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facebook.com/ georgiatoday

Issue no: 1010/110

• DECEMBER 26 - 28, 2017

• PUBLISHED TWICE WEEKLY

FOCUS ON TOURISM Georgia recognized as Tourism Location of the Future

PRICE: GEL 2.50

In this week’s issue... Queen Elizabeth Congratulates Georgian Patriarch on Election Anniversary

PAGE 2

NEWS PAGE 3

Is Less, More? On “Usakhelauri” Wine ISET PAGE 4

Photo source: Georgian National Tourism Administration

Anaklia Deep Sea Port Construction Officially Launched

Tbilisi Next Global Fashion Capital: Latest Labels & Promising Designers at Showroom BY LIKA CHIGLADZE

O

ver recent years, Georgia has evolved in many fields and the fashion industry is no exception. Hailed as the clubbing center of Eastern Europe, Tbilisi has also been recognized as one of the leading fashion scenes, with a number of emerging designers and labels. Now buyers and fashion lovers need no longer search for unique, trendy and tasteful outfits abroad, with such a big variety of individual and chic labels right here, in Georgia. Continued on page 7

BUSINESS PAGE 7

NEW YORKER Officially Opens at Galleria Tbilisi BUSINESS PAGE 8

Regus Organizes Media Tour BUSINESS PAGE 8

Tourism Market Watch GALT & TAGGART PAGE 11 Prepared for Georgia Today Business by

Markets Asof22ͲDecͲ2017

STOCKS BGEOGroup(BGEOLN) GHG(GHGLN) TBCBankGroup(TBCGLN)

COMMODITIES CrudeOil,Brent(US$/bbl) GoldSpot(US$/OZ)

INDICES

Price

w/w

Price

w/w

m/m

GBP35.17

+0,8%

+6,6%

GEOROG04/21

107.56(YTM4.29%)

Ͳ0,0%

+0,1%

GBP3.59

+2,6%

+3,8%

m/m

GEORG04/21

BONDS

112.35(YTM2.91%)

Ͳ0,0%

Ͳ0,2%

GBP16.90

+2,9%

+3,0%

GRAIL07/22

112.44(YTM4.68%)

+0,1%

+0,5%

BGEOLN07/23

104.65(YTM5.03%)

+0,0%

+0,9%

Price

w/w

m/m

65,25

+3,2%

+3,0%

CURRENCIES

w/w

m/m

1274,16

+1,4%

Ͳ1,4%

GEL/USD

2,5347

Ͳ0,2%

Ͳ6,6%

GEL/EUR

2,9909

+0,2%

Ͳ6,8%

Price

Price

w/w

m/m

GEL/GBP

3,3873

+0,1%

Ͳ6,4%

FTSE100

7592,66

+1,4%

+2,3%

GEL/CHF

2,5661

Ͳ0,2%

Ͳ7,1%

FTSE250

20481,07

+2,2%

+2,3%

GEL/RUB

0,0434

+0,5%

Ͳ6,7%

DAX

13072,79

Ͳ0,2%

+0,4%

GEL/TRY

0,6641

+1,0%

Ͳ4,2%

DOWJONES

24754,06

+0,4%

+5,2%

GEL/AZN

1,4891

Ͳ1,0%

Ͳ6,8%

6959,96

+0,3%

+1,3%

GEL/AMD

0,0053

Ͳ

Ͳ5,4%

NASDAQ

162,49

+0,0%

Ͳ1,5%

GEL/UAH

0,0905

Ͳ1,3%

Ͳ11,0%

1141,09

+2,0%

Ͳ1,3%

EUR/USD

0,8430

Ͳ1,0%

Ͳ0,3%

SP500

2683,34

+0,3%

+3,3%

GBP/USD

0,7484

Ͳ0,3%

Ͳ0,3%

MICEX

2102,94

Ͳ1,9%

Ͳ2,6%

CHF/USD

0,9880

Ͳ0,3%

+0,6%

MSCIFM

2959,34

+2,3%

+2,8%

RUB/USD

58,3067

Ͳ0,8%

GTIndex(GEL)

1582,68

Ͳ

Ͳ

TRY/USD

3,8093

Ͳ1,4%

Ͳ2,8%

GTIndex(USD)

1208,13

Ͳ

Ͳ

AZN/USD

1,7000

+0,0%

+0,0%

MSCIEMEE MSCIEM

Ͳ0,2%


2

NEWS

GEORGIA TODAY

DECEMBER 26 - 28, 2017

EU Allocates €9.9 mln FDi Intelligence Includes Georgia for Extension of Georgian in ‘Tourism Locations of the Future’ Transmission Network BY NINO GUGUNISHVILI

G Photo: Signing of Financing and Project Implementing Agreement on the “Extension of the Georgian Transmission Network”

BY THEA MORRISON

T

he European Union, through its Neighborhood Investment Facility (NIF), provided a €9.9 million (GEL 28 million) grant to support the program on “Extension of the Georgian Transmission Network”, co-financed by the German government-owned development bank KfW. Deputy Minister of Economy of Georgia, Giorgi Chikovani; General Director of Georgian State Electro system (GSE), Sulkhan Zumburidze; and KfW representative, Hans Rieck, signed a Financing and Project Implementing Agreement on the ‘Extension of the Georgian Transmission Network.’ The aim of the program is to: provide grid infrastructure for promotion of net integration of hydropower plants (HPPs), increase transmission capacities, including cross-border trade, and improve the security of energy supply of Georgia. The program consists of the following

components: the Tskaltubo-AkhaltsikheTortum Connection, reinforcement of transmission infrastructure in Guria, construction of the North Ring, and reinforcement of Kakheti transmission infrastructure. The EU NIF contribution of €9.9 million consists of a €5.9 million investment component and €4 million technical assistance component. This contribution comes in conjunction with the €125 million loan already provided by KfW Development Bank. The program is also co-financed by the European Bank for Reconstruction and Development (EBRD). The total cost of the project is €225.36 million. KfW´s activities in Georgia started in 1993. Since then, more than €750 million has been invested in different sectors, among them the energy, financial, municipal infrastructure, environment and health sectors. The Economy Ministry reports that more than 50% of the whole investment (€400 million) has been attributed to the energy sector of Georgia.

eorgia is among the FDi's inaugural Tourism Editor's Choice Awards, as one of the countries named winner in the Tourism Locations of the Future for 2017/2018, alongside Thailand, the Maldives, Hong Kong, Greece, Montenegro, Dominican Republic, Croatia, Panama, Saint Lucia, Cape Verde, Antigua, Cyprus, Jamaica, Macau, Luxembourg, Malta, Seychelles, Dominica and Belize. “The FDi's inaugural Tourism Editor's Choice Awards for tourism single out the countries that have devised specific and successful strategies to attract investment,” the article, by Cathy Mullan on www.fdiintelligence.com, says. Data was collected using specialist online tools, the FDi Benchmark, Fdi Markets, and other sources, for 43 locations, determined by “Countries with at least 10% of GDP derived from tourism receipts; and/ or countries with at least 10% of all FDI projects in the tourism cluster.” Countries scored up to a maximum of 10 points for each data point, which were weighted by importance to the FDI decision-making process to compile the overall ‘Tourism Locations of the Future 2017/18’ ranking. In addition, surveys were collected under a sixth category, FDI Strategy, for which there were nine submissions. For these, the judging panel awarded the bespoke Editor’s Choice awards. Georgia was awarded with the Investment Award for Hotels. “Major developments include the €70m Biltmore Hotel, a seven-star hotel in Tbilisi, and the €25m Castello Mare five-star hotel on the Black Sea coast” the report states.

Further to the Investment Award, the country received a specialism award for Spa and Wellness, noting that, “The main promotional subsector in the tourism sector for 2017 is spas and wellness, and the government is currently developing Tskaltubo Spa and Wellness Resort”. As reported, “Investors in the hotel industry can apply for the Hotel Development Incentive from 2018, allowing them to access state-backed finance for the development of hotels. The country has thus been given a Financing Support award in recognition of its effort to assist investors in the tourism sector.” Furtermore, Georgia has also been recognized

with the Diversity of Visitors Award and Ease of Entry Award. “Georgia has seen the composition of its tourist arrivals (which numbered nearly 6 million in 2015) develop and expand. Middle Eastern markets have increased, as has the number of visitors from India and China. This contributed to the country’s Diversity of Visitors award. In 2015, the country introduced an e-visa portal, which allows visitors to apply for a visitor’s visa online. However, nationals from 97 countries do not require a visa to enter the country, which is in receipt of the Ease of Entry award,” the report states.


NEWS

GEORGIA TODAY DECEMBER 26 - 28, 2017

3

Queen Elizabeth Congratulates Georgian Patriarch on Election Anniversary

Alexei Navalny Nominated to Challenge Putin for Presidency BY TOM DAY

L

awyer and political and financial activist Alexei Navalny has been nominated to run for presidency next year against Vladimir Putin. Over 15,000 of his supporters met this weekend in 20 cities, from St. Petersburg to Vladivostok, to compile the necessary signatures to endorse him. Mr. Navalny is seen as the only man capable of beating Putin in the upcoming election in March 2018. However, due to a criminal conviction, election officials say it is not possible for him to run for president. He says the conviction is corrupt and politically motivated. Putin hopes to secure his run for a fourth term and if he succeeds, this will make him the longest-serving Russian Leader since Joseph Stalin. Navalny spoke at one of the gatherings

outside Moscow, labelling Mr. Putin a “poor leader”. "It is you, Vladimir Putin, who's turned this country into a source of personal enrichment for yourself, your family and your friends. That's why you should no longer be president. You are a bad president." He said that Mr. Putin does not have the mass support he claims and to prove it, he intends to run against him. He claims that he would beat Mr. Putin in a fair fight, where he had access to state television (the main news source throughout the country). "[I would win] if I am allowed to run and if I'm allowed to use major media.” Despite the opposition’s claims, Mr. Putin has approval ratings of 80%, which means he is almost guaranteed to win. Navalny however, has managed to galvanize some of Russia’s key regions over the last year. Mr. Navalny is, for many Russians, the man to rid their country of corruption.

He highlighted Putin’s alleged wrongdoings, saying he has taken "from poor people, oil, gas and metal worth trillions of dollars, sold it abroad, rewarded those people by turning them from poor to destitute". Navalny gained his large following from organizing anti-Putin rallies in 2011-12, following accusations of vote rigging in parliamentary votes. Over time, the protests eased, and he has now been able to bring a fresh perspective on Russian politics, especially for the younger generation. This year he has served three separate jail sentences of 15, 25 and 30 days following the protests. He says that these arrests are the Kremlin trying to destroy his political ambitions. Other Presidential hopefuls include Sergei Polonsky, a property developer who also secured enough backing from supporters. Ksenia Sobchak is the other competitor, whose late father was Putin’s boss in the early 90s.

BY TEA MARIAMIDZE

H

er Majesty the Queen Elizabeth has sent a message of congratulations to His Holiness Ilia II, Catholicos-Patriarch of All Georgia, congratulating him on the 40th anniversary of election to his post.

“I have pleasure in sending Your Holiness my warmest congratulations on the occasion of the 40th anniversary of your election as the Catholicos-Patriarch of All Georgia,” the letter reads. The Queen also recalls the visit of Ilia II to London in 2011. "I am delighted that the close relationship between our peoples continues to grow. I send you my best wishes for your good health and happiness,” the letter reads.


4

BUSINESS

GEORGIA TODAY

DECEMBER 26 - 28, 2017

THE ISET ECONOMIST A BLOG ABOUT ECONOMICS AND THE SOUTH CAUCAUS

www.iset-pi.ge/blog

The ISET Policy Institute (ISET-PI, www.iset-pi.ge) is an independent think-tank associated with the International School of Economics at TSU (ISET). Our blog carries economic analysis of current events and policies in Georgia and the South Caucasus region ranging from agriculture, to economic growth, energy, labor markets and the nexus of economics, culture and religion. Thought-provoking and fun to read, our blog posts are written by international faculty teaching at ISET and recent graduates representing the new generation of Georgian, Azerbaijani and Armenian economists.

Is Less, More? On “Usakhelauri” Wine for most common Georgian grape varieties, and shows that Usakhelauri grapes sell for several times higher than other grapes in Georgia, even the rare and expensive Aleksandrouli/Mujuretuli varieties (which go into the production of Khvnchkara wines). As for the yields of other Georgian grape varieties, Rkatisteli vines usually provide 15-20 tons per ha, Saperavi vines 10-15 tons per ha and Mujuretuli vines yield around 7 tons per ha. Therefore, preserving the unique Usakhelauri grape variety is associated with higher incomes, even if only for a few farm households owning suitable land plots. Moreover, while the produced wine quantities are tiny, Usakhelauri wine still contributes to the branding of Georgian wines as being unique as well as the country’s overall rich indigenous grape varieties.

BY PATI MAMARDASHVILI

T

his summer I bought a small piece of land (0.15ha) in the village of Okhureshi to grow a vineyard. About 700 “Usakhelauri” vine seedlings planted on that land in November this year will soon provide the most scarce and expensive grapes in Georgia. In just in a couple of years the vines will mature, and I will enjoy something as nice as the neighboring vineyard depicted in the photo.

NO NAME… Usakhelauri is an ancient red-wine grape variety unique to Georgia. The grapes are cultivated in just a couple of villages in the Lechkhumi region (West Georgia), as this variety can only grow in specific areas (micro zones) of this region. One season can only produce a couple of hundred tons of these rare grapes in Georgia. The unique and rare semi-sweet wines produced from this grape variety sell for 150-170 GEL (6070 USD) per bottle. The name Usakhelauri translates as “with no name”. By giving such a distinguished name to this grape variety, locals meant to portray the features of these grapes as being beyond words. As claimed on the website for Usakhelauri wines, “the most precious feelings have no name.”

WHAT’S THE BIG DEAL ABOUT RARE WINES? While the worldwide price of most wines (basic and premium wines) varies between $5-$50 per bottle, some wines do hit prices of several hundred thousand US dollars. A bottle of Cabernet Sauvignon recently sold for $350,000, setting a new record for the most expensive wine ever sold in the world. Other examples of fabulous wine prices include Chateau Lafite’s 1869 (sold for $230,000 per bottle at an auction in Hong Kong) and 1947 Cheval Blanc (an imperial bottle sold for $304,375 at an auction in 2010). Though such high prices of wine are seen only in exceptional cases, wine prices still vary a lot even for wines produced with similar grape varieties and wine-making techniques. Why do consumers pay a lot for some wines and not for others? Are some wines hun-

Usakhelauri vines in the village Okureshi, Georgia (Photo by Pati Mamardashvili)

dreds and thousands of times better than others? Wine is a typical experience good, meaning that unobservable product characteristics play an important role in consumers’ buying decisions. Consumer value not only intrinsic (physicalchemical attributes of wine such as taste, color, etc. - the characteristics that cease to exist when wine is consumed) but also extrinsic characteristics such as region, aging, bottle form, vineyard and winery landscape, purchase place or occasion, consumer involvement in purchase, history and so on. All of which provides wine producers with plenty of opportunities for product differentiation. For instance, the basic factors that make wine more expensive - oak, time and terroir - provide a notable mark-up on the bottle price. On average, additional prices per bottle are $2-4 for oak, $1 per year of aging and more than $5 for terroir. One of the extrinsic signals consum-

ers consider in their purchasing decisions is perceived scarcity of product. Scare products are generally preferred over abundant products (Amaldoss, W., and Jain, S., 2005). Scarcity can be on supply-side or demand-side. In case of supply-side scarcity, consumers consider the product to be exclusive, and are willing to pay more than for other similar products. Purchasing such products makes consumers to feel unique; they are happy and proud to get something that is rare and unavailable for others. As about 70 percent of the world's wine is produced from just 30 grape varieties, trying wines made from rare grapes is a dream of most wine geeks. On the other hand, demandside scarcity is often perceived as related to products’ popularity. Consumers’ perception is that popularity caused a particular shelf of wine to be almost empty (e.g., Robinson et al., 2016). Researchers have looked at both types of scarcity and tried to show

CHEERS! when (and if at all) product scarcity increases consumer preference. While the findings are rather controversial and depend on context as well as type of consumers (e.g., age, wine involvement, etc.), research in this area provides interesting insights for developing wine marketing strategies (Erica van Herpen et al., 2014). Although it is easier to sell known and inexpensive wines than expensive ones, its characteristics make the product especially well-suited for value and thus price addition. However, the higher the price segment, the more sophisticated marketing efforts need to be made. An article from The Economist argues that mass advertising may even be counterproductive, as it makes expensive wines seem less exclusive. Expensive wines are often promoted through other publicity mechanisms, such as tasting rooms, gift baskets during the holiday season, or charity events.

LESS IS MORE Table 1. Average prices of wine grapes in Georgia (in GEL per kg)

2013

2014

2015

2016

2017

Rkatsiteli (white), in GEL

1.04

1.01

0.65

0.79

0.82

Kakhuri Mtsvane (white), in GEL

1.29

1.18

0.68

0.82

0.95

Saperavi (red), in GEL

1.30

1.95

0.77

0.90

1.58

Aleksandreuli/ Mujuretuli (red), in GEL

6.50

7.25

4.70

4.95

5.93

Source: http://rtveli2017.gov.ge/statistic

10 Galaktion Street

Notwithstanding its low yields, cultivating Usakhelauri grapes is associated with high profits for farm households. While only 1-1.5 kg of grapes can be harvested per vine (5-6 tons per ha), this drawback is easily offset by the high prices of Usakhelauri grapes, which vary between 10-20 GEL per kg (according to Okhureshi village dwellers). For a comparison, Table 1 presents the development of average grape prices

When my vines enter their full production years, I expect to harvest about 1,000 kg grapes, and produce around 800 liters of wine per year. Although it would be unwise (and almost impossible) to sip all the produced wines with my family and friends, my newly planted vineyard is more to quench my nostalgia for Okhureshi (my home village!) than a business endeavor. Others certainly have long-term business plans regarding this wine, as several new investments have been undertaken in Usakhelauri vineyards in the last couple of years. Those investments include several newborn agricultural cooperatives, which produce this rare wine, or are planning to in the future. May these businesses preserve the uniqueness and high quality of Usakhelauri wine, make best use of various marketing techniques, and be successful! References 1. Amaldoss, W., and Jain, S. (2005). Pricing of conspicuous goods: A competitive analysis of social effects. Journal of Marketing Research, 42, 30-42. 2. Herpen, E. van., Rik Pieters, R., Zeelenberg , M. (2014). When less sells more or less: The scarcity principle in wine choice. Food Quality and Preference 36, 153-160. 3. Robinson, S. G., Brady, M.K., Lemon, K.N., Giebelhausen, M. (2016). Less of this one? I’ll take it: insights on the influence of self-based scarcity. International Journal of Research in Marketing 33, 961-965.

Tel: (995 32) 2 45 08 08 E-mail: info@peoplescafe.ge


6

BUSINESS

GEORGIA TODAY

DECEMBER 26 - 28, 2017

Hotels & Preference Hualing Tbilisi Summarizes 2017 BY NINO GUGUNISHVILI

H

otels and Preference, an international hotel chain, was created in 2000 in France, currently owning 150 four and five-star hotels in twenty destinations globally. In its 12 years of history, Hotels and Preference as a brand is considered among the top luxury hotel chains. It appears 2017 was an extremely succesful year for the Hotels and Preference Hualing Tbilisi Hotel, a five-star property located beside the Tbilisi Sea, which, during a relatively short two-year period of being present on the Georgian market, managed to become a successful business-type hotel with its own niche. GEORGIA TODAY talked to Petter Lillvik, General Manager, Hotels & Preference Hualing Tbilisi, to sum up another year of successful operations in Georgia.

THIS YEAR, HOTELS & PREFERENCE HUALING TBILISI WON NUMEROUS AWARDS AND RECEIVED TOP RECOGNITION FOR ITS EXCELLENCE. TELL US MORE Hotels & Preference Hualing Tbilisi was honored to be recognized by some of the most reputable industry groups and respected juries in the world for excellence in business hospitality and more. These awards reflect the commitment of our five-star property to set high

standards for a Business Category Hotel and provide the ultimate guest experience. This autumn, we won at one of the most important global events of the hospitality business the “World Luxury Hotel Award,” held in Switzerland. We won in three different categories: Luxury Wedding Destination, Luxury Business Hotel and Luxury Hotel and Conference Center. One of the most prestigious and objective global organizations, the World Luxury Hotel Award is recognized as a “Second Oscar,” seeing luxury hotels chosen for their service excellences and facilities by worldwide famous jury experts in the hospitality industry. In addition, this year, we were granted a second worldwide important award – ‘Georgia’s Leading Business Hotel’ at the 24th annual Awarding ceremony of the World Travel Awards, held in St. Petersburg. In December 2017, Hotels & Preference Hualing Tbilisi got another welldeserved trophy from French Restaurant Guide ‘Gault&Millau,’ the first such presentation in Georgia. This year Gault&Millau expert inspectors anonymously assessed all the leading Food & Beverage objects in Georgia for its Catalogue 2018. After a very long procedure, the world renowned experts and gourmets rated Western Restaurant “Be CHIC” of Hotels & Preference Hualing Tbilisi with the highest scores among the five-star hotels in Tbilisi. This is just a short list of the successful pro-

jects that we have carried out together with our hardworking team!

WHAT MAKES HOTELS & PREFERENCE HUALING TBILISI STAND OUT FROM OTHER INTERNATIONAL HOTEL BRANDS REPRESENTED ON THE GEORGIAN MARKET? During our two years of successful operation on the Georgian market, Hotels & Preference Hualing Tbilisi has been recognized as one of the leading business hotels for hosting big MICE groups and business travelers. Having the larg-

est ballroom in Tbilisi, six additional conference halls and five VIP meeting rooms is a big advantage and privilege for large companies searching for an outstanding venue. Besides the conferences, the grand ballroom of the property has hosted many Luxurious Weddings, perfectly matching the marvelous atmosphere and services of Hotels & Preference Hualing Tbilisi. In 2017 alone, Hotels & Preference Hualing Tbilisi was honored to be an official host hotel of the NATO Parliamentary Assembly Spring Session, attended by 500 parliamentarians from

the 28 NATO member countries. Our hotel became a real hot spot this summer in terms of sports events; we hosted the UEFA European Under 19 Championship, Handball Championship, Rugby Under 19 World Championship and the FIDE chess World Championship. 2017 has also been a very successful year in terms of cooperation with governmental structures: ministries, sport federations, big MICE events, premium class automobile events, workshops, exhibitions, etc. So, 2017 was extemely successful for us and we look forward to the prosperous future!


BUSINESS

GEORGIA TODAY DECEMBER 26 - 28, 2017

Anaklia Deep Sea Port Construction Officially Launched BY NINO GUGUNISHVILI

A

naklia Deep Sea Port construction works have begun, with the official launching ceremony held on December 24, attended by Anaklia Development Consortium management representatives, Georgian government officials and other distinguished guests. “We’re starting the second phase of the ‘project of the century’ today. Exactly a year ago, we signed an agreement with the Georgian government according to which we took the responsibility to build Anaklia Deep Sea Port in Georgia. During this year, massive work has been done in terms of technical, geological, marine, engineering, topography, environmental impact assessment and other studies, carried out with experts from leading international companies,” Mamuka Khazaradze, Anaklia Development Consortium Co-Founder said, going on to thank partners Conti International and SSA Marine, the investor and the container terminal operator of the Anaklia Deep Sea Port. He also thanked the Georgian government for their intensive cooperation within the Anaklia Deep Sea Port project. “We’re not just constructing a port here; it’s an announcement for Georgia to regain its historic function on the Silk Road. We now have this chance to be integrated into these huge transport routes, with Georgia to become a crucial part and a junction for transport and infrastructure,” he stated, noting that negotiations are almost finalized with one of the UK’s leading companies with regards to

Anaklia City, a special economic zone which is expected to become an industrial and transport center, enabling regional and international companies to start their businesses in Georgia. “Anaklia is the last gateway between Europe and the East, and by opening the Anaklia Deep Sea Port, we’ll be opening this gateway wider, receiving ships within two years, that will serve the larger economy,” Khazaradze said. “With no exaggeration, today we’re starting the biggest project of the 21st century Georgia, the construction of the Anaklia Deep Sea Port. This is the beginning of a huge transformation and change in our country,” Giorgi Kvirikashvili, Prime Minister of Georgia, said at the launch ceremony. “Anaklia Deep Sea Port will strengthen Georgia’s position on the Silk Road map, enabling our country to receive the biggest ships and to be a part of the container shipment operations in the region,” the PM noted. “Anaklia Deep Sea Port will give people living in Georgia and in the region a chance to start businesses; thousands of people are to be employed in the construction process alone. Anaklia Deep Sea Port is to have an immeasurable impact on the country’s economy,” Kvirikashvili said, noting that Anaklia Deep Sea Port and the Anaklia City will bring new possibilities for Georgia to become an industrial, logistics, and innovation hub with new dynamics of development. “This is where Europe meets Asia. Georgia will be represented as a country for international cooperation, as a country of stability and peace, and again, with no exaggeration, today the new Georgia starts here,” Giorgi Kvirikashvili concluded.

Tbilisi Next Global Fashion Capital: Latest Labels & Promising Designers at Showroom Continued from page 1 From December 20 to 31, in relation to the New Year, Tbilisi Fashion Week has organized a showroom in the newly opened shopping center, Galleria. Presented at the venue are the participants of Tbilisi Fashion Week as well as the partner designers of the event. Various local brands and young Georgian designers are putting their autumn/winter collections, made especially for the New Year, on show. Potential customers have a wonderful opportunity to explore Georgian fashion and purchase clothes, shoes, handmade bags and different kinds of accessories for a special price. The labels presented at the venue are: Person, Mariam Gvasalia, Atelier 27, CO.MODE, CO.LAB, Sopo Iosebidze, NT-style, NO ONE, M.G., Shavdia, Mari Zet Handmade, Makratelli, Katrine, SaliO Abuseridze, ART salon "Lika", Besiki22, Ani Titvinidze, Anishko, Atelie Naka. ‘What looks good is your personality,’ is the chief motto of Person, a Georgian clothing brand founded two years ago by two different persons sharing same views. “Person offers its customers the ‘street style;’ completely free and unique clothes,” Keti Topuridze, co-founder of ‘Person,’ told GEORGIATODAY. “The label manufactures outfits for women and men, as well as unisex items. The core principles on which the brand stands are freedom of expression and individualism. Within two years, the label has managed to move from online to offline sales. Stalls selling Person products can be found in three shopping centers in Tbilisi and we have shown our products at various music festivals throughout Georgia.” On can find robust, sparkling, bright, colorful, oversized jackets, refined dresses, vintage pieces and extravagant shoes, all in one place: a true example of the creativity flourishing here, and a dem-

onstration that Tbilisi is becoming a real fashion hotspot in the modern world. After selecting an outfit, you can pair your chosen look with handmade jewelry and accessories produced by the brand Anishko. “We produce various kinds of accessories, necklaces, earrings, bracelets, brooches and bags,” said designer and founder Ani Tevdoradze. “Our products are made from real leather, natural stones, metal and silver. The label has been on the market for three years now. Besides shopping centers, our products are often presented at fashion weeks and various exhibitions.” Another interesting and eye-catching corner was that of label Besiki22, named after the address where the shop is located. “My friend and I decided to create a label that anyone could afford to buy. We don’t use dark colors, instead offering our potential customers totally different products. We create clothes using the quilt technique and use various textiles with colorful patterns,” Keti Kavtaradze, co-founder of the label, told us. “Most in demand are our bags, inspired by different themes, that are like nothing else in Georgia.” M.G. is the name of an emerging label headed by Megi Gabunia, who creates distinct clothes, unisex wear, some of which boast Georgian motifs. Her most attention-grabbing handmade leather bags and rough, extremely stylish bracelets. “I had my debut at Tbilisi Fashion Week in 2016. The same year, I opened my first store on Aghmashenebeli Avenue. I use my own drawings and graphic prints and transfer them onto my clothes, giving them a distinct look,” the designer said, adding that 70% of her customers are foreigners and her shop is frequently visited by tourists. So if you wonder what Georgian fashion is all about, then drop in to the exhibition and check out the cutting-edge looks by local designers this Christmas.

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8

BUSINESS

GEORGIA TODAY

DECEMBER 26 - 28, 2017

NEW YORKER Officially Opens at Galleria Tbilisi

ADVERTORIAL

N

EW YORKER has just opened a third branch in Galleria Mall, located in the heart of Tbilisi. The opening ceremony gathered many people out for an evening of fun. They got to enjoy interesting and entertaining activities, including a breakdance show, cocktails, music, and a huge cake. Actor Ninutsa Makashvili and Nichieri (Georgia’s Got Talent) finalist singer Zura Balanchivadze, hosted the event. Especially on the day, NEW YORKER offered a 20% discount to customers. This year, and this third branch, celebrate the

brand’s fifth annual jubilee on the Georgian market. NEW YORKER is a German clothing brand founded in 1971. They are already present in 40 countries with 1000 shops and are continuously enlarging their customer base. Focused on customers’ interests, NEW YORKER creates high quality pieces at affordable prices. NEW YORKER offers Young Fashion, jeans, sportswear and streetwear fashion for a young, trendconscious target group, supplemented by a wide range of accessories and underwear. The shop is officially open for everyone! Don’t miss a chance to shop for the best New Year presents and update your wardrobe with chic and fresh clothing. NEW YORKER – Dress for the moment.

Regus Organizes Media Tour

BY SOFO JAVAKISHVILI

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egus is a branch mark offering worldwide services. The company has maintained a long history of success and loyalty on the market. The idea behind Regus is the creation of unique options for companies and individuals, contributing over 3000 locations in 900 cities across 120 countries, fully furnished and equipped workplaces approachable through convenient and flexible client services. Regus can now be found in Georgia, located in the busiest part of Tbilisi, on Freedom Square. And since the company is new here, their current prices are special, with discount packages being offered with each membership card. Ruska Chikvaidze, Regus Area Manager, took us on a media tour of the premises. The place has modern, ergonomic office furniture and a professional business environment and everything you would expect to find in a present-day office: a receptionist to greet guests, communal kitchen

with tea and coffee-making facilities, business lounge and smaller break areas. All utility costs are included in the membership price. Regus has its own parking space, 24/7 building security and office cleaning service. They focus on clients’ interests and offer benefits, such as exclusive access to the Regus Marketplace program, providing discounts from leading brands, a regular calendar of company community events and activities, an app for booking workspace and more. “Regus pays attention to the details so there is more time for you to spend on what really matters, and the Regus team is ready to receive your mail and arrange tasks like document collation or arranging couriers,” the company policy states. Office space, Co-working, Business lounge, Virtual office and Community meeting rooms (accessible for each card owner) are currently available in Regus Georgia. A number of recently arrived brands, such as H&M, have taken advantage of the Regus space already. The area is non-smoking but offers a designated space for smokers. Regus is also accessible for disabled clients.


BUSINESS

GEORGIA TODAY DECEMBER 26 - 28, 2017

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Georgian Dairy Industry on the Upswing BY MARIAM SALDADZE, GEORGIANDAIRY.ORG

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rowth in Georgia’s dairy industry is on the upswing, owing to an improving investment climate, good dairy farming conditions and strong demand for milk, cheese and other dairy products. Still, some obstacles remain. Many of the country’s dairy farmers lack specific technical know-how to produce safe and high-quality milk. For the last several years, the European Bank for Reconstruction and Development (EBRD) and the Food and Agriculture Organization of the United Nations (FAO) have been supporting Georgia’s leading dairy farmers to modernize their facilities and boost milk productivity and quality. “We’ve reached a lot of dairy stakeholders in Georgia through a combination of training, study tours, a portal with updated technological and market information, as well as knowledge-sharing events on everything from the latest dairy trends, technologies and food safety standards to investment opportunities,” said Andriy Yarmak, an FAO economist. “This type of knowledge transfer can help make the country’s dairy supply chain more efficient and inclusive.”

MODERNIZING OPERATIONS An EBRD/FAO study found that by making simple improvements, Georgian commercial dairy farmers could increase productivity by up to 35%. What’s more, most of the changes do not require major investments.

Inspired by the example in Ukraine, a group of farmers set up the Association of Professional Milk Producers of Georgia. With support from the FAO and EBRD, the group visited commercial dairy farms in Georgia and Ukraine to learn more about modern dairy farming, including how producers organize themselves. Many farmers have also begun upgrading their facilities and buying new livestock breeds and technology to increase productivity and profits. Several highefficiency dairy farms have since emerged in the country. Owing to changes implemented since visiting and learning from Ukrainian milk producers, one Georgian farmer, Kvareli Baga, noted how the mortality rate of his calves has dropped from 20 to 2.3% in just one year, as one of many tangible improvements.

GREATER EFFICIENCY AND PROSPECTS The EBRD and FAO launched a modular training program in 2016 to introduce dairy farmers across the country to new production methods. “The country’s dairy farmers have made a lot of progress in a short time, increasing their efficiency and improving safety standards and animal health and welfare,” said Victoria Zinchuk, Head of Agribusiness Advisory from the EBRD. “Prospects for the sector continue to look good, especially as demand for highquality milk and dairy products grows. We’re seeing new investments in milk production and processing, which is exciting because it’s this type of momentum that can transform the industry to the benefit of all, including consumers.”

GOING FORWARD One way to maintain this momentum is

to continue strengthening the capacity of the country’s Association of Professional Milk Producers. According to Mamuka Meskhi, Assistant FAO Representative in Georgia, “Such organization among producers is incredibly beneficial in better integrating the value chain. On top of that, greater cooperation will increase knowledgesharing and ultimately make production practices more efficient.” The Association has set up a consultancy center where trained specialists can provide members with professional advice, and where opportunities for buying inputs and processing milk can be explored. Formal public-private dialogue, as promoted by the EBRD and FAO in neighboring countries, would also benefit Georgia’s dairy industry. As part of a separate project, the FAO and EBRD are currently supporting the emergence of origin-based labels for Georgia’s famous traditional cheeses, with a view to creating extra value in specific market niches. In addition, a forthcoming FAO and EBRD project will look to strengthen the policy and business strategy in the Georgian dairy sector by facilitating constructive dialogue between private dairy sector representatives and the government, while also providing support to local stakeholders in the shape of training and knowledge sharing.

President Margvelashvili Promotes Georgian Products BY THEA MORRISON

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eorgia’s President Giorgi Margvelashvili has called on society to purchase Georgian products in order to promote local entrepreneurs and boost the country’s economy. The President addressed the public at the summarizing event of the campaign ‘Ask for Georgian,’ which aims at promoting products made in Georgia. The exhibition-sale of Georgian products and an award ceremony for the most active supporters of Georgian products were also held during the event on Sunday evening. Three winners were identified within the campaign, including journalist and photographer Goga Chanadiri, who was actively involved in the campaign together with the President of Georgia and supported the development of Georgian production. While delivering his speech, Margvelashvili thanked those Georgian entrepreneurs who create and asked society to buy Georgian products for the New Year. “This promotes Georgian production, our country, and contributes to employment,” the President stated.

Margvelashvili wished everyone Merry Christmas and a Happy New Year and expressed hope that Georgian products will be found in every home during the holidays. Before attending the final event, the president visited the companies Natakhtari and Zedazeni to promote Georgian products. He also viewed the Barambo sweet products on display. Zedazeni, Georgian manufacturer of beer and non-alcoholic soft drinks, currently employs 700 people. The founder of the company hosted the President who examined the beer production technology and manufacturing process. In the Natakhtari Brewery, President Margvelashvili was also hosted by company representatives and the General Director, who introduced visitors to the company's activities. “I would like to once again encourage our society to ask for Georgian products. It is important to exercise pragmatic, everyday patriotism. This patriotism is reflected in choosing and purchasing Georgian products and thus strengthening Georgia,” the President said. The campaign ‘Ask for Georgian’ was initiated in January. Through this initiative, the President joined the movement KAR.GE and the initiative of photographer Goga Chanadiri, ‘Buy Georgian’.


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BUSINESS

GEORGIA TODAY

DECEMBER 26 - 28, 2017

Georgian Government Brings Rural Development Programs to the Regions

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armers’ cooperatives, local tourism, infrastructure, environmental challenges and youth activities were the focus of meetings in Lagodekhi and Kazbegi in December 2017, organized by the Government of Georgia, with assistance from the European Union (EU) and United Nations Development Program (UNDP), under the EU-funded ENPARD program. The meetings brought together more than 150 representatives of the national and local authorities, civil society, private sector and community organizations, as well as the Local Action Groups (LAGs) established to promote rural development initiatives in their respective communities. The participants received first-hand information about the state programs and initiatives that support rural development and the growth of local business in the regions, in line with the national rural development action plan for 2018-2020. The public officials presented ongoing initiatives, including “Produce in Georgia”, programs by the Agriculture Projects’ Management Agency (APMA), and business support initiatives by the Georgian Innovation and Technologies Agency (GITA).

The consultations in the regions aimed to improve communication and encourage partnership among the rural development stakeholders – government, civil society, business, local communities, and promote the effective implementation of rural development policies that should create jobs and raise life standards in rural areas. The meetings in Lagodekhi and Kazbegi are the first in a series of consultations that will be held in eight municipalities of Georgia that are piloting Local Action Groups (LAGs) with the assistance of the ENPARD implementing agencies – Lagodekhi (CARE), Kazbegi (People in Need), Borjomi (Mercy Corps), Akhalkalaki (GIPA), Dedoplistskaro (HEKSEPER), Tetritskaro (RDFG), Keda (CENN) and Khulo (Caritas-Georgia). The European Union is supporting rural development in Georgia through its ENPARD Program. Aiming to reduce rural poverty in Georgia, ENPARD has been implemented since 2013, with the total budget of EUR 102 million. The first phase of ENPARD focused on developing the national agriculture potential, while the second phase focuses on creating economic opportunities for rural population that go beyond agricultural activities.


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GEORGIA TODAY DECEMBER 26 - 28, 2017

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The Galt & Taggart Research team comprises Georgian and Azerbaijani finance and economic experts who have broad experience of covering the macro and corporate sectors of the two countries. Our current product offering includes Georgian and Azerbaijan macroeconomic research, Georgian sector research, and fixed income corporate research. For free access to Galt & Taggart Research, please visit gtresearch.ge or contact us at gt@gt.ge.

Tourism Market Watch FOR GEORGIA TODAY BY KAKHABER SAMKURASHVILI

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ector research is one of the key directions of Galt & Taggart Research. We currently provide coverage of Energy, Healthcare, Tourism, Agriculture, Wine, and Real Estate sectors in Georgia. As part of our tourism sector coverage, we produce a monthly Tourism Market Watch, adapted here for Georgia Today’s readers. Previous reports on the sector can be found on Galt & Taggart’s website - gtresearch. ge.

Georgia submitted an application to host the FIS Freestyle Skiing and Snowboarding World Championship in 2023 and will compete with France and Finland. The host country will be selected at the FIS Congress in May 2018.

SECONDARY SOURCE MARKETS ALSO POST ROBUST PERFORMANCES IN FIRST 11 MONTHS

Of the top four source markets, Russia was the top performer (+35.2% y/y), while Armenia (+7.2% y/y) and Azerbaijan (+11.2% y/y) also posted solid growth. The number of visitors from Turkey also increased (+6.8% y/y) for the fifth consecutive month. Arrivals from the EU were down 1.0% y/y to over 14,000 visitors.

Gudauri, Goderdzi, and Bakuriani ski resorts opened to visitors over December 10-12, thanks to early snow. Tetnuldi and Hatsvali resorts opened on December 17th, while Kokhta-Mitarbi will open on December 23rd.

The new 1,200m Mestia-Hatsvali chairlift became operational on December 23. The chairlift connects the Hatsvali ski resort with Mestia, eliminating the need to use road transportation to get to the slopes. Furthermore, five shorter

tors was up 2.2x to over 307,000 visitors and surpassed the number of Ukrainian visitors (181,801).

NUMBER OF INT’L ARRIVALS UP 14.1% Y/Y TO 0.52MN IN NOVEMBER 2017

FOR SECOND CONSECUTIVE YEAR, WINTER IN GEORGIA STARTS EARLY

MOUNTAIN INFRASTRUCTURE AND FACILITIES BECOMING MORE ATTRACTIVE FOR VISITORS

MAJOR WINTER SPORT EVENT, NEEDS REQUIRE SIGNIFICANT SPORTS INFRASTRUCTURE DEVELOPMENT

NUMBER OF INT’L ARRIVALS UP 18.4% Y/Y TO 6.95MN VISITORS IN FIRST 10 MONTHS

ski lifts will be installed in the villages (Mazeri, Etseri, Ushkvanari, Lentekhi, and Ushguli) of Svaneti.

ACCORDING TO 2018 DRAFT STATE BUDGET, GEL 60.0MN TO BE ALLOCATED FOR KOBI-GUDAURI PROJECT

The 7.5km Kobi-Gudauri air lift, connecting the Gudauri ski resort with Kazbegi, is expected to be finalized in 2018. In addition, GEL 12.0mn will be allocated for the creation of an artificial lake in Gudauri. The lake will be used for snowmaking purposes, extending the winter season at the resort.

The number of visitors increased from all major source countries except Turkey (-3.2% y/y). The largest individual contributor to overall growth was Russia (+33.4% y/y), while Armenia and Azerbaijan also posted double-digit increases. The number of Iranian visi-

Arrival growth from secondary (nonEU) source markets contributed 3.6ppts to the overall growth of 18.4% y/y. The number of Israeli visitors increased 36.2% y/y to over 121,000 visitors, while the number of visitors from Saudi Arabia was up 165.7% y/y to almost 56,000. Arrivals from the EU were up 22.6% y/y to over 307,000 visitors, with Germany, Poland, and UK accounting for a third of the growth.

TOURIST CATEGORY CONTINUES TO DRIVE ARRIVAL GROWTH IN NOVEMBER 2017 The number of overnight visitors (‘tourist’ category) was up 21.8% y/y and accounted for 38.4% of international arrivals. The transit category was also a major contributor (+33.4% y/y), while the number of same-day arrivals was roughly flat. The number of tourist arrivals in the first 11 months is up 27.6% y/y to 3.2mn, already surpassing the annual figure for 2016 by 0.5mn tourists.

FIRST INTERNATIONAL BRANDED HOTEL IN GEORGIAN WINTER RESORTS NOW OPEN Best Western Plus Bakuriani added 70 rooms to the resort’s accommodation stock. Radisson Blu in Gudauri and Ramada Resort in Goderdzi are also expected to be completed by end-2018. Adjara Group Hospitality has announced development plans for the KokhtaMitarbi resort. A new Rooms Hotel property, with a ski-in ski-out concept, and residential apartments will be built at the base of Kokhta Gora during the first phase of the project in 2018, while the second phase entails developing a tourist zone in Mitarbi. Notably, for the first time, Kokhta and Mitarbi ski areas connected to each other with a new ski piste.

GEORGIA AIMS TO HOST FIRST PUBLISHER & GM

George Sharashidze COMMERCIAL DEPARTMENT

Commercial Director: Iva Merabishvili Marketing Manager: Salome Vashalomidze

GEORGIA TODAY

EDITORIAL DEPARTMENT:

Editor-In-Chief: Katie Ruth Davies

Journalists: Tony Hanmer, Zaza Jgarkava, Maka Bibilashvili, Dimitri Dolaberidze, Maka Lomadze, Joseph Larsen, Vazha Tavberidze, Nugzar B. Ruhadze, Nino Gugunishvili, Thea Morrison Photographer: Irakli Dolidze

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Issue #1010 Business  
Issue #1010 Business  

December 26 - 28, 2017

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