Georgia's Successful Response to COVID-19

THE GEORGIAN SPACESUIT THAT AMCHAM MEMBER FRAMING GEORGIAN ART AS WILL WORK LIKE MAGIC ON COMPANIES RESPOND TO AN INVESTMENT MARS CORONAVIRUS

Investor.A Magazine Of The American Chamber Of Commerce In Georgia geISSUE 73 APR.-MAY 2020

Georgia’s successful response to COVID-19

APRIL-MAY 2020 Investor.ge | 3 Investor.ge CONTENT 6 Investment News Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment.

10 AmCham member companies respond to coronavirus

11 AmCham member hotels providing quarantine spaces, critical support in fight against coronavirus

12 Follow the tiger: to survive Covid-19, Georgia 12 should look to the East 18 BLC: Coronavirus and its legal impact on business

20 Coronavirus’ impact on the Georgian real estate market

22 9 things you didn’t know about Georgian wine

26 Framing Georgian art as an investment

30 Investor spotlight: the Georgian spacesuit that will work like magic on Mars

34 Taking the four-day work week for a spin in 22 Georgia

36 What’s behind the unlikely duo of Georgia and Japan?

38 What Georgian startups can take away from Silicon valley

41 Agro-exports to the EU: overcoming key barriers

44 Delivery service, restaurants saying ‘fork no!’ to plastic

46 How Georgia can solve its plastic bottle waste 30 problem

48 Banking regulations revisited – NBG eases lending requirements

50 The Georgia wide web – a snapshot of the country’s internet infrastructure

55 NEWS ...... 54

4 | Investor.ge APRIL-MAY 2020 APRIL-MAY 2020 Investor.ge | 5 GOVERNMENT ANNOUNCES 2 EU ALLOCATES 183 MILLION INVESTMENT BLN GEL STIMULUS PACKAGE EUROS TO GEORGIA TO FIGHT AMID CORONAVIRUS OUTBREAK CORONAVIRUS The Georgian government announced The European Union announced on NEWS a series of measures to mitigate damage April 9 it will provide 183 million euros to the economy during the coronavirus in a relief package to help Georgia deal INVESTOR.GE crisis. The measures have particularly with the coronavirus crisis. The funds emphasised support for the tourism come as part of the EU’s commitment PROVIDES A and hospitality industries, which have to redirect over 15 billion euros to help BRIEF UPDATE been hit the hardest. Taxes for tourism partner countries efforts in tackling the ON INVESTMENTS companies will be suspended for four epidemic. EU Ambassador to Georgia months, and will affect a total of 18,000 said that “while Europe is in the midst of AND CHANGES companies and almost 50,000 employ- its own struggle to overcome the harsh IN GOVERNMENT ees. The government also announced consequences of the COVID-19 pandem- POLICY THAT that it intends to double the volume of ic, it continues to stand by its partners... COULD IMPACT VAT returns this year, from a predicted These funds will support economic and 600 million GEL to 1.2 billion [around social recovery, and will be provided at THE BUSINESS $375 million]. For six months, the state the local level, and also strengthen state ENVIRONMENT. will bear the costs of the interest rate on ¿QDQFHVWRKHOS*HRUJLDVXFFHVVIXOO\JHW INFORMATION IN loans for 2,000 hotels which have be- WKURXJKWKLVGLI¿FXOWHFRQRPLFSHULRG´ tween 4 - 50 rooms. Banks have agreed The funding will be provided as non- THIS ISSUE WAS to help tourism companies restructure reimbursable grants. TAKEN FROM their debts, and have announced they AGENDA.GE AND will accept postponed payment on loans WORLD BANK PREDICTS CLOSE OTHER SOURCES. taken out by private individuals for three TO 0% ECONOMIC GROWTH IN months. GEORGIA IN 2020 The World Bank predicts the coronavirus pandemic will sharply slow GDP growth in Georgia to close to 0% over the course of the next year, noting this will EHSDUWO\FXVKLRQHGE\D¿VFDOVWLPXOXV of around 2% of GDP. Several scenarios even suggest the economy will experience a recession in 2020, contracting by as much as -4.4%.

IFIS, INTERNATIONAL PARTNERS PLEDGE FINANCIAL SUPPORT FOR GEORGIA AMID PANDEMIC International financial institutions such as the IMF, the World Bank, the EBRD, ADB and other partners such as the EU published an open letter on $SULOSOHGJLQJD¿QDQFLDOUHOLHISDFN- age for Georgia to provide economic assistance and help with recovery amid the coronavirus outbreak. The EBRD

6 | Investor.ge APRIL-MAY 2020 APRIL-MAY 2020 Investor.ge | 7 investment, business environment and macroeconomic stability in the face of regional shocks. Georgia’s account GH¿FLWKLWDKLVWRULFDOPLQLPXPLQ at 4.5% of its GDP, and Fitch forecasts that the trend will continue in 2020 down to 4.1%.

FDIS AMOUNT TO $1.26 BILLION IN 2019 FDIs in Georgia amounted to $1.26 billion in 2019, with the UK (19.5%), itself has made an emergency ‘Solidar- HUZLVHZLOOUHVXOWLQD¿QHRI*(/ Turkey (18.7%) and Ireland (10.5%) ity Package’ of 1 billion euros available >@7KHSURSRVHG¿QHIRUGLVSRVLQJ making for the three largest investors for 38 countries, including Georgia. of two kilograms of municipal waste in Georgia last year. The three larg- EBRD Managing Director for Eastern from residential areas will be set at 200 est economic sectors in the country Europe and the Caucasus Matteo Patrone GEL [$71] instead of the current 100 ±¿QDQFH PLOOLRQ HQHUJ\ commented “we are prepared to step up *(/>@7KH¿QHIRULQDSSURSULDWH million) and hospitality ($157 million) our efforts, together with the Georgian disposal of batteries, light bulbs, electric – accounted for 48% of investments in DXWKRULWLHVWRVXSSRUWWKHHFRQRP\´ devices, and sharp objects will quintuple, Georgia in 2019. The support will include measures such and will be set at 500 GEL. as emergency liquidity, working capital FIRST LARGE-SCALE INVESTMENT DQGWUDGH¿QDQFLQJLQDGGLWLRQWRDLG REMITTANCES FROM ABROAD FOR GEORGIAN PENSION for SMEs. CONTINUE TO CLIMB IN JAN-FEB AGENCY 2020 The Georgian Pension Agency has ANNUAL INFLATION REMAINS Remittances from abroad to Georgia made its first large-scale investment ABOVE TARGET RATE continued to increase in January (+8%, since its launch in January 2019, placing $QQXDOLQÀDWLRQVWRRGDWLQ $125 million) and February (+9.5%, 560 million GEL ($200 million) in high- February, with food and non-alcoholic $137 million). The largest suppliers of yield deposits, with annual interest rates beverages as a whole (12.7%) and hos- remittances in February 2020 remained RIIRUD¿YH\HDUWHUPE\ZKLFK pitality (8.7%) accounting for the highest Russia (21%), Italy (16%) and Greece time the investment will have doubled. ULVHLQLQÀDWLRQ)UXLWDQGJUDSHVZHUHXS (12%), followed by Israel (10.5%), the The accumulated pension system is 25%, followed by milk, cheese and eggs US (10%) and Turkey (5.5%). Remit- mandatory for the employed under the (19.2%), meat (15%) and vegetables WDQFHVÀRZLQJRXWRI*HRUJLDFRQWLQXHG age of 40. 7KHWDUJHWLQÀDWLRQUDWHVHWE\ to grow in February 2020, totaling $21.7 the National Bank of Georgia for 2019- million, up almost 20% from the follow- NATIONAL BANK OF GEORGIA 2021 is 3%. ing year. KEEPS REFINANCING RATE AT 9% The Monetary Policy Committee of HEFTIER FINES PROPOSED FOR FITCH RATES GEORGIA AT BB the National Bank of Georgia decided IMPROPER GARBAGE DISPOSAL WITH STABLE OUTLOOK WRNHHSWKHUH¿QDQFLQJUDWHDWLQ A bill put forward in parliament pro- Fitch Ratings has left Georgia’s sov- mid-March to decrease the pressure of SRVHVOHY\LQJVLJQL¿FDQWO\KHIWLHU¿QHV ereign credit rating at ‘BB with a stable WKHH[FKDQJHUDWHRQLQÀDWLRQ$QHDUOLHU on companies and individuals that fail outlook’ in its last review in February. forecast from the NBG had predicted to properly deal with waste. Per the bill, Fitch notes that Georgia’s sovereign WKDWLQÀDWLRQZRXOGEHJLQWRGHFOLQHLQ VHWWLQJ¿UHWRPXQLFLSDOZDVWHLQFOXG- credit rating is more stable than the me- early March, and would move towards ing leaves and other organic matter and dian of the BB category countries with WKHWDUJHWLQÀDWLRQUDWHRIE\WKHHQG domestic waste, in the open air or oth- its high- quality governance, attractive of 2020.

8 | Investor.ge APRIL-MAY 2020 CENTRAL BANK EASES KUTAISI AIRPORT COMES IN Foundation’s global 2020 Index of Eco- HOUSEHOLD LENDING 2ND IN EUROPE IN UPTICK OF nomic Freedom, increasing its overall REGULATIONS PASSENGER TRAFFIC AMONGST score by 1.2 points. Out of 45 countries The National Bank of Georgia ap- SMALLER AIRPORTS in Europe, Georgia ranked 6th. The re- proved changes to lending regulations Kutaisi International Airport ranked port notes that “the Georgian economy for individuals that will come into force second in Europe in 2019 in terms of continues its spectacular, seven-year run on April 15, 2020. The NBG said the experiencing the highest increase in pas- up the ranks of the mostly free. GDP has purpose of the changes is to move from VHQJHUWUDI¿FDPRQJVW(XURSHDQDLUSRUWV also been expanding at a healthy rate for a “rule-based approach to a more princi- ZLWKDQDQQXDOSDVVHQJHUÀRZRIOHVV WKHSDVW¿YH\HDUV0XOWL\HDUUHIRUPV SOHVEDVHGDSSURDFK´5HDGPRUHDERXW than 5 million, ACI Europe announced to reduce corruption, cut regulation the banking regulations on page 48. back in mid-February. Such airports and simplify taxes have led to upward which reported the highest increases in movement in all aspects of economic PASSENGER TRAFFIC DOWN 4% SDVVHQJHUÀRZLQLQFOXGHG2KULG IUHHGRP´ AT AIRPORTS IN JAN-FEB 2020 (Macedonia – 72%), Kutaisi (Georgia 3DVVHQJHUWUDI¿FGHFUHDVHGWRFORVHWR – 41%), Zadar (Croatia – 32%), Bucha- INJURIES, DEATHS ON THE JOB 597,000 passengers in January-February rest (Romania – 25%), Turku (Finland SIGNIFICANTLY DOWN IN 2019 2020 – a 4% decrease compared to the – 22%). In 2019, Kutaisi International The number of injures at worksites same period of 2019, United Airports Airport served just under 900,000 pas- in Georgia were down 16% in 2019, the reported in early March. While Kutaisi sengers. Labour Conditions Inspection Depart- (+51%) and Batumi (+33%) airports ment reports. Deaths were down by 25%. experienced a growth in passenger 2019 VISITOR ARRIVALS UP 7.8% More than 1,500 inspections were carried numbers, Tbilisi International Airport The total number of arrivals by out at construction worksites in 2019 – 9 experienced a 19% decrease, largely due international, non-resident travelers times more than in 2019. to coronavirus travel fears. in Georgia increased by 7.8% in 2019 compared to the year before, reaching AVERAGE SALARIES CAME OUT 9.4 million travelers, Geostat announced TO 1,319 GE IN Q4 2019 in mid-February. Of these visits, 5.1 mil- Monthly earnings in Georgia were lion were tourist-type visits (as opposed up by 117 GEL on average in Q4 2019 to transit or transport), which is 6.8% compared to the same period in 2018, and more compared to 2018. Russia still stood at 1,319 GEL [$426], the National made for about 20% with 1.2 million Statistics Office of Georgia reported visitors entering the country, making in March. Women [1,018 GEL / $338] for just a 1.6% increase compared to HDUQHGVLJQL¿FDQWO\OHVVWKDQPHQ> 2018. The top three reasons for visitors GEL / $529] on average in Q4. coming to Georgia were holiday, leisure and recreation (43.5%), visiting friends GEORGIAN ECONOMY POSTS and relatives (19%) and transit to other 5.1% GROWTH IN 2019 countries (16%). Visitors spend the most Georgia’s real GDP amounted to amount of money on food and drink 5.1% in 2019, Geostat reported in March. (27.5%), accommodation (23.7%) and The largest contributors to GDP were: shopping (21%). wholesale and retail trade, repair of mo- tor vehicles (14.4%), real estate (11.5%), GEORGIA RANKS 12TH IN manufacturing (10.1%), construction WORLD, 6TH IN EUROPE IN (8.6%), agriculture (7.2%), public ECONOMIC FREEDOM INDEX – administration and defence (6.8%), 2020 WUDQVSRUWDWLRQ DQG¿QDQFLDODQG Georgia ranked 12th in the Heritage insurance activities (5.4%).

APRIL-MAY 2020 Investor.ge | 9 tions by companies, the GRCS has made it possible for individuals to do their part by purchasing and donating essential IRRGLWHPVIURPDVSHFLÀFOLVWRILWHPVLQ supermarkets. The Caucasus Environmental NGO Network (CENN) is assisting ethnic minori- ties in the quarantine zone of Kvemo Kartli to obtain information about the COVID-19 pandemic in the region in Armenian and Azerbaijani, in addition to providing face masks and sanitizers there. CENN is also implementing rapid grants programs for communities, groups and organizations to respond to the COVID-19 crisis in Keda and Tsalka municipalities. Yet other companies have created their own initiatives to deal with the member companies damaged wrought by COVID-19. Adjara Group, in cooperation with other companies, has established the Ertianoba respond to coronavirus platform [Georgian for unity] - this project helps people in need such as the elderly or mCham member companies have taining health insurance and more. those with underlying medical conditions, been swift to react to the chal- 0HPEHUEDQNVDQGÀQDQFLQJLQVWLWX- by providing them with essential medical Alenges posed by the COVID-19 tions have been doing their part as well. items and food stuffs through volunteers crisis in Georgia. TBC Bank intends to spend more than that register to lend a helping hand. Gulf Financial donations to the anti-virus 5 million GEL to roll-out services that will Georgia supports Ertianoba volunteers effort have been quick in the coming from facilitate distance education, assistance by providing fuel for their transportation companies such as M2, PMI, APM Terminals for the elderly and the dissemination of needs. Poti, Silknet, Lomisi, Batumi International digital technologies. TBC Bank will also Gulf Georgia established a platform Container Terminal, GeoSteel LLC, Efes purchase 10,000 coronavirus rapid tests. called Ekimebistvis [‘For doctors’], through Brewery in Georgia (JSC Lomisi), Hydrolea Bank of Georgia has pledged to purchase which it donates 5 tetri per liter of gas sold LLC, Orient Logic, PMI, Maqro Construc- essential medical supplies for the Ministry to support doctors and other medical tion, Caucasus Online, Efes, Georgian of Health, including 20,000 lab tests, 10 workers. The fund had accumulated more American University and the Georgian ventilators, 60,000 gloves and 50,000 than 121,000 GEL as of April 8. Industrial Group, who have given sums masks. Liberty Bank has decided to prepay SavvY has unveiled a new platform between 10,000 – 1 million GEL each to April pensions with 100 million GEL of its called supportbusiness.ge, where compa- the StopCov Fund, which had already own resources to individuals older than 70 nies will be able to register their problems received 126 million GEL as of April 13. years of age, who will be able to access and challenges. The Georgian Retailers Despite enormous strains on the tour- these funds via their social cards. Gazelle Association and British American Tobacco ism sector caused by the spread of the Finance has announced a three-month have provided face masks to doctors and virus, some of the country’s largest hotels grace period for companies affected journalists. have given or offered their premises to by the risks, and is offering technical as- Meanwhile, the United States is provid- be used as quarantine spaces, including sistance facilities to companies in need to ing $1.1 million in health funding to Geor- Adjara Group’s Holiday Inn in Tbilisi, the FRYHUWKHLULPPHGLDWHFDVKÁRZGHÀFLWV gia to help prepare laboratory systems, Grand Gloria Hotel Batumi, the Marriott All of our member universities have DFWLYDWH FDVHLGHQWLÀFDWLRQ DQG HYHQW Hotel Moxy in Tbilisi, the Radisson Park Hotel now completed transition to online classes. based surveillance, support technical in Tsinandali, Ibis Hotel and the Sheraton The Georgian American University (GAU) experts for response and preparedness, Grand Tbilisi Metechi Palace. The Ramada is supporting three charities to support bolster risk communication and other Encore Tbilisi has also offered its premises if the socially vulnerable, and has delayed activities. needed. Coca Cola is supplying quaran- tuition payment until July 2020 for students This is by no means an exhaustive look tine spaces with their products throughout IDFLQJÀQDQFLDOKDUGVKLS at how AmCham member companies the country. The Georgia Red Cross Society has DUH GRLQJ WKHLU SDUW LQ WKH ÀJKW DJDLQVW These hotels, amongst others, have a number of on-going efforts to mitigate COVID-19. Over the coming weeks, Am- been doing their best to support their the effects of the virus on the elderly and Cham will maintain a database of what employees, keeping as many as possible other vulnerable groups by providing them our members are doing, which can be on salary, providing reduced salary for with food and hygiene products across found on the AmCham website at: https:// furloughed staff in some instances, main- the country. In addition to handling dona- bit.ly/2wDgXe4.

10 | Investor.ge APRIL-MAY 2020 most cases they subsidize the stay of their AmCham member hotels guests, but McNeillie says this “does not affect our commitment to doing what we can in this time of crisis.” providing quarantine spaces, Another issue faced by hotels is that support in terms of the provision of appro- critical support in fight against priate safety equipment and apparel for staff such as masks, sanitizer and gloves, coronavirus has been slow in the coming, and that at times hotel staff personnel have to interact DESPITE CLOSED BORDERS AND SUSPENDED FLIGHTS, A NUMBER with patients instead of doctors. OF HOTELS IN GEORGIA ARE ALMOST AT FULL CAPACITY – BUT Looking ahead, AmCham member NOT WITH TRAVELERS. hotels note that 2020 will continue to be GLIÀFXOW \HDU HYHQ DIWHU WKH VSUHDG RI tepping up to the plate to contribute Different approaches have been the coronavirus peaks in the country, as to efforts to handle the coronavirus employed in making sure that member there will be lingering uncertainty as to the Soutbreak in Georgia, several Am- hotels’ staff remain provided for, includ- epidemiological situation on the ground in Cham member hotels have offered up ing: continuing to pay full salaries up foreign countries. their premises to be used as quarantine through a certain month and then shifting In Georgia’s case, this will be especial- spaces to temporarily isolate Georgian WRDPRGLÀHGVDODU\WKURXJKRXWWKH\HDU ly pertinent when it comes to Russia and citizens returning home from abroad via decreasing salaries by 20–50%, retaining the idea of re-welcoming Russian tourists, government-orchestrated evacuations KHDOWK EHQHÀWV IRU VWDII DQG DVNLQJ VWDII where transparency in the issue seems to and others who have come into contact to take non-paid holiday. be lacking. Russian tourists accounted for with infected individuals. However, despite pay cut measures, 20% of Georgia’s inbound tourists in 2018 Some of these hotels include: the AmCham member hotels note they will EHIRUHWKHLQWURGXFWLRQRIWKHÁLJKWEDQ Adjara Group’s Holiday Inn in Tbilisi, the IDFHGLIÀFXOW\LIWKH\FRQWLQXHWRSD\VDOD- in July 2019. Grand Gloria Hotel Ba-tumi, the Moxy in ries for more than three months in a row. Hotels that cater to domestic tourism, Tbilisi, the Radisson Park Hotel in Tsinandali, Hotels that have not shuttered for the largely those in the countryside, feel that Ibis Hotel and the Sheraton Grand Tbilisi duration of the coronavirus epidemic are demand will remain low likely for the rest of Metechi Palace. now playing host to individuals in quar- the year, as lost jobs and layoffs will act as AmCham Tourism Committee Head antine and have had to adapt quickly. a further disincentive to travel once move- Cameron McNeillie says offering to help AmCham Tourism Committee Head ment bans are eased, public transport in this time of crisis was a natural step for 0F1HLOOLHVD\VWKDWHIÀFLHQWSODQQLQJKDV UHVXPHV DQG WKH SXEOLF IHHOV FRQÀGHQW hotels to take. made this possible: “Serving three meals a enough to venture outdoors again. “This is a matter of giving back to the day and en-suring the comfort of guests in But there is light at the end of the tun- people of Georgia to the best of our ability this environment is of course a challenge, nel, McNeillie notes: right now. In fact, we look at it as a civil but logistically the change in operations “There are varying rates of success in duty”, McNeillie says. has been smooth.” dealing with the coronavirus across the A number of hotels in Georgia have Government support has been around world, and tourism might re-cover sooner extended that responsibility to their em- 50 GEL per quarantinee per day, which is in Georgia than elsewhere given the ployees as well, and remain committed to meant to cover three meals a day as well. country has, overall, done an excellent the well-being of their employees in facing Hotels note that this sum largely falls short job in containing the outbreak. If this trend the uncertainty of these next few months. of operation costs, howev-er, and that in continues, this could have an impact on people’s decision on where to travel 12-24 months down the line, as tourism trends may be redirected towards regions and countries that have dealt effectively with the pandemic”, McNeillie says. Until then, riding out the crisis’ unfore- seeable duration is the priority. AmCham member hotels have proposed four ways in which the Georgian government can act to help soften the blow of the crisis by: waiving property and other taxes for several months; covering the payment of staff salaries; postponing utility payment, and; providing appropriate medical equipment for hotels which have been converted into quarantine spaces.

APRIL-MAY 2020 Investor.ge | 11 FOLLOW THE TIGER: to survive Covid-19, Georgia should look to the East

BY BIDZINA LEBANIDZE, GEORGIAN cessful in holding Covid-19 at bay and and its member states have miserably INSTITUTE OF POLITICS NHHSLQJFDVHQXPEHUVORZLQWKH¿UVW mismanaged the initial phase of the days since the outbreak. In order to re- outbreak of Covid-19. his op-ed re-printed below by main resilient against Covid-19 and keep Surprisingly enough, Georgia, with Dr. Bidzina Lebanidze, a senior WKHLQIHFWLRQFXUYHÀDWWKHFRXQWU\ZLOO much less resources did a much better job Tanalyst at the Georgian Institute need to emulate the experience of Asian LQFRQWDLQLQJWKHYLUXVLQWKH¿UVWGD\V of Politics (GIP), argues that to continue states, not European. It can remain a free than the majority of EU member states. its success in handling the coronavirus and open society in the process, yet this Whereas the Georgian government has crisis, Georgia should learn from the endeavor will also require some substan- managed to keep the virus within the experiences of East Asian countries, in- WLDOVDFUL¿FHV*HRUJLDLVDPRQJWKHIHZ ¿UVWWZRSKDVHVRIHSLGHPLFPDQDJHPHQW troduce the use of tech to stem the spread countries in the EU’s neighborhood that (prevention and control), much of the EU of the virus and encourage a range of new consistently looks to its European peers sleepwalked into the third phase marked hygienic practices. for policy guidance in its economic and by exponential growth of infections, Georgia has been moderately suc- political development. However, the EU DQGLVQRZ¿QGLQJLWKDUGWRFRQWDLQWKH

12 | Investor.ge APRIL-MAY 2020 APRIL-MAY 2020 Investor.ge | 13 spread of the virus. ogy, and transparency. Georgia did lack three times more infection cases in the Yet despite initial success, Georgia technology but has shown unexpected ¿UVWPRQWKVLQFHWKH¿UVWGHWHFWHGFDVH may soon face two major challenges. resilience in terms of the quick mobiliza- First, the attempts by the government tion of state resources, medical prepared- CAN BIG DATA CONTAIN THE to suppress cases of local transmission ness and aggressive contact tracing. The VIRUS? and to isolate new hotspots show that chart below shows that in terms of early Despite initial success, Georgia is the risk of exponential growth is still preparedness, Georgia not only did a bracing for a rough road ahead. The imminent and can occur at any time. better job than many EU countries but country just registered its 100th infection Second, the current lockdown is not LWDOVRRXWSHUIRUPHGWKH³$VLDQWLJHUV´ case and the lockdown of economic life sustainable for a long period of time as it who are well-known for their manage- has already resulted in the devaluation would do irreparable harm to Georgia’s ment of epidemics. of the Georgian currency. Hence, like fragile economy and may even result in By introducing somewhat draconian the rest of the world, Georgia faces the social or political unrest. Hence, to avoid measures much earlier than its European dilemma of how to preserve its economy the Covid-19 nightmare, Georgia should peers, Georgia successfully prevented a and ensure the healthiness of its popula- look to countries who have so far man- ODUJHRXWEUHDNLQWKH¿UVWIHZZHHNVDQG tion. Should the virus fade away within aged to accomplish both tasks – avoid saved its vulnerable healthcare system a few weeks or a couple of months, full lockdown and contain the virus: East from congestion. Georgia’s management additional measures will likely not be Asian democratic states. of the Covid-19 epidemic also stands out needed and Georgia can outlive the virus in other interesting aspects. For instance, in lockdown mode. But should it last for GEORGIA’S ASIAN PLAYBOOK like some Asian states, Georgia seem- months, the government will be forced to Fortunately for Georgia, the handling ingly did not follow the WHO guidelines gradually reopen economic activities and of Covid-19 by the Georgian government which often issued controversial recom- public life. In this case, Georgia will need LQWKH¿UVWGD\VVLQFHLWVDUULYDOLQ mendations such as not to limit interna- more enforcement mechanisms to ensure the Black Sea country has been in many WLRQDOWUDI¿FRUDVVXPSWLRQVDERXWIDFH the compliance of citizens especially for ways a replica of East Asian crisis man- masks not being effective. For instance, a time when the state of emergency is agement. East Asian countries managed Georgia changed the WHO guidelines in ¿UVWOLIWHG to contain the spread of Covid-19 below its national protocol by removing high In this case, again, the European and the vulnerable threshold by relying on a fever from the list of suspicious symp- Asian approaches could not be more combination of preparedness, technol- toms which made it possible to detect different.

14 | Investor.ge APRIL-MAY 2020 The European approach puts too ment of AI technologies and big data demic without individual vigilance and much faith in the rational and enlightened techniques to identify residents who were social adaptation to new dangers. The citizen who bears responsibility for both at greatest risk through their travel and Asian social norms of contactless greet- themselves and the whole of society. In medical history. Mobile phone records ings and social distancing are considered doing so, the state seems to be unwilling are used “to track the social contacts of to be the major factor behind East Asian to make use of its central function: using WKRVHLQIHFWHGZLWKWKHFRURQDYLUXV´ resilience against disease outbreaks. the right of the monopoly on legitimate Currently, mobile phones are digitally Georgia belongs to the Mediterranean violence in case of need. WUDFNHGYLDDVRFDOOHG³HOHFWURQLFIHQFH´ culture, with hugging and kissing as Yet even in the EU countries the to enforce the quarantine of some 6,000 usual greeting habits and generally a very irresponsible behavior of citizens and residents of Taiwan. rich social life. Yet to cope with Covid-19 their lack of compliance with lockdown South Korea too uses satellite-based and be better prepared for future pandem- rules has often been a problem that sig- phone tracking to trace infection chains. ics Georgia should embrace more Asian QL¿FDQWO\FRQWULEXWHGWRWKHHPHUJHQFH Coupled with early aggressive testing of cultural habits. of the Covid-19 hotspots in Italy, Spain suspected clusters and the enforcement It’s worth noting that East Asian and elsewhere. of social distancing, South Korea has states have collected invaluable experi- In relatively young states like Geor- managed to contain one of the biggest ence from previous disease outbreaks gia, citizen compliance may be a bigger early outbreaks of the virus outside China such as MERS and SARS. In a way, they problem. The latest expert poll conducted and to stabilize the curve. could be better role models for inexperi- by a Georgian think tank indicated the Finally, Hong Kong has one of the enced countries such as Georgia than the non-compliance of citizens as a major most comprehensive yet controversial WHO and some Western actors, not just challenge for Georgia’s fight against disease tracing systems. The government in their clever use of AI technologies but Covid-19. Hence, the European solution webpage dedicated to Covid-19 pub- LQDOODUHDVRI¿JKWLQJGLVHDVHRXWEUHDNV of relying mostly on individual respon- lishes very detailed data on each known Taiwan’s approach to surgical face masks sibility should be balanced with stricter positive case, including their address (!), and other medical equipment is illustra- central enforcement mechanisms. East to help other residents identify possible tive in this regard. Whereas the WHO and Asian states provide some insightful local transmission chains. the governments of Western countries evidence how the state can ensure the As one can observe, using AI and dismissed face masks as unnecessary for compliance of citizens and track the virus big data is an important part of the re- the general population, Taiwan stepped outbreak by using big data and modern silience of the East Asian states against up their production to 10 million daily AI technologies. Covid-19. It helped Asian countries to production units and even introduced In particular, there are four coun- avoid long-term and economically pain- a face mask rationing system to ensure tries/territories which stand out in this ful lockdowns. Countries like Georgia its population was constantly supplied regard: Singapore, Hong Kong, Taiwan could take notice. Still, using private and there was no shortage. Meanwhile and South Korea. Singapore’s resilience data for surveillance purposes is a very everyone agrees that wearing face masks against Covid-19 consists of a mix contentious issue especially for aspiring can protect from Covid-19 and can be of surveillance technology as well as democracies such as Georgia – especially a measure which can help prevent the “transparency, comprehensive testing, since Georgian governments have a track re-emergence of the disease in the post- and quick quarantining and isolation of record of using private data for politi- lockdown period. VXVSHFWHGFDVHV´6LQJDSRUH¶VVXUYHLO- cal blackmail. Therefore, if introduced, lance toolbox to control Covid-19 in- it should be ensured that surveillance cludes mobile phone app TraceTogether, is limited to the tracking of Covid-19 which tracks users’ proximity to other epidemics and that its use be free from Dr. Bidzina Lebanidze is a senior people and alerts “those who come in political risks. analyst at Georgian Institute of Politics contact with someone who has tested (GIP). He is Postdoctoral fellow at the positive or is at high risk of carrying the BE SMART: LEARN ASIAN HABITS Institute of Slavic Studies and Caucasus FRURQDYLUXV´ Finally, no surveillance mechanism Studies at the Friedrich Schiller Uni- Taiwan too has centralized manage- can ensure the containment of an epi- versity Jena.

ew trends in hospitality, resi- ICR and Gtex announced the closure of of more stores is to be expected which dential and retail real estate their stores, including some of the most will in turn put a downward pressure Nhave reshaped the Tbilisi land- popular brands on the market such as on rent rates both on high streets and in scape in recent years, but the COVID-19 Zara, Mango, Massimo Dutti, Adidas, shopping centers as vacancy increases. crisis is presenting a number of chal- L.C. Waikiki, Nike, Bata and others. While the effects have been almost OHQJHV&XVKPDQDQG:DNH¿HOG*HRUJLD 2QHRIWKHGH¿QLQJFKDUDFWHULVWLFVRI LPPHGLDWHIRUUHWDLOHUVRI¿FHUHDOHVWDWH outline just how in a recent report. the Tbilisi retail market – and especially will likely have a longer reaction period. 7KRXJKWKH1DWLRQDO6WDWLVWLFV2I¿FH in its apparel, footwear and accessories As tenants transition to remote working, of Georgia reported GDP real growth rate segment – is the lack of the presence of RI¿FHEXLOGLQJVZLOOKDYHWRGHDOZLWK DWDQGLQÀDWLRQDWLQ0DUFK e-commerce. This has a number of under- reduced turnover, adopt rent-relief pro- 2020, the unfortunate reality is that fears lying reasons; rigid return policies often grams and prepare for reduced market and the actual reduction in trade, com- mean that the customer may run a greater demand, given that the number of new merce and tourism, as well as the devalu- risk purchasing online than if they were entrant businesses is expected to drop ation of the national currency, will likely to purchase an item in-store. Addition- within the short term. We also expect change for the worse in the medium term, ally, the factor of perceived convenience the scheduled openings of new business as has happened world over since the is low: Tbilisi is small enough, and travel centers to be delayed until 2021. COVID-19 breakout. times to malls and stores is small enough to cancel out the convenience advantage RESIDENTIAL REAL ESTATE COMMERCIAL REAL ESTATE of buying online. In a shrinking economy, the housing The commercial real estate market This market gap of e-commerce market typically suffers as demand is is already experiencing a shortage of PD\ZHOOEH¿OOHGLQWKHPHGLXPWHUP redirected towards short-term needs and demand – just before Prime Minister given that online shopping has a distinct necessities rather than long-term invest- Giorgi Gakharia announced the closure upper hand over the traditional brick- ments. Expectations – which are low at of non-essential retail establishments and-mortar option in the context of the WKHPRPHQW±ZLOOUHÀHFWWKHVHWUDGLWLRQDO on March 19, Retail Group Georgia, COVID-19 pandemic. However, closure dynamics as well. Yet the primary and

20 | Investor.ge APRIL-MAY 2020 underlying cause for concern is the heavy will gradually put a downward pressure commercial loans with a special focus on reliance of the Georgian residential mar- on residential prices. The ability of this small and medium sized businesses that ket on remittances. sector to rebound quickly, however, was rely on tourism and social gatherings to With the economic crisis gripping seen in 2019, when the new regulatory generate revenue. nations where remittances typically framework caused a slowdown in sales With the assumption that COVID-19 originate from – Italy being the prime in Q1, until improving expectations will be contained globally by June, Cush- H[DPSOH±DPDMRUUHGXFWLRQLQWKHLQÀRZ provided a much-needed boost in April. PDQDQG:DNH¿HOGSURMHFWVWKHIROORZ- of these funds is to be expected. With It remains to be seen how the timeline of ing end-year benchmarks for the tourism, the loss of tourism revenue, a reduction the race against COVID-19 will affect hospitality and real estate markets: in the circulation of foreign currencies, the lifeline of the residential market. Ɣ\\UHGXFWLRQLQWKHQXP- the drop in oil prices and the devaluation ber of residential real estate transactions of neighboring countries’ currencies, the STRONG PUBLIC AND PRIVATE Ɣ\\UHGXFWLRQLQLQWHUQDWLRQDO lari is also facing destabilization. Mea- RESPONSE visitor trips sures have been taken by the National The Georgian government and the Ɣ$YHUDJHFLW\ZLGHRFFXSDQF\UDWH Bank of Georgia to hinder the process healthcare sector has dealt admirably of 30-35% in Tbilisi of devaluation; nonetheless, the negative with the COVID-19 crisis, mobilizing all However, there are still many un- pressure on residential demand may soon the means necessary to contain the virus. certainties concerning the coronavirus become apparent. A number of commercial banks, and its effects, with the greatest concern In coming months we expect the including TBC Bank, Bank of Georgia being the longevity of COVID-19’s subdued demand to become apparent in and Liberty Bank, have instituted a three- survival and the overall resilience of the transactional and mortgage data, which month grace period on personal and global economy.

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© [Year] [Legal entity name]. 9 things you 1. WINE RUSH There was a rush to get into the wine biz in 2018 – 2019, didn’t know about TBC Capital’s report shows, with Georgia experiencing a jump in newly registered wine producers, increasing from 337 in 2018 Georgian wine TBC CAPITAL’S RECENT REPORT HERITAGE OF SPLENDOR DELIVERS A SWEEPING OVERVIEW OF THE GEORGIAN WINE INDUSTRY: FROM THE DIFFICULTIES FACED BY LARGE-SCALE PRODUCTION TO CHANGING CONSUMER HABITS AND EXPORT TRENDS. INVESTOR.GE SAT DOWN WITH TBC CAPITAL’S HEAD OF RESEARCH TORNIKE KORDZAIA TO TAKE APART SOME OF THE MOST CURIOUS AND SURPRISING FINDS.

22 | Investor.ge APRIL-MAY 2020 to already 420 in 2019 H1. TBC Capital’s Kordzaia comments: The end of the state grape subsidies program at the end of ³7KH¿UVWUHDVRQLVWKDW5NDWVLWHOLDQG6DSHUDYLZHUHERWK 2018 may have played something of a role in this, as many chosen for their weather resistant properties and high yields in wine growers and makers may have registered and formalized Soviet times, so in part this is an issue of a remaining legacy. WKHLUSURGXFWLRQWREHQH¿WIURPWKH¿QDOWKURHVRIWKHSURJUDP Other reasons include that Rkatsiteli and white wines are the Another contributing factor were regulations introduced in 2016, which established mandatory quality controls and obliged wine producers hoping to export abroad to register their companies and submit samples for laboratory testing. Up until LWZDVHDVLHUWRJHWXQYHUL¿HGSURGXFWVWRPDUNHWZKLOH recent restrictions have made that harder. &RPLQJLQWRWKHIRUPDOVHFWRUDOVRKDVWKHDGGHGEHQH¿WRI allowing wineries to add themselves to Georgia’s wine routes, which in turn attracts more tourists.

2. VINEYARD CONSOLIDATION PICKING UP STEAM The relatively small amount of land suitable for viticulture in Georgia has always framed the question of the wine industry’s priorities, and whether the volume of wine production will remain low. TBC Capital thinks this issue is moving towards resolution, as smaller, private land plots are being consolidated into larger, formal production companies and away from household drink of choice at supras, weddings and other large social production. This is necessary not only for growth, but also to gatherings, where the pace of drinking is quicker, and for that ensure standardization in taste and production. you need a wine that’s cheap to produce and easy to source. However, one question remains as to what effect this will “One other reason is that Georgian spirits, such as chacha have on rural economies and livelihoods. and brandy, often use Rkatsiteli and its remains in their pro- TBC Capital’s Tornike Kordzaia says this is unlikely to have duction, and it uses a lot: for every volume of Rkatsiteli wine serious consequences: produced, it can be used to make only around 7% of of the “Basically, almost half the population lives in the country- same volume of spirits. side, where the contribution to the economy is way less overall. However, TBC Capital expects a shift in production pat- There is a great mismatch in the distribution of labor and WHUQV±¿UVWEHFDXVHVXEVLGLHVIRU5NDWVLWHOLSURGXFWLRQHQGHGLQ productivity and urbanization levels will likely pick up with 2018, which will shift attention elsewhere, and second because time. drinking culture is slowly moving away from quantity and As this happens, people will go into more productive in- drinking wine in large volumes, as consumers learn to enjoy dustries and switch to the demand side of the value chain or ¿QHUZLQHVLQVPDOOHUTXDQWLWLHV become suppliers for formal production. “What’s interesting is that export data show an almost Natural demographic processes will support this process, ÀLSSHGSLFWXUH´.RUG]DLDQRWHVSRLQWLQJRXWWKDWLQ QRWDQWDJRQL]HLW´ of wine exports by value were comprised of red wines, while ZKLWHVPDGHIRUMXVW´ 3. TWO GRAPES TO RULE THEM ALL While Georgia has over 500 varieties of grapes, just two of 4. RTVELI HARVEST ON TWO-YEAR STREAK them account for 93% of all grape production in the country Rtveli [grape harvest] yields in 2019 broke 30-year record – Saperavi and Rkatsiteli. While many may associate Georgia highs for the second time in a row in 2019, with an estimated with the ubiquitous Saperavi, it’s actually Rkatsiteli that makes total of 282,000 tonnes of grapes processed in 2019, with largely for the overwhelming majority of wine production, with a 63% good weather to thank. share of total grape production in the country. However, as climate change progresses and vineyards ex-

APRIL-MAY 2020 Investor.ge | 23 perience less precipitation, grape growers are beginning to talk TBC Capital reports that increased consumer purchasing about the need to move to higher altitudes. power has led to local demand shifting towards better quality and standardization, and away from homemade wines. For comparison, back in 2005 homemade wine accounted for more than 70% of production, and remained high during the years of the Russian embargo between 2007-2013.

6. RUSSIA – AGAIN

7RPXFKRIWKHVHFWRU¶VFKDJULQLW¶VGLI¿FXOWWRWDONDERXW Georgian wine without talking about Russia. Currently about 60% of Georgian wine exports go to Russia, and despite talk RIGLYHUVL¿FDWLRQWKHPDUNHWVKDUHRIH[SRUWVWRWKH5XVVLDQ

Kakheti remains the country’s main grape grower, responsible for the production of 72% of the Rtveli 2019 harvest, followed by Imereti (12%) and Shida Kartli (6%).

5. COMING OUT OF THE SHADOWS

The share of household and shadow production of wine has been steadily decreasing since the early 2000s; in 2019, this pattern continued and even picked up pace, with formal

Federation continues to rise. The Russian market for wine remains attractive, given that there is no footwork needed to introduce Georgian wine to the Russian market, and the shipment of goods is cheap and the procedure simple. However, Kordzaia says, TBC Capital’s analysis shows that this puts the market at risk: 30-40% and higher dependence on a VLQJOHEX\HUFRXQWU\SRVHVVHULRXVSUR¿WDELOLW\DQGLQVROYHQF\ risks. Currently, many major winemakers in Georgia export as much as 50-60 percent of their product to Russia.

7. FRUITFUL RETURNS Despite the risks faced by the industry, the wine business production accounting for close to 88% of production value, remains incredibly fruitful with IRRs ranging between 14 – while informal production made for just 9%. 18% and project payback period standing between eight to 10

24 | Investor.ge APRIL-MAY 2020 years. TBC Capital estimates that initial investment per hectare Russia and China import predominantly red wines from of grape production on an industrialized scale ranges between Georgia, with their share of imported Georgian white wines 21,000-40,000 USD, depending on the variety of grape. PDO standing only at 10% and 3%. The EU’s imports are more wines and plots located in microzones are the costliest.

8. GEORGIANS DRINK LESS THAN YOU THOUGHT One of the most surprising discoveries in the TBC Capital report: domestic consumption of wine is actually decreasing. “This is seemingly due to a shift in drinking habits, where supras are becoming less the venue for drinking; instead, consumers are moving to bars, where the culture is less to guzzle, DQGPRUHWRVLSDQGHQMR\´1RWRQO\LVGRPHVWLFFRQVXPSWLRQ down, it is perhaps even more curious that it is far below the level of a number of European countries. “This can partially be attributed to the levels of tourism in these countries, which going forward will be one of the main GULYHUVRIFRQVXPSWLRQLQ*HRUJLDLWVHOIDVZHOO´7%&&DSLWDO¶V Kordzaia says.

9. EXPORTS BY WINE TYPE REFLECT OPPOSITE IMAGE OF PRODUCTION While white wine might make for the bulk of production in Georgia, red wine’s account for 77% of wine exports, and white wines account for just 21%. The breakdown of exports of wine by type for 2019 was: Alaznis Veli (28%), Kindzmarauli (22%), Saperavi (17%), Mukuzani (7%), Pirosmani (4%), Tsinandali balanced, with 69% of Georgian wine imports being reds, and (4%), Rkatsiteli (3%), Khvantchkara (3%), other (3%). 28% whites.

APRIL-MAY 2020 Investor.ge | 25 Framing Georgian art as an investment TBILISI’S ART SCENE BY SALLY WHITE Since the inception of Baia Gallery 27 years ago, Baia says the gallery has HAS BEEN STEADILY racking values of contempo- been “been researching the market and GROWING OVER THE rary Georgian art through the owns an extensive database of photo and PAST DECADE, AND Tgalleries and sales rooms is no documentary materials on the works it THE CITY NOW HAS easy task. Georgian art seldom comes has sold and their prices, and has created up at international auctions, there are a price index; it has also explored the THE POTENTIAL TO few large-scale regional exhibitions, no available results of works by Georgian BECOME A REGIONAL price monitoring and most sales are made artists sold at international auctions and EPICENTER FOR THE privately between artists and collectors. RQWKHORFDOPDUNHW´ This lack of infrastructure has been a A wave of interest in Georgian art ARTS, BUT BEFORE major put-off for buyers, particularly in- was started by a major exhibition and THAT CAN HAPPEN, ternational ones, who want the full mar- sale at leading international auctioneer PRICE AND TREND keting back-up, with prices and trends. 6RWKHE\¶V³$UWDWWKH&URVVURDGV´KHOG MONITORING, ARTIST However, the latest project by the in London back in 2013. owner of one of Tbilisi’s longest estab- It included 10 Georgian artists among RATINGS AND BUYER lished galleries, Baia Tsikoridze, could those on show which focused on Central INFRASTRUCTURE help change this and revolutionize the Asia and the Caucasus. Apart from in- NEEDS TO BE Georgian art market. troducing regional artists to the outside Tskoridze is building an online plat- world, Sotheby’s purpose was to connect DEVELOPED. form to provide access to all the infor- with the wealthy in these regions and mation buyers want, with statistics and encourage local interest in art purchases. details on sales, artist ratings and a price Sadly, after 2014 Sotheby’s dropped index. She hopes to be able to launch the this exhibition. However, in Georgia platform next year. the Expo Georgia Convention Center’s

26 | Investor.ge APRIL-MAY 2020 Supervisory Board chairman, Kaha The fair is helping overcome major sell better than most. He has his own Gvelesiani and its creative director, Nino obstacles for the recognition of Georgian 7ELOLVLJDOOHU\EXWPRUHVLJQL¿FDQWO\KH Gamrekeli, took up the challenge and art which rarely hits the international has entered into an exclusive agreement in 2018 organised the Tbilisi Art Fair, headlines and has no well-known patrons with a London-based art gallerist, Kat- which has become an annual interna- whose purchases would bring much erine Levin to represent him in London tional event. needed publicity. and New York, securing in return for ex- She told Euronews: “We think there While many could name Pirosmani, clusivity the backing of price-supporting is a potential to transform Tbilisi into not least because his painting of a Geor- marketing strategies and international the regional art centre. We have a very gian Woman Wearing a Lechaki sold for campaigns. authentic, diverse art scene with many a record-breaking £2.2m at Sotheby’s Another of her Georgian artists is interesting painters and artists. The na- just over a year ago, this museum-status 0DPXND'LGHEDZKRVH¿JXUDWLYHZRUNV tional art market either does not exist, Georgian primitivist, who died in 1918, such as the Sommelier and The Mission, or is underdeveloped, and our aim is to is in a league of his own. sell between £15,000 - £18,000. PDNHWKLVPDUNHWPRUHUHDODQGDOLYH´ The fair and the galleries around “The price varies depending on size, A collector trawling through the fair Tbilisi offer many paintings at a tiny frac- complexity and, as during the times of and the accompanying Art Week events tion of that price, starting at under $500. WKH2OG0DVWHUVWKHQXPEHURI¿JXUHV in Tbilisi’s galleries, museums, and art A more usual price indicator for an in the painting. VSDFHVZLOOVKHVD\V¿QGDUWLVWVIURP established living Georgian artist selling “These are ‘starting out’ prices for an the Caucasus and Central and Eastern abroad is the $31,250 New York auction DUWLVWRIWKLVFDOLEUHUHÀHFWLQJWKHEHJLQ- (XURSH³WKDWDUHKDUGWR¿QG«HOVH- price ascribed by the art news website QLQJRIKLVLPSDFWLQWKH:HVW´VKHVD\V ZKHUHLQWKHZRUOG´/DVW\HDU MutualArt to Untitled Red painted by Katerine Levin “specialises in ex- visitors attended, buying works priced Levan Lagidze, one of Georgia’s most traordinary artists from places less ex- from $250 to $55,000. VLJQL¿FDQWOLYLQJDUWLVWV+LVSDLQWLQJV SORUHG´,QWHUQDWLRQDOSDUWQHUVKLSVVXFK as hers are rare for Georgian artists, but YHU\ZHOFRPHGE\LQYHVWRUVDVRI¿FLDO gallery sales in Georgia are put at a mere 30 percent, making prices untrackable. There is certainly no shortage of col- lectible work by contemporary Georgian artists - though they are scattered around the world – from paintings and drawings to installations, textiles and cloisonné HQDPHOZRUN7KHUHLVHYHQDÀRXULVK- ing Georgian street-art scene emerging, most famously the murals on Tbilisi’s’ iconic hostel complex Fabrika, although Georgia has yet to produce its own graf- ¿WLDUWLVWWRULYDOWKHHPLQHQWO\VWHDODEOH (often with hammers and chisels) works by Banksy. Nor is there a shortage of galleries. Tbilisi has a number of well-established ones including Baia Gallery, Vanda Art Gallery, Chardin Gallery, Vernisage Gal- lery, Gamrekeli Gallery and Dedicace Gallery. There are new galleries opening, especially in Vake, though many of these Niniko Morbedadze – ‘About Mystical Places #1’, Acrylic, Indian ink on paper, 94,3X110cm. 2019

APRIL-MAY 2020 Investor.ge | 27 Rita Khachaturyan – ‘The Guest’ – from the series ‘Fear’, Oil on Canvas. $12,500. are catering to interior designers rather Mirzashvili, Edmond Kalanandadze, However, “it is hard to predict which than collectors. Jemal Kukhalashvili, Irakli Sutidze and artist can be the best investment, every- Artists need patrons and promoters, Ushangi Khumarashvili. Established art- thing depends on promotion and the artist and as Ia Dvali (founder of the Chardin ists from the last century, such as David himself. At this time, probably the most Gallery along with fellow art critics Kakabadze, Elene Akhvlediani and Lado promising artist in Tbilisi in our view Khatuna Chkheidze and Maia Nozadze) Gudiashvili, she says, enjoy “stable and is Rita Khachaturyan, who is already says, the economic downturn has caused KLJKSULFHV´DWKHUJDOOHU\ considered one of the strongest Georgian “investment in art to slow down a little At Vanda Gallery, (which very active- DUWLVWV´WKH\VD\ ELWLQ*HRUJLD´)RUWXQDWHO\WRKHOS ly promotes contemporary and young art- Ornament Enamel Art Gallery, which offset that, the internet has brought in ists via its international mailing list and is a cloisonné enamel artwork special- foreign online customers. Those buying regular shows) the Georgian art market ist, has found wide interest, especially for investment, she says are interested “in LVGHVFULEHGDV³TXLWHDFWLYH´ZLWK³PRUH among tourists. It has increased the fol- both contemporary artists and in earlier \RXQJDQGQHZDUWFROOHFWRUVHPHUJLQJ´ lowing for cloisonné by also teaching the SDLQWLQJV´ The gallery, run by Vanda Mujiri and her craft in its studios. Chardin Gallery, which sells mainly brother Sandro, has a long list of promis- The development of enamel art in FRQWHPSRUDU\*HRUJLDQ¿QHDQGDSSOLHG ing young artists - Rita Khachaturyan, *HRUJLDVSDQQHGVD\V6R¿D.HUHVHOLG]H art, including some amazing cloisonné Tedo Rekhviashvili, George Gatserelia, art manager of the gallery, “the 8th to enamel work, puts a wide price range on George Gagoshidze, Levan Mindiashvili, WKHHQGRIWKHWKFHQWXU\´ZKHQLWZDV the artists attracting the most attention Vaho Bugadze, Zurab Gikashvili, Alex employed in making icons. Yet its revival currently of $500 to $50,000. Artists, Berdisheff, George Gugushvili, Shalva in the last century has brought not only both past and living, which Ia Dvali in- Matuashvili, Kako Topuria, Tengiz Marr, a much wider range of pieces, as can cludes in her list of those “whose value Temo Javakhishvili, Jemal Kukhalashvili be seen in the gallery, from jewelry to and recognition are slowly but surely and Gogi Chagelishvili – who sell at small and exotic sculptures and works JURZLQJ´DUH9HUD3DJDYD)HOL[9DU- anything “between $1,000 and tens of of art, but a diverse range of materials lamishvili, Natela Iankoshvili, Tengiz WKRXVDQGVRIGROODUV´ (including copper as well as gold and

28 | Investor.ge APRIL-MAY 2020 silver) and techniques. Prices start from as low as 200 lari. Ornament Gallery has taken Geor- gian cloisonné enamel work to exhibitions in the Baltics and the United States. The gallery says artists who have a fol- lowing include Thea Gurgenidze, Jimi Lominadze, Irakli Megrelishvili, Nino Tadiashvili, David Tskhadaia, Maia Jikia, Darejan Kochiashvil and Nino Kurtsikidze. Who is buying Georgian art? Baia Tsikoridze says that while the market is active “most of the buyers are Georgians or our compatriots living Niniko Morbedadze – ‘Flight Lessons.’ Acrylic, Indian ink on paper, 50 x 69,5 cm. 2016. abroad, with a smaller proportion of IRUHLJQHUVZRUNLQJLQ*HRUJLD´ZKLFK is unsurprising, given the relative lack of international publicity. However, there are foreign buyers, including some who have built large collections. And her choice of best investments - Guranda Klibadze, Niniko Morbedadze, Tutu Kiladze, Rita Khachatryan, Jibson Khundadze, Vakho Bugadze and Kote Sulaberidze. The Georgian galleries have been doing their best to help local artists ¿QGEX\HUVRQLQWHUQDWLRQDOPDUNHWVDV Sandro Mujiri points out, taking them to overseas fairs, even in the hard times of the 1990s when the cultural support enjoyed in Soviet times was lacking. However, there is a huge amount of competition out there, and as Katrine Levin says, while Georgian artists are known and appreciated by Georgians, “….geographic distance from cultural epicentres OLNH/RQGRQDQG1HZ

APRIL-MAY 2020 Investor.ge | 29 INVESTOR SPOTLIGHT: the Georgian spacesuit that will work like magic on Mars ELVEN TECHNOLOGIES IS SHOOTING FOR THE STARS BY HOPING THEIR INNOVATIVE APPROACH TO SPACESUIT DESIGN MAY MAKE THE FIRST MANNED MISSION TO MARS A REALITY.

30 | Investor.ge APRIL-MAY 2020 JOSEF GASSMANN ually improve upon the suit. We realized WRFRRSHUDWHZLWKORFDO¿UH¿JKWHUVZKR WKDWLIZHEXLOWWKH¿UVWWZRHDVLHVWWHFK- will test the suit in both laboratory and lven Technologies wants to build nologies and combined them into a suit, ¿HOGFRQGLWLRQVDIWHUZKLFKWKH\PD\ the spacesuit that will send hu- we could make a product for earth that begin to use the suit themselves. Emankind to Mars. would generate revenue, and thus lead us Elven claims its current prototype The spacesuits we currently have? WRZDUGVWKHSURGXFWLRQRIDVSDFHVXLW´ in laboratory conditions can withstand Won’t do. They can weigh up to 200kg, Elven Technologies founder, CEO and flames and temperatures up to 1,200 which is alright when you’re in open High Elder Vamekh Kherkheulidze says. degrees Celsius for at least 30 minutes space (no gravity), or on the moon Elven Technologies is currently (!), compared to the 8-10 seconds of (about a sixth of Earth’s gravity), but working on two of 10 technologies that protection afforded by conventional Mars, which has a bit more than a third will need to be perfected before a Mars ¿UH¿JKWHUVXLWV±WKDW¶VDERXWWLPHV of Earth’s gravity, is a different story. suit will be viable: heat resistance and a longer protection. The company is working against the cooling system. With a viable product in hand, Elven clock. Elon Musk wants to get a manned On the Martian landscape, there is 7HFKQRORJLHVSODQVWRPRYHWKH¿UH¿JKW- mission to Mars by 2024 with SpaceX. EDUHO\DQDWPRVSKHUHRUPDJQHWLF¿HOG ing suit to foreign markets, establishing And so when Elven Technologies came to stop the sun’s rays, and humans on the a revenue stream to continue its chain of together back in April 2019, it recognized surface would be exposed to both intense innovations. the immediacy of the task. heat and radiation. But moving from a fire suit to a But just like the journey to Mars it- Kherkheulidze says it’s conceivable spacesuit is a long game, and the startup self, the road to developing a suit that will that you could have a situation on Mars realized they would need enormous sup- work on the red planet is a long one, and in which “on one side, where you are port along the way. so Elven Technologies is approaching the standing in the sun, it might be 100 - 150 “When we set out, we asked our- task by dividing it into parts. degrees, whereas on the other it’ll be selves the question – can we even do “We want to be a part of this new negative 100 – 150. That’s the problem this? We saw that the major reason the frontier of exploration. So we decided to WREHVROYHG´ suit didn’t exist yet was not the lack of take the problem apart, piece by piece, Once the suit comes together in about expertise, it was the lack of desire to go and innovate in each technology to grad- six months, Elven Technologies plans there – the problem is that science is not a process dedicated to speed. It’s not market driven. Science is done for its RZQVDNH´.KHUNKHXOLG]HVD\V Elven Technologies thus chose a startup business model to attack the problem. “With a startup, you don’t have the possibility of researching for 10 years, you will fail. That’s why SpaceX has progressed so much in so little time, because it is a private company. It relies on revenue and not on grants. And that’s ZK\1$6$QRZXVHV6SDFH;WRÀ\WRWKH VSDFHVWDWLRQ´.KHUNKHXOLG]HSRLQWVRXW Elven Technologies bootstrapped itself and shortly thereafter received a 100,000 GEL grant from the Georgian Innovation and Technology Agency (GITA). A further 30,000 euro grant from the EU’s CBRN (Chemical Biological

APRIL-MAY 2020 Investor.ge | 31 Radiological and Nuclear) Risk Mitiga- talk to everyone you tion Initiative helped the company stay can. Not because you on its feet as it moved towards a build- are likely to find the able prototype. investor yourself – but Kherkheulidze says the company because once the word needs another 700,000 USD to achieve is out there, if you’ve its goal, of which $400,000 will be pri- something worth invest- vate investment. The company hopes to LQJLQWKH\¶OO¿QG\RX´ receive a 650,000 GEL grant from the Kherkheulidze says. Georgian Innovation and Technology 7KHTXHVWLRQRI¿- Agency later this year. nancing has been a per- Perhaps surprisingly, given local sistent one for Elven investors’ reticence to getting involved Technologies as it is in large-scale and risky projects, some of for any startup, but one this money the company plans to source they have addressed by from private investors in Georgia. asking the question: ‘would we invest in ize how to build the company in which “There are private investors in the the company if we weren’t the founders?’ \RXZRXOGZDQWWRLQYHVW\RXUVHOI´ country willing to invest in exciting “In the beginning of any project, the Kherkheulidze says. projects, but this is a fairly new de- answer is probably ‘no.’ But when you As for why Elven Technologies got velopment. You have to get out there, say that, and admit this truth, you real- into the suit business at all, that story

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goes back to Kherkheulidze’s training as a doctor. “I studied medicine out of concern for human well-being. But I soon felt that medicine had stagnated, as it doesn’t provide for patients whose conditions lie outside the realm of established protocols. So I decided to do something that would PRUHLPPHGLDWHO\DIIHFWDQGSURYLGHIRUSHRSOH¶VZHOOEHLQJ´ Kherkheulidze recounts. The startup’s concern for human health and well-being has its roots in what they say is the astounding potential and capacity of science to problem-solve. “The fact that life on earth is so accidental makes it so SUHFLRXV´.KHUNKHXOLG]HH[SODLQVDGGLQJWKDWWKHSXUVXLWRI VFLHQWL¿FDGYDQFHPHQWLVDQDWWHPSWWRSURWHFWWKLVµUDUHDF- cident’, “and so we want to share with other people the joy we feel in the uniqueness, and maybe even the absurdity, of our existence. We want the next generations to continue to feel this VDPHVHQVHRIZRQGHU´ It’s to this same next generation and other startuppers that Kherkheulidze advises remaining truthful to yourself about your business and your goals, noting that the fear of failure can be so dramatic so as to distort the evidence in front of you. “Failure is not something you want to experience, and so you automatically are inclined to defend yourself against it. You lie, tell yourself that everything is going to be OK. But actually, there is absolutely no way that everything will be OK. If you’re truthful, you can see the challenges you might have in the IXWXUHSODQDFFRUGLQJO\DQGKDYHDKLJKHUFKDQFHRIVXFFHVV´ As for the origins of the name Elven Technologies: “they say that magic is simply technology that you can’t understand. It works seamlessly. We want our suits to work in the same way: we want them to work so well that people think they’re (OYHQPDJLF´

APRIL-MAY 2020 Investor.ge | 33 tivity. approach the task of creative differently: Taking the Georgian companies are starting to “Partially because we have a four- experiment as well. day work week, but also because this is how we prefer to work — we only four-day take projects that have longer deadlines, because we want to do quality work, Takaka Abramia is the co-founder and not in a rush. For some clients, that work week and creative director of Studio Impulse, doesn’t work, and we have to turn them a Tbilisi design studio which started with away. But a customer who can tell good for a spin in a four-day work week when the company design from mediocre, and who is still ¿UVWODXQFKHGEDFNLQ$SULO paying the same amount, will know that “I had the same problem everywhere WKHWLPHLVYDOXDEOHDQGPXFKQHHGHG´ Georgia else I had worked – I didn’t have time for Takaka says. myself, for my personal development. I The reader, in disbelief, may ask: do RECENT EXPERIMENTS DONE have many interests aside from my job, they work more hours during the week? BY LARGE COMPANIES LIKE and need to pursue them as an artist. To which Takaka responds: “nope, MICROSOFT SUGGEST THAT EMPLOYEES MAY BE HAPPIER :KHQ,ZDVZRUNLQJ¿YHGD\VDZHHN ZHZRUNIURP±´ AND MORE PRODUCTIVE and going home at 10 in the evening, ³,FKDVHWKHPRXWRIWKHRI¿FHLIWKH\ WHEN THEY WORK 4 DAYS ,ZDVQ¶WSDUWLFXODUO\KDSS\´7DNDND UHPDLQDIWHUKRXUV´ A WEEK, INSTEAD OF says, noting the four-day work week at THE STANDARD 5. TWO Studio Impulse is actually an approach to GEORGIAN COMPANIES cultivating the talents of the company’s DISCUSS WHY THEY DECIDED personnel, and not just time off work. TO MAKE THE SWITCH. “People in general need time for themselves to pursue what they are Headhunting and HR company In- interested in – otherwise they become source also decided to make the switch he 40-hour, 5-day work week has stale, stop growing and their work suf- to a four-day work week in November been the business standard for IHUV´VKHDGGV 2019. Tthe last century, but some com- In one of Studio Impulse’s early Director Medea Tabatadze says panies are starting to rethink this model. concept videos, Abramia says design is the company received a mixed bag of Recent experiments suggest that a highly cerebral process: ‘I think about feedback after announcing their transi- employees may be less productive when it while en route, in the bath, while tion, ranging from encouragement to they work a normal 40-hour week, and sleeping. My subconscious is always discouraging messages as well. many full-time white-collar workers hunting ideas and chasing inspiration in “We were told that we shouldn’t be complain of creative burnout and cogni- unconscious pools.’ When asked how working less, that we should be working tive overload. one can be thinking about work all the more. That Georgians should work 25/7, When Microsoft Japan decided to test WLPHDQG¿QGLQJRWKHUKREELHVWRHQJDJH and that ‘skipping’ working days won’t drive a 4-day work week in August 2019, in, she laughs: result in anything good. This touched on the company reported a ‘40% rise in “This is a description of the creative something of a sensitive topic for some SURGXFWLYLW\PRUHHI¿FLHQWPHHWLQJVDQG process in general. The creative mind is SHRSOH´7DEDWDG]HVD\V happier workers who took less time off’ always running in the background, even The impetus to switch, Tabatadze There are other ways to tinker with when you appear to be thinking about claims, came from the stressful nature the orthodox work week – one experi- something else. I’ve often seen my proj- of the company’s work, which “can often ment in the Harvard Business Review ects in dreams, or ideas will come to me translate into improperly used working from late 2018 shows that a decrease ZKLOHP\DWWHQWLRQLVHOVHZKHUH´ KRXUVVODFNDQGDODFNRIHI¿FLHQF\´ from the average 8-hour work day to a At the heart of the decision to work “For an agile, five-person team, 6-hour workday may increase produc- only four days a week was a decision to WKLVLVQ¶WDYHU\KDUGWDVN,YHU\¿UPO\

34 | Investor.ge APRIL-MAY 2020 EHOLHYHWKDWLI\RXDUHVDFUL¿FLQJ\RXU themselves whether their employees are our focus. The second month we needed free time for work, it’s more than likely responsible and conscientious, and also if to become adjusted to the new ways of you’re not doing it right. There are they have good time management skills communicating with not only between exceptions of course, but if you find ±WKHVHDUHWZRYHU\GLIIHUHQWWKLQJV´ ourselves for projects, but with our cli- someone is working extra hours, it’s Tabatadze says. ents. This has now more or less coalesced probably because they’re badly orga- The new schedule hasn’t forced the into a division of work per weekday: QL]HG´7DEDWDG]HVD\V company to take on less work, either. Monday is when we kick things off, and In her estimation, on average just “Our 10 years of experience helps us divvy up our tasks. Tuesday we’re hard at DERXWRIWLPHVSHQWDWWKHRI¿FH be more agile and exact, and so we can it. Wednesday is when we troubleshoot, is actual work. To ensure productivity, handle the same workload. We try not to and Thursday is for communicating Tabatadze and her team stick to a strict spend too many hours on unnecessary EHWZHHQRXUVHOYHVDQGFXVWRPHUV´7D- task list and calendar. tasks. That is where our agility comes batadze explains. “Time management skills on the IURPZKDWPDNHVXVÀH[LEOH$QGZH Like Studio Impulse, Insource keeps team have changed drastically. Every never take work home with us – I respect DQRUWKRGR[QXPEHURIRI¿FHKRXUVDV minute and every hour has its price my personal time, and other people’s well. now. For some of us on the team, this WLPH´ “10? 10 is too much. We have eight has been a challenge, for others it has She comments on the process of working hours. We avoid even an extra been an opportunity to blossom. It’s not adjusting to the new schedule: 30 minutes of work. I chase anyone out for everyone though, if companies want “It took us a month to get used to our ZKRWULHVWRVWD\RQORQJHU´7DEDWDG]H to make this transition, they have to ask new work rhythm, and how to readjust jokes.

+995 (32) 250 00 20 [email protected] www.amcenters.com 11 Dimitri Arakishvili Street Tbilisi, Georgia, 0179 APRIL-MAY 2020 Investor.ge | 35 \HDUV´VKHVD\V Clues to Japan’s interest in Georgia’s traditional premium wine product can be found in Vinitrac’s explanation of WKHGLI¿FXOWLHVIDFHGE\QHZ&HQWUDO Eastern European producers in selling in the Japanese market: “This is partly owed to the ingrained ethnocentric mentality of Japanese cul- What’s behind the unlikely ture. Consumers have also traditionally been elitist in their tastes, an approach that has permeated into the wine market duo of Georgia and Japan? as well. Even with Chilean and Austra- THOUGH THE GEOGRAPHICAL AND CULTURAL DISTANCE lian wines gaining ground in Japan, they BETWEEN GEORGIA AND JAPAN HAS HISTORICALLY LIMITED still cannot measure up in terms of appeal CONTACT BETWEEN THE TWO COUNTRIES, NEW BUSINESS to the classic wine-growing regions of PARTNERSHIPS ARE BLOOMING, ESPECIALLY IN THE WINE TRADE the Old World, such as Bordeaux and %XUJXQG\´,WLVLPSRVVLEOHWREHPRUH SALLY WHITE unprocessed aluminium). ³2OG:RUOG´WKDQ*HRUJLDQTYHYULZLQH Last year, Tokyo also hosted the same Having discovered qvevri wine at apan is fascinated by Georgia’s major exhibition of Georgian wine that the supras held to celebrate the many rich history, as the Ambassador of launched France’s new show-case wine business and investment links between JJapan to Georgia, His Excellency center in Bordeaux – Georgia: Homeland Japan and Georgia, Japanese business- Tadaharu Uehara, has remarked more of Wine, an exhibition combining unique men introduced it to Japan’s growing than once on his Embassy’s website. archaeological exhibits and modern number of wine drinkers. Japan has Georgia’s historic viniculture and its technologies. also added a traditional Georgian dish aeons-old way of making wine in qvevris Some may be surprised that Japan to its gastronomic scene: the fast-food epitomise to many there the character of should have taken so strongly to a non- company Matsuia has begun to sell the the Caucasian country. traditional beverage, yet even a few years classic Racha dish Shkmeruli (made of Wine exports to Japan are growing ago, according to a report by the Japan- chicken, garlic and milk). Importers are and are now worth around $40 million, EU Trade Center, wine market tracker already bringing in Georgian kiwi fruit up over 700% on a couple of years ago. website Vinitrac found that over 50 and berries. This is adding a further strand to a rela- percent of the Japanese population was There is, in fact, a long history of tionship that goes back far into history, drinking wine at least once a week. So, wine-drinking in Japan. one which Georgia hopes will give it given this level of interest, the exhibition Legend has it that Japanese viticul- another Free Trade Agreement. won the support of two major companies ture began in 718 AD, in Katsunuma, Such is the special status ascribed - Sony Music and Japan’s global printing

36 | Investor.ge APRIL-MAY 2020 ity and Japanese viticulture emerged. This grape comes from a long- He added: “But we are also becoming It used then mainly imported American established Japanese vinicultural center. physically closer. As technology and eco- grape varieties, according to the Vinitrac A report written in 1869 by John Adams, nomic growth are revitalizing the ancient survey. Secretary to the British Legation in Yedo, Silk Way, Georgia and Japan emerge as Japanese wine production grew describes “a quantity of vines, trained on bridges between mature and emerging slowly in the last century and in the horizontal trellis frames, which rested on economies. Japan is of course the third VDQGV\HWIRUWKH¿UVWWLPH poles at a height of seven or eight feet biggest economy in the world and is a domestic wineries began to focus on IURPWKHJURXQG´LQWKHUHJLRQRI.RVKX global investment and technology hub producing superior wines using only Yamanashi. WKDWSLRQHHUHGWKHURDGWRWKH3DFL¿F domestically cultivated grapes. Also, in Referring to Koshu grapes’ history Century. Georgia on the other hand is response to demand from Japanese con- the then Ambassador explained to Geor- an emerging economy that tries to imbue sumers, the production of organic wines JLD7RGD\LQ³,WLVGH¿QLWHO\DYHU\ LWVORFDWLRQZLWKHFRQRPLFVLJQL¿FDQFH became popular. interesting discovery as it goes to show creating a nexus of free trade agreements In the 1990s and 2000s, due to a re- MXVWKRZIDUEDFNWKHWZRFRXQWULHVJR´ and physical infrastructure that bridges duction in taxes on imported wine and a Moreover, he wrote, Japan has “a (XURSHDQG$VLD´ GLYHUVL¿FDWLRQRI-DSDQHVHIRRGFXOWXUH very old national treasure warehouse Are Japan and Georgia too far apart wine consumption continued to grow. ‘Shosoin’ in Nara prefecture that was to be relevant to each other, he asked: ,Q6KLQ\D7DVDNLEHFDPHWKH¿UVW built in the 8th century by the then-Em- “No, we are not. The distance between Japanese to be awarded the title of Meil- peror. Within that warehouse, we found us is shrinking, as we are at opposite lieur Sommelier du Monde and helped Sasanian (an Empire of Iranians in Late ends of a tunnel linking the Atlantic with WRVLJQL¿FDQWO\UDLVHSXEOLFDZDUHQHVV Antiquity that encompassed Georgia) in WKH3DFL¿FHFRQRPLHVGHYHORSHGDQG of wine appreciation. ornamental jugs, plates and pots: Japan is HPHUJLQJHFRQRPLHV´ Media attention given to the ben- one of the destinations of the Silk Road, He added: “Georgia is strategi- eficial effects of tannins (in which that bridge between East and West and cally located between Europe and Asia Georgian red wine is rich) and local a project that Georgian government is with preferential access to the Single government led efforts to promote high emphasizing. European Market – through the Asso- quality domestically produced wine also “Since Japan is recognized as a part ciation Agreement (AA) and the Deep contributed to industry expansion. From of that, this bridge between the cultures, and Comprehensive Trade agreement 2002 onward, leading with Yamanashi it is very natural for Japan to play a co- (DCFTA), the CIS, and China. We have Prefecture, competitions focused on operative role to develop this strategy in been negotiating the same kind of Trade “Japanese wine using only 100% Japa- PRGHUQIRUP´KHFRPPHQWHG regime with India. QHVHJUDSHV´EHJDQ While some Central and Eastern Eu- “Given globally low energy prices, a Of significance is that Japan has URSHDQSURGXFHUVKDYHIDFHGGLI¿FXOWLHV competitive workforce, and increasingly found, from DNA analysis, that its Koshu in entering the Japanese market, due to sophisticated logistics infrastructure, ZLQHJUDSHVDUHVFLHQWL¿FDOO\LGHQWLFDOWR lack of country and brand awareness, it Georgia is precisely the kind of partner one of the Georgian species, according to helps that Japan is very much in sympa- Japan seeks as an export-driven global former Japanese Ambassador to Georgia, thy with Georgia on a number of levels. manufacturing powerhouse: this is a His Excellency Tadaharu Uehara. “Japan and Georgia are two countries place where the vectors of localization Characteristics of wines made from ORRNLQJDWDJHRSROLWLFDOPLUURU$W¿UVW and globalization intersect with each the Koshu grape are typically a pale, sight, the two countries are far apart, other, making Georgia a reliable partner straw colour and a soft, fruity bouquet SK\VLFDOO\DQGTXDOLWDWLYHO\´ZURWH in the localization of a qualitatively dif- with overtones of citrus and peach. Its veteran Georgian diplomat and politician ferent corporate culture and a purveyor of ancestry, according to The Winegang Tedo Japaridze, a few weeks ago after a Western digitalized standards and ideals, website, includes the Davide hybrid, visit to Japan. thus creating opportunity for anyone who which is believed to have come via Chi- “And yet we are so close! Both our FDQVHHLWDQGH[SORLWLW´ na, travelling the Silk Road from Georgia countries have part of our territory ef- And a toast to that, be in with a glass across Asia a thousand years ago. IHFWLYHO\DQQH[HGE\5XVVLD´ of Rkatsiteli or Koshu wine!

APRIL-MAY 2020 Investor.ge | 37 hat can Georgian startups What Georgian startups learn from Silicon Valley? WThe question may sound rhetorical to some, but innovation and can take away from Silicon entrepreneurship still mean drastically different things in the Bay Area’s tech Mecca than in Tbilisi. Valley In February, a group of Georgian GEORGIA’S FASTEST GROWING CAR REPAIR startups got on a flight – just weeks SERVICE, DESIGNING A SPACESUIT FOR before the Coronavirus would turn our world upside down! – and made the HUMANKIND’S FIRST STEPS ON THE MOON AND transcontinental trek to San Francisco. PHUBBING ON PHUBBER – THREE GEORGIAN Some went to participate in Startup STARTUPS SHARE SOME OF THEIR MOST Grind’s annual Global Conference, while others attended a USAID-sponsored IMPORTANT TAKE-AWAYS FROM THEIR TIME IN four-week acceleration program con- SILICON VALLEY. ducted by the US Market Access Center. Investor.ge sat down with three of these homegrown startups to talk about

38 | Investor.ge APRIL-MAY 2020 WKHLUFRPSDQLHVWKHFKDOOHQJHVRI¿QG- WKDW¶VGLI¿FXOWWKH*HRUJLDQPDUNHWLV ing investors in Georgia, what to expect small. Another thing attractive about the when courting US investors and what States is that if we can get set up there, they’ve brought home to share with other a US investor won’t ask for 50% of the aspiring entrepreneurs. company. In Georgia, investors can ask for too much, and can suck the motiva- tion or enthusiasm out of the company by WDNLQJWRRELJDVWDNHLQLWVRZQHUVKLS´ Abashidze says. Going by your experience in the US and speaking to investors there, what is the moment in the relationship when you can ask for a dollar?

“That moment comes when a potential investor becomes your ‘cheerleader’ – your supporter. When they start caring about you and your endeavor. “To do that, you need to build trust, Crazy things is just what Elven Tech- and that’s a feat in itself. My favourite nologies is looking to do: by aiming to be quote is ‘A reputation is something you the company that designs and produces The Caru platform allows car owners EXLOGLQ\HDUVDQGWDNHVMXVW¿YHPLQ- the spacesuit that will accompany hu- to effortlessly connect with service pro- utes to destroy.’ As a startup, you must mankind to Mars in either 2024, if Musk fessionals whose ultimate responsibility take into consideration that your goal has his way, or in 2040, with NASA’s LVQRWPHUHO\WR¿[DEUHDNRUSXPSD is not to give investors a reason to say more conservative estimate. tire, but to oversee the entire process of ‘yes.’ Your goal is not to give any reason “As it stands now, we’ve nothing in car repair – from pick up through repair for an investor to say ‘no’. That’s when ZKLFKWRVHQGSHRSOHWR0DUV´(OYHQ and return. \RX¶OO¿QGVXSSRUW±ZKHQQRWJLYLQJ\RX Technologies CEO Vamekh Kherkheu- “We’re the Uber of car repair ser- PRQH\LVDFULPH´ lidze told Investor.ge. YLFH´VD\V1LND$EDVKLG]HWKHIRXQGHU What would you tell startups just “The issue is this: the current space- of Caru, Georgia’s fastest growing car getting on their feet? suits weigh up to 200 kg – that’s alright maintenance company, which in early on the moon, where gravity is just about March began its expansion abroad in ³7ZRWKLQJV7KH¿UVWLVGR\RXUH- one-sixth of that of earth, or in space, Ukraine. ally want to? If you stop to think about where there is no gravity. But Mars has Caru is convinced it has the ultimate what it will really involve, there is a about a third of earth’s gravity – so that’s formula for car service and maintenance 99.95% percent chance that you, in fact, one problem. Another is that the suit has to become the car repairman of not only don’t want to do it. to be able to handle a slew of additional WKHUHJLRQEXWRIJDUDJHVDVIDUD¿HOG “The second: forget fear. Making a issues, amongst which is the fact it has as the US – Caru founder Abashidze’s mistake, getting beaten by a competi- to be able to handle high temperatures, target market. tor – forget about it. You must think like as well as low ones – you could feasibly “The US market is attractive for a one of the ‘craziest’ men on earth. Forget have a situation in which the rays of the number of reasons: the market is bigger, restrictions, and have the ability to pur- sun are heating suits to 100 C + on one businesses are more scalable. In Georgia, sue your project your way. Even if 100 side, while the back will be - 40 C. the problem is we have great ideas, but experts and experienced people come to “To get there, we’ve decided to start local investors are after quick returns – you and say ‘don’t do it like this’, you with a product that will be commercially they want to see that the business will be must have the ability to follow your gut viable on earth – a suit that could be VHOIVXI¿FLHQWZLWKLQ*HRUJLDLWVHOI%XW IHHOLQJV´ XVHGE\¿UH¿JKWHUVWRZLWKVWDQGÀDPHV

APRIL-MAY 2020 Investor.ge | 39 and something that can keep them cool how willing and eager people were to DVZHOO´ cooperate and network. What surprised you the most about “You never know who’s sitting next Silicon Valley culture? to you in Silicon Valley. Be it in a Star- EXFNVDWDWUDI¿FOLJKW7KH\PLJKWEH “One thing that got me was that ev- GUHVVHGZRUVHWKDQ\RXEXWEHVLJQL¿- HU\ERG\¶VLQÀLSÀRSV3HUVRQDOFRPIRUW cantly wealthier than you are. Everyone is so important there, and is maybe even is doing something in Silicon Valley. a determinant of success. If you’re happy Everyone has some interesting idea, and all the time, the likelihood you’ll be you never know who it is. motivated to achieve great stuff is much “What this means is that there is a higher. This freedom to be comfortable, culture of helping one another – it’s rare and the individual’s pursuit of happiness, that someone won’t give you at least LVVRLPSRUWDQWLQWKH86´ 15-20 minutes to talk, to hear you out. The most important thing you’d Sometimes this can open very unforeseen tell young startups? GRRUV´&KXJRVKYLOLVD\V And that’s partially because of the ³$OZD\VEHWUXWKIXO¿UVWWR\RXUVHOI fear of missing something big – like a and then communicate that truth to oth- unicorn: ers. The idea of failure is so dramatic “While we have this culture of help- and traumatic that you don’t want to ing our friends and family in Georgia, it experience it. You automatically defend is limited to close friends and acquain- yourself, and try not to experience it. tances. That’s not the case in Silicon You lie to yourself that everything is Valley – people really just want to help. going to be OK. But actually, there is If you don’t give people the time of day, absolutely NO WAY everything will be days of launching their app, which con- \RXFDQPLVVRXWRQELJRSSRUWXQLWLHV´ OK. If you’re truthful, you can see the nects sellers of clothings and accessories It seems clear what an investor challenges you might have in the future, to buyers. Now, they say they are the might be looking for in you as a com- so you can plan accordingly. If you are largest online clothing and accessory pany – but what does your company truthful, then you have a higher chance website in Georgia. look for in an investor? of success, because you can plan truth- “We never thought it would reach fully. This is also important of course WKHVFDOHWKDWLWKDV´FRIRXQGHU*LRUJL “We’re currently reinvesting our when it comes to investors – lying kills Chugoshvili says. revenue into our development, so what DUHODWLRQVKLSLQWKHYHU\EHJLQQLQJ´ Phubber capitalized on the fact that we’re looking for is not just money. In Kherkheulidze says. in Georgia, most people were selling our case, we want to be in 10 countries and buying secondhand clothing and ZLWKLQ¿YH\HDUVZKLFKZLOOJLYHXVD accessories via Facebook groups, where base of several million people. While buyers and sellers were faced with a slew we’ve expanded here, doing that abroad of issues when it came to shipping, veri- ZLOOEHKDUGHU:KDWZHZDQWWR¿QGLV fying product authenticity and payment. a partner who could help us expand our When Giorgi Chugoshvili and Anano The market was a mess. base, not just give us money. Dolaberidze launched secondhand retail Having realized the value to be “Also important to us is our potential app Phubber, they felt they were not found in bringing people together more partners’ willingness and excitement to kidding themselves when they thought effectively, Chugoshvili says that dur- continue with Phubber as it is, and not it would be an achievement to have just ing his one-month stay in San Francisco to try to change it according to their 10,000 users in Georgia. to participate in the US Market Access own understanding of what our product 7KH\KLWWKDWQXPEHULQWKH¿UVW programme, he was most interested in VKRXOGEH´&KXJRVKYLOLVD\V

40 | Investor.ge APRIL-MAY 2020 foreign direct investment and by accelerating exports of existing producers; by Agro-exports to the EU: providing critical logistics infrastructure, including an airport cargo terminal in overcoming key barriers Kutaisi; by stimulating domestic demand for quality logistics; and by bundling LIMITED VOLUMES, AS WELL AS SPECIFIC interests and closing information gaps. BARRIERS IN TRANSPORT AND LOGISTICS, POTENTIAL OF AGRO-EXPORTS CONSTRAIN THE GROWTH OF AGRO-EXPORTS TO EU TO THE EU. AGRICULTURAL SPECIALIST HANS In 2014, Georgia and the European GUTBROD PROPOSES FOUR MEASURES THAT Union established a Deep and Compre- COULD IMPROVE EXPORT PROSPECTS. hensive Free Trade Area (DCFTA). Most observers hoped that Georgian exports to the European Union would rapidly HANS GUTBROD agro-food exports from Georgia to the increase, especially in agriculture. European Union, according to a recent However, the actual exports of agro- roduction volumes, as well as study of the German Economic Team. food products to the EU have remained barriers in transport and logistics, These challenges can be addressed by small and concentrated. The limited suc- play a key role in constraining P focusing on increasing exports through cess is all the more of concern as Georgia

APRIL-MAY 2020 Investor.ge | 41 KDVVLJQL¿FDQWSRWHQWLDO:LWKDFOLPDWH GEORGIA’S AGRO-FOOD mixtures and jams. as diverse as California (add Svaneti EXPORTS TO THE EU, 2013 VS 2018 Whichever way you spin the data, glaciers, subtract the Mojave desert), Georgia exported USD 120 million the actual export volumes remain low. Georgia could supply – and tradition- of agro-food products in 2018 to the Limited volumes lead to higher per unit ally has supplied – many neighboring EU. Exports have, in fact, reduced since cost for shipping. Additionally, there is countries. 2013. The reduction has been due to the no regular provision of transport. As one As one Swiss-based agronomist put invasion of the so-called brown marmo- exporter put it, there is “no established it: “in the North of Georgia, it is cold; to rated stinkbug (see ‘Pushing back the SLSHOLQHWR(XURSH´&RQVHTXHQWO\ the East, it is mostly dry; in the South, pest – is Georgia beating the stink bug? essential logistics services (including it’s hot; and to the West, labor is more ex- in the Dec-Jan 2019 issue of Investor.ge), advanced laboratories for doing reliable pensive. This puts Georgia’s agriculture which took a big bite out of the hazel- residue tests) often are not yet commer- LQDJUHDWVSRWORQJHUWHUP´6LPLODUO\ nut harvests, which had been Georgia’s cially viable. Georgian entrepreneurs can a recent German Economic Team study biggest agricultural export category in ¿QGLWDVWUXJJOHWRJHWWKHLUSURGXFWVWR listed more than a dozen products that recent years. Somewhat compensating EU clients. should do well in the EU market, includ- for this loss, non-hazelnut agricultural ing fresh berries, fresh peaches, greens/ exports grew, but from a low base. As MAIN EXPORT ROUTES TO THE EU herbs, and nuts. UN Comtrade data shows, the exports Currently, trucks typically take one Why, then, has there only been a of beverages grew by 33% from 2013. of three routes to the EU. The major- lackluster expansion of exports? Limited Other agricultural products increased by ity (70%, by one estimate) takes the YROXPHVDVZHOODVVSHFL¿FEDUULHUVLQ 104% but still only stand at USD 29 mil- long road winding through Turkey. The transport and logistics, constrain the lion for 2018. Exports now encompass a least expensive option is the ferry from growth of agro-exports to the EU. broader range of products, including nut Poti to Odessa, though transits through Ukraine are not without complications. A few years ago, entire containers could go astray on that route. The safest and fastest route, according to one European logistics company, is the ferry from Georgia to Bulgaria. This ro-ro (roll-on, roll-off) ferry, however, does not have a regular schedule. The cost for a refrigerated truck to Western Europe will typically be above EUR 4,000, with seasonal peaks of up to EUR 5,500. For some fruits and vegetables, the advantageous production cost in Georgia can be offset by high transport costs to the EU. Transporting goods to the EU by ship is cheaper, at around EUR 2,000, but takes longer. Containers require reloading in Turkey or Greece, take 28 days to Antwerp and a few extra days to Bremen, Hamburg or beyond. Trucks, by contrast, take about seven days. A second driver, at extra cost, can cut two days from the trip. For special products, Source: UN Comtrade, GET estimates; agro-food exports include codes HS 01 – 24; re-exports are not included cruising to their markets can be an at-

42 | Investor.ge APRIL-MAY 2020 tractive option. Otherwise, patience is from their ideal – acidic – soils close lines and destinations often do not have not necessarily rewarded: products that to the Black Sea shore. There are also cargo facilities. People in the transport can sail from Georgia could also travel not yet enough cooling facilities in the sector say they may invest more if there HJIURP&KLOHOHDGLQJWR¿HUFHUSULFH Guria region. Similarly, the herbs grown were dedicated logistics zones, in Kutaisi competition. in a thriving cluster by Kutaisi could be and other locations, close to major roads, Exporting products by air is viable for exported by plane. If exported by truck, with all utilities and building permits. a handful of products that are valuable they mostly wilt when driven beyond Stimulating domestic demand for relative to their weight, such as berries or Bulgaria. logistics by implementing standards for KHUEV:KLOHÀLJKWFRVWVYDU\WKH\W\SL- the local market would increase readi- cally are around EUR 1-2 per kilogram. FOUR SUGGESTIONS TO ness for export. In that light, the wider At this point in time, few airlines offer INCREASE AGRO-EXPORTS adoption of the GeoGAP standard (see air freight, nor is there always a full cool- our measures could improve export GeoGAP – moving towards traceable, ing chain if blueberries have to catch a prospects. First, paradoxical as it may safer, sustainable produce in Georgia, in FRQQHFWLQJÀLJKW sound, volume should be increased for the Feb-Mar 2020 issue of Investor.ge) An added challenge is that most its own sake: more chicken means more could develop the logistics value chain, exportable products require special eggs. In practical terms, targeted foreign including laboratories. The key in all of packaging. As export volumes from investment would accelerate export this is not just the geographic destination Georgia are low, such packaging can- growth. The best strategy may be to of the EU, but rather the quality of the not be sourced domestically. Importing identify mid-sized investors with access product. Once Georgian products have packing materials requires time, added to EU retail shelves to assist in building EU-level quality, they also fetch pre- cost and prepayment. One exporter says that export pipeline. For this purpose, a mium prices in Russia and even China. that they import heat-treated pallets. smooth implementation for investment Lastly, business associations (in- This pallet sells for EUR 17 in Italy yet exceptions for foreign investors buying cluding AmCham, and its Agribusiness costs EUR 35 by the time it arrives in agricultural land remains vital. Volumes committee), donors and the government the Caucasus. Used pallets are available can also be increased by accelerating could bundle interest and close informa- locally, but exporters do not want to risk the export of existing producers. Con- tion gaps. There is, as of yet, no compre- contamination when sending their quality tinued access to inexpensive capital, as hensive map of key services, including products abroad. Some exporters have well as facilities for absorbing growth refrigeration and storage facilities. A lost a part of their harvest to frost, while risks, would help current exporters business-to-business platform might waiting for their shipment of cardboard expand faster. The use of the system of smooth export transactions. Business boxes from abroad. Pan-Euro-Mediterranean cumulation associations could focus even more of origin can help to increase volumes on addressing information gaps and EXPORTING WINE, BLUEBERRIES also. Georgian producers can still keep facilitating exchange. Donors can help, AND HERBS the preferential access to the EU market but sustainability beyond their assistance The logistics and transport play out if they use inputs from its FTA partners will be essential. in various ways for different products. within the Pan-Euro-Med zone. For more Wine producers say that they can get detail, refer to the German Economic The German Economic Team’s full their products to Western Europe on 7HDP¶V3ROLF\%ULH¿QJIURP)HEUXDU\ SROLF\EULH¿QJLVDYDLODEOHDWKWWSELW single pallets at approximately EUR 2020 at bit.ly/Geo-PEM2020. O\3URPRWLQJ*(2([S(8 500, adding EUR 0.50 to the cost of Providing logistics infrastructure is a ,QWHUHVWHGLQMRLQLQJ$P&KDP¶V each bottle. The main headache is orga- key step. Current exporters would like to DJULEXVLQHVVFRPPLWWHH"*HWLQWRXFK nizational. Bundling pallets can help but see more regular ferry service to Bulgaria ZLWK$P&KDP([HFXWLYH'LUHFWRU has its hazards. Some exporters have had (or Romania). Most exporters would also *HRUJH:HOWRQ their consignment caught up with others’ welcome a cargo terminal at Kutaisi air- +DQV*XWEURGLVDFWLYHLQDJULFXO quality problems. port. They believe this would accelerate WXUHWHDFKHVDW,OLD6WDWH8QLYHUVLW\DQG For blueberries, being shipped out exports to the EU, though there are sev- FRQVXOWVZLWKWKH*HUPDQ(FRQRPLF from Tbilisi airport entails a far drive eral challenges. For example, budget air- 7HDP

APRIL-MAY 2020 Investor.ge | 43 Delivery service, restaurants saying ‘fork no!’ to plastic

THE #SAYNOTOPLASTIC CAMPAIGN LAUNCHED BY CENN WITHIN THE port of USAID, launched the #SayNo- WASTE MANAGEMENT PROGRAM SUPPORTED BY USAID TO RAISE ToPlastic campaign in October 2019, in AWARENESS ON SOCIAL MEDIA HAS NOW EVOLVED TO INCLUDE ONE which social media users were asked to OF THE LARGEST FOOD DELIVERY SERVICES IN GEORGIA, AS WELL AS post pictures and stories describing the MANY LOCAL RESTAURANTS AND CAFES. INVESTOR.GE SAT DOWN WITH THREE OF THEM TO TALK CORPORATE SOCIAL RESPONSIBILITY efforts they have made towards more AND HOW ATTITUDES TO WASTE MANAGEMENT ARE CHANGING. sustainable living. As local restaurants started to join TAYLOR MARGVELASHVILI environment where they pose a threat in the campaign, delivery service Glovo to wildlife. decided to get involved as well in Feb- lastics take centuries to break To reduce Georgia’s dependence on UXDU\DQGFUHDWHGD¿OWHUWRJLYH down, which gives them ample plastic, the Caucasus Environmental customers the choice to say no to plastic Ptime to make their way into the NGO Network (CENN), with the sup- cutlery and packaging.

44 | Investor.ge APRIL-MAY 2020 More than 1.8 million people use were complaining or asking us to explain involved in the #SayNoToPlasticCam- Glovo across the world ever year, result- why we made this choice. But with the paign are still serious about reducing ing in hundreds of tons of plastic waste. recent campaign, people have been very plastic waste. The company hopes this campaign could understanding, seeing that we’re ulti- Ana Tikaradze, founder of vegan drastically reduce that number by offer- mately trying to prevent polluting the food cafe Namu, is taking recycling to ing re-usable alternatives, such as wood, HQYLURQPHQW´ the next level. paper, and even plant-based packaging However, he admits that the cafe can “Waste management is even a hobby or cutlery. only do so much. “The scale that these IRUPH´VD\V7LNDUDG]H³,WU\WRUHXVH “I believe all corporations should feel companies work at is much bigger than most things. I use coconut oil jars that I UHVSRQVLEOHDERXWZDVWHPDQDJHPHQW´ what we do, and the effect they have is have lying around anyway for soups. I says Glovo Marketing Manager Shalva much bigger. They have better tools, and use glass bottles with stickers on them, Iosava. Iosava says that the campaign has WKH\KDYHDODUJHULPSDFW´ asking clients to return them. I use cotton already seen enormous success. Negahdari says that there are still for bags, and I’m talking with experts in “We only started a week ago, and al- several barriers to overcome before we the UK to bring in eco-friendly packag- ready more and more partners are signing will see a broader switch to sustainable LQJ´7KHSDFNDJLQJDOWHUQDWLYHVVKHLV up and want to get involved in this proj- packaging. considering are made from decompos- ect. As for the consumers, the numbers ³2QHLVVXHLVFRPIRUW´KHH[SODLQV able, plant-based materials. speak for themselves – the sales of the “When people are used to having some- Tikaradze also runs a blog on her participating restaurants have doubled in thing, any kind of change is a shock or website namu.ge, where she teaches WKHSDVWZHHN´ a little bit uncomfortable. You need to people about composting and the three CENN expands on the purpose of raise awareness, to let people know how ‘Rs’ – reduce, reuse, recycle. the campaign: “The #SayNoToPlastic important it is, how huge the impact is of But it’s not just vegan and raw food campaign is aimed at companies just as this tiny thing that makes their life a little cafes that are participating. Big chain much as individuals. If companies and bit more comfortable. This is the most restaurants are also taking on their share organizations can establish sustainable important part, because people need to of the responsibility. practices and give their customers an op- EHUHDG\WRSDUWLFLSDWHDQGFRRSHUDWH´ Giorgi Manjavidze, founder of fast tion to choose environmentally friendly Money is another barrier: “Supply food chain Manjistan, which has recently products, the results will be much bigger and demand is not balanced. There joined the Glovo campaign, says he is and systematic. Often, as consumers, we should be good options available, includ- happy to do what he can. are faced with the issue of not having ing with animal rights and vegan food. If “It’s an overstatement to say we’re other options and this is an excellent you don’t give them a good, healthy meal VDYLQJWKHZRUOG´VD\V0DQMDYLG]H example of how businesses can offer that that is tasty and affordable, you cannot “But I think that these small steps, if choice and encourage positive change in ask them to switch without any interest- we take enough of them, will at least do EHKDYLRU´ ing offer. We try to make that available VRPHWKLQJ´ One restaurant that joined the cam- and possible, with both the food and “I remember when I was a kid, no one paign is Kiwi Vegan Cafe, which was the the packaging. But the more people and thought about these issues. Nowadays - I ¿UVWYHJDQUHVWDXUDQWLQ7ELOLVLZKHQLW companies join these kinds of campaigns, have two kids, and they participate, they was founded in 2014. the more production and the cheaper the say, ‘We can’t throw that out, we have to Co-founder and director Soroush SULFHVZLOOEH7KDW¶VKRZLWZRUNV´ recycle it.’ And my generation is starting Negahdari discusses how public opinion Negahdari believes that in environ- WRWKLQNDERXWLWDVZHOO´ surrounding the issue of plastic waste has mental activism, time is of the essence. Manjavidze believes that raising FKDQJHGRYHUWKHSDVW¿YH\HDUV “With all of these issues, they’re going to awareness about the issue is an impor- “From the beginning, we’ve had this get better, whether we like it or not, be- tant step towards changing the future. YLVLRQ´VD\V1HJDKGDUL³:HKDYHSDSHU cause they’re not sustainable. It’s about “We need to start educating people - in containers and bags, we didn’t have how fast we get it done to prevent further schools, in kindergartens, so that the new disposable cutlery, and we saw that not GDPDJHWRWKHHQYLURQPHQW´ generation starts not only to think about everybody was happy about it. People Many restaurants that are not directly WKHVHLVVXHVEXWWRDFW´ management successfully implemented How Georgia can solve throughout Europe, per which producers and importers of products take on the responsibility of properly collecting and its plastic bottle waste treating the waste they produce. There are several models that have been implemented to recuperate plastic waste packaging across the world, but problem stakeholders in Georgia seem to have settled on a deposit return scheme (DRS). DISCUSSIONS CONCERNING THE LAST EXTENDED PRODUCER When Lithuania implemented such a RESPONSIBILITY BY-LAW ON PACKAGING WASTE, INCLUDING system for plastic bottle collection back PLASTIC BOTTLES, ARE ONGOING, HOWEVER THE GENERAL in 2016, within two years it had a 92% FRAMEWORK OF HOW THE SYSTEM WILL WORK HAS BEEN ESTABLISHED. IT REMAINS TO BE SEEN TO WHAT EXTENT THE recycling rate. MANAGEMENT OF PLASTIC BOTTLE WASTE WILL BE HANDLED For Georgia, that rate has been set at BY MUNICIPALITIES IN ADDITION TO PRODUCER RESPONSIBILITY 70% for the deposit system. ORGANIZATIONS The approach is private sector-led, and would involve the formation of eorgia’s National Waste Man- target is the last remaining EPR (ex- producer responsibility organizations agement Strategy for 2016- tended producer responsibility) bylaw on (PROs) by local stakeholders and import- G2030 calls for 80% of the packaging waste, which has yet to be put ers, who would be responsible for the country’s plastic waste to be recycled forward to the government for approval, creation of a plastic bottle deposit system by 2030. despite expectations it would be tabled that would cover the entire country. 2QHRIWKHPRVWVLJQL¿FDQWDWWHPSWV in early January 2020. Elsewhere, this generally results in to get the country on track to hit this EPR is a policy approach of waste the creation of one large PRO that serves

46 | Investor.ge APRIL-MAY 2020 the entire country, but any stakeholders “as producers say that this will make it about where the responsibilities of PROs that account for more than 10% of the problematic for them to establish prices ends, and where that of municipalities waste produced will be able to form a IRUWKHLUSURGXFWV´ EHJLQV´.DODQGDG]HVD\V PRO after receiving authorization from While in many countries with simi- “Handling post-consumer waste is the Ministry of Environment. lar schemes VAT is calculated with the clearly a producer’s responsibility, and The scheme in broad strokes: 20 tetri deposit fee, Deputy Head of Department not that of public entities. Public money would be added to the price of goods of Waste Management at the Ministry of VKRXOGQRWEHVSHQWRQIXO¿OOLQJZKDWLV packaged in plastic bottles on the retail Environment Irma Gurguliani says the a producer’s responsibility, especially end, which would then be redeemable via issue is still under discussion with the when the private sector will be able to bottle deposit machines located at larger Ministry of Finance but that “we are try- deal with this issue. The involvement of supermarkets and potentially other key ing our best for the VAT not to be applied the public sector would also double the locations as well. Curbside collection WRWKHGHSRVLWIHH´ ZRUNRI352V´.DODQGDG]HQRWHV bins will also be made available for the It’s not all bad news though for pro- Head of the Georgian Waste Manage- disposal of plastic bottles. ducers, Gurguliani says: “When it comes ment Association Giorgi Guliashvili says PROs will be responsible for invest- to this 20 tetri fee, a number of bottles that international experience shows that ing in the creation of the system, install- will still remain outside the system and such waste collection schemes work best ing and servicing it and facilitating the will not be returned for various reasons. when driven by the private sector. return of the deposit to those who bring This money will then remain within the “This is the classic private-public bottles back via the host locations. system of the PROs, and it can be put sector problem – if there is no monetary The collected waste will then either towards bolstering and strengthening or business incentive to do your job be sold on to local recyclers or exported WKHV\VWHP´ EHWWHULWLVOLNHO\WREHOHVVHI¿FLHQWDQG DEURDGDQGDQ\SUR¿WPDGHIURPWKLV Gurguliani touched on the impor- RUJDQL]HG´*XOLDVKYLOLVD\V transaction will have to be redirected WDQFHRI¿QGLQJDVZHHWVSRWZKHQLW Another issue, Guliashvili notes, is into the expansion and maintenance of comes to establishing a deposit fee, that if the capital’s plastic bottle waste the system. noting that in Georgia, 20 tetri is not an is managed by municipalities, it would There have been several hiccups amount of money that a number of people likely mean that regional cities would be along the way that have postponed the can ignore. responsible for organizing plastic bottle implementation of the scheme, and still “If it were 10 tetri, or five, then collection as well, since PROs would be several roadblocks remain, however maybe it wouldn’t work so well. But in rendered less effective given the reduced consensus slowly seems to be forming. WKLVFDVHLWLVGH¿QLWHO\DQLQFHQWLYHWR resources they would receive from col- return the bottles. lecting raw material to sell to recyclers, 20 TETRI What works about this system is that which otherwise would have been put to There are several issues associated even if I don’t do it, then my neighbor work in strengthening collection efforts. with the bottle deposit price. will. People will go out and look in “Cities already had the obligation to One is the deposit amount itself – bins, they will even retrieve them from begin separate collection – this obliga- some producers are concerned a price QDWXUH´*XUJXOLDQLVD\V tion existed even before the EPRs were bump could hurt sales. formulated. However, this task has Another issue is pointed out by Givi PUBLIC-PRIVATE SURYHGGLI¿FXOWIRUWKHSXEOLFVHFWRU Kalandadze – the head of a group of One of the last issues remaining The EPR will resolve this problem the producers that have banned together before the EPR by-law is put before the EHVWEHFDXVHLWLVEXVLQHVVRULHQWHG´ to look into the issues surrounding the government for approval is that of the Guliashvili states. implementation of the EPR: that of involvement of municipalities, given that Head of the Environmental Depart- value-added tax being calculated by UHJDUGOHVVRIWKHHI¿FDF\RIWKHLPSOH- ment of Tbilisi City Hall Giga Gigosh- including the 20 tetri deposit fee in the mentation of the EPR policy, some waste vili says internal discussions concerning total price of the product. ZLOOVWLOOHQGXSLQPXQLFLSDOODQG¿OOV the municipality’s participation in the “We believe that VAT should not “From the beginning, there seems to management of plastic bottle waste are DSSO\WRWKHWHWUL´VD\V.DODQGDG]H have been some overlap and confusion ongoing.

APRIL-MAY 2020 Investor.ge | 47 ers from the recent GEL devaluation. This has turned out to be more important than even the National Bank could have expected, since (at time of printing) dollarised loans have seen their local currency repayments go up by 20% since January 2019. Earlier this month, that LQFUHDVHEULHÀ\KLW Nonetheless, recent changes mean that banks will be able to grant loans with VXEVWDQWLDOO\KLJKHU37,VDQGÀH[LELOLW\ The other important changes slated for mid-April include: Ɣ )LQDQFLDOLQVWLWXWLRQVZLOOKDYH increased leeway in determining a bor- Banking regulations rower’s complete income Ɣ 0RUWJDJHPDWXULW\OLPLWVZLOO increase from 15 to 20 years revisited – NBG eases Ɣ &RUSRUDWHJRYHUQDQFHUHTXLUH- ments will be introduced for commercial EDQNVDQGPLFUR¿QDQFHLQVWLWXWLRQV lending requirements The National Bank of Georgia introduced the 2019 regulations in a measure New lending regulations going into the ability of banks to make loans in dol- to counter foreign currency over-indebt- effect April 15, 2020 aim to create some lars, on PTI (payment-to-income) ratios edness in the country (the household wiggle room for banks to expand their for loans and on effective interest rates. debt to GDP ratio had risen from 10.6% lending activities and provide relief for These restrictions have brought some in 2011 Q1 to 36% in 2018 Q4), to pre- households looking for mortgages. XQGRXEWHGEHQH¿WVIRUFRQVXPHUV2QH vent what it said were predatory lending The new regulations follow on the tail ELJEHQH¿WLVWKDWE\IRUFLQJSHRSOHWR practices at the time and to encourage the of changes that came into force in Janu- take local currency debt, the national process of de-dollarization. ary 2019, which set stringent limits on bank regulations have protected consum- $VSUHGLFWHGWKH¿UVWIRXUPRQWKVRI

48 | Investor.ge APRIL-MAY 2020 2019 saw a cool down, with year-on-year them into loans that may be more expen- availability will be created for borrow- growth across retail, SME and corporate sive than what they could have gotten at ers by this round of easing of lending loans shrinking, demonstrated in the banks before. regulations, but one positive that banks graph below. Nadaraia suggests a middle-ground KDYHDOUHDG\LGHQWL¿HGLVOHVVSURFHGXUDO 0LFUR¿QDQFHRUJDQL]DWLRQVDOVRIHOW be sought between the ease of the pre- headaches. the squeeze, and experienced net losses 2019 regulations and the stringency of TBC CEO Vakhtang Butskhrikidze of 79 million GEL in H1 of 2019. what has followed since. says the new regulations will ease the Though lending across most portfo- “A rational approach would be burden on operations: “The impor- lios picked up again in April and more something in the middle: multi-currency tant thing is that we are moving away so in the third quarter of 2019, calls for lending. You could mandate half the from a rules-based approach towards a lighter regulation have continued to loan be denominated in GEL. From a principles-based approach. For example, resound in the Georgian banking, con- risk management perspective, this is ef- when it comes to the self-employed, we struction, real estate development and fective, and it would allow the banking ourselves will determine the formulation business communities, as growth has sector to reclaim some of the business of how to extend a loan. Of course, we been slow. WKDWKDVJRQHLQWRWKHLQIRUPDOPDUNHW´ will agree on these principles with the Prime Minister Giorgi Gakharia Time will tell how much lending 1DWLRQDO%DQN´ himself urged Finance Minister Ivane Matchavariani in November 2019 to consider decreasing the GEL ceiling from 200,000 to 100,000. Head economist of TBC Bank Otar Nadaraia says that overall, the lending restrictions have not ended in drastic downturns for banks, and lending has picked up because of competition and banks’ willingness to lend at lower mar- gins, however: “The situation is still not great for the market. The [earlier] regulations created a large informal mortgage market, in which people can now get quasi-loans from developers, which is problematic because this market is nowhere near as regulated as the banking sector. This further jeopardizes consumers, and pushes

APRIL-MAY 2020 Investor.ge | 49 The Georgia wide web – a snapshot of the country’s internet infrastructure

IN THE PAST TWO ANDREW WESTON BRAUN get more than 100 megabits per second DECADES, GEORGIA (Mbps)—a relatively low speed limit for RUDFRXQWU\WKDWJRWLWV¿UVW'6/ DPRGHUQ¿EHUQHWZRUNEXWTXLWHJRRG HAS GONE FROM A connection in 2002 and only had for the Caucasus region. That’s not an COUNTRY WHERE THE F27% of the population online in issue for residential users, though, who MAJORITY OF THE 2010, Georgia has come a very long way. usually don’t need much more than 10-20 As of 2020, Georgia is ahead of most megabits per second for typical stream- POPULATION HAS NO RIWKH(8LQWHUPVRI¿EHURSWLFFDEOH ing and browsing. INTERNET ACCESS TO penetration – currently the most common A large-scale, data-heavy enterprise A REGIONAL INTERNET form of connection in the country – and ZLWKLQWHUQDWLRQDOWUDI¿FPLJKWQHHG at least 70% of Georgians were using the or even 10 gigabits per second (Gbps), HUB. READ ON TO internet every day as of November 2019 however, and that can be a bit more of a FIND OUT HOW THE (according to the Caucasus Research FKDOOHQJHWR¿QGLQ*HRUJLD LOCAL INDUSTRY Resource Center’s Caucasus Barometer The country’s geographical location HAS EVOLVED, WHAT 2019 Georgia). and modern infrastructure make it an Overall, most residential users in attractive place for routing and storing CHALLENGES IT FACES Georgia have access to a good internet data, though, and there are efforts under IN ITS EXPANSION connection, though quality and stabil- way to enhance its potential as a regional AND WHERE IT’S ity may vary somewhat by region and internet hub. Fiber penetration is increas- neighborhood. The most obvious limita- ing, the regions are steadily getting more HEADED. tion is that it’s not generally possible to connected, a new international cable

50 | Investor.ge APRIL-MAY 2020 is in planning stages, and regulation is DFWLYHFRQÀLFW]RQHVDOUHDG\PDNH*HRU- the older areas. working to keep the markets open and JLDDJHRSROLWLFDOO\VLJQL¿FDQWUHJLRQDO Nonetheless, as of December 2019, innovative. connection hub. over 82% of all internet connections in What does Georgia’s internet infra- A Caucasus Online employee told *HRUJLDZHUH¿EHUXSIURPLQ'H- structure look like? Investor.ge this is seen as an opportunity: cember 2018, 55% in 2015, and 43% in Georgia’s primary fiber links run “Georgia has a geographically strategic 2012. The total number of connections through the Black Sea to Poti, where hub location, a key position in the Cauca- more than doubled from 426,293 in high-capacity cables connect the coun- sus region, and if we talk about Georgia December 2012 to 915,622 in Decem- try to Bulgaria via the Georgian-owned as a gateway between Europe and Asia, EHUEXW¿EHUDFWXDOO\JUHZIURP Caucasus Cable System owned and op- WKLVLVWUXHDOVRIRUGLJLWDOLQIUDVWUXFWXUH´ 184,109 connections to 758,680—an erated by Caucasus Online, and Russia Of course, the cable also gives increase of 574,571. via the Russian/Danish/Georgian-owned Georgian users fast, international inter- That’s because DSL connections Georgia-Russia Optical Fibre Submarine net access—If they’ve got a line to the have been steadily shrinking in number Cable System. A plan for a new cable be- backbone. since around 2014, with telecom compa- tween Romania and Georgia was put for- *HWWLQJRSWLFDO¿EHU FXUUHQWO\WKH QLHVJUDGXDOO\XSJUDGLQJWKHPWR¿EHU ward in 2018 by Diamond Link Global in gold standard for high-speed broadband As of December 2019, there were still partnership with Subcom, but no major connections) to dense urban areas like 41,345 DSL connections in Georgia, updates have emerged since then. 7ELOLVLDQG%DWXPLLVQ¶WYHU\GLI¿FXOW ZLWKDVLJQL¿FDQWVKDUHRIWKRVHORFDWHG )URPWKH%ODFN6HDWKH¿EHUFRQ- as connection distances are relatively in Tbilisi, Batumi, and Kutaisi—likely nection runs along the Georgian Railway short and the number of subscribers in the abovementioned older areas. That line to Tbilisi, forming the country’s pri- PDNHVWKHLQYHVWPHQWSUR¿WDEOH(YHQ number is steadily shrinking, however, mary internet backbone. Extensions from VRFLWLHVDUHQ¶WFRYHUHGE\¿EHU with DSL losing at least 1,000 connec- this cable also provide connections to to the home/premises (FTTH/FTTP), WLRQVDPRQWKZKLOH¿EHUJDLQVDWOHDVW Azerbaijan and Armenia, both of which as upgrading the copper-based DSL (an 10,000. depend heavily on this connection. The older technology with lower bandwidth Fixed wireless is currently the sec- network ultimately reaches as far as the FDSDFLW\WKDQ¿EHU QHWZRUNVLQVRPH ond-most common connection technol- Iran-Pakistan border. older locations is expensive and time- ogy in Georgia, with 94,846 connections The reach of the Caucasus Cable consuming—an issue shared by many recorded in December of 2019—about System and its direct route to Europe, other European cities, where internet 10% of the total. Unlike all the other particularly its avoidance of Russia and speeds also tend to drop as you approach technologies mentioned, the absolute

Figure 1. Breakdown of internet connections by type over last 10 years in Georgia

APRIL-MAY 2020 Investor.ge | 51 Figure 2. Number of internet subscribers over last 10 years in Georgia

QXPEHURI¿[HGZLUHOHVVFRQQHFWLRQVKDV created at some point in the future. technically have more connections than stayed fairly stable since 2017, hovering Armenia set one up in 2010, they’re households—likely because businesses between roughly 85,000 and 100,000. ubiquitous in Europe, and other countries are being counted as connections, but not This relative equilibrium may be due to in the region like Kyrgyzstan, Kazakh- households. If you live in a city, chances WKHH[SDQVLRQRIERWKWKH¿[HGZLUHOHVV stan, Uzbekistan, Turkey, and Iran all are very good that you have access to DQG¿EHUQHWZRUNVZLWKWKHJURZWKLQ have at least one. While an IXP won’t ¿[HGEURDGEDQG new wireless masts offsetting the expan- necessarily enable noticeably faster If you live in a more rural area, VLRQRI¿EHULQWRVRPHDUHDV internet, it will certainly help save on though, there’s a chance you won’t have One piece of infrastructure Georgia is bandwidth and fees. access to a connection at all. The map of currently missing is an Internet Exchange Rates of infrastructure-sharing are Georgia showing internet connections vs Point, or an IXP, which is a physical also fairly low. You’ll generally see three households is a fairly uniform light green location where multiple networks (ISPs, cell towers clustered together, Gotoshia when you look at the regions, indicating CDNs, et cetera) converge in order to says, as the mobile networks aren’t just penetration rates in the 40-70% range. route information between them directly putting up one and sharing it, which Guria (33%), Racha-Lechkhumi (15%), rather than depending on private connec- is common practice in Europe. Fixed and Kvemo-Svaneti (15%) are the exceptions or requiring data to take a circuitous broadband is in a similar situation, with tions here. route to some farther away point where telecoms generally having to build out If you break the regions down into the data can be exchanged. This has an infrastructure before offering service districts, though, it becomes easier to see impact on speed, and, since the data may in an area, rather than being able to that certain areas have very little con- have to travel through networks that compete directly by paying a fee to the nectivity, with some having just 5-15% charge fees for using their bandwidth, it cable owner. of their households connected. These affects prices and smaller ISPs’ ability to are typically quite remote, mountainous compete as well. INTERNET PENETRATION RATES places with populations that, in many NewTelco Georgia has been advocat- How many people is the internet cases, are getting smaller—a trend par- ing for carriers to cooperate and set up actually reaching in Georgia? tially attributable to the lack of internet an IXP in Georgia since 2016, managing If you look at the more densely-pop- access. director George Gotoshia told Investor. ulated areas, penetration rates seem to This is where projects like Tusheti ge, and while it’s not on the immediate equal of any country with robust telecom Community Internet Network can be horizon, it’s an important part of modern infrastructure. Tbilisi, Batumi, Rustavi, especially effective, as shown by the suc- internet infrastructure and will likely be Borjomi, and even Stepantsminda FHVVRID¿[HGZLUHOHVVSURMHFWFRYHULQJ

52 | Investor.ge APRIL-MAY 2020 76 villages in the Khevsureti/Pshavi/Gu- already signed a distribution agreement seems set up for success: it has higher damakari ravines, built with the support with OneWeb, making them responsible UDWHVRI¿EHUXVHWKDQPRVWRI(XURSH of the Internet Society (ISOC) in Georgia for providing the base stations and other it’s in a geographically advantageous and the Small and Medium Telecom equipment required to use the satellite area between Europe and Asia, and the Operators Association of Georgia (TOA). internet. If OneWeb sticks to its plan to digital economy is catching up with the Both Tusheti and the Mtskheta-Mtianeti start service in 2021, it will be a very infrastructure. GLVWULFWVFRQQHFWHGIDLUO\VLJQL¿FDQWVHJ- clear alternative to the arduous process of :KHWKHU¿[HGZLUHOHVVORZHDUWK ments of the population for relatively OD\LQJ¿EHUDQGEXLOGLQJPDVWQHWZRUNV orbit satellites, or 5G networks, the low cost, but the fact remains that these Another innovation on the horizon is Georgian telecom sphere seems eager to and any future initiatives can really only the coming 5G revolution, which, a Cau- make the most of the latest tech—and, FRPHIURPQRQSUR¿WDQGFRPPXQLW\ casus Online employee believes, “will purely from a numbers standpoint, their organizations, as the cost of entry is high VLJQL¿FDQWO\FKDQJHH[LVWLQJEXVLQHVV track record seems to back up that spirit. and subscriptions from small, spread-out models not only for telco companies, but Georgia went from having very little in- populations are unlikely to even cover also for everyone. Telco companies will ternet connectivity to having most of the infrastructure costs for a commercial need to create ecosystems with different country connected to modern networks provider. SDUWLFLSDQWVWRSURYLGH*VHUYLFH´WKH\ in less than two decades, and there’s now &RYHULQJ*HRUJLDZLWK¿[HGZLUHOHVV say, and “Caucasus Online will be one of a chance to reinvest some of the residual may not be the only solution, though. Sat- WKHPDLQSDUWVRIWKLVHFRV\VWHP´*LV energy from that catch-up growth into ellite internet is currently used around the a short-range technology best-suited to expanding Georgia’s networks both do- world (though minimally in Georgia), but urban environments, where its up-to-2 mestically and internationally. its low speeds, high latency, and instabil- Gbps speeds may end up actually being Regardless of anything else, though, ity make it a last resort for any. Recent IDVWHUWKDQWKHKDUGZLUHG¿EHUQHWZRUNV Georgia’s journey from 130,000 DSL developments in low-Earth-orbit satellite Future developments and opportuni- DQG¿EHUFRQQHFWLRQVLQWR constellations like Starlink and OneWeb, ties ¿EHUDQG'6/FRQQHF- however, could potentially provide even Yes, developing Georgia as a regional tions in 2019 is an impressive achieve- the most remote Georgian settlement KXEIRULQWHUQHWWUDI¿FZLOOWDNHVRPH ment, and one which may lead to Georgia with low-latency, gigabit-speed internet infrastructure upgrades and changes on EHFRPLQJDVLJQL¿FDQWGLJLWDOKXELQWKH by the time the decade is out. Silknet has a few different levels, but it certainly future.

APRIL-MAY 2020 Investor.ge | 53 NEWS

CONTENT

AMCHAM GEORGIA TAKES 57 BUSINESS ONLINE

55 AMCHAM HOSTS ROUNDTABLE 58 NEW MEMBERS DISCUSSION WITH NEW BUSINESS OMBUDSMAN 60 MEMBERSHIP DIRECTORY

56 GWMA HOLDS WASTE EXPO 2020 64 BOARD OF DIRECTORS FOR AMCHAM MEMBERS

57 AMCHAM GEORGIA TAKES BUSINESS ONLINE

54 | Investor.ge APRIL-MAY 2020 NEWS

ENVIRONMENTAL BUSINESS COMMITTEE MEETING

Georgia with participation of Georgian Waste Management Association (GWMA) and in the scope of USAID WMTR II Pro- gram (@WMTRProgram), organized a meeting of the Environment committee on January 29 which was hosted by the ProCredit Bank Georgia. AMCHAM BUSINESS ROUNDTABLE WITH NEW BUSINESS OMBUDSMAN

AmCham Georgia hosted a business roundtable meeting on February 4 at the Sheraton Grand Tbilisi Metechi Palace with the new Business Ombudsman of Georgia Mr. Mikheil Daushvili. He presented on the current challenges faced by the private sector and introduced the plans of his RI¿FHIRUWKHIXWXUH7KHSUHVHQ- tation was followed by a dynamic 4 $VHVVLRQEHWZHHQ$P&KDP members and Mr. Daushvili.

APRIL-MAY 2020 Investor.ge | 55 NEWS

AMCHAM HOSTS BUSINESS ROUNDTABLE WITH MARK MCCORD

AmCham hosted a presentation by Mr. Mark McCord on February 18 on the USAID Economic Security Program’s grant and other support mechanisms for private companies, which was then fol- ORZHGE\D4 $VHVVLRQ

GWMA HOLDS WASTE EXPO 2020 FOR AMCHAM MEMBERS

The Georgian Waste Management Association (GWMA) organized Waste Expo 2020 for AmCham members on February 27. The exhibition, which featured 14 waste recycling and collection companies in Georgia was opened by AmCham President Mr. Michael Cowgill. Welcoming speeches were made by Solomon Pavliashvili, Deputy Minister of Environment Protection and Agriculture of Georgia, Nana Janashia, Executive Director of CENN, and Giorgi Guliashvili, President of the Georgian Waste Management Association. The event was moderated by George Wal- ton, Executive Director of the American Chamber of Commerce.

56 | Investor.ge APRIL-MAY 2020 NEWS AMCHAM TAKES BUSINESS ONLINE

The American Chamber of Com- tained, albeit digitally, its tradition Hall Deputy Mayor Ilia Eloshvili, both merce has been engaging with its mem- of cocktail hours, and has organized of whom spoke to AmCham members EHUVLQWHQVLYHO\LQWKLVWLPHRIGLI¿FXOW\ roundtable discussions, such as with about what they are doing to manage the with the help of online conferencing. the Georgia Red Cross and Tbilisi City coronavirus crisis. This has involved multiple cor- respondences on new laws regulating the state of emergency, exceptions and monitoring. It has also included extensive engagement with AmCham committees. In particular, the committees that cover tourism, construction, education/training, commercial law/tax and agribusiness have met regularly to share experience and to provide input that has been forwarded to the government authorities working on the crisis response and support for the economy and business sector. AmCham Georgia has also main-

APRIL-MAY 2020 Investor.ge | 57 NEWS

Forbes Georgia Magazine / KFC/Iberia Food Company Bene Exclusive LLC Media Partners JSC Corp A Corp B Corp A KFC Corporation, based in Louisville, Bene Exclusive is a prime and business Forbes Georgia is a business magazine Kentucky, is one of the few brands that class transportation service company, DQRIÀFLDOOLFHQVHHRI)RUEHVLQ*HRUJLD can boast a rich, decades-long history covering transportation of 4/5 star hotel Published on a monthly basis, it features of success and innovation. It all started guests’, Government delegations and RULJLQDODUWLFOHVRQÀQDQFHLQGXVWU\LQYHVW- with one cook who created a soon-to-be RIÀFLDOV EXVLQHVV HYHQWV DQG FRUSRUDWH ing, and marketing topics. Forbes also re- world-famous recipe more than 70 years customers. ports on related subjects such as technol- ago, a list of secret herbs and spices Since November 2019, Bene Exclusive ogy, communications, science, and law. scratched out on the back of the door to operates with Taxi service in Tbilisi Interna- The magazine is already well known for its his kitchen. That cook was Colonel Harland tional Airport, with 90% of electric vehicles. lists and rankings, including Georgia’s 100 Sanders, of course, and now KFC is the Bene Exclusive is also actively and suc- 0RVW3URÀWDEOH&RPSDQLHV*HRUJLD·V world’s most popular chicken restaurant cessfully involved in organizing business Largest Companies, the Georgian Retail chain, specializing in that same Original events, such as: Networking Georgia, Index and others. Recipe® along with Extra Crispy™ chicken. Mercedes-Benz Business Week Georgia, www.forbes.ge We’re at over 23,000 KFC outlets and more Mercedes-Benz Summer Event. than 140 countries and territories around www.bene-exclusive.ge the world. Ltd Iberia Food Company man- ages 6 restaurants in Georgia, Tbilisi since December 2014. www.ifc.ge

Gergili LLC Golden Tulip Design Tbilisi Imperial Tobacco Production Corp B Hotel Management Gergili LLC is a Health, Safety, Environ- Corp B Corp B ment (HSE) consulting company based in The 4-star hotel Golden Tulip Design Imperial Brands is a dynamic FMCG Tbilisi, Georgia. The company was found- Tbilisi, offers you a playful and original business, today represented with tradi- ed in 2002 in Tbilisi, Georgia. The director experience in the historical part of Tbilisi, tional tobacco products, as well as with of the company is Mr. Revaz Enukidze. Georgia. Golden Tulip is operating under new generation products (smokeless Since its establishment the company Louvre Hotels Group with over 1,175 hotels tobacco, e-cigarettes, heated tobacco provides consulting services in the areas in 51 countries. The Hotel comprises 77 products, etc.). of Environmental Assessment, Natural trendy rooms and suites, gourmet 80-seat The company is the world market Resources Management, Water Supply, all-day dining restaurant with a panoramic OHDGHUIRUÀQHFXWWREDFFRFLJDUVUROOLQJ Waste Management, Urban Environment view over the city, a trendy 100 seat Roof paper, as well as the fourth largest player Improvement, Social Development etc. top terrace bar and a 50 seat lobby bar, in the cigarette market. The product www.gergili.ge VPDOO KHDOWK FOXE DQG ÁH[LEOH PHHWLQJ portfolio of the company includes more rooms for up to 60 delegates. Be inspired than 30 strong international brands, the by its extraordinary location, contempo- most famous among them are Davidoff, rary design, authentic cuisine and amaz- West, Gauloises, JPS, Cohiba, Montecristo, ing views over the Mtkvari river combines Golden Virginia, Rizla, Drum, Bastos and with dedicated services. The Golden Tulip others. Design Tbilisi will open its doors in second half of 2020. www.goldentulip.com NEW MEMBERS

58 | Investor.ge APRIL-MAY 2020 NEWS NEW MEMBERS

PMO Business Consulting Prime Concrete LLC SEA LLC Copr B Corp B Copr B PMO is a management consulting Prime Concrete is the leading Con- SEA LLC operates under brand name company that provides expert knowledge tracting and Materials Company, oper- World Sightseeing Tour (WST). WST was and a various of services to organizations ating throughout Georgia, specializing in established in 2013 and is the leading Des- across industries. The company’s services Civil Engineering, Infrastructure and Port tination Management Company in Cau- are distinguished by superb quality, true in- Construction, Aggregate and Concrete casus region. The company brings new QRYDWLYHDQGDFOLHQWVSHFLÀFDSSURDFK production, production of reinforced European standards to the travel industry PMO offers consultation to organizations to concrete elements, and paved concrete and is the expert in organizing general and DVVLVWWKHPLQEHFRPLQJPRUHHIÀFLHQWDQG materials. special interest tours all around Georgia. to meet their growth and expansion goals, As EPC contractors, in coordination assists their clients in market research and with leading international companies, analysis, organizational improvement, Prime Concrete has acquired exceptional market entry and expansion, human competence and invaluable expertise in resource management marketing and WKHÀHOGVRISRUWLQIUDVWUXFWXUHZDWHULQ- SURGXFWV GHYHORSPHQW DQG LQ ÀQDQFLDO frastructure, road infrastructure, as well as and risk management. construction of different civil and industrial www.pmo-bc.com infrastructure. www.primeconcrete.ge

APRIL-MAY 2020 Investor.ge | 59 AmCham Company Members as of April 2020

PATRON MEMBERS Budget Rent a Car - Otokoc Dentons Georgia LLC Gosselin Moving Georgia Georgia LLC 10 Melikishvili St. 3 M/D, Didi Digomi 37 Rustaveli St. Tel: 2509300; Fax: 2509301 Tel: 2596601/02/03; Fax: 2596600 Tel: 2234112 www.dentons.com www.gosselin-moving.com/ BP Exploration Georgia www.budget.com.ge 24, S. Tsintsadze St. Tel: 2593400 Diplomat Georgia Grant Thornton LLC 54 Ketevan Tsamebuli Ave. www.bpgeorgia.ge Capitol HPS / Best Western 65, Kakheti Highway Tel: 2604406 Hotels & Resorts - Area Developer Tel: 2984950 www.grantthornton.ge in Georgia www.diplomat.ge QGÀRRUE9D]KD3VKDYHOD$YH KPMG Georgia LLC 0186 5th Floor, GMT Plaza, Dressler Consulting Greco Group Tel: 2197835 1 Nutsubidze St. 4 Freedom Sq., 0105 www.capitolhps.com 1664 De Mott Court/ Merrick Tel: 2935713; Fax: 2982276 New York, 11566, USA Tel: 2393138; Fax: 2311107 www.kpmg.ge Tel: +1-5169081444 www.greco.ge www.dresslerconsulting.com Caucasus University .RVWDYD6W%OGWKÀ GT Group 48 B. Cholokashvili St. PwC Georgia Tel: 2377777; Fax: 2313226 EY LLC Tel: 2740740 12 M. Aleksidze St., 0160 www.cu.edu.ge 44 Kote Abkhazi St. www.gtgroup.ge King David Business Center Tel: 2439375; Fax: 2439376 Tel: 2508050; Fax: 2508060 www.ge.ey.com www.pwc.com Chemonics International GULF Georgia 9 N.Ramishvili St, 1st Dead End,0179 by Sun Petrolium Georgia LLC Tel: 2227495 F H Bertling Georgia Ltd. Pixel Business Center, www.chemonics.com Room 3, 4th Floor, 34 Chavchavadze Ave. UGT 154 Agmashenebeli Ave. Tel/Fax: 2496444 D&KDYFKDYDG]H$YHWKÀRRU Tel: 2252287 www.gulf.ge Tel: 2220211; Fax: 2220206 www.bertling.com Coca-Cola Company www.ugt.ge 114 Tsereteli Ave. Tel: 2941699, 2942609 Hertz Georgia FINCA Bank Georgia www.coca-cola.com 1 Rose Revolution Sq. Hotel 9D]KD3VKDYHOD$YHUGÀ 5DGLVVRQ%OXH,YHULD*ÀRRU Tel: 2244949 Tel: 2723530 CORPORATE A MEMBERS ZZZ¿QFDJH www.hertz.com.ge Colliers International Georgia LLC Adjara Group Hospitality 11th Floor, King David Business Forbes Georgia Magazine Hilton Batumi 1, 26 May Sq., 0179 Center, 12 M. Aleksidze St. 0171 19 Gamrekeli St., Room 311 13 Takaishvili St., Batumi Tel: 2300099 Tel: 2224477 Tel: 577787777 Tel: 292092 www.adjaragroup.com www.colliers.com www.forbes.ge www.hilton.com

Alliance LLC Hilton Garden Inn Tbilisi Conformity Assessment Gazelle Finance Georgia LLC 135 King Parnavaz St., Batumi Chavchavadze International (CAI) LLC Tatishvili st. 3/5 (Melikishvili Ave. Tel: 591555757 64a, Chavchavadze Ave. 11 Giorgi Saakadze Descent $ZRUG%XVLQHVV&HQWHUWKÀRRU www.alliancegroup.ge Tel: 2252020 Tel: 595690008 Tel: 2904304 www.hilton.com www.ca.international ZZZJD]HOOH¿QDQFHFRP Alliance Group Holding, JSC 47/57 M. Kostava St., 0179 General Electric Iberia Refreshments, JSC Tel: 2424181; Fax: 2998112 &XVKPDQ :DNH¿HOG*HRUJLD 5th Floor, Pixel Bulding, Tetri Khevi Hesi District, Orkhevi www.agh.ge 4th Floor, 34 l. Chavchavadze Ave. 34 Chavchavadze Ave. Tel: 2241091; Fax: 2241090 0179 Tel: 2259516 / 2259505 www.pepsi.ge Tel: 2474849 www.ge.com Alta LLC ZZZFXVKPDQZDNH¿HOGJH Beliashvili st. 104, 0159 ICE Ltd. Tel: 2510111 Chavchavadze Ave. #33b Geomedica Ltd. www.alta.ge Tel: 2990172 12 First Lane, N.Bokhua St, 0131 DAI Global (Implementer of the www.ice.com.ge USAID Economic Security) Tel: 2520035 Anaklia Development 7th Floor, 34 l. Chavchavadze Ave. www.geomedica.ge Consortium 0179 IT Consulting Georgia LLC 6 Marjanishvili St. Tel: 577465059 Irakli Abashidze 36-34, Terminal Tel: 2959910 www.dai.com Georgian American University Gate 13 www.anakliadevelopment.com 8 Aleksidze St. Tel: 599231313 Tel: 2206520; Fax: 2206519 www.spotcoin.net www.gau.edu.ge Dasta Records Management Avon Cosmetics Georgia LLC 15 Grigol Lortkipanidze St. 117 Tsereteli Ave. Kavkaz Cement JSC Tel: 2900112 Tel: 2226805; Fax: 2226806 Georgian Wine 29 Andronikashvili St., 0189 www.drm.ge www.avon.com 35 Razmadze St. Tel: 2619090 Tel: 595001889 www.kavkazcement.ge

Deloitte British American Tobacco King David Business Center GMT Group KFC / Iberia Food Company 71 Vazha Pshavela Ave. WKÀRRU0HUDE$OHNVLG]H6W 4 Freedom Square 29 Chavchavadze Ave. Tel: 2157500/01/02; Fax: 2157503 Tel: 2244566; Fax: 2244569 Tel: 2988988; Fax: 2988910 Tel: 577043769 www.bat.com www.deloitte.ge www.gmt.ge www.facebook.com/KFCGeo

60 | Investor.ge APRIL-MAY 2020 Le Meridien Batumi Philip Morris Willis Towers Watson Ltd. Biltmore Hotel Tbilisi Intersection of Ninoshvili/Zghenti 1 Tabidze St. 17 M. Lebanidze St. 29 Rustaveli Ave. Streets, Batumi Tel: 2439001; Fax: 2439005 Tel: 2905509 Tel: 2727272 Tel: 422 299090 www.philipmorrisinternational.com www.willis.com http://www.millenniumhotels.com/en/ www.lemeridien.com tbilisi/the-biltmore-hotel-tbilisi/ ProCredit Bank M² Real Estate JSC 154 Agmashenebeli Ave. CORPORATE B MEMBERS 29 Chavchavadze Ave. Tel: 2202222; Fax: 2202222-2226 BLB Law Firm Business Legal Tel: 2444111 www.procreditbank.ge Bureau www.m2.ge 5/18 K.Marjanishvili St., II building, II AE Solar LLC Floor, 0102 Radisson BLU Iveria Hotel 88 Avtomshenebeli St. (Hualing Tel: 2999755 Maersk Georgia LLC 1 Rose Revolution Sq. .XWDLVL)UHH,QGXVWULDO=RQH .XWDLVL www.blb.ge 12 Aleksidze St., King David Tel: 2402200; Fax: 2402201 Tel: 2300099 %XVLQHVV&HQWUHÀ www.radissonblu.com www.ae-solar.com Tel: 248 66 81 %/&/DZ2I¿FH https://www.maersk.com/local- 129a D. Agmashenebeli Ave., 0102 information/georgia RE/MAX Capital Air Astana Airlines JSC 43 Irakli Abashidze St. 5th Floor, Pixel Business Center, Tel: 2922491; Fax: 2934526 Tel: 2222424 34 Chavchavadze Ave. www.blc.ge Marriott Hotels, Resorts & Suites www.remax-georgia.ge Tel: 2514999 13 Rustaveli Ave. www.airastana.com Tel: 2779200; Fax: 2779210 BMC Gorgia www.marriott.com School of Tomorrow LLC 140 Tsereteli Ave. 21, Petre Kavtaradze St. Akustiko 93 Shalva Nutsubidze st. Tel: 2960960 Tel: 2233199 www.gorgia.ge 0DUV//&5HSUHVHQWDWLYH2I¿FH hwww.st.edu.ge Tel: 568299559 in Georgia www.akustiko.ge 71 V. Pshavela Ave; “BCV”, 0186 Tel: 2207507 Sheraton Grand Tbilisi Metechi CaspiGroup Ltd. APM Terminals Poti www.mars.com Palace Hotel 29 Bochorma St. 52 Aghmashenebeli St., Poti 20 Telavi St. Tel: 2550818 Tel: 0493 277777 Tel: 2772020; Fax: 2772120 www.caspigroup.com Mastercard www.apmterminals.com www.sheraton.com/tbilisi 2 Leonidze St. /1 G.Tabidze St., Premises No.315, Floor 4 Aversi Pharma Tel: 2900815 Caucasus Online LLC SICPA Security Solutions 148/2 Aghmashenebeli Ave. www.mastercard.com Georgia 71 Vazha-Pshavela Ave. Tel: 2987860 Tel: 2000022 79 Chargali St., 0178 www.aversi.ge Tel: 2434580 www.co.ge Meridian Express www.sicpa.com 15-17 Ketevan Tsamebuli Ave.0103 Baker Tilly Georgia Ltd. Tel: 2745188 Meidan Palace, 44 Kote Abkhazi St. Channel Energy (Poti) Limited www.ups.com Simetria LLC Tel: 2505353; Fax: 2505353 Georgia LLC, By Petrocas Energy 70b, Vazha-Pshavela Ave. www.bakertillyinternational.com Group Microsoft Georgia LLC Tel: 2420692 52, David Agmashenebeli St., Poti www.simetria.ge 34 Chavchavadze Ave. Bank of Georgia 7HO Tel: 2970123 3 Pushkin St. www.petrocasenergy.com www.microsoft.com Strada Motors/Jeep-Chrysler Tel: 2444134; Fax: 2983269 191 Ak. Beliashvili St. www.bog.com.ge 2I¿FH7HFKQRORJLHV6WHHOFDVH Tel: 23073007 Château Mukhrani, J.S.C. www.strada.ge Sangebro St. Dealership Basis Bank JSC Tel: 2201878; Fax: 2201878; 4 Freedom Sq., 0105 1 Ketevan Tsamebuli Ave. www.mukhrani.com Tel: 2999980, 2688229 T&K Restaurants (McDonald’s Tel: 2922922; Fax: 2986548 ZZZRI¿FHWHFKQRORJLHVJH Georgia) www.basisbank.ge 1 Dzmebi Kakabadze St. CMC LLC Oracle Nederland B.V. Tel: 2921246; Fax: 2251422 Batumi International Container 4 Besiki St. www.mcdonalds.ge Terminal 5HSUHVHQWDWLYHRI¿FH Tel: 2240717 Kievskoe Shosse, 22nd km, bld 11, Baku Street, 6010, Batumi www.cmc.ge 6/1,10881, Moscow, Russia TBC Group Tel: 422 276452 Tel: +74956411400 7 Marjanishvili St. www.bict.ge www.oracle.com Tel: 2272727; Fax: 2228503 Conse www.tbc.com.ge BDO LLC 3 Akaki Khorava St. Orient Logic Ltd. 2 Tarkhnishvili Str. Tel: 599994978 8 Beliashvili St. Vere Business Centre, 0179 TMC Global Professional www.conse.ge Tel: 2541818 Tel: 2545845; Fax: 2399204 Services www.orient-logic.ge www.bdo.ge 6001 Indian School Road NE, Suite 190, Albuquerque, NM 87110, USA Crowne Plaza Borjomi Pace International LLC 7HO Bene Exclusive Baratashvili Str. 9, 1200 Borjomi Abuladze st. First Lane 8, 0162 www.tmcservices.com 15 Kazbegi St. Tel: 995 367 220260 Tel: 2914701 Tel: 2241515 www.cpborjomi.com www.pace.ge www.benegroup.ge Visa International Service Association PepsiCo Wimm-Bill-Dann 900 Metro Center Boulevard, Foster BGI Legal Crystal, MFO JSC Village Ponichala, Tbilisi 0165 City, CA 94404, USA 5XVWDYHOL$YH,,ÀRRU 72 Tamar Mepe St. Kutaisi, 4600 Tel: 2475290 Tel: 599374877 Tel: 2470747 Tel: 431253343 www.wbd.ru www.visa.com www.bgi.ge www.crystal.ge

APRIL-MAY 2020 Investor.ge | 61 AmCham Company Members as of April 2020

Dio Ltd. Georgian Airways Golden Tulip Design Tbilisi Hotel Kockablo 12th Km David Agmashenebeli Alley 12 Rustaveli Ave. 2a, 300 Aragveli St. 10 Chirnakhuli St., Saknavtobi N3, Parsadani St. Tel: 2999730; Fax: 2999660 Tel: 551518300 Settlement, 0151 Tel: 2361112 www.georgian-airways.com www.goldentulipdesigntbilisi.com www.dio.ge Kordzahia, Jgenti Law Firm Georgian Beer Company Gvinadze & Partners LLC 10 Petriashvili St. Domson’s Engineering 3311 Saguramo, Mtskheta District 44 Kote Abkhazi St, 0105 Tel: 2921878 8a Sanapiro St. Tel: 2437770 Tel: 2438970, Fax: 2438971 www.kjlaw.ge Tel: 2050303 www.geobeer.ge www.gvinadzeandpartners.ge www.domsons.com Legal Partners Associated LLC Georgian Express HeidelbergCement Georgia 2I¿FH%HVLNL%XVLQHVV&HQWHU Dorche Branch Prepabrik Iapi Ve 105, Tsereteli Avenue, 0119 21 Al.Kazbegi Ave. 4 Besiki St. 0108 Inshaat Sanai Tijaret JSC Tel: 2696060 Tel: 2474747 Tel: 2200203; Fax: 2250458 026/13 Ilia Chavchavadze Ave. www.dhl.com www.heidelbergcement.ge www.lpa.ge Tel: 593472419 www.dorce.com.tr Georgian Hospitality Group Herbalife Nutrition Liberty Bank JSC 22 Peritsvaleba St., 0103 Bld. 4a Tamarashvili St., 0116 74 Chavchavadze Ave. Duty Free Georgia Tel: 2987789 Tel: 2202929 Tel: 2555500; Fax: 2912269 www.herbalife.com www.libertybank.ge UGÀRRU%HVLNL6W www.ghg.ge Besiki Business Center Tel: 2430150 www.dfg.ge Georgian Industrial Group LLC Hydrolea LLC Lisi Development GIG Plaza, 14 Gazapkhuli St., 0177 Floor 4, 29 Chavchavadze Ave. 2 Tiripebi St. 0159 Tel: 2210187 Tel: 2290003 Tel: 2002727 www.hydrolea.com www.lisi.ge Efes Brewery in Georgia - www.gig.ge Lomisi JSC Village Natakhtari, Mtskhta Region ICS Ltd. TNT Agent in Georgia Luca Polare Tel: 2357225 Georgian Integrated Systems 25 Agmashenebeli Ave. 54 Oniashvili St. www.natakhtari.ge (GiS) Tel: 2910220 Tel: 2990399 2I¿FH$EDVKLG]H6W Tel: 2243724 www.tnt.ge www.lucapolare.com Element Construction Ltd. www.gis.ge 13 S.Mgaloblishvili St. Imperial Tobacco Production M & M - Militzer & Munch Tel: 2374737 Ukraine Georgia Geo Steel LLC www.ec.ge 35 Akademika Zabolotnoho St. Kyiv 39 Ketevan Tsamebuli Ave. 36 Davit Gareji St., Rustavi, 3700 Tel: 2748240, 2748941 Tel: 2243794 http://ge.mumnet.com www.geosteel.com.ge ExpoGeorgia JSC Insta 118 Tsereteli Ave., 0119 8, Zakariadze St., 0177 Tel: 2341100 Tel: 2202020 Maqro Construction Gergili www.expogeorgia.ge www.insta.ge 22 Panjikidze St. Apt. 13, Block 3, Building 7, Vaja- Tel: 2000909 Pshavela Ave. www.maqro.ge Tel: 2323145 Interco Travel Group Fircroft Engineering Services www.gergili.ge /LPLWHG%UDQFK2I¿FH 117 I. Abashidze St., 0179 Block 2, Level 2, BCV Business Tel: 2294343 Maqro Food “Dinehall” Center, 71 Vazha-Pshavela Ave. www.interco.travel 28 Rustaveli Ave. Globalink Logistics LLC Tel: 2900875 Tel: 2001616 60 Sh. Nutsubidze St., 0186 ZZZ¿UFURIWFRP www.dinehall.ge Tel: 2000238, 2208147 International Black Sea www.globalinkllc.com University Foresight Investment Group David Agmashenebeli Alley 13 km, Mercure Tbilisi Old Town 2, 0131 9 Gorgasali St., Old Tbilisi, 0105 2I¿FH%HVLNL6W *ORULD//& 7LÀLV3DODFH Tel: 595 559966 Tel: 2595005 Tel: 2006060 3 Gorgasali St., 0105 www.ibsu.edu.ge www.mercure.com Tel: 2000245 ZZZWLÀLVSDODFHJH Gebrüder Weiss LLC ,úEDQN*HRUJLD-6& 0*/DZ2I¿FH//& Airport Adjacent Territory, 140/B Agmashenebeli Ave., 0102 WKÀRRU3L[HOEXLOGLQJ Kakheti Hwy GlovoApp Georgia Tel: 2310515 34 Chavchavadze Ave., 0179 Tel: 2710011 5 Mikheil Asatiani St., Floor 6 www.isbank.ge Tel: 2206633 www.gw-world.com www.glovo.ge www.mglaw.ge

JTI Caucasus GeoEngineering LLC GM Capital LLC VII Floor, Pixel Business Center, Mira Hotels Ltd. 15a Tamarashvili St. 2 Tarkhnishvili St., 0179 34 Chavchavadze Ave. Brose Street Turn,Old Tbilisi Tel: 2311788; Fax: 2311787 Tel: 2912626 Tel: 2604111 Tel: 2242244/55/88 www.geoengineering.ge www.gmcapital.ge www.jti.com www.riverside.ge

Geomill LLC GMC Motors KK & Partners MKD Law 4, Chirnakhuli St. 12km, Kakheti Highway, 0109 2I¿FH1LQR5DPLVKYLOL6W 36, K. Khetagurovi St. 0102 Tel: 2400000 Tel: 2921319 Tel: 2432227 Tel: 2553880 www.geomill.ge www.eg.ge kkpartners.ge www.mkdlaw.ge

62 | Investor.ge APRIL-MAY 2020 Mosmieri LLC Prime Concrete Tbilisi View (CiDA) Civil Development 7, Bambis Rigi, 0105 11 Vazha-Pshavela Ave. 4a, Freedom Sq. Agency Tel: 2970420 Tel: 2224870 Tel: 2999980 9/1 Pirosmani St., Rustavi, 3700 www.mosmieri.ge www.primeconcrete.ge www.tbilisiview.ge Tel: 341258822 www.cida.ge Terabank JSC Publicis Ltd. 3 Ketevan Tsamebuli Ave. Eastern European Centre for Murphy Kazbegi 17 V. Jorbenadze St. Tel: 2507700 Multiparty Democracy (EECMD) 2I¿FH0DUL%URVH6W Tel: 2745672; Fax: 2745671 www.terabank.ge 7 Luarsab Sharashidze St. Tel: 2007107 www.publicis.ge Tel: 2915650 www.murphyshipping.com www.eecmd.org Theco Ltd. Qebuli Climate 16 Chikovani St. Europe Foundation 101, Tsereteli Ave. Tel: 592107515 3 Kavsadze St. MyGPS Tel: 2356201 www.tbilisia.ru 6 Bokhua St., 0159 www.qebuli.ge 7HO)D[ H[W Tel: 2180180 www.epfound.ge www.mygps.ge Transporter LLC Rentals LLC 113b Beliashvili st. Free University of Tbilisi 46 Rustaveli Ave.; 36 Griboedov St. Tel: 2147171 140 David Agmashenebeli Alley Tel: 2454567 / 2996412 http://www.transporter.com.ge Tel: 2200901 NCC Ltd. www.rentals.ge www.freeuni.edu.ge 9, Erekle II turn Tel: 2725088 University of Georgia www.ensisi.ge Resolution Insurance Brokers, 77a Kostava St. Georgia Red Cross Society Georgia LLC Tel: 2552222 15 J. Kakhidze St. 61, Gorgasali St. www.ug.edu.ge Tel: 2961092 Tel: 2936305 www.redcross.ge Nexia TA www.rib.ge VBAT Law Firm 4th Floor, 19 David Gamrekeli St., 2I¿FH*1LVKQLDQLG]H6W Georgian Retailers Association 0160 Tel: 2305777 13b Lubliana St. Tel: 2242559 Rooms Hotel www.vbat.ge 555 373733 www.nexia.ge 14 Merab Kostava St. www.facebook.com/ Tel: 2020099, 2730099 GeorgianRetailersAssociaton www.roomshotels.com Vinotel (“Aigvinissakhli”) LLC 4 Elene Akhvlediani Ascent Georgian Waste Managment Nodia, Urumashvili & Parnters Tel: 2555888 Association 2I¿FH,9%ORFN RSM Georgia LLC www.vinotel.ge 36 Mnatobi St. 71 Vazha-Pshavela Ave. 85 Paliashvili St., 0162 Tel: 599 224070 Tel: 2207407 Tel: 2558899 www.facebook.com/wmageorgia www.nplaw.ge www.rsm.ge Wings and Freeman Capital Green Building, 6, Marjanishvili St. Tel: 2940051; Fax: 2940053 Good Governance Initiative www.wfcapital.ge SavvY Pixel Center, 8th Floor, 34, Nutrimax Ltd. 1st Pavilion, Expo Georgia,118 Chavchavadze Ave. 68a Rustavi Highway, 0165 Tsereteli Ave., Wissol Georgia Tel: 2243111 Tel: 2305335 Tel: 2421342; 74b Chavchavadze Ave. www.ggi.ge www.nutrimax.ge www.savvy.ge Tel: 2915315; Fax: 2915615 www.wissol.ge MAC Georgia 3 Lado Kavsadze St, 2nd Floor SEA Tel: 2197378 Zarapxana LLC Paine Stevens LLC 44 Kote Apkhazi St. www.macgeorgia.org 1 Ivane Javakhishvili Sqr. Email: [email protected] 15 Lubliana St. Tel: 2903211, Fax: 2903291 Tel: 2510001 www.painestevens.com www.zarapxana.ge QSI International School of Silknet Ltd. Georgia 95 Tsinamdzgvrishvili St. Village Zurgovani, Tbilisi Tel: 2910345; Tel: 2537670; Fax: 2322607 PASHA Bank Georgia JSC www.silknet.com www.qsi.org 2 Leonidze St. / 1 G.Tabidze St. NON-PROFIT ORGANIZATIONS Tel: 2265000 San Diego State University - www.pashabank.ge SRG Investments LLC Agricultural University of Georgia D&KDYFKDYDG]H$YHUGÀRRU Georgia 5 Kostava St. 0108 Tel: 2253581 140 David Aghmashenebeli Alley Tel: 2311611 www.silkroad.ge Tel: 2594901 www.georgia.sdsu.edu PMO Business Consulting www.agruni.edu.ge 16 Raphiel Eristavi St., 2 Floor Tel: 2377307 T3Concept Ltd. Transparency International American Friends of Georgia www.pmo-bc.com 13 Radiani St., 0179 Georgia 77 Nutsubidze St. Tel: 2434455 61 Agmashenebeli Ave. 0102 Tel: 2397174; Fax: 2388495 www.turner.com, www.t3concept.ge Tel: 2932129 www.afgeorgia.org www.transparency.ge Policy and Management Consulting Group (PMCG) TBC Leasing JSC CENN Union of Busines Ladies $JKPDVKHQHEHOL$YHWKÀRRU 8 Bulachauri St., 0161 27 Betlemi St., 0105 8 D. Gamrekeli St., 0194 Tel: 2921171 Tel: 2272727 Tel: 2751903 Tel: 2308661 www.pmcg.ge www.tbcleasing.ge www.cenn.org www.ubl.ge

APRIL-MAY 2020 Investor.ge | 63 NEWS

Board Of Directors 2020

R. MICHAEL COWGILL PRESIDENT

SARAH WILLIAMSON IRAKLI BAIDASHVILI LASHA GOGIBERIDZE FIRST VICE-PRESIDENT VICE-PRESIDENT & TREASURER DIRECTOR

BADRI JAPARIDZE OTAR KIPSHIDZE DIRECTOR DIRECTOR

AmCham Executive Director Writers George Welton Lika Jorjoliani, Josef Gassmann, Sally White, Andrew Weston Braun, Taylor Margvelashvili Editor in Chief Ari Neumann Special thanks to all the contributors to the magazine, especially our member Copy Editor companies for their contributions, AmCham Georgia staff and all our Taylor Margvelashvili contributors. Marketing & Promotion This magazine would not be possible without your help. Nini Kapanadze Promotional Design Levan Baratashvili Magazine Design and Layout Giorgi Megrelishvili 64 | Investor.ge APRIL-MAY 2020 NEWS

SERGI KOBAKHIDZE KETTI KVARTSKHAVA ANN DAVIES DIRECTOR DIRECTOR DIRECTOR

SANDRO SHELIA BETSY HASKELL, DIRECTOR FOUNDING ADVISOR

GEORGE WELTON ELIZABETH ROOD EXEC. DIRECTOR EX-OFFICIO MEMBER

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