Caucasus Business Week #292

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July 22, 2019 - www.cbw.ge

#292

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Whether Investing of Pensions Agency funds in Energy and Logistics Sectors bring Profits

Stock Exchange Development to heat up in 2020

Tea Industry Worldwide – What about Georgia?

Georgian App 'Expago' connects Locals and Travelers for Unique Traveling Experience

Successful 5 Months for Georgian Exports

Irakli Lekvinadze: Expected Impact of Russian Tourism Embargo and GEL Exchange Rate Volatility are Real Challenges for Business Environment

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Hazelnut Culture is One of the Main Source of Income for the Population of Western Georgia

ADB sells 60 Million Lari Dual-Tranche Domestic Bonds in Georgia

Hazelnut culture for the population of Western Georgia is one of the main sources of income, noted Minister of Environment Protection and Agriculture of Georgia Levan Davitashvili.

The Asian Development Bank (ADB) raised 60 million lari (around $21 million) from two new issues of local currency bonds auctioned in Georgia.

Vice Mayor: Overhead Railway Construction works to start in 2020 SOCAR expands its Gas Pipeline Network in Georgia SOCAR Georgia Gas company (Georgian subsidiary of Azerbaijan’s state oil company SOCAR), has increased the length of its gas pipeline network in the neighboring country, Trend reports.

Union of Oil Product Importers: Diesel Imports declines in January-June Diesel imports have shrunk in January-June period, the Union of Oil Importers of Georgia says.Petrol and diesel imports in January-June made up 494.3 thousand tons, down 22.5 thousand tons year on year (516.8 thousand tons).

MC Mobility Consultants GmbH, the Austrian consulting company invited by Government of Georgia, has launched research works for designing overhead railway construction works for Rustavi.

Strasbourg Court's Decision: Violation of Convention on Rustavi 2's Case not established and Suspension Mechanism lifted The European Court of Human Rights has announced the decision into the case of Rustavi 2 TV company.As noted in the court decision, the ECHR unanimously decided to suspend Article 39 of the Rules of Court, on the basis of which the enforcement of the decision of the Supreme Court of Georgia regarding the Rustavi 2 TV company had been suspended.

JSC Bank of Georgia signs c.GEL 28 million 5-Year Loan Agreement with EBRD

Georgian Artist to be awarded with Michelangelo International Art Prize

Bank of Georgia Group PLC announces that JSC Bank of Georgia and the European Bank for Reconstruction and Development have signed GEL 28 million loan agreement with a maturity of 5 years.

Georgian artist, Natia Mkheidze was awarded with Michelangelo International Prize in Rome. Recently, Natia Mkheidze works in Germany. Her paintings are presented in various international platforms and catalogs.

EIF, ProCredit to provide EUR 800 mln in Support for Innovative SMEs in 11 Countries, including Georgia

Nino Kirtadze to be Representative of Georgia in Eurimages

The European Investment Fund (EIF) and ProCredit Group have announced that they would provide an additional EUR 800 million to innovative small and medium-sized companies (SMEs), bringing a total of EUR 1.62 billion to companies in eleven countries: Albania, Bosnia and Herzegovina, Bulgaria, Georgia, Germany, Greece, Moldova, the Republic of North Macedonia, Romania, Serbia and Ukraine.

According to the National Film Center, a film director, screenwriter and artist Nino Kirtadze will be the representative of Georgia in "Eurimages".

The Editorial Board Follows Press Freedom Principles Publisher: LLC Caucasian Business Week - CBW Director: Levan Beglarishvili WWW.CBW.GE Address: Aleksidze Street 1 Sales: Mob: +995 591 01 39 36 Email: caucasianbusiness@gmail.com Editor: Nutsa Galumashvili. Mobile phone: 595 380382 Copy Editor: Ellie Rambo Reporters: Nina Gomarteli; Mariam Kopaliani; Merab Janiashvili, Economic columnist: Andria Gvidiani; Technical Assistant: Giorgi Kheladze;

George Chogovadze: In 2020 Kutaisi Airport will be 4 Times Bigger and its Passenger Turnover will increase 4 times Kutaisi International Airport’s new terminal construction second phase comes to the end.

The deputy minister of Economy and Sustainable Development of Georgia Akaki Saghirashvili and CEO of United Airports of Georgia, George Chogovadze, examined the new terminal extension.

The new terminal is being built, which will have seven gates that is expected to increase the capacity of the airport by four times. Once the new terminal becomes operational, it will be able to serve 1,200 passengers in an hour. Currently the Kutaisi International Airport is capable of serving 300 people an hour.

After the construction is completed Kutaisi will have a modern four-floor airport with so called ‘green roofing’ and an open veranda. ‘’Kutaisi airport terminal expansion works are being carried out in intense regime.

In 2020 Kutaisi airport will be 4 times bigger and its passenger turnover will increase 4 times”, Giorgi Chogovadze, CEO of United Airports of Georgia said.

The country follows the strategy of becoming a regional center in this direction, Chogovadze noted. ‘’Our strategy is that Kutaisi airport perform as many lowcost flights as possible so as both

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foreign tourists visit Georgia more frequently and our citizens will also travel to Europe more frequently”, Giorgi Chogovadze said.

Dutch firm UNStudio, which completed the terminal building of Kutaisi Airport in 2012, is responsible for the extension works and has already unveiled plans, featuring a rooftop plaza.

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Successful 5 Months for Georgian Exports Georgia’s Negative Trade Turnover Shrank to 40% In January-May 2019 Georgia’s external trade turnover (without undeclared trade) made up 4 959.4 million USD, up 1.1% year on year, including the exports constituted 1 466.7 million USD (up 14.2%) and imports marked 3 492.8 million USD (down 3.6%). Georgia’s negative trade balance in January-May 2019 constituted 2 026.1 million USD, that is, 40.9% in external foreign trade turnover. In the same period, exports without re-exports rose by 4.7% to 938.6 million USD. It should be noted that major exports items are copper ores and concentrates with 261 129.3 thousand USD; vehicles ranks second with 207 780.9 thousand USD; ferroalloys ranks third with 136 715.0 thousand USD, packed medications and wines rank 4th and 5th.

In January-May 2019 the ratio of the major exporter countries in Georgia’s total exports constituted 72.9%. Top three major exporter countries are as follows: Russia (218.7 million USD), Azerbaijan (168.8 million USD) and Bulgaria (119.1 million USD).

As to top 5 imports items, oil and oil products rank first with 277 894.4 thousand USD, vehicles rank second with 248 378.4 thousand USD; copper ores rank third with 236 034.1 thousand USD and oil gas and carbon dioxide and packed medications rank 4th and 5th. In January-May 2019 the ratio of top ten importer countries in Georgia’s total imports constituted 66.2%, including Turkey – 595.7 million USD, Russia – 349.6 million USD and China - 347.9 million USD.

“Georgia’s external trade deficit is the lowest since 2005. In terms of month on month, the figure in May constituted 38.4%, while the highest deficit was recorded in December of 2007 and 2008 – 70% and 74.1% respectively”, economic expert Vakhtang Charaia said. The analogical situation is recorded in terms of January-May indicators.

Namely, the indicator equaled to 40.9% in January-May 2019. The figure systematically declines over the past years. The figure exceeded 60% in 2007, 2008 and 2009, he noted.

Vakhtang Charaia makes focus on the fact the exports have hit historical maximum month on month - 334.3 million USD in May 2019. The same may be said regarding the JanuaryMay indicators – 1.47 billion USD. The figure marked 303.6 million USD in 2005, 611.5 million USD in 2010 and 882.5 million USD in 2015.

Georgia’s foreign trade turnover has not been diversified in either exports or imports. According to the JanuaryMay indicators for exports and imports, Georgia’s top three trade partners hold 1/3 ratio in total trade, top five trade partners – over 50%.

Diversification of trade partners and trade products is of crucial importance. New export items should be developed (electric cars, solar panels and so on) and the ratio of traditional imports products should decline and they should be replaced with more machineries for production process for manufacturing importsreplacing and export-oriented goods, he added.

By Merab Janiashvili

5 July 22, 2019 #292

Irakli Lekvinadze: Expected Impact of Russian Tourism Embargo and GEL Exchange Rate Volatility are Real Challenges for Business Environment Irakli Lekvinadze, Business Ombudsman of Georgia, has introduced a report on the 2019 January-June performance to media agencies and overviewed issues that were outlined in the reporting period, based on analysis of applications that the business sector representatives have submitted to the Business Ombudsman’s Office.

How many and what kind of applications were submitted to the Business Ombudsman’s office in January-June? How many cases were discussed? what results have you received and what are your future plans? – Business Ombudsman of Georgia Irakli Lekvinadze widely discusses these issues in his interview for the Caucasus Business Week (CBW).

Mr. Irakli, according to your statistics, in January-June 2019, your office received 171 applications and your office has provided reaction to 90 ones. Which regions and fields apply to your office most frequently and how efficiently do you assist the applicants?

Based on entrepreneurs’ applications, the Business Ombudsman’s office has prepared 44 solicitations, 29 recommendations and 17 legal conclusions in January-June 2019. We finished working on 42 cases and the Government offices have fully or partly satisfied our position in 78% of the cases. 40% of the applications were submitted by companies from production, retail and wholesale trade sectors. The main part of applications are related to Ministry of Finance and its agencies.

The majority of applications are submitted by small and medium companies regarding tax administration issues.

Tbilisi is the most active location in terms of number of applications. In January-June 2019 the Business Ombudsman’s Office registered 60% of applications from Tbilisi (100 applications). Adjara region ranks second with 29 applications (20%), of which 30% refer to construction and infrastructure development issues asking for mediation before Batumi City hall. We provide active job and have good results at the Finance Ministry Board for Disputes, where the board have partly or fully satisfied our position in 14 cases out of 15 ones.

You have noted that your office has prepared 44 soliciations, 29 recommendations and 17 legal conclusions and real results were received in 42 cases. Besides specific companies, are there system aspects in these applications and how efficiently do you treat these system aspects?

We work on both specific companies and system issues that are reflected on entrepreneurship process in Georgia, including the existing and planned new regulations.

Among our solicitations, mediations, recommendations and legal conclusions, there are also business ombudsman’s conclusion regarding exports and transit goods and this conclusion was fully approved by the Parliament. As a result, services related to exports and transit goods will not be subjected to VAT taxation any more. Furthermore, the mentioned amendment will apply to legal relations arisen after November 23, 2011.

Moreover, the Georgian business ombudsman’s office has forwarded remarks regarding the organic law on Ownership of Agriculture Lands and the draft law on Determination of Purpose of Land and Sustainable Management of Agriculture Lands.

Parliament of Georgia has approved our recommendations in a number of cases. As a result, regulations for submitting investment plans and decision-making were improved.

Moreover, our representative has taken part in the workgroup that was established for developing a bill on Consumer Rights Protection. The workgroup has approved many our remarks. It is also important that Ministry of Environment Protection and Agriculture has partly satisfied our legal conclusion on approval of “technical regulations for biodegradable plastic bags”. As a result, amendments were reflected into the bill on technical regulations, under which production and sales of biodegradable plastic bags are allowed on the territory of Georgia.

Based on analysis of applications to the Business Ombudsman’s office, which challenges were named in terms of protection of business interests? What aspects and

directions are accentuated as key challenges before the business sector?

Today key challenge comes from expected outcomes of Russian tourism embargo. Flight ban and essential contraction in tourist inflows have already affected tourism industry and related fields. In this situation, the markets should be further diversified as part of the international free trade agreements. Based on the mentioned factors, GEL exchange rate volatility remains a key challenge for business environment, because effect on clients’ solvency, losses from exchange rate volatility grows expenses in the business sector. In this reality, it is important to neutralize the pressure on political process and the National Bank of Georgia (NBG) should intensify coordination and communication with business to minimize the effect of negative expectations on the GEL exchange rate formation process. Moreover, tobacco control regulations remain relevant, as well as the effect of new banking regulations on development and home appliances sector.

At the same time, the Business Ombudsman’s office works on exempting dairy products from VAT. We have also forwarded our legal conclusion to the Ministry of Finance for initiating legislative amendments for entitling the crediting institutions to regain the profits tax paid before 2019, under the so-called Estonian model.

Which important projects would you name in the reporting period that you have implemented for business sector advancement?

We made essential progress when the function of a court friend was added to the Business Ombudsman as part of the common courts system. This function enables us to strengthen business sector positions during trials against government offices, based on the business ombudsman’s conclusion. Moreover, for improving communication between local governments and business sector, regional business forums were held in Tskaltubo, Telavi and Tbilisi with the engagement of the Business Ombudsman’s Office. A series

of regional meetings were held for local businessmen in Kutaisi, Poti, Akhaltsikhe and Telavi for rising awareness about advantages of mediation and arbitration, with the support of UN Development Program (UNDP). Memorandum on cooperation was signed with Georgia-France Chamber of Commerce and Industry, Georgia-Switzerland Business Association and European Business Association. We have actively engaged in communication between the government and construction sector regarding new legislative regulations on labor safety.

And finally, what are your plans on international arena? Do you plan to deepen cooperation with colleague institutions in other countries?

The business ombudsman’s office keeps deepening cooperation with colleague institutions abroad and we plan to sign cooperation memorandums with business ombudsman’s offices of Ukraine, Uzbekistan and Kazakhstan. Moreover, we have participated in a joint event of World Bank and European Commission on strengthening and developing investments. Promoting Investment Retention and Expansion P2P learning Event was held in Kuala Lumpur, Malaysia.

Georgia is one of the first countries, which has established the business ombudsman’s electronic portal with the support of World Bank. We have updated representatives of participant countries about our experience in this direction. We have also actively engaged in the 2019-2020 National Anti-corruption Action Plan developed by recommendations of Organization for Economic Cooperation and Development (OECD). Our office plays a leader’s role in this process in terms of Business Integrity aspects. As part of the AntiCorruption week , at the OECD head office in Paris, we have participated in sessions as part of the round table format and received information about the experience that East Asia and Central Europe countries have accumulated in the field of Business Integrity.

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Whether Investing of Pensions Agency funds in Energy and Logistics Sectors bring Profits The Pension Agency may invest money in energy, telecommunications and logistics sectors, the Agency executive director Levan Surguladze noted.

“There are profitable and reliable sectors in Georgia, for example, power sector, telecommunications sector, logistics sector, banking sector and so on. I believe we can diversify investment portfolio with good proceeds and low risks”, Surguladze noted.

The Caucasus Business Week has inquired whether the Pensions Agency can make profitable investments in the mentioned sectors.

“Investing of the Pension Fund’s savings in power sector will bring real profits”, Deputy Energy Minister David Mirtskhulava noted.

It is a widespread practice, when pension funds invest accumulated finances into energy projects. This is a good deal for stable revenues. Therefore, I would welcome similar deals in Georgia, David Mirtskhulava said.

As to the presumable risks, Mirtskhulava explained that risks are lower because the demand for electricity grows everywhere.

The statistics proves that Georgia built 24 megawatt power in 1999-2004, 15 megawatt was put into exploitation in 2004-2012, and 1035 megawatts was added since 2012. There was certain boom after signature of guaranteed contracts for electricity purchase, Mirtskhulava noted.

“I have frequently criticized similar contracts, because this method comprises a lot of gaps. Nevertheless, this practice used to somehow stimulate investors. Our region includes high risks and similar agreements are very attractive for investment climate. This method includes certain gaps, but it is also inadmissible to refrain from stimulating construction of power facilities.

Certain stimulation mechanisms should be selected and in this case it is absolutely adequate to employ the Pensions Fund resources in this field (I mean power sector), because this sector will bring real profits for many years”, Mirtskhulava noted.

This idea will bring benefits to both Pension Fund and the whole power sector, he said. Georgia will lack for electricity supply up to 2030. The country imports electricity. Our steam power plants work on imported natural gas. Therefore, the demand for electricity will always grow in our country, Mirtskhulava said.

Investing in renewable energy sources will also bring profits such as wind power plants, solar power plants and so on, David Mirtskhulava noted.

In response to the question whether the Government will compete with the private sector, Mirtskhulava rules out similar scenario, because the fund may develop a methodology for entering the project for several years , receive benefits and withdraw from the project.

As to logistics aspects, Paata Tsagareishvili, head of Transport Corridor Research Center and HUB Georgia expert, explains that expedience of funding the logistics sector by the Pension Agency and its profitability may be questionable.

About 2 years ago the Government announced plans for building two logistics centers in Tbilisi and Kutaisi.

Consolidated investment value of both projects made up 150-160 million USD. Total value of Tbilisi Logistics Center made up 80.3 million USD (60.7 million USD for the first phase), while total value of Kutaisi Logistics Center made up 72.5 million USD (27.1 million USD for the first phase).

Feasibility studies have been also prepared by well-known German company Dornier Consulting International. Two years have passed and no real results are seen, Tsagareishvili noted.

“The winner was not announced and even the preliminarily prepared feasibility studies remain useless. Our neighbor Azerbaijan have made use of our frustration and built a new logistics center near Baku.

They have made important investment in this project.

Kazakhstan has also built a logistics center. At the same time, in Karsi Turkey also launched a construction of important logistics center. The construction works will be finished in the near future. Thus, the niche that we had to grasp has been already taken by our neighbors”, Tsagareishvili said.

If our country makes focus on building logistics centers and make investments from the Pensions Fund resources, naturally, we welcome this process and this is necessary. However, it should be also noted this is the business of private sector rather than public sector, he said.

“Regretfully, I do not know details of this idea. They have failed to attract investors, because many countries have already built similar centers and our project has become questionable in terms of profitability.

Logistics center should be built near Anaklia. A set of logistics centers is necessary for developing the country. Otherwise, the corridor cannot work and cannot compete with other alternative routes. We have this niche, on the one hand, however, another aspect is whether investing of the Pension Fund resources in this sector will bring real benefits. We may receive benefits or bear losses. This aspect requires fundamental examination and calculation”, Tsagareishvili noted.

The Authorities should have a logistic centers development strategy that would answer all questions, he added.

In response to the question whether investing of the Pensions Fund’s resources in construction of logistics center will make the Government competitor to the private sector, Tsagareishvili explained that similar projects should be implemented by private companies, in general, and the Authorities should only provide support and develop due infrastructure.

Stock Exchange Development to heat up in 2020 Stock exchange development will accelerate in Georgia in 2020-2021, according to TBC Bank Deputy Director General Giorgi Tkhelidze on the TV program Business Partner.

Bonds issued by companies are very expensive for small investors. Bondissuing companies will place shares on theGeorgian Stock Exchange, Tkhelidze explained.

“Confidence should be higher when buying shares. Therefore, we believe that companies that take active efforts when issuing bonds, or have already issued bonds, and are the strongest candidates to place shares on the stock exchange, because for the placement of bonds and shares that do not differ much from each other.

I mean, preparation for issuance, corporate management, financial accountability. Therefore, I believe these companies will be pioneers in the development of the stock exchange.

At this early stage the process is protracted, however, there are several factors that will essentially boost the stock exchange in 2020-2021”, Tkhelidze said.

Meri Chachanidze, managing director of the TBC Capital brokerage company, noted that the

Pension Fund is also a pro-growth factor, because the agency plans to start making investments on the stock exchange in 2020.

“There are a number of companies that are ready to enter the stock exchange.

Investor confidence is of crucial importance, on the one hand, and Georgians’ confidence in companies is also very important when buying their shares. The Pension Fund is one of the decisive factors. Its investment board has already been staffed, and we expect them to launch active investing in 2020, in both securities and shares. It is very important that they make investments only on the stock exchange. Therefore, it is essential to deliver information to all Georgiabased corporations to get ready for this process”, Chachanidze said.

The market for Georgian corporate bonds grew by 20% in the second quarter year on year and made up about 12 billion GEL, she noted.

We know that the Georgian bonds market used to grow by 23% on average before 2018, and the market hit 10 billion GEL in 2018. Much higher growth was recorded in the first half of 2019, because this 10 billion GEL grew by 11% to 11 billion GEL. Higher growth was recorded in the second quarter. A high pace of growth on the bond market will be maintained, because companies try to diversify their financial resources, Chachanidze said.

“In the second quarter, TBC Bank placed two flows of Eurobonds, and the 11% upturn in the first quarter was replaced by 20% growth in the second quarter. The consolidated value of the bonds market

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made up 12 billion GEL. These figures mean that companies that try to diversify their finances and attract resources from the capital market, too, besides loans from financial institutions”, Meri Chachanidze said.

The ratio of private bonds grows considerably as a part of the total volume of bonds, and this growth represented 50% of the domestic market, compared to the previous year. Various factors will further accelerate the growth, she noted.

“The ratio of private bonds is growing.

Domestic corporate bonds have grown by 50% year on year. We have a high rate of growth, and we expect this pace to heat up further, because the companies, which have issued bonds, are able to issue new bonds by the time they buy off the initial bonds; that is, they are able to carry out re-issuance. The more companies grow and improve their management structure, the weaker the barriers will be.

Based on all these factors, I believe the number of companies ready for issuing securities that are interesting for investors will increase”, Chachanidze said.

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Keti Pirtskhalaishvili: "More Caution and Attention are required for Clients" Interview with Partner in the Marketing Agency “Gingers’’, Keti Pirtskhalaishvili.

Tell us about how you got into the field of marketing, and what factors played an important role in choosing this profession?

is a small list of features that a marketing manager needs.

oriented toward our clients and their satisfaction.

One word that describes your work.

My choice of profession was mainly due to getting into the ESM Business School. I’ve been doing internships in various companies while studying, in order to find out what direction excited me the most, and marketing was the one. After graduating from the Institute, all my jobs were connected to marketing, and in the end I worked in this field for more than 10 years.

What are you doing to help the organization keep up with new trends and use innovative approaches in the field of marketing?

I can’t put it in a single word, so I’ll offer a sentence that’s our company’s motto- we believe, We try to constantly search for at Ginger, that character denovelties, and test new solution fines everything. on the local market. We offer user-oriented services, that will The most useful advice you’ve simplify communication with ever received in your life? target audience and have real results.

It’s cool to ask for help.

What’s your organization’s business model regarding PR and marketing?

Think of a person who inspires you, professionally.

What has changed in the field in the last 5 years, and what changes are expected?

Over the last five years, the efficiency and use of advertising channels have significantly changed. If earlier, television, radio and the press were the leading channels for advertising, now all efforts and attention are placed on digital channels. More caution and attention are required for clients, as communication between companies and consumers is bilateral and open.

What important features should a marketing manager focus on, and what are their roles in an organization?

Catching up with users’ requirements and demands, flexibility, and striving to develop, interest towards novelties- this

As I represent the agency, our business model is thoroughly

There are many professionals in this field, thus it’s hard to name only one.

9 July 22, 2019 #292

Business News

Startup founded by Georgian Picks up $28M Backing from Goldman Sachs

NBC Universal to examine Film Making Potential in Georgia

Raisin, the fintech startup that offers a pan-European marketplace for savings and investment products, has picked up additional funding.

Goldman Sachs has invested $28 million (€25 million), following the company’s $114 million in Series D in February.

Representatives of NBC Universals were hosted by Prime Minister of Georgia, Mamuka Bakhtadze.

According to the administration, on the meeting were discussed the matters of future collaboration perspectives and opportunities, which exist in the field of film making in Georgia. In this context, "Enterprise Georgia" was surveyed.

London, are Dimitri Chaava and Soso Eliava.

Except for Shilda, Euronews also announced Canada, Germany, Romania, Singapore, and Guatemala buildings as magnificent examples of green architecture.

AiCar Auto Park to add 50 automobiles

Georgian-American Law Company EK Law Office PLLC to launch Operation in New York EK Law Office PLLC Georgian-American law company has launched operation in New York.

Ekaterine Egutia, licensed lawyer in New York, graduate of Harvard Law School, has quitted the position of senior layer at TBC Bank and founded a company jointly with Nino Kobakhidze, head of supervisory board of Women for Future federation of business leaders.

The company AiCar already consists of 100 automobiles.A few days ago, carsharing service added a new model of automobile, which is Renault Zoe. Usage of this service will be probable with two different types of automobiles - Nissan Leaf and Renault Zoe. Silk Road Group to open New Hotel in Tsinandali Silk Road Group will open a new three-floor hotel Park Hotel near Al. Chavchavadze house-museum. The hotel will receive first guests in August. The project’s investment value is about 4 million USD. Brazil’s Most Honored Art Director Marcello Serpa will be Speaker at Ad Black Sea Brazil’s most honored art director and winner of multiple international advertising festivals Marcello Serpa is a guest speaker with the topic “Art Director” at Ad Black Sea 2019. The festival will take place in Batumi, Georgia in September 19-21.

Georgia to host Eurobasket in 2021 FIBA Europe announced that Eurobasket 2021 will be played in Germany, Italy, Georgia, and the Czech Republic.

Shilda Winery to be One of the Most Magnificent Examples of Green Architecture around the World on Euronews Shilda winery was built by X-architecture 3 years ago. The founders of Georgian-English based architecture company, with the colleges from

Contemporary Camping Place to be settled in Borjomi The contemporary camping place will be equipped with necessary infrastructures, such as picnic table, fireplace and shower rooms.

Georgian Olive and KTW Group start Collaboration As a founder of Georgian Olive, Giorgi Svanidze declares, during the next two years negotiation processes between KTW group and Georgian Olive will lead to building up the gardens in Kakheti, Dedoplistskaro on 1000 hectare.

10 July 22, 2019 #292

Tea Industry Worldwide – What about Georgia?

Tea is a staple product across the world, and it ranks as the second most popular drink.

Tea production started in China several thousand years ago, and it appeared in Europe only in the 17th century. Today, 37 countries have developed tea production, and annual tea exports to the international market makes up 3.5 million tons.

According to the UN Food and Agriculture Organization (FAO), China is reported as the world’s major tea manufacturing country, with 2.8 million tons, and this is 30%-35% of global tea production.

According to experts’ appraisals, the volume of China’s tea market exceeds 10 billion USD. India ranks second, and has produced about 900,000 tons of tea varieties in 2018.

According to the official statistics, 70% of Indian tea is sold on the domestic market, and only 30% of Indian tea is exported to the international market. Kenya ranks third among the world’s major tea production countries, with an annual 399,000 tons. This African country is one of the major tea exporters, and it supplies about 370,000 tons of tea to foreign markets a year.

Sri Lanka grows 295,830 tons of tea on 188,175 hectares, and this country ranks fourth worldwide.

Turkey ranks fifth, with 175,000 tons. Indonesia ranks sixth, with more than 157,000 tons. Vietnam ranks 7th,with 116,780 tons, Japan at 8th, with about 88,000 tons.

This country exports only 2% of produced tea. Iran ranks 9th with 83,990 tons, and Argentina is 10th with 69,924 tons.

As for tea importers, Pakistan is the world’s major tea importer.

Pakistan’s ratio in global tea imports constituted 9.9% in 20162018. Russia ranks second, with 9.6%. Great Britain ranks third, with about 7.4%. The USA ranks

4th with 7.3%, and the United Arab Emirates ranks fifth, with 6.3%. On the whole, these countries import 40% of tea production worldwide.

As for Georgia, the history of tea in this country started 170 years ago, and this industry reached its peak in the Soviet Period. In the USSR, tea plantations covered 67,000 hectares, and the country used to pick 500-600 tons of tea leaves.

The Republic’s ratio ofSoviet tea production accounted for 87%.

The regression of the Georgian tea industry started in the 1990s, and today, tea plantations cover about 3.5 thousand hectares. Georgia’s annual tea consumption makes up about 1,000 tons, noted Tengiz Svanidze, head of the Georgian Tea Growers Association.

Domestic production satisfies only 20% of the Georgian tea market, and the remaining 80% is imported from abroad. Despite this Georgia carries out tea exports, mainly to Mongolia, Svanidze noted.

Georgian tea is also imported by Central Asian and Baltic countries.

Marginal volumes are exported to Eastern Europe.

Georgia mainly manufactures three varieties of tea: black, green and green brick tea. Major tea manufacturers are: Gurieli, Ternali, Kobuleturi Tea, Shemoqmedi, Anaseuli and Tkibuli.

According to Geostat, the national statistics service of Georgia, in 2018, Georgia sold tea worth about 3.6 million USD on the international market. Georgian tea exports have increased by 50% compared to 2017. This year, tea exports constituted 2.4 million USD. As for imports, according to Geostat, in 2018 Georgia imported tea of 8.9 million USD.

By Zurab Khachapuridze

11 July 22, 2019 #292

Georgian App 'Expago' connects Locals and Travelers for Unique Traveling Experience Adventure seeker, caring mother, fisherman, pensioner, student or professional guide - anyone can be a part of Expago and earn an income. As well as, any traveler can join the locals instead of walking around guidebooks and surfing the internet, and enjoy a unique experience.

Georgian app 'Expago' offers an evolution of traditional guided tours, reinventing the way we travel and discover the world.

CBW had an interview with Guri Koiava, Country Manager of ExpagoGeorgia: Please tell us a little bit about your company – what is Expago all about?

In brief, Expago is an online platform to discover and book local tours, activities and experiences. It’s available on desktop and on mobile — both on Apple’s App Store and Android’s Google Play. We’re basically connecting travelers with the locals, and letting the travelers discover Georgia from more interesting, authentic perspectives. For example, on Expago they can find Nikoloz who will walk with them in the Old Town and tell stories about Tbilisi and its people, traditions, architecture, or they can book Asya who’ll take them to her home, teach them how to make khinkali or bake khachapuri, and

tell about Georgian supra and toasts.

How did you come up with the idea, which factor helped you implement and develop your startup?

Our team members with tourism background, who have worked in the industry for many years, have realized the growing interest towards not standard, unique, authentic local experiences.

Given that this is a worldwide trend, we decided to connect it with our original technological ideas, developed this product and launched it in Georgia.

How did the public react to the appearance of your brand and who is your target group?

We’re overwhelmed with the attention and positive feedback. Many locals are rushing to register on our platform — this is a great opportunity especially for the youth to meet foreigners, tell them about their country and their hobbies, and to generate additional revenue. Travelers love Expago, too! But we’re always asking for additional feedback to make our platform even better.

What are the advantages of making tourism business in Georgia?

Georgia is one of the fastest-growing

tourism destinations in Europe. Although this is a small country, it offers a very rich and very diverse touristic product.

Tourists visit Georgia for culture, history, architecture, food, wine, sea and mountains, to name a few. Recently we saw fashion and raving being added to the list.

Who’s your team and what’s work process like?

We are a small team of professionals who have huge experience and expertise in the tourism industry. We’re looking for interesting people who can deliver interesting experiences, meeting them in person and interviewing them. We’re also adding functionality to the platform based on the feedback from the travelers and the guides.

What excites you most right now and what do you see as your next step?

The products (the website and the mobile apps) are launched, so now we’re focusing on attracting users — locals who want to offer tours and experiences, and travelers who want to be immersed in the local culture.

By Ninna Gomarteli

12 July 22, 2019 #292