Georgia's Transit Potential If Explored Will Contribute Greatly to the Nation's Budget Growth

Tamaz Chkhikvishvili, a Georgian businessman who has achieved incredible business successes in the last three decades, is one of the leading Georgian businessmen pursuing strategic business opportunities in Kazakhstan. In this interview, Chkhikvishvili identified the key areas where their efforts are concerted and the benefits that will be accrued by Georgia from the successes recorded in these areas.

You have been in business for 30 years now, how would you rate the business environment in Georgia?

Well, so much has changed in the past 30 years, and I can honestly say that the difference in the business environment we had 30 years ago, and our business environment today, can be likened to the distance between heaven and earth. Georgia has led those of us in the business world through a very difficult path, with a lot of pressure. Basically, the events that we witnessed in the country 30 years ago, definitely had effects on business as well. Judging by the present however, we have to say that business is completely free today, as any citizen of Georgia has the opportunity to choose his or her preferred business direction. Everything is done to help businesses develop successfully. Despite all of this, there is always a need from government to improve the business environment and a lot of hard work is what is sometimes needed in this direction. However, I would like to reiterate that any person today, not only a citizen of Georgia, but also foreigners who have decided to start a business in our country, can meet the necessary conditions for success, and this is largely due to the role government plays in our business environment.

What are the main areas of your business?

The current major focus of our business, is to complete what we can call a dream project which, we embarked upon with our partner company nearly two years ago. This project is the construction and development of a deep-water terminal in Poti Port. As you know, there are only two ports in Georgia, Poti and Batumi, and only the Supsa and Kulevi terminals work for petroleum products. Unfortunately, our Georgian ports are not effectively adapted to handle cargoes of any quantity or type. There are low depths in our ports and there are other problems preventing Georgia from maximizing the benefits of the Silk Road. The Silk Road passes through our corridor, and should be used to properly approximate and transfer freight from Asian countries, and Central Asia to Europe in a short period of time and at desired rates. On this project, we will build a deep-water terminal in the port of Poti and this will help us mitigate these problems. Our partner is IPM Terminal Poti, a subsidiary of the world-renowned Maersk, with extensive experience in shipping. We are working together on this project and hope that its construction will begin next year and that we will be able to get the first ships in the next two or three years.

You have actively pursued the expansion of your businesses in Georgia, do you also make expansion moves for your business in other countries?

This project I have just mentioned will help us find partners from our neighboring countries, especially in those countries where Georgia’s geopolitical situation is acceptable and their plans include servicing Georgian ports. We have identified a large and powerful country as Kazakhstan in this regard. Our efforts to expand our business activities in several Central Asian countries would soon reach its third year, but we are mainly concentrated in Kazakhstan. Our goal is to clearly explain our projects and its needs to our future partners. As you know, it is iconic to say that Mendeleev’s table is fully represented in Kazakhstan, because Kazakhstan is a country that is rich in natural resources, and is keenly interested in using our corridor to transport its cargoes through the ports of Poti and Batumi to Europe and every other place.

I would also like to point out that we currently have many competing routes in this region. The Russian factor dominates, and Russia is doing its best not to move cargo to other corridors. Therefore, it is imperative for our Kazakh businessmen to have an alternative in deciding which direction to ship their cargoes. For example, I can name cargoes such as wheat, coal, various raw materials, ores, metal products and scrap metal that are abundant in Kazakhstan and are unfortunately transported through only one direction – crossing the Russian route and passing through Russia from Europe. The products I listed are usually produced in excess in Kazakhstan. They usually have a lot left to satisfy local needs and to export, so Kazakhs are very interested in finding alternative routes. It is this idea that has brought us to this country, we have set up our infrastructure there and we believe that we have achieved tremendous success from our efforts in recent years.

I would like to ask about the Baku-Tbilisi-Kars railway project because it is within the same context. Do you think that it should be logically perceived as a competing direction for cargo transportation?

As for the route mentioned above, I may be mistaken, but I think this route will be mainly used for containers at the initial stage and will not have much impact on non-container traffic to Georgian ports. This project is, I suppose, mainly aimed at Turkey’s trade with Central Asian countries. Services provided through Georgian ports should cover trade in Central Asia, and the Caucasus with Europe, North and South America, and the Far East.

Why are you interested in Kazakhstan and what are your plans for this country?

Over the years, there’s always been a failure to reconcile tariffs between the two countries operating in the region – Kazakhstan and Azerbaijan. Georgia also prevented businesses from shipping too much cargo produced in Kazakhstan via the Caspian Sea. The goods would have to arrive in Georgia before being shipped to the Far East or European countries. In many cases, there were ambitions from different sides, and unfortunately, for years, as I mentioned, these topics were unending. Today, everyone is convinced that at the expense of natural resources, oil or petroleum products, life cannot be sustained, and that is exactly what these countries are looking for, any path where they can make their business more effective.

The main reason for our work in Kazakhstan is to make contact with various service providers such as freight forwarders, so that we can establish ourselves as one of the crowning chains on this great chain. Through this project we have currently embarked upon, we are going to claim these big ships that are missing in Georgia today. We are going to ship products produced in Kazakhstan or transit goods, through the territory of Kazakhstan, and we will take them with these great ships to their destination. We are currently making efforts to share this information. Since logistics is of the utmost importance, logistics often solves the fate of business owners. We think that through our efforts, our ports will be ready to receive large quantities of transit goods, which will be processed in our Georgian ports and then shipped to various large distances. The efforts of our friends in both Kazakhstan and Azerbaijan are quite positive in response to these demands.

I would like to reiterate that partnering with a world-renowned company such as IPM Terminal, the sole managers of Poti Port, provides our company with an image, and a reputation which, makes it easier to convince high-profile business people. We have established good personal contacts with the managers of the companies that determine the business scope in this area. I had the opportunity to be invited to the Caspian Sea Jubilee Day in Baku, where all the carriers, all the logistics companies gathered, and at that event, we had the opportunity to get in touch with the high echelons of the Kazakh Railway Service with whom we discussed our project extensively. I was also honored to meet the new President of Kazakhstan Kassym-Jomart Tokayev, in Nursultan and I intimated him about our investment plans. I can say that our team, our consortium, and all of our projects that are directly related to our business in Kazakhstan were supported by the President of Kazakhstan.

What was the purpose of the meeting with the President of Kazakhstan, and what is the significance of this meeting for you?

We had the opportunity to talk about our plans in detail in this meeting, and I want to emphasize the fact that I was impressed by the meeting with the President of Kazakhstan. My impression about the meeting was not only formed because he agreed to this meeting, but because he posed comprehensive questions about the aspects of our business activities in his country. We mainly talked about transit shipments through the Caspian Sea, as well as some of our initiatives to invest in Kazakhstan. This is our third year in Kazakhstan and we have a company set up, we have contracts, for example with both ports of Kazakhstan’s main seaport of Aktau. We were also interested in his vision as a relatively new president, and I was pleasantly surprised by the programs he shared at this meeting about business, and about his visions as the new Head of State. This meeting and the recommendations we received will help us in our business activity in Kazakhstan.

How do you assess Kazakhstan-Georgia trade relations and where do you see the potential for development?

Georgian-Kazakh business relations are developing very dynamically, and one of those who play a decisive role in the development of these relations is the Ambassador of Georgia to Kazakhstan, Mr. Zurab Abashidze. If you try to gather the common opinion of all Georgian businessmen, who at least applied once to our embassy in Kazakhstan, you will hear positive remarks about the Ambassador and his staff. They do absolutely everything to promote the establishment of contacts between Georgian and local businessmen. They give advice and help Georgian businessmen build ties with government agencies in Kazakhstan. Also, our Honorary Consul, Mr. Shota Jakhutashvili, who, if I am not mistaken, has been a citizen of Kazakhstan for over 30 years, lives and actively cooperates with both the Georgian business sector and Kazakhstani, and he facilitates these visits. He has great authority in the Republic of Kazakhstan and is a kind of “bridge” through which we establish fruitful ties between the two countries. I have met many Georgian businessmen in Kazakhstan working in various fields, such as trading, transportation, catering, and other industries.

You should also probably know that Kazakh businessmen in Georgia have been experiencing booms in the last two years or more. One of our ports, Batumi Port, has been leased by one of the Kazakh companies for a long time. It is quite possible, as you know, for Kazakh businessmen to be investing money in real estate, in Batumi, and Tbilisi. There is a lot of investment in construction in those areas. If I am not mistaken there are five direct flights a week from Almaty, Nursultan and Aktau. I often have to travel and in the plane, there are mostly Kazakhs and only a few Georgians. So, the prospect is very big, but the key, if not the main direction, is probably the work of our Poti New Terminal Consortium in helping this huge country and its cargo or transit cargo as much as possible to reach Georgia and Georgian ports successfully. This will help boost the activities of Georgian Railways and it would create additional jobs, and will contribute more money for the country’s budget. Georgia is making extensive and progressive moves with her transit potential. I think that working in transport field is the most important, but we should also highlight another distinct potential of the Kazakh nation. Very good people live in this country and I would like to emphasize that they are sympathetic towards our country and that we should take advantage of this, and hope that our trade turnover, which is not so high today, will increase in the future.

Lastly, I would like to emphasize our deepest respect for the heroic Kazakh people, I mean each citizen of this country. In this regard, I would like to take this opportunity to congratulate the Kazakh people, my friends and partners on the anniversary of the independence of the country, and to wish them all the best in 2020.