What to Do in Georgia This Summer

GEORGIA’S NEW CHACHA COCKTAILS GEORGIAN LARI BONDS PENSION REFORM

Investor.geA Magazine Of The American Chamber Of Commerce In Georgia ISSUE 63 JUN-JULY 2018

What to Do in Georgia this Summer

JUNE-JULY 2018 Investor.ge | 3 Investor.ge CONTENT 6 Investment News

8 Innovators and Disruptors: Ideas To Bring Change

10 The Best Minds in the Business: Famous Economists Weigh In On Georgia

12 Big Georgian Brands Look to Lari Bonds for Expansion 22 14 Explainer: Georgia’s New Pension System

16 Fake Cement is a Problem in Georgia: How to Spot Counterfeits

18 Tbilisi Overhauling Master Plan, Tackling Traffic

20 Georgia Plans Recycling Programs to Tackle Growing Waste

22 Tbilisi’s Night Economy: A New Mayor and a New Plan to Boost Jobs

24 SUMMER FUN: A Cultural Calendar of Events, Performances, Exhibitions and Festivals in 32 Georgia

32 SWOT: Georgia’s Tourism and Hospitality Sector

36 In Numbers: Georgia’s Growing Tourism Sector

38 Chacha Stars in Tbilisi’s Growing Cocktail Culture

40 Georgia Celebrates the Centenary of the Georgian Democratic Republic

44 NEWS ...... 44

4 | Investor.ge JUNE-JULY 2018

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JUNE-JULYJUNE-JULY 20201818 Investor.geInvestor.ge | 5 and more inclusive growth by fostering The factory, MGMtex, will produce INVESTMENT private investment, productivity, and clothing for H&M stores and is projected competitiveness.” to employ as many as 400 people. There are currently 130 people working GEORGIA, EUROPEAN FREE at the factory, which was built with a Geor- NEWS TRADE ASSOCIATION SIGN DEAL gian-Romanian investment of 7 million lari The Georgian government and the (about $2.81 million), the report said. European Free Trade Association’s trade agreement went into effect on May 1, GEORGIAN TOURISM AGENCY economy.ge reported the same day. LAUNCHES YOUTUBE ADVERTS The European Free Trade Associa- The Georgian National Tourism Admin- tion (EFTA) is comprised of four countries: istration will be targeting European and Iceland, Liechtenstein, Norway, and Middle East tourists with a series of YouTube Switzerland. The deal gives Georgian advertisements this summer, agenda.ge producers access to a market of 14 million reported on May 17. consumers. The three-month campaign will start on May 29. It is estimated that the clips will be $93-MILLION DOLLAR AIRPLANE viewed over 21 million times. PARTS FACTORY OPENS A factory set to manufacture civil TOP SWISS TOURISM SCHOOL aircraft parts for Boeing, Airbus and OPENS IN GEORGIA Bombardier passenger planes opened Le Roche, one of the top three hospi- in Tbilisi on May 10, agenda.ge reported tality schools in the world, has announced the same day. it will start operations in Georgia, gov.ge GEORGIAN ECONOMY GROWS 7KHÀUVWSURGXFWLRQOLQHVZLOOVWDUWZRUN- website reported on May 18. BY OVER FIVE PERCENT ing by 2020, the report said. Prime Minister Giorgi Kvirikashvili at- The Georgian economy grew by 5.2 The factory was built by a joint Israeli- tended the presentation, the report said. SHUFHQW LQ WKH ÀUVW TXDUWHU RI DF- Georgian venture company, Aerostruc- “There comes a time when Georgia FRUGLQJ WR RIÀFLDO VWDWLVWLFV DJHQGDJH ture Technologies Cyclone (ATC). An must place special emphasis on service reported on April 30. estimated 300 locals will be hired and will quality. It is at this time of such rapid The government has forecast 4.5 receive specialized training. growth that the issue of preparing high- percent growth this year, the report said. level managers in our country is becoming ,W QRWHG WKDW LQWHUQDWLRQDO ÀQDQFLDO FIREFIGHTING VEHICLES TO BE especially urgent. institutes have also predicted positive PRODUCED IN GEORGIA This is why we are eager to welcome growth for the Georgian economy: the An Austrian company plans to start Les Roches, one of the world’s top three World Bank forecast 4.2 percent growth; EXLOGLQJ ÀUHÀJKWLQJ YHKLFOHV LQ *HRUJLD hospitality schools, entering Georgia to the European Bank for Reconstruction agenda.ge reported on April 26, citing operate at the University of Business and and Development (EBRD) predicted 4.5 information provided by the Emergency Technologies and to start training high- percent growth, as did the Asian Devel- Management Service of Georgia. level managers. We certainly welcome opment Bank. The plant will be built at Delta, Geor- this fact,” Kvirikashvili said. The International Monetary Fund has gia’s State Military Scientific Technical increased its estimate for Georgia’s eco- Center. OVER HALF A MILLION TOURISTS nomic performance this year, predicting “The time has come when it is neces- VISIT MOUNTAIN RESORTS the country will grow by 4.5 percent this VDU\ WR IXOO\ UHHTXLS WKH ÀUHÀJKWLQJ DS- Over half a million tourists visited Geor- year and 4.8 percent in 2019. paratus in Georgia. We have chosen [the] gia’s mountain resorts during the 2017-2018 “According to the International Mon- company Rosenbauer and together we winter season, a 25 percent increase from etary Fund forecasts, Georgia will have will manage to achieve this goal. I have last year, agenda.ge reported on April 27. one of the highest economic growth great expectations of fruitful cooperation Goderdzi, located in Adjara, saw the rates among the countries of Eastern Eu- with Rosenbauer,” agenda.ge quoted biggest increase in visitors, the report said. rope and Central Asia in 2018-2023,” the Giorgi Mgebrishvili, the head of the Emer- There was a 129 percent increase in Georgian Economy Ministry said in a press gency Management Service of Georgia, the number of people who traveled to release published on April 23. as saying. Goderdzi, compared to a 122 percent “Growth in 2018 is expected to remain increase at Tetnuldi, 119 percent increase VWURQJ>@7KHFXUUHQWDFFRXQWGHÀFLWLV NEW SEWING FACTORY OPENS IN in Tatsvali and a 25 percent increase in expected to widen slightly due to higher KUTAISI Gudauri. oil prices and public investment. Over A new factory opened in Kutaisi on the medium term, the sustained imple- May 16 as part of the government’s Pro- ASIAN DEVELOPMENT BANK TO mentation of Georgia’s economic reform duce in Georgia program, agenda.ge FUND RENOVATIONS AT GUDAURI program is expected to support higher reported on May 17. The Asian Development Bank will fund

6 | Investor.ge JUNE-JULY 2018 the second phase of work on water sup- AUSTRIAN LOGISTICS ister’s remarks to journalists. ply, sanitation and wastewater treatment COMPANY EXPANDS IN “Today our budget is dependent on systems at Gudauri ski resort, agenda.ge GEORGIA about 300 companies, which is a bad has reported. The Austrian Gebruder Weiss transpor- tendency. This means that we have such The bank is also helping to fund the tation and logistics company will invest €2 sectors in the economy where a high risk of development of Georgia’s transit system million in Georgia to expand its logistics monopolization has occurred. This makes and its tourism sector, including the con- terminal, agenda.ge reported on April 19. our economy less sustainable,” he said. struction of a 24-km-long section of the ´:HHQWHUHG*HRUJLDDERXWÀYH\HDUV “At the same time, we see high interest road leading from Mtskheta to the Larsi DJRDQGDUHVDWLVÀHGZLWKRXULQYHVWPHQWV rates, which do not allow the chance to checkpoint at the Georgia-Russia border. We have attracted a number of businesses start businesses. The banking system should The Asian Development Bank has in- [. . .] We intend to invest €2 million to en- not be a brake for economic develop- vested over $2 billion in Georgia over the large our logistics terminal in Georgia,” ment, but its driving force.” past 10 years, the report said. Wolfram Senger-Weiss, a member of the “Taking into account these circum- Gebruder Weiss Management Board, told stances, we decided to start a large-scale EUROPEAN INVESTMENT BANK Prime Minister Giorgi Kvirikashvili. reform in our economy, which aims to pro- TO OFFER €250 MILLION FOR Gebrüder Weiss has invested €10 mil- vide young start-ups with zero-interest-rate GEORGIAN ROADS lion in Georgia, establishing one of the capital,” said Bakhtadze. The European Investment Bank (EIB) largest premium logistics terminals in the is proposing €250 million to help improve South Caucasus region. GEORGIAN POST STARTS regional connectivity and road transport Gebrüder Weiss includes 150 branches E-COMMERCE PLATFORM efficiency in Georgia, agenda.ge has in 28 countries and employs more than Georgian Post has created a platform UHSRUWHG7KHEDQNKDVDOUHDG\ÀQDQFHG 7,000 people. to help small- and medium-sized business- over €500 million within the Georgian es sell their goods in Georgia and abroad, Transport Communication Project. The GEORGIA PLANS FINANCING Economy Minister Dimitry Kumsishvili an- project includes the construction of a 14- REFORM nounced on May 16. km section of the Grigoleti-Choloki road, Georgian Finance Minister Mamuka The new service is called ‘Georgian as well as rehabilitation work on other Bakhtadze has pledged to make it easier Products to the World’ and aims to international and secondary roads in the for start-ups to receive funding, agenda. strengthen the e-commerce industry of country, the report said. ge reported on April 12, quoting the Min- Georgia, agenda.ge reported on May 17.

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7VHUHWHOL$YHQXH7ELOLVL 7HO ZZZVKRVKDQDJH Innovators And Disruptors: Ideas To Bring Change

INVESTOR.GE IS STARTING A NEW COLUMN ON THE ENTREPRENEURS PUSHING GEORGIA’S DEVELOPMENT FORWARD. FOR OUR SECOND INTERVIEW, WE SPOKE WITH cines cannot be retailed alongside other enough that their industry and medical GIORGI BEZHITASHVILI AND e-commerce traded products because partners, advisers and mentors are well- HIS START-UP PARTNER medicines are controlled by extensive entrenched, connected and respected JOSUAH RECHTSTEINER ABOUT THEIR APP TO CUT MEDICAL government regulations. In the U.S., locally in the U.S. BILLS, WHICH THEY PLAN TO GHGLFDWHGRQOLQHSUHVFULSWLRQIXO¿OOPHQW “The solution is to restore competi- LAUNCH IN THE U.S. MARKET. is a well-established and accepted busi- tion and market forces by creating an ness in its own right, with a number of HI¿FLHQWSODWIRUPZLWKLQZKLFKPDQX- companies claiming to deliver the cheap- facturers, pharmacies and patients can act SALLY WHITE est possible drugs. freely without the pricing interference of Yet, after just a few months of delving WKLUGSDUWLHVDQGRWKHUFRQÀLFWVRILQWHU- small Tbilisi-based team of into the U.S. business models, Bezhitash- est that have degraded U.S. healthcare,” IT and start-up specialists is vili and Rechtsteiner found them full of says Bezhitashvili. A nothing if not ambitious. What ÀDZV1RWRQO\FRXOGWKH\VHHRQO\WRR What they have designed is an app began as their project to cut medical clearly what in other countries would that allows patients to “select drug, price prescription costs for Georgians is now EHFRQÀLFWVRILQWHUHVWDQGWKLUGSDUW\ and pharmacy just seconds after the doc- targeting the $500-billion U.S. pharmacy LQÀXHQFHVZLWKPXOWLSOHFDVHVRIFURVV tor has submitted the e-prescription,” market. Almost up-and-running with it, ownerships, but customer complaint adds Rechtsteiner. “Instead of sending they are collecting seed money to com- levels are rising. Industry players and the electronic prescription to a normal plete an app, widen their U.S. business- professionals with whom they were pharmacy, doctors are able to send to-business (B2B) client base and sign meeting also expressed a clear level of prescriptions to our app over existing up more partners. discontent. prescription networks.” As founders Giorgi Bezhitashvili and The Georgians found themselves “With our app installed on the pa- his start-up partner Josuah Rechtsteiner thinking that by working with disaffected tient’s smartphone, the patient is im- explain, their international research for professionals within the U.S. distribu- PHGLDWHO\QRWL¿HGDWZKLFKSULFHVWKH electronic prescription and distribution tion chains they could offer a better and medication is available at and which business models for pharmaceutical competing service. The great advantage allowed substitutes are available,” he products drew them inevitably to the vast of the internet is that the fact that they added. U.S. market. In most countries, medi- are Tbilisi-based is not an obstacle. It is The app, says Bezhitashvili, also in-

8 | Investor.ge JUNE-JULY 2018 forms the patients of any industry deals uncaptured point-of-sale data, plus rev- America’s “sky-high drug bills.” He is or government help offered on products. enue from various features of the U.S. making a concentrated push toward ex- Then the patient makes a choice on the medical system. panding generic drug competition. drug and price and the prescription is In addition, changes in the U.S. phar- The Georgian team has pitched My forwarded to the chosen pharmacy. maceutical industry could open up huge Drug App to meet this. It “allows generic Their partnerships with established opportunities. At the moment, patients manufacturers to launch ad and rebate pharmacists mean they can offer online may not know the names of generic med- campaigns with very high precision and consultation, giving the ability to un- ications because their manufacturers do RSWLPDOHI¿FLHQF\´VD\V%H]KLWDVKYLOL derstand how to choose the right drug at not advertise them. Yet even now, more The data captured by My Drug App also the right price before buying. The app and more patients are switching to these provides manufacturers with information includes drug information and reviews, cheaper versions. Patients are very much on customer decision-making at the point too, so that the patient can be fully more likely to pay and take-up generic, as of sale, and this is going down “very briefed on the options. opposed to branded medicines. In 2016, well” with prospective customers. The U.S. business is called My Drug 3.9 billion prescriptions were dispensed, Currently, the team expects to very App. The service is designed to be free according to the U.S. Association for quickly reach the stage of processing for patients, the revenue coming from Accessible Medicines. around 100,000 prescriptions a month, multiple B2B sources. These include More income from generic medicine helped by their strong local connections. client sourcing fees, ad sales to phar- sales is forecast. The pace of change is 1RWEDGIRUDVPDOO7ELOLVLVWDUWXS maceutical companies and healthcare expected to speed up as U.S. President The team members already have several providers, provisions for cross-selling Donald Trump’s new appointee running IT start-ups under their belts, and a next complementary services, monetization the Food and Drug Administration, Scott step is a similar drug distribution app for of analytical insights from currently Gottlieb, strives to move the needle on Georgia – Health Hub.

JUNE-JULY 2018 Investor.ge | 9 or the third column in the series, Inves- lenges and opportunities. It takes stock The Best tor.ge is looking at what international of Georgia’s development progress since FÀQDQFLDOLQVWLWXWLRQVDQGRWKHULQWHU- its “rebirth” a quarter of a century ago. It national bodies are saying about Geor- also takes a forward look at the social and Minds in the gia’s reforms and the country’s economic economic landscape,” the report states. outlook. In particular, the United Nations The SCD notes that Georgian econ- Economic Commission for Europe’s recent omy suffered a 65-percent contraction Business: ÀQGLQJVRQWKHLPSDFWRIUHIRUPVRQWKH over three years from 1991-1993, an “un- trade sector; the World Bank’s latest report precedented economic collapse,” even Famous on the Georgian economy; and the latest among former Soviet republics. ÀQGLQJVIURPWKH,0) Over the past ten years, however, the Georgian economy has made real prog- Economists TRADE REFORM ress, the authors of the SCD note. The United Nations Economic Commis- “Georgia is a fundamentally different sion for Europe (UNECE) named Georgia and better country today than it was a Weigh In On one of the top trade reformers in the re- generation ago. Georgians can be proud gion in a report published on May 3. of having achieved middle-income status, Georgia “With its lean institutional set-up and dramatically reduced extreme poverty to paperless trading environment, Georgia 8 percent, and implemented social poli- stands among the top trade reformers cies that support the poorest people and in the UNECE region,” the organization regions. At the same time, the country INVESTOR.GE IS PILOTING A announced. is still far from the level of broad-based NEW COLUMN: QUESTIONS WITH “Today, it takes 30 minutes for im- prosperity that EU accession countries now INTERNATIONALLY RENOWNED ports to pass customs and documentary enjoy,” the report said. The SCD highlights ECONOMISTS. WE ARE REACHING requirements are reduced to two docu- the challenges Georgia faces as it seeks OUT TO ECONOMISTS FROM ALL ments only (transport document and com- to create sustainable growth, and warns OVER THE WORLD WHO HAVE mercial invoice or sales contract). Exports that, among other things, the government WRITTEN POPULAR AND WELL- are cleared in only 10 or 15 minutes, de- needs to watch spending and prioritize REGARDED BOOKS ON THE ISSUES pending whether standard or advance protecting the environment. THAT ARE IMPORTANT TO THE procedures are used. Georgia exported “In the absence of sound macroeco- GEORGIAN ECONOMY AND TO goods worth $2.11 bn in 2016, and im- QRPLFDQGÀVFDOSROLFLHVDWWUDFWLQJLQYHVW- DEVELOPING ECONOMIES, AND TO ported goods worth $7.27 bn,” the report PHQWÀQDQFLQJWKHUHTXLUHGLQIUDVWUXFWXUH ECONOMISTS WORKING AT THINK said. The study was conducted during and upgrading service delivery will not be TANKS THAT ARE AT THE FOREFRONT the period of October 2017-January 2018. possible. Likewise, environmental degra- OF DEVELOPMENT POLICY. WE POSE It included assessments from traders dation would undermine a key asset of the QUESTIONS ABOUT THE ISSUES THEY working in Georgia, as well. country in leading sectors of the economy, ARE WORKING ON THAT APPLY “Moreover, the 65 traders from across namely tourism and agriculture,” the TO THE CHALLENGES GEORGIA IS the country representing leading sec- report said. FACING. IF YOU HAVE A QUESTION, tors, expressed their appreciation of the OR A RECOMMENDATION ON procedures’ high level of transparency REFORM PROGRAM WHOM WE SHOULD TALK TO, in interviews. Traders are kept abreast of “ADVANCING WELL” PLEASE CONTACT US AT AMCHAM@ trade-related regulatory and procedural Mercedes Vera Martin, the IMF mission AMCHAM.GE requirements through online information head, praised Georgia for meeting many dissemination systems and public-private of its structural reform benchmarks. consultations managed by the different “Sustained implementation of Geor- line Ministries,” the report said. gia’s economic reform programme is ´5HDSLQJ IXUWKHU EHQHÀWV ZLOO UHTXLUH expected to support higher and more strengthening state agencies with tech- inclusive growth by fostering private invest- nical skills and expertise, particularly for ment, productivity, and competitiveness,” completing the approximation to the she was quoted as saying in an April state- European Union Acquis Communautaire; ment published by the IMF mission as part consolidating the existing paperless trad- of its announcement concerning the third ing systems; and, improving the country’s tranche of a three-year program. transport infrastructure,” the UNECE noted. Martin noted that economic growth was expected to remain strong this year ECONOMIC DEVELOPMENT and the country’s risks are balanced. The The World Bank’s 2018 Systematic FXUUHQW DFFRXQW GHÀFLW ZLOO OLNHO\ ZLGHQ Country Diagnostic (SCD) “highlights she warned, due to higher oil prices and the country’s core development chal- public investment, the statement said.

10 | Investor.ge JUNE-JULY 2018 JUNE-JULY 2018 Investor.ge | 11 Scope). Its needs the GEL 20 million advisory and investment banking arm of Big Georgian bond to realize its growth ambitions: TBC Bank, which is the sole arranger of a market share of 20 percent in juices both these two bond issuances. “The lev- DQGD³VLJQL¿FDQW´LQFUHDVHLQH[SRUWV el of interest is steadily increasing as cor- Brands WRQHLJKERULQJFRXQWULHV1LNRUDKDV porates hear of more examples of bond over 19 percent of Georgia’s food retail placements,” he commented. Investors market, again according to Scope, (which are being found, though so far largely Look to Lari excludes bazaars and brand shops) with IURPDPRQJORFDO¿QDQFLDOLQVWLWXWLRQV 220-plus shops. Its funding is to enable (banks and funds) and individuals. Bonds for it to continue consolidation of the food For the rating agency Scope, a Berlin- retail market, expediting the contraction based group and relative newcomer to of Georgia’s bazaars by opening 400 new international ratings markets (joining Expansion stores over the next three years. It also Moody’s, Standard & Poor’s and Fitch), plans discount shops and own-label prod- these bonds are evidence of Georgian po- ucts. Scope believes tential. Companies THE DECISION OF TWO 1LNRUDFDQGRWKLV For Georgian financial (and countries) are MAJOR GEORGIAN despite the presence required to undergo CONSUMER GOODS of Carrefour, since markets, these new a credit rating as- COMPANIES TO SEEK the international re- bonds are a signal that sessment by one of LARI-FINANCED BONDS tailer’s format is for the major agencies TO FUND EXPANSION city hypermarkets, the country is able to before acceptance in PROJECTS IS A SIGNAL ZKLOH1LNRUDLVIR- international finan- cused on a national develop a funding base in cial markets. Scope, THAT THE GEORGIAN network of smaller, its local currency outside along with the other FINANCIAL MARKETS ARE neighborhood shops. major rating agen- DEVELOPING BEYOND There should be of bank loans. cies, has been ap- BANKS plenty of space for proved to do this in it to grow given that the size of the “in- *HRUJLDE\WKH*HRUJLDQ1DWLRQDO%DQN formal” retailers’ market share is put by and is offering helpful terms. SALLY WHITE Scope at around 70 percent. Its 30 million GEL bond is hoped to achieve just that OPTIMISTIC OUTLOOK eorgia’s consumer goods and kind of market share. “Our pipeline is promising and we are financial industries are both optimistic that our activities in this mar- Gmodernizing rapidly, and to MOVING BEYOND BANKS ket will continue to grow,” says Torsten PXWXDOEHQH¿W$UHFHQWSULPHH[DPSOH )RU*HRUJLDQ¿QDQFLDOPDUNHWVWKHVH Hinrichs, managing director of Scope is two of the country’s biggest consumer new bonds are a signal that the country Ratings. Scope’s Georgian ratings are EUDQGV1LNRUD7UDGH 1LNRUD DQG*HRU- is able to develop a funding base in its largely favorable in international com- gian Beer (GBC). Both are in the throes local currency outside of bank loans. The parisons both for Georgia as a country of funding rounds for new moves to corporate sector has historically funded and the companies it has analyzed so far. expand their businesses and are sourcing bonds in dollars, and even in that curren- 6FRSHDSSURYHGRI*%&¶VGLYHUVL¿HG around 50 million lari from the emerging cy, bond issuances have been a relatively portfolio, market share and strong bal- local lari bond market, with public issu- infrequent event. The authorities are now ance sheet, which give a “high level of ance planned in Q2-Q3. steering the markets away from dollars, FUHGLELOLW\DQG¿QDQFLDOVXVWDLQDELOLW\´,W GBC has about 30 percent of the and GEL bonds have already been issued DOVRSUDLVHVWKHDFKLHYHPHQWVRIMXVW¿YH local beer market, and 17 percent of E\WKH¿QDQFLDOVHFWRU \HDUVRISURGXFWLRQ³UHÀHFWLQJ*%&¶V the soft drinks and lemonade market GEL bonds are gaining acceptance, focus on premium brands and quality (according to European ratings agency says Irakli Elashvili at TBC Capital, the vis-à-vis the competition.” GBC is the

12 | Investor.ge JUNE-JULY 2018 ¿UVWGRPHVWLFEUHZHUWRRSHUDWHXQGHU in this industry.” It anticipates that “the companies to regularly publish IFRS licenses from international brewers. Georgian government will gradually ¿JXUHVDQ\ZD\7KHVHDUHVWDQGDUGVIRU The new bond will, Scope says, cover implement new laws and frameworks the presentation of companies’ accounts most of 2018’s scheduled 22 million GEL (based on the stricter control of hygiene that are followed internationally, giving capital investment. It notes that Czesar standards, for example,) to decrease IXOOGLVFORVXUHRIWKHLU¿QDQFHVZKLFK Chocheli, “who has a 65 percent stake in the weight of this kind of retail in the enable analysis and comparisons. Aware the company,” has built a “Western-style RYHUDOOHFRQRP\´6FRSHSUDLVHV1LNRUD of the need to help companies grasp the brewery, equipped with a state-of-the-art for gaining one of the highest market GEL bond opportunities, TBC is not only EUHZKRXVHDQG¿OOLQJOLQHWHFKQRORJ\ shares (at 19 percent in 2017 versus Car- pitching it but “intends to lead a series (KHS, Krones) from scratch.” refour’s 22 percent) and its plan to open of discussions on the topic with wider GBC’s own comment is that “Geor- 120 shops in 2018, followed by 122 in audiences to promote better understand- gian companies should come up with 2019 and 229 in 2020. It likes the cost ing,” Elashvili says. “There are a number European-level companies in terms of advantages that exist with ownership of advantages to having the bond in a market organization and production.” At of food suppliers:“In 2017 this vertical IXQGLQJPL[VWUXFWXUH1DPHO\WHQRU a recent press conference, GBC Director LQWHJUDWLRQOHGWRSHUFHQWRI1LNRUD¶V (bonds are usually medium- to long-term Kakhaber Kotrikadze said it has a 7 mil- revenues [. . .]” It also praises the fact funding instruments), bullet structure lion euro budget for 2018-19 for devel- WKDW1LNRUD¶VSUR¿WV³UDQNLWZLWKLQWHU- (the company only pays coupon [pay- oping a natural juice production project. national peers.” ments/interest] until redemption, there- The company has invested heavily over /DVWVXPPHU1LNRUDLVVXHGD IRUHLPSURYLQJWKHFDVKÀRZV VHFXULW\ its entire history, spending 150 million million bond two-year bond, which it structure (in most cases the bonds are GEL to create a wide product range, with has already repaid. Further growth in unsecured liabilities), withholding and a split of 60 percent in beer brands and the GEL bond market looks assured. FDSLWDOJDLQVWD[EHQH¿WV H[HPSWLRQV the rest in soft drinks. Prospects are improving as corporates for investors if a public bond,” he adds. 2Q1LNRUD6FRSHFRPPHQWHGWKDWLW become accustomed to the necessary “Last but not the least, is the diversi- has “strong purchasing power and inte- disclosures of business details, Irakli ¿FDWLRQEHQH¿WWKDWFRUSRUDWHVJHWZKLOH grated holdings with product suppliers,” Elashvili notes. It helps that there is getting a bond into their funding mix,” as well as “possibilities for consolidation new Georgian legislation requiring large he explained.

JUNE-JULY 2018 Investor.ge | 13 he long-discussed government Minister, argues, however, that the ac- Explainer: plan to revamp Georgia’s uni- cumulative pension system will be very Tversal pension system is in the EHQH¿FLDOWRWKHVHOIHPSOR\HG works in Parliament. MPs are scheduled “The government decided to help Georgia’s WRSDVVWKH¿QDOYRWHWKLVVXPPHUDQGWKH self-employed people declare their in- reform should be actively implemented come by setting a 1 percent income tax after the third quarter of 2018. for them, which is very low compare to New Pension The plan devised by the government 20 percent, the common rate for employ- would create a pension fund and encour- ers [. . .] Once a self-employed person System age citizens to save for retirement. pays 1 percent [of his or her monthly The universal pension system would income] as income tax, the government remain in effect for certain social groups. will deposit [the equivalent of] 2 percent Over 734,000 pensioners live in [of that person’s monthly income] into THE GEORGIAN Georgia currently; the state budget that person’s pension account,” Gagua GOVERNMENT HAS spends about 132 million lari each month told Investor.ge. ASKED PARLIAMENT on their pensions. Otar Sharikadze, the Managing Director of Galt & Taggart, says it is TO CONSIDER A DRAFT HOW WILL THE NEW PENSION likely that only a small number of self- LAW TO REFORM THE SYSTEM WORK? employed people may participate in the COUNTRY’S UNIVERSAL Participating in the accumulative accumulative pension scheme. PENSION FORM AND pension scheme would be obligatory for “They will remain under the univer- CREATE A PENSION any employee under age of 40; persons sal pension scheme funded by the state FUND. INVESTOR.GE’S over the age of 40 could opt into the budget,” he said. NINO BAKRADZE ASKS system if they want. “Going forward, I think that the exist- PENSION SPECIALISTS Under the new system, six percent of ing universal pension scheme should be AND OTHER EXPERTS every worker’s monthly paycheck would limited to certain segments of population be deposited in the state-run pension in order to avoid major spending from the ON THE REFORM ABOUT fund: employees would save 2 percent state budget in a long term. Moreover, HOW IT WILL AFFECT of every monthly paycheck, while the the acceleration of economic growth in PENSIONERS, EMPLOYERS government and employer would each Georgia should reduce the number of AND THE SELF-EMPLOYED. also put aside 2 percent of workers’ self-employed people in the country and monthly salaries. increase their involvement in the second For instance, a person earning 1,000 pillar pension scheme,” Sharikadze said. lari a month would accumulate 60 lari in Martin Hutsebaut is an independent the pension fund every month. expert of pension systems from Belgium. He evaluated this upcoming reform for HOW WOULD Friedrich Ebert Stiftung’s Georgian THE SYSTEM TREAT THE SELF- office, and believes that the pension EMPLOYED? scheme provided by Georgian govern- Half of Georgia’s active workforce ment lacks some social safety nets. LVVHOIHPSOR\HGDFFRUGLQJWRRI¿FLDO For example, in the case of a pro- statistics. longed illness, maternity leave or un- Under the proposed system, people employment, a person will not be able to who are self-employed are not legally save money in the pension fund. obligated to participate in the new pen- Gagua stressed, however, that the sion program. universal pension system will continue 1LNROR]*DJXD'HSXW\RI)LQDQFH to operate for some groups and no citizen

14 | Investor.ge JUNE-JULY 2018 will be left without a pension in his or A transparent competition process million citizens currently live abroad. her old age. will be used to determine where to invest Gagua noted, however, that based WHO WILL MANAGE THE PENSION money from the pension fund and should on the government’s calculations, 35- FUND? have a good international reputation and 40 percent of employed citizens will According to the draft law, the pen- experience, according to the Georgian voluntarily participate in the program sion fund will be managed by the LEPL Ministry of Economy. initially, and there is an expectation that Pension Agency, which will appoint an Sharikadze agreed that the asset man- the number will double in 12 years. investment council. Gagua underscored agers should be selected based on their At initial stage of the pension scheme, that the members of this council will be reputation and experience. He noted that Sharikadze, does not expect a high rate LQWHUQDWLRQDOO\TXDOL¿HGH[SHUWV Galt & Taggart is a clear candidate for the of involvement of those segments of em- The council will be created after position in light of its experience manag- ployed population who are not obliged to Parliament approves the pension reform ing the pension fund for Sakaeronavigat- participate in this scheme. “People will law, which should happen in early sum- VLD/WG *HRUJLDQ$LU1DYLJDWLRQ wait to see how successful this reform mer this year. The investment council is and how carefully money is managed will be tasked to decide how to use the WHAT ARE SOME CHALLENGES by the fund. We need to clearly explain savings accrued in the pension fund, i.e. FOR THE REFORM? WRSRWHQWLDOSDUWLFLSDQWVWKHEHQH¿WVRI where to invest the money. The council There are serious questions about the accumulative pension system. If we will have the right to invest the pension how successful the reform will be, based want to consume more in the future, we savings in private companies or lend it on the fact that half of Georgia’s active should reduce current spending and save to the government. workforce is self-employed and over a more today,” Sharikadze said.

JUNE-JULY 2018 Investor.ge | 15 looked inside the bag that he or she had last December. The counterfeit cement just purchased to make sure the physical results were truly discouraging: 14 out of Fake Cement product conformed to the characteristics the 25 of the cement samples tested in described on the bag, it would be impos- December 2017 were substantially below sible for the customer to tell visually or by VSHFLÀFDWLRQVUDQJLQJIURPPLQXVSHU- is a Problem touch. Cements even of vastly different cent (-39%) to an astounding low of minus grades look and feel pretty much the ninety percent (-90%). Approximately same. In fact, even if you added water in 300,000 tons (13 percent of the total ce- in Georgia: a test, you would not know the result for ment market) of such products were sold 28 days: the time it takes for cement or to consumers last year. concrete to reach its full strength. Quality cements that are made to THE TELL-TALE SIGNS OF How to Spot VSHFLÀFDWLRQUHTXLUHWKHXVHRIDFHUWDLQ COUNTERFEIT BAGS blend of materials. The most expensive of Since a consumer cannot distinguish these is clinker, which generally accounts visually or by touch whether the physi- Counterfeits for 75-95 percent of the physical cement, cal product he or she just bought is the depending on the grade. Clinker is milled product described on the packaging or PAUL RODZIANKO, THE together with gypsum, slag and other whether it is an inferior product, what can CHAIRMAN OF THE DGGLWLYHV IROORZLQJ WKH VSHFLÀF IRUPXOD a consumer do? Here are some clues for GEORGIAN CEMENT QHHGHG WR \LHOG D VSHFLÀF W\SH RI FH- a consumer to bear in mind: ASSOCIATION, OVERVIEWS ment. On average, a quality cement must Neither the name nor the contact produce a compressive strength of about information of the producer of the cement GEORGIA’S COUNTERFEIT 110 percent more than a given standard, is listed on the bag. CEMENT PROBLEM AND for instance 35.75 mpa rather than the The sub-standard cement in bags EXPLAINS HOW CONSUMERS minimum 32.5 mpa for M400. The reason labeled as coming either from Iran or Ar- CAN BE SURE THEY ARE for this margin of safety is that all manu- menia appears to have been produced PURCHASING THE REAL facturing processes are inevitably subject locally since no cements from these coun- WR VRPH PRGHVW ÁXFWXDWLRQV LQ TXDOLW\ tries were imported legally into Georgia in THING. If the average compressive strength is 2016 or 2017. KLJKHUWKDQWKHPLQLPXPVSHFLÀHGLWLVH[- Green bags that look like Heidelberg ounterfeit cement? Yes, coun- tremely unlikely that any cement sample bags but with mis-spellings, other small terfeit cement. A new concept produced by that mill will be below its distinguishing marks or no contact informa- Cfor you? And, yes, it exists here VSHFLÀHGVWUHQJWK2QO\WKLVPDQXIDFWXU- tion must be avoided. in Georgia. ing approach can produce 100 percent Bags that are priced 10-40% lower In this article, we will tell you how reliable cement for sale to the consumer than bags of the same listed quality sold and why these counterfeit products are in bags or in bulk. by known reputable producers are not made; what are the tell-tale signs of In the case of counterfeit cement likely to be legitimate. these bagged forgeries; how these faked products, their approach is very simple Avoid dealers who stock obviously products cheat you and expose you, the to understand. If the clinker alone repre- fraudulent bags next to legitimate ones. consumer, to risk; and the impacts of these sents 75 percent of the composition—and Consider contacting reliable, GCA- products on the economic well-being of somewhat more of the cost of the ce- approved producers for the names of Georgia as well as about the mission of the ment— using only half the clinker needed recommended dealers, or buy directly Georgian Cement Association. will increase that mill’s profitability by from these companies. about 35-40 percent. Even if their bagged Unfortunately, there are some pro- HOW FAKED CEMENT IS MADE product is sold for 10-20% less than the ducers who produce bags containing When they can, unscrupulous people genuine product, this reduction in the low-grade cement-like material and nev- worldwide try to make an extra buck by amount of clinker used will still increase ertheless still list their names and contact trying to pass off cheap “knock-offs” as WKHSURÀWDELOLW\RIWKDWSURGXFWWRWKHRZQ- information on the bags. They substitute genuine products. With cement, cheating ers—at the cost of a dramatic reduction the essential materials needed to make is not a harmless exercise: it can lead to in the quality of the cement. Such manu- JRRG FHPHQW ZLWK ZRUWKOHVV ÀOOHU 7KHVH injuries and fatalities from collapsed con- facturers can even afford to provide extra companies seem to bank on the fact that struction. If a proven-quality cement sells incentives for their distributors to sell their customers either will not notice the poor for 11-12 lari a bag and similarly marked bags more aggressively than the more quality of the product or do not care. bags generally sell in the range of 9-10 lari expensive quality products by offering (but sometimes even as low as 6-7 lari), a them a larger commission. HOW CONSUMERS ARE CHEATED customer might think that they are making The Georgian Cement Association AND EXPOSED TO RISK a great buy because both bags describe has been conducting blind testing in the Obviously, if a consumer needs to the cement inside as M400, CEM II, 32.5 marketplace for one year now, with the choose which brand of cement bag to or something similar. Even if a customer most recent testing having taken place buy (of identical quality according to the

16 | Investor.ge JUNE-JULY 2018 markings on the bag), he or she will need to ask: How can there be such a large price difference between products of al- The Georgian Cement legedly the same quality? The answer to this excellent question is that, barring some Association: What We Do sort of real sale price, such a price differ- Over the last several years, the main producers of quality cement ence has to represent a quality difference. in Georgia noticed an alarming trend. Even with the decrease in price And, as Georgian Cement Association and increase of availability of imported clinker, more and more tested testing has shown, the difference in quality cements were proving to be counterfeit and of sub-standard quality. is generally far worse than the difference In addition, the presence of counterfeit bags was also ascertained. in price. With faked cements now opportunistically approaching 20% of the Cement is a commodity product. Georgian market, it has become clear that the goal of those produc- There is no mystery that you have to put HUVLVWRPD[LPL]HWKHLUSURÀWVDWWKHH[SHQVHRIWKHFRQVXPHU2QH WKHULJKWVSHFLÀFDPRXQWVRIWKHULJKWUDZ year ago, HeidelbergCement and GBG/Kavkaz Cement agreed to materials together to produce a certain establish the Georgian Cement Association (GCA) in order to bring grade of cement. this disturbing development to the attention of consumers, builders, There are no shortcuts. If a customer government and politicians and to encourage all producers to shift thinks that he or she will save 20 percent to quality production. Our approach involves the quarterly purchase off a certain product and yet the cement in the open market of 25-30 bags of different cement products for inside the bag has one tenth of the quality testing, as follows: VSHFLÀHG RQ WKH EDJ WKH FXVWRPHU KDV Under contract with the GCA, the Georgian Chamber of Com- been cheated. merce randomly purchases 25-30 bags of cement on the open Then there is the issue of safety. Certain market for testing. projects using cement do not have struc- 7KH&KDPEHUWKHQPDNHVÀYHWHVWVDPSOHVIURPHDFKEDJDQG tural issues. They are more decorative or assigns each sample a number. constitute surface covering. While strength 7KHVH QXPEHUHG VDPSOHV³ZLWK QR LGHQWLÀFDWLRQ DV WR ZKLFK is not a factor in these cases, durability is. If company’s cement it is—are then distributed to four accredited one carries out such a project expecting laboratories for blind testing. that it will last 5-10 years but then discov- One of these laboratories is that of the fully independent Georgian ers he or she has used sub-standard ce- Technical University (GTU). ment and have to repeat the work every When the 28-day results are obtained, all the results are compared two years, any “savings” realized on the to ensure general consistency. purchase price of the cement is entirely 7KH*&$WKHQSUHSDUHVDFRQÀGHQWLDOWDEOHOLVWLQJWKHUHVXOWVE\ illusory. In the short-, medium- and long- company and ranking the test results. terms, such “savings” actually cost the The GCA then announces GTU’s results as to which companies’ consumer money. cements are consistent with the description on the bags. Then there are projects that at least to The GCA only mentions the number, not the names, of compa- some degree require structural strength. nies whose products are sub-standard and therefore counterfeit. In the countryside in particular, bagged :KLOHIRXUWHHQRIWZHQW\ÀYHRIWKH'HFHPEHUVDPSOHVIDLOHGWKLV cement is often used for dwelling con- testing and three were marginal, it was a pleasure to note that a third struction. company had achieved fully satisfactory results: GCC/Georgian Ce- If sub-standard counterfeit cement ment Company. Furthermore, one additional company had some is used because it appears to be cheap samples that almost passed the testing (marginal), but it unfortunately and its bag states that the product inside also had some products that clearly did not. These results represent is of, for example, CEM II 32.5 grade, then an improvement over the previous testing. the customer bears the risk that the struc- The mission of the GCA is to encourage all producers of cement ture that is built using this product could in Georgia to produce products that conform to the quality that is collapse. Let’s remember that Georgia VWDWHGRQWKHSURGXFWV·EDJV,IVXFKDOHYHOSOD\LQJÀHOGLVFUHDWHG is an earthquake-prone zone. If a house consumers will not have to worry about being cheated. built with counterfeit cement collapses, The GCA at this time has two Full Members: HeidelbergCement and physical injury or death could result for its GBG/KavkazCement. GCC/Georgian Cement Company has now be- inhabitants or visitors. come eligible to join the GCA as an Associate Member. Full Members Are these the consequences con- source 70% of their raw materials in Georgia, but local sourcing is not sumers want? About 100,000 families are a requirement for quality producers who do not meet that threshold being cheated every year by as much as and agree to become Associate Members. 60 million lari. Commodity products simply Every company producing cement in Georgia is eligible to join the cannot have such wide variations in price GCA in one of these two categories provided that their products pass and be in fact what they are labeled sup- our blind testing program on a continuing basis. posedly to be.

JUNE-JULY 2018 Investor.ge | 17 COUNTERFEIT CEMENT AFFECTS counterfeit sub-standard cement prod- all raw material ingredients are available GEORGIA’S ECONOMIC WELL- ucts. Clearly, the issue is not the source in Georgia. Roads—especially with bridges BEING of the clinker but in the behavior of the and tunnels—require quality (on- or At the present time, all 14 of the sub- mills who use that clinker. In addition to above-spec) cement and concrete. The standard cements tested from the De- continuing to produce “fake” cement, remaining roads are currently made of cember 2017 sampling were made from these companies are also thus exporting asphalt which requires the importation of clinker imported into Georgia from other Georgian jobs by importing clinker when bitumen. If all or almost all roads were built countries. This fact alone does not dem- VXIÀFLHQWTXDQWLWLHVRIGRPHVWLFFOLQNHUDUH of concrete, substantial imports of road- onstrate that imported clinker is of worse available to meet Georgian construction building materials could be avoided, thus quality than clinker produced in Georgia needs for infrastructure, roads, buildings, helping Georgia’s balance of payments, entirely from Georgian raw materials. residences, dams, and so forth. and more local jobs would be created Private testing of some of those clinkers These companies are also competing throughout this entire sector. KDYHLQIDFWFRQÀUPHGWKDWWKHLUTXDOLW\ unfairly with the honest companies. By is entirely adequate and that there is no offering false economies and diluting im- CONCLUSION technical reason for the mills who use that SRUWHGFOLQNHUZLWKZRUWKOHVVÀOOHUWKH\DUH Eliminating counterfeit cement prod- clinker to produce bad cement. Quite seeking to increase their market share un- ucts in Georgia will provide safe and qual- simply, less good clinker is used in these fairly at the expense of those companies ity construction materials for Georgia, pro- counterfeit cements in order to reduce who produce cement whose quality cor- tect the consumer, and create more jobs. the manufacturing cost of the product UHVSRQGVWRZKDWLVVSHFLÀHGRQWKHEDJ The Georgian Cement Association DQGWRFUHDWHKLJKHUSURÀWIRUWKHRZQHUV Georgian jobs are therefore put at risk. urges all concerned parties in government of these companies. 2QH ÀQDO SRLQW QHHGV WR EH PDGH agencies as well as in the construction and Not so long ago, most of these same particularly in the area of road-building. the building-materials sectors to demand companies were utilizing good clinker Currently, most paved roads in Georgia integrity in the quality and pricing of ce- produced in Georgia to produce similarly are being built out of concrete, for which ment products manufactured in Georgia.

Tbilisi Overhauling Master Plan, Tackling Traffic

TBILISI MAYOR KAKHA KALADZE’S ayor Kakha Kaladze and his urban development policy for the city, TEAM HAS AN AMBITIOUS team are bringing new ideas according to the deputy mayor—a major PROGRAM, INCLUDING A Mand new designs to the existing XSGDWH%XWLWLVDGLIÀFXOWSURFHVV REVAMPED MASTER PLAN FOR plan for the city, and revamping Tbilisi’s Part of challenge is dealing with pri- THE CITY AND CHANGING THE master plan to help develop a better, vate property owners who purchased MENTALITY OF TBILISI DRIVERS. greener, cleaner city. and invested in land under the previous INVESTOR.GE SPOKE WITH DEPUTY master plan and who now could face MAYOR IRAKLI KHMALADZE ABOUT PLANNING A GREEN CITY new or different restrictions on how the MAKING TBILISI A GREEN CITY, “In one or two months we will have the land can be used. THE PARKING PROBLEM AND ÀQDOGRFXPHQWWKDWZLOOEHDGRSWHGE\ “That is why this is a very complicated SUSTAINABLE RENOVATIONS TO THE our local council, and after that the city issue. At the same time we should not OLD CITY. will have a general master plan,” Deputy forget the main priority: this is the correct Mayor Irakli Khmaladze told Investor.ge, urban development so it should be done noting that it is a matter of redoing —not in cooperation with the private sector in just updating—the master plan, including order not to harm many interests—not some radical changes. public, not private. This is one of the key “The exciting part is increasing green issues at the last stage which we are dis- areas. This is what we are missing in our city. cussing with the expert,” he said. :HDUHWU\LQJWREULQJWKLVEHQHÀWWRWKH public at a reasonable expense. It costs HOW TO SOLVE A PROBLEM LIKE money: if you want to have more green PARKING areas it means that you have to build less, One major challenge for Tbilisi is the so it means that you have to privatize less, transportation system. so this means a decrease in the income “Day by day it is becoming impossible for the local budget. We can make every to move around the city[...]If we compare part of the city green but it will cost a lot,” 2011 to 2016, we have almost 3 times more Khmaladze said. use of private cars. So if we do not change The changes will introduce the best anything, it means that in 2020-2021, we

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([FHOOHQFHLQ :+$7:('2 will have lots of problems. Maybe it will to start recycling waste, Caucasus Environ- be totally impossible to move around mental NGO Network (CENN) Executive the city. That is why[…]we should look to Georgia Director, Nana Janashia, told Investor.ge. developed countries, what they did, how “Since 2014, we have been working they achieved that development, and on the project “Waste Management we should use the best practices in the Plans Technology in the Regions” in Georgia . . world,” he said. . According to the Association Agreement The current policy used abroad is concluded between Georgia and EU, to make it “comfortable” to use public Recycling each self-governing body and munici- transportation—and less comfortable to pality was obliged to develop a plan of use private cars, Khmaladze said. management of municipal waste before There are about a half a million cars the end of 2017,” she said. registered in Tbilisi. There are 33,000 mu- Programs The current deadline calls for a nation- nicipal parking places. wide recycling system to be in place by “Everyone is expecting that we will be 2025, according to Georgia’s 2015 Code working to increase the amount of parking to Tackle on Waste. spaces. Our policy is to decrease the de- “We have developed a plan for 19 mand for parking spaces,” he said, adding municipalities, and additionally, with the it is impossible to just create 100,000 or Growing support of foreign experts, our organiza- 200,000 parking places. WLRQ LV DVVLVWLQJ WKH 7ELOLVL 0D\RU·V 2IÀFH “If you want to have the correct trans- in developing a master plan on waste portation system, you need to reduce management. Currently, there are not the use of private cars. So it means that Waste enough recycling plants and, if we look at you will be achieving it by making it more the country as a whole, there are only 15 comfortable to use public transportation GEORGIA SUFFERS A waste recycling plants, among which four and make it more uncomfortable to use plants are recycling paper,” Janashia said. private cars,” he said. MYRIAD OF PROBLEMS One major challenge, she said, is the The city is planning to present its plans DEALING WITH WASTE lack of modern recycling equipment in for the transportation system and the BUT NEW DEADLINES ON Georgia. “Existing equipment is outdated parking issue in June, which will include EU-MANDATED REFORMS and new equipment needs to be pur- an 18-month study of the transportation chased. Another problem is obtaining system to identify how best to improve it. COULD BOOST THE LEVEL OF secondary raw material for production,” Over the next four years, the city estimates RECYCLING IN THE COUNTRY she said. that half a billion lari need to be invested AND HELP CREATE NEW Without modern equipment and LQWKHWUDQVSRUWDWLRQVHFWRUDÀJXUHWKDW BUSINESS OPPORTUNITIES IN quality raw material, Georgian recycling includes public and private spending. companies are not able to produce high- WASTE MANAGEMENT. quality goods. “Mainly, they produce A NEW FACE FOR OLD TBILISI carton board and toilet paper. In the 7KHFLW\LVDOVRSODQQLQJWRLQYHVWÀYH nearest future, we will announce a grant million lari for rehabilitating historic neigh- competition for companies dealing with borhoods around the city. LIKA JORJOLIANI the recycling of solid waste to receive Khmaladze said there are 10 different grants to procure equipment. The winner locations that have been selected for eorgia’s waste problem is obvious ZLOOWDNHDSDUWLQDFRÀQDQFLQJSURMHFWLQ rehabilitation and reconstruction for the to even the most casual observ- the amount of 15-20 percent [of the cost next four years. “We will invest this money Gers: too much trash, not enough of equipment]. Grants will be worth up to in these locations to create more and recycling and far, far too few trash cans. one million lari,” Janashia added. more opportunities for business,” he said. But a new timeline to make EU-man- “Tbilisi has a lot of areas that are histori- dated changes is set to change that. RECYCLING ELECTRONIC GOODS cally important. Today, these areas are not Starting in 2019, manufacturers and im- The new regulations also call for busi- attractive from the point of view of doing porters will be legally obligated to collect nesses to recycle electronic goods and business... But when you demonstrate that and process waste connected with their other types of waste within the framework you politically support those areas, when products under the Extended Producers’ of Extended Producers’ Responsibility. you popularize these areas as historically Responsibility regulation. In addition to Georgia’s legal obliga- important areas, when you invest a huge tion to start recycling electronic goods, amount, you are increasing the value of COUNTRY-WIDE RECYCLING BY there is also concern about the growing the immovable assets in this area... People 2025 quantity of waste from telephones and start businesses there... this is economic ac- The new rules, which will go into effect other devices. tivity, you are bringing additional income in December 2019—11 months later than The Head of the Waste Management for the people,” he said. initially planned—call for all municipalities Division of the Ministry of Environmental

20 | Investor.ge JUNE-JULY 2018 Protection of Georgia, Alverd Chankse- waste. management, including collection and liani, told Investor.ge that the expanded 9HUD7DELG]HWKHÀQDQFLDOPDQDJHU disposal. Based on our methodology, the obligations for companies are a “key of ACC Distribution, told Investor.ge that tariff must be reviewed annually, and it will component of the waste management there are currently no laws regulating the GHSHQGXSRQGHÀQLWHSDUDPHWHUVWKDWDUH system.” recycling of electronic waste in Georgia FKDQJHDEOHLQFOXGLQJWKHUDWHRILQÁDWLRQ “The process has already started, and and no companies in the country provide the cost of fuel and others,” she said. we already have a legislative base and a that service. “We are working on such a method- national waste management strategy and “We import computer and household ology and [plan] submit it to the govern- action plan . . . The registration of collec- equipment and 150 different brands. ment. We have also calculated a real tors of different types of waste (electronic Today, no company in Georgia deals tariff for waste collection and for the entire and metal) started on January 1 of the with the processing of electronic wastes. process,” Janashia added. There is not any legislation base CENN, with the support of USAID, has supporting the processing and created the Georgian Waste Manage- Starting in 2019, manufacturers production from secondary raw ment Association to help businesses material. We have very high “establish and develop recycling meth- and importers will be legally WD[HVDQGLWLVQRWEHQHÀFLDOWR ods, help with waste separation and the deal with recycling. For example, manufacturing of products using recycled obligated to collect and process if we supply waste from electric goods,” she said. The Association is also waste connected with their and electronic goods, we will be working to create a business-friendly envi- charged tax for the sale of new URQPHQWLQWKHZDVWHPDQDJHPHQWÀHOG products under the Extended goods. Now, we transport waste Janashia added that CENN is already WRWKHODQGÀOODQGXWLOL]HLWRQVLWHµ helping companies adapt to the new 3URGXFHUVs5HVSRQVLELOLW\ she said. legal requirements. Director of the Solid Waste “We already have companies that regulation. Company of Georgia Giorgi deal with the separated collection of Shukhoshvili agreed that the tar- waste in Tbilisi and Batumi. They can col- iffs are too low to cover the cost lect and deliver already pre-sorted materi- current year. Now the Ministry is planning of disposing of or recycling waste. als to recycling companies: plastic, glass, to create a database of collectors and “Today, the tariff for waste the category of waste they are dealing removal is symbolic and doesn’t with,” he said. cover expenditures. Currently the The current deadline calls for a Based on the national plan, com- tariff is 3 lari in the municipalities, panies were supposed to start recycling but local governments are able nation-wide recycling system to waste at the beginning of 2019, but that to establish this tariff themselves, deadline has been pushed back to later and the average tariff on waste be in place by 2025, according to in the year. removal in the regions is 50 tetri. “We are planning to process 20 per- Surely this is not enough to cover *HRUJLDsV&RGHRQ:DVWH cent of collected waste in 2020, the types even the expenditures for waste RI ZDVWH GHÀQHG >E\ WKH ODZ@ :H QRZ removal, let alone disposing of have to work a great deal in order to suc- WKHZDVWHLQODQGÀOOVµKHVDLG paper and aluminum. We have opened cessfully implement this plan. We have to Janashia said CENN specialists are eight sites in Tbilisi where people can bring conduct meetings with companies and working on the tariff issue. sorted waste for further recycling . . . the representatives of different structures to “Our specialists have developed a company Supta Samkaro collects and develop normative acts to regulate this methodology to calculate the tariff for delivers the waste to the companies, and activity. In addition to electric and elec- waste management, as the current tariff exports any remaining waste to Turkey,” tronic equipment, the types of waste [for doesn’t cover the whole cost of waste she said. recycling] include batteries, car batter- WHERE TO RECYCLE IN TBILISI? ies, packaging materials, oils and tires,” Chankseliani said. The Waste Management Technology in the Regions program has created several He added that this reform is com- recycling points in Tbilisi, including: pletely new for Georgia and, in addition to developing necessary laws, there is also Dighomi Goodwill Hypermarket a need to increase awareness and bolster Carrefour Market at the GTC center on Vekua Street the capabilities of state agencies and the Ministry of Environment and Natural Resources Protection of Georgia, 6 Dimitry private sector. Gulia St, Tbilisi 0114, Georgia Old Meidan Hotel, 9/11 Samghebro St, Tbilisi 0105, Georgia TARIFF CONCERNS East Point Mall, 2 Aleksandre Tvalchrelidze St, Tbilisi 0182, Georgia Businesses have expressed concern, Fabrika Hostel Tbilisi, 8 Egnate Ninoshvili St, Tbilisi 0102, Georgia however, about the cost of recycling the

JUNE-JULY 2018 Investor.ge | 21 But Gvarjaladze is optimistic, in part because this initiative is being driven IURPWKHPD\RU¶VRI¿FH He is also drawing inspiration and optimism from the similar—and successful—undertakings in major (and not-so- major) cities around the world, especially in Australia, the U.S. and the UK. There is also evidence that night mayors make a major difference in towns closer to home: Vilnius, Lithuania— the only city in the former Soviet Union with a night mayor—has seen a growth of around 200,000 more visitors, attracted by new events since the night economy program started in 2016, Gvarjaladze said.

BRINGING NEW BUSINESS TO THE ‘BURBS The main goal is to bring more business to local districts that are underdevel- ELOLVLLVHQMR\LQJDPDMRULQÀX[ oped. To do that, Gvarjaladze is looking Tbilisi’s Night LQWRXULVWVEXWFLW\RI¿FLDOVEH- at what events draw people and where Tlieve there is potential for more: EURZQ¿HOGLQYHVWPHQWSDFNDJHVFDQEH more visitors, more attractions, more developed to pitch to investors, among Economy: A business, and longer stays. other initiatives. Mayor Kakha Kaladze has an- “The goal and the main idea is to cre- New Mayor nounced an ambitious program to expand ate jobs, to support small- and medium- the city’s offerings—building on what is sized businesses here in Georgia, and to currently provided and developing new develop and position Tbilisi as a 24/7 city and a New attractions, as well as the infrastructure, for tourism. And we are very interested to make it happen. in cultural life, and we want to develop Plan to Boost The man tasked with the job is Sergi the outskirts of Tbilisi, the suburbs of Gvarjaladze, a long-time club promoter Tbilisi, for tourism,” he told Investor.ge. and a cofounder of the Electronauts, “You probably know we had 28 per- Jobs which has been advocating and support- cent growth in tourism last year and 50 TBILISI MAYOR KAKHA KALADZE ing electronic music in Georgia for the percent of those visitors were coming to HAS CREATED A NIGHT MAYOR past decade. Tbilisi. They mostly spend 2.5-3 days POST TO HELP MAKE THE CITY A There are plenty of challenges to here generally; we want to increase the 24-HOUR TOWN FOR TOURISTS build Tbilisi’s night economy including number of days here and increase the AND LOCALS ALIKE. THE PLAN, a lack of public transportation from mid- late-night activities for our visitors. In INSPIRED BY SUCCESSES IN night to 6 a.m.; the absence of transporta- this case it is not just for club life, since CITIES IN AUSTRALIA, THE U.S. AND THE UK, AIMS TO ATTRACT tion routes connecting Tbilisi’s central club life right now is very successful; INVESTMENT, INSPIRE BUSINESS night clubs and main restaurants/theaters; they don’t need our help. Mostly we AND BOLSTER THE CITY’S public concerns about noise pollution; want to create—creative ideas, creative ECONOMY. and the budget to pay for it all. projects,” Gvarjaladze added.

22 | Investor.ge JUNE-JULY 2018 He believes a combination of plan- “I think that whatever will be done a plan for the next six months. For the ning, investment and community out- inside and around those buildings will ¿UVWVWHSVZHKDYHEHHQUHVHDUFKLQJ reach can help push Tbilisi tourism past make them more attractive. This is a strategies and international experience. the Rustaveli-Shardeni loop, creating part of our history, these buildings; this Right now, we are compiling models for jobs and rejuvenating the suburbs. is a part of Tbilisi if we want it or not. general research; the next step will be the “We have been thinking about nights This is part of the architecture and the strategy . . . I think this strategy will be in museums, a very successful project . urban part of the city, so why don’t we do >LQSODFH@IRUDWOHDVW¿YH\HDUVDQGZH . . and we want to create summer activi- something with this because it is impos- ZLOOGH¿QLWHO\GLVFXVVWKHVWUDWHJ\ZLWK ties, especially at night. Things like open sible to destroy them and do something the citizens. We do not want to make air cinemas, mobile theater activities, new,” he said. any decisions without the stakeholders,” but also I think sport activities will be a Gvarjaladze added. priority for us,” he said, adding “we are COMMUNICATION IS KEY The process has already started: a southern country and I am always very The night economy program will last nearly 50 different festivals are planned jealous when I see, in Spain for instance, several years, Gvarjaladze told Investor. for this year and Gvarjaladze and his people playing football at night.” ge, stressing that community support will WHDPDUHZRUNLQJWR¿QGODWHQLJKWHOH- These projects can also create sum- be crucial to its success. ments to tie into the festivals. mer jobs for young people, as well as “On one side, we have the citizens In addition, this summer they are business opportunities. who cannot not sleep at night, and on the planning a large international forum For instance, he has his eye on Gl- other side, business, which we need as on the late-night economy, where cities dani—and Mukhrani, as well as other well . . . I think the major challenge and from around the region can learn from Tbilisi suburbs— as potential locations issue will be to mediate between those other countries’ experiences with night IRUEURZQ¿HOGLQYHVWPHQWVRQROGEXLOG- WZRELJJURXSVDQGWRWU\DQG¿QGVROX- economies. ings that can be repurposed as multifunc- tions. Generally, the nighttime economy “I think if we manage the transpor- tional spaces. is about communication; it is about the tation issue and solve a couple of big “I did a documentary about the his- involvement of different groups, and this epicenters of noise pollution . . . and tory of Gldani, and I have been intently is what I am trying to provide and support create a couple of good, creative events researching this part of the city. This and help with,” he said. in the outskirts, in the suburbs, that could was one of the most innovative projects “We have been working: we have already be a step ahead,” he said. of that time; very young architects had their vision of modern cities. Actually, this involved a lot of buildings and places for cultural events, sports life—which have been abandoned,” Gvarjaladze said. “Also we understand, especially in the European Union countries, there is a trend to get into those old industrial buildings. If you take Berlin, that is ba- sically those old industrial textile buildings. But I have also been to many places in London, like an old munitions factory that young people turned into a very nice, interesting place,” he said. While these buildings may not be attractive for the casual observer, Gvarjaladze stressed that there is the potential to make them into something great.

JUNE-JULY 2018 Investor.ge | 23 SUMMER FUN: A Cultural Calendar of Events, Performances, Exhibitions and Festivals in Georgia

FROM THE CONCERTS AND THE SPORTING EVENTS TO THE MUSEUMS AND EXHIBITS, THERE IS PLENTY TO DO IN GEORGIA IN THE SUMMER. THE FOLLOWING IS A PARTIAL LIST OF EVENTS SCHEDULED FOR JUNE-AUGUST IN THE CITY AND ELSEWHERE IN THE COUNTRY. INFORMATION IS AVAILABLE ON TKT.GE AND BILETEBI.GE,

24 | Investor.ge JUNE-JULY 2018 UNLESS OTHERWISE NOTED. OTHER LINKS TO CHECK FOR GREAT SUMMER EVENTS: CULINARYBACKSTREETS. COM - GREAT WALKS AND OTHER FOOD TOURS HAPPENING ALL THE TIME; MUSEUM.GE; EVENTS.GOV.GE; CREATIVEGEORGIA.GE; MCS.GOV.GE.

JUNE-JULY 2018 Investor.ge | 25 MUSIC/CONCERTS:

STEPHANE When: Jun 7 at 20:00 Where: Tbilisi Concert Hall

SIMON BOCCANEGRA When: June 10,13,16,17 20:00 Where: Tbilisi Opera and Ballet Theatre

TBILISI OPEN AIR 2018 When: June 22-24 at 15:00 Where: Lisi Wonderland

CHRIS BOTTI When June 28 Where: Black Sea Arena

ELTON JOHN When: June 30, July 1 at 20:00 Where: Black Sea Arena

NINO KATAMADZE & INSIGHT When: July 8 on 12:00 Where: Tbilisi Open Air Museum of Ethnography

ASEA SOOL When: July 9 at 12:00 Where: Tbilisi Open Air Museum of Ethnography

HIP HOP DAY When: July 10 at 12:00 Where: Tbilisi Open Air Museum of Ethnography

ROBI KUKHIANIDZE & “OUTSIDER” When: July 11 at 12:00 Where: Tbilisi Open Air Museum of Ethnography

GROUP FRANI When: July 12 on 12:00 Where: Tbilisi Open Air Museum of Ethnography

GROUP REGGAEON When: July 14 at 12:00 Where: Tbilisi Open Air Museum of Ethnography

NIAZ DIASAMIDZE & 33A When: July 15 at 12:00 Where: Tbilisi Open Air Museum of Ethnography

ROBERT PLANT When: July 19 at 18:00 Where: Black Sea Arena

HOUSEBAND AFTERPARTY When: July 19 at 23:00 Where: Batumi Tennis Club

26 | Investor.ge JUNE-JULY 2018 DJ LO LORETTA BROWN AKA ERYKAH BADU When: July 20 at 19:00 Where: Batumi Tennis Club

WYCLEF JEAN When: July 21 at 19:00 Where: Batumi Tennis Club

R+R NOW - ROBERT GLASPER When: July 22 at 19:00 Where: Batumi Tennis Club

SUMMER SET When: July 27 at 21:00 Where: Tbilisi Sea

GEM FEST 2018 When: August 9 at 11:00 Where: Anaklia

AKCENT LIVE IN GEORGIA When: August 10 at 21:00 Where: Mtatsminda Park

NINO KATAMADZE When: August 21 Where: Black Sea Arena

THE CHEMICAL BROTHERS When: Sep 1 at 17:00 Where: Rustavi International Motopark EXHIBITIONS

GEORGIA THROUGH THE EYES OF MAGNUM PHOTO When: May 19 - August 19 Where: Svaneti Museum of History and Ethnography, 7 A. Ioseliani Str. Mestia, Svaneti.

SOSO DUMBADZE: A YELLOW BUS When: June 8-10 Where: Fabrika, Rooftop, 8 Egnate Ninoshvili St, Tbilisi

11TH INTERNATIONAL WINE AND SPIRITS FAIR When: June 14-16 Where: ExpoGeorgia www.expogeorgia.ge/calendar; www.winexpo.ge EVENTS

ICE CREAM FESTIVAL When: July 15 at 11:00-18:00 Where: Mtatsminda park, Tbilisi

EZO ART AND MUSIC FESTIVAL 2018 When: Multiple days (June 15-16; July 14; September 7-8) Where: Mtatsminda Park, Tbilisi

ART GENE FESTIVAL When: July 8-15 All Day Where: Tbilisi Open Air Museum of Ethnography JUNE-JULYJJUJUNUNUNE-EE-JEJ-JUULYULY 202201801818 Investor.geIInnvev ststoror.g.ge | 2727 THEATER/PERFORMANCES pantomime.ge HOST AND GUEST WELCOME TO GEORGIA - THE MUSICAL When: June 22, 23 at 20:00 When: Multiple Dates at 20:00 (June 8, 15, 22, 29 check tkt.ge Where: Shalikashvili Theatre for more info) Where: Music & Drama State Theatre (182 Davit Aghmash- SHAKESPEARE SONNETS enebeli Ave., Tbilisi) When: June 30 at 20:00 facebook.com/musical.ge/ Where: Shalikashvili Theatre http://musical.ge/ pantomime.ge

SOUNDS OF GEORGIA - HOMEMADE MUSIC BASTI BUBU & BBB ACADEMY When: Multiple Dates at 17:00 (June 6, 13, 20, 27; July 11, 18, When: July 7, 19 at 16:00 25; August 1, 8, 15, 22, 29). A cozy atmosphere of Tbilisi “Italian” Where: Batumi State Musical Centre yard with the aroma of homemade food. Where: Ivan Turgenev Str., 2 / Tbilisi yard SUKHISHVILEBI facebook.com/soundsofgeorgia (for more information, map When: July 13 at 12:00 and additional dates/times) Where: Tbilisi Open Air Museum of Ethnography

SOUNDS OF GEORGIA- CITY OF TUNES When: Multiple Dates at 17:00 (June 7, 14, 21; July 12, 19, 26) Where: Europe square, Dutu Megreli Str., 2 / Hotel “Nata” / Terrace facebook.com/soundsofgeorgia (for more information, map and additional dates/times)

SOUNDS OF GEORGIA - SING AND DRINK When: Multiple Dates at 17:00 (June 8, 15; July 13, 20, 27) Where: Agmashenebeli Ave., 21, wine salon “Papa Heming- ZD\µ1HZ7LÁLV facebook.com/soundsofgeorgia (for more information, map and additional dates/times)

BU SEHIRDE When: June 16 at 19:00 Where: Tbilisi Concert Hall

THE WISHING TREE When: June 15,16 at 20:00 Where: Shalikashvili Theatre

28 | Investor.ge JUNE-JULY 2018 5"9-"8 13"$5*$&

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SWOT: Georgia’s Tourism and Hospitality Sector

INVESTOR.GE IS INTRODUCING May study by Galt&Taggart “Importantly, Georgia has never seen A NEW PLATFORM FOR found that tourism is “the most a decline in its tourism revenues—not MEMBERS TO LEARN MORE A ÀRXULVKLQJSDUWRIWKH*HRUJLDQ even in 2009 and 2015, beating peers ABOUT EACH OTHER. IT IS economy.” which experienced reduced tourism DEDICATED TO SHOWCASING 1RWRQO\KDYHWRXULVPQXPEHUVEHHQ revenues in those years,” the report said. OUR MEMBERS’ OPINIONS LQFUHDVLQJVLJQL¿FDQWO\RYHUWKHSDVW In addition, the report found that tour- AND CONCERNS ABOUT THE several years, but the sector was unaf- ism numbers should double over the next ISSUES THAT ARE IMPORTANT fected by regional economic turmoil in ¿YH\HDUV7KDWGRHVQRWPHDQKRZHYHU FOR THEM. THE SECOND 2015-2016. that increased revenue will automatically FEATURE IN THIS SERIES IS THE In fact, the $2.8bn earned by the follow, warned Galt&Taggart Economist TOURISM AND HOSPITALITY tourism sector in 2017 helped Georgia Eva Bochorishvili. SECTOR AND WE ASKED AMCHAM COMPANIES WR³VLJQL¿FDQWO\UHGXFHWKHFRXQWU\¶V “Given the ongoing trend in arrivals INVOLVED IN THE FIELD ABOUT FXUUHQWDFFRXQWGH¿FLW´WKHUHSRUWVDLG as well as examples of other compara- GROWTH, CHALLENGES AND noting that it fell to single digits (8.7 tive countries, we think that doubling of PROSPECTS FOR THE SECTOR. percent of GDP) that year. WRXULVWQXPEHULQWKHQH[W¿YH\HDUVLV

32 | Investor.ge JUNE-JULY 2018 quite realizable. However, more tourist ism industry in Georgia say the country he said. arrivals do not mean that revenues in has an incredible number of strengths The country’s ancient culture heri- the sector will increase by the same rate to build on. tage is an important draw for tourists, if the services Georgia offers to tourists Georgia’s biggest strength is the noted Alliance Group Founder Akaki ZLOOQRWEHIXUWKHUGLYHUVL¿HG´VKHWROG “heartfelt experience” it offers tourists, Songulia. Investor.ge. noted Hilton Batumi’s Torsten Weller. He added that Georgia’s liberal visa “So the emphasis should be on “From my professional point of view policy and public safety also add to its GLYHUVL¿FDWLRQRIWRXULVWVHUYLFHVDQG WKHVWUHQJWKVDUHGH¿QLWHO\WKHFXOWXUHLW ability to attract tourists. quality of service in order to generate is the heartfelt hospitality, the feeling you Others underscored the sheer variety more revenues in the tourism sector,” get from the people who live in Georgia, Georgia offers tourists, in terms of where Bochorishvili added. from the Georgians, who are really wel- to go and what to do—as well as in terms Tourism and hospitality professionals coming and hospitable,” he said. of budget. agree. In a survey of AmCham mem- “It is the culture, the culinary, it is the “Georgia is a wonderful, adventur- bers involved in the tourism industry, wine, the landscape, the people them- RXVDQGFXULRXVSODFHWRYLVLW1RWRQO\ many pointed out the need to do more selves...everyone who experiences this is for those who come to see the nature but to continue developing and growing the bragging about it. That is why we [tour- also if you just walk around the capital. sector. They also underscored the many ists] want to come back,” Weller said. Online services and maps are fairly easy strengths and opportunities in the sector. Riverside Hotel’s Dito Shvelidze to use and the multiple taxi services are agreed that Georgia’s legendary hospi- also helpful. There are lots of choices for GEORGIA’S STRENGTHS tality plays an important role. “People accommodation which enables tourists From culture to climate, safety to here are very hospitable and go the extra to visit on almost any budget,” Betsy’s accessibility, professionals in the tour- mile to make guests’ stay unforgettable,” Hotel owner, Steve Johnson, said.

JUNE-JULY 2018 Investor.ge | 33 “For a small country, it’s capacity to develop infrastructure not only in major Others echoed his concerns about offer vastly different experience options cities but in regions and villages as well. WKHÀLJKWVLQWRWKHFRXQWU\²DVLWXDWLRQ is truly astounding—one can relax at a It is also important to raise the tourism that is improving, but still requires work. high-end hotel in the city center and head education, especially in rural areas, to “It has been, and continues to be a toward the wilderness of mountainous directly involve local communities in challenge for the airlines arriving and villages within a blink of an eye. Excit- the management of regions tourism and departing in the middle of the night into ing destinations coupled with the easy to make it more effective,” Vinotel’s and out of the capital. Kutaisi’s airport is immigration laws, investment friendly Benedikt Kashakashvili said. DJRRGRSWLRQIRUOHVVH[SHQVLYHÀLJKWV climate and political stability contribute Batumi Hilton’s Torsten Weller also and better arrivals and departures but, to the recent growth spurt of Georgian noted the need to provide people with not for the main tourist trade since it is tourism sector,” Radission Blu Iveria better infrastructure to move around the located 3-4 hours drive from Tbilisi,” Hotel Tbilisi’s Avtandil Tsurtsumia said. country. He said the work on the new noted Johnson. roads connecting Batumi and Kutaisi as +HDGGHGWKDW¿QGLQJTXDOLW\VWXGLHV CHALLENGES TO OVERCOME well as between Batumi and the capital on how much tourists are spending— Overwhelmingly, tourism profession- are a “very great start” but more work DQGRQZKDW²LVVWLOOGLI¿FXOW-RKQVRQ als told Investor.ge that infrastructure is needed. underscored that this is “important remains a real challenge for the industry. In addition, Weller pointed out to the information” and the data that is avail- “The country’s biggest challenge is to KLJKFRVWRIÀ\LQJLQWR%DWXPL able also seems to be “over reported and

34 | Investor.ge JUNE-JULY 2018 inaccurate.” ation,” he said. represents an important segment of the Songulia said more hotels are needed, global tourism industry today,” he said. especially mid-class hotels in the regions OPPORTUNITIES FOR GEORGIA’S Vakhtang Chipashvili, the general outside of the capital. But he stressed that TOURISM SECTOR manager of Best Western Tbilisi Art Ho- DTXDOL¿HGZRUNIRUFHLVDOVRQHFHVVDU\ Providing affordable education is tel, noted that the tourism sector has the WR¿OOWKHGHPDQG actually “the biggest opportunity in this “opportunity and huge potential to in- ³6HUYLFHTXDOLW\DQGTXDOL¿HGPDQ- VHFWRU´0F1HLOOHQRWHG crease of economic contribution, social, agement is what Georgia’s hospitality He added that Georgia also needs a cultural and humanity heritage values.” sector needs to strongly focused on,” proper convention center, which “if in “To capture the country’s full poten- he said. place, could attract large international tial, we have to explore new opportuni- Others echoed his concerns. business in order for Georgia to compete ties. Aparthotels are becoming popular “Human capital remains a serious within the international arena.” accommodation, both in sea and ski challenge within the hospitality sector. Valeri Chekheria, the director gen- resorts and this could be a good solution Whilst there are educational institutes eral of Adjara Group Hospitality, noted for tourism development in different WKDWSURYLGHWUDLQLQJLQWKLV¿HOGDQG the potential of agro-tourism as well as parts of Georgia,” noted Songulia. develop local talent, as the hospitality wellnesss tourism. Batumi Hilton’s Weller noted that VHFWRUJURZVIXUWKHUVSHFL¿FWUDLQLQJLV Tsurtsumia also pointed out to the Georgia has a great opportunity to con- required to enhance and develop service opportunities to expand “existing popular tinue to grow as a tourism destination, delivery and educate on current trends in locations” and explore lesser known, but especially if the country is able to cre- order to be competitive to other destina- equally interesting parts of the country, ate and promote a united “story” about tions and to meet and exceed customers including Racha, Imereti and other Georgia as a destination. growing expectations,” noted Cameron regions. “What do people like? They like to 0F1HLOOLH0XOWLSURSHUW\*HQHUDO0DQ- Vinotel’s Kashakashvili agreed. listen to a story,” he said, noting that a ager, Marriott Hotel, Courtyard by Mar- “One of the important directions of good narrative about a place—like Italy riott, and Moxy Hotel. hospitality and tourism development in and France have accomplished—attracts “The increased tourism figures Georgia is to increase adventure tourism people and makes them want to learn are creating further jobs opportunities and to move toward sustainable tourism more. “I think a story would be a great within this sector, however the lack of development in mountain regions, to opportunity, it would be more effective to educational institutes are apparent and place mountains and alpine areas in a the outside world [to package] all those certainly need to be a future consider- dominant position, as mountain tourism heartfelt experiences.”

JUNE-JULYJJUJUNUUNNEEJE-J-J-JULYUULLYLY 20220180188 Investor.geIInnveveststoorr.gge | 3535 36 | Investor.ge JUNE-JULY 2018

restaurant, Georgians are ordering more cocktails.

MORE BARTENDERS, BETTER COCKTAILS Igor Boriskin, Group Bar Manager at Tbilisi’s La Boheme restaurant, noted that “the bar culture, particularly cocktail bars, is a few steps up from a few years ago.” “It is a growing industry in Georgia. Anyone can make a drink, but people leave their homes to interact with other people. Uptight cocktail bars have gone. Any neighborhood ‘beer and shot bar’ FDQQRZPDNHD0DQKDWWDQDQGD1H- groni,” he told Investor.ge, adding that one reason for the increased interest in cocktails is growing competition among the bartenders and establishments, TATJANA MONTIK Boriskin added. At Dinehall, one can order classic Chacha Stars ixed drinks have long played cocktails, such as the Cosmopolitan, second fiddle to wine in based on cranberry juice and tequila, in Tbilisi’s MGeorgia—a fact that, while which is popular especially among QRWVXUSULVLQJKDVPDGHLWGLI¿FXOWWR women diners, Grigorian said. get anything more complicated than a Growing gin and tonic at Tbilisi bars. GEORGIAN COCKTAILS But that is changing, and Georgia’s Bars and restaurants are also in- Cocktail own grappa-esque chacha is playing a troducing local variations on classic starring in the country’s budding cocktail cocktails, as well as creating new drinks culture. based on local tastes. Culture “Despite the fact that Georgia is At La Boheme, bartenders are re- known as a cradle of wine, a lot of specting fresh and local produce the GEORGIA’S people, especially those of the young way chefs do. “Sours and cocktails that INFAMOUS CHACHA generation, love to drink cocktails,” are based on herbaceous plant and fresh Joni Tarziani, bartender of the Funicular ingredients are becoming a newer trend IS EARNING RAVE Lounge Bar on Mtatsminda at the Upper in cocktail making,” Boriskin said, add- REVIEWS AS THE Funicular station, told Investor.ge. LQJ³WKH\WDNHRQVRPDQ\ÀDYRUVLI\RX STAR INGREDIENT IN “You do not always feel in the mood ZDQWWRDGGDVSLULWRUOLTXRUÀDYRUWR TBILISI’S BUDDING for wine, for example, if you are about accompany them that it will be a next to experience wild night-life. Therefore, level thing in big cities.” COCKTAIL CULTURE. cocktails are a perfect choice as an alter- The Zesty Martini is a very good native,” he added. example. A refreshing blend of coriander Diana Grigorian, Manager at Dine- ZLWKLWVPXOWLIDFHWHGÀDYRUDQGIDEXORXV hall restaurant, agreed, noting that kick is paired with fresh, crisp ginger while foreigners often drink wine at the and the vibrant taste of pineapple. The

38 | Investor.ge JUNE-JULY 2018 Esmaki Martini is notable for its unusual CHACHA PUNCH They have also developed chacha- mix of ingredients: chili, cucumber, pine- The bar also serves Chacha Punch, based cocktails. apple, passionfruit and gin. made with chacha, the Georgian grape- “Chacha is noble and a very good What is the most popular cocktail based spirit; Martini Rosso vermouth and ingredient for cocktails. A good-quality of all? “I would say it is the Bohemian some syrups; as well as the Cucumber chacha is never harsh on the palate and Grove,” Boriskin said. “It is simple and Ginger Collins. should leave a long and pleasant after- perfect, based on 100% agave tequila, La Boheme also offers Georgia- taste and a generous feeling of warmth. Mexican lime, Demerara sugar, Chacha mixes well with chocolate, fresh mint and a dash of cran- honey, mint and nuts. berry juice stirred into crushed *HRUJLDsVRZQJUDSSDHVTXHFKDFKD Our signature cocktail, Crema- ice. This cocktail reminds you LVSOD\LQJDVWDUULQJLQWKHFRXQWU\sV tion of Care, is based on Oaked of warm summer evenings on Saperavi chacha. winter nights and is refreshing budding cocktail culture. 7KHGLVWLQFWLYHÀDYRURIFKDFKD during hot summer days.” shines through in this smooth drink, Funicular Lounge Bar’s cocktail inspired signature drinks. with Frangelico adding rich noisette, menu is expanding with the season, noted “We adapted the old classic Bloody herb notes and pear with a touch of Tarziani. In addition to famous cocktails, 0DU\WRORFDOÀDYRUV6YDQHWLDQVDOW honey.” RQHFDQ¿QGVXFKGULQNVDV%HWZHHQWKH homemade ajika, and Saperavi wine,” In La Boheme’s cocktail list, there Sheets and Funicular Iced Coffee, made Boriskin said, adding that right now are also two drinks based on Georgian with Georgian brandy, shaken with cof- they are “experimenting with seasonal wine: Sangria, which uses semi-sweet fee and dark chocolate, and served over ingredients such a tarragon, pennyroyal, Kindzmarauli wine, and Punch, made ice and seasoned with vanilla. and mulberries.” with Saperavi wine.

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40 | Investor.ge JUNE-JULY 2018 A MILITARY PARADE, HIGH-RANKING POLITICAL GUESTS, CELEBRATES ABROAD, NATION-WIDE CONCERTS AND A SAVVY SOCIAL MEDIA CAMPAIGN: GEORGIA HAS BEEN PREPARING FOR MONTHS TO CELEBRATE THE 100TH ANNIVERSARY OF THE GEORGIAN DEMOCRATIC REPUBLIC (1918-1921). President of Georgia Press Office

JUNE-JULY 2018 Investor.ge | 41 Georgia Celebrates the

Centenary of Government of Georgia Press Office the Georgian Democratic Republic

A MILITARY PARADE, HIGH- RANKING POLITICAL GUESTS, CELEBRATIONS ABROAD, NATIONWIDE CONCERTS AND A SAVVY SOCIAL MEDIA CAMPAIGN: GEORGIA HAS BEEN PREPARING FOR MONTHS TO CELEBRATE THE 100TH ANNIVERSARY OF THE DEMOCRATIC REPUBLIC OF GEORGIA (1918-1921). Government of Georgia Press Office he Georgian government has been working hard over the past Tseveral months to create a special celebration for the country’s Inde- pendence Day and the 100th anniversary of the Georgian Democratic Republic. In addition to official events, at home and abroad, a lively social media campaign was launched to engage young Georgians with the words and ambitions of the men and women who founded the Georgian Democratic Republic. While more events are planned for the rest of the year, May 26 was a major celebration across the country and in diaspora communities abroad. The presidents from six countries and the European Commission President Government of Georgia Press Office

42 | Investor.ge JUNE-JULY 2018 President of Georgia Press Office

Jean-Claude Juncker, in addition to a host with efforts to build ties with European importance now. The First Republic’s RIKLJKUDQNLQJRI¿FLDOVIURPRWKHUQD- powers. experience is another strong argument tions, joined Georgia in its celebrations. proving our Western identity. And the The children and descendants of the NATIONWIDE CELEBRATIONS fact that Georgia is now so strongly pur- 5HSXEOLF¶V¿UVWOHDGHU1RH-RUGDQLDDQG The Georgian government held a VXLQJWKHSDWKRILQWHJUDWLRQLQWR1$72 other prominent statesmen also attended days-long celebration across the coun- and Europe originates from there [the the celebration. try, complete with a military parade and year of 1918],” he added. high-ranking foreign officials. There At the same event, Georgian Presi- DEMOCRATIC LEGACY were also planned events in France, the dent Giorgi Margvelashvili hailed the The Republic did not last long, just U.S. and the UK, as well as other coun- country’s successful foreign policy, its three years, from 1918 to 1921, before tries, and more conferences and openings engagement with the West and its de- the democratically elected government in honor of the country’s First Republic veloping democracy. “Georgia has never was forced into exile and the country fell are scheduled to take place until the end [before] had such representative delega- to Bolshevik Russia. of the year. tions as are now in Georgia, and we are %XWWKHLQÀXHQFHRIWKRVHWKUHH\HDUV On May 26th, Prime Minister Giorgi FRQ¿GHQWWKDWWKLVLVDSUHUHTXLVLWHIRU and the patriotic men and women who Kvirikashvili praised the legacy of the victory that is leading us to our strategic strove to create a modern democracy First Republic in an address. JRDORXUPHPEHUVKLSLQ1$72DQGWKH for the Georgian nation following the “We created the Georgian Democrat- European Union,” Margvelashvii said. collapse of the Russian Empire, is still ic Republic a hundred years ago, but in “Our goal is clear; we must maintain growing. three short years the Red Army invaded our country’s independence. We should Scholarly research into the accom- Georgia and the country’s independence establish a free country in which our plishments of the First Republic contin- and our freedom was put on hold for 70 citizens, through their multiple talents, ues to uncover more and more details years,” Kvirkashvili said while address- will strengthen our homeland and leave about those fateful years, and with it ing a ceremony. “Over these years, we a legacy of achievements for our future comes increased recognition for what never betrayed the idea of freedom and generations as our ancestors [did]….The 1RH-RUGDQLDDQGKLVJRYHUQPHQWZHUH passed it from generations to generations unity of our nation clearly demonstrate able to do: Among many other accom- and resulted in the restoration of the that Georgia is walking the path of vic- SOLVKPHQWVWKH¿UVWIHPDOH0XVOLP03 independence of Georgia 27 years ago.” tory. Together with our friends we will was elected in Georgia; the country was “The declaration of independence by move only in this direction. RQHRIWKH¿UVWWRJLYHZRPHQWKHULJKWWR Georgia in 1918 and its establishment ³*RG%OHVV*HRUJLD´3UHVLGHQW vote; and it had a dynamic foreign policy as a sovereign country carries greater Margvelashvili said.

JUNE-JULY 2018 Investor.ge | 43 NEWS

CONTENT

55 AmCham Social

45 AMCHAM GEORGIA HOSTED 48 AMCHAM SPOTLIGHT INTERVIEW AGRICULTURE MINISTER LEVAN DAVITASHVILI 49 NEW MEMBERS

46 AMCHAM MEETS PARTNERSHIP 50 MEMBERSHIP DIRECTORY FUND AND THE CO-INVESTMENT FUND 54 SOCIAL: FABRIKA COCKTAIL RECEPTION 46 AMCHAM BOARD HOSTS A CONGRESSIONAL DELEGATION 55 SOCIAL: COCKTAIL RECEPTION AT LA BOHEME 47 AMCHAM MEMBERS MEET BRITISH AMBASSADOR

47 AMCHAM MEMBERS MEET CRYPTOCURRENCY, BLOCKCHAIN EXPERTS

44 | Investor.ge JUNE-JULY 2018 NEWS

AMCHAM GEORGIA HOSTED AGRICULTURE MINISTER LEVAN DAVITASHVILI AGRICULTURE MINISTER LEVAN DAVITASHVILI DISCUSSED THE ONGOING PROJECTS OF THE MINISTRY AT THE MONTHLY AMCHAM LUNCHEON ON MAY 30 AT TBILISI MARRIOTT HOTEL. THE MINISTER DISCUSSED A RANGE OF ISSUES, INCLUDING EFFORTS TO PROMOTE EXPANSIONS IN INVESTMENT IN THE SECTOR, AS WELL AS THOSE TO MITIGATE RISKS. THE PRESENTATION WAS FOLLOWED BY A Q&A BETWEEN MEMBERS AND THE MINISTER.

JUNE-JULY 2018 Investor.ge | 45 NEWS

AMCHAM MEETS PARTNERSHIP, CO-INVESTMENT FUNDS AMCHAM GEORGIA HOSTED THE PARTNERSHIP FUND AND THE CO- INVESTMENT FUND AT A ROUNDTABLE AT RADISSON BLU TBILISI ON MAY 21.

AMCHAM BOARD HOSTS A CONGRESSIONAL DELEGATION AMCHAM GEORGIA’S BOARD HOSTED A CONGRESSIONAL DELEGATION LED BY CHAIRMAN OF THE HOUSE JUDICIARY COMMITTEE BOB GOODLATTE AT VINOTEL ON MAY 5.

46 | Investor.ge JUNE-JULY 2018 NEWS

AMCHAM MEMBERS MEET BRITISH AMBASSADOR AMCHAM GEORGIA HOSTED A MEMBERS-ONLY LUNCHEON WITH THE UK AMBASSADOR TO GEORGIA, MR. JUSTIN MCKENZIE SMITH, AT THE RADISSON BLU HOTEL ON APRIL 23. THE AMBASSADOR SPOKE ABOUT THE UK’S ROLE IN GEORGIA AND UK FOREIGN POLICY AS IT RELATES TO GEORGIA AND THE REGION. THE PRESENTATION WAS FOLLOWED BY A LIVELY Q&A BETWEEN MEMBERS AND THE AMBASSADOR. AMCHAM MEMBERS MEET CRYPTOCURRENCY, BLOCKCHAIN EXPERTS

AMCHAM HOSTED A ADVERTISEMENT PANEL DISCUSSION ON www.ilf.com CRYPTOCURRENCIES AND BLOCKCHAIN TECHNOLOGIES AT THE CHAMBER’S MONTHLY ROUNDTABLE MEETING AT COURTYARD MARRIOTT ON APRIL 10. PANEL SPEAKERS WERE GIORGI MELASHVILI, EXECUTIVE DIRECTOR OF THE NATIONAL BANK OF GEORGIA; ANDREW THORNHILL, CO-FOUNDER OF SPOTCOIN LLC; AND NIKOLOZ 50 years of experience and innovation in providing world-class KHUNDZAKISHVILI, DIRECTOR OF project management, engineering and consultancy services shaped EFES BREWERY IN GEORGIA - JSC ILF Consulting Engineers into your trusted advisor worldwide. LOMISI. THE PRESENTATION WAS FOLLOWED BY DYNAMIC Q&A 50 YEARS OF ENGINEERING EXCELLENCE BETWEEN AMCHAM MEMBERS AND THE PANELISTS. ILF Consulting Engineers Georgia LLC ILF Consulting Engineers Austria GmbH 20, Ushangi Chkheidze Street Feldkreuzstraße 3 0102 Tbilisi, Georgia 6063 Rum, Austria Phone 1 +995 (59) 151 72 84 Tel. +43 (512) 24 12 - 0 Phone 2 +995 (59) 140 99 41 Fax +43 (512) 24 12 - 5900 E-Mail [email protected] E-Mail [email protected] NEWS

your business and plans in Georgia? What impact could this have on Geor- gia and the development of its tourism industry? I hope to be an active member of the YGL and to have the possibility of working on global issues. My top priority is to introduce Georgia to other YGL members who are opinion leaders in their UHVSHFWLYH¿HOGV Through future acquaintances I would like to contribute even more to the economic growth of the country as ZHOODVWR¿QGQHZDYHQXHVIRUWRXULVP development. I hope to further enhance my new contacts’ interest in our culture, society, history and the beautiful nature of Georgia. I want to generate new connections and build stronger ties and bridges across countries and cultures. I want to bring other YGL members to Georgia, introduce them to the business sector, to government, to civil society, to the cultural and artistic sector, and to hospitality and agriculture, creating an open dialogue. $UH\RXWKH¿UVWSHUVRQIURP*HRU- gia to be selected? SPOTLIGHT INTERVIEW: 1R,DPWKHIRXUWKPHPEHU Kakha Kaladze, the current mayor of Valeri Chekheria, Director General of Tbilisi, Vera Kobalia, the former Minister Adjara Group Hospitality of Economy and Sustainable Develop- PHQWDVZHOODV1LQR=DPEDNKLG]HWKH VALERI CHEKHERIA, THE DIRECTOR GENERAL OF ADJARA GROUP HOSPITALITY, Chairwoman of the Georgian Farmers’ WAS RECENTLY SELECTED AS ONE OF THE WORLD ECONOMIC FORUM’S Association were all members before me. YOUNG GLOBAL LEADERS, WHICH IS AN ANNUAL HONOR EXTENDED TO What are you looking forward to 100 “OF THE WORLD’S MOST PROMISING ARTISTS, BUSINESS LEADERS, PUBLIC the most from the program? SERVANTS, TECHNOLOGISTS AND SOCIAL ENTREPRENEURS.” YOUNG GLOBAL LEADERS PARTICIPATE IN A FIVE-YEAR PROGRAM THAT SEEKS TO MAKE THEM I look forward to new challenges. I MORE IMPACTFUL LEADERS. INVESTOR.GE SPOKE WITH VALERI CHEKHERIA am convinced that the program will en- ABOUT BEING SELECTED AS ONE OF THE 100 AND HIS EXPECTATIONS FOR THE courage us to think outside the box, and YOUNG GLOBAL LEADER PROGRAM. that it will make us even better at what we How were you selected as one of the bined with my background in hospitality GR1HHGOHVVWRVD\,DPNHHQWRPDNH Young Global Leaders (YGL)? and my contribution to the economic new acquaintances and build new ties. I was nominated by a previous mem- development of the country, helped my I am very touched and humbled to be EHURIWKH<*/1LQR=DPEDNKLG]H candidacy. among the world’s most promising busi- Then I went through a process of inter- :KDWGR\RXH[SHFWIURPWKH¿YH ness leaders, public servants, technolo- views. I suppose my education, com- year programme and how will it help gists, social entrepreneurs and artists.

48 | Investor.ge JUNE-JULY 2018 NEWS NEW MEMBERS

Visa International Feel Harmony Mr. Richard Lussen, Mr. Hans Gutbrod Service Association Non-Profit Individual Individual Corp. A Visa International Service Feel Harmony is a USA or- International Education Based in the Caucasus Association is a global pay- ganization that has received Consultant since 2002, Hans works in pol- ments technology company NGO status. Its main goal is icy research and consulting. that connects consumers, to motivate and assist people businesses, financial institu- and improved environmental tions, and governments in protection and sustainable more than 200 countries and development. The aim of the territories to fast, secure and organization is to conduct reliable electronic payments. scientific research, educate Visa operates one of the the public on renewable en- world’s most advanced pro- HUJ\ DQG HQHUJ\ HIÀFLHQF\ cessing networks — VisaNet as well as provide consul- — that is capable of handling tations and monitoring. The more than 65,000 transaction organization is working with messages a second, with fraud scientists, professors, university protection for consumers and teachers, energy and ecology assured payment for mer- experts, local specialists, busi- chants. Visa is not a bank and nesspeople, and students. The does not issue cards, extend main objectives are creation credit or set rates and fees for and utilization environmental consumers. Visa’s innovations, protection systems; environ- KRZHYHU HQDEOH LWV ÀQDQFLDO mental awareness and envi- institution customers to offer ronmental education; public consumers more choices: pay participation in EIA and ESIA; now with debit, pay ahead participation in environmental with prepaid or pay later with campaigns and events; imple- credit products. menting education programs, www.visa.com implementing renewable energy and energy efficiency projects; scientific research programs; organizing conferences, seminars, workshops; monitoring and evaluating different projects; implementing projects; publishing books, VFLHQWLÀFQHZVSDSHUVOHDÁHWV and organizing TV and Radio PR.

JUNE-JULY 2018 Investor.ge | 49 AmCham Company Members as of June 2018

PATRON MEMBERS Betsy’s Hotel / Prosperos Books Dentons Georgia LLC GMT Group 32/34 Makashvili St. / 10 Melikishvili St. 4 Freedom Square 34 Rustaveli Ave. Tel: 2509300; Fax: 2509301 Tel: 2988988; Fax: 2988910 Tel: 2987624, Fax: 2923592 www.dentons.com www.gmt.ge BP Exploration Georgia www.betsyshotel.com 24, S. Tsintsadze St. Tel: 2593400 www.bpgeorgia.ge Diplomat Georgia Best Western Hotel Tbilisi Gosselin Mobility Georgia 65, Kakheti Highway 11 Apakidze St. 3 M/D, Didi Digomi Tel: 2984950 Tel: 2300777 Tel: 2596601/02/03; Fax: 2596600 www.diplomat.ge www.gosselinmobility.eu KPMG Georgia LLC www.bestwesterntbilisi.ge 3rd Floor, Besiki Business Center, 4 Besiki St., 0108 Tel: 2935713; Fax: 2982276 British American Tobacco EY Georgia Grant Thornton LLC www.kpmg.ge 71 Vazha Pshavela Ave. 44 Kote Abkhazi St. 61 D. Aghmashenebeli Ave. Tel: 2157500/01/02; Fax: 2157503 Tel: 2439375; Fax: 2439376 Tel: 2604406 www.bat.com www.ge.ey.com www.grantthornton.ge PwC Georgia 12 M. Aleksidze St., 0160 King David Business Center Budget Rent a Car - Otokoc F H Bertling Georgia Ltd. Tel: 2508050; Fax: 2508060 Georgia LLC Greco Group Room 3, 4th Floor, www.pwc.com 37 Rustaveli St. 1 Nutsubidze St. 154 Agmashenebeli Ave. Tel: 2234112 Tel: 2393138; Fax: 2311107 Tel: 2252287 www.budget.com.ge www.greco.ge www.bertling.com UGT D&KDYFKDYDG]H$YHWKÀRRU Caucasus University Tel: 2220211; Fax: 2220206 GT Group .RVWDYD6W%OGWKÀ www.ugt.ge FINCA Bank Georgia 48 B. Cholokashvili St. Tel: 2377777; Fax: 2313226 9D]KD3VKDYHOD$YHUGÀ Tel: 2740740 www.cu.edu.ge Tel: 2244949 www.gtgroup.ge ZZZ¿QFDJH

CleanTech Ltd. CORPORATE A MEMBERS 5 Avlip Zurabashvili St., 0144 GULF Georgia Food TV Geo LLC Tel: 2922202 by Sun Petrolium Georgia LLC 45b. M. Kostava St. www.cleantech.ge Pixel Business Center, AECOM Georgia LLC Tel: 2931570 34 Chavchavadze Ave. 34, Chavchavadze Ave. www.foodtvgeo.com Tel/Fax: 2496444 Tel: 555603200 www.gulf.ge www.aecom.com Colliers International Georgia LLC 11th Floor, King David Business Frontera Resources Georgia Center, 12 M. Aleksidze St. 0171 12 Paliashvili St. Alliance LLC Hilton Batumi Tel: 2224477 Tel: 2252412 135 King Parnavaz St., Batumi 13 Takaishvili St., Batumi www.colliers.com www.fronteraresources.com Tel: 591555757 Tel: 292092 www.alliancegroup.ge www.hilton.com

Conformity Assessment Alliance Group Holding, JSC International (CAI) LLC Gazelle Finance Georgia LLC 2I¿FH1LNR1LNRODG]H6W 47/57 M. Kostava St., 0179 8 Politkovskaya St., 1086 Iberia Refreshments, JSC Tel: 2424181; Fax: 2998112 Tel: 595690008 Tel: 2904304 ZZZJD]HOOH¿QDQFHFRP Tetri Khevi Hesi District, Orkhevi www.agh.ge www.ca.international Tel: 2241091; Fax: 2241090 www.pepsi.ge

American Medical Centers, &XVKPDQ :DNH¿HOG*HRUJLD General Electric Georgia WKÀRRU%ORFN 5th Floor, Pixel Bulding, 11 D. Arakishvili St., Tbilisi 71 Vaja-Pshavela Ave. 34 Chavchavadze Ave. IMSS Ltd. Tel: 2500020 Tel: 2474849 Tel: 2259516 / 2259505 10a Bakhtrioni St. 114, Gorgiladze St., Batumi ZZZFXVKPDQZDNH¿HOGJH www.ge.com Tel: 2920928 Tel: (+995 32) 250 00 77 www.imss.ge www.amcenters.com

Dechert Georgia LLC Georgian American Alloys, Inc. WKÀRRU3L[HOEXLOGLQJ Anaklia Development 200 S Biscayne Blvd Suite 5500, Kavkaz Cement JSC 34 Chavchavadze Ave. Consortium Miami FL 33131 USA 29 Andronikashvili St., 0189 Tel: 2334719 6 Marjanishvili St. Tel: (1)3053757560 Tel: 2619090 www.dechert.com Tel: 2959910 www.gaalloys.com www.kavkazcement.ge www.anakliadevelopment.com

Deloitte Avon Cosmetics Georgia LLC King David Business Center Georgian American University Maersk Georgia LLC 117 Tsereteli Ave. WKÀRRU0HUDE$OHNVLG]H6W 8 Aleksidze St. 6 Khetagurov St. Tel: 2226805; Fax: 2226806 Tel: 2244566; Fax: 2244569 Tel: 2206520; Fax: 2206519 Tel: 2200800; Fax: 2200815 www.avon.com www.deloitte.ge www.gau.ge www.maerskline.com

50 | Investor.ge JUNE-JULY 2018 Marriott Hotels, Resorts & Suites Renstor LLC Air Astana Airlines JSC %/&/DZ2I¿FH 13 Rustaveli Ave. Building I , Gamrekeli St. 5th Floor, Pixel Business Center, 129a D. Agmashenebeli Ave., 0102 Tel: 2779200; Fax: 2779210 Tel: 551122392 34 Chavchavadze Ave. Tel: 2922491; Fax: 2934526 www.marriott.com www.renstor.com Tel: 2514999 www.blc.ge www.airastana.com

SEAF Management LLC Mastercard 7, Niko Nikoladze St. II Floor. BMC Gorgia 2 Leonidze St. /1 G.Tabidze St., Tel: 2998115; Fax: 2923533 Aliance Georgia Ltd 140 Tsereteli Ave. Premises No.315, Floor 4 www.seaf.ge 33 Samurzakano St. Tel: 2960960 Tel: 2900815 Tel: 2243773 www.gorgia.ge www.groupaliance.com www.mastercard.com Sheraton Metechi Palace Hotel 20 Telavi St. Tel: 2772020; Fax: 2772120 Borjomi Likani International www.sheraton.com/tbilisi 16 Meskheti St., Borjomi Aversi Pharma Meridian Express Tel: 2292292 15-17 Ketevan Tsamebuli Ave.0103 148/2 Aghmashenebeli Ave. Tel: 2745188 SICPA Security Solutions Tel: 2987860 www.ups.com Georgia www.aversi.ge 79 Chargali St., 0178 CaspiGroup Ltd. Tel: 2434580 29 Bochorma St. www.sicpa.com Tel: 2550818 Microsoft Georgia LLC Baker Tilly Georgia Ltd. www.caspigroup.com 34 Chavchavadze Ave. Meidan Palace, 44 Kote Abkhazi St. Tel: 2970123 Spotcoin LLC Tel: 2505353; Fax: 2505353 www.microsoft.com 13 Shalva Radiani St., 0179 www.bakertillyinternational.com Tel: 599258539 Caucasus Online LLC www.spotcoin.net 71 Vazha-Pshavela Ave. Tel: 2000022 www.co.ge M & M - Militzer & Munch Bank of Georgia T&K Restaurants (McDonald’s 3 Pushkin St. Georgien, FedEx GSP Georgia) 39 Ketevan Tsamebuli Ave. Tel: 2444134; Fax: 2983269 1 Dzmebi Kakabadze St. www.bog.com.ge Tel: 2748240, 2748941 Tel: 2921246; Fax: 2251422 Channel Energy (Poti) Limited www.fedex.com/ge www.mcdonalds.ge Georgia LLC, By Petrocas Energy Group 52, David Agmashenebeli St., Poti TBC Group Basel LLC 49 Krtsanisi St. Tel: (995493) 2-7-08-60 2I¿FH7HFKQRORJLHV6WHHOFDVH 7 Marjanishvili St. Tel: 2550110 www.petrocasenergy.com Dealership Tel: 2272727; Fax: 2228503 www.krtsanisi.com 4 Freedom Sq., 0105 www.tbc.com.ge Tel: 2999980, 2688229 ZZZRI¿FHWHFKQRORJLHVJH Château Mukhrani, J.S.C. TMC Global Professional Sangebro St. Services Basis Bank JSC Tel: 2201878; Fax: 2201878; 6001 Indian School Road NE, Suite 1 Ketevan Tsamebuli Ave. www.mukhrani.com 190, Albuquerque, NM 87110, USA Tel: 2922922; Fax: 2986548 Orient Logic Ltd. Tel: (1 505) 8723146 www.basisbank.ge 8 Beliashvili St. www.tmcservices.com Tel: 2541818 Citicorp Funds www.orient-logic.ge 32/34 I. Abashidze St. Visa International Service Batumi International Container Tel: 555446699 Association Terminal laboheme.restaurant 900 Metro Center Boulevard, Foster 11, Baku Street, 6010, Batumi PepsiCo Wimm-Bill-Dann City, CA 94404, USA Tel: 422 276452 Village Ponichala, Tbilisi 0165 Tel: 599374877 www.bict.ge Tel: 2475290 www.visa.com City & Co. www.wbd.ru 4 Besiki St. Tel: 2920921 West Invest Ltd. BDO LLC 13a Lortkipanidze St. 2 Tarkhnishvili Str. Tel: 2997275 Philip Morris Vere Business Centre, 0179 www.west-invest.ge CMC LLC 1 Tabidze St. Tel: 2545845; Fax: 2399204 4 Besiki St. Tel: 2439001; Fax: 2439005 www.bdo.ge www.philipmorrisinternational.com Tel: 2240717 Willis Towers Watson Ltd. www.cmc.ge 17 M. Lebanidze St. Tel: 2905509 www.willis.com BGI Advisory Services Georgia ProCredit Bank 5XVWDYHOL$YH,,ÀRRU Crowne Plaza Borjomi 154 Agmashenebeli Ave. Tel: 2997292; Fax: 2996615 Baratashvili Str. 9, 1200 Borjomi Tel: 2202222; Fax: 2202222-2226 www.bgi.ge Tel: 995 367 220260 www.procreditbank.ge www.cpborjomi.com CORPORATE B MEMBERS

Biltmore Hotel Tbilisi Radisson BLU Iveria Hotel Adjara Group Hospitality 29 Rustaveli Ave. Crystal, MFO JSC 1 Rose Revolution Sq. 1, 26 May Sq., 0179 Tel: 2727272 72 Tamar Mepe St. Kutaisi, 4600 Tel: 2402200; Fax: 2402201 Tel: 2300099 http://www.millenniumhotels.com/en/ Tel: 431253343 www.radissonblu.com www.adjaragroup.com tbilisi/the-biltmore-hotel-tbilisi/ www.crystal.ge

JUNE-JULY 2018 Investor.ge | 51 AmCham Company Members as of June 2018 NEWS

Dio Ltd. Georgian Airways HeidelbergCement Georgia Legal Partners Associated LLC 12th Km David Agmashenebeli Alley 12 Rustaveli Ave. 21 Al.Kazbegi Ave. 2I¿FH%HVLNL%XVLQHVV&HQWHU N3, Parsadani St. Tel: 2999730; Fax: 2999660 Tel: 2474747 4 Besiki St. 0108 Tel: 2361112 www.georgian-airways.com www.heidelbergcement.ge Tel: 2200203; Fax: 2250458 www.dio.ge www.lpa.ge

Herbalife Nutrition Georgian Beer Company Liberty Bank JSC Domson’s Engineering Bld. 4a Tamarashvili St., 0116 3311 Saguramo, Mtskheta District 74 Chavchavadze Ave. 8a Sanapiro St. Tel: 2202929 Tel: 2437770 Tel: 2555500; Fax: 2912269 Tel: 2050303 www.herbalife.com www.geobeer.ge www.libertybank.ge www.domsons.com

Hualing International Special Luca Polare Dorche Branch Prepabrik Iapi Ve Georgian Express Economic Zone 54 Oniashvili St. Inshaat Sanai Tijaret JSC 105, Tsereteli Avenue, 0119 25 Apt. 34/36 Kobuleti St. Tel: 2990399 026/13 Ilia Chavchavadze Ave. Tel: 2696060 Tel: 591005900 www.lucapolare.com Tel: 593472419 www.dhl.com www.hualing.cn www.dorce.com.tr Maqro Construction 22 Panjikidze St. Hydrolea LLC Georgian Hospitality Group Tel: 2000909 Duty Free Georgia 11 A. Apakidze St. 22 Peritsvaleba St., 0103 www.maqro.ge UGÀRRU%HVLNL6W Tel: 2987789 Tel: 790420015 Besiki Business Center www.ghg.ge www.hydrolea.com Tel: 2430150 www.dfg.ge Maqro Food “Dinehall” 28 Rustaveli Ave. ICS Ltd. TNT Agent in Georgia Tel: 2001616 Georgian Industrial Group LLC 25 Agmashenebeli Ave. www.dinehall.ge Efes Brewery in Georgia - GIG Plaza, 14 Gazapkhuli St., 0177 Tel: 2910220 Lomisi JSC Tel: 2210187 www.tnt.ge www.gig.ge Village Natakhtari, Mtskhta Region Mercure Tbilisi Old Town Tel: 2357225 9 Gorgasali St., Old Tbilisi, 0105 www.natakhtari.ge Tel: 2006060 ILF Beratende Ingenieure ZT www.mercure.com Georgian Integrated Systems GmbH Branch in Georgia (GiS) 15 Tamar Mepe Ave. Enviroserve Caucasus 2I¿FH$EDVKLG]H6W Tel: 2199453 [email protected] Tel: 2243724 www.ilf.com Mgaloblishvili Kipiani Dzidziguri www.enviroserve.ae www.gis.ge (MKD) 2I¿FH9D]KD3VKDYHOD$YH Tel: 2553880 International Black Sea www.mkd.ge ExpoGeorgia JSC Geo Steel LLC University 118 Tsereteli Ave., 0119 36 Davit Gareji St., Rustavi, 3700 David Agmashenebeli Alley 13 km, Tel: 2341100 Tel: 2243794 2, 0131 Mina JSC www.expogeorgia.ge www.geosteel.com.ge Tel: 2595005 4 Besiki St. www.ibsu.edu.ge Tel: 2449981/82/83; Fax: 2449980 www.mina.com.ge

Gebrüder Weiss LLC Airport Adjacent Territory, Globalink Logistics LLC Isbank Georgia JSC Kakheti Hwy 60 Sh. Nutsubidze St., 0186 140/B Agmashenebeli Ave., 0102 Mira Hotels Ltd. Tel: 2710011 Tel: 2000238, 2208147 Tel: 2310515 Brose Street Turn,Old Tbilisi www.gw-world.com www.globalinkllc.com www.isbank.ge Tel: 2242244/55/88 www.riverside.ge

Geocell *ORULD//& 7LÀLV3DODFH JTI Caucasus Murphy Bridge 3 Gotua St. 3 Gorgasali St., 0105 VII Floor, Pixel Business Center, 8th Floor, Building 6, Saakadze Sq, Tel: 2770100, ext. 7435; Tel: 2000245 34 Chavchavadze Ave. 0160 Fax: 2770119 ZZZWLÀLVSDODFHJH Tel: 2604111 Tel: 2007107 www.geocell.ge www.jti.com www.murphyshipping.com

GeoEngineering LLC GM Capital LLC Kordzahia, Jgenti Law Firm MyGPS 15a Tamarashvili St. 2 Tarkhnishvili St., 0179 10 Petriashvili St. 6 Bokhua St., 0159 Tel: 2311788; Fax: 2311787 Tel: 2912626 Tel: 2921878 Tel: 2180180 www.mygps.ge www.geoengineering.ge www.gmcapital.ge www.kjlaw.ge

National Center for Dispute Geomill LLC Gvinadze & Partners LLC Leavingstone Resolution 4, Chirnakhuli St. 44 Kote Abkhazi St, 0105 12a Al. Kazbegi Ave. 4/7 Rustaveli St., Rustavi Tel: 2400000 Tel: 2438970, Fax: 2438971 Tel: 2105103 Tel: 2193406 www.geomill.ge www.gvinadzeandpartners.ge www.leavingstone.com www.ncdr.ge

52 | Investor.ge JUNE-JULY 2018 NEWS

NCC Ltd. Qebuli Climate Terabank JSC CARE International in the 9, Erekle II turn 101, Tsereteli Ave. 3 Ketevan Tsamebuli Ave. Caucasus Tel: 2725088 Tel: 2356201 Tel: 2507700 37 Tsagareli St., 0162 www.ensisi.ge www.qebuli.ge www.terabank.ge Tel: 2291941 www.care-caucasus.org.ge Terma JSC Rakeen Development LLC Floor 1, 10 Budapest St. Nexia TA Pixel Business Center, Tel: 599554794 (CiDA) Civil Development 4th Floor, 19 David Gamrekeli St., 34 Chavchavadze Ave. www.terma.ge Agency 0160 Tel: 2933393; Fax: 2933993 9/1 Pirosmani St., Rustavi, 3700 Tel: 2242559 www.rakeen.ge Tel: 341258822 www.nexia.ge Terrace Hotel & Restaurant www.cida.ge 7 Polikarpe Kakabadze St. Tel: 2999001 Regus, Georgian Branch, Tbilisi www.theterracetbilisi.com Business Centre Noblet Media Level 4, 1 Tabidze St., 2 Leonidze Europe Foundation 7, Khorava St. St.,0105 Theco Ltd. 3 Kavsadze St. Tel:w 2396300 Tel: 2900039 16 Chikovani St. Tel: 2253942; Fax 2252763 (ext. 112) www.nobletmedia.com www.regus.com Tel: 592107515 www.epfound.org www.tbilisia.ru

Rentals LLC Feel Harmony Nodia, Urumashvili & Parnters University of Georgia 46 Rustaveli Ave.; 36 Griboedov St. 187 E. Warm Springs Rd. 2I¿FH,9%ORFN 77a Kostava St. Tel: 2454567 / 2996412 Suite B172, Las Vegas, 71 Vazha-Pshavela Ave. Tel: 2552222 www.rentals.ge Nevada 89119, USA Tel: 2207407 www.ug.edu.ge Tel: +1 702 781 7460 www.nplaw.ge Veziri Ltd. Resolution Insurance Brokers, 7 Luarsab Andronikashvili St., 0131 Georgia LLC Tel: 2251614 Free University of Tbilisi 61, Gorgasali St. Nutrimax Ltd. www.veziri.net 140 David Agmashenebeli Alley Tel: 2936305 68a Rustavi Highway, 0165 Tel: 2200901 www.rib.ge Tel: 2305335 www.freeuni.edu.ge www.nutrimax.ge Vinotel (“Aigvinissakhli”) LLC 4 Elene Akhvlediani Ascent Rooms Hotel Tel: 2555888 14 Merab Kostava St. www.vinotel.ge Georgia Red Cross Society 15 J. Kakhidze St. Overall Management Group Tel: 2020099, 2730099 Tel: 2961092 (OMG) Inc. www.roomshotels.com Wings and Freeman Capital www.redcross.ge 29 Marjanishvili St. Green Building, 6, Marjanishvili St. Tel: 2436052; Fax: 2436052 Tel: 2940051; Fax: 2940053 Sakcable JSC www.wfcapital.ge Suite 414, 19 Gamrekeli St. Good Governance Initiative Tel: 2221418 Wissol Georgia Pixel Center, 8th Floor, 34, Paine Stevens LLC www.sakcable.ge 74b Chavchavadze Ave. Chavchavadze Ave. 1 Ivane Javakhishvili Sqr. Tel: 2915315; Fax: 2915615 Tel: 2243111 Tel: 2903211, Fax: 2903291 www.wissol.ge www.ggi.ge www.painestevens.com Silknet Ltd. 95 Tsinamdzgvrishvili St. Zarapxana LLC Tel: 2910345; 15 Lubliana St. QSI International School of www.silknet.com Georgia PASHA Bank Georgia JSC Tel: 2510001 Village Zurgovani, Tbilisi 15, Shota Rustaveli Ave. www.zarapxana.ge Tel: 2537670; Fax: 2322607 Tel: 2265000 SRG Investments LLC www.qsi.org www.pashabank.ge D&KDYFKDYDG]H$YHUGÀRRU Tel: 2253581 NON-PROFIT ORGANIZATIONS www.silkroad.ge San Diego State University - Policy and Management Georgia Consulting Group (PMCG) Agricultural University of 5 Kostava St. 0108 $JKPDVKHQHEHOL$YHWKÀRRU T3Concept Ltd. Georgia Tel: 2311611 Tel: 2921171 13 Radiani St., 0179 140 David Aghmashenebeli Alley www.georgia.sdsu.edu www.pmcg.ge Tel: 2434455 Tel: 2594901 www.turner.com, www.t3concept.ge www.agruni.edu.ge

Transparency International Georgia Primera Golf & Residence TBC Leasing JSC Alliance for Progressive 61 Agmashenebeli Ave. 0102 36, Khetagurovi St., 0102 8 Bulachauri St., 0161 Healthcare Tel: 2932129 Tel: 2200036 Tel: 2272727 27/29 Chavchavadze Ave., 0179 www.tbcleasing.ge Tel: 2242413 www.transparency.ge

Publicis Ltd. Tbilisi View American Friends of Georgia Union of Busines Ladies 17 V. Jorbenadze St. 4a, Freedom Sq. 77 Nutsubidze St. 8 D. Gamrekeli St., 0194 Tel: 2745672; Fax: 2745671 Tel: 2999980 Tel: 2397174; Fax: 2388495 Tel: 2308661 www.publicis.ge www.tbilisiview.ge www.afgeorgia.org www.ubl.ge

JUNE-JULY 2018 Investor.ge | 53 NEWS

AMCHAM HOSTS MEMBERS AT FABRIKA COCKTAIL RECEPTION

ON MARCH 30, AMCHAM GEORGIA HOSTED ITS MEMBERS AT A COCKTAIL RECEPTION AT FABRIKA. AMCHAM MEMBERS HEARD PRESENTATIONS FROM SALOME ZURABISHVILI, WHO SPOKE ABOUT THE UN GLOBAL COMPACT GEORGIA; SALOME ZURABISHVILI, WHO PRESENTED CENN’S “LET’S KEEP GEORGIA BEAUTIFUL” PROJECT; AND EKA GEGESHIDZE, WHO SPOKE ABOUT JUNIOR ACHIEVEMENT GEORGIA.

54 | Investor.ge JUNE-JULY 2018 NEWS

AMCHAM COCKTAIL RECEPTION AT LA BOHEME

ON MAY 11 AMCHAM GEORGIA HOSTED A MEMBERS COCKTAIL RECEPTION AT LA BOHEME RESTAURANT. AMCHAM GEORGIA PRESIDENT MICHAEL COWGILL GREETED THE GUESTS AND THANKED THE LA BOHEME FOR HOSTING THE RECEPTION. MEMBERS USED THE OPPORTUNITY TO RECONNECT WITH FRIENDS, COLLEAGUES AND FELLOW REPRESENTATIVES OF MEMBER COMPANIES.

JUNE-JULY 2018 Investor.ge | 55 NEWS

Board Of Directors 2018

R. MICHAEL COWGILL PRESIDENT

SARAH WILLIAMSON IRAKLI BAIDASHVILI ANDREW COXSHALL FIRST VICE-PRESIDENT VICE-PRESIDENT & TREASURER DIRECTOR

ESBEN EMBORG LASHA GOGIBERIDZE BADRI JAPARIDZE DIRECTOR DIRECTOR DIRECTOR

AmCham Executive Director Writers George Welton Nino Bakradze, Lika Jorjoliani, Tatjana Montik, Sally White

Copy Editor Photos Alexander Melin The Office of the Georgian President and the Government of Georgia’s PR Office Marketing & Promotion Nini Kapanadze

Promotional Design Special thanks to all the contributors to the magazine, AmCham Georgia’s Levan Baratashvili staff, and all our contributors, especially the Georgian government and the Georgian President’s Office, which allowed us to publish photos from the May Magazine Design and Layout 26 Independence Day celebrations. This magazine would not be possible Giorgi Megrelishvili without your help 56 | Investor.ge JUNE-JULY 2018 NEWS

STEVE JOHNSON OTAR KIPSHIDZE KETTI KVARTSKHAVA DIRECTOR DIRECTOR DIRECTOR

CHRIS SCHLUETER BETSY HASKELL, DIRECTOR FOUNDING ADVISOR

GEORGE WELTON DWIGHT NYSTROM EXEC. DIRECTOR EX-OFFICIO MEMBER

AmCham Georgia Patron Members:

© The American Chamber of Commerce in Georgia, 2018 arising from the use of any product or service advertised within All rights reserved. No part of this magazine may be re-printed, or the pages of this issue. reproduced or utilized in any form or by electronic, mechanical Investor.ge is printed by CEZANNE or other means now known or hereafter invented, including AmCham Georgia: photocopying and recording, or in any information storage or rd retrieval system without permission. 36a Lado Asatiani Street, 3 ÁRRU7HO 7KHRSLQLRQVH[SUHVVHGLQWKLVPDJD]LQHGRQRWUHÁHFWWKHRSLQLRQ [email protected] of the American Chamber of Commerce in Georgia nor its Board HGLWRU#DPFKDPJHɕZZZDPFKDPJH Members or staff, unless otherwise stated. AmCham Georgia neither endorses, nor can be held liable for any eventuality www.investor.ge JUNE-JULY 2018 Investor.ge | 57