers in Georgia are various small farmers and family-based farmers with no stable milk output, compared to the 15 litre/day per cow WBD farms in Russia. Of course, there are objective reasons for such a moderate number, such as low quality nutrition base, lack of grass and water, huge seasonality in supplies due to climate conditions. But at the same time there are clear opportunities to increase it. WBD is working with the farmers on a regular basis: we audit the milk production, help in shaping the plan of the corrective measures, train specialists and assist in formulating the development plan for the farm. Based on our current information on the dairy farming of Georgia, we think that the key areas for improvement of milk farming refer to the intensification of fodder (could give up to +25 increase in the amount of raw milk), revision and modernization of dairy equipment (+10-15 percent milk + quality improvement), and the possibility of organizing animal feeding (+15 percent increase in milk volume along with a rise of protein level). WBD is working on a project to ensure sustainable and high quality supply of raw milk. We plan to in the nearest future approach the

Ministry of Agriculture of Georgia with a project proposal for improving the genetics of cattle, organization of veterinary services in order to increase marketability of milk and reduce somatic cells in raw milk, making an agronomic development plan aimed at perennial pastures and fixing winter feeding. Q. WBD is also producing Chudo (yoghurt). Is it imported or produced locally? A. Part of Chudo products are produced locally, part imported. The famous Chudo Curd Mass and Glazed Curds are produced at our local plant; we also produce Drinkable Yogurts in cartons packaged here in Georgia. Other products are mainly imported from Ukraine and Russia. As a successful, innovative and developing company we definitely plan to launch new products that would satisfy the demands of our customers. Q. What about the date of expiry of your products, what amount of production is left not realized? A. Expiry dates differ according to product categories; e.g. pasteurized milk has to be consumed within 7 days from the production date, sour cream - within 14 days. As a result of proper sales and distribution systems, returns of dairy category products do not exceed 2 percent of the production volume (which is common for the category).

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Geoplant. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Geoplant Starting Production of Herbal Tea The FINANCIAL By NANA MGHEBRISHVILI

eorgian tea manufacturer Gurieli will soon be selling a range of herbal teas in Georgia alongside its currently available Gurieli Export and Gurieli fruit tea. Geoplant is currently working to produce tea made from Georgian herbs. The company is also trying to harvest and produce ‘mono-tea’ which is quite rare in the world. “By the end of the year our consumers in Georgia and all over the world will taste The Everest of Georgian tea Prince Gurieli, luxury product for real gourmands. We also plan to have our own herbal tea providing health benefits to its drinkers,” Mikheil Chkuaseli, CEO of Geoplant, told The FINANCIAL in an exclusive interview. “This tea will be made solely from herbs. For that purpose we conducted laboratory trials to create a tea made from Georgian herbs. They will be teas made from camomile, mint, and other savoury culinary herbs” Q. What does Golden Brand mean to Geoplant? A. This is the second time that we have been awarded by Golden Brand. This is a very important award for us the same as it is for the other companies that also won. The winning of any competition is an important event. It means that the business is progressing in the correct direction of development. Georgian brands are developing rapidly and this is important. Just a short while ago Georgia faced the problem of having few high quality products being produced here. But Georgian manufacturers have overcome this challenge and now Georgia has lots of local high quality products and brands. The consumer features of a product are essential, but at the same time brand is very important. Georgian companies have started thinking about how to develop brands and about their value. Q. Geoplant experienced success almost as soon as the company entered the market. What was the driver of this success? A. Gaining success was very difficult, especially in our sector. Consumer trust toward Georgian tea was very low. In fact there was no Georgian tea on the market. It gave us the chance to hold a position in the market, but simultaneously it was difficult because the market was occupied by global brands like Lipton, Ahmad, Greenfield and others. The general attitude toward Georgian tea was that it couldn’t be good quality simply for the reason that it was produced locally. They had the preconception that any good tea would automatically be exported rather than be offered to the local market. We spent a lot of financial resources and work on creating a brand and a name which would have a story behind it. A product isn’t only defined by its consumer features. It is a brand, a name, and packaging. They determine the product’s value. We therefore created our launching strategy on how to best enter the market, what messages to send out, where to pay attention to. All these aspects resulted in the success of the brand Gurieli. The initial reaction of customers was higher than we expected. We named our first brand Gurieli Export. We wanted people to think that this was an export tea and therefore high quality. We got a great reaction consequently. A survey conducted three months af-

MIKHEIL CHKUASELI, CEO of Geoplant

ter the launch showed that people knew the brand as Gurieli and not Gurieli Export. This urged us to create another product line apart from Gurieli Export. So we soon added Gurieli fruit tea. This contains only dry fruit and not any tea leaves. Tea is a staple product for every member of the family. Children especially and the younger generation tend to drink a lot of it. But older generations also drink lots of tea. Therefore all customers are very sensitive toward its quality and ecological features. And in spite of such a sensitive attitude toward our product we have managed to gain success. Q. What is the size of the tea market in Georgia? A. Use of tea in Georgia was 2,500 tons in 1989. In comparison this number for the packed tea totalled just 750 tons in 2007 and is now approximately the same. Use of tea has decreased because of several reasons. There were no teabags in the past. At the same time increased use of coffee has significantly reduced tea consumption too. In the past coffee was a bourgeois drink. Also, officially branded tea is expensive. There are tea plantations in almost every village of Western Georgia although the residents of these villages are harvesting the tea for themselves only. In Eastern Georgia lots of people drink herbal tea which they have made themselves. All these aspects have resulted in a reduced tea market. Q. How many percent of the market does Geoplant hold? What is the share of Gurieli and Rcheuli in your piece of the market? A. As I’ve said the tea market for

packed tea totals 750 tons. This market is divided into two parts. Very special area - Gardabani, Bolnisi and Marneuli, where mainly Azerbaijani people are settled. The consumption of tea is around of 40% or 350 tons. Tea is a very special product here as part of their culture and lifestyle. Rest of Georgia tea consumption is 400 tons. If we calculated from this point of view we cover 15% of total consumption and 23 percent excluding special area. Regarding brand shares, despite big difference between Gurieli, costs 2.4 GEL in most shops and Rcheuli - 1.5 GEL, Gurieli is leading and has a much bigger share of our tea sales. Q. You are going to produce Prince Gurieli. What is the difference between Gurieli Export and Prince Gurieli? A. Prince Gurieli is the Everest of Georgian tea. It will be harvested in high mountainous regions where the tea grows in special conditions. The tea will be made only from the youngest, bud leaves. Prince Gurieli will be special blended tea. All these aspects will ensure the highest quality of the end product. In first stage Gurieli Prince won’t be available in teabags, it will only be available in loose tea form. Q. In which regions do you have your plantations? What is the total size of the plantations? A. We have tea plantations in Guria, Samegrelo. The other regions of Georgia were not involved in producing Georgian tea before we started producing fruit tea. Therefore by our work we involved Racha-Lechkhumi, Kakheti, and other

regions in the process thanks to our fruit tea as we gather fruit mainly from these regions. We collect apple and wild rosehips in East Georgia too. After producing herbal tea the entire territory of Georgia will be involved in the tea-making process. Southern Georgia is very interesting because of its wild flowers. Our plantations are spread over 1,240 ha. 900 ha are tea plantations. We are improving them gradually. Q. Which countries do you export tea to? Which is the biggest market? A. We have been in the international tea market for sixteen years. Lipton, Martin Bower, Martin Bower Middle East and some other global companies buy tea from Geoplant. We exported 550 tons of tea abroad in 2011. We have already started exporting packaged tea. We sold fifteen tons of packaged tea on foreign markets in 2011. We weren’t expecting to have such results. We started export to Germany, France, Estonia, Lithuania and Latvia. We plan to enter the markets of Kazakhstan, Ukraine, Belorussia and Poland. We are in the process of negotiations and I’m sure that Georgian tea will soon be sold in the USA as well. We are meeting the requirements of foreign markets. Therefore we are producing Georgian tea Baikhi #36 as well, which is only an export tea. This is a message for the people who appreciated Georgian tea during the Soviet period that Georgian tea is still available on the market. Sales of this are quite high. 12 million emigrants from the CIS are living in Europe and there are 4,000

points where it is sold at. In addition we have had an offer from England to make special packaging for them. Q. How much tea are you going to sell in 2012? A. The forecast is very high - double the sales figures. This means, that we are planning to sell more than 180 tons of tea. This is figures for local as well as for export market too. First Q of 2012 show to us very optimistic figures, we increase sales up to 24% comparison to same period of 2011, but there still lot’s of to do to reach such a high point. Q. Have prices increased during these past two years? A. No, we have not raised prices during these years. The profit margins haven’t grown either, but we won’t raise the prices. That would cause discontent amongst our customers. Q. Which market holds the most value for the company, local or foreign ones? A. The Georgian market is most important for us. Gurieli will soon become a mark of the country like its wine and mineral water Borjomi are for example. Export will be more than the local market by 2014-2015. Q. Do you use flavourings in your tea? Is it safe for the health? A. We have very special business relation with Martin Bauer and Plantextract, the leading flavour (and not only) producing companies. We use natural and naturally identical flavourings for our fruit teas. It doesn’t present any danger to the health whatsoever. Our herbal tea won’t include any flavourings at all. It will be created purely for the health benefits. Q. Is green tea popular in Georgia? A. Yes it is. Green tea is quite popular in the country. It is very popular especially with female customers. There are biologically active substances in green tea which act as a kind of prevention against certain diseases, especially for female. Georgian green tea is especially tasty because of the climate in Georgia. Harvest lasts only six months, because of this we do not use pesticides and herbicides, the difference between day and night temperatures is quite significant. All this gives to Georgian tea, black and green extra advantage as an ecologically clean product with very special flavour and aroma. Q. How much have you invested during the past several years? A. We have invested more than 3 million USD in 2008-2012. Q. How much is the turnover of the company? A. Turnover was more than 3.5 million GEL in 2011. This year we plan to have more then 5 million GEL. Q. How many individuals do you employ? A. We have 85 individuals permanently employed with us. Twelve of them work in the head office. The majority of them are working in Zugdidi though. During harvest time the number of our employees reaches 350. But in fact they are employed throughout the whole year as we have leasing arrangements with the plantations. Incidentally the way we conduct business is making sure that our employees are occupied and motivated year-round. The idea behind leasing the land to private individuals is to motivate them, rather than to expect any income out of the arrangement. We want develop a sense of ownership in the pickers, instead of them feeling like they are merely working for someone.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Kula. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Golden Brand: Kula to Start Producing Fresh Juices

IVANE GOGLIDZE, company Kula’s General Director

We are pleased that our work which we did last year has been appreciated. Now more people believe that we really do produce natural products. The quality of the products is already tried and tested. So people have enough information about the reliability of the product and the producers as well. For building relationships with our customers, new and old partners, we use our status as recipients of Golden Brand awards. Customers and partners choose the company according to its awards and certificates.

The FINANCIAL By MARIAM PAPIDZE Gori Baby Feeding Cannery, which produces ecologically clean fruit and vegetable juices, intends to add a new line to its list of products. The company will soon be producing fresh juices as well. Gori Baby Feeding Cannery includes two brands at present. The first, Kula, produces ecologically clean fruit and vegetable juices. The other, Kula Baby, produces natural juices for children. “It is planned to make a new brand which will produce fresh juice. By this brand we will enter all segments. Now we take up only half of the premium segment,” said Ivane Goglidze, company Kula’s General Director. “Creating a new brand is due to the high and increased demand for juices in Georgia. The demand has impacted financial indicators and sales statistics as well,” he added. Kula had annual turnover of 4 million in 2011. The company had 45 percent growth in 2011 compared to the previous year. “We did not expect such big demand,” said Ivane Goglidze. “After selling all the production we had to wait for a new party of juices. So we lost time. This fact led to the company’s losses in 2010. As the demand was so high, and we were better prepared, our sales statistics had good indicators in 2011.” Q. During your time on the market in Georgia, how much have you invested here? A. Kula was founded in 2009 and entered the market the same year. During the period of its existence, Kula has invested more than 42 million USD. In addition we have

added new equipment worth 700,000 USD. Q. How would you assess the attitudes of Georgians towards natural products, do they really pay attention to whether a product is pure or not? A. In Georgia the tendency used to be that people were buying cheaper production and did not pay attention to its quality because they were more oriented at low prices. So they were satisfying their fluid needs in such a way. It was later found out that people who used to buy low quality juice tended to become unwell with various diseases. Preserved, saturated products were proven to be harmful to the health. And that was reflected in the health of customers. Now the situation is changed. Customers are more oriented at healthy products. Perhaps it is the better economic conditions that have led to customers’ decisions to pay more and get natural, healthy products. As for prices, I would say that in general our production is not expensive. It depends on how expensive the fruit is that the juices are made from. We cannot compare the juices of apple and raspberry for example. Apples cost ten times cheaper than raspberries and five times cheaper than cherries. Juice made from a product which is cheap in Georgia, will of course itself be cheap. Cheap products in Georgia are those products which are unlimited in quantity. Ultimately all our juice is made from fruit, a completely natural product. Natural products are good for the health. If people do not want to catch a cold they need to drink fresh juices as often as possible. That way people will have a stronger immune

system. Q. Do you import fruit in Georgia, or do you only use Georgian fruit to make your juice? A. Almost all the fruit we use is Georgian. The only fruit we import is pomegranates. We import is as a fruit and then press it here. Some of the pomegranates we buy in Kakheti however, and the rest we import from Azerbaijan. Imported fruit is not as delicious as that which grows locally. There is a lack of some fruit in Georgia, such as blueberries, blackberries and raspberries. In our first year we could not get a big enough cherry harvest. In the second year we decided to have cherry orchards in Gori. Our cherry orchards take up 20 hectares. Only part of this territory is cultivated at this time. In such a way we try not to import fruit from elsewhere, but get it from our own land instead. Kula works in cooperation with different farmers in Georgia and they supply us with the fruit we need. Q. How would you assess the export potential of Kula? A. We export our products to about 16 countries. Among them are Germany, Israel, Poland, the Czech Republic, Ukraine, Belarus, Finland, Armenia and others. We have entered the premium segment in those countries as well. They are satisfied with our quality and we are satisfied with the sales statistics. We have been successfully exporting our product for two years already. Q. Kula has opened its first shop. Besides Kula’s production do you plan to offer customers other companies’ production as well?

A. At the moment we sell only Kula’s production in this shop. We plan to offer other companies’ products as well, but they will only be natural products. These companies should have quality proving certification. We want customers to know that they are buying completely natural, safe products in our shop. The prices will be affordable and cheaper than other shops because we will be offering wholesale prices. Q. Is it profitable for Kula to produce ‘bio’ products? Please assess this issue in terms of doing business. A. Of course it would be easier for us to not to produce purely natural products. We would save money. We work hard and we are proud that we are doing useful work for our country. Our priority is to produce natural products, and employ many people. The aim of the Gori Baby Feeding Cannery is a combination of nature and technology. That’s why we participate in every process of making juice and preserving products, beginning from the cultivating, treating and producing of fruit and vegetables and ending with distributing them. Q. Kula is involved in different kinds of CSR activities. Why is CSR one of the priorities of the company? A. Our company is located in Gori, where lots of internally displaced people live. 30 of them are employed by our enterprise. That means that we are helping not only these 30 people, but their families as well. We bring children from Gori to Tbilisi to present different kinds of events held in Tbilisi Event Hall. We help them as much as we can. In total 186 people are employed at Kula.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Orbi Group. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Orbi Group: 40% of its Apartments Purchased By Foreigners

rbi Group, a high end construction company running its operations in Batumi, won in the “Favourite Brand” nomination at the Golden Brand 2011 awards ceremony. As company CEO, Irakli Kvergelidze, said, “This title further establishes our company’s status as a leader in Batumi construction projects”. As he told The FINANCIAL, the company is going to open its sales representative offices in Ukraine this June, later in Moscow, Kazakhstan and other countries of the former Soviet Union. He said that 150 apartments have been purchased by Ukrainians already and overall 4050% of the spaces are purchased by foreigners.

IRAKLI KVERGELIDZE, CEO of Orbi Group

The FINANCIAL By KOKA KALANDADZE Q. Why did you decide that your construction company would only be based in Batumi, what was the reasoning behind this decision? A. Construction company Orbi Group was founded and further developed in the region of Adjara. The geographical location of Adjara and the increasing development of tourism infrastructure in the region were in line with Orbi Group’s plans from the very beginning. That was reflected in our innovative projects, and expressed in our large-scale construction of hotel type apartments. Today’s Batumi has transformed into a ‘construction polygon’

one could say. European investment is continuously flowing here. From the beginning the Orbi Group team believed that Batumi (in early times named Porto Franco) would regain its strategic importance and we are glad that our company is the leading one in the region with its innovative design, top-notch quality construction projects. Q. What types of residential or apartment hotels are you offering your clients? A. At the beginning Orbi Group was building multi residential dwelling houses. As I already mentioned, the improving tourism infrastructure has increased the demand for private apartments. The population of Batumi gradually began capital investment in purchasing apartment-hotels which would be used

not only seasonally but throughout the year. When you buy this kind of accommodation you become a business partner of Orbi Group. The clients of our company include not only those in the business and corporate sector but individuals as well. It is important to note that during the most recent months of the company’s sales more than 50% of buyers have been foreign citizens or companies. Q. There are several big projects which Orbi Group is undertaking; could you describe one of them for our readers? A. Orbi Group is working on the realization of innovative projects, which include constructing 950 and 1,900 room apartment-hotels in Batumi. In the world there has never before been built an apartment-hotel

with such a large number of rooms. The site contains three towers, two of which are 25 storeys while the other is a 32 storey building. Q. How about the foreigners who are buying residential houses in Batumi, what is the share of them compared to Georgians? A. The share of foreign capital in the purchase of our apartments goes up to 30-40%. As an example, up to 150 rooms have been bought by Ukrainian citizens. With the rising sales of our apartments to foreigners, Orbi Group is going to open a representative office in Ukraine in June of this year. Later on we plan to open offices in Kiev, Israel, Moscow, Germany, Kazakhstan and other post Soviet countries. By our own estimates Orbi Group will attract 200300 million USD investments with its current projects. Q. How many construction units have been completed so far and what kind? A. So far Orbi Group has managed to complete 14 construction units. Currently the company is working on 550 thousand square meters of space. Of course the prices are different because the constructions of Orbi Group are located in the coastal zone as well as in the old city of Batumi. In line with the historical infrastructure of old Batumi we are constructing terraced-type lowstorey houses where the apartment space is bigger and therefore the prices are higher. Q. Did the 2008 crisis affect your company? A. Despite the brief war in August and the global economic crisis in 2008 the company did not stop its construction works, moreover it actually kept up the pace of construction. Recently the company began constructing two new projects. I think it is as a result of Orbi Group’s independent resources and private capital investment. Q. What types of financing do you use in your construction projects? And with which banks do you cooperate in this regard? A. Orbi Group has never had a bank credit problem. Nevertheless we do not use bank financing for our projects, in fact each project is financed by our own capital funds. With the help of good management and governance our company has been able to develop its own business without any bank credit resources. As for interest-free instalments of our apartments Orbi Group offers its clients a full package of services: Interest-free instalment till completion of the construction, acting as guarantor with the bank, flexibility of the payment schedule etc. Q. Do you only sell apartments once they are finished or how does it work? A. A significant achievement of the company is that Orbi Group can offer all kinds of products. Specifically space at the beginning, during and at the end of construction. The majority of our apartments are sold before they are constructed. We also sell finished apartments but the price of the final product in this case can be 300% of the original price. The price value of our company’s apartments rises every year. There was a significant shift from 2010 to 2012. Q. You won the nomination of Favourite Brand at the Golden Brand ceremony - what does that mean to you? A. The Orbi Group, as winner of the favourite brand’s nomination at the Golden Brand awards ceremony, once more means introducing our company to a wider audience, which is already well aware that Orbi Group is a leader in its sphere.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Barambo. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition

FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Barambo Introducing Premium Ice Cream Line Alba

arambo, the leading producer of chocolate and confectionery in the Caucasus, recorded solid sales increases in 2011. In just a short time the company has gained huge popularity on the ice cream market and launched a new premium line - Alba. The most delicious Georgian brand of confectionary justly became a 2011 Golden Brand winner. The company has increased its success in Azerbaijan and plans to expand its export to Kazakhstan and Azerbaijan.

ALEKO STROGANOV, Head of the Marketing Department of Barambo

The FINANCIAL By MADONA GASANOVA “The Azerbaijani market is very interesting for us. We plan to increase our sales volume there and increase the assortment available. Entering a foreign market and strengthening our position there is always difficult. However in Azerbaijan our products already have customers and we are therefore trying to develop further with some confidence,” Aleko Stroganov, Head of the Marketing Department of Barambo, told The FINANCIAL. The only chocolate producer in Georgia shares its success story with The FINANCIAL here. “Barambo is a Georgian product of high quality, which strives to please its consumers,” Stroganov said. Q. What are the main advantages of Barambo over its competitors? A. Barambo is a Georgian company, oriented on Georgian consumers’

demands. Quality is the most prioritized aspect of our work and a taste that is totally oriented on the tastes of Georgian customers. In comparison with other companies, who are mostly foreign ones, we make products specifically tailored for the Georgian customer. Q. Barambo was the first company to have started chocolate production in Georgia. Why was such an industry not developing in Georgia before? What obstacles are there in the business? A. The success of our company proves just the opposite - that production is developing in Georgia. Q. What is the number of employees at Barambo? A. More than 400 workers are employed at our company. About 300 are employed by the distribution company which is working on the realization of our products. Q. Ice cream producers usually put their work on hold during the winter season. Why is the culture of eating

ice cream in cold weather not developed in Georgia and are you planning to change that? A. Eating ice cream in winter is more characteristic for Northern countries like Finland. In Southern countries it is not developed. As for Georgia, changing this tendency in one or two years would be difficult. We have a plan to increase ice cream sales in winter but it is a long-term perspective. Q. What are the best selling chocolate and ice cream products at Barambo? A. All of our products have their own consumers? However the most popular products are our milk chocolate and chocolate with nut filling. The ‘Eskimo’ is our best selling ice cream. Q. What are your plans for 2012? How will you increase the assortment of your products? A. Our brand new ice cream Alba was introduced for customers in 2012. This line is oriented at the premium segment and is distinguished

by its form, taste and package. We are sure that Alba will gain huge popularity. As for other assortments, we will offer new products from September. Q. What is the main message of Barambo’s adverts that you want to be received by the public? A. Our company’s adverts vary depending on the products. In general our main message is that Barambo is a Georgian product of high quality, always aiming to please its consumers. Q. The chocolate shop niche in Georgia is essentially free. Are you not thinking about occupying it? A. It is only two years since we started operating on the Georgian market. So we did have other priorities. In the future we plan to open an actual Barambo brand shop. Q. Which is the best season for selling sweets? A. Sweets are most demanded during New Year. Summer is less active but we compensate for that drop with ice cream sales. Q. What is your expenditure on publishing commercials and marketing newsletters in retail shops? A. It is a tense fight for good places in shops. After our entrance on the market our competitors increased their commercial budgets which also include retail shops. In these circumstances Barambo also have to activate and issue finances for occupying visible places in shops. Q. Which is the region where your products sell best? A. Tbilisi is the most active region in general. With its size and number of inhabitants Imereti is also dominant. Q. Are you offering customers any products with sugar substitutes? A. We do have special chocolate for diabetics which is more expensive than other chocolates. However it obviously has its specific customers. Q. Which countries are you importing raw materials from? Do you use flavour enhancers or colorants? A. Barambo imports raw materials of the highest quality from Belgian company Barry Callebaut. This is the world’s largest chocolate manufacturer. We always choose supplier companies that are authorized in their work and are famous for having the best quality. On top of this, we conduct quality control under strict observance at every level of production. Q. What share do children make out of the total number of your customers? A. Children occupy the largest number of our customers. This number has increased more since issuing the special kids product Barambino. Barambino is a 100% natural product which immediately occupied the leading position in its segment. Q. Are you carrying out any social responsibility programmes for children? A. We frequently conduct CSR activities. We help various organizations with their products. During Easter we hosted orphans from Saguramo and Tsilkani. We arranged an excursion to our factory and gave them Barambo sweets. We love these children very much and try to improve their lives as much as we can. Q. Are you using the Golden Brand award in any of your marketing or advertising campaigns? A. Any award is greatly appreciated by us. Our attitude towards Golden Brand is very special. This is one of the most prestigious awards in the country and participation in it is a big honour for us.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: 08. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition

FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Information Centre 08 Gets 10,000 Calls Per Day

GIORGI KOCHLADZE, General Director of 08

THE TYPES OF INFORMATION SERVICES THAT 08 PROVIDES: • Organizations: address; postal index; telephone number; fax number; website; e-mail; legal status; Director’s name; search by business type; search by identification code. • Currency: currency exchange rates; exchange rates of any country; currency name and turnover zones. • Transport: airline/railway/city transport and cash boxes; service schedules, routs and delays. • Codes: codes for any country and city/town telephone codes; codes of mobile operators abroad; bar codes; indexes of regions of Georgia. • Search for subscriber: search for subscribers’ addresses by their names and surnames. • Search for streets: present and previous names of streets; nearest streets; street regional location. • Transport in Tbilisi: routes of minibuses; city bus schedule; numbers and routes.

• Search by number: search for organization or subscriber by telephone number. • Distance: distances between countries/towns etc. • Exact time: current times of various countries and towns; difference in time of any country and towns; time zones. • Plural sights: locations and names of cultural and historical monuments; locations and names of parks; locations and names of gardens. • Entertainment: TV; cinema; theatres; circus; playbills; concerts; night clubs; exhibitions; ticket booking. • Sports: events; games; results and accounts. • Extra service: taxi on call; evacuator on call. • E-mail: unlimited delivery of information via e-mail. • Information about sales in Tbilisi. • Information from various fields.

The FINANCIAL By KOKA KALANDADZE “Our brand name is very important to us,” said Giorgi Kochladze, General Director of 08, the information centre which recently became a “Golden Brand” of 2011. “We have been running an active advertising campaign for the last six months. Georgian customers should be aware of our brand and be able to rely on said brand.” “Information centre 08 started functioning in 2008 but in 2011 the founder and management were changed and it was in the last six months that we started rebranding the company. We re-entered the market after our re-branding in November 2011. Taking all of this into account our Golden Brand win will further help us establish our brand as the leading one in its sphere on the market.” Information centre 08, winner of the nomination “Favourite Brand” at the Golden Brand ceremony, shared the company’s plans for 2012. In his interview with The FINANCIAL, Giorgi Kochladze revealed that despite the relatively short period of 08’s presence on the market, the company is already getting up to 10,000

calls per day on average. In addition the majority of the company’s customers are business organizations. The company also plans to cooperate with Tbilisi airport to substitute the latter’s dial number to 08 so that it can offer a variety of flight details, including delay information, local time at arrival and weather at the place of destination. Q. What is the background to your managing to lead the information call centre 08? A. I had been working in this particular sector for quite some time already. Namely I was the managing director of the then “09” information centre starting from 2001. Then I left the company and established the new company 08 in 2008. The majority of qualified call-centre operators as well as some heads of different departments moved along with me to the new company. So all of the staff who are currently working at 08 have extensive experience in this sphere. Q. 09 is also present on the market. How much lower are the tariffs that you charge per call? A. It depends. In some cases we charge about half the price that they do. For example whereas calling 09 from an organization costs 1.30-1.50 GEL, we charge much lower - 0.78 GEL. Q. Statistics show that the number of internet users in Georgia has already hit about half a million and is growing from year to year. Have you noticed a drop in demand for your services as a result? A. Well, in countries even more developed than Georgia with much more widespread access to internet, there still remains such a service. That said however the effect of the internet on use of such a service as ours is significant and the negative dynamics are noticeable. On the other hand, there is often information which cannot be found on the internet but that we have, i.e. you might go to an organization’s website and only find contact information of a very basic kind, which could even be outdated. Meanwhile we will know who the current general director of the company is, what the organization type is (LTD, etc), which hours they work and so on. Q. What happens when you are not able to answer a question asked right away? A. We take some time to search for the answer and then call our customer back. There have been cases of customers asking something really obscure, even for example how many screws there are in the Brooklyn Bridge. It took ten minutes to find the answer to that and

then we called the customer back; there was also someone interested in how many litres could fit in the “Kartlis Deda” (Mother Georgia) monument’s cup - and we also found out the answer to that and called the customer back. Such cases are actually surprisingly common and the time it takes to give an answer depends on the individual case, meaning it depends on the complexity of the question asked. Q. What is the overall number of organizations you have in your database? A. The overall number of organizations which are in Georgia comes to 60,000 and includes all kinds of organizations, businesses, NGOs and others. In addition we have a schedule of Tbilisi airport, we know whether a flight is delayed, all Tbilisi transport routes etc. Q. Who are your main customers - organizations or individuals? And what is the difference between how much you charge them for your service? A. The majority of our customers are organizations of course but we also have an individual client base. As for the prices they also differ for these two segments. Whereas for physical individuals we charge 0.78 GEL, organizations are charged 0.88 GEL. Also I would note that this is a onetime fee so for example even if you talk for two or three minutes the same amount will be charged regardless. Q. How active are you in the regions of Georgia? A. It was only recently that we signed an agreement with “Silknet” to launch our service in cooperation with them. So then we will be able to document how many calls are made from the country’s rural regions. Until now we have also of course had calls from those in the countryside but we could not document the statistics as the calls were made from mobile operators. The company employs over 100 people and the majority of them are operators whilst the rest are the heads of various departments. In total, on average, 08 gets up to 10,000 calls per day. Q. What new projects are you working on at present? A. We have several new projects going on at the moment. Right now we are negotiating with Tbilisi airport to change their number to 08. So if this goes ahead customers will only have to dial 08 to get all kinds of information related to flights, like how long the flight will last, what the local time will be on the flight’s arrival as well as weather at the destination. Thus as you can see, the information we aim to provide will be that much broader.

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golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Kopala. Contact FINANCIAL Ad Dep at marketing@finchannel.com

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FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Kopala Expanding its Chain Being awarded by Golden Brand is a special responsibility and new challenge for Kopala in the environment of the 21st century. Adequate strategy planning plus a good concept are essential for creating a competitive environment and achieving economic success. I think that we are doing all of this correctly and therefore we gained quite big success GIORGI DEMETRASHVILI, Kopala

The FINANCIAL By NANA MGHEBRISHVILI

opala is planning to expand its chain in the near future. A new Kopala construction on Rike will be finished in several months time. The company also has construction going on in Tskneti to be completed in several months. “We will be offering society the highest quality service in line with affordable prices in these places,” Miranda Kvavadze, Director of Kopala Hotel, told The FINANCIAL. Kopala is located at the heart of ancient Tbilisi. The hotel is surrounded by numerous fortresses and other historical sites. The city’s main central Orthodox churches, Synagogue and Mosque are also located near the hotel. Traditional Georgian sulphur baths are within walking distance. Each room of the hotel has an enchanting view over the historical

part of the capital. Q. Kopala was awarded by Golden Brand. What are the priorities of Kopala compared to other hotels? A. I feel uncomfortable talking in length about our success. It would probably be better if the jury who awarded us a Golden Brand were to talk about the hotel. This is a very prestigious award for us. We do of course have some deserving features though. Our successful operating as an establishment and this award are the results of all our hard work over several years. Q. What does Golden Brand mean for the company? A. Being awarded by Golden Brand is a special responsibility and new challenge for Kopala in the environment of the 21st century. Adequate strategy planning plus a good concept are essential for creating a competitive environment and achieving economic success. I think that we are doing all of this correctly and

therefore we gained quite big success. Q. How would you estimate the current hotel market in Georgia? A. The Georgian hotel market is quite diversified. There are lots of good hotels in Tbilisi which offer high quality service. At the same time the number of foreign visitors is gradually increasing in Georgia. This includes all types of travellers including leisure and business tourists. Therefore I think that more intensive activities have to be implemented. The demand can’t exceed the supply. The number of hotels has to grow and meet the demand. Q. How competitive is the current hotel market in Georgia? A. Of course there is tough competition in the market. Refuting its existence would simply be being ignorant. But we maintain our popularity thanks to our business strategy. We have our concrete accents, priorities and according to them we plan our activities. All of these are

important prerequisites for gaining success. Q. What problems is the hotel business encountering in Georgia? A. I don’t think that there is any specific problem in the hotel market in Georgia. I can say that in general for all types of business it is always necessary to attract more and more investments. Stability is another main factor for the successful operation of entrepreneurs. Q. What was the average occupancy rate at Kopala Hotel in 2011? Are you satisfied with such an indicator? A. Kopala Hotel had a preferable and satisfying result in terms of occupancy rate in 2011. But the whole resources of the hotel have not yet been used. We plan to work at full capacity in 2012. Q. Does your occupancy rate grow from year to year? A. Compared to previous years Kopala Hotel plans to host more visitors. We are going to use the whole re-

sources of the hotel in 2012. All these are the result of positive changes that Kopala has been implementing. Visitor dynamics are really growing. Q. What is the average price of a room at Kopala? A. The price of rooms varies from 65 EUR to 200 EUR starting from standard rooms and finishing with apartments. We have 32 standard rooms, two family suites and 15 double rooms. Our service includes work desk with lamp, mini-bar, satellite TV with all new channels, internet access in all guest rooms, direct dialling and international calls, air-conditioning, in-room safe, hairdryer, slippers and bathrobe, fitness and sauna, business centre, room service, 24-hour reception and security, medical service, baby-sitting, wake up service, audio visual equipment and technician, airport transportation, airport pick-up, copy/ printing/fax and gift shop. Q. What is the share of bookings by tourism agencies out of all sales? A. Booking via tourism agency is quite common for Kopala Hotel. Such reservations make up about 60-70 percent of total bookings. Q. Which is the target segment for Kopala? A. Kopala is mainly aimed at tourists and the business segment. But at the same time the hotel does host all types of visitors. Q. You said that Kopala is mainly aimed at tourists. What are the shares of your local and foreign visitors? A. The vast majority of visitors at Kopala are foreigners. The shares of Georgians and foreigners are 5 and 95 percent respectively. Q. Which market is more important for the hotel - local or foreign ones? A. Both local and foreign markets are very important for Kopala. But currently the number of our foreigner guests is much more. Therefore we are more oriented at foreign visitors. Q. What is the main challenge for Kopala Hotel in 2012? A. Kopala does not have any specific challenge at present. But I would say that the affairs of 2008 negatively influenced on the operations and development of the company. Because of this dramatic situation, Kopala went in to slight debt. Covering this debt became slightly difficult. However the situation has now normalised we are not dealing with such problems anymore. Q. Kopala has a wellaccommodated conference hall. How much is it used? A. The conference hall is quite a popular product. I would evaluate demand for it as average verging on intensive. The conference hall can accommodate 40 people. Q. Do you have any special offers for newlyweds? A. We prepare various special gifts for honeymooning couples visiting Kopala. We present them with exotic fruit assortments, different expensive alcoholic beverages and other such gifts.

CMYK

golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Geocell. Contact FINANCIAL Ad Dep at marketing@finchannel.com

CMYK

FINANCIAL & Global Idea Special Edition FINCHANNEL.COM | 17 MAY, 2012

golden brand 2011

Advertiser: Global Idea. Contact FINANCIAL Ad Dep at marketing@finchannel.com

CMYK

golden brand 2011

FINANCIAL & Global Idea Special Edition 17 MAY, 2012 | FINCHANNEL.COM

Advertiser: Geocell. Contact FINANCIAL Ad Dep at marketing@finchannel.com