WEALTH magazine_February 2010

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FEBRUARY 2010

INVESTING American Business in Georgia

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FINANCIAL MAGAZINE | FEBRUARY 2010

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FINANCIAL MAGAZINE | FEBRUARY 2010

Contents: FEBRUARY 2010 | Vol.1.No.1 EXECUTIVES: LADO GURGENIDZE

NEW POSITION IN AFRICA

p.26

MARKET REPORT: BANKS in 2010

ARCHIL KONCELIDZE, CEO, VTB BANK GEORGIA

p.17 INTERVIEW: COME START BUSINESS IN GEORGIA

p.5

INVESTING: REASONS TO INVEST IN GEORGIA

p.12

NEW FACE: ANDREI PIATAKHIN GENERAL DIRECTOR, BEELINE GEORGIA

DAVID LEE, AMCHAM GEORGIA

p.29

TED JONAS, TBILISI MANAGING PARTNER DLA PIPER

OUTLOOK: CHANGING STRATEGY VAKHTANG BUTSKHRIKIDZE, TBC BANK CEO

p.24

IT MARKET: 20 YEAR ON MARKET

GEORGE BAKANIDZE, DIRECTOR, ESABI

HUMAN RESOURCES: Top Hiring and Human Resources Trends for 2010

p.9

INVESTING: Give Us Stability and Take Billions

p.36

FADY ASLY, ICC GEORGIA

MYCAREER

p.22 CCOVER CO V PHOTO: IVANA TRUMP IVA

US BUSINESS IN GEORGIA SUPPORTED BY

TR TRUMPS FAMILY FA AND AN GEORGIAN GE BUSINESS BU

|

FINANCIAL MAGAZINE

CEO, GEOSTEEL

p.18

REGULARS: p.30 GEORGIAN PALACE HOTEL INTRODUCED

BY GPH CEO

p.46 HEALTH FOR WEALTH KEEP FIT AT PRIME FITNESS

p.38 TOP TRAVEL DESTINATIONS COUNTRIES OF WANDER

p.40 RADISSON BLU IVERIA SPA: BUSINESS AND PLEASURE

p.44 CELEBRITY RECESSION WHO LOST IT ALL IN 2009

p.52 LUXURY

WORLD’S MOST EXPENSIVE CARS

p.62 STYLE & BUSINESS

p.20

Wealth

WEALTH AND BUSINESS: HARDEEP SINGH

| FEBRUARY 2010

Publisher: Intelligence Group llc. Director and Editor-in-Chief: Zviad Pochkhua. Copy-Editor: Iona Maclaren. Technical Director: Temur Tatishvili.

Marketing Director: Lali Javakhia. Communication Manager: Eka Beridze. Layout: Intelligence Design Studio. Writers: Madona Gasanova, Tamar Khelaia. Distribution: Intelligence Group llc. Projected in partnership with American Chamber of Commerce. Consulting: Global Idea. Sponsored by: DLA Pipers, Radisson BLU Iveria Hotel, Georgian Palace Hotel, Prime Fitness, Roniko, PSP. Distributed free of charge among corporate and private subscribers. All materials are copyrighted. Copying, reproduction or distribution of text and image materials are prohibited.

Address: 17 Mtskheta str. Tel: (+995 32) 252 275. Advertise in WEALTH magazine: marketing@finchannel.com Get a copy: Tel: (+995 32) 252 275 Ext: 3. Letters to Editor: editor@finchannel.com | Website: http://wealth.finchannel.com

FASHION TRENDS 2010

p.75 NIGHTLIFE

GLAMOUR NIGHT/CLUBS

“I think that Georgia has a problem with convincing investors.

I hope and I believe that it is understood now…”

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FINANCIAL MAGAZINE | FEBRUARY 2010

Georgia will return to its pre-war position in 2010, David Lee, President of American Chamber in Georgia says in exclusive interview with The FINANCIAL’s Wealth Magazine. Mr. Lee believes that foreigners are not facing any kind of risks by coming here. “There is really nothing now that can stop Georgia from doubling its GDP in a very short time”, Mr. Lee believes.

“This year foreign investment has clearly proved to be a problem. Less people are coming to Georgia because of the war, because of the financial downturn and political demonstrations on the streets. All of those factors together have turned out to be bad for business.

AmCham’s point of view is that the worse of the recession is definitely over in most countries, we are seeing that in Georgia many of our members, banks, telephone companies are reporting that their revenues have started to rise again.

Between May and July deposits rose in banks. It looks as though the recovery has started in Georgia as well. This is a recovery in people spending money. It is not necessarily a recovery in jobs and it is not a recovery in new investments.

What we now need to focus on, for American businesses, is getting more American investors to come here and invest.

This is a number one priority of Amcham. We also want any companies from any country to come join us in Georgia. Specifically we are interested in the USA as it has the world’s largest economy.

Investing

Come Start Business in Georgia

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FINANCIAL MAGAZINE | FEBRUARY 2010

INTERVIEW WITH DAVID LEE, PRESIDENT OF AMCHAM IN GEORGIA Q. Please name the investments made by US companies in 2009 or since the August war?

A. I do not have that information.

It has not been a good year for new companies. What has been positive is that new and existing companies have stayed. The only good thing about the last year has been that we have not seen any companies leaving Georgia. So the majority of companies are still here.

We also see that some of the powerful companies are continuing to invest. Magticom is the biggest American investment in Georgia.

We have already invested over USD 400 million in Georgia. This year we will invest over USD 100 million again. I think that if you look at the chains like GMT, Radisson, BP, all these companies are continuing their operations.

We are not in terrible shape, it is ok but as for running good news about new investments, no. That is why I think that it is very good for the Government to be doing this conference. Amcham continues to talk to as many people as we can to get new investments. The US Embassy together with Amcham was with the head of Georgia’s autonomous region Adjara a month ago and with the mayor of Batumi. We are going to try to put together another investment conference in the first half of 2010. I think that it is a good time to get new investments to come back to Georgia.

Q. How has the economical

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downturn affected the businesses of Amcham members?

A. The main problem for Amcham members’ businesses has been the economical downturn. The reduction of revenues was a big problem. People in Georgia spent less. People simply stopped buying. Even telecommunication companies faced a reduction of revenues, people just made less phone calls. The problem is that when companies reduced revenues, they reduced costs.

Many businesses had to cut their workforces; many businesses stopped investing, many businesses stopped even buying products to sell. The fall of demand was a similarly large problem for all of the business sectors.

Q. Can Georgia assure foreigners that the current political calm is not just temporary?

A.IthinkthatGeorgia has a problem with convincing investors.

I hope and I believe that it is understood now. When I talked to politicians, both from the Government and from the opposition parties they indicated that they do not want to create a situation in which investments and businesses are affected. During each meeting of AmCham’s with politicians, we received the same message that it is very important for them to keep business in Georgia working and get new investments coming in. I think that is a very positive sign when both sides of the political arguments seem to be agreed that it is in nobody’s interest to create a business environment where

Investing

you cannot do business, or where new investors are concerned about that situation. Therefore I am positive about that.

AmCham can do its job much easier than it could in the first part of 2009. They say that they are interested in a good business environment and they believe that Georgia needs to develop economically. That is very good for us when we talk to our potential investors. We do not have any serious political party in Georgia saying that they want to restrict business.

Q. Georgia is often targeted for its pro-American orientation.

Against this background, do you not think that the US should be more active in regard to investments? We can all see that the US did much supporting and lobbying of Georgia, but does the country not need more than this?

A. If you look at the US’s relationship with Georgia, I think it is extremely difficult to criticize what the American Government has done for Georgia in the last five years. It is clear that the promised USD billion to Georgia in August last year has been delivered. Georgia hosted the Vice President of the new administration of the US just over two months ago.

We see that the US is making all its commitments to Georgia on a political level. If we focus on a business level, the American Government cannot tell its businesses to invest here. The businesses have to want to come here. In this case, we cannot expect the US Government to do very much. What can encourage the entrance of businessmen are the conferences and the work of

Investing in Georgia Amcham. The best message that we can deliver is to suggest investing in Georgia.

In the end, the individual investors need to come here themselves. On that basis, are there enough American businesses in Georgia?

Who’s fault is that? - Our fault.

The business community here needs to be more active in encouraging investors to come. The bodies of the Government can help us but we have to do those things ourselves.

Q. We still read on the official website of the US Embassy to Georgia that “the Department of State continues to warn US citizens of the risks of travel to Georgia. Is Georgia safe for US citizens?

A. I do not know why that is said on that website. I do not believe that the risk in Georgia is high. It was high when we had Russian tanks in our cities; when we had Russian tanks coming towards Tbilisi.

Now I think that Georgia is not a dangerous place for people or tourists or businessmen to visit. I think that this is something that the American Embassy needs to decide itself but I would recommend any tourists who plan to visit Georgia to come here.

Those dangers are now over.

Q. Can the US guarantee the safety of Georgia?

A. I do not know, I am a businessmen not a politician. I just do not know what the security situation is between the US, Georgia

and Russia. What I am much more focused on is Amcham. I believe that now is the time to get the business sector working and return to the level that we were at before the war and to continue this work for the next five years.

There is really nothing now that can stop Georgia from doubling its GDP in a very short time. I think it is the right time for Georgian businessmen and politicians to start rebuilding Georgia. It is time to stop focusing too much on any level, security, economical etc.

Q. When will Georgia return

Investing

to its pre-war economical situation?

A. I think that Georgia will return to its pre war position in 2010. To do that we need to start attracting investors again. We have to get this cycle flowing. We need to get as large investments as possible. We need to get a cycle of new investment coming in all the time. It is not all gloomy though.

If you go down to the west of the country now, you will see the massive road works taking place there. When you get to Batumi, you see huge development taking place as well, the construction of new hotels, a new container port, and container terminal at Poti.

These are all good indicators, but as the President of Amcham what I really want to see is that new businesses are coming in as well. It is about building what we have, getting back to last year’s level as quickly as we can. I am positive about 2010’s forecast.

I think that the last six months have been good for Georgia.

We are seeing changes in many things, in both the economical and political situation, it all looks much better than it did six months ago and it is ten times better than it was a year ago.

Q. What are the main risks investors face in Georgia?

CONTINUED ON PAGE 8

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“Losing Russia was not ideal, but gaining Europe will compensate our loss” A. There are three things that investors look at before making a commitment. The first and most important thing, without which there is no point in investing, is the market. You have got to be able to see that you can create a successful business. Georgia has single exceptions of potential in banks. It really was nexpected. telecom, tourism and agriculture We understood a long ago that directions. We are importing food would not manage to get any new products from Turkey when we investments in Georgia for some could be producing them here. time. The best we can hope for is There is a huge opportunity for to keep the companies that are making money in this sphere. presented here and continuing The second and most important thing to invest. And we have seen that is corruption. Georgia did a great job Magti is the best example of this. in this area and has made it easy to In 2009, Magticom invested in start a business. Businessmen are Georgia more than we did in 2007 always looking for political stability or 2008. We are continuing to invest and now we have a much positive and other companies are doing the same thing, picture than HSBC, the what it was “There is really nothing Hilton in Batumi. like just six now that can stop Georgia This lack of months ago. investments Risks for from doubling its GDP in from the USA investors who a very short time” was expected. are coming to Georgia is a Georgia for the purpose of starting a business small country. Most people in Europe have probably been identified and America, unfortunately, do and Georgia actually has a good not even know where Georgia is environment for doing business. and would not be able to point It is impressive when you look at to it on the map. We just have to how foreign and local businesses be realistic about this. Georgia is have developed over the past five roughly the size of Scotland or years. Georgia is a relatively ideal Ireland but does not yet have the visibility in the business community place for doing business.

The main reason for the lack of those countries.

We should think about Georgia of US businesses in Georgia is that US businesses, since the first and need to talk the average financial crash, were focused on person sitting in NY, saying “come loan survival. We have seen major start business in Georgia”. Every Georgian, particularly American companies fail, including single

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Investing

those who are in foreign colleges, universities, who have business, who have contact with foreigners, should try to sell Georgia.

Q. What should Georgia do to attract US businesses, to become as much attractive as Singapore or the United Arab Emirates?

A. I think that Georgia is fundamentally attractive to foreigners. It is on the eleventh level according to the World Bank’s rates for doing business.

Culturally, it is European. Any European or American would be very comfortable here. It is a European oriented society.

It is not strange being here, it is very a welcoming place. So I do not think Georgia has to do anything, I think it has done much already. They just have to go on being European-oriented and that takes care of itself. Everything is now in place. The law, the infrastructure - and all that is almost developed now. The tax regime is good, corruption is low, there is a huge market here, it is all in place. What we need to do now is sell it and hope that nothing unfortunate happens again, like the financial crisis, war or more street demonstrations. All we can do now is wait and see.

Changing Strategy “TBC Banks plans to focus on increasing the loan book”

Vakhtang Butskhrikidze, TBC Bank CEO

OUTLOOK “I think that 2010 will be a hard year, but compared to 2009 we will have less problems, overall in the Georgian economy and in the banking sector as well. Significant effort is required to encourage customers to start spending more”, Vakhtang Butskhrikidze, Director General of TBC Bank.

In an exclusive interview with The FINANCIAL, Vakhtang Butskhrikidze, says that he does not plan to resign any time in the near future.

strategy. Before the August war we were performing better than majority of other focused on enhancing our market share. countries. We are optimistic about the And then over a period of one week we Azeri market and plan to grow our loan had to change this strategy completely. book significantly. If in Georgia market We started focusing on portfolio will grow 7-10%, in Azerbaijan the market reduction, quality of loans and other growth will reach 40-50%. We did plan aspects of crisis management. It is good to enter the Ukrainian and Belarusian that the situation markets as stabilized so soon well, but now but initiating crisis I believe that we have I think that it management was a emerged from the effects was a good real challenge for us. thing that we The management of the August war and did not enter Team of TBC Bank economic downturn. the abovedid a great job in this mentioned “A while before the crises I had said that respect. Our risk perception changed markets, as the global recession I’d aim to resign from Banking by the dramatically”. affected the activity of those markets. age of 40. Despite the fact that we have “I don’t think that customers will The Azeri market is linked with oil gone through some very difficult times I altogether stop using banking products. and accordingly they did not face believe it’s a challenging experience and The fact is that during the economic serious problems. I was in Azerbaijan currently have no plans to leave either boom our estimation of risks was a week ago and saw how fast Baku is the profession or my current job”. less accurate. We had positive developing. The demand for loans is expectations which were not fulfilled. also high there. Accordingly focusing on 2009 for TBC Bank?

The crisis changed the habits of the Azeri market and investing there is customers.

Whereas previously optimal not only in the short term.

“2009 was a difficult year in general for people were focused on spending Q. What can you advise companies the Georgian banking sector. This was money, currently they have become that have difficulties ahead. What due to the August war followed by the more cautious and are only saving practical advice can you give them in global recession. Up until May 2009 money. To encourage the increase of order to emerge from the recession there was mass deposits withdrawal and our economy banks need to stimulate and continue developing?

Banking assets were shrinking.

A. The main task for them is to estimate Our expectation is that banks The crisis changed the the situation realistically and only after will start increasing their loan that plan future steps. Over the last year portfolios from the first quarter habits of customers.

I met with almost all of our creditors of 2010. There is a difference and saw that the companies that faced between the first and second difficulties are already emerging from parts of 2009. In the first part of 2009 customers to restore sales increase, them. Those who had illusions that we were focused on business reduction, offering them credits with reduced the number of their sales would be in the second part we started working interest rates. as previously and that they would not on credit portfolio increase. We restored It is expected that from 2010 the GDP need to implement changes within the competition between local banks. of our economy company are There are some reasons behind will rise by 2%, but We expect to increase the just deceiving these dramatic changes. First of all to stimulate this number of our staff by 7themselves. we managed to return all deposits. tendency banks C o r r e c t Customers are not investing in real need to be more 10% in 2010. estimation of estate as actively as before and now active. the situation prefer to keep their money in banks. And “Foreign markets are still remains and implementing appropriate steps last but not the least - political stability. our priority. We will be concentrated accordingly, for cost reduction and Changing Strategy on TBC Credit’s growth in Azerbaijan. effectiveness, is a key point for “We almost completely changed our Azerbaijani economy has been emerging from the situation.

Banks

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ADVERTISING IN PRINT IS TWICE AS EFECTIVE AS TV, SAYS MICROSOFT rint advertising is more than twice as effective as television advertising for large retailers, according to new data seen by The Times. Every £1 spent on print advertisements yields £5 in revenue, compared with £2.15 for television and £3.44 for online advertising, a study of 26 leading UK retailers found.

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The anonymous participants of the study, which was carried out by Microsoft Advertising, included large clothing stores, big grocery retailers, fashion retailers and department stores.

Of the firms surveyed, 24 were in the top 100 UK companies in terms of media spend. The study recommended retailers increased online and print advertising budgets by 10 per cent and decreased television budgets by that amount.

“Print is very good for targeting specific audiences and getting eyeballs on key products,” said Joel Dawson, head of online marketing at Boots.

Of television advertising, Mr Dawson said: “It works very well for us in terms of reach and frequency.”

Deloitte, the professional services firm, forecast that online advertising’s global share would grow from its current 10 per cent to 15 per cent by 2012.

The FINANCIAL LEADING BUSINESS EDITION IN GEORGIA PHONE: (+995 32) 252 275 EXT: 1 EMAIL: marketing@finchannel.com

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FINANCIAL MAGAZINE | FEBRUARY 2010

President Barack Obama reads the newspaper in the Outer Oval Office. March 05, 2009 White House. Pete Souza / Maison Blanche

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FINANCIAL MAGAZINE | FEBRUARY 2010

“

Americans have another reason to invest in Georgia

........................

In his interview with The FINANCIAL, Mr. Ted Jonas, Tbilisi Managing Partner of DLA Piper summed up the work of the DLA Piper Tbilisi office and talked about the main challenges for Georgia in 2010.

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INTERVIEW

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e kept our prior commitments and donated the same amount of money in 2009 as we did in the past.

We also managed to reduce our facility costs, our lease costs.

We have not lain off anybody.

So that has been very good.

Some people left to go study in the USA. A couple of others left to go work in business.

But we did not have to discharge any of our people. In prior years we were constantly trying to recruit more people, and if anyone left, it was a big problem and the vacancy had to be filled immediately.

That’s not the case now.

We have gone from a high of 19 fulltime lawyers in mid 2008 to 15 now. We have seen some decline in our business and we will see how things go by the end of the year, but I expect we will probably have a 15% reduction in our top line revenue level compared to 2008.

This is not good but compared to how other businesses have suffered in this recession, and how other law firms have done generally in Georgia and elsewhere, I think it’s not bad.

In previous years, we had tremendous growth – we doubled in size from 2006 to 2007.

If we have a 15% decrease in revenue in 2009 we have man-

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aged to reduce our costs in a way that it has kept pace with that, so basically we are doing okay, considering it’s a recession.

Q. You said Georgia remains as attractive for investments today as it was before the war, perhaps even more so. What are the main risks investors face in Georgia right now?

A. Well, what I mean is that I do not think that the reality is any riskier than it was before, even if the perception is different.

In some ways, the reality is less risky than before. There was always instability in terms of risk of war over Abkhazia and South Ossetia.

I think that that risk is actually less now. Because unfortunately we have now been through it and experienced the worst. So I think that currently there is a lot attention being put on the situation, not only by Georgia and Russia but even more by the USA and EU, focused on preventing any further hostility.

As for political instability, there is also a risk that demonstrated itself in November 2007 and demonstrated itself again in spring of 2009.

The Government has learned some lessons from how they handled the situation in 2007 and did a better job this time of staying calm and accepting the protests peacefully. The opposition’s

INTERVIEW WITH MANAGING PARTNER OF DLA Piper

tactics were very counter-productive and most of the public saw that.

So I think that the Government is stronger today than it was before the Russian invasion.

Q. Do you think that the economic downturn, which was regarded as one of the main reasons for a lack of investment in Georgia from Europe and the US, is still hampering investments?

A. The major thing that is still preventing investment in Georgia is the international economic situation. After the world economy begins to pick up again, and I think that is going to happen soon, nobody knows for sure, certainly not me, but I think the general opinion is that things are getting better and probably within the next few months, we will really see an improvement in the international economy.

Foreign investment capital is going to begin moving around again to the places it is interested to go. Georgia will probably begin to benefit along with other targets of foreign investment.

But Georgia is going to have perception problems to overcome.There have been political crises and a Russian invasion.

The international economic crisis has left investors with less money than they had before, so even without the political problems and the war foreign investors will be more cautious simply because they recently went through an economic crisis. For all these rea-

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sons, investors will be a lot more careful about Georgia in 2010 than they were in 2007.

So the big challenge for the Georgian Government is to create a positive image and a positive reality for foreign investment when it is ready

to come back here. They are trying to do that with ads being aired on BBC and CNN. But they need to match the image with substance.

Q. Every year we are questioning global companies operating in Georgia about the advantages of working in this tiny country. Why should Americans invest in Georgia?

A. Americans should invest in Georgia for the same reasons anybody should invest in Georgia.

Georgia is a natural transit corridor; it is a natural physical reason to invest in any kind of warehousing, terminaling, product assembly -- anything that takes advantage of and uses

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the country’s position as a transit bottleneck and corridor between Europe and Central Asia.

Georgia is a beautiful country where tourism remains a pomising sector for future development.

Every year Georgia, despite the fact that its tourist infrastructure is underdeveloped, and there are perception problems about safety and stability, sees more tourists coming here.

Real estate assets were underpriced in Georgia even in 2007 and now the prices have deflated. In the banking sector all the things that were attractive before will still be attractive. I do not think that there is anything uniquely attractive for Americans, or for Europeans or anybody else by nationality.

But one thing that can be more attractive for Americans is the political relationship between the USA and Georgia. The political relationship is so strong and the USA is so important as a political ally for Georgia that American investors can feel an added layer of confidence that their investments will be safe in Georgia.

So perhaps there is a political reason why American investors should feel even more secure than others investing here, but economically the reasons are the same for everybody.

Q. What kinds of services have become more in demand since the August war?

A. We had two major restructuring transactions in late 2008 and in 2009. They in-

volved exactly what you mention -- restructuring debt, rescheduling debt, debt for equity swaps, restructuring of shareholdings. It’s a common joke that lawyers make money coming and going. It is true that there is business for lawyers that is actually generated by the bad economy. Not only restructurings but litigation can increase in a bad economy.

And both the restructuring work and the increase in business litigation have benefitted our business in 2009. But it doesn’t come close to replacing the business that we have in a booming economy. Like I said, we are going to have a drop in our overall revenue in 2009. A managageable one, but a drop nonetheless, And that is not nearly as good as the double and triple digit growth we had in previous years. I’d rather be making money off of real estate deals, M&A, banking, corporate finance work, capital markets – the kind of work we doing well into 2008 -- than restructurings. eorgian banks are very conservative about lending right now but I cannot blame them. They are trying to keep strong balance sheets.

It is obvious that they have had many borrowers’ defaults – consumers and businesses who cannot repay their loans.

The banks need to be conservative, to conserve cash resources, to deal with the risk of more defaults. That is why we need credit to be infused into this economy. The private international banks are doing the same things as Georgian banks are doing.

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JP Morgan and Citibank are not lending into Georgia today like they were 2 years ago.

When private international banks, private equity funds, real estate funds, have started to feel better and more secure and can start looking for investments again, that is going to start bringing money into the Georgian economy.

The Georgian economy needs liquidity like this coming in from outside. Hopefully in the next year we will start to see more capital coming in.

Q. You said warehousing, transportation and logistics services are attractive for investments, and that Americans are good at this business. However, we see that there is still very weak interest towards these sectors.

A. The reason is that the international economy is still weak. Those businesses -- ports, shipping, cargo handling -- all of them lost a lot because there has been a drastic reduciton in the international shipment of goods due to the recession. Mainly due to the decline of consumer demand in the US and Europe, but elsewhere too. The shipping business will pick up when the general economy picks up.

I think right now the only people who are going to invest in transportation infrastructure are people with deep pockets or good credit, which is the same thing, who are looking at the long term opportunity and not depending on short term cash

LAW

flow. Most businesses need to know that their projects will have immediate cash prospects and so will not invest right now because things are too slow. But fundamentally you cannot change facts of nature and geography, and that’s why it makes sense to invest in transportation infrastructure in this country, because its advantages are simply a product of its location and topography.

Once the international economy gets better things in Georgia will get better too.

Q. What is the strategy of the DLA Piper Tbilisi office for 2010?

A. Our strategy for 2010 is “continued conservatism.” We are not hiring new people for the moment because we are satisfied that we have a good level of staffing for the current situation. We are not looking to take on additional fixed costs in terms of office facili-

ties or number of lawyers. We are in the right place for the current level of business, although certainly that could change and we have a good pool of candidates to draw on for new hires if we need them.

And I want to mention we have not cut back on training our people. We’ve had trainers here in Tbilisi from DLA Piper in the UK working with our lawyers on legal writing, negotiating skills and other subjects.

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FINANCIAL MAGAZINE | FEBRUARY 2010

“In 2010 Georgian banks have to be more active in giving credit to clients as they are facing unprecedented liquidity. Many credit products, like mortgage loans and auto credit that were well structured and stable in the past, will return in 2010 and their terms and interest rates will be very attractive. There will be good products, with good terms and for good payers”

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“

Georgian Banks Will Face Unprecedented Liquidity in 2010 ..........................

Archil Koncelidze, General Director of VTB Bank Georgia

n 2010 we will be more active towards our corporate clients.

Corporate customers will have some advantages compared to other clients. We will offer them the whole spectrum of credit packages”.

“At the same time we plan to increase the share for financing small and middle sized businesses.

We will increase our portfolio in this segment. It is more difficult now for banks to give out loans than it was previously. Bankers have become more cautious and also customers who previously were optimistic about their businesses are now trying to avoid any additional monetary responsibilities”.

“In Russia VTB Group is one of the leading banks, with over USD 100 billion of assets. They hold second position there and have aggressive plans to become first in the country.

As for us, we do not have such an aggressive policy we just want to consolidate our niche”.

“Currently VTB Bank Georgia is occupying 5% of the local market. In the short term we do not expect our share to grow by more than 2%. Hopefully the total share of VTB Georgia will be 10% in five years time.

We will not occupy more of the market share in Georgia than that as we do not want to focus on retail banking.

Out of the 20 largest companies

in Georgia the majority are our customers”.

“If we rate the banks in Georgia least affected by the recession VTB Bank Georgia would be among the top three with a doubt. As for VTB Group, they were in the list of banks that were more affected by the recession. The effect of the crisis was hardest in Russia and in Ukraine, where VTB Group is very active.

However they have now managed to return to their pre recession situation”.

“The Georgian economy was severely dependent on direct foreign investments. Direct investments dramatically decreased. No one expects the economical boom that Georgia experienced in 2006 to return in 2010. The financial support issued by international donor organizations will compensate the losses, but not totally.

“I think that the real estate sector will actually increase this year, as prices of real estate have stabilized and circumstances for exporters have improved.

“We will see obstacles in the development of the economy, as our economy was mainly dependent on foreign investments. It is hard to actually count though what share of the Georgian economy depends on direct investments. The less that is dependent on foreign investments, the better it will be for the economy’s recovery”.

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MEET CEO

Mr. Hardeep Singh CEO of GeoSteel, company representing one of the largest direct foreign investments in Georgia.

I

studied in India. I did my post graduation MBA in economics. After that I got a job working in Iraq for four years where I was working in the commercial department of a construction company, which was a joint venture between India and Yugoslavia. After that I moved from Iraq to London, where I started work in the steel business; steel trading, and since then I have been involved in this business.

I am married and have three children. My eldest son is doing Law and is in his second year in Abertay University. Then my daughter is studying for a business degree at Kingston University in London. My third child, a boy, is in his eleventh year in a middle school in London. My wife looks after the children and also looks after the business. I was born in the north of India. I lived there for most of my life.

My family name - Singh means lion. It is associated with strength, humility and also caring for others.

The name Singh is a sign of my diligent background. Indian society is divided in to two classes. The whole country is divided into classes. People come from either the top of the hierarchy, or the bottom of the hierarchy. Singh also stands for equality as the representatives of both of these classes are equal and the current diversification of the classes should be removed from modern Indian society. Singh means that I am a keen learner. oney is always important for building one’s life. Still money is not everything. The most important thing is sharing and caring. The best thing you can do in life is share with others, provide for them, give them the opportunity to do something constructive, to

M

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FINANCIAL MAGAZINE | FEBRUARY 2010

constantly as I have been coming achieve something. Education is and going. I am a British citizen always very important because it and visited Georgia for the setting creates a basis for the later-lives up of this plant and ensuring that of children. But before education, the plant commissions the most are going through with important thing production. is how parents “Money is always important for I have been look after spending their children. building one’s life. more time Children fulfil Still money is not in Georgia a cycle in that everything” recently. But they repeat I have had whatever they absolutely have been no difficulties with living taught, whatever they have seen and experienced when growing up. in this country as our staff members are very They will never learn something hospitable and if you ask if they are seeing the complete me I think that Georgia opposite occurring at home. is one of the most Education is concerned with the beautiful countries in the biggest values which can be given to children; these are honesty and world. diligence. It is at university that There are always things they learn discipline and by that which some people like discipline they will build their lives. and others do not like.

The things which you like are ealth is important when you share it with based on no particular reason others. This is the real other than personal preference.

Georgia has lots of potential nd joy of wealth. When lots of companies are now focusing you give something to someone on it. This region needs to develop else. That is the real purpose of further though. It needs to continue the wealth that one acquires. growth. This country has huge Georgian and Indian traditions potential for tourism, because it have lots in common. The biggest is very close to Europe and the thing I have noticed is family Middle East and the environment values, the family system, of here is very attractive. You have living together, looking after each beautiful other, these things mountains, are commonplace in “I believe, one day natural rivers Indian society and I have seen the same in Georgia could become and forests Georgia. Here people the Switzerland of the and the hospitality are closely connected Caucasus” business with their families, will be very even extended successful in this country. relatives. Another similarity is that I think that hydro plants also Georgians are very hospitable, just like Indians. So when you look have a big future here. There is a lot of potential. It is a long term at Georgian culture you can find investment and takes a much obvious similarities between the longer period to get benefit from two countries. but it has very large perspective.

I have not been living in Georgia

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INVESTOR

GeoSteel was founded in Georgia three years ago.

The people behind this company are from one of the biggest companies in India, Jindal South West (JSW).

19 NEXT

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FINANCIAL MAGAZINE | FEBRUARY 2010

Ivana and Ivanka

T

rump flew to Georgia with Ukrainian Intentional Airlines and left with Turkish Airlines.

She lost her luggage on December 1 but had it returned to her the next day. She travelled to Tbilisi alone, without any security guards.

Nineteen year ago, on December 11, 1990 Ivana Trump was divorced from the real estate mogul Donald Trump.

Trump stayed two nights at the Radisson BLU Iveria Hotel built by Silk Road Group, the company who invited her.

She visited Batumi, the Black Sea city of Georgia and met President Saakashvili during her stay.

She was offered participation in various projects

by Silk Road Group: Batumi Riviera, Medea (Hotel Radisson in Batumi), Meskheti and Bobokvati.

“During an interview with me I concluded that Trump is overly cautious in business. When I asked her about the aim of her visit she gave me a very discrete comment.

It was difficult to make any concrete conclusions. She was very careful with her comments. She knows what she wants and how to achieve it. Trump is a woman who always lives and works by her own rules, even with her business partners.

She seemed very stubborn,” Nata

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FINANCIAL MAGAZINE | FEBRUARY 2010

Amaglobeli, Rustavi2 reporter says.

“When I asked her to sit down during the interview she insisted on giving the interview on foot. When we wanted to fasten a mike on to her blouse, she still objected, and so I had to hold it in my hand for the duration of the interview,” she says.

“I had to work uncomfortably,” Amaglobeli says. “She dictated her rules very politely but firmly,” she says.

It was difficult to find out whether Trump was interested in Georgia and how the relations would continue. When I asked her what the aim of her visit was, she answered, “This is my first time in Georgia. I have very good friends here and they have grandiose plans. We have discussed several projects and perhaps I will also participate in them. I came here to become acquainted with the country, people and culture.”

Trump spoke freely on both the subjects of jewellery and her ex husband.

“Donald was 30 when we got married, I was 28. We started doing business from zero. His father was wealthy, but strict. He was not planning to give Donald a million USD. That’s why we had to get everything by our hard work. After our divorce I wrote a book which became a bestseller. The Best is Yet to Come: Coping with Divorce and Enjoying Life Again. No man has the right to destroy your life, do not get depressed, remember, the best is yet to come,” Trump said in her interview.

Ivana still maintains a good relationship with Donald.

“We talk on average twice a week.

Donald is like a good French wine.

You do not need him more than that,” she says.

“I travel a lot and spend about half the year in Europe. We trust each other and share business ideas with each other. An exhusband does not disappear from your life after divorce. Presently we have better relations than we had before,” Trump adds.

Ivana was born in Zlín, the Czech Republic. In the early 1970s she earned a master’s degree in physical education from Charles University of Prague. She met Donald in New York.

Ivana took a major role in the Trump Organization. She became the Vice President of Interior Design for the company, spearheading the signature design of Trump Tower. Afterwards, Donald appointed her to head up the Trump Castle Hotel and Casino as president.

Soon after her divorce from Donald Trump, Ivana signed on with the William Morris Agency and developed lines of clothing, fashion jewellery and beauty products that have been sold through television shopping channels, all massive successes. She has also written several books including the bestselling novels For Love Alone and Free to Love as well as the bestselling self-help books The Best is Yet to Come: Coping with Divorce and Enjoying Life Again.

Ivanka Marie Trump (born October 30, 1981) daughter of Ivana and Donald Trump is a socialite, heiress, and fashion model. She is Executive Vice President of Development & Acquisitions at the The Trump Organization.

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“I am sure that the Georgian economy will do pretty well and I strongly believe that Georgian businesses will perform strongly in the future too. Georgia will continue being a very attractive place for foreign investors and will no doubt become the pearl of the Caspian and of Central Asia,”

“

Give Us Stability and Take Billions Fady Asly, Chairman of the International Chamber of Commerce says Georgia remains a beacon of democracy

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G

eorgia is not the only country to have lost its attractiveness; all emerging markets have lost their competitive edge. There is a shortage of liquidities on the international markets, and for those investors who have access to cash, the western markets offer today very attractive opportunities and therefore such investors are ignoring emerging markets for the time being.

Georgia being one of those emerging markets is suffering for sure. However among the emerging markets I believe that Georgia is still offering many advantages that other competing markets are not, be it the geographical location, the country’s potential or the business and investment climates, all of which play tremendously in Georgia’s advantage.

Q. What can you tell us about the investment climate in Georgia at the moment?

A. Georgia’s legislation is very business friendly however we are still waiting for investors; if you own a good restaurant but have no customers you have to be patient!. If the location

is good, the food tasty, the service efficient and the prices moderate, all the parameters are there to succeed. I strongly believe that FDI will increase substantially starting the end of 2010.

We will have a difficult year in this respect but there is nothing to worry about as long as political stability is guaranteed, this is where the opposition needs to take responsibility and preserve internal stability by keeping their struggle within the frame of the institutions.

Q. In your view do foreign investors have enough information about Georgia?

A. I think that foreign investors cannot be grouped in one category only. On one hand there are the larger or wealthier foreign investors who are specialized in emerging markets.

Those investors are well informed about Georgia and track regularly all information related to emerging markets through the data released by the International Financial Institutions However a very large number of insular investors don’t know where Georgia is on the map considering the small size of our country and this

is where the government is doing a very good job by advertising Georgia and doing business in Georgia on the major international TV channels.

Q. What were the main challenges for Georgia in 2009?

A. Well starting November 2007 it has been an uninterrupted ballet of events that seriously undermined the investment climate in Georgia. It all started with street protests in November 2007 that were followed by presidential elections, legislative elections, the 5 days Russian aggression on Georgia, then the international financial crisis and to rap it all the April and May 2009 protests.

ICC was very vocal about the negative impact that the street protest would have on the economy but a proverb says: “No one is more deaf than the person that doesn’t want to listen” and unfortunately the Georgian opposition had an agenda and didn’t want to hear the voice of reason...

It takes years of hard work to improve the image of a country but it unfortunately takes 30 seconds on CNN and Euronews to destroy years of hard work.

Those were the challenges that culminated in 2009, currently businesses are assessing their damages and implementing the proper strategies to recover... I sincerely hope that all political leaders understand now that the only way to improve things is through dialog within the frame of the institutions and not in the streets.

I think that Georgia is attractive in terms of investment. There can be no investment without political stability.

Therefore all political forces should work constructively and with a big sense of responsibility to ensure internal political stability. Once we have long term political stability the potential for investment is huge in so many sectors, be it hydro power, green energy, agriculture, tourism, real estate, infrastructure, services, you name it;. Georgia is the entry gate for the whole Caucasus and Central Asia and therefore offers so many opportunities, Q. Why should foreigners invest in Georgia, what is the most attractive things about the country?

A. Well there are several sectors, first of all in green energy there is huge potential, and Georgia with hundreds of hydropower stations is a leader in this respect. Agriculture is for sure another area of tremendous potential for both internal and export markets.

When we speak of agriculture we mean value added agriculture of course not cereals.. Georgia is blessed with many microclimates that vary from subtropical to temperate. Infrastructure offers lot of opportunities starting with new roads, ports, dams creating, building, you name it. Services like banking, insurance, restaurants, tourism, I am just giving you some examples as there really is a lot of potential in almost every sphere. Georgia is serving the whole region, the region is very wealthy, it’s an oil and gas region so this will have a formidable impact on Georgia.

Q. Georgia is often targeted for its pro-American orientation. Against this background, do you not think that the US should be more active in regard to investments?

A. frankly I think that the United States has done as much as anyone could do. What do you expect the US administration to deport investors to Georgia? Through USAID the US Government has done a lot for the country and the US Embassy in Tbilisi is extremely active in assisting to improve the business climate. By the same token we have a very active Georgian Ambassador in Washington who is doing a great job in promoting Georgia there as much as possible.

Georgia remains a small country and potential investors in the States and elsewhere are struggling themselves, therefore no one expects flocks of investors invading Georgia anytime next week; Once the good opportunities that were created by the world financial crisis in the west will dry out, then investors will be massively eying towards emerging markets that would have regained their competitive edge.

Q. What should Georgia do to attract US businesses, to become as attractive as Singapore or the United Arab Emirates?

A. Georgia cannot become overnight as attractive as Singapore or the United

Arab Emirates, for the simple reason that these are very wealthy countries with very high revenues and that have been building up their economies since the 1950’s.. In the United Arab Emirates there are thousands of investments worth hundreds of billions of dollars on a totally different scale from what we see in Georgia. However if it will take us several decades to reach this level is not important, what is important is that we are on the right track to achieve it.

Q. Are Americans interested in doing businesses in the Free Industrial Zone in Poti? What are your suggestions for them in this regard?

A. I think that not only Americans but any businessman interested in operating in the region should have huge interest in the free industrial zone. I think that the free industrial zone is a brilliant idea. I think that it’s extremely well managed; the concept is very good and I would strongly encourage any business that operates in the region to use Poti Free Zone as a base.

Prices are way below competing free zones in the area and you have hundred fifty million consumers at the grab of your hand. The bottom line is: Give us stability and take billions, this should be our motto.

The US markets cannot substitute the Russian market. that was substantially supplied with Georgian products.

During Soviet times, Georgian wines and fresh produce were heavily present in the Soviet markest and very much in demand. Today in the US, Georgian wines are not well known and have to compete with the best wines coming from Chile, Argentina, France, Italy and every other wine-producing country, so it is a very difficult market.

Yes the Georgian embargo has hurt the Georgian economy but it did not destroy it as planned by Russia.

Little by little the market will readjust, and we will reach a golden equilibrium between our potential to produce and our ability to sell.

On a positive note the Russian embargo has helped Georgian businesses to find other markets that gradually will totally substitute the traditional Russian market.

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INTERVIEW WITH ICC PRESIDENT

Esabi Ltd, the one of biggest Georgian IT companies, is celebrating 20 years of success in developing the IT market of the country

“

It’s a bit difficult to sum up such a long period, so it’s easier to speak about the company’s development. I have to remark on the fact that these years have been quite hard at times and full of challenging periods to overcome in order to have the final face of the company that we present nowadays.

Esabi

20 years on the Georgian Information Technologies Market Mr. George Bakanidze

Director and one of the stakeholders of ESABI speaks about company development strategy

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FINANCIAL MAGAZINE | FEBRUARY 2010

We, like all companies existing on the local market have gone through quite a tense period most recently. We have seen wars and many other problems in the country but we managed to survive and maintained our strength and the right activity directions. We now believe that we can overcome any potential future problems too based on our market knowledge, expertise, qualified company staff, and permanent company structure which change in line with customer demand.

Our company was established in 1989 on the 12 December. The company first started working as a Xerox Ltd. partner. Of course it’s an American company and our first customers were American companies - the American Embassy of Georgia.

Other missions were also added to the list of our customers, including USAID, the UN and EU. Our strong excellent business reputation gave us the opportunity to make a sale of equipment and service support to all foreign embassies in Georgia.

In 1997 we became the first partners that signed a contract with the American company HP, which is the producer company of computer technology and extended Esabi product portfolio to give our customers more that we could provide them with before. Then we found new partners in office technology providers Kinderman and GBC which is an office accessories provider.

Also last year we became direct partners of the American company APC. We consider the Esabi product portfolio balanced at the moment to satisfy every customer of the country in terms of IT.

20 YEARS ON GEORGIAN IT MARKET Mr. George Bakanidze Director and one of the stakeholders of ESABI speaks about company development strategy

O

ur main clients on the local market are the international organizations and embassies, organizations equal to them, diplomatic corps, governmental organizations, ministries, as well small and medium sized businesses. We have our retail show room and have a Digital Print Shop equipped with the latest Xerox and HP equipment specially designed for Graphic Arts industry situated on Vazha Pshavela street.

Esabi has a retail shop and service centre with qualified engineers certified by Vendor’s training centres ( Xerox, HP, APC, Microsoft, Oracle and others) with a services agents network to cover cross country customers warranty and post warranty support. Also Esabi Digital Print Shop gives advanced print and copy documents services on a fast and quality basis.

Our strategy is 100% our customers’ satisfaction.

We serve our customers to fully meet customer expectations.

The marketing strategy is competently, fast and fully informing Esabi customers about all novelties in equipment, software, solutions and services which the company can deliver to the Georgian market.

benefits

F

irst of all our quality of service makes us different from other companies.

We also have quite larger share of experience than most because there are only a few companies that have been working on the local market for such a long time as us. Our company has a wealth of experience of working on the Georgian market and that’s the main advantage of ours; we know what and how to offer our clients in order to make them fully satisfied. One of our strongest points is our service support centre to support all the equipment and software we sell with a high level of

competence to our consumers. We have very serious and experienced engineers, certificated and trained abroad in the companies mentioned above and that’s what gives us the opportunity to offer the highest quality service to our customers.

most popular products

W

e offer a full range of computer operational systems to our corporate clients, office programmes, antivirus programmes and software solutions that help our customers keep data secure in all their activities. I will name some of them: these are the products of Microsoft Corp., Kaspersky production, Symantec production and also Adobe products used in documents design.

According to our retail sales, laptops are very popular among young people. Generally they are interested in computer products and we hope that this tendency will continue with future generations too. For the whole of Georgia when speaking about the comparative sales of laptops and computers of course the more popular product is the desktop, but in retail sales the most demanded is the laptop.

We import products from Europe.

Mostly from Holland, Finland, Switzerland and Luxembourg. We also import products from Ireland and France as well. Esabi gets the majority of office accessories from Germany and Hungary.

This is the very fastdeveloping sphere. Esabi is changing together with customers demand. We are moving into project business to optimize customer data flows by offering solutions like billing solutions for Telecoms, corporate data flow management automation in Government institutions, solutions for banking to reduce their expenses per every electronic or paper document paper page, low cost solutions for Graphic arts and

IT MARKET

corporate print shops and others.

Of course they have changed, there is a more refined consumer in Georgia at the moment and this is similar to the situation in fully developed countries. In every family, people are becoming more aware of the characteristics, the usefulness of a product, how to choose it and where to buy it from.

The most remarkable thing is that whereas 8-10 years ago the average customer would buy a cheap computer and not care about its services at all, over the last 3 years the tendency has been that most retail customers prefer to pay a bit of a higher price but get a higher quality product. They prefer to buy computers set up by the manufacturer, which have the factory’s guarantee for 3 years, rather than ones set up on the local market.

strategy

T

he strategy is development and improvement of our 20 years of experience.

We are going to implement a culture of consumption of equipment bought by official producers and manufacturers, because at the moment the majority of equipment available in Print Shops are bought in China under nameless production with no service support.

The companies using these products try to look after the equipment at their own expense which is quite unacceptable at serious job and they spend more money and resources on improving these products. We just want to change this tendency and make people used to buying products under the official brands which have proper service support. People do not have official programmes at home and this is a very serious issue absolutely unacceptable in Europe or the States, but one that is popular in post Soviet countries.

We are trying to change this psychology amongst the people in Georgia at the moment.

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LADO GURGENIDZE

FORBES BILLIONAIRE PREDICTIONS 2010 Norman Braman

Citizenship: U.S. Net worth: $1.2 billion Which emerging world economy is the best bet for investors?

The experts keep talking about China and India, but I’ll pass on that question.

What’s the best asset to own in 2010? Gold.

Leon Charney

Citizenship: U.S. Net Worth: $1.4 billion Gold: buy, hold or sell?

I would hold.

Which emerging world economy is the best bet for investors? China.

Mort Zuckerman

L

ado Gurgenidze, 39, former PM of Georgia was hired

by African bank – Bank of Kigali in December 2009. “We’re trying to go regional and become dominant. This is where Lado Gurgenidze comes in with his international experience,” James Gatera, Managing Director of Bank of Kigali told Bloomberg.

Bank of Kigali has assets in excess of $200 million, while Rwanda’s gross domestic product is about $4 billion.

Gurgenidze was CEO of the Bank of Georgia before his 11-month stint in politics. He stepped down as prime minister in October 2008. Late November he took the reins as chief executive at People’s Bank of Georgia,

26 Wealth

the former state agricultural bank. Gurgenidze and a partner, Romanian oil and real estate billionaire Dinu Patriciu, bought 91 percent of People’s Bank for $15 million, with a promise to invest an additional $10 million”.

Rwanda is a small, landlocked country in Central Africa with 9.7 million people and a high population density (368 people per sq. km). Rwanda became independent in 1962 after colonization by Germany (1899) and Belgium (1919).

According to World Bank Rwanda’s US$4.2 billion economy grew 7.9 percent in 2007 and an estimated 8.5 percent in 2008.

Gurgenidze holds dual citizenship of Georgia and of the United Kingdom.

FINANCIAL MAGAZINE | FEBRUARY 2010

Citizenship: U.S. Net worth: $1.5 billion Gold: buy, hold or sell?

I am agnostic on this.

Which emerging world economy is the best bet for investors? Brazil.

John Catsimatidis

Citizenship: U.S. Net Worth: $1.65 billion Gold: buy, hold or sell?

Hold for the interim; buy for the long term.

Which emerging world economy is the best bet for investors? India.

What’s the best asset to own in 2010?

Fixed assets with a return.

David Cheriton

Citizenship: Canada Net Worth: $1.1 billion Gold: buy, hold or sell?

Buy. Which emerging world economy is the best bet for investors? Brazil.

20 Years at Georgian IT Market

37d Chavchavadze ave. Tbilisi, 0162, Georgia

Wealth&Money Credit Cards In 2010

T China’s billionaires hope money can help buy love

A

t least 21 of China’s 130 dollarbillionaires are lonely men in search of suitable partners, Irish Times reported based on recent study. It’s not all hearts and flowers being a billionaire in China these days.

Forced to focus on building a huge pile of wealth during the early part of their careers, many of China’s filthy rich simply don’t have time, or the inclination, to follow the traditional route and take their parents’ advice on who to marry. Finding the time to socialise is always a challenge when you are busy amassing billions of yuan. The average wealth among China’s richest 1,000 people grew by 30 per cent to €400 million in the past year or so, which is even more than in the boom year of 2007. While money can’t buy you love, it can help in the search for affection.

Nearly 30 billionaires who have appeared on the Hurun annual rich list have been charged with bribery or are at the centre of a police investigation, while 19 of the 1,330 business tycoons listed in the past 10 years are either in jail or are waiting for sentencing on bribery charges.

The super-rich with too many problems to deal with can always indulge in some retail therapy.

Wealthy Chinese bought one quarter of all luxury goods in the world last year, and this year China will replace the US as the world’s second-largest luxury goods market, according to the head of Gucci.

Chinese customers bought 60 per cent of luxury goods when they travelled overseas.

Wealth&Money

MAGAZINE | FEBRUARY 2010

he most important changes in U.S. will come in late February. That’s when the final provisions of the Card Act, legislation passed last May with overwhelming support from both parties, will take effect.

According to Forbes magazine, beginning Feb. 23 financial institutions will be prohibited from several billing practices that have long irked cardholders. Among the most important: All payments must go to the highest balances first. That means that if Bank of America ( BAC - news - people ) charges you 30% for cash advances and 15% for all other balances, the money you send should help you erase the most problematic debt first.

Banks will no longer be able to say that payments are due at say, 10 in the morning, and instead accept all payments until the close of business on the due date. They will no longer be able to raise a customer’s interest rate on a fixed-rate card and cannot make significant changes without 45 days’ written notice.

Consumers will also get a wakeup call on every bill on how making only the minimum payments will keep them in debt. Banks will soon have to disclose how long it will take a cardholder to pay off his entire balance if he sends in only the minimum.

NEW FACE

O

n his third day in Tbilisi, Andrei Piataxin, 34, newly appointed General Director of Beeline in Georgia, traveled around Tbilisi aquainting himself with the characteristics of the city.

“The first thing that I looked for after my arrival in Tbilisi was a teacher of the Georgian language. People here are polite and hospitable. We have a similar faith and lots of things in common.

There might be some political difficulties between our countries at the moment, but they are not relevant to the relations between our citizens.”

“When it was first suggested I move to Georgia, I called my father-in-law who served as a soldier in Georgia and asked him to share his impressions of the country. As it was long time ago, the first thing he remembered was that roses were flourishing in January. Of course he had a lot of positive impressions. My expectations were also positive as a result and I have not been dissapointed yet.”

“The political disagreement between Russia and Georgia has not influenced our business in Georgia. Although since the August war we have become more careful in what we do and say. Sometimes we like to avoid this topic and try to leave it out of the messages we give out.”

“Georgians should not consider Beeline a Russian company”.

“The majority of our employees are Georgians. Some of them do not even speak the Russian language.”

“When I was offered the chance to come to Georgia the main criteria was a knowledge of the English language, not Russian”.

“

Our plans sound ambitious, but why not!

Andrei Piataxin, 34 years old, was born on September 5, 1975, in Lipetsk. In 1997 he graduated from Lipetsk Technical University. In 2007 he received an MBA grad at the American University of Business Administration.

Piataxin began his career in the sphere of telecommunications in 1996. In 4 years from an expert of the department of marketing he advanced to the Deputy Director of the Lipetsk branch of the Joint-Stock Company Mobile Communication of Chernozem region.

Andrei Piataxin came to Vimpelcom in 2001 at the position of sales manager of the Lipetsk branch, and in 2004 moved to position of sales manager of the Ural region of Vimpelcom.

From 2006 Andrei was responsible for the corporate sales of Vimpelcom, at first in the Moscow region, and then on a corporate level. After integration of the business Vimpelcom and Golden Telecome in Russia Piataxin was appointed to the position of Director for development of corporate business in the regions of Russia.

Piataxin is married and has two kids. His family members think to move to Georgia aswell.

29 NEXT FINANCIAL

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USD 18,000,000 has been spent on the construction of the hotel.

This Georgian-Italian project has the capacity to host 350-370 people. It includes 156 apartments. Among them are 5 single rooms, 4 rooms for disabled people, 111 double rooms, 31 De LUXE and 5 LUXE type rooms.

G

eorgia Palace Hotel, an exclusive five-star hotel located on the Black Sea coast in Kobuleti which is distinguished by a unique microclimate which benefits cardiovascular, respiratory and nervous system unlike any other on Georgia’s Black Sea coast.

GPH Dramatically Increased Number of its Guests in 2009 30 Wealth

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“First of all we are lucky that we have a unique location for recreation but of course our biggest priority and asset is the outstanding quality of our overall service”, Lela Tsulukidze, GPH Executive Director is introducing the hotel.

“Kobuleti is historically known as a prestigious curative and recreational place. Kobuleti is famous for its unique microclimate, which helps in curing heart diseases, problems with inhalation and the nervous system.

Kobuleti has huge investment potential and it comes as no surprise that there’s been such a concentrated amount of

EDITOR’S PICK

Georgia Palace Hotel lobby

investments there recently.

First of all it is worth mentioning that as a result of this project new workplaces appeared in Kobuleti and hundreds of locals were employed. This project has introduced Kobuleti to many people. Foreign guests who visit us become acquainted with the beauty of our region and underline that our country has quite large potential for developing tourism in the country.

Many of the representatives of foreign organizations choose Kobuleti as a place for recreation or business meetings, which is indisputably due to the merit of Georgia Palace Hotel.

Prices have significantly decreased at our hotel and we have

introduced new special packages for newlyweds and businessmen as well.

Q. Summer 2009 was quite busy for Georgian Palace Hotel. Despite the economic crisis, popularity of the 5 star hotel increased dramatically compared to the previous year. What do you think was the main determiner of the success of your hotel?

A. The popularity of Georgian Palace Hotel was determined by many different factors; among them the most important is that we represent the first Georgian 5 star brand. This fact counts for a lot and it is necessary

to prove every day that the hotel really corresponds to the stated standards.

The quality of service, right method of approach and hard work of the staff all contributed to the company’s level of popularity.

Despite the unstable economic conditions existing in the country, interest in GPH increases on a daily basis.

In 2008 we hosted only 7,112 guest but we should not forget the August events in 2008 that significantly contributed to a lower number of guests.

For the year 2009 the situation has changed radically. We hosted nearly the same number of guests in August of 2009 that we did in the whole 2008.

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156 elegantly designed rooms, all with private balconies and wonderful views of the sea and garden

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As you see our predictions have come true.

On average 35% of our guests are foreigners and 65% Georgians.

In our view, this percentage index will significantly change in 2010 and the percentage index of our Georgian and foreign guests will become practically the same.

We are mostly visited by people from neighbouring countries Armenia, Azerbaijan and Turkey.

Out of the European countries we get most guests from Germany and Italy. We also have many guests from the USA. Q. At different periods your guest list has included the likes of Tanya Marya, Marcus Miller and Victor Uschenko.

Which celebrities visited you in the year 2009 and tell us of their impressions.

A. Every year the Black Sea Jazz Festival is held at GPH which means us hosting a wealth of famous guests. At different periods our guests have included Katie Melua, Marcus Cahill, DJ Giom, Naturally Seven. We have also been visited by world opera star Nino Surguladze and Prima Ballerina Irma Nioradze. We have also hosted famous singers Diana Gurtskaia, Bianka and many others others.

We have of course had many famous Georgian politicians as guests, I would specially like to mention out of our foreign guests the Swedish Premier Minister Carl Bildt and Representative of the EU Peter Semneby.

Our corporate clients are prioritized for our hotel. We have low tariffs specially for our corporate clients and we give them maximal comfort and satisfaction for the price of their stay. The prices have significantly decreased and we

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have made special packets for newlyweds and businessmen.

For very low prices our guests will be able to live in a comfortable area, use the spa centres and other different services.

Q. What is the difference between the numbers of summer and winter guests at your hotel?

A. Winter is generally a hard time for the Adjarian Region, however despite this the hotel management and sales department try to turn the statistics around so as to maximally increase the number of guests in winter, and decrease the margin between the 2 seasons.

Q. Are you interested in attracting investments?

A. Of course we are interested in attracting investments. We welcome any kind of investment if they are directed in the right way and what’s most important, if they will be implemented by our partner country the US. Q. What makes GPH different from those other famous hotels brands in Georgia that are planning to open in Adjara?

A. First of all it’s the name - “the First 5 Star Brand”, our service quality and the uniqueness that only GPH offers its customers.

The existence of such a kind of hotel in Adjara is in itself a popularization of the region.

That’s exactly the main idea and charm of the place and I think that we do our best in this regard. And we trust that our hard work will definitely yield more positive results in the future.

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EDITOR’S PICK

Serve Your Country At MyCareer.ge we are assisting HR professionals to recruit candidates they need.

We are promoting thousands of professionals in order to support their career development.

We are developing employment in Georgia.

This is the way how we serve our country. http://mycareer.ge Assisting to Build a Better Career

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Top Hiring and Human Resources Trends for 2010

Trim Perks and Benefits: Perks and benefits will be cut significantlly in 2010, including: bonuses; medical coverage.

Replace Under-Performing Employees: Taking advantage of the large number of talented jobseekers currently looking for work, employers plan to replace underperforming employees in 2010.

Rehire Retirees & Postpone Retirement: Employers will consider retaining workers approaching retirement in 2010, large number of workers expressing interest in postponing retirement.

Use Social Media: Employers plan to emphasize social media in 2010, some of them will add social media responsibilities to current employees.

Hire Freelance & Contract Workers: Employers anticipate hiring freelancers or contractors in 2010.

including: alternate schedules; telecommuting; and compressed workweeks.

Rehire Laid-off Workers: Among companies with lay-offs in 2009, many of them plan to bring back workers in 2010.

Recruit Bilingual Workers: Employers will hire bilingual candidates in 2010 and half will hire the bilingual candidate of two otherwise equally qualified candidates.

Provide Flexible Work Arrangements: Employers plan to provide more flexible work arrangements in 2010,

Reduce Business Travel: Employers plan to have less business travel in 2010 than in 2009

Combined forces of The FINANCIAL newspaper, the main business edition in Georgia, Caucasus University, Georgian Institute of Public Administration and MyCareer.ge enable users to create business networks, connect, communicate, promote company products or establish business relations. It also enable employers to reach active candidates online, in print, and in person.

MyCareer.ge serves as the only marketplace of high-quality professionals actively seeking new job opportunities or considering career moves.

MyCareer.ge users are: Employers and Employees Experienced C category managers; Alumni and students; http://mycareer.ge Assisting to build a better candidates

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W

TOP 6 TRAVEL

DESTINATION

2010 BROUGHT TO YOU BY

BUSINESSTRAVELCOM TEL: 999 662 EMAIL: info@sky.ge

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ANCIENT

ROMANTIC SEXY

ROME

FRANCE

KIEV

Rome is a modern and interesting city with a robust heritage; this place has long been famous among travelers.

It’s commented one life is not enough to get to understand Rome. But a week will serve for a first introduction.

Flight to Rome: EUR 300 Hotel: EUR 100 Apartment: EUR 50

Paris is the city of romance, and a tremendously popular destination for couples, lovers and honeymooners. The city is filled with cozy, intimate romantic hotels and accomodations.

Paris will remain one of the top destinations for Georgians in 2010.

Flight to Paris: EUR 300 Hotel: EUR 100 Apartment: EUR 50

Kiev remains one of cheapest and most attractive places you could visit in 2010. It’s top business destination for Georgians. It’s also full of undiscovered supermodels. Kiev is the best choice for nightlife lovers and clubbers. Kiev is not about one week. It lasts for whole life.

Flight to Kiev: USD 300 Hotel: USD 100 Apartment: USD 50

EXOTIC

HYSTORIC SUNNY

THYLAND

EGYPT

Thailand will open your eyes to an exotic experience that is safe and affordable, yet equipped with every modern amenity you need, there is something for every interest and every price bracket, from beach front backpacker bungalows to some of the best luxury hotels in the world. Now charter flight from Tbilisi is available.

10 days tour: EUR 1500

Egyptians are hospitable and extremely friendly people. But main attraction for tourists, beside of ancient Piramids are low living prices.

10 days tour: EUR 715

TURKEY

Turkey is one of the world’s top 10 travel destinations, welcoming more than 23 million visitors every year. It will remain top summer destination for Georgians because its too close and unexpensive.

Flight to Istanbul: EUR 280 10 days tour: EUR 450

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Business and Pleasure 40 Wealth

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Tbilisi ‘s most visible hotel, the brand new Radisson BLU Iveria Hotel, is in a hilly part of the city center; it rises 18 floors above the Mtkvari River and offers magnificent views of the city and the river. Enviably located at the Rose Revolution Square on Rustaveli Avenue, the hotel is in the heart of the business and commercial district of the Georgian capital, with just a short walk from all the city’s major attractions, shops and restaurants, the hotel is the ideal place to enjoy Tbilisi from.

Project cost is USD 100,000,000.

Hotel is close to many famous tourist & business spots, including Rustaveli Avenue, Tbilisi Opera & Ballet House, Rustaveli State Academy Theatre and etc.

249 modern and sophisticated spacious rooms are equipped with high-quality amenities and come with large windows and comfortable furnishings.

Free high-speed and wireless Internet access is available for all otel guests.

Guests will have all possibilities to pamper themselves with one of our facial, beauty or massage treatments at our state-of-the art Spa with the city view.

Filini, the hotel’s gourmet restaurant, serves up the best of the Italian kitchen; Filini will offer a tempting menu of innovative dishes using the freshest of ING redients.

A wide variety of cuisines will be on offer at the All day dining restaurant, starting with Super Buffet Breakfast.

Lounge Bar with working fire place is perfect for meeting up with friends and family while you can enjoy the marvelous view of the city lights from the Roof Bar. 3100 sq meter Iveria Casino presents casino entertainment with the usual range of table games, slot machines and two bars.

Hotel offers 9 meeting rooms and an impressive Ballroom spread over 340 sq meter m2 with 6 m ceiling height; ideal for large corporate events, private banquets and weddings.

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The Spa centre at Radisson BLU Iveria Hotel was opened in October and since then offers amazing spa facilities to its customers.

Gold Annual Membership Peak time (7 days a week) 410 GEL per month 348 GEL net price. one year

Silver Annual Membership Off Peak times (Mon-Fri 6:00 - 17:00) 328 GEL per month 278 GEL net price one year

Gold Six Month Membership Peak time (7 days a week) 490 GEL per month 416 GEL net price six months

Silver Six Month Membership Off peak times (Mon-Fri 6:00 - 17:00) 392 GEL per month 333 GEL net price six months

Living or doing business in Tbilisi? Discover the new universe of well-being in the Radisson BLU Iveria Hotel by escaping from the daily stress and taking a breath of energy from absolute well-being and comfort provided by our Spa and Fitness centre. The Radisson Spa is now open for everyone who wants to experience real relaxation.

F

rom the moment you enter, you are swept into peace and quiet where your spirit is restored and your energy is revitalized. This relaxing, nurturing environment serves to rejuvenate and de-stress the body, mind, and spirit. Before entering the massage room you will feel as tense as usual but then in the modern designed massage room you are quite ready to leave all that stress at the door.

The process of a massage is fascinating, while covering your eyes you appear in a different world, completely forgetting about the problems and hard working day waiting for you outside.

The spa is introduced by Anne Semonin Paris, a pioneer in combining trace elements and essential oils.

“This is an upscale French brand that has truly luxurious products to offer its customers. Anne Semonin has a chain of spa centres around the world, in the Caribbean, Maldives, Dubai, Greece and France. This is the first Anne Semonin’s SPA centre in the region, the Spa

centre offers Classic Aroma Relaxing Massages, Body Treatments, Scrubs and Wraps, Anne Semonin’s Customized Facials, Selected Day Spa Need Packages, waxing, and Hand & Foot Care Treatments,” Dimitrov explains.

“We have a growing SPA community already. Our Spa centre, encompassing 1,600 sq Nicolay Dimitrov meters with 9 treatment rooms, a warming solarium experience, aromatic steam baths, Finnish saunas, indoor infinity pool and a Spa Juice Bar. Spread over two top floors and including a Spa “Oxygen” bar, the Spa and Fitness Centre promises to soothe, relax and rejuvenate,” Nicolay Dimitrov, Radisson BLU Iveria Hotel Spa Director says.

The Spa centre in the Radisson BLU Iveria is available for kids as well.

“In the tank people will also listen to music and maybe even go to sleep, it’s time for one’s brain to rest and a person to feel completely relaxed. This facility will also be added to our spa centre’s magnificent list of treatments very soon”.

EDITOR’S PICK

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Wealth&Health: CELEBRITY RECESSION:

Who Lost It All In 2009 Not even celebrities were immune to the economic downturn of the past year. See who fell and why, according to Investopedia.

Stephen Baldwin

Stephen Baldwin, of The Usual Suspects and, more recently, reality TV, filed for bankruptcy this past summer as a result of more than $2.3 million in personal debt, including more than $1 million owed in back taxes. Baldwin became a victim of the housing market collapse after he took out a second mortgage on his $1.1 million home and became “underwater” on the loan.

Kim Basinger

If you’ve ever quit a job, you can be thankful that it probably didn’t cost you nearly $9 million. That’s how much a judge ordered Basinger to pay a film production company for failing to honor her commitment to star in the movie Boxing Helena.

Apparently she didn’t save enough of her previous earnings to pay the bill; she ended up losing $19 million when she had to sell the town of Braselton, Ga., which she purchased in 1989, and had to file for bankruptcy.

Nicholas Cage

The National Treasure star owes a king’s ransom to the IRS--more than $6 million in back taxes to be exact. He blames his former manager, Samuel J. Levin, for losing millions of dollars to risky and speculative investments and recently filed a $20 million suit against the CPA. To settle up accounts, he recently sold his castle in Bavaria. He also lost two of his homes in New Orleans to auction after falling into foreclosure.

Billy Joel

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He may be a musical genius, but this Grammy winner hasn’t enjoyed the same string of success when it comes to his finances. He has had to file for bankruptcy, and he filed a $90 million lawsuit against his former manager (and former brother-in-law) Frank Weber for losing tens of millions of dollars as a result of fraud, risky investments and unauthorized loans.

Health Is More Important Than Beauty and Wealth for Singletons in 2010 It’s that time of year again when we all evaluate our lives over the past 12 months and set ourselves goals for the year ahead. Fast developing UK’s dating website Smooch. com revealed that nearly half of the members surveyed (48%) hoped to be healthier in the new year. This rose by six percent in comparison to last year. In contrast, only 7% set themselves the goal to increase their attractiveness; this fell from the 10% in the previous year.

With the increased media exposure of issues such as obesity, binge-drinking and the effects of smoking in the past year, it is likely that people are taking note and working from the inside out.

Despite the credit crunch of 2009, only 16% of members aimed to be wealthier in the coming year. Interestingly, this also fell slightly from 18% last year. Whether people feel more comfortable in the economic climate or have simply become accustomed to it is unclear, however it appears to have had little impact on our hopes for the future.

Women were most likely to make resolutions to be more attractive and more healthy in 2010 whilst men were more likely to aim for wealth. In contrast, last year, men were more likely than women to aim for wealth and attractiveness.

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“Iam very happy that there is a growing tendency amongst the population in Georgia to choose to follow a healthy lifestyle,” Tea Shengelia, Director of Prime Fitness, one of the most popular fitness centres in Tbilisi.

Wealth&Health:

Keep Fit at Prime Fitness

I

t’s now the 4th year that we have been involved in this business and the results we are seeing are very satisfying. Today Prime Fitness is helping up to 1,200 people keep fit and live healthily. The company manages two popular fitness clubs, 11 tennis courts and is soon going to open its largest branch in Krtsanisi.

At the moment the Vake branch of Prime Fitness is visited by up to 700 club members. Gldani branch visits about 350 clients a month and tennis club has 100 children and 50 amateurs every month. Prime Fitness serves about 1,000-1,200 customers in total every month.

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EDITOR’S PICK

BY TAMAR KHELAIA

...................................................................

Prices: AEROBICS: GEL 80 TENNIS: GEL 100 POOL: GEL 100 IOGA: GEL 90

“In the beginning stages it was quite hard for us to attract clients.

We invested a lot in marketing, researching and informing potential customers about our club. We started by initially explaining how important it is to take frequent physical exercise.

At the moment the trend has changed and the population is in general more informed about the benefits of working out.”

“The success of employees largely depends on their appearance as many companies pay careful attention to appearance when hiring personnel. According to this demand, desire to look fit has increased on the local market. Working out has somehow became fashionable, even though some people don’t like to take exercise they know that they must in order to keep fit. Our client number has been increasing every year; despite the economic crisis and rising unemployment in the country,” Shengelia explains.

Starting regular physical exercise is as hard as starting to diet, so many of us believe. The difficult part is making the initial commitment, but once having started, routine takes over.

“I would advise everyone to start going to fitness clubs. Alternatively they could just get up early and walk outside in the fresh air every day in order to keep fit. At one time in England people were advised to get off the bus one stop before their actual destination in order to walk more each day, and this fact underlines that it is not only in Georgia, but in many parts of the world that being overweight is a problem,” Shengelia says.

“Everyone needs to take physical exercise at least 3 times a week.

For those people who have little free time (and these are mostly women) we offer Aerobics, Yoga and Aqua Aerobics classes 3 times a week. Visiting the gym three times a week is the minimum one should do in order to lose weight or improve muscle tone.”

P rime Fitness has 2 branches, one in Vake district and one in Gldani.

Prime Fitness also has its own tennis courts.

“The cost of working out at our Vake branch starts from GEL 100 and goes up to GEL 250, a price which includes a personal trainer.

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The fitness facilities include swimming pool, Jacuzzi and sauna as well.

These prices are for the whole month, but if people choose long term membership they can receive 40-50% discounts,”Shengelia explains.

“We offer massages from GEL 25 to GEL 35 as well having a combined weight loss programme including pool sessions, massages and training which costs GEL 420. Our rehabilitation procedure starts from GEL 50,” Shengelia says.

Club membership of the Gldani Prime Fitness branch costs GEL 55 per month. The maximum fee there is GEL 150. Prime Fitness manages 11 tennis courts; 7 open and 4 closed courts. Standard membership of the tennis court, which means 10 visits per month, costs GEL 100.

Tennis club membership for children costs GEL 120 per month. Children are tutored by professional trainers.

Shengelia says that fitness is the most demanded facility among men and Aqua aerobics among women.

The Gldani branch of Prime Fitness

was opened in 2008. Investment totalled about GEL 3,000,000.

“Simply visiting Prime Fitness doesn’t mean that your body will become perfect on its own, people should train in the right way. I know some of our club members who visit us very often but don’t train on the level we suggest. The main point is to use the time and services that are available in the fitness centre in the right way. A perfect body is achieved through a correct regime of nutrition and appropriate physical exercise,” Shengelia says.

“We had investors but due to the economic and political events in Georgia there have been many obstacles in implementing the investments. I think that rehabilitation and building the new branch will happen in 1 year’s time, we will have many services there including a spa, salon, guest house, and international standard swimming pool, as well as other facilities. We are just waiting to attract the necessary amount of funds,” Shengelia says.

Everyone dreams of having a beautiful and healthy body. To achieve this you should exercise regularly, eat properly, avoid stress and give up bad habits.

Prime Fitness is one of the most modern fitness clubs in Tbilisi, designed for the comfort and enjoyment of people of all ages, fitness levels and abilities.

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The monthly cost of aerobics at the Vake Branch is GEL 80, Yoga - GEL 90, twice weekly Aqua Aerobic - GEL 120, and thrice weekly - GEL 160.

TOP-10 fitness trends for 2010 The American Council on Exercise announced the top-10 fitness trends for 2010 based on an annual survey of personal trainers, group fitness experts and others. The key words are “unique” .

1. Cost-conscious workouts at fitness clubs and at home. The impact of the economy continues to affect the choices of fitness enthusiasts and health clubs alike.

2. Group training.

Individuals will scale back on personal training sessions to take advantage of smallgroup training and group class.

3. Time-efficient workouts. Shorter yet higher-intensity workouts will be more appealing to those with busy schedules.

4. Exergaming.

Exergames will continue to climb in popularity and be taken to the next level: fitness clubs. By integrating fitness-based video games into their programming, clubs will offer exercise sessions for game-lovers.

5. Boomer-specific programs. Growing numbers of Boomers recognize the multitude of benefits that come along with regular exercise participation, from lowering blood pressure and cholesterol to maintaining one’s functional independence and overall well-being.

6. Functional training workouts, including popular suspension training tools such as TRX. The portability and time-efficiency of these workouts will appeal to

people looking to stay fit at home, the office, the gym or while traveling.

7. Health and fitness awareness. Diverse groups will work together in the fight against physical inactivity and obesity.

8. Importance of proper professional credentials. Health and fitness clubs are recognizing the need for, and the importance of, hiring trainers who hold high-quality, reputable professional credentials, the council says.

9. Specialty exercise classes. Specialty classes such as ethnic

dance, hooping and pole dancing are fueled by the continued success of shows like “Dancing With the Stars” and “So You Think You Can Dance.”

10. Fitness training tools. Some popular examples of tracking gadgets include GoWear Fit and Fitbit, while online tools such as TrainingPeaks software offer fitness programs and meal plans that people can access 24/7.

Mobile applications are even bringing fitness on-the-go through iPhone applications and other downloadable programming.

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Michael Jackson is the last hope for music retailers in Georgia.

His death has prolonged life of moribund music business Jackson’s “Thriller” is one of the best selling albums of all time, and is still popular some 26 years later 50 Wealth

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M

usic stores in Georgia claim that sale statistics have fallen dramatically over the last few years. There is almost no demand any longer for audio albums at stores selling CDs. But Michael Jackson’s Triller is still one of the best selling albums.

Retailers are actually in the process of closing down their businesses. Store managers are blaming the social and economical situation for the music crisis, but continue closing their eyes to the unauthorized distribution of digital music.

According to International Federation of the Phonographic Industry (IFPI) statistics 95 percent of music downloads are unauthorised, with no payment to artists and producers.

In 2008 the digital music business internationally grew by around 25 percent to USD 3.7 billion.

Digital platforms now account for around 20 percent of recorded music sales, up from 15 percent in 2007.

Single track downloads, up 24 percent in 2008 to 1.4 billion units globally, continue to drive the online market, but digital albums are also growing steadily (up 37%). The top selling single of 2008 was Lil Wayne’s Lollipop.

The US is the world leader in digital music sales, accounting for some 50 percent of the global digital music market value. Single track downloads crossed the one billion mark for the first time in 2008, totalling 1.1 billion, up 27 percent on 2007. Digital album sales totalled 66 million, an increase of 32 percent (Nielsen SoundScan).

In Japan, a predominantly mobile music market, digital sales helped overall trade revenues to grow in the first half of 2008. 140 million mobile singles were sold in 2008, an increase of 26 percent from the previous year (RIAJ).

The UK saw the biggest increase in digital sales in the first half of 2008 among the top markets, with sales up by 45 percent. 110 million single tracks were downloaded in 2008, up 42 percent from 2007.

Digital album sales also rose sharply, by 65 percent to 10.3 million now accounting for 7.7 percent of the albums market (OCC/BPI).

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EDITOR’S PICK

M

ichael Schumacher returns to the fast lane of F1 racing in 2010 and he has to be a strong contender for the world drivers’ championship now that he had teamed up with Mercedes.

He has signed a one-year deal with the renamed Brawn team which steered Jenson Button to the title this year.

Often it is said that ‘they never come back,’ but Schumacher is a different kettle of fish.

He wouldn’t entertain the idea unless he felt he had a serious chance and he is quoted at 9-2.

Still only 41, he retired in 2006 and jettisoned the idea of returning last year, probably to concentrate on his fitness.

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“If his Mercedes is fast enough, there’s no reason to think that Schumacher will not be competing at the front with the McLarens of Lewis Hamilton and the current world champion Jenson Button; the Ferraris of Alonso and the Brazilian Felipe Massa; and the Red Bull of Sebastian Vettel”, Associated Press, January 2010 Michael Schumacher is the only German to win the Formula One World championship. He is an ambassador for UNESCO and a spokesman for driver safety. He has been involved in numerous humanitarian efforts throughout his life and donated tens of millions of dollars to charity.

He is the elder brother of former F1 driver Ralf Schumacher, who currently races in the Deutsche Tourenwagen Masters (DTM). They stand as the only brothers in F1 history to have both won races and they scored the first sibling 1-2 finish in Formula One. Ralf Schumacher said in January 2010 he would follow his older brother Michael’s return to Formula One racing if he receives a good offer.

World’s Most Expensive

CARS 2009-2010

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Aston Martin DBS Cabon Black Special Edition Aston Martin has released special edition Carbon Black models for the DBS and the V12 Vantage. These special edition models are hand painted in a special Carbon Black metallic and is said to take 50 man hours to complete.

The models also feature Obsidian Black leather with silver stitching interior, seats made from carbon fiber and Kevlar, gloss black 10 spoke diamond turned alloy wheels and front parking sensor. The new seats are lightweight constructed and save about 17 kilos of weight.

These special edition models are priced nearly 5% more than the standard models.

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ASTON MARTIN ONE MILLION EUROS

U.S. dollars: $1.4 million

Even with a sticker price (as if Aston would put a sticker in the window of this car) of more than a million U.S. dollars, all 77 examples of the Aston Martin One-77 supercar have been snapped up already.

The distinctive shape has won design awards already in the model’s short life.

Front-mounted 7.3-liter V12 700 bhp, 553 lb-ft of torque Carbon fiber body with aluminum panels

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U.S. $1.2 MILLION The Koenigsegg CCXR is notable for being the first FlexFuel supercar. That’s right -- this monster runs on gasoline or biofuel. But while lower greenhouse gas emissions are a nice perk, the CCXR uses bioethanol to go even faster. Can fuel make that much of a difference, you ask? Oh, yes -- a 200 hp and then some difference.

4.7-liter twin turbo engine 806 bhp on gasoline; 1008 bhp on E85 Still only gets about 11 mpg on E85

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Koenigsegg CCXR Wealth 57

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Bugatti Veyron 16.4 Grand Sport 1.4 MILLION EUROS U.S. dollars: $2 million

Lamborghini Reventon ONE MILLION EUROS U.S. dollars: $1.4 million Only 20 examples of the Lamborghini Reventon were ever built for sale, though there was one extra built at Sant’Agata for the Lamborghini museum. The Reventon was offered only to loyal Lamborghini customers, and even at more than a million dollars, it sold out before the production run was complete.

Exclusive fighter-jet inspired Grey Berra exterior The G-force meter is displayed on a 3D TFT panel.The transmission shifts faster than any human driver

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The Bugatti Veyron 16.4 coupe is expensive enough at $1.5 million, but if you’re going to put down that kind of cash, why not go all the way to two mil? That’s what it costs to get a Bugatti Veyron 16.4 Grand Sport, with an open top through which you can see a sliver of sky. The tinted glass roof can be removed and stored inside the car, and a fabric canopy can be popped up in a pinch in case of rain.

Chassis #1 sold for $2.9 million at the 2008 Gooding Pebble Beach auction. The fabric panel is only good for 80 mph - in a car that does 217. 1001 hp from an 8-liter engine.

Pagani Zonda Cinque ONE MILLION EUR $1.4 million Cinque is Italian for five, so you could have guessed that only five Pagani Zonda Cinques will ever be built, making it one of the most exclusive supercars as well as one of the most expensive.

And, of course, all five are already spoken for. Amazingly, the carbo-titanium-bodied car is street legal, even with a 062 mph time of 3.4 seconds.

Maybach Landaulet $1,380,000

The Maybach Landaulet is the same under the skin as its fellow Maybach sedan, the 62S. But the Landaulet takes a tip from the early days of the auto age by offering a body style not seen since, oh, World War I. Sport-tuned V12 engine has 612 hp.

Each car built to order.

Options list nearly endless: embroidered coat of arms, 24k gold trim, etc.

AMG-tuned engine from Mercedes-Benz 0-62 mph in 3.4 seconds; 62-0 mph in 2.1 seconds. Leather and carbon racing seats.

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“2010 will be an exciting year for fashion; experts predict that we’ll emerge from the global financial crisis and, as a result, we can expect to see a new standard of fashion rise up,” says Daniel P Dykes, Fashionising’s lead fashion trend analyst.

Introducing 2010 fashion trends Dykes believes that the late-2000s credit crisis will be ultimately good for fashion. Dykes sees a future for fashion where grounded in traditional values; where luxury fashion again comes to represent quality production as opposed to being solely label driven. Classically inspired but with a serious infusion of the sex and skin, this is what we’ll be wearing in 2010.

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2010

Fashion Trends

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AVTANDIL

trends 2010 “In the new 2010 season black, beige and red colours will dominate,” commented Avtandil Tskvitinidze, famous Georgia designer.

“Georgian’s favourite colour - Black, will remain in trend throughout 2010.”

“Very short dresses and very long ones will also be in style.

The waist should be tight and the dress should have some beads, stitching or decorations on it,” Avtandil Tskvitinidze says.

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trends 2010 “The colour black will be very fashionable in the year 2010,” told The FINANCIAL’s Wealth Magazine Bakur Bakuradze, famous Georgian designer.

“Elastic materials will dominate in the general trends of 2010. My collection is called black rose.

In every detail of my collection a black rose is present.”

“Women’s attire will be very feminine in my 2010 collection and as a result I have sewn some extraordinary details in to my new line of clothing.”

“My collection for 2010 is mysterious and is for high class women who will wear these clothes at work as well as informally. The collection is called Colleczione Donna.

The price of a whole outfit at my salon might begin from around USD 250 and higher.”

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EDITOR’S PICK

ugg

U

gg boots are still hanging on despite previous predictions they would fade into oblivion. Here’s hoping that 2010 is the year that Uggs are undone.

Uggs are popular unisex sheepskin boots lined with wool on the inside and with a tanned outer surface. Ugg boots often have a synthetic sole, although this is not universal.

Uggs became popular in Georgia thanks to Georgian tourists and business travelers frequently visiting Amsterdam and Paris.

There has been considerable dispute over the origins of the ugg boot style, with both Australia and New Zealand claiming to have been the originators of the footwear.

The UGG trademark in the United States was first registered in 1984 but has gone through several stylistic changes and changes in ownership until its present state.

Uggs are being advertised on the Internet at prices significantly below retail. While a pair of the popular “Classic Black Tall” boots retails for $179, the average price on eBay was recently $105.

The catch: Those cheaper Uggs probably aren’t real.

Eva Longoria Parker. Image: Pacific Coast News

Hayden Panettiere

Jessica Simpson wearing ugg boots

Robbie Savage, 2009 Image via EMPICS-KEYSTONE Press

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VICTORIA

SECRET SHOW 2009

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Men’s Fashion

TRENDS OF 2010 Though men’s fashion trends change at a slow pace, and suits slowest of all, 2009 and 2010 will see a major move away from the monochromatic skinny-boy suit to something a lot more masculine and adventurous. But don’t worry, the slim cuts aren’t going anywhere.

Taking their lead from 2009, 2010 men’s hair trends are the classic hair styles revived.

While the classic revivals sees the Edwardian hairpart revived, styles such as the Regency fringe will increasingly take a modern twist as they fused with a style normally reserved for women: bed hair.

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FINANCIAL GLAMOUR

NIGHT TBILISI, EVENT HALL

“Hello Georgians, this is Louie Austen - the electro crooner of hearts - I’m looking forward to entertaining you all, at The FINANCIAL’s Glamour Night in the Tbilisi Philharmonic Hall,” Louie Austen’s message was getting guests excited about the event and making them plan what to wear.

LOUIE AUSTEN

GLAMOUR

NIGHT

The FINANCIAL, leading Georgian business newspaper and its partners celebrated company’s birthday at Tbilisi Event Hall.

More than a 600 distingueshed guests joined The FINANCIAL Grand Celebration.

Louie Austen, world’s famous electro crooner performed his Glamour Girl, Hoping and other hits.

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Adress to Increase shares on Azeri and

Armenian Markets

A

dress, incorporating world clothing brand stores: Celio, Etam, 1.2.3, Gerry Weber, Tom Tailor, Dpam and Joop plans to expand to Azeri and Armenian markets in the near future. Goga Simonishvili, head of the marketing department of Adress, says that at present they are conducting market research in the neighbouring countries and negotiating with their partners there.

Q. Which of the brands’ stores under Adress is the bestselling?

A. We have well diversified portfolio, the maximum difference by sales per brand doesn’t exceed 7% the reason for that is our group’s strategy to focus on family offers and give our customers the opportunity to choose clothes in stores placed next to one another.

We maximally try to make the whole shopping experience easier for our customers and so have launched a loyalty card system. The majority of our customers, over 75%, are female. Female customers dominate even in the shops that offer only men’s clothing. Over 20% of our total sales are generated from our loyalty card programme and that is a good volume.

Q. Presently Adress’s shops are located in different buildings. Have you not thought of bringing them together in one building so that your customers can enjoy a ‘one-stop shop’?

A. The slogan of our company is – Adress your shopping address. This motto is proven by the fact that most of our stores are located next door to each other which a) does provide a comfortable shopping experience for our customers, and b) increases the volume of our

traffic. We have decided to increase our market share and soon we will be presented in the shopping mall Karvasla too.

Q. Which year has been the most profitable for your company and what was the effect of the economical downturn? By how many percents were your sales decreased?

A. We always try to achieve the best results in the following then in present year, Despite the war with Russia and global economic crisis we managed to open 5 new stores in late 2009 Q. What will the main challenges for Adress be in 2010?

A. In 2010 our main challenge will be increasing our attention towards our customers based on the results of various satisfaction surveys. In addition we will focus on internet marketing and online shopping.

Q. What novelties will you be offering your customers?

A. Adress will continue offering novelties to its customers in 2010. We have decided to launch an exclusive offer to our customers.

The package includes various packages for newlyweds, as those starting a new family are always in need of any help on offer. If purchasing a wedding dress or suit for a bride or bridegroom or even best man or maid of honour, there will be a special discount card that can be used at beauty salons, tourist companies, bakeries, accessory shops, florist’s and home apparel.

So we are offering every type of service that is useful for new couples. As well as that, this discount can be used by any bridesmaid or any other person too. This campaign is launched from April 12th.

BAMBA ROOMS

“In 2010 we are planning to invite world famous DJs to come and perform.

We don’t usually charge an entrance fee. However we do sometimes have an entrance fee, for example when Xzibit and Timati came we charged GEL 100 - GEL 300,” says Levan Qoqiashvili, Manager of Bambarooms.

As the rule club usually holds an event once a month.

“Coolio, Xzibit, Ja Rule, Jim Jones and Timati all hosted events last year.

Invited DJs in 2009: Da Sa Lounge, RyRalio DJs, Kinky movement: Andy Mcloughling, DJ K-GEE, DJ Dlee, DJ J West, A-skillz, Lucardo Parena, DJ Max More.

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A unique and vibrant premier Restaurant & DJ Bar, having one of the chic locations at Tbilisi Chardin area, is one of the liveliest and trendiest spots attracting a younger, faster-living crowd and enthusiastic clubbers, as one of the wikicontributor desrcibes.

“A good combination of a restaurant and a bar for around 300 people is perfect for a quiet, romantic meal in early evenings while towards midnight at weekends the place erupts into a wild party zone.

Bamba rooms is probably the best and newest club in tbilisi.

You will feel like in London-NY with a great interior and nice lounge music and techno”.

OPEN: Daily from 1:00 PM - last guest WHERE: Bambis Rigi st. # 7 WEB: www.bambarooms.ge CONTACT: 43 99 77

360

o

U2

IN BATUMI

Legendary U2 is coming to Georgia. U2 is currently in its 360 Degree tour that is expected to gross around 750 million USD by the time it ends later this year.

Eastern Promotion, company responsible for organizational issues told WEALTH Financial Magazine that show in Georgia is planned to be in September “and it should be in Batumi”.

It follows U2’s show in Istanbul.

The concert, scheduled for Sept.

6 at Atatürk Olympic Stadium and coming as part of the band’s ongoing 360° Tour, will be the Irish rockers’ first-ever appearance in Turkey.

Organizers expect to sell over 100,000 tickets for the concert.

The lowest ticket for the İSTANBUL concert costs 22 euros, which is 8 euros cheaper than the lowest-priced ticket for a concert on the European continent.

Ticket for TBILISI show will cost around USD 100. The concert is expected to be held on Black Sea cost of batumi.

The MOSCOW 360° show took place on August 25. The Turin show took place at the Stadio Olimpico on August 6 and the Rome show was at the Olympic Stadium on October 8.

To date U2 band has played 44 sold out dates for 3.2 million people and grossed 320 million USD. The staging runs around 750,000 USD every day.

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Katie Melua

has announced an extensive European tour to follow the release of her fourth studio album, which will be released in May 2010.

The tour includes 13 shows in the UK in December, kicking off at Manchester Apollo on Saturday 4th December and concluding at Bristol’s Colston Hall on Tuesday 21st December.

Melua’s as yet untitled new album is currently in its final stages, with producer William Orbit describing the recording sessions as “one of the finest things I’ve ever been involved with. I am hearing what can only be described as magic”.

According to the Sunday Times Rich List 2008, Melua has a fortune of £18 million, making her the seventh richest British musician under thirty. It was reported in 2009 that she had lost almost half of her fortune as a result of the global economic downturn

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She was born in Born 16 September 1984 Kutaisi, Georgia, but moved to Northern Ireland at the age of eight and then relocated to England at the age of 14. Melua is signed to the small Dramatico record label, under the management of songwriter Mike Batt, and made her musical debut in 2003. In 2006, she was the United Kingdom’s biggest-selling female artist and Europe’s highest selling European female artist.

Men’s Fragrances Unisex Thing is Dead, Men’s Flair These days men are more aware of their personal appearance and less intimidated by fragrance products. With presence of word “metrosexuals” on every corner you would expect that trend in men’s fragrances is towards fresh fruit accords and sweeter floral notes that would give men’s fragrances more of a feminine approach. The rediscovery of male sexuality doesn’t necessarily mean that all men are crazy for their feminine side. Many of men (and women) are becoming afraid of where this whole “metrosexual” thing is going. When it comes to scents, it becomes even truer. Men do not want to smell like women, and women also do not want them to smell like women. Thankfully, trend in fashion is towards classic elegant looks and men’s fragrance industry is following that trend.

The hot trend in the men’s fragrance world these days are men’s fragrances that evoke a masculine attitude. It means unisex thing is dead. Woody oriental will be buzzword in fragrances for men for next few years. Also popular is use of rare, more exotic and diferent spicy notes in every product which lend the brand’s signature. Trend is bigger scale of distinction among brands, which produces unique, recognizible style of every product.

New big trend in men’s fragrance industry is using a celebrity to create his own fragrance (with a little help

of professionals) in attempt to entice buyers to identify with characteristics of celebrity by using his fragrance product.

It is up to you to choose will you fall for this or not, but our recommendation is: stick to classic men’s fragrances makers.

Trends in daytime men’s fragrances will remain crisp and cool scents, as men still want to be fresh and clean during the day. Fruit notes will hardly find their way into men’s fragrances this year, but expect more of aromatic woody blends. Classics will prevail, with oriented and spicy fragrances that will be clean and not overpowering. “Sport”

fragrances will continue to influence world of men’s daywear fragrances.

Cool, fresh, less aromatic spices with warm, woody fragrances will be generally trend in daytime fragrances.

For evening, lighter, crisp daytime scents will not be an option. Spicy warm Orientals with precious woods scents and new exotic spice notes will find their way into evening fragrances for men. Scents will be stronger, more classic and more macho, with new dash of elegance through more romantic, woody fragrance.

Bell’s Top 10 Flavor and Fragrance Trends for 2010 In January 2010 Bell Flavors and Fragrances has announced its top 10 fragrance and flavor trends for 2010. The selection process included sample tracking, trend scouting and compilation of trends from external sources. Fragrance trends were developed on the basis of trends in fashion, art, color, politics and entertainment: Grapefruit rhubarb rose (youthful) Seashore driftwood (androgynous) White amber/patchouli (shocking) Mahogany vetiver (relaxed traditional) Absinthe (provocative) Mandarin/orange blossom (simplistically fashionable) Mojito (planned simplicity) Woody iris (realism) Satin wood (transparent fashion)

Szechwan pepper (bold accents) Flavor trends were categorized in sweet (confectionery, bakery and dairy) savory (meat, condiments, dressings, sauces, soups and seasonings) and beverage (non-alcoholic and alcoholic) segments; bacon, meanwhile, is predicted to be on the top of all product development for 2010.

Sweet flavors: Honey, milk chocolate, rose, chocolate with bacon, Ellison orange apple, golden russet, pomelo, chili, sea buckthorn and aronia.

Beverage flavors: Coconut water, hibiscus, Peppadew (sweet piquanté pepper), yumberry, chamomile, lavender, jasmine, cupuacu, aloe vera and cucumber.

Savory flavors: Bacon, sriracha, rich umami, brown butter, black garlic, saffron, Tasso “ham,” aji amarillo, za’atar and thai green curry.

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