Caucasus Business Week #112 by Caucasian Business Week

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September 7, 2015 #112

September 7, 2015, Issue 112 GEORGIA

ANNUAL INFLATION IN AUGUST SEES 2 YEARS’ MAXIMUM

nnual inflation in August exceeded NBG’s targeted index. According to official data, annual inflation level has amounted to 5,4% in August, 2015. Pg. 9

INDIAN COMPANIES INVEST IN GEORGIA

usiness ties between Georgia and India is growing. After investing in Georgia’s energy sector, now Indian companies are showing their interest in the country’s hotel and hospitality sector. Pg. 9

GEORGIAN RAILWAY REDUCED TARIFFS BY 20% ON DOMESTIC AND EXPORT TRANSITS

tarting July 1st of this year, tariffs on domestic and export transits reduced by 20%, says Georgian Railway’s management. The change applied to both domestic transit and exports of all kinds of dry goods, as well as container shipping. Pg. 10

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ELECTRICITY RATE HIKE IN TBILISI

fter rate hike in the regions last month, residents in the capital city Tbilisi will also see their electricity bills increase. Households in Tbilisi will have to pay 3.5-4.5 tetri more per kWh depending on how much of electricity they consume per month. The Georgian Energy and Water Supply Regulatory Commission approved tariff hike for Telasi

at a session on September 3. Telasi, which is an electricity distributor company in the capital city with about 524,500 customers, was requesting rate hike citing increased expenses for purchasing electricity, attributed mostly to depreciation of the Georgian currency lari. Russia’s state-controlled power trader Inter RAO holds 75.1% of shares in Telasi, the rest is held by the Georgian state.

AMBASSADORIAL 2015 Georgia’s Ambassadors Gather in Tbilisi to Discuss Country’s Foreign Policy Pg. 7

PASHA BANK – THE FASTEST GROWING CORPORATE BANK IN GEORGIA

ASHA Bank is named The Fastest Growing Corporate Bank in Georgia 2015 by International Finance Magazine. Pg. 11

Irakli garibashvili: Khudoni HPP Electricity will Remain in Georgia Pg. 2 Giorgi Tkhelidze Currency Volatility Preconditions and Georgian Bank System Pg. 8

Zviad Diasamidze: We Aim to be a Leader in the Field of Corporate Social ResponsibilityPg. 6 Betsson Acquires Europe-Bet in $85 million Deal

TBC GALLERY HOSTS REZO KEZELI’S PHOTO EXHIBITION

ULRIK BENGTSSON CEO of Betsson Malta Pg. 4

Microfinance Organizations – Heavy Burden on Economy (Infographics)

TBILISI - MICE TRENDS AND ITS IMMEDIATE FUTURE Industry predictions indicate that the MICE sector is poised for vigorous growth. On the background of the regional financial instability it’s springing back and is positioned stronger than ever. The demand for meetings is on the rise and though companies are not splurging, the expensive venues are not being ruled out either. Based on Cushman & Wakefield | Veritas Brown (CW|VB) research publication MICE tourism is considered lucrative by hoteliers whereas the revenue generated by this segment is a few times more than leisure travelers. Pg. 8

The last years have recorded an impressive leap in the microfinance sector development. The sector has nearly doubled its profits in the first half of 2015. Does this upturn signify a growth in the real economy financing expressed in new enterprises and new job places? Microfinance organizations issue loans to the highrisk category clients, who fail to borrow loans from commercial banks. Consequently, the policy and terms of microfinance organizations impose a heavy credit burden on Georgian citizens. Commercial banks issue loans to microfinance organizations. Therefore, commercial banks act as allies of microfinance organizations in financing high-risk categories. At the same time, a major part of Georgia based microfinance organizations and pawnshops are owned by commercial banks or top managers of commercial banks and financial groups (Naturally, no legal records exist in this case). Has this factor made the microfinance sector a significant financial source for the Georgian economy?

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A simple scheme works: commercial banks show caution in issuing credits to business companies in various sectors (the below statistics proves this). Meanwhile, commercial banks easily issue credits to companies that act as mediating financial bodies. These organizations borrow cheap credits from commercial banks and issue loans with increased interest rates. Georgia based commercial banks draw money resources from the international finance market with an annualized 5-7% interest rate and issue this money to microfinance organizations at 12-18% interest rates. Finally, the microfinance sector lends money with 24-36% interest rates. There is no other business sector in Georgia that would operate with such a high top margin. Similar simple speculative schemes inject very expensive financial resources to the business sector. The Georgian finance sector earns significant profits every year, while other business sectors remain in the survival regime because of expensive money resources. Pg. 5

ROMPETROL RESTYLES FILLING STATION Rompetrol Georgia” has finished restyling/rebranding of the petrol station, located on “Saakadze Square”. The opening event of renovated station was held on September 3. After restyling/rebranding, the station is equipped with modern technology, high durability materials and lighting which ensures the station will stay in top condition for a long period. Previous branding colors have been replaced with white, orange and red. – With the new Rompetrol logo, as part of the rebranding process of the entire Rompetrol network at Group level. Pg. 10

2 MAIN EVENTS PARLIAMENT OVERRIDES PRESIDENTIAL VETO ON BANKING SUPERVISION BILL

GOVERNMENT NEWS caucasus business week

GEORGIA-USA PARTNERSHIP BRINGS GREAT REWARDS FOR BATUMI COAST GUARD

he Parliament overturned on September 3 presidential veto on a package of bills that removes banking supervisory functions from the Georgian National Bank (NBG). The veto was overridden by the Georgian Dream (GD) parliamentary majority group with 81 votes, 5 more than required minimum of 76. Opposition lawmakers from UNM and Free Democrats parties voted against overturning the veto. The vote on September 3 was preceded by lengthy debates a day earlier at parliament’s first sitting after the summer recess during which one senior GD MP called President Margvelashvili “the Sorosian NGO-shnik” who “is getting on our nerves with vetoes.” MPs were not able to hold voting on September 2 as UNM lawmakers resorted to procedural levers to drag the hearing out and to delay the vote for the next day. The controversial bill, which has faced criticism from international financial institutions, business associations, opposition parties, a group of civil society organizations and from the central bank itself, was vetoed by President Giorgi Margvelashvili in late July, who said that he was critical towards both “the hasty process” through which the bill was adopted and “its content.

PM: KHUDONI HPP ELECTRICITY WILL REMAIN IN GEORGIA

he Government has revised the Khudoni HPP construction project. Namely, the investor’s obligation will be corrected. The Government meeting discussed the project changes on September 4. The 2011 memorandum will be amended, the Georgian Prime Minister noted. “We imply the 2011 memorandum revision. The investor company will be obliged to leave the Khudoni HPP electricity in Georgia throughout the year instead of previously determined 3 months”, PM Irakli Gharibashvili said. Negotiations are underway with the investor company on the memorandum revision.

AGE PENSION GROWS TO 160 GEL

ge pension is increased by 10 GEL from September 1. As of the Ministry of Healthcare, all pensioners will get grown pension - 160 GEL from October 15, after pensions of September will be issued. Besides that, pensioners will still have possibility to utilize state insurance program. Over 30 million GEL will be allocated annually from the state budget for pension increase. It should be noted, that as of the final data, over 703 thousand citizens get age pension in Georgia. And from 104 to 106 million GEL is allocated from the budget. However, women get age pension at the age of 60, while men – at the age of 65.

CABINET CHANGES: GEORGIA HAS NEW FOREIGN, ECONOMY MINISTERS

eorgian Prime Minister Irakli Garibashvili has appointed Minister of Economy Giorgi Kvirikashvili to the post of foreign minister. Vice-Mayor of Tbilisi Dmitry Kumsishvili was appointed new minister of economy. “I want to introduce Kvirikashvili as foreign minister,” Garibashvili said at a briefing. He said that the new foreign minister will take a decision about the further position of former Foreign Minister Tamar Beruchashvili. “Kumsishvili will take the position of economy minister,” he said.

LASHA ABASHIDZE APPOINTED AS TBILISI VICE MAYOR

avit Narmania represented Lasha Abashidze, former governor of Vake district, as a new Vice Mayor of Tbilisi on Wednesday. Abashidze replaced Dimitri Kumsishvili, after he was appointed as a Minister of Economy and Sustanble Developmnet.

September 7, 2015 #112

eorgia and America are celebrating a successful joint project to strengthen Georgia’s maritime border security and advance the country’s coast guard capabilities. Officials from both countries gathered today to attend a festive celebration marking the opening of a new in-port boat basin in Georgia’s western Black Sea seaside town Batumi.

The new basin, constructed with $14 million funding from the United States (US) government, provided docking space for up to 15 vessels and ensured ensure the Georgian Coast Guard now functioned as an important operational centre. The US side also contributed to developing the country’s maritime border security and coast guard capabilities by fully modernising a specialist rescue and support boat – an Offshore Patrol Cutter P-103 named Batumi. The US noted the boat would help the Georgian Coast Guard to better carry out its maritime duties, and officially handed over the fully-equipped boat to the Georgian side today at the opening ceremony. “The boat basin is one more vivid proof of Georgian and American strategic partnership,” said Garibashvili today while thanking the US for their support. “The project was fully financed by Georgia’s ma-

jor strategic partner, the United States, and I want to thank the country’s government and its diplomatic representation in Georgia,” he added. Chargé d’Affaires of the United States to Georgia Nicholas Berliner said the in-port boat basin and the addition of the new Coast Guard vessel would help strengthen Georgia’s border and regional security capacities, and added this was “one more aspect of the vibrant US-Georgia security partnership”. At the final part of the opening ceremony Garibashvili thanked Georgia’s coastguard staff for their service to the country and added much had been done in Georgia over the past three years to strengthen and develop the country’s coastguard departments. “We have modernised the Coast Guard fleet, increased the technical capacity of watercrafts and ensured their safe stationing. We have increased our efforts to combat (the use of) weapons of mass destruction as well,” Garibashvili added.

CONSTRUCTION OF NENSKRA HPP BEGINS IN GEORGIA

onstruction of a billion dollar Hydro-Electric Power Plant (HPP) has begun in Georgia’s northwest. Parties involved in the development and construction works signed a special agreement today, signaling the launch of the 280 megawatt Nenskra Hydro-Electric Power Plant (HPP), worth $1 billion USD. The construction phase of the project is due to end sometime in 2021 however the Nenskra HPP, earmarked for the Svaneti region, will start producing electricity from 2019. The HPP is expected to annually produce 1.2 billion kilowatts of electricity per hour. The HPP is projected … to replace imported electricity during the winter months. This will improve the sustainability of our country’s energy system and energy independence,” said Georgia’s

Prime Minister Irakli Garibashvili. “This is the first time Georgia is building such large scale HPP since its independence,” he stressed. The Korea Water Resources Corporation (K Water) is one of the project’s major investors, while the construction works will be carried out by the Italian industrial group Salini Impregilo. Today the sides agreed and signed a special agreement that outlined all the technical, financial and legal details of the project. The Nenskra HPP construction will be based on a Build-Operate-Transfer (BOT) structure, according to which the investor is obliged to build the HPP, operate it for 35 years then transfer ownership of the HPP to the state. Meanwhile, nine HPPs have been built in Georgia recently that collectively produced 157 megawatts of energy.

Recently construction work ended at the 237 megawatt Combined Cycle Thermal Power Plant (TPP) in Gardabani. As of today 16 HPPs are under construction on Georgian territory. From 2012 until now about $400 million USD has been invested into Georgia’s energy sector through Foreign Direct Investments (FDIs).

ELECTRICITY RATE HIKE IN TBILISI

three-step electricity tariff scheme is in force in Georgia and rates depend on how much electricity is consumed by customers per month. Electricity tariff in Tbilisi was last revised in January, 2013, when the rate for some category of households were reduced, which was one of the pre-election campaign promises of the Georgian Dream ruling coalition. According to regulator agency’s September 3 decision the first-step tariff, applying to households in Tbilisi which consume less than 101 kWh

electricity per month, will go up from 9.48 tetri (about 4 U.S. cents as of September 2) to 12.98 tetri (about 5.5 cents). With this increase the firststep tariff will still be less than before the previous rate revision in early 2013, when it stood at 13.48 tetri. The second-step tariff, applying to customers who consume between 101 and 301 kWh electricity per month, will increase from 12.46 tetri per kWh to 16.992 tetri (about 7.2 cents). The increased tariff is slightly more than pre-2013 tariff of 16 tetri. The third-step tariff, applying to customers who consume more than 301 kWh of electricity

per month, will increase from 17.7 to 21.476 tetri (about 9.1 cents) per kWh. Tariff decrease did not apply to this category of consumers in 2013. Starting from August 1, electricity rate increased by 3.95 tetri for over one million customers of Energo-Pro Georgia, which distributes power to consumers outside Tbilisi in most of the regions, except of Kakheti in eastern Georgia. After the rate hike in the regions, the government said it would allocate GEL 20 million annually to subsidize increased tariffs for socially vulnerable households. Officials say that the similar scheme is expected to also apply in Tbilisi.

GEORGIA’S EUROPEAN PERSPECTIVES AT NYC GLOBAL CONFERENCE

top official from the Parliament of Georgia is promoting the country’s European future and raising awareness of Russia’s aggressive steps on Georgian soil at an international conference in the United States (US). Today the Speaker of Georgia’s Parliament David Usupashvili addressed foreign officials at the Fourth World Conference of Speakers of Parliaments, organised by the independent body InterParliamentary Union (IPU). Usupashvili is one of about 180 parliamentary leaders, including more than 35 Deputy Speakers, from nearly 140 countries taking part in the conference, held at the United Nations (UN) headquarters in New York. The August 31-September 2 conference is examining ways to effectively tackle global challenges to peace and democracy. Today Usupashvili held bilateral meetings with six high officials, including Vice President of the Parliament of France Laurence Dumont, Speaker of the Swedish Parliament Urban Ahlin and Speaker of the Czech

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Chamber of Representatives Jan Hamacek. After meeting Hamacek the Czech official said: Georgia is not only very popular in the Czech Republic but we also have been through the difficulties that Georgia now encounters on its EU integration path. We would like to express our full support.” At all three meetings the sides spoke about the ongoing ratification process of the Association Agreement (AA) that Georgia signed last June with the European Union (EU). EU Association deals must be ratified by all 28 EU member countries before they can be fully implemented. Looking ahead Usupashvili noted an important step for Georgia was pursuing its visa liberalization plans. In this regard the country expected to see “positive results” by the end of this year, stated Parliament of Georgia’s press service. When it came to Georgian-NATO relations, Usupashvili stressed that Georgia’s Euro-Atlantic course was not directed against anyone but served to ensure peace and stability in the region. Also today Usupashvili met with high officials

from Cuba, the Maldives and Uganda and emphasized that such Parliamentary forums were important not only for current relations but to establish bilateral relations with new colleagues. While meeting Speaker of the Parliament of the Maldives Abdulla Maseeh Mohamed, the parties spoke about bilateral relations and cooperation. Mohamed noted his country had “rich” experience in tourist infrastructure development and Maldives was ready to share this knowledge with Georgia. At a meeting with Speaker of the Parliament of Uganda Rebecca Kadaga, Usupashvili spoke about the importance of the UN General Assembly’s 3rd Resolution on the Status of the IDPs and Refugees from de-facto Georgian regions of Abkhazia and South Ossetia. Finally today Usupashvili also met with Vice Speaker of the Parliament of Cuba Ana Maria Machado and underlined international humanitarian importance of the Resolution that envisaged protection of rights of those who were forced to leave their homes due to internal conflicts.

The weekly is distributed to top companies, banks, embassies, state sector, Tbilisi and Batumi hotels, Tbilisi, Batumi and Kutaisi Airports, as well as in the town of Marneuli. The newspaper will also penetrate Azerbaijan in the near future

Editor: Nino Gojiashvili. Mobile phone: 595 050404 Reporters: Nutsa Galumashvili; Lazare Gvimradze; Shiva Parizad

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

September 7, 2015 #112

PUBLICITY

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4 HEADLINES KARVASLA TO OPEN FIRST EUROBRAND OUTLET STORE IN SEPTEMBER

rading and business center in Tbilisi Karvasla will greet September with new stores and new plans. On September 1 Karvasla will open the first European brands Outlet store in Tbilisi. Brands such as GAP, ZARA, KOTON, H&M, etc. will be available with large discounts at the Karvasla Outlet store. The store will open its doors to new customers at 11 am, September 1. A 70% discount on women’s, men’s and children’s clothing will await the customers. Apart from the Eurobrand Outlet, Karvasla is planning to open new brand stores in September. New entertainment events are also planned at Karvasla starting with the new season.

ZARAPXANA CLOSES PART OF STORES IN GEORGIA TO ENTER AZERBAIJANI MARKET

arapxana, the only jewelry manufacturing company in Georgia, closes some of its stores and focuses on exports. According to the company’s representative, Zarapxana is planning to open a store in Baku, negotiations are entering the final stage and the first store in Baku is expected to open by the end of September. They say in the company that Zarapxana products are very popular in Baku, they have a lot of corporate clients who show great interest in the ancient Georgian jewelry and the company wants to export Georgian unique products outside the country.

DUTCH SUPERMARKET BRAND EXPANDS IN THE GEORGIAN MARKET

utch supermarket brand SPAR is expanding and opening another branch in the center of the Georgian capital. The object will be opened on the site of Ioli store in mid-September. According to the company’s marketing manager Oto Shamugia, by the end of 2016, the company plans to replace Ioli and Foodmart all facilities by SPAR. To open 60 stores, the company will spend $ 7 million. At the moment, SPAR is represented with 12 stores on the Georgian market. In the near future supermarkets will be opened in Batumi and Kutaisi. Shamugia notes that SPAR supermarkets are very popular among the population. SPAR appeared on the Georgian market this year.

NEW HIGH CLASS HOTEL TO OPEN IN VARDZIA

tarting from September 15, hotel Vardzia Resort will be open to guests, owner of resort is a Georgian businessman. The whole complex is arranged on the territory. cottages, a restaurant, a Meskhetian hall, arbor, lounges, two large hanging outdoor pool, wine cellar, Meskhetian Oda, wood fired oven are available at resort, there is also a 10th-century chapel of St. Marine, which has been restored.

INTERVIEW caucasus business week

BETSSON ACQUIRES EUROPE-BET IN $85 MILLION DEAL

By Joseph h Al Alexander d Smith

tockholm-based Betsson AB has acquired Georgia’s second-largest gaming company Europe-Bet in a deal worth up to $85 million. The purchase gives Betsson a 30% share of Georgia’s local gaming market and further strengthens the company’s ongoing expansion into Eastern Europe. Speaking to the press on his first visit to Georgia since the deal was struck in June, CEO of Betsson Malta, Ulrik Bengtsson spoke of the “island of stability” offered by Georgia in a sometimes volatile region which made expansion into the country so attractive. “This [acquisition] fits quite well with our portfolio of brands, and our acquisitions strategy, because it’s in a region which we know” says Bengtsson. “We have a big office in Kiev, where we operate software development and we have one of our business-to-business partners that runs a business in Turkey. [Another] reason why it made sense is that Georgia actually has a very robust, predictable, fair and commercially viable license regime which we really liked.” Since its formation by a group of private entrepreneurs in 2010, Europe-Bet has established itself as a leading brand in Georgia’s gaming market, clipping at the heels of market-leader Adjarabet. Like most gaming companies, Europe-Bet does most of its business online, offering customers a range of gaming experiences from online poker and backgammon to live casino gaming. In 2014, Europe-Bet’s revenues amounted to

$52.4 million, with online operations accounting for $40.8 million, and the remainder coming from land-based business. The company’s EBIT margin was 38.1% and the company has managed to achieve solid double-digit growth in the few last years. Betsson’s acquisition of Europe-Bet brings a company with 50 years’ experience in the gaming industry into the Georgian market. The company has been investing heavily in software development, counting 400 developers and software engineers within its group. Bengtsson is optimistic that expansion into Georgia can signal a step forward in sharpening its competitive edge in online customer experience. “There are opportunities for us to over time move some of our central development to Georgia as well. However this requires a good talent pool of engineers” – Bengtsson explains – “if we think that the environment is good enough for us to do that, both in terms of the regulation for our existing business, but also in terms of having good cooperation with universities and the education system to provide the talent we need for building something like that. For a technology company in 2015, there is always a shortage of engineers. If we find them in Georgia, no one’s happier than me.” According to Bengtsson, Georgia’s domestic market is made all the more attractive by a regulatory regime which is robust, fair and commercially viable even by the standards of many EU member

he information is disseminated by Sakstat, which prepared statistics relaying on the declared data by the legal entities and individual entrepreneurs, registered in line of the legislation. According to this data, 986 hotels and similar type of enraptures were operating in Georgia in 2014, which is on the maximum of 8 years and exceeds by 150 units to the index of 2013. The hotels included 18 248 rooms, the figure is increased by 2897 comparing to 2013.

MANGO RETURNS TO GEORGIA TO OPEN NEW STORES

ANGO, one of the most distinguished Spanish brands in the fashion world, has returned to Georgia open two new stores. The first asset was unveiled at Tbilisi Mall on September 4. The store hosted a closed presentation for media agencies and invited guests. Later, the store was introduced to domestic consumers and Tbilisi guests. Another store will open at the East Point shopping mall by a solemn ceremony on September 12.

counties: “If you look at France, for example, it has a regulation which is completely not viable commercially and not particularly fair. It’s purely rigged to protect the local monopoly, so in that sense Georgia is actually quite advanced.” The stability of Georgia’s regulatory regime is a key factor in Betsson’s decision to expand into a new market. Europe-Bet was purchased from shareholders for an initial consideration of $50 million, with a further $35 payable after one year should Georgia’s gambling regulation remain unchanged. Meeting with government representatives during his time in Tbilisi, however, Bengtsson is confident that the Georgian government is committed to keeping the country open for business. Given the success of Europe-Bet over the last few years, Betsson is also keen to keep majority of the current management in place, “We intend to keep the business here” says Bengtsson, “and we don’t want to move a lot of things outside of Georgia, we want to keep the Georgian business and the 750 people that are employed here.” Betsson’s other key priority will be the continued growth of Europe-Bet and the continued improvement of customer experience: “We’re a growth company” Bengtsson explains, “and we expect this brand to grow at least at the same pace as the rest of Betsson, if not more. We’re going to do that by continuing to improve the product and customer experience and to launch more features for the sites to improve the customer journey.”

FIRST INTERNATIONAL ARCHITECTURE SHOWROOM TO BE HELD IN TBILISI THIS FALL

HOTELS AND GUESTHOUSES HOSTED 1 391 400 VISITORS IN 2014

September 7, 2015 #112

he first international architecture showroom The Architectural Forum of Caucasus 2015 is going to be held in Tbilisi in late October,” the founder of the forum Giorgi Maisuradze told CBW. Architectural Forum was founded in 2012 by George Maisuradze and Co-founders, Elene Machaidze, Mariam Gvazava, Beka Kakabadze and Anna Gulisashvili. The main goal of the forum is organizing architectural events that will unite young and creative Georgian architects, as well as the companies, in order to help develop the field in Georgia. They had held almost 10 architecture lectures at the Presidential Library and recently the first architectural workshop called “Innovation in Architecture” at ExpoGeorgia with the sponsorship of Government and the private sector. “We were expecting only 15-20 participants, but we were pleasantly surprised when we got 300

applicants. It was a really great signal for us to continue our route,” Maisuradze stated. In the upcoming event they hope to unite all Georgian as well as greater Caucasus architectural companies and all the motivated students to join together to do another great job — to present their products and designs. One of their future goals is to establish architectural forum showroom in Asia and Europe. “This year we are concentrating on Baku, Tbilisi and Yerevan. We want Azeri and Armenian companies to present their products and projects. We also have great support from the media, especially the Architectural Journal.” “I see this even as another great success for our organization as it is the first event not only in Georgia but also in Armenia and Azerbaijan,” Maisuradze added. The event will include approximately 50-60 companies among which 40 companies are going to

be Georgian. There will also be a lecture held by architects for participants and attendants. Giorgi Khmaladze, ART STUDIO, ORBI, AXIS are just several known people and companies to attend and participate on behalf of the Georgian companies, designers and development sector and real states. Also, on-going negotiations are held with LISI LAKE complex, DIRSI and individual DESIGNERS such as IA KUTATILADZE NEW LIGHT who is another sponsor will hopefully have a hand in the internal design and lightening of the event. “We are really proud of being the first ones to help the Georgian people to develop this field. Our main slogan is building a new vision” Giorgi said. “Another part of our activity is to prepare a list of students and young architects who are seeking jobs and have their portfolios to offer to companies. This way, each company can find suitable matches for their vacancies. The list already contains 300 qualifiers and hopefully in one or two months we will start this activity to help both groups. We just developed our marketing section whose supervisor is Zaza Navrozashvili to extend our capacity and productivity.” “One of the most interesting parts is that we are planning a surprise exclusively for this event. All I can say is that you will be able to meet one of the most famous architects who have done astonishing projects in Malaysia, Singapore, Israel and Europe. Previously we invited Michel Polin who is placed as the number one speaker at Ted Talk. We believe our new guest will amaze everyone, even the ones with no interest in this field.”

September 7, 2015 #112

ECONOMIX

caucasus business week

MICROFINANCE ORGANIZATIONS – HEAVY BURDEN ON ECONOMY

TOP STORY

he legislation does not ban this scheme and the regulatory body does not control this scheme either. We can only talk about moral aspects. Bankers forget moral responsibility, when they think of financial profits. We submit the statistics of microfinance organizations (the national bank’s report): Total Assets: Two Quarters of 2015 - 1 416 125 711 GEL. Two Quarters of 2014 - 938 083 836 GEL Two Quarter of 2013 – 808 465 654 GEL. Net Profits Two Quarters of 2015 - 70 546 418 GEL. Two Quarters of 2014 - 38 748 718 GEL Two Quarter of 2013 – 32 261 544 GEL. Attracted Loans: The second quarter of 2015 – 839 112 633 GEL, including from international finance organizations – 425 835 891 GEL, from commercial banks – 197 957 251 GEL, from physical bodies – 176 745 869 GEL. The structure of loans issued by microfinance organizations in the two quarters of 2015: Consumer Loans: 532 734 284 GEL; Agriculture and Forestry – 238 461 842 GEL; Trade and Service – 222 003 897 GEL; Tourism and Sports – 8 740 506 GEL; Housing Sector – 7 423 587 GEL; Processing Industry – 2 426 423 GEL; Transportation – 1 751 144 GEL; Education and Culture – 259 122 GEL; Mining Industry – 17 796 GEL. All misunderstandings and criticism derive from the fact Georgian citizens consider all financial organizations to be microfinance organizations, excluding commercial banks, while at least two varieties of financial organizations under this appellation operate in Georgia: 1) genuine microfinance organizations and 2) consumer credit organizations (pawnshops), Archil Bakuradze, head of the association of microfinance organizations, said. Genuine microfinance organizations finance the real economy and a major part of clients borrow business loans. Only a small part of the clients applies to microfinance organizations for consumer loans, he said. A total of 111 000 loans were issued to the agriculture and forestry sectors, according to the July 2015 report. This fact proves microfinance organizations support the real economy, he added. “The same opinion may be expressed regarding the trade, service and other sectors. Therefore, it is not expedient to assert microfinance organizations issue only consumer loans”, Bakuradze noted. As to the assertions as if commercial banks act behind microfinance organizations, Bakuradze assures all members of the association are independent and no one operates in the name of a commercial bank and no one receives financial support. When borrowers fail to pay the liabilities to commercial banks, microfinance organizations provide refinancing services, but consumer credit organizations provide the same services too, Bakuradze noted. Similar organizations do not need information about revenues of their clients. They accept real estate and property as a mortgage, he added. “There are many cases when customers take loans from other organizations to serve bank loans, as a rule, from consumer credit organizations or online render companies and this sort of financial organizations issue loans with very high interest rates”, Bakuradze noted. The ratio of commercial banks in financing the microfinance sector is 23%, he added. A part of the experts blame the principles Bakuradze has named. The microfinance organizations seek expensive and valuable mortgages, but their clients are people, who fail to obtain bank loans because of high risks. Therefore, this category of borrowers may lose the mortgaged property, Zurab Kukuladze, editor-inchief for the Banks and Finances newspaper, said. In certain cases loans taken from microfinance organizations may promote the implementation of this or that business project, but these cases are an exception and, in general, the performance of microfinance organizations deteriorates the social condition of borrowers, Kukuladze noted.

DCFTA BENEFITS FOR GEORGIA IN TERMS OF TRADE

eep and Comprehensive Free Trade Agreement (DCFTA) signed between Georgia and EU came into force one year ago. Georgia-EU Association Agreement, which includes the Deep and Comprehensive Free Trade Area (DCFTA) agreement, means Georgia and the EU will cancel all custom tariffs on products which meet EU standards. What benefits did the agreement bring in terms of trade and when should Georgia expect actual results in this regard ? According to the National Statistics Service, in January-July Georgia’s foreign trade turnover with EU countries amounted to $ 1 724 million, which is 2% more than the figure for the previous year, namely, exports fell 0.4% and imports increased by 3%. On the whole , in 2014 Georgia’s foreign trade turnover with EU countries totaled $ 2 990 million that is 4 percent more than last year. Exports increased 2% and imports – by 4%. However, it should be noted that the 2014 figure cannot be fully associated with the DCFTA as trade barriers between the two sides were removed from 1 September last year, therefore, the EU and Georgia were given the ability to freely trade in the last 4 months of 2014. At the same time, we should consider the economic situation in the region, including in Georgia, and first of all, the national currency devaluation by 30%. According to preliminary studies, as a result of the DCFTA, the Georgian exports should grow by 12% and imports by 7.5%, however, when Georgia will reach these figures, it is impossible to say yet. Beso Namchavadze, economist at the Georgia’s Reforms Association (GRASS), believes that the main benefit the agreement should have brought was Georgian exports growth in Europe, but for that Georgia should develop domestic production. According to him, DCFTA’s positive results should be clearly reflected in the export figures, all other positive results will be political. As for the question of when Georgia will be able to benefit more from the agreement, Namchavadze thinks that considering the current difficult economic situation, the country needs at least a year to cope with it. Georgian Business Association also expects noticeable benefit from the Deep and Comprehensive Free Trade Agreement in about 2-3 years.

INTERVIEW

September 7, 2015 #112

caucasus business week

Zviad Diasamidze: We Aim to be a Leader in the Field of Corporate Social Responsibility Adjaristsqali Georgia is developing the Shuakhevi HPP in the highlands of Adjara. One of the company’s priorities is promoting regional development. To accomplish this aim, AGL has chosen three directions for its social responsibility efforts: education and awareness raising, community empowerment, and infrastructure projects. Choosing these directions was done based on a combination of social and economic research which the company conducted, development priorities of local governments, and daily meetings with local residents. The development and implementation of social projects is guided by ZVIAD DIASAMIDZE, the director of land and social affairs at AGL.

- Mr. Diasamidze, are the social projects implemented by Adjaristsqali Georgia an obligatory part of the project or are they voluntary? - It should be noted from the very beginning that any project implemented in the field of social responsibility is a voluntary activity by that company. Social responsibility has been a part of western business culture for a long time. The modern business world has realized that for successful growth an organization must not only support its own growth but also support concerned groups surrounding that organization. This important part of western business culture has also become part of current Georgian private business culture. Steps have already been taken in this direction and the tendency is growing. Adjaristsqali Georgia, LLC tries to be one of the most successful companies in the region from a social responsibility standpoint, and we wish to be leaders of the field in the highlands of Adjara. - Let’s speak more specifically about those projects that are currently running. What kind of projects are planned in the education field? - First of all I would like to note that education is one of the most important priorities for Adjaristsqali Georgia, LLC. Our company tries to implement educational projects that support the growth of education for the next generation of Adjaran highlanders. This is why we established a scholarship program, which we implemented with the Ministry of Education, Culture and Sport of the Autonomous Republic of Adjara. Eight local students from Khulo and Shuakhevi districts were chosen based on an application process. The program which we funded covers expenses for the entire period of undergraduate studies. Recently, we also implemented an educational project for English teachers. This project aims to improve teachers’ knowledge of English and to enhance their professional skills. Over 40 English teachers from the Khulo and Shuakhevi districts took part in the project. We also held English-only after-school activities for gifted and

talented students to develop their English and critical thinking skills in an informal atmosphere and held an essay competition in which 44 local students participated. Finally, Adjaristsqali Georgia, LLC is beginning a student internship program in August in cooperation with Tbilisi State Technical University. Three students were chosen to take part in an internship for two months at Shuakhevi HPP and work alongside Georgian and foreign specialists. I hope that these young people will go on to join the professional team of the future hydropower plant and will be involved in the process of development of their own regions. Our company is planning to perform such internship programs in the future as well. - Let’s focus on infrastructure projects. What kind of projects do you implement? Infrastructure projects are an important part of regional development. We have quite a long list of infrastructure projects which we are implementing in cooperation with local municipal governments. These projects include building road infrastructure, improving drainage systems, and providing local communities with permanent water supplies. This is just a short list of the projects

All of our projects are directed by current needs. The rehabilitation of the Vashlovani school yard has been recently finished. We are currently performing a large scale water rehabilitation project in Makhalakidzeebi village and starting another in Akhaldaba together with the regional government. It is noteworthy that when implementing infrastructure projects we try to employ local residents and give them an opportunity to contribute to the development of village infrastructure. In 2015 alone, up to 150 local residents were periodically employed in our infrastructure projects. - Representatives of your company often talk about the need for developing and reinforcing the local community. What kind of activities do you perform in this respect? - Empowering communities is one of the most important issues for the development of highland Adjara and consequently is a key direction for our company. We have recently started a project of funding startup businesses by awarding grants and promoting household businesses. This project includes training in both practical and theoretical aspects of running a business. We have also launched a beekeeping project

Community Empowerment • •

Business Support Project Agricultural Development Project

Awareness Raising and Education • • • • • • • •

English Pilot Program - Language and Pedagogical Skills Training English Pilot Program - For Students English Pilot Program - English Essay Contest Students Scholarship Program Health Awareness Students Internship Road Safety Awareness Sustainable Use Firewood and Energy Efficient Wood Stoves

Infrastructural development • • • • • • • • which are currently in progress or which have already been implemented. We are also improving school facilities. For example, we have built sports fields, improved school yards, and refurbished libraries. As I have already mentioned, the company, government authorities, and the local population are jointly involved in this process.

in the Khulo and Shuakhevi municipalities. The aim of this project is to improve and restore the livelihoods of affected farmers to pre-project level. Farmers are trained in new trends and modern technologies of beekeeping to acquire the skills for setting up beekeeping enterprises. Apart from training, participants are provided with bee families, beehives, and any other necessary equipment. - I would also like to ask how you communicate with the local population. - First, from moment we began our project, we set up information centers in order to conduct direct and effective dialogue with the local population. The main function of the information centers in Khulo and Shuakhevi is to inform these communities about the development of the project as well as different social projects that we conduct. With the help of these centers we have daily, close connection to local people; quite a few meetings are held here on a daily basis. Permanent communication with the local population, listening to them, and determining preferences together – all of these support important points of regional development and are part of Adjaristsqali Georgia, LLC’s daily work. I believe we can play an important part in the long term development of the Adjaran highlands.

• • • • • • • • • • • • •

Didadjara village, landscaping of kindergarten yard Makhalakidzeebi village, building of drainage system Construction of gabion on the Makhalakidzeebi village road is finished Village Tsablana, village road rehabilitation Tsablana village, drainage system Rehabilitation of sports playground in the Tsabliani village publicschool Tsablana village public school storeroom construction Kinchauri village school library and classroom renovation Tsablana village school library renovation Tsabliani village (kishla) school library renovation Cheri village school inventory Chapkha village school sports playground rehabilitation Akhaldaba village central road retaining wall Vashlovani village public school yard landscaping Diakonidzeebi village irrigation channel rehabilitation Okruashvilebi village irrigation channel rehabilitation Gurta village irrigation channel rehabilitation Pachkha village mill construction Akhaldaba village drainage system rehabilitation Vashlovani village road rehabilitation Makhalakidzeebi village road rehabilitation

AMBASSADORIAL

September 7, 2015 #112

caucasus business week

AMBASSADORIAL 2015

Georgia’s Ambassadors Gather in Tbilisi to Discuss Country’s Foreign Policy

Irakli Garibashvili Prime Minister

his week Georgia’s ambassadors representing the country abroad gathered in Tbilisi to discuss their homeland’s foreign affairs and aspirations at the city’s Courtyard Marriott.The event was attended by envoys of the of the Government’s executive and legislative branches as well as diplomatic corps serving abroad. At the opening of the event, Prime Minister of Georgia Irakli Garibashvili raised the subject of the country’s international economic aspirations. He discussed some of the on-going foreign policy projects with the present audience, highlighting Georgia’s role in the New Silk Road project: “In February this year Georgia received the first cargo train from China. This is a part of the New Silk Road project, which was successfully implemented through participation of Georgia, Azerbaijan, Kazakhstan and China.” The PM stressed Georgia’s key role as a transit

country within the New Silk Road: “Transporting cargo to Europe through Georgia once again underlines the fact that Georgia plays an important role in the region as a transit country. The increased turnover in Georgia’s ports and railway will bring an additional $100-120 USD into the Georgian economy,” Garibashvili said. The newly nominated minister of Foreign Affairs, Giorgi Kvirikashvili stated Georgia’s foreign policy aspirations concisely as “integration with the West and economic relations with the East.” As for Russia, Kvirikashvili noted that there has been success in the economic relations, but not in political: “With Russia there have been positive developments in the economic sense, but there is no such dynamics on the political arena. Unfortunately, in this regard there are only negative developments.”

Georgian Diplomats’ Main Concern is to Attract Foreign Investment

“

In February, Georgia received the first cargo train from China. This is a part of the New Silk Road project.

“

Georgian diplomats’ main concern is to attract foreign investments. The Prime Minister presented the new Foreign Minister to the ambassadors at the annual Ambassadorial event and discussed the new assignments facing the Ministry. Irakli Garibashvili underlined that the political priorities remain unchanged and requested the Ministry to be more active in economic affairs. The Ambassadors also commented on the initiative. Many of them spoke about the need of material resources. Natali Sabanadze, Georgia’s permanent representative to Belgium and Luxemburg underlined that “Georgia should have a representative to the EU who will be fully focused on the economic issues primarily.” Ekaterine Siradze-Delone, The ambassador to France and Monaco and Permanent Delegate to UNESCO stated that diplomatic resources are scarce. She welcomed the initiative to appoint a professional who would work specifically on these topics.

Giorgi Kvirikashvili Foreign Affairs Minister

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In our work the greatest importance will be attached to the protection of Georgia’s sovereignty and territorial integrity.

“

Natalie Sabanadze

Lado Chanturia

Irakli Koplatadze

Giorgi Janjgava

Ambassador to Belgium

Ambassador to Germany

Ambassador to Turkey

Ambassador to Saudi Arabia

“Belgian Companies are Interested in Poti Port Development”

“Georgian Managers will be Trained to Enter German Market”

“Georgia-Turkey Trade Turnover Reaches 2 billion USD”

"Strategical Policy of Attracting Foreign Investors is Very Important”

“It is necessary to activate a mutual economic cooperation with the countries of the EU, especially since we have the DCFTA. Belgium has a big interest in Georgia. It is my personal goal to attract Belgian companies in the development of Poti Port infrastructure. As you know, Belgium has a much experience in this regard. I will hold negotiations with the leading Belgian companies on this subject. And I will acquaint them with opportunities that Georgia holds for them.”

“With the initiative of Germany’s ministry of economy we will start training Georgian managers to work on the German market. This will create new opportunities for the two countries’ economic cooperation. Many German investors will come to know Georgia. In this regard we are very hopeful toward our relationship with Germany. I think there should be separate department created that will work on the economic projects only,” the ambassador stated.

“Turkey is one of the largest investors into Georgia. Grandiose projects, which will attract foreign direct investments, are underway. Specifically, these projects are electro-transmitting pathways, by implementing which Georgia becomes not only the receptor and importer of electricity, but also the exporter of electricity to Turkey. The trade turnover between the two countries is reaching 2 billion USD, which is a very impressive figure,” ambassador Koplatadze said.

“Quite large investments have been implemented from Saudi Arabia in the recent years. If we take into account the statistics, 80 million USD were invested by Saudi Arabia in the last three years. How we lead the country’s policy in attracting new investors is essential for Georgia’s economy,"- Giorgi Janjgava said.

INTERVIEW 8 CURRENCY VOLATILITY PRECONDITIONS AND GEORGIAN BANK SYSTEM caucasus business week

September 7, 2015 #112

The last week recorded a new wave of currency fluctuation. It is interesting how the Georgian sector responds to the existing realities and how steady the Georgian bank system is. GIORGI TKHELIDZE, a TBC Bank deputy director general in risks management field, overviews the current developments.

- Mr. Giorgi, how would you characterize the relevant currency crisis in Georgia? What factors do you consider to have inspired the currency volatility? - We remember the currency fluctuations started in November 2014. The dynamics shows the GEL rate was quite strong last year, including in the month of October, while the currency rate volatility in our neighboring and trade partner countries emerged in August 2014. Their currencies depreciated, while our national currency showed steadiness in relation to both USD and the currencies of the mentioned countries. Nevertheless, the process was accompanied by a number of negative aspects. Our exports became less competitive. In November, the USD rate started extremely strengthening; on the other hand, regional currencies became more vulnerable and this factor affected the GEL exchange rate too. As to the outer and domestic factors, the main challenge is related to the deficit of current account. The budget spending is also very important and it was traditionally intensified in the last months of the year. In the fourth quarter of 2014 the currency account deficit worsened and this aspect badly affected the GEL rate. This process was the first reason for the GEL rate devaluation. Besides the budget spending, we should also take into account the negative dynamics in the tourism sector and in a growth pace of tourists inflows. This negative factor, to a certain extent, was related to bureaucratic approaches towards the entrance visa issuance. There is also a balance of exports and imports. Georgia’s exports, especially to the neighboring countries, had already shrunk before November 2014. As a result, the currency account misbalance affected the national currency rate. The fact is the USD exchange rate, in general, strengthened in the region and the Georgian national currency could not be an exception. On the

contrary, the GEL devaluation pace was much lower compared to other national currencies in the Region. Regretfully, several additional outer negative circumstances arose in July 2015. Namely, the USD rate further strengthened, the Greek crisis sensibly restricted foreign currency transfers to Georgia. However, the outer factors have played unimportant role in the recent devaluation process. I think the last depreciation was enflamed by negative expectations in relation to the GEL exchange rate. - Amid a plunge of global stock exchanges and national currencies, including in our neighboring countries and in Georgia, what would be your prognosis for the near future? - In this case we should also analyze main external and internal factors in relation to the dynamics in the next months. The global dynamics shows the situation has deteriorated and negative macro trends of big developing countries like China and Russia are one of the important factors in this respect, along with expectations the US Federal Reserve System will increase the interest rate in September. We should analyze the current realities in the close neighbor countries, with which we keep tight trade and economic-political ties. Regretfully, negative trends are discerned in Kazakhstan, Azerbaijan, Armenia, Turkmenistan. In this situation we should maintain healthy dynamics in exports and imports to prevent a negative impact on the current account deficit. The budget spending is also of vital importance. Budget expenditures should be managed skillfully and the expenditures part of the state budget must be equally distributed to the end. The current expenditures should be also sensibly cut and the government should make a focus on creating new job places and developing new infrastructures. Foreign investment inflows and foreign currency inflows will be also very important – higher injections will sensibly strengthen the Georgian national currency. - It is interesting to compare the Georgian bank sector to other bank sectors in the region. What are the differences in terms of regulations, structures and stability? - I have supervised the Georgian bank system from the United Kingdom for 5 years, when I was focused on the East European financial sector of the Barclays investments bank. The Georgian bank system was a leader in many aspects. I would name

many positive parameters: Georgia is a country of growing dynamics like all other developing countries. The bank sector is quickly growing. We can assert the Georgian bank sector is positively developed for many years: it is regulated conservatively; it is stable and very transparent. As opposed to the neighboring countries, the indicator of bad loans is very low and this indicator is often lower several times compared to Romania, Hungary, Azerbaijan, Ukraine. Georgia’s bank portfolio could be compared with Turkish and Polish bank indicators. Moreover, the Georgian bank sector records a high capitalization level. This signifies commercial banks have accumulated capital to withstand higher losses than planned in case of any shocks and emergency situations. When making a comparison on the regional level, we should note TBC Bank obtained the right for placement of shares at the London Stock Exchange (LSE) amid the regional crisis and the rising conflict between Ukraine and Russia. The past years have registered no serious shocks in the Georgian bank sector, even the crisis phases have not recorded an outflow of deposits, no commercial bank has been nationalized and the bank sector is a healthy and valuable segment. All these factors have preconditioned more than 100 investors from Europe and the USA have invested more than 240 million USD in TBC Bank. I believe the Georgian bank sector will meet any challenges and shocks that take place in the economy time by time, thanks to the stable and strong system. This system remains steady and I believe we will ensure a correct navigation in this situation. - Many customers complain that Georgia based commercial banks have set extremely high interest rates. Are these complaints grounded and what is the situation at the regional level in this respect? - When discussing the interest rates, we should remember the customers have always expectations of taking less costs and receiving better conditions. We should emphasize two positive aspects in Georgia – in spring 2014 KPMG introduced a research report, under which Georgia has set the lowest interest rates compared to other countries in the region. I mean Azerbaijan, Kazakhstan, Serbia. In this respect we are closer to Poland, an only economy in Europe that kept growing amid the 2008 global recession. The second important factor is that along with the economic development, interest rates are also de-

creasing in Georgia and this is a very sensible alleviation. At the same time, all of us should work on how to make resources more attainable, cheaper, so as the interest rates maintain positive dynamics. - The customers also complain commercial banks show excessive caution in crediting businesses and this factor hinders a development of small and medium business sectors. Do you agree with these complaints? If you agree, why do the bank sector is so cautious? - I think commercial banks should be provident when issuing credits to determine whether the microenvironment will be good or bad. By the way, more caution is often required in good situations, because the more positive, the less we think about the available problems. Lending and borrowing loans implies bilateral obligations between clients and commercial banks. Clients should appraise their own genuine resources and potential to identify whether they are able to serve the loan liabilities. At the same time, commercial banks should take reasonable decisions, make realistic analysis and give a correct advice to clients how adequate the requested loan is. Loans may become problematic and this aspect is also very challenging for commercial banks, because bad loans bring financial results, bad statistics and all these factors make interest rates more expensive and crediting is more restricted. - What are the threats and obstacles hindering the Georgian bank sector development? - We should reaffirm external factors largely determine the economic and bank sector development in Georgia. If our neighbors and partners are stronger, we will draw more investments, more tourists and the trade turnover will also increase. On the other hand, there are domestic factors – we should maintain the power and might for the bank sector stability, steadiness and quality. These two factors are decisive - professionalism of the bank sector’s staff and strong regulations that are being practiced in Georgia for many years. It is of vital importance that the bank sector regulation be carried out independently in line with the best traditions of the international practice. I believe based on these two factors the bank sector will follow the correct navigation, it will be adapted to the changes to remain one of the decisive institutions and directions for the state economy development.

TBILISI - MICE TRENDS AND ITS IMMEDIATE FUTURE

By LEAH RUSIA-BESELIDZE Director | Head of Consultancy Services

ndustry predictions indicate that the MICE (Meetings, Incentives, Conferences and Exhibitions) sector is poised for vigorous growth. On the background of the regional financial instability it’s springing back and is positioned stronger than ever. The demand for meetings is on the rise and though companies are not splurging, the expensive venues are not being ruled out either. Based on Cushman & Wakefield | Veritas Brown (CW|VB) research publication MICE tourism is considered lucrative by hoteliers whereas the revenue generated by this segment is

a few times more than leisure travelers. Also taking into consideration that up to 60% of the local hotels’ occupancy is being formed by corporate demand that is about 70% generated by MICE. Meeting and conference demand is at its peak since 2008, there is growing demand across all sectors, governmental and corporate – healthcare, sports, and energy. Georgia is not only the one of the most attractive tourism destinations of the Caucasus Region, but also a bustling business hub in the very heart of the region and cross road of Europe and Asia, thus MICE is becoming the fastest growing sector around. The meeting sizes are also growing, resulting in hotels giving preference to larger meetings capable of paying more. Hotels are not as flexible as before when it comes to walk-in bookings, good venues have to be booked well in advance. The rise in demand has also affected the prices increasing slowly. Though value for money is still an important factor, the planners are yielding to prices being a little higher than before. Whilst the MICE market is expected to continue to exhibit moderate growth, it is dependent upon the prevailing economic circumstances. A confident market will lead to more meetings and incentives whilst a nervous market is liable to have the opposite effect. However, notwithstanding the currency fluctuations and the regions financial instability, 2015 has been quite productive and progressive for Georgian Mice Sector with a number of important events having taken place and planned both in the capital and other cities, including EBRD Annual Meeting in May, Eu-

ropean Youth Olympic Festival in July, UEFA Super Cup with Barcelona and Sevilia in August, Investment Forum Batumi in September, Silk Road Forum in October. One can say for Georgia that it is a young MICE destination. It is encouraging that in the last few years the hotels have invested into the amelioration of the quality of their offers, so that today we have an increasing number of excellent venues. Having said the above the largest meeting/ conference capacity that can be accommodated in the country is around 500-600 people, creating a niche for the large well-equipped conference & convention center development. The good example for this was the EBRD Forum that had to be arranged in the Tbilisi Parliament backyard with tents. Teambuilding activities are also a popular trend, however not in Tbilisi. Almost the full majority of corporate teambuilding events take place out of the city in secluded hotels guaranteeing privacy. Accoridng to the hoteliers of the country’s popular destinations the Group corporate demand is usually lower during the high season, but still at 40% minimum, however MICE generates most of the lodging facilities’ room sales during lower

and shoulder seasons. MICE tourism is the most rewarding type of tourism for the destination development, not only does it have good influence on the extension of the season, which is perhaps the most important factor for the summer and winter resort destinations of Georgia, but also boosts the development of other tourism forms. For one, meetings, conventions and exhibitions create economic value with increased travel and hospitality spending by MICE visitors who combine participation in events with leisure The MICE industry, in our opinion, is set to move ahead rapidly. Meetings, exhibitions, events are essentially networking tools and will always be the cornerstone of successful businesses. What is needed here is to recognize the changing way in which the world is conducting business; the changing trends which are influencing global economies; the technological revolution which is making its presence felt in the way in which events and meetings are being conducted. Assimilating these changes seamlessly and responding to it with strategic initiatives is what will make the MICE industry stronger than before. www.veritasbrown.com

ECONOMY

September 7, 2015 #112

caucasus business week

INDIAN COMPANIES INVEST IN GEORGIA

usiness ties between Georgia and India is growing. After investing in Georgia’s energy sector, now Indian companies are showing their interest in the country’s hotel and hospitality sector. Representatives from large Indian companies Unique Mercantile India and Apna Punjab are in Georgia on their second visit to learn more about the business environment and investment opportunities in the Eurasian nation. The Indian sides voiced their interest in building four and five-star hotel networks and operate pro-

fessional golf courses in Georgia’s capital Tbilisi, seaside resort town Batumi, at the health resort Tskaltubo and alpine town Mestia. At the same time the companies would like to purchase a metallurgy factory in Kutaisi, in Georgia’s west. The potential investors today met Georgia’s Prime Minister Irakli Garibashvili to discuss details of bilateral cooperation. Garibashvili welcomed the Indian investors to the country and wished them success in implementing their projects. Garibashvili noted Georgia had one of the leading positions in the world’s influential rankings in terms of having a preferential business environment and made a comprehensive presentation on the investment climate and business opportunities in Georgia to his guests. Combined, the large Indian companies own dozens of hotels in India, Singapore, Malaysia and Indonesia. The investors are visiting Georgia to choose the location of their investment projects and begin the first stages of implementation. The National Investment Agency is cooperating with the Indian investors to help realise their investment goals.

GOVERNMENT SPENDS 8 MILION GEL ON AD CAMPAIGNS, TOURISM REVENUES MARK 96.634 MLN GEL

he state spent over 8 million GEL on tourism marketing and promotional campaigns of Summer, 2015, while the estimated revenue has made up 96 634 009 GEL , which has been conditioned by increased tourist number (merely in April-July), George Chogovadze, head of Tourism Administration has declared at the pressconference on Wednesday. He has also noted, that international travelers of 2 086 831 have arrived through summer season (June-August) in 2015, the growth amounts to 10% comparing to the same period of the previous year. At that, number of tourist, who spent 24 hours and more in Georgia, is grown by 2,4% comparing to the same period of the previous year. However, number of international travelers is grown by 183 950 in summer season comparing to 2014, at that 21 224 have been tourists. As of August of 2015, 852 377 international travelers have visited Georgia, the growth is 10% comparing to the same period of the previous year. Including, number of tourist, who spent 24

hours and more in Georgia, is grown by 2 % comparing to August of the previous year. As of 8 months data, positive trend is sustained with the EU countries: The increase has been fixed with the following countries: Lithuania (+ 21%), Czech Republic (+ 20%), Latvia (+ 14%), Germany (+ 12%), Italy (+ 10%), United Kingdom (+ 10%), the Netherlands (+ 10%). However, the following countries should be noted as well: the United Arab Emirates (+ 766%), Saudi Arabia (+ 75%), Belarus (+ 54%), Kazakhstan (+ 36%), Moldova (+ 35%). However, growth has been fixed in August from the following countries: the United Arab Emirates (+ 761%), Israel (+ 42%), Belarus (+ 69%), Kazakhstan (+ 50%), Oman (+ 1036%) and Spain (+ 87%). Payments made by foreign cards has amounted to + 47% in April, + 43% in May, + 24% in June and + 32% in July. According to National Statistics Office, added value, created in the tourism sector has been significantly increased in Q1, 2015, - Chogovadze declares.

IRANIAN INVESTOR WAITING FOR LIFTING INTERNATIONAL SANCTIONS

ranian businessmen are waiting for the lifting of international sanctions to invest in Georgia. They are going to be more active just after the abolition of the sanctions. According to businesswoman Nazi Alasania, her partners plan to invest several hundred million dollars in Georgia, mainly in the oil business, however, what specific projects will be carried out, Alasania doesn’t divulge. In her words, Georgian businessmen who have contacts with the Iranians are also impatiently waiting for the lifting of sanctions, as bank transfers limitations make it difficult to communicate with Iranian partners. Vano Mtvralashvili, Chairman of Iran-Georgia Chamber of Commerce, also says that Iranian investors are in standby mode. He notes that at this stage it is not known about the specific projects, however, tourist and business visits from Iran

have become more frequent in recent months. According to him, Iranians are studying the current environment in the country and will proceed to active work as soon as the sanctions are lifted. Mtvralashvili believes that direct flights resumed a few weeks ago will contribute to this, because so far only transit flights were carried out. On July 14, 2015, an historic agreement between Iran and the P5 + 1 was reached that would see limitations imposed on Iran’s nuclear program. In exchange international sanctions that have hampered the Iranian economy for a number of years will be lifted. Many U.S. sanctions related to Iran’s support of terrorism and human rights abuses will remain in place, but many of the most significant sanctions will be lifted on implementation day, when the International Atomic Energy Agency (IAEA)verifies that Iran has met certain conditions. In March 2012, as a result of international attempts to intensify financial sanctions on Iran for its nuclear program, 30 Iranian banks were barred from using the Society for Worldwide Interbank Financial Telecommunications (SWIFT) global payment services. Because Iran is a major oil exporter, SWIFT is critical to its exporters because it allows them to making large international transactions with oil importers. Excluding Iran from the payment system made it harder for importers to pay for Iranian oil and consequently had a negative effect on Iran’s exports.

ONE BILLION INVESTMENT TO BUILD ECO GREEN CITY AT TBILISI SEA

he area surrounding Tbilisi Sea is set to undergo major infrastructural development to turn the area into a bustling district with medical centres, schools, trade districts, an ecologically friendly housing area and more. Georgia’s Prime Minister Irakli Garibashvili visited the 200-250 hectare construction site today, located on the outskirts of Georgia’s capital Tbilisi and reviewed the progress. The Tbilisi Sea development project included building kindergartens, schools, sport and recreation centres, medical and rehabilitation centres and a trade district. It will also foresee establishment of residential villas, cottages and apartments. The whole area will be classed as an Eco Green City where 90 percent of the energy used by all facilities will be generated from solar, wind, hydro power and bio gas. The project was being managed by the same investor who built Gino Paradise waterpark about two years ago, also on the Tbilisi Sea territory. At Gino Paradise today the waterpark’s founder Nodar Giorgadze introduced Garibashvili to the Eco Green City project.

Afterwards PM Garibashvili said: “Gino Paradise is the largest project that has been implemented in the South Caucasus. Georgian investor Nodar Giorgadze invested $28 million USD in this project. We have discussed other projects that are designed to develop the Tbilisi Sea area.” About $100 million USD will be invested in the first stage. In total one billion USD might be invested in this territory,” Garibashvili added. The PM said the Eco Green City project was being discussed by the Ministry of Economy and Tbilisi City Hall. As well as this we also plan to implement several projects in [winter resort towns] Gudauri and Bakuriani. Furthermore we are also discussing the camping state camping program [where] initial plans involve creating 10 camping places. This initiative belongs to Nodar Giorgadze and we support it as much as possible,” Garibashvili said. Giorgadze explained there were plans to build a Gino Paradise waterpark in Bakuriani, which would be open all-year round. Recently, an Olympic Village boasting about a dozen apartment blocks and five-star Hualing Tbilisi hotelopened on the shorelines of Tbilisi Sea.

ANNUAL INFLATION IN AUGUST SEES 2 YEARS’ MAXIMUM

nnual inflation in August exceeded NBG’s targeted index. According to official data, annual inflation level has amounted to 5,4% in August, 2015, that is the highest index after 2013. It should be noted, that NBG’s targeted annual inflation is defined by 5% through 2015-2016. Inflation has been 4,9% in July. Monthly inflation level accelerated in August. Consumer basket increased in price by 1% through the last month, which is merely behind the data of March, when the inflation was 1,2%. Average annual inflation was 3,2% in August, while in July – 3,1%. According to Sakstat, group of food staff and alcohol beverages is grown by 2% merely in August, which is basically conditioned due to 9,4% - price increase on milk, cheese and egg, as well as on fruit and grape (8,6%). However, costs are declined on vegetable and greens (-0,7%) through the reporting period. Therefore, prices are increased by 4,4% on apartments, water, electricity, gas and other heating materials. Price dynamic in the group is basically conditioned by increased costs on electricity. The increase amounts to 11,4%. As for annual inflation, prices are grown by 6,3% on the group of food staff and non-alcohol beverages through 12-month period. Price growth should be noted on the following

sub-groups: fruit and grape (48,3%), vegetable and greens (14,9%), bread and bread products

(3,6%), oil and fats (12%). Costs are increased by 9,1% in the healthcare. At that prices are mostly grown on medical products, apparatus and devices (24,2%). It should be noted, that price increase amounts to 13,1% on the group of alcohol beverages (13,4%) and tobacco (11,8%). However, costs are grown by 9,3% on furniture, household appliances and home maintenance.

JULY GDP GROWTH 3% – PRELIMINARY DATA

eorgia’s real GDP grew 3% yearon-year in July, according to preliminary data released by the state statistics office Geostat on Monday. Economy grew 2.6% y/y in the first seven months

of this year, according to Geostat. GDP growth in the same period of last year stood at 6.2%. Parliament confirmed on July 17 amendments to the 2015 state budget cutting economic growth forecast from 5% to 2% and reducing targeted tax revenues by GEL 200 million to GEL 7.4 billion.

BUSINESS

caucasus business week

September 7, 2015 #112

ROMPETROL RESTYLES FILLING STATION ON SAAKADZE SQUARE

ompetrol Georgia” has finished restyling/rebranding of the petrol station, located on “Saakadze Square”. The opening event of renovated station was held on September 3. After restyling/rebranding, the station is equipped with modern technology, high durability materials and lighting which ensures the station will stay in top condition for a long period. Previous branding colors have been replaced with white, orange and red. – With the new Rompetrol logo, as part of the rebranding process of the entire Rompetrol network at Group level.“Because of the location, the station represents one of the most demanded one, so we are happy that renewed station will be enable us to serve our customers in a more comfortable way. The restyling works of the petrol station lasted 20 days and a substantial investment was made”- says General Manager of “Rompetrol Georgia” Constantin Popusoi. “Rompetrol Georgia” has been present on Geor-

gian market for already 9 years and continues successful development. It represents one of the largest importers in Georgian oil industry which offers customers Euro 5 quality European fuel. “Rompetrol Georgia” is member of KazMunayGas International NV, former The Rompetrol Group NV. The company has changed its name at the beginning of 2014 as part of the process of integration of the activities and transactions with the company KazMunayGas (KMG) - Kazakhstan’s national oil and gas operator and the Group’s sole shareholder. With over 7.000 employees in 12 main markets, KazMunayGas International NV is one of the well-established oil companies operating in Romania and an important player in the Black Sea and Mediterranean basins. The company is primarily active in refining, marketing and trading, with additional operations in exploration and production and other oil industry services such as drilling, EPCM and transportation.

TRUVOX INTERNATIONAL- A LEADING SUPPLIER OF COMMERCIAL AND INDUSTRIAL FLOORCARE MACHINES WILL HOLD THE MASTERCLASS AT CLEAN WORLD

eptember 8, Truvox International Limited will visit our studying center of company and will hold the masterclass, which will last one day. Export Manager for Europe of Truvox company, Max Chupis, will show and explain how to use modern machines. The aim of the master class is to introduce Truvox technology to Georgian specialists. At the end of the presentation Clean World specialists will use

the latest equipment of Truvox by themselves. Truvox International prides itself in being a world leader in the design and production of innovative floorcare machines as well as demonstrating thorough attention to quality standards. Truvox is a BSI Registered Company (BS EN ISO 9001:2008). The master class will help the company’s employees to learn about the specifications of the equipment. This master class will improve our specialists’ professional skills.

DHABI GROUP TO BUILD SKYSCRAPER FOR VIP SEGMENT IN TBILISI

BW has learned that the Arabic Dhabi Group is planning to build two skyscrapers in the Georgian capital of Tbilisi. In the words of Dhabi Group Executive Director, at this stage negotiations are underway with the Ministry of Economy regarding the land allocation. Sam Edward says that the luxury residences will be located in one of the skyscrapers, which will be mainly sold to the citizens of the United Arab Emirates, as price of residences will be high. He explains that Dhabi Group is going to open the hospital in Tbilisi as well. The group has bought the building where a modern hospital will be placed, Georgian doctors will be employed, but the equipment will come from the United States and Germany. Dhabi Group CEO notes that they are in talks with several large business groups about the hos-

pital project. As for the Millennium 7-star hotel, Edward says it is due to open in the first half of next year. “We wanted to open the hotel in January, but due to a fact that Georgia lacks enough materials, we have to bring them from various countries, Millennium hotel will be the best in the Caucasus region,” Dhabi Group CEO told CBW. He adds that they are conducting negotiations with Fly Dubai airlines and offer joint 7-day tour packages for those who wish to spend their vacation in Georgia. Sam Edward is staying in Tbilisi now and is holding various meetings. Dhabi Group will also participate in the investment forum scheduled in Batumi in September. A world-renowned casino brand Melko Crown Entertainment will be opened in the building of a 7 –star Millennium Bilmore hotel located behind the so-called Imeli building.

GEORGIAN RAILWAY REDUCED TARIFFS BY 20% ON DOMESTIC AND EXPORT TRANSITS

This marketing decision in the rail transport sector will reflect on company’s future sales growth, significantly contributing to increasing Georgian products’ competitiveness and local production volumes. This in turn will positively reflect on the country’s economic growth prospects.

EAST POINT TBILISI TO SOLEMNLY OPEN ON SEPTEMBER 12 Georgians have been observing the construction of EastPoint Tbilisi mall on the Kakheti Highway for the past year. Everyone is curious to see what the outcome of the long construction will be like. The country’s yet largest mall is set to open its doors on September 12, 2015 with Nino Katamadze and Insight’s concert. Located on 85,000 square meter territory EastPoint will have 10 cinemas, the first IMAX Movie Theater in Georgia, the biggest electronics hypermarket and a 3,500 square meters children’s entertainment space under one roof. CBW spoke with the Marketing Director of EastPoint TEA LOMINADZE regarding the advantages of the new mall, its main investor company Quadrum Global, and the mall’s future plans. - There have been rumors in the Georgian media in regards to an H&M store opening at EastPoint mall. Were these rumors baseless or there actually were negotiations with the Swedish retail network? - Unfortunately, at this point H&M has no plans of entering the South Caucasus region. In this regard, they could not have been part of our project either. These were just baseless rumors, I have to say. - How large is the investment put into EastPoint’s construction? And who is the investor? - The investment amounts to over USD 100 million. An international private equity investment company Quadrum Global is the main investor. Quadrum Global manages USD 1,3 billion capital in equities, which are distributed in different real estates and investment funds. The company’s head office is located in London. Quadrum Global also has offices in Hong Kong, Shanghai, Beijing, Moscow, Kiev, and Tbilisi. In Georgia, Quadrum Global operates under the name of CBD Development Ltd and BD Property Ltd. Two major projects in Georgia are under the management of these companies — the entertainment and shopping mall on Kakheti Highway EastPoint Tbilisi and the multi-function residence complex Tbilisi Gardens, located on Asatiani Street.

With these two projects, Quadrum Global is making a 200 million USD investment in Georgia. - From the perspective of a Marketing Director, how do you think EastPoint will take on the challenge of competing with the existing Tbilisi Mall? - Healthy competition on the market is always a positive factor that pushes the market players to develop their projects further. EastPoint will offer a unique architecture, a diverse brand mix, a good location – just 12 minutes from the city center in a spot where there is practically no traffic jams. EastPoint will also operate the very first IMAX technology Movie Theater in Georgia and 10 cinema halls; 12-lane professional bowling center with an accompanying café and a restaurant; the biggest ZARA, MANGO, Massimo Dutti and Stradivarius stores in the South Caucasus; a construction hypermarket Domino – this is the incomplete list of all the comforts and advantages we will offer our customers starting September 12. By the end of the year, we will also operate an electronics market, where the largest operators in Georgia will be present in one common space. EastPoint will operate the Georgian consumers’ beloved Carrefour, as well as a 3,500 square meters children’s entertainment center that will have no analogs in South Caucasus. Nino Gojiashvili

September 7, 2015 #112

BANKING NEWS

caucasus business week

TBC BANK HAS A NEW DIRECTOR

BC Bank announces about the appointment of Sean Wade as the Director of International Media and Investor Relations. As of the press-released published at the web-age of TBC Bank, Sean will work closely with the Bank’s senior management and will act as a permanent representative of the management team in London. Sean has approximately 20 years of experience

in the field. Prior to joining TBC, he acted as the Head of Investor Relations and Group Communications at Asia Resource Minerals plc. Vakhtang Butskhrikidze, Chief Executive Officer of TBC Bank welcomes Sean to TBC Bank and hopes that his extensive experience in both developed and emerging markets will play a key role in improving of Bank’s communication with investors, analysts and other market participants.

PASHA BANK – THE FASTEST GROWING CORPORATE BANK IN GEORGIA

TBC GALLERY HOSTS REZO KEZELI’S PHOTO EXHIBITION

rom August 30th TBC bank hosts Rezo Kezeli’s exhibition “The man with accordion”. In the beginning of 90-ies, in the storehouses of the Institute of Physics negatives of unknown photographer were found, which were saved by chance. If it hadn’t happened, 20th century Georgian history of photography, and in particular, the section, which covers the period of the Soviet Union, would have remained unknown Rezo Kezeli’s name. It would be really a great loss, because at first, Rezo Kezeli is a highly interesting and original author; another reason is that the Soviet-era Georgian photography is not so rich with authors who could stop a Soviet-era photography and escaped from strict aesthetic and contextual dogma.

Rezo Kezeli creates portraits of his time. But, in fact, it couldn’t be called a soviet human portrait. It’s a cliché-free vision of a free man who see the world in completely different way and uses a different visual “source code”, creates a sort of “unofficial”, completely different personalities in photography and visual aesthetics telling completely “non-Soviet” stories about himself and about artists of his time. After 20 years of conservation and restoration of works, exhibition of Rezo Kezeli was opened for the first time in February 2013 at the Gallery “Container”, where were exhibited 30 more photos by Rezo Kezeli. “Man with accordion” joins the project of Tbilisi Photo Festival and the gallery “Container” in October. Exhibition in Batumi will be open until 6th of September.

THE GLOBAL FINANCE GRADES HEADS OF CENTRAL BANKS, NBG PRESIDENT MISSES THE RANKING

lobal Finance magazine has named the heads of the Central Banks of the Czech Republic, the European Union, India, Israel, Malaysia, Paraguay, Peru, the Philippines, and Taiwan as the World’s Best Central Bankers over the past year, in recognition of their achievement of a prestigious “A” grade on Global Finance’s Central Banker Report Cards. Georgia did not appear in the ranking. In addition, the Central Bankers of Colombia, Saudi Arabia and the United States earned “A-” grades. Global Finance publisher and editorial director Joseph Giarraputo notes, “Global economies are starting to recover. This comes despite a number of challenges, including a strengthening US dollar and the end of the Federal Reserve’s easy money policy. Central bankers remain crucial in overcoming these hurdles. Sound monetary policies can dampen the effects of currency swings and rising interest rates—and thus spur economic growth. As our scores show, some central banks have fared better than others in devising such policies. Our grades also reflect the willingness of central bankers to stand up to political interference as well as their ability to influence government policies on spending and foreign investment.” The Central Banker Report Cards, published annually by Global Finance since 1994, grade the central bank governors of nearly 75 key countries (and the European Union) on an “A” to “F” scale for success in areas such as inflation control, economic growth goals, currency stability and interest rate management. (“A” represents an excellent performance down through “F” for out-

right failure.) Subjective criteria also apply. This year, 5 central banks are being graded for the first time (Botswana, Iceland, Namibia, Paraguay and Uganda). Recall that a few months ago the world’s leading financial magazine The Banker, owned by Financial Times Group, named Giorgi Kadagidze, Governor of National Bank of Georgia, as the Central Banker of the year 2014 for Europe. Well capitalized and stable banking sector that showed resistance to major shocks, is Georgia’s key feature so that the head of the country’s central bank Giorgi Kadagidze shared his experiences with the representatives of the central banks of Kazakhstan, Tajikistan and other countries through programs funded by the World Bank,” – The Banker writes. The publication notes that there is still a very high level of dollarization in Georgia, which is a serious problem and will remain so in the coming years. “In 2014, George Kadagidze stimulated the process of de-dollarization and by using different instruments, the National Bank has improved the availability of loans in the national currency. The NBG supported the development of the local capital market. In 2014, the European Bank for Reconstruction and Development (EBRD) for the first time issued GEL-denominated bonds, and in the words of George Kadagidze, other international financial institutions plan to do the same. In his opinion, the release of the GELdenominated bonds by international financial institutions will contribute to the emergence of long-term loans in local currency in the market and the process of de-dollarization,”- writes the magazine.

ASHA Bank is named The Fastest Growing Corporate Bank in Georgia 2015 by International Finance Magazine. Headquartered in London, International Finance Magazine (IFM) represents one of the leading and the most trustworthy source of information, analysis and insights for the global finance community. The topics covered by IFM include Banking, Wealth Management, Pension Funds and Emerging Markets. The IFM annual Award shines a spotlight on those who make a contribution to raising the bar in the financial industry through activities of note. These include path-breaking initiatives in corporate social responsibility or charitable activities, better corporate governance and other achievements that impact the global finance community. In 2013 International Finance Magazine has named PASHA Bank Azerbaijan “The Best In-

vestment Bank in Azerbaijan”. This year after having completed the researches and analyzing performance figures of the banks operating in Georgia, International Finance Magazine awarded PASHA Bank for the sustainable development in its field. “PASHA Bank has been operating in Georgia since 2013, providing regional corporate and investment banking services to large and medium enterprises. Being a young organization like this, we naturally feel double happiness to receive such international recognition. Winning the nomination of “The Fastest Growing Corporate Bank” gives us even more motivation to continue our teamwork in order to reach new heights together with PASHA Bank Azerbaijan and PASHA Bank Turkey and of course, share the success with our dearest clients and partners.”- Said Shahin Mammadov, CEO at PASHA Bank.

JANUARY-JULY RECORDS 31% UPTURN IN PROFITS OF COMMERCIAL BANKS

n January to July 2015 the profits of commercial banks rose by 31% compared to the same period of 2014. The bank sector experts assert commercial banks have earned much profit from the national currency rate fluctuation. Despite several other factors influence the final outcome, the currency exchange rate is of vital importance in this respect. The process will be continued to the benefit of commercial banks, because the GEL rate devaluation is expected to go on and the inflation impact will be more sensible, specialists assert. According to the National Bank indicators, net profits of commercial banks have reached impressive figures. In January to July 2015 net profits marked 282.014 million GEL, up 31% from 214.877 million GEL of the same period of 2014, and up 46% compared to 192.264 million GEL in the same period of 2013. Irakli Doghonadze, head of the Tbilisi State university Centre for Analysis and Prognosis, says the GEL depreciation has also driven an upturn in net profits of commercial banks in the reporting period, but several other factors have also played a significant role. “Naturally, a reassessment of bank assets, as a result of the currency exchange rate fluctuation, would bring sensitive affects, because in the same period of 2014 the GEL exchange rate was much stronger. The same period has recorded a 25% growth in interest revenues, while interest expenditures have increased by 22%. At the same time, noninterest revenues have risen by 97% year on year, of which other noninterest revenues increased by 201%. These indicators clearly show a growth in noninterest revenues have conditioned an upturn in net profits of commercial banks”, Irakli Doghonadze said. It is worth noting despite these huge profits com-

mercial banks have paid only 43 383 GEL to the budget in the reporting period. Bank sector specialists assert this is a very small amount. It is not accidental the bank sector specialists are also interested in the amount of payments the bank sector has made. Experts assert the budget payments must be higher and the society should possess real information about financial resources of commercial banks. Bank expert Lia Eliava emphasized several factors that have ensured a growth in profits in the bank sector. First of all, commercial banks have earned considerable funds from the GEL rate volatility, she said. “This sector has earned much money through conversions. Moreover, a rise in refinancing rate has also played a significant role, as commercial banks earn more money through increased interest rates. Unlike the international banking practice, there is unusually high commission interest rates in Georgia. There is a commercial bank in the country that issues loans in the form of commission fees. The tendency of profits growth will continue in the future too. The inflation indicators grow in Georgia. The indicator is expected to exceed the 5% point and along with this process the bank sector’s profits will also hike. Naturally, the GEL devaluation has also enflamed the process. I expect the process to deepen further”, Eliava said and added: “All over the world commercial banks are proud of having earned much profit. In Georgia commercial banks avoid divulging similar statistics. I think it would be expedient either to hand over the bank sector’s funds to the economy sector or commercial banks should genuinely show what funds they own. Their budget payments are very small and this issue should be also resolved”.

PUBLICITY

September 7, 2015 #112

caucasus business week

September 24 - October 8

International Program Restaurant OUR GARDEN welcomes you! Visit OUR GARDEN and see that it’s not just another restaurant! This is an English-style garden with delicious and original Georgian food. OUR GARDEN is plentiful with old trees, beautiful rose bushes, comfortable swings, walking lanes, small fountains and the gorgeous mountain view. Come and relax at OUR GARDEN, between Tsiteli Sopeli and Bulachauri turns. Contact us: +995 599 801 801

4, october

THE NATIONAL THEATRE “MARIN SORESCU” OF CRAIOVA, Romania

A TEMPEST Drama

Purcarete’s world is beautiful and wonderful. The most important elements of Silviu Purcarete’s performance: simple ideas, theatre performing, enthralled spectators by the essence of encountering theatricality. Katarzyna Wysocka PortKultury.pl About performance; In a strange room, Prospero tells Miranda about their arrival to the island. Miranda, turned then into Caliban, tries to kill Prospero. Ferdinand enters and Caliban, transformed again into Miranda, falls in love with him. The shipwrecked king and his men lament their fate, while Caliban makes friends with Trinculo and Stephano. Ferdinand and Miranda affirm their love. Caliban and his accomplices conspire to kill Prospero. Ariel reminds the king and his men about their past injustice towards Prospero. Prospero offers the two lovers a magical performance. Caliban and his accomplices are banished. Prospero bids Ariel good-bye, gives up the magic and makes peace with his former persecutors. Duration: 125 minutes www.tbilisiinternational.com www.facebook.com/TbilisiInternational

September 7, 2015 #112

RESEARCH

caucasus business week

THE IMPACT OF POSSIBLE RUSSIAN EMBARGO ON GEORGIAN EXPORTS Economic Outlook and Indicators

NEIGHBORHOOD

Iran to Set up a Wind Farm in Azerbaijan

APNA Group, which is a group of Iranian companies involved in construction and installation of energy production machinery, including boilers, gas and steam turbines, electrical generators, as well as industrial scale petroleum processing installations, railway locomotives and wind power, has signed a memorandum of understanding (MoU) with the Azerbaijani government to construct a wind farm in Baku, Akbar Adibfar said in an interview with the Tasnim News Agency. The company initially named Iran Power Plant Projects Management Company (MAPNA) that now is recognized as MAPNA Group was founded in 1993 with the aim of developing indigenous knowledge production capacity for petroleum facilities, power plants and other industrial facilities, and as a contract management company.

Aeroflot Buys Transaero to Create Air Transport Giant

ussia’s flagship airline, Aeroflot, will buy one of its largest competitors, Transaero, after the deal was approved by Deputy Prime Minister Igor Shuvalov, the RIA Novosti news agency reported Tuesday. Aeroflot will purchase 75 percent plus one of Transaero’s shares, an Aeroflot spokesman was quoted by RIA Novosti as saying. Transaero has grown to become Russia’s second-largest airline since its humble beginnings in 1990 as a St. Petersburg-based charter company, flying airplanes leased from Aeroflot. This year, the company was looking to purchase large modern airplanes such as the most recent model of Boeing’s 747 and Airbus’ new double-decker A380 for flights between Moscow and New York. It operates scheduled and charter flights to 103 domestic and international destinations.

Turkey is Guarantor of Azerbaijan’s Border Security

s long as Turkey is next to Azerbaijan, the country will not have any border issues, the PM of Turkey Ahmet Davutoglu told the local news agency Anadolu. The PM stressed that Turkey has always been close with Azerbaijan and will always support the brotherly republic. The conflict that divided the two South Caucasus countries Armenia and Azerbaijan commenced in 1988 after a military conflict over the NagornoKarabakh region. Turkish PM explicitly sides with the Azerbaijani perspective of the conflict. According to him, the successes of Azerbaijan are successes of Turkey. He stressed that the Victory Day celebrated in Turkey on August 30th is also Azerbaijan’s day. Turkey annually celebrates August 30th, which marks the victory against the Greek forces in the Battle of Dumlupinar in 1922.

Ukraine Agrees 20% Debt Haircut With Creditors, Russia Refuses To Take Part

kraine has agreed a restructuring deal to reduce its debt burden by about $3.6 billion. Moscow has refused to agree to Kiev’s terms according to Bloomberg. Ukrainian Finance Minister Natalie Jaresko, has agreed with a creditor committee led by Franklin Templeton (which owns about $7 billion of Ukrainian bonds) on a 20 percent write-down of about $18 billion worth of Eurobonds, the first of which mature in less than a month. Russia won’t participate in Kiev’s debt restructuring, said Russian Finance Minister Anton Siluanov after the news broke. Ukrainian Prime Minister Arseny Yatsenyuk said that Russia didn’t accede to the creditors’ committee and wouldn’t receive better terms than the other lenders under any circumstances.

WORLD NEWS

Saudi King to Meet with Obama Amid Gulf Concerns Over Iran Deal

audi King Salman will meet with U.S. President Barack Obama in Washington on Friday to seek more support in countering Iran, as the Obama administration aims to use the visit to shore up relations after a period of tensions. The visit is the king’s first to the United States since ascending to the throne in January, and comes after the United States agreed to a nuclear deal with Iran in July, raising Gulf Arab fears that the lifting of sanctions on Iran would enable it to pursue destabilizing policies in the Middle East. The U.S.-Saudi relationship has suffered strain because of what Riyadh sees as Obama’s withdrawal from the region, a lack of direct U.S. action against President Bashar alAssad in Syria, and a perceived U.S. tilt towards Iran since the 2011 Arab uprisings. “Both nations are close strategic partners in spite of their differences, and both states need each other,” wrote Anthony Cordesman, a Middle East analyst at the Center for Strategic and International Studies think tank in Washington. But he said the Obama administration “needs to reassure its allies and reinforce its commitment to that partnership,” especially given Saudi concerns about the Iran nuclear deal.

Brazil’s Economy Enters Recession

razil has entered recession after official figures showed the country’s economy contracted by 1.9% between April and June compared with the previous three months. Analysts had expected a contraction, but the number was worse than expected. First quarter output was also revised down to show a 0.7%, rather than a 0.2%, contraction. The country, the seventh-largest economy in the world, has seen economic growth fall sharply in recent times. This is due in part to low commodity prices and sluggish global growth. High interest rates – currently 14.25% – have also affected consumer spending, an important element of Brazil’s economy, while this year, the government has introduced stringent austerity measures designed to tackle high levels of debt.

Switzerland Avoided a Recession

witzerland unexpectedly avoided a recession last quarter as investment and private consumption helped return the economy to growth. Gross domestic product increased 0.2 percent in the three months through June, after a contraction of 0.2 percent in the previous quarter, the State Secretariat for Economic Affairs in Bern said on Friday. Economists forecast a 0.1 percent contraction, which would have pushed Switzerland into its first recession in six years. The Swiss franc fell against the euro. Seven months after the Swiss National Bank scrapped its currency ceiling, allowing the franc to float freely again, the economy is grappling with headwinds.

U.S. Weighs Sanctioning Russia and China in Cyber Attacks

he United States is considering sanctions against both Russian and Chinese individuals and companies for cyber attacks against U.S. commercial targets, several U.S. officials said. The officials, who spoke on condition of anonymity, said no final decision had been made on imposing sanctions, which could strain relations with Russia further and, if they came soon, cast a pall over a state visit by Chinese President Xi Jinping in September. The Washington Post first reported the Obama administration was considering sanctioning Chinese targets, possibly within the next few weeks, and said that individuals and firms from other nations could also be targeted. It did not mention Russia.

NEW TECHNOLOGIES

September 7, 2015 #112

caucasus business week

International Network “Aesthetic Medical Clinics Group” – Prague, St.Peterburg, Tbilisi

TOP–12!!!

Clinic “MEDI” Presents 12 Technologies For Slimming Down Recognized World Wide!

Excess weight and obesity is a malady of the XXI century. According to statistics, a number of overweight people increased by 26% worldwide in 2014. Lots of people strive for slimming, though visiting fitness centers and strict diets are associated with difficulties, especially when a person works, is busy and his/her time is scheduled. For such people a lot of devices are available in the esthetic medicine, where 30 minutes of spent time is equal to hours spent in the fitness centers.

Top-10 of top-12 of the world slimming methods are presented only in the “MEDI” clinic.

3. BODY-ESTHETIC - is a ultramodern procedure of body correction, a French conception and treatment of the cellulite. It aids in body correction, modeling, cellulite removal, restoring of blood circulation, improvement of metabolism. Vacuum removes superficial subcutaneous fat, ultrasound removes deeper deployed fat and eradicates it from the body by means of lymphatic system. 4.

RF-LIFTING – is a technology based on the radio-frequency wave, which makes a skin lifting, has an anti-cellulite effect, burns fat and smoothes a body surface.

CAVITATION – is one of the most effective combined methods of fat and cellulite decomposition for today. The procedure improves blood circulation, stimulates connective tissue cells, smoothes a skin surface. Metabolism in the fat layer improves due to skin warming by the radiofrequency waves; lymphatic drainage and skin tonus increases; so called orange skin removes; amount and size of fat cells decrease on the treated zone.

PRESS THERAPY – is an ap-

paratus method, which is considered to the most effective in reducing lymphostasis and various swellings. It is unique for treatment obesity and cellulite.

the procedure a special cocktail consisting of various preparations is injected into the surface layer of skin. The cocktail contains bio-active substances, herbal extracts and vitamins, that improve a skin structure.

AQUALEX – the latest method for cellulite removal. A fat decomposing cocktail may be applied on any zone of the body. It is an anti allergy injection method. The preparation decomposes fat and has got an anti-cellulite effect. It has a long-lasting effect on the treated zones, prevents creation of new cellulites, improves blood circulation. This unique method makes skin more flexible and elastic. The procedure is quite painless and requires no anesthesia. It lasts for 30-40 minutes.

10. FRAXEL – is the latest technology of a fractional laser peeling. Skin is treated superficially, without exfoliation. It changes skin quality, makes it smooth and even, flexible and elastic, fades and eliminates pigment spots, removes fine wrinkles, acne and caused by it scars, retards aging. 11. DOT-LASER – is a fractional laser, which makes a skin ablation (skin peeling by

IMPEDANOMETER – is a device for diagnosis of a skin structure, amount of fat and liquid in it. On its basis a doctor will select proper for you method of slimming technology.

MESOTHERAPY – is method of treatment of subcutaneous fat tissue. During

1. ZELTIQ – removal and decomposition of fat by freezing. It is a painless alternative to liposuction, that doesn’t require a rehabilitation. By means of a vacuum system fat cells are absorbed and frozen. And above all, the procedure lasts for an hour (on one zone) and, on average, removes 30% of total fat amount. Upon a completion of the procedure You may return to a normal rhythm of life. 2.

MANTIS – is a unique innovative system, combining two types of energy: endomassage and magnetic field. Mantis has created a technology which fights not only a result, but also a reason of the problem. MRG - Magnetic Regeneration technology (Magnetic Regenerate) is one of the best ways of fighting cellulite. It is effective and safe lipolysis (fat decomposition).

Clinic “MEDI” 52 Kostava str. Tbilisi Tel: 291 00 00

using a laser high energy). The procedure aims at restoration of damaged and aged skin. It is a unique laser technology, which copes with a lot of skin problems in the shortest period of time: changes skin quality rate; makes it smooth and even, flexible and elastic, fades and removes pigment spots, fine wrinkles, acne and skars.

12.

PLASMOLIFTING – is the latest method of rejuvenation both for face and body. The procedure reduces fine wrinkles, scars, pigment spots. Is recommended for a sunburned dry skin. Eliminates acne active elements, smoothes skin surface. The skin becomes healthy and young. Has no side effects and allergic reactions. As a result of the procedure we get healthy, moisture, elastic and rejuvenated skin.

September 7, 2015 #112

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

TBILISI GUIDE

caucasus business week

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

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

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

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

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

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

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

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

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

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

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

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

PUBLICITY

caucasus business week

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

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

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

www.metrocity.ge

September 7, 2015 #112