WHATSAPP, DOC? GEORGIA MTATSMINDA MAKEOVER– IF YOU BUILD IT, THEY MIGHT DIALS IN TO TELEMEDICINE REVIVING TBILISI’S ICONIC NOT COME–GEORGIA’S RIDGE FOR GENERATIONS TO MOUNTAIN TOURISM COME CONUNDRUM

Investor.A Magazine Of The American Chamber Of Commerce In Georgia geISSUE 79 JUNE-JULY 2021

: startup dreams come true with Georgia’s ÀUVWVWDUWXSH[LW

JUNE-JULY 2021‡ Investor.ge | 3 Investor.ge CONTENT

6 Investment news

10 Infographic: Georgia’s external trade in Jan-Apr ‘21

12 Georgia Abroad: highlights of Georgia’s spring success stories

16 Pulsar AI: startup dreams come true with Georgia’s first startup exit

20 WhatsApp Up, Doc? Georgia dials in to 16 telemedicine 22 Old routes, new parks for both digital and traveling visitors to Georgia

26 TBC Capital: Georgia’s transport sector getting back on the rails

28 Georgia delivers: the food-delivery startup boom

32 Mtatsminda makeover—reviving Tbilisi’s iconic ridge for generations to come

36 Plants for the future—improving Georgia’s 28 nurseries 38 ‘The law will set you free.’ Lawyer Zviad Kordzadze on the early days of the legal profession in Georgia

40 If you build it, they might not come—Georgia’s mountain tourism conundrum

42 Business Process Outsourcing in Georgia: the sweet spot in the back room

44 Galt & Taggart: as the power comes back online, 32 so does the economy 46 The case for waste and Georgia’s new strategy on plastics

48 Something smells fishy, but that may be a good thing for the Georgian seafood industry

50 Is Georgia’s energy potential being transformed into a potential liability?

38 NEWS ...... 52

4 | Investor.ge ‡ JUNE-JULY 2021

 
        JUNE-JULY 2021
    ‡ Investor.ge | 5 GEORGIAN EXTERNAL TRADE UP and Adjara (1.1%). Unemployment for Investment 12.8% IN JANUARY-APRIL 2021 women increased by just 0.2 percentage Georgia’s external trade turnover points in 2020, the data show, while for amounted to $3.9 billion in January-April men it was up 1.3%. News 2021, which is 12.8% higher compared INVESTOR.GE to the same period of the last year, show WORLD’S ‘MOST EXPENSIVE WINE preliminary data from Geostat. The PRODUCER’ TAKES AN INTEREST PROVIDES A value of exports increased 19.6% in IN GEORGIAN WINES BRIEF UPDATE the reporting period and totaled $1.19 ,QÀXHQWLDO)UHQFKZLQHPDNHU/RLF ON INVESTMENTS billion, while imports also increased 3DVTXHWIRXQGHURIWKHFRPSDQ\/LEHU AND CHANGES 10.1%, amounting to $2.7 billion. The Pater and producer of the one of the IN GOVERNMENT WUDGHGH¿FLWRI*HRUJLDLQ-DQXDU\$SULO world’s most expensive wines, is in- 2021 amounted to $1.5 billion, or 39% WHUHVWHGLQODXQFKLQJKLV¿UVWSURMHFWLQ POLICY THAT COULD of total trade turnover. Georgia together with the founder of IMPACT THE BUSINESS local wine company Askaneli, Gocha ENVIRONMENT. UNEMPLOYMENT UP 0.9%, TO Chkhaidze. The project aims to bring INFORMATION IN 18.5% IN GEORGIA IN 2020 Georgian wine to the most expensive THIS ISSUE WAS The unemployment rate in Georgia segment of the EU market. increased by 0.9% compared to 2019 “In the best-case scenario, we will TAKEN FROM and totaled 18.5% in 2020, Geostat data be able to start producing Georgian wine AGENDA.GE AND show. The regions with the most pro- that will be ready to enter the most ex- OTHER SOURCES. nounced spike in unemployment were pensive segment of the EU market in 12 Tbilisi (3.8%), Kvemo Kartli (2.8%) \HDUV´&KNKDLG]HWROG)RUEHV Pasquet’s most expensive wine is produced in quantities of around 1,200 bottles yearly. In 2015, only 550 bottles were made, fetching an average price of €30,000 per bottle, which makes this wine from Bordeaux one of the world’s most expensive.

JANUARY-APRIL 21: GEORGIAN DOMESTIC EXPORTS UP 19.6% Georgia’s domestic exports came out to $1.19 billion in January-April 2021, a 19.6% year-on-year increase, Geostat data show. The share of domestic exports in total exports constituted 73.8% and amounted to $884.2 million, a full 25% higher than the same period in 2020. The top countries that imported goods from Georgia during this time were China ($198.5 million), Russia ($146.1 mil- lion) and Turkey ($98.3 million). Copper ores consisted of nearly 30% of the total exports, with ferroalloys accounting for 12.6% in terms of value. Wine came in

6 | Investor.ge ‡ JUNE-JULY 2021 third, constituting 7.5% of the total value remittances in April 2021. Overall, the China – 1.5 million bottles (+19%), of exports. vast majority (94.9%) of all money trans- Kazakhstan – 1 million bottles (+56%). fers from abroad came to Georgia from PECULIAR RIKE JUGS CONCERT, FRXQWULHV/DVWPRQWKUHPLWWDQFHV 50-MEGAWATT WIND POWER CONFERENCE HALL REMAINS leaving Georgia totaled $25.8 million, PLANT IN EASTERN GEORGIA TO UNSOLD DESPITE DESPITE 50% compared to $10 million in April 2020. BE LAUNCHED IN 2022 DISCOUNT A 50-megawatt wind power plant Tbilisi’s quirky Rike Jugs concert and INTERNET ACCESS PROGRAM near the village of Nigoza in eastern conference hall, two glass and steel tube ROLLS OUT IN REMOTE VILLAGES Georgia is planned to begin operations constructions located in Tbilisi’s Rike IN GEORGIA in 2022, announced the Ministry of Park, are still up for sale, despite efforts Half a million people living in almost Economy of Georgia. to auction them off at a 50% discount a thousand settlements across Georgia, Turkish company Calik Enerji is ZLWKDQDVNLQJSULFHRIPLOOLRQ*(/ including in the highlands, will soon re- implementing the project in cooperation the National Agency of State Property ceive internet access and services such as ZLWKWKH(QHUJ\'HYHORSPHQW)XQGRI announced in late April. e-healthcare, education and governance Georgia. The $70 million project aims This was the fourth attempt to auc- WKDQNVWRDQHZSURMHFWFDOOHGµ/RJLQ to employ 200 people in the construc- tion off the Rike Jugs, with “nobody Georgia.’ tion process, while 25 people will be announcing interest in them” this time The project of ‘universal internetiza- employed after it becomes operational. DURXQG7KH¿UVWDXFWLRQDWWHPSWZDV tion’ in Georgia started from Ozurgeti KHOGLQ)HEUXDU\ZKHQWKHEXLOGLQJ municipality, in the Guria region, where NEW ADVISER ON FOREIGN ZDVYDOXHGDWPLOOLRQ*(/7KH5LNH 29,000 residents living in 49 settlements INVESTMENTS Jugs were installed over 15,000 square already have access to the internet. Georgian Prime Minister Irakli meters of space in 2012. The facility By 2025, the project is planned to Garibashvili has appointed Vazil Hudak, was expected to serve as a concert hall cover 1,000 settlements in Georgia, former Vice-President of the European in Europe Square, however, it was never giving internet access to about 500,000 Investment Bank (EIB) and former Min- FRPSOHWHG,QWRWDOPLOOLRQ*(/ZDV people. ister of Economy of Slovakia, as his spent on the construction of the building. µ/RJLQ*HRUJLD¶LVLPSOHPHQWHGE\ special adviser on foreign investments. Open Net in cooperation with the World Hudak will cooperate with the Euro- Bank. The World Bank has allocated pean Union, the International Monetary €35.7 million to support the project. )XQGWKH:RUOG%DQNWKH(XURSHDQ Investment Bank, the European Bank GEORGIAN WINE EXPORTS UP for Reconstruction and Development and 15% IN JAN-APRIL 2021 RWKHULQWHUQDWLRQDO¿QDQFLDOLQVWLWXWLRQV Georgia exported 28.3 million bottles as well as with the international business of wine to 55 countries in January-April community, investment funds and banks 2021, which is an increase of 15% com- in his new role. pared to the same period of 2020, says the APRIL 2021: MONEY TRANSFERS Georgian National Wine Agency. GEORGIA AMONG TOP-RANKED TO GEORGIA UP 145.4% Wine sales abroad generated Georgia COUNTRIES FROM WHICH TO Georgia received $194 million from $65 million in revenue, up 7% year-on- SOURCE TECH SERVICES abroad in April 2021, which is 145% year. *HRUJLDKDVDSSHDUHGIRUWKH¿UVW more than the amount received in April 7KHWRS¿YHFRXQWULHVWKDWLPSRUWHG WLPHLQ.HDUQH\¶V*OREDO6HUYLFHV/R- 2020, reports the National Bank of Georgian wine in January-April 2021 FDWLRQ,QGH[ *6/, WDNLQJWK Georgia. were: place among the top-ranked countries Russia ($33.3 million), Italy ($31.7 Russia – 17.1 million bottles (+16%), from which to source tech services, an- million) and the United States ($24.8 Ukraine – 3.3 million bottles (+9%), Po- nounced the country’s export promotion million) were the largest senders of land – 1.8 million bottles (+2%) agency, Enterprise Georgia.

JUNE-JULY 2021‡ Investor.ge | 7 *6/,LVDELHQQLDOUDQNLQJSXEOLVKHG by leading global management consult- ing organization Kearney. )RU¶VHGLWLRQRIWKHUDQNLQJ countries were assessed in 47 measure- ments grouped in four main categories: ¿QDQFLDODWWUDFWLYHQHVVSHRSOHVNLOOV DQGDYDLODELOLW\EXVLQHVVHQYLURQPHQW and digital resonance. “Georgia is at the crossroads of Europe and Asia and posts competitive rankings on financial attractiveness, workforce skills, and the business envi- ronment,” the report says. equaled 44.8% year-on-year and 8.1% Wine Agency and German PR and mar- *6/,KHOSVFRPSDQLHVPDNHNH\ in January-April of 2021 year-on-year, keting company ff.k Public Relations. location decisions about where to lo- show preliminary data from Geostat. Numerous presentations of Georgian cate offshore operations, and the Index 7KH¿JXUHLVUHÀHFWLYHRIWKHIDFW wine are planned both online and in sheds light on their complex and shifting that Georgia experienced its strictest person. Georgian wines will take part in choices through an analysis of more than Covid-19-related economic lockdowns various competitions, and visits of wine 50 countries. in precisely April 2020. professionals and media representa- The Georgian economy is expected to tives to Georgia from Germany will be ANNUAL INFLATION UP 7.2% IN grow by 3.5% in 2021, rebounding with planned, the country’s wine agency says. APRIL 2021 the gradual lifting of Covid-19 pandemic Germany has been included on the The consumer price index increased restrictions and the revival of domestic list of strategic markets for Georgian 0.9 percentage points compared to the demand, reads the Asian Development wine since 2020. SUHYLRXVPRQWKZLWKWKHDQQXDOLQÀD- Bank (ADB) Outlook 2021. /DVW\HDUDERXWERWWOHVRI tion rate amounting to 7.2%, Geostat The ADB projects Georgia’s gross wine were exported from Georgia to reported. domestic product (GDP) growth to accel- Germany, posting an increase of 4%. 7KHPRQWKO\LQÀDWLRQUDWHZDVPDLQ- erate to 6% in 2022, as a full reopening O\LQÀXHQFHGE\SULFHFKDQJHVIRUWKH of the economy and expected recovery in GEORGIAN CENTRAL BANK following groups: transport (+3%), cloth- tourism will boost travel and commerce. RAISES MONETARY POLICY ing and footwear (+4.9%), furnishings, The World Bank says that the Geor- RATE TO 9.5%; LOANS FOR household equipment and maintenance gian economy is projected to expand to ABOUT 125,000 BORROWERS TO (+2.1%), and food and non-alcoholic LQDQGWKHQWR¿UPXSWR INCREASE 1% beverages (+0.3%). in 2022. The National Bank of Georgia (NBG) $VIRUDQQXDOLQÀDWLRQSULFHVLQ- KDVLQFUHDVHGWKHUH¿QDQFLQJUDWHE\RQH creased in the group of restaurants and GEORGIAN WINE ADVERTISING percentage point to 9.50%, as a result of hotels (+15%), health (+13.8%), trans- CAMPAIGN PLACES FOCUS ON which, loans for about 125,000 borrow- port (+12.4%), housing, water, electric- GERMANY ers will increase by one percent, says the ity, gas and other fuels (7.1%), and food In order to raise awareness and non-government organization Society and non-alcoholic beverages (+3%). increase the export of Georgian wine and Banks. to Germany, a Georgian wine advertis- Society and Banks announced that, AFTER YEAR LONG DOWNTURN, ing campaign will be strengthened in as of April 1, a total of 124,400 loans GEORGIAN ECONOMY POSTS Germany this year using various media WLHGWRÀRDWLQJLQWHUHVWUDWHVKDGEHHQ 44.8% GROWTH IN APRIL platforms. issued since the beginning of 2021. The The estimated real gross domestic 7KHFDPSDLJQZLOOEHKHOGZLWKWKH¿- vast majority of these loans are tied to product (GDP) growth rate in April 2021 nancial support of the Georgian National WKHUH¿QDQFLQJUDWH

8 | Investor.ge ‡ JUNE-JULY 2021 TBILISI TOPS INTERNATIONAL 7KH0LQLVWU\RI)LQDQFHRI*HRUJLD 1RNLD0LNNR/DYDQWLHDUOLHULQ$SULOWR CITIES BY BITCOIN ATMS PER $10 completed the placement of $500 million discuss areas in which Nokia could invest BILLION GDP LQ(XURERQGVRQWKH/RQGRQ6WRFN([- in Georgia. The Georgian capital city of Tbilisi change in mid-April, with a maturity date The development of broadband infra- has the most number of Bitcoin ATMs RI¿YH\HDUVDQGDFRXSRQUDWHRI VWUXFWXUHDUWL¿FLDOLQWHOOLJHQFHDQGWKH in the world per $10 billion local GDP, *HRUJLDQ)LQDQFH0LQLVWHU/DVKD digital economy in general are the main says a new study titled ‘World’s Most Khutsishvili said the state budget of GLUHFWLRQVWKDW1RNLDFRXOG¿QGLQWHUHVW- &U\SWR)ULHQGO\&LWLHV¶ *HRUJLDZLOOVDYHDERXWPLOOLRQ*(/ ing in Georgia, the ministry reported. “Tbilisi seems an unlikely contender thanks to the low coupon rate. for the top spot on this list of interna- “The current bonds actually refi- 14.5% OF GEORGIAN tional cities pioneering Bitcoin adop- nanced Eurobonds issued in 2011 at a POPULATION RECEIVING SOCIAL tion. But the former Soviet republic of coupon rate of about 2.5 times higher ASSISTANCE Georgia, with a population of less than (6.875%) and were repaid on April 12 In Georgia, more than 541,000 peo- four million people, is now the second this year. ple, or 14.5% of the Georgian population, largest miner of cryptocurrency in the Due to the fact that the coupon rate receive social assistance from the state. world. Inexpensive hydropower and a QRZLVPXFKORZHUIRUWKHQH[W¿YH\HDUV This number increased by over lack of federal regulation have turned the budget will save about 350 million 83,000 individuals in 2020, announced the country into a ‘virtual printing press’ *(/´VDLG.KXWVLVKYLOL the Social Service Agency of Georgia. for virtual money, giving the 23 bitcoin He added that such a low rate “has In addition, social assistance is the only ATMs in Tbilisi an outsized presence in never been seen before in our region.” source of income for 151,000 families in the Georgian economy,” reads the study. “With this transaction and this cou- Georgia, says the agency. pon rate, we have created a new, truly The town with the highest ratio of the GEORGIAN FINANCE MINISTER: historic landmark [. . . ] which will be number of aid recipients to the popula- LOW COUPON RATE ON important for private companies, as it tion was Mestia in the Svaneti region of EUROBONDS WILL SAVE BUDGET makes it much easier and cheaper to at- Georgia, where according to the latest AROUND 350 MILLION GEL OVER tract investment to our country [. . .] This data, 65.9% of the local population re- NEXT 5 YEARS >LVLQGLFDWLYH@RIFRQ¿GHQFHIURPLQWHU- ceived social assistance last year. national investors in Georgia’s economy [. . .] [such] investors are mainly from the JOINT POLISH-SOUTH AFRICAN United States, the European Union and DRONE PRODUCTION VENTURE the United Kingdom,” Khutsishvili said. MAY COME TO GEORGIA Khutsishvili said that one of the main A military drone venture may set up determinants of such a low coupon rate camp in Georgia, with South African was the country’s sovereign credit rating, and Polish companies discussing the which has improved in recent years from possibility with the government, Defense “B+” to “BB”. Minister Juansher Burchuladze said at a parliamentary session in late April. “We IS NOKIA INTERESTED IN are in active negotiations with South ENTERING THE GEORGIAN African and Polish companies to estab- MARKET? lish a joint venture of small and large )LQQLVKFRUSRUDWLRQ1RNLDKDVH[- unmanned aerial vehicles at the Delta pressed an interest in entering the Geor- base,” Burchuladze said. gian market, the Ministry of Economy Burchuladze says an agreement may of Georgia says. be signed as early as this year, with pro- Georgian Deputy Economy Ministers duction beginning in 2022. It is unknown Genadi Arveladze and Irakli Nadareish- what kind of drone the venture would vili met with regional Vice-President of produce.

JUNE-JULY 2021‡ Investor.ge | 9 10 | Investor.ge ‡ JUNE-JULY 2021 JUNE-JULY 2021‡ Investor.ge | 11 Georgia Abroad: highlights of Georgia’s spring success stories

VERONIKA MALINBOYM

espite global shutdowns and closures, Georgia has continued to make a name for itself abroad in the arts Dand sports in recent months. Investor.ge presents some RIWKHVHPRVWH[FLWLQJYLFWRULHV)URPZLQQLQJWRSDZDUGVDW DSUHVWLJLRXVZLQHFRPSHWLWLRQLQ/RQGRQWREUHDNLQJDQRWKHU world record in weightlifting, here’s everything you need to know about Georgia’s breakthrough success stories this spring.

SPORTS

12 | Investor.ge ‡ JUNE-JULY 2021 Abandoned Village tells a story of a remote village slowly disappearing due to neglect and natural phenomena. Georgia continued its cinematographic success this spring with a documentary on the lives of Georgian star female chess players, Glory to the Queen, which was featured in the South (DVW(XURSHDQ)LOP)HVWLYDOLQ/RV$QJHOHVWKLV$SULO7DWLD Skhirtladze and Ana Khazaradze’s work explores how four Georgian women took over international chess competitions Nikoloz Basilashvili, Source: @BMWOpen2021 and offers a glimpse into how they live today. played three consecutive games against Tier 1 teams. %ULJKWRQWKDIHDWXUH¿OPE\DZDUGZLQQLQJ*HRUJLDQ Georgia’s spring winning streak continued with Shmagi GLUHFWRU/HYDQ.RJXDVKYLOLZLOOEHVFUHHQHGLQ-XQHDVSDUW Bolkvadze winning gold at the European Wrestling Champion- of the 20th anniversary edition of the international Tribeca ship in Warsaw on April 26, pushing his team to the third spot )LOP)HVWLYDOLQWKH8QLWHG6WDWHV.RJXDVKYLOL¶VPRYLHDERXW RIWKHFRPSHWLWLRQ¶VUDQNLQJV,QWKH¿QDOPDWFKRIWKHNJ a Georgian wrestler attempting to save his son in Brooklyn division, Bolkvadze defeated Armenia’s Malkhas Amoyan with from gambling debts already won the Jury Prize and the ARP a total score of 4-1. 6HOHFWLRQ$ZDUGDW-HUXVDOHP6DP6SLHJHO)LOP/DELQ Star Georgian tennis player Nikoloz Basilashvili has once again brought his country into the spotlight after winning his ¿IWKFRQVHFXWLYH$737RXUWLWOHDWWKH%0:2SHQGHIHDWLQJ -DQ/HQQDUG6WUXIILQ0XQLFK*HUPDQ\LQ0D\%DVLODVKYLOL VHFXUHGKLV¿IWK$737RXUWLWOHE\FRPSOHWLQJWKH%0:2SHQ ZLWKRXWGURSSLQJDVHWLQ¿YHPDWFKHVWKH$737RXUZHEVLWH reported. *LRUJL6KHUPDGLQLDSOD\HUIRUWKH/HQRYR7HQHULIHFOXE and Georgia’s national basketball team, was awarded the Most Valuable Player of the Year prize of the top Spanish basketball league. On May 27, Shermadini received the highest possible score of 100 from the league votes of fans, reporters, players and coaches. A screenshot from Koguashvili’s Brighton 4th, Source: IMDB

ARTS Another success story of the country’s cinema is the Nika Georgian animation director Mariam Kapanadze’s work Award of the Russian Cinematographic Arts Academy earned ZLOOEHVFUHHQHGDWWKHLQWHUQDWLRQDO$QQHF\)HVWLYDOIRUVKRUW by Georgia’s director Dito Tsintsadze in late April for his feature DQLPDWHG¿OPVLQ)UDQFHWKLV-XQH.DSDQDG]H¶V$EDQGRQHG ,QKDOH([KDOHD¿OPDERXWDIRUPHUFRQYLFWWU\LQJWRUHEXLOG 9LOODJHVKRUWDQLPDWLRQ¿OPZDVRQHRIRWKHU¿OPVWKDW KHUOLIHDIWHUFRPSOHWLQJKHUVHQWHQFH7KH¿OPKDVDOUHDG\ZRQ were selected to feature in the festival out of 2,700 submissions. awards twice for Best Actress at international movie festivals in Shanghai and Minsk. The highlight of Georgia’s cinematography this spring was WKHQHZVRIUHQRZQHGGLUHFWRU/DQD*RJREHULG]HUHFHLYLQJ WKH)UHQFK2UGHURI$UWVDQG/HWWHUV /¶2UGUHGHV$UWVHWGHV /HWWUHV 7KHRUGHUZDVSDVVHGRQE\WKH)UHQFK$PEDVVDGRUWR Georgia, Diego Collas, who stated that Gogoberidze has become an irreplaceable persona of international cinematography and *HRUJLDQ)UHQFKIULHQGVKLS ,QPXVLF*HRUJLDQSLDQLVW,UPD*LJDQLZRQ¿UVWSUL]HDWWKH international Bechstein-Bruckner competition in Austria. Gigani was also awarded a special prize for the best performance of

Mariam Kapanadze’s Abandoned Village. Source: Georgian National Film Centre JUNE-JULY 2021‡ Investor.ge | 13 CULTURE And where would the country be without its wines? Almost 20 Georgian wine companies have been awarded gold, silver DQGEURQ]HPHGDOVDWWKHZRUOG¶VPRVWLQÀXHQWLDOZLQHFRP- SHWLWLRQWKH,QWHUQDWLRQDO:LQH&KDOOHQJHKHOGLQ/RQGRQWKLV April. Kindzmarauli Marani’s Kindzmarauli Marani Kakhuri, 2013, received the principal award of the competition, and 18 other wines from Georgia were distinguished among thousands of other submissions from over 50 countries around the world. There is big news for the country’s tourism destinations: the Vardzia Cave Complex, a 12-13th century monastery in the south of Georgia, was awarded this year’s Europa Nostra/Euro- pean Heritage Award of the European Union. The project for the

Dito Tsintsadze’s Inhale-Exhale. Source: Georgian National Film conservation and monitoring of the Vardzia complex, conducted Centre between 2015-2019 in partnership with the National Agency for

0R]DUW¶V3LDQR6RQDWDDQG%UXFNQHU¶V3LDQR)DQWDVLD2Q-XQH 17, Irman Gigani will be performing solo at Brucknerhaus. The country gained recognition in the visual arts as well in UHFHQWPRQWKVZLWK*HRUJLDEHFRPLQJD¿UVWWLPHSDUWLFLSDQW LQ0H[LFR¶V,QWHUQDWLRQDO,PDJH)HVWLYDO$VDQLQYLWHGFRXQWU\ Georgia saw the works of award-winning photographer Badri 9DGDFKNRULDDVZHOODV¿OPPDNHUV1LQR.LUWDG]HDQG'HD Kulumbegashvili, displayed as part of the festival’s program. Georgian video artist Andro Eradze’s exhibition opened at the New Museum’s Screens Series in April in New York. Screen Series: Andro Eradze focuses on the space between human and Kindzmarauli Marani’s Kindzmarauli Marani Kakhuri, 2013, non-human perception, the space between the organic and the received the principal award in the prestigious wine competition. Via industrial or synthetic, interconnectedness between all things International Wine Competition and the responsibilities that humanity inevitably holds. Cultural Heritage Preservation of Georgia, the Italian National Institute for Environmental Protection and Research (ISPRA) and the Ilia State University Centre for Cultural Heritage and Environmental Studies, has become one of nine initiatives from across Europe to receive the prize for cultural heritage. Were it not for the pandemic, Tbilisi may have experienced DÀRRGRIERRNZRUPVWKLVWRXULVWVHDVRQ7ELOLVLKDVIRUPDOO\ DFFHSWHGWKHRI¿FLDOVWDWXVRI81(6&2%RRN&DSLWDORI for which it will hold book festivals, publisher events, confer- ences, performances, and organize author residencies. Along with students and artists, the Union of Tbilisi Museums, the *HRUJLDQ1DWLRQDO)LOP&HQWUHWKH8QLWHG1DWLRQV3RSXODWLRQ )XQGWKH1DWLRQDO3DUOLDPHQWDU\/LEUDU\WKH:ULWHUV¶+RXVHRI *HRUJLDWKH*LRUJL/HRQLG]H0XVHXPRI*HRUJLDQ/LWHUDWXUH and the Georgian Publishers and Booksellers Association will participate in the upcoming prestigious international literature project hosted by Georgia. Georgian pianist Irma Gigani won first prize at the international Bechstein-Bruckner competition. Source: Irma Gigani, Facebook 2QOLQHHYHQWVDUHQ¶WDOZD\VGUHDU\0HUFHGHV%HQ])DVKLRQ

14 | Investor.ge ‡ JUNE-JULY 2021 The project for the conservation and monitoring of the Vardzia complex has become one of nine initiatives from across Europe to receive the prize for cultural heritage. Image via Georgia’s National Agency for Cultural Heritage Preservation

Week was held in a digital format in Tbilisi between May 6-9. A total of 15 selected designers showcased their collections to viewers worldwide on a digital platform with free access. On WRSRIIDVKLRQVKRZVWKH0HUFHGHV%HQ])DVKLRQ:HHN7ELOLVL platform offered a variety of multimedia content including Mercedes-Benz Fashion Week was held in a digital format in Tbilisi virtual showrooms and interviews with designers. between May 6-9. Source: Mercedes-Benz Fashion Week Tbilisi

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JUNE-JULY 2021‡ Investor.ge | 15 Pulsar AI: startup dreams come true with Georgia’s first startup exit

HRUJLDQDUWL¿FLDOLQWHOOLJHQFH sought quick returns. large outcome in such a short timeframe. startup Pulsar AI has made The initial investment in Pulsar It’s also encouraging that investors de- GORFDOKLVWRU\E\EHLQJWKH¿UVW AI was a mix of Georgian and Silicon cided to keep betting on Pulsar’s future. homegrown startup to be acquired by a 9DOOH\LQYHVWRUVDQGLVVLJQL¿FDQWIRU Investors overwhelmingly are converting US company: digital automotive mer- WKHFRXQWU\DVLWZDVWKH¿UVWRUJDQL]HG to stock in the new company, following chandising platform SpinCar. angel investment in a startup which has the Pulsar team’s expectations of contin- The cash and stock deal, signed in produced returns of this sort. ued rapid growth.“ 0D\WRWDOHGHLJKW¿JXUHVDQGKDVVHW Startup Grind Tbilisi Director Colin a number of precedents in the Georgian Donohue, who works to create connec- IN THE BEGINNING WAS THE startup world. The small group of Geor- tions between startups and international (CHATBOT’S) WORD gian investors who bet on Pulsar AI in resources and has supported Pulsar AI )ULHQGV'DFKL&KRODG]HDQG=DDO its seed round had the opportunity to in various ways, hopes the deal will Gachechiladze formed Pulsar AI in HQMR\WKHLU¿UVWVWDUWXSH[LWIROORZLQJ encourage more investment in Georgian 2016 having decided to put their talents the acquisition, but have decided instead startups. WRZRUNWRJHWLQRQWKHDUWL¿FLDOLQWHO- to double down–a strong message in a “It’s a great day for Georgia as $1.2 ligence game. country where investors have historically million in investment produced such a Machine learning problems were be-

16 | Investor.ge ‡ JUNE-JULY 2021 coming increasingly relevant and excit- the startup world, from top-tier VCs like LQJ)DFHERRNKDGMXVWHQDEOHGFKDWERWV Sequoia and Andreessen Horowitz to on its Messenger platform, and the time founders from top startups like Stripe, was ripe to help Georgian companies ac- Airbnb and Tesla. celerate the adoption of these new tools. Two of the core SG values are ‘make The duo developed a successful busi- friends, not contacts’ and ‘help others’. ness on the Georgian market contracting Trip organizers Giorgi Tukhasvhili and for local companies in need of AI and Colin Donohue felt these values were machine learning tools. While such ex- important to drive success in Georgia’s isted for English, Pulsar AI had to build nascent startup ecosystem. Extending the them from scratch for Georgian. ‘help others’ mantra beyond the confer- While eventually Pulsar AI would end ence, Giorgi and Colin took the approach Pulsar AI CEO Dachi Choladze up developing voice-recognition tools for of bringing together specific groups English, “much of what we learned at of people whose connections could be that time”, CEO Dachi Choladze says, powerful and helpful. “would become the foundation on which Georgia had sent a delegation of we would later create our other process- startups to Silicon Valley the year before, ing tools.” paying ‘insider’ consultants to organize Revenue on the Georgian market was meetings with VCs, but the trip did not good for the young techies, but they were produce results and was costly. This dreaming much bigger. Pivoting away time around, Georgian startups were from individual contract projects, they connected with individuals who would began building a conversation engine naturally have more of an interest in which could learn and be adapted to other supporting Georgian founders. uses more quickly and potentially scale Pulsar AI COO Sopho Chkoidze faster than custom development. PLANNED SERENDIPITY The challenge they faced: being in Donohue and Tukhashvili researched Georgia, how were they to enter new successful Georgians in Silicon Valley markets and in what product segment? and worked to introduce the top pros- pects to Georgian founders in a welcom- MAKING FRIENDS, HELPING ing environment. OTHERS They arranged small side events with In early 2018, Pulsar AI accepted specific groupings of individuals. To the invitation of Startup Grind Tbilisi provide a venue for the side events, the Co-director Giorgi Tukhashvili to be eight people on the startup trip crammed part of a group the chapter was sending into a 2-bedroom AirBNB next to the to Silicon Valley. RFHDQLQ3DFL¿FD Pulsar CTO Zaza Gachechiladze “It wasn’t clear at the time what this One of these events was the ‘Di- platform which George successfully could lead to,” Dachi says, “but we un- aspora Dinner’, where a small group placed on NASDAQ where it trades as derstood that connecting with the world of hand-picked Georgians in the Bay 6)7ZLWKDPDUNHWFDSRI center of innovation and startups would Area were introduced to the Georgian at time of writing. JLYHXVDJRRGSHUVSHFWLYHRQWKH¿HOG founders. George had built a personal brand and maybe some leads.” Enter Irakly George Arison, one of in Silicon Valley which fostered invest- The trip to Silicon Valley was orga- the most well-known Georgians in the ments from heavy hitters as Goldman nized around the Startup Grind Global startup world. Born and raised in Georgia Sachs, with hundreds of millions of conference–a 10,000 person event in his teenage years, Arison is the founder dollars invested into Shift under his showcasing some of the top names in of Shift Technologies–a used car buying leadership.

JUNE-JULY 2021‡ Investor.ge | 17 Startup Grind Tbilisi Director Colin Donohue

Other Bay Area Georgians who came A STARTUP IS BORN brought by their cofounder George and to the dinner included NBA Champion Arison and Pulsar continued talking: were able to achieve remarkably high =D]D3DFKXOLZKRZDVDFWLYHO\GHYHO- KHJDYHWKHÀHGJOLQJVWDUWXSDSURMHFW accuracy in responses. oping his knowledge and experience in to test their capabilities, and later ac- The AI chatbot could understand venture investing, and ‘mentor capitalist’ cess to Shift data, which enabled them questions, even complex multi-part ques- 1LFKRODV=DOGHVWDQLZKRFDUULHGDWUDFN to develop a conversational AI tool tions, was able to search the database record of work with Oracle and tech VSHFL¿FWRWKHDXWRPRWLYHLQGXVWU\+H of cars to provide relevant answers to startups as well as a family legacy of also positioned them with investors and customers without bothering sales teams philanthropy. industry contacts, giving generously of and chewing up time. Having two or three hours of time his scarce time because he believed in Pulsar successfully raised funds from over dinner and drinks allowed the the team and saw an opportunity to help Georgian and Silicon Valley investors Georgian founders to really connect with make them succeed. totalling $1.2 million. A small seed round Silicon Valley Georgians, producing )ROORZLQJKLVLQLWLDOLQYHVWPHQW for Silicon Valley but a tremendous op- some solid connections. It also gave a Arison later came on as Pulsar AI’s board portunity for the Georgian team. Dachi dose of Silicon Valley pace. chair when the company incorporated an comments: 'DFKL&KRODG]HUHPHPEHUVKLV¿UVW HQWLW\LQWKH86IRFXVHGVSHFL¿FDOO\RQ ³)LYHRIWKHQHDUO\LQYHVWRUVWKDW meeting with George Arison: conversational AI tools for the automo- bought into Pulsar’s vision were from ³:KHQ,¿UVWPHWKLPKHLQYLWHGPH tive industry. Georgia, many of whom were making to talk about what we’d done in Georgia, 'DFKLDQG=DDOUHDOL]HGWKH\ZRXOG DQJHOLQYHVWPHQWVIRUWKH¿UVWWLPH7KH but while I was talking he was texting need to expand the management team fact that we had Georgian investors on on his phone. I thought he wasn’t really to be ready for this new direction and board meant a lot to Silicon Valley, and paying attention to what I was saying. He rapid expansion, so their team member vice versa. We’re happy to have created suddenly said he had already scheduled Sopo Chkhoidze became co-founder of this precedent to show that it’s worth three meetings for us. the new entity and joined the c-suite as investing in a tech company in Georgia.” I realized that while listening to me FKLHIRSHUDWLQJRI¿FHU he was pitching the same thing to other The team rushed to get a prototype to ADAPTING TO THE AMERICAN people in order for us to get those meet- share with investors. Though at the time MARKET ings. there was not a dominant player in con- Cash and prototype in hand, Pulsar That’s when I realized that in the US, versational AI in the automotive industry, AI moved to push its product onto the people make use of every second to move it would be just a matter of time before American market. IRUZDUGDQGWRJURZ7KLVZDVWKH¿UVW someone occupied that niche. “The vision about the product that time I had the impression that [the US] Pulsar AI worked hard and fast to we started with was pretty different from was the right place to be.” build a system they trained on the data the end product. That’s mainly due to

18 | Investor.ge ‡ JUNE-JULY 2021 the customers we were dealing with”, Several months after working together, when customers are done looking at &72=DDO*DFKHFKLODG]HVD\V³%HLQJ SpinCar told Pulsar they had been receiv- pictures and want to ask questions about a dev shop for a customer and a product ing positive feedback from customers, the vehicle. Its technology can even pick developing startup are two very differ- and thus began a conversation on pos- XSRQWKHVSHFL¿FGHVLUHVRIFXVWRPHUV ent things”. sibly acquiring Pulsar, a prospect the from the verbal interaction, and if they’re The needs and preferences of custom- team evaluated very carefully and “a interested in something else additionally, ers shaped the product and required the little slow”, as Dachi puts it. creating new leads. team to be nimble and continually adapt In the end, however, Pulsar AI de- “In doing so, Pulsar AI’s tech creates and iterate to get closer and closer to a cided the growth they were aiming for enormous value for dealers, because SURGXFWPDUNHW¿W would be easily achievable with SpinCar, dealers know what customers like, what The technical development of the and decided to accept the acquisition they’re interested in. And they can an- product was continually informed by offer. swer these questions as well and help conversations with customers, which But the founders and investors were WKHLUFXVWRPHUV¿QGDSHUIHFWPDWFK´ Sopo shares were surprisingly natural QRWWKHRQO\RQHVWREHQH¿WWKHWHDP Dachi comments. and informative, somewhat unlike what that had spent long days in pursuing the the team had experienced in Georgia. dream of Pulsar AI will continue to be SIGNIFICANCE FOR THE “Customers were very insightful SDUWRIWKDWGUHDPDQGWREHQH¿WIURP GEORGIAN STARTUP ECOSYSTEM and it was amazing how helpful it was the deal. “People often ask me if Georgians to have at least a 15 minute conversa- In the process, Tbilisi also has be- can compete on the global level”, Startup tion with each of them. They were very come more prominent and will continue Grind Tbilisi’s Donohue says. “Pulsar’s open about sharing their experience, their to be the home of the team, says Sopo performance gives us a sense of that value, and their vision, how they saw the Chkoidze: “All of our team members are answer. They were faced with massive product evolving. I feel they appreciated part of the SpinCar family now. We’re in challenges of quickly building a product the solution that we were building and the process of merging the two cultures for a foreign market, and then that of the devotion we had. That was one of together, and we’re really focused on that responding rapidly to customer feedback the differences that I saw – they were right now. SpinCar has visited Georgia and reworking the product to customers’ committed to building a long-term rela- twice, they recognize that the product needs and preferences.” tionship with us.” we create is backed by the people and The Pulsar AI acquisition will send Soon the team’s work and attention to the team. They see it as a big asset and positive vibes throughout Georgia’s customers showed signs of turning into want to expand that. They see Tbilisi as startup ecosystem, Donohue adds: VRPHWKLQJYHU\VLJQL¿FDQW one of the assets behind Pulsar that they ³)RU\RXQJ*HRUJLDQVLW¶VDPD]LQJWR “We felt confident that we’d get can use to accelerate the growth that they see Pulsar founders making ‘life chang- noticed if we found the product-market are anticipating.” ing money’ in a short time. A good startup ¿WDQGFUHDWHGWKHWHFKWRVROYHWKDW The partnership opens up more exit means that you may never have to problem. But we didn’t expect it to hap- growth potential for Pulsar AI’s products work again, but also that you have money pen so soon”, CEO Dachi Choladze says. which had been used by over 50 dealer- to do amazing things. And soon they did get noticed. Major ships prior to the merger. I also think it’s time investors start market player SpinCar, in the business of The automotive sales industry has ‘getting real’ about startups as something online merchandising of vehicles with lagged behind new technologies in recent to invest in. We will see inexperienced the help of 360 degree visuals, began to years, but Covid-19 has left many of individuals claiming to be able to make take an interest. them with no choice but to adapt. money on startups and it will be a danger- SpinCar’s initial approach to Pulsar The initial product with which Spin- ous time. But for the people who learn AI’s came with an offer to become the Car appeared on the market was a tool about best practices and invest with startup’s exclusive reseller, which the to help dealers provide better (360*) experienced VCs or experienced angel team felt would limit their space to in- visualisations of their vehicles, and groups, there are great opportunities to crease the value of the company. SpinCar support nearly 3000 dealers with their grow wealth and create new opportuni- agreed to a regular reseller agreement. products. Pulsar AI comes into play ties for Georgia”.

JUNE-JULY 2021‡ Investor.ge | 19 was quick to identify and react to the need for telemedicine, setting up 25 WhatsApp Up, Doc? online clinics in the initial stages of the pandemic, with that number growing to 87 e-health platforms by the end of 2020. Georgia dials in to The private sector responded to the increased demand for medical support as well. Mamuka Monavardisashvili, co- telemedicine founder of myDoc.ge, a company which has been on the market since 2018 and ZKLFKFDOOVLWVHOIWKH¿UVW*HRUJLDQGLJL- tal healthcare platform, told Investor.ge that demand for medical services without leaving home increased dramatically in the past year. ³7UDI¿FKDVVLJQL¿FDQWO\LQFUHDVHG Although we had customers before, the number of remote consultations with doctors has grown rapidly, especially for general practitioners (so-called fam- ily doctors),” Monavardisashvili says, DGGLQJWKDWWKHUHDVRQIRUORZWUDI¿FLQ the pre-pandemic period was not skep- ticism, as might be expected. “Many simply didn’t know that the possibility was there. And some were unable to use COVID-19 HAS SPED ANA MEZVRISHVILI the platform for reasons of technological UP THE ADOPTION OF know-how,” he says. he medical profession has tra- In the case of myDoc.ge, this may E-HEALTH PLATFORMS ditionally been distrustful of have been partially due to the platform’s BOTH IN GEORGIA’S Ttelemedicine, citing concerns OHYHUDJLQJRIDUWL¿FLDOLQWHOOLJHQFHDQG PUBLIC AND PRIVATE of the feasibility of dispensing quality machine learning in delivering diagno- medical care at a distance. ses. The platform combines information SECTOR. INVESTOR. However Covid-19 has made the from more than 3,500 medical textbooks, GE TAKES A LOOK sidelining of additional medical care used by an algorithm to process user- AT SOME OF THE an unaffordable luxury, and been a life- entered data (symptoms) and compare saver for overburdened medical institu- MAIN PLAYERS IN THE the data with potential diagnoses avail- WLRQV²DQGSDWLHQWVWRR able in the medical literature. NASCENT INDUSTRY Some studies claim telemedicine has After receiving a potential diagnosis, AND FORECASTS FOR the potential to reduce the number of users can receive a video consultation THE COMING YEARS. hospital admissions by more than 30%, from more than 50 doctors to receive in addition to creating serious savings further treatment. for patients. 'HVSLWHWKHLQFUHDVHLQWUDI¿F0R- )ROORZLQJRQWKHEDFNRIDJOREDO navardisashvili hesitates in calling the uptick in use, telemedicine has cropped phenomenon a ‘boom,’ and instead ex- up in Georgia as well. The government pects that the industry will really take off

20 | Investor.ge ‡ JUNE-JULY 2021 in the next two-to-three years, predicting are available in the country’s digital health: that nearly 30-40% of visits to the doctor space. Redmed.ge, an e-health platform ³)RUWKHSDWLHQWWKLVPHDQVPLQLPL]- will be carried out through telemedicine that appeared on the market before the ing time and effort in providing informa- FKDQQHOVLQ¿YHWRVL[\HDUV¶WLPH Covid-19 pandemic, allows users to tion to medical staff, reduced waiting 7KRVHSXWRIIE\WKHXVHRIDUWL¿FLDO browse and contact doctors, plan ap- times, and increased access to medical LQWHOOLJHQFHKDYHEHHQDEOHWR¿QGKHOS pointments, and receive e-consultations. care for individuals living in rural areas. RQ)DFHERRN7KHJURXS0HG*XLGHKDV The platform onlineclinic.ge works More support for early detection and nearly 90,000 members and more than on a ‘one window’ principle, wherein WUHDWPHQWRIGLVHDVHLVDQRWKHUEHQH¿W a 1,000 actively participating doctors. customers can select a package of ser- Meanwhile, increased data from elec- Co-founder of the group, Nutsa vices ranging from calls to doctors and tronic health records will give physicians =XUDELDQLVD\VLQWHUHVWLQWKHJURXSURVH e-consultations to discounts on select a more complete picture of a patient’s especially quickly during peak Covid-19 PHGLFDWLRQV3ULFHVVWDUWIURP*(/ health,” Chikhladze says. periods when ambulances and hotlines DQGJRXSWR*(/SHUPRQWK In addition to doctors, Chikhladze were overloaded, with more than 1,000 Online psychotherapy platform believes that health system managers, to 1,500 people joining daily at peak speak.help also made its debut during researchers and statisticians will sig- times after its creation in October 2020. the pandemic in Georgia, and offers QL¿FDQWO\EHQH¿WIURPPHGLFLQHJRLQJ The group sought to help dispense the virtual services of psychologists in digital and online: Covid-19 advice, and facilitate commu- Georgian, English, Russian, and Turkish. “The availability of reliable and nication between doctors and patients, Critical infrastructure to support tele- up-to-date statistics is one of the major =XUDELDQLVD\V*URXSPHPEHUVSRVW medicine came into place shortly before challenges that our current healthcare health-related questions, and then receive the pandemic began: Georgia launched system faces. Without reliable and up- doctor recommendations and contact an electronic medical record system to-date statistics, it is impossible to plan information from administrators in the (EMRS) in January 2019, which at that future programs and budget properly.” group. time was in use only by state medical in- What remains to be seen is whether “We had contact with many doctors, stitutions in Tbilisi, Kutaisi and Batumi. telemedicine will follow the trend of so we were easily able to connect patients By the beginning of 2020, all medi- food delivery. Will e-health companies with them. Based on the interest in the cal institutions, both public and private, be tempted to expand abroad? And if they group, I see a very pressing need for inpatient and outpatient, were obligated do, how well will local market players medicine to be further digitized in the to produce electronic medical records. be able to stand up to the newcomers? country, and even brought onto social Dr. Sergo Chikhladze says both the A follow-up appointment to check in on PHGLD´=XUDELDQLVD\V state and patients could stand to gain the industry might be called for if the A number of other e-health resources from the large-scale introduction of e- pandemic is brought under control.

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JUNE-JULY 2021‡ Investor.ge | 21 Old routes, new parks for both digital and traveling visitors to Georgia

SALLY WHITE system are graded from Strict Nature are recognized for their environmental Reserves, where access is controlled importance through their inclusion in the eorgia is taking its natural won- and limited, to Wilderness Areas, where :RUOG:LGH)XQGIRU1DWXUH ::) ¶V ders online and expanding its UHFUHDWLRQDODVZHOODVVFLHQWL¿FUHVHDUFK Ecoregional Conservation Plan for the Grange of trekking options to in- access is allowed, to National Parks and Caucasus and are also considered a Key country visitors, as the spaces designated National Monuments, where there are Biodiversity Area of the region,” the as Protected Areas and National Parks in VSHFL¿FSURYLVLRQVIRUWRXULVWVWR+DELWDW Ministry of Environmental Protection Georgia are steadily growing. or Species Management Areas and lastly, and Agriculture says. The project for the Currently around eight per cent of WR3URWHFWHG/DQGVFDSHVDQG6HDVFDSHV new national park is backed not only by Georgia’s land mass is under formal “The forested areas found in Guria WKH::)EXWWKH(PEDVV\RI6ZHGHQ protection of one category or another, but in Georgia. the aim is to increase this to 20 percent *HRUJLDsV(QYLURQPHQWDO And for those who can’t make it, in the next eight years. ,QIRUPDWLRQDODQG(GXFDWLRQ *HRUJLD¶VLPPHQVHÀRUDOGLYHUVLW\LV In time for the opening of the trek- &HQWUH (,(& ZKLFKZRUNV now viewable internationally, despite king season, recognizing the allure to the travel restrictions of the Covid-19 international tourists of Georgia’s nature, XQGHUWKHZLQJRIWKH0LQLVWU\ pandemic, on the new dedicated Museum the government has announced a new RI(QYLURQPHQWDO3URWHFWLRQDQG of Georgia website (http://museum.ge/ protected area in Guria to help preserve $JULFXOWXUHFXUUHQWO\OLVWV herbarium). Plants are presented in high the forests there and a new walking route SURWHFWHGDUHDVRIGLIIHUHQW resolution, to enable zooming in for for Adjara. Newly protected territories FDWHJRULHV EDVHGRQFULWHULDRI close-ups, and in their actual environ- promoted on tourism websites will also ments. These are from botanical collec- open up new opportunities for tourism- WKH,QWHUQDWLRQDO8QLRQIRUWKH tions amassed via expeditions held across related small businesses and jobs with fa- &RQVHUYDWLRQRI1DWXUH ,8&1  the South Caucasus since 1852, as well cilities for walkers, cyclists and campers. VWDWHUHVHUYHVQDWLRQDO as from contributions, organizations and 7KLVQHZLQLWLDWLYHLQ*XULDZLOO¿UVW SDUNVPRQXPHQWVRIQDWXUH private collections. be the subject of “various types of studies ZLOGHUQHVVDUHDVDQGWZR )XUWKHUDUPFKDLUYLHZLQJRI*HRU- by local and foreign experts as a prepa- JLD¶VGLYHUVLW\RIÀRUDDQGIDXQDLVQRZ ratory phase.” Protections in the IUCN SURWHFWHGODQGVFDSHV accessible on https://map.nationalgeo- graphic.ge/en/, a map which will cover the public and decades out of date. Public and Resorts of Adjara says the route WKHZKROH&DXFDVXVUHJLRQZKHQ¿QLVKHG domain aerial imagery is inconsistent will connect the towns of Kobuleti and and which is being built by National and often at too low a resolution to be Shuakhevi. Indicators and information Geographic Magazine-Georgia and the useful to the hiker. Open-source map- boards are being installed on the tourist Georgian National Museum, supported ping varies enormously in accuracy and route from Kintrishi National Park to by Silknet and the German Society for completeness, often having been created Chvani Valley, which will connect the ,QWHUQDWLRQDO&RRSHUDWLRQ *,= &XU- by untrained hobbyists from second-hand national park to Jvarimindori and Gomis rently, this project incorporates 120 illus- sources. It is this broad-reaching problem Mta. Tourists will be able to see several trations and basic diversity information. of access to the outdoors across the mod- destinations while hiking along the new At the same time as new funding and HUQGD\QDWLRQVRIWKH&DXFDVXV²DUHDO route including, but not limited to, Kin- legislation are increasing the protection barrier to an appreciation of geography trishi National Park, Khinotsminda Mon- of some of Georgia’ most beautiful land- and thus a responsible and caring attitude DVWHU\7ELNHOL/DNHDQG-YDULPLQGRUL´ scapes and the country’s biodiversity, ac- toward nature and the wilderness that they add. As of now, 15 tourist routes cess is being enhanced. The most notable the Transcaucasian Trail aims to solve.” have been created in the mountainous example is via the Transcaucasian Trail The site, available at http://transcauca- Adjara region. (TCT), funded by the Austrian Develop- siantrail.org/en/home, currently carries One of Adjara’s protected areas, PHQW&RRSHUDWLRQDJHQF\-DJXDU/DQG a guide for Svaneti and for three routes Mtirala National Park (according to Rover, and voluntary contributions, in Armenia. records, the rainiest place in Georgia), which is a hiking trail that will traverse Georgia is also providing more walk- won a 2020 World Travel Award and *HRUJLD:KHQ¿QLVKHGWKLVZLOOEHD ing routes, of which the Adjara route is ZDVQDPHGµ*HRUJLD¶V/HDGLQJ1DWLRQDO world-class, long-distance hiking trail the latest. The Department of Tourism Park 2020’ beating Borjomi-Kharagauli more than 3,000 km in length, follow- LQJWKH*UHDWHUDQG/HVVHU&DXFDVXV Mountains and connecting roughly two dozen national parks and protected areas in the region. This international project is not only organizing volunteers to install the actual paths but is organizing the production of maps as well. As its website comments: “[. . .] the best available topographic maps are Soviet-made military maps dating back to before the Cold War, unavailable to

24 | Investor.ge ‡ JUNE-JULY 2021 %HQHNJWVRI:DWHU ADVERTISEMENT 3XULNJFDWLRQ

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National Park, Kazbegi National Park, Kolkheti National Park DQG/DJRGHNKL1DWLRQDO3DUN$GMDUD¶VERWDQLFDOJDUGHQLVDOVR %HWWHU7DVWH being expanded. :DWHUNJOWUDWLRQSURFHVVUHPRYHV Recent additions to the protected territories have totaled &KORULQHWKXVLPSURYHVWKHWDVWHRI ZDWHUDQGKRWGULQNV around 100,000 hectares, according to the Ministry of Envi- ronmental Protection. The Ministry of Environmental Protec- tion has announced plans for a Racha National Park and Shovi Nature Reserve and a 4,000-hectare expansion of the Borjomi- &KLOG+HDOWK Kharagauli Protected Area, adding to its current 60,000 hectares. ,PSURYHVSK\VLFDODQGPHQWDO GHYHORSPHQW Borjomi-Kharagauli National Park is known for its diversity of ÀRUDDQGIDXQDZLWKSHUFHQWRIWKHSDUNFRYHUHGZLWKIRUHVWV that contain red deer, chamois, roe deer, brown bears, wolves and lynx. Also announced was a 5,000-hectare expansion of the Mariamjvari protected territory to form a Tsiv-Gombori ,PPXQLW\ 5HGXFHVKDUPIXOHljHFWVRIWR[LQVDQG Reserve, in a move to protect the brown bears and red deer na- VWUHQJWKHQVWKHLPPXQHV\VWHP tive to the area, in addition to safeguarding highland oak and evergreen conifer trees. )XQGLQJWRKHOSSD\IRUUDQJHUVDQGHTXLSPHQWIRUWKH SURWHFWHGDUHDVKDVFRPHIURP7KH&DXFDVXV1DWXUH)XQG (FRORJ\ &1) ZKLFKODVW\HDUFRQWULEXWHGPLOOLRQWRKHOSPDNH 5HGXFHVWKHFRQVXPSWLRQRISODVWLF up for the shortfall resulting from lack of international visitors, GULQNLQJERWWOHV DQGIURPWKH*HUPDQJRYHUQPHQW7KH&1)DOVRGHFLGHGWR LQFUHDVH¿QDQFLQJWRDWWUDFWWRXULVWVVHWXSLQIUDVWUXFWXUHDQG provide services in the protected areas of Georgia. Other sup- port for the parks has come from the U.S. government, which 6DYLQJV )LOWHULQJZDWHULVDORWFKHDSHUWKDQ KDVIXQGHGD¿YH\HDUPLOOLRQSURJUDPµ1DWLRQDO3DUNV EX\LQJDERWWOHGRQH and Ecotourism,’ to protect Georgian national parks and make them economically sustainable and more attractive for tourists. The United Nations Development Programme (UNDP) and the *OREDO(QYLURQPHQW)DFLOLW\ *() KDYHDPLOOLRQSURJUDP 4XDOLW\&RQWURO IRUWKHSDUNV³WRVWUHQJWKHQWKHLUPDQDJHPHQWDQG¿QDQFLDO

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Georgia’s transport and logistics sector had been cª­Ü­ÃãçØíÜ㪂úÜãÉ㪚ã؂–ššÃšğãÜ‚ÖÕØ­ò­¼š¥šÜ steadily picking up pace before the Covid-19 pandem- Georgia enjoys with a number of third countries, which is ic put the brakes on forward momentum. But as global one of the main drivers of re-exports, constituting around markets recover from the initial shock, so too is the one-third of Georgia’s total exports. country’s transport sector, a recent report released by Room for further growth remains. Interconnectability and TBC Capital shows. infrastructure supporting contact with other markets The transportation and storage sector posted positive remains a problem, TBC Capital states. As of 2018, Geor- accelerating dynamics prior to the pandemic, with the gia stood in 119th place (out of 160 countries) in the World sector’s total contribution to Georgia’s GDP having Bank’s Logistics Performance Index (LPI), up by 11 spots increased since 2016, reaching 6.6% of GDP in 2019, since 2016. Compared to two years prior, Georgia made and dropping down to 5.9% in 2020. serious gains in customs clearance, infrastructure and logistics quality and competence, but took a hit in track- Transportation and storage value add (GEL bn) ing and tracing. and share in GDP (%) Internally, the dynamics of the country’s transportation and freight system remain fairly stable, with roads the

4,0 7 %5, preferred mode of transport for the majority of market

3,5 7,1% 7,0% 6,8% 6 %5, players. In 2020, a total of 42.9 million tonnes of cargo 6,6% 6,4% 6,2% 6,4% 6,3% 3,0 6,1% 5 %5, was transported in Georgia domestically, a 1.4% Y-o-Y Value add 5,7% 5,9% increase despite the pandemic and a second consecu- 2,5 2,8 4 %5, Sha re in G DP 2,5 2,5 tive year of growth after a downward sloping trend since 2,0 3 %5, 2,2 2014. 1,9 2 %5, 1,5 1,7 1,8 1,6 1,7 1,6 1,0 1,4 ,1 %5 Historically, road transportation has the largest share of

0,5 0 %5, total transported cargo in the country, averaging at around 72% in the 2014-2019 period, followed by railway 0,0 0- 5, % 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 and aviation standing at 28% and 0.06%, respectively, over the same period. “The pickup in the sector in 2016,” TBC Capital’s SeniorA- lyst Andro Tvaliashvili says, “was due to the rebound in Transported cargo in Georgia (mln tons) external trade that began in 2016, after a downturn in 2011-2016. External trade is the main driver of transport and logistics, and that’s why we see that rise.” 60 By the sector’s share in GDP, Georgia surpassed the EU Road Railway Air average in 2019, but ‘trailed’ behind neighboring Azerbai- 50 46.5 jan and Turkey, as well as countries in the extended 44.2 42.3 42.3 42.9 region, such as Ukraine and Kazakhstan. 41.4 41.1 40 The sector’s prominence in the country’s GDP is attribut- able to its geographic location, but the TBC Capital report notes that its export and import policies are also to 30 thank: “Georgia stands apart from other regional and European 20 countries for the ease with which items can be imported and exported...in the Doing Business 2020, among 190 10 countries only 31 performed better than Georgia in the time it takes to export the largest export product to its 0 main purchaser.” 2014 2015 2016 2017 2018 2019 2020 Tvaliashvili comments: “The predominance of the coun- Throughout the past six years, on average 82% of road try’s roads in freight transport (from 64% in 2014 to 76% in transit cargo transported in Georgia originates from the 2018) has come at the expense of decreasing volumes of same 10 countries, with immediate neighbors making up railway freight and decreased petroleum product on average over 70%. In 2020, this share increased to volumes between 2011-2018. However, in 2019-2020, 87%. there was a slight reversal of this trend as volumes picked /ÃãšØÂÜɤÜ՚­ğã؂–šՂØãÚØÜŶ­ÃĨĦĨĦ'šÉØ¥­‚ó‚Ü up, and road freight’s share in total inland freight trans- used as a transit corridor the most by Armenia and the portation reverted back to 74%.” Russian Federation, totaling 1.8 million tons and 31% of As for external trade in USD terms, the transfer of goods total transit cargo throughput of the year. is mostly allocated among sea and motor transport, with rail, air and other means being responsible for on average Road transit cargo in Georgia by top 20% between 2016-2020. countries of origin

External transport turnover by modes 1800 20 15 20 16 20 17 20 18 20 19 20 20 of transport USD bn 1600

1400 15 14 13,32 1200 Sea transport 12,74 13 Air transport 0,81 1000 12 11,37 Air transport 10,80 0,98 1,00 11 800 1,10 0,76 9,46 10 0,80 0,87 600 9 0,99 0,61 5,18 8 0,82 4,73 400 7 4,50 4,02 6 3,56 20 0 5 - 4 TJK AZE TUR RUS UZB KAZ UKR TKM CHN 3 5,92 ARM 5,55 Other 4,87 2 4,11 4,60 1 - Road transit cargo in Georgia by top 2016 2017 2018 2019 2020 recipient countries Motor transport Sea transport Air transport Rail transport Other Transports

In 2019, Georgia’s two operating ports handled more than 1800 647,000 TEUs, a historic maximum and a 43% YoY 20 15 20 16 20 17 20 18 20 19 20 20 increase. However, due to the pandemic and the wearing 1600 off of the one-time effect related to the suspension of car 1400 imports into Armenia because of its customs obligations 1200 as a member of the Russia-led Eurasian Economic Union, 1000 the amount of handled TEUs dropped 24% YoY in 2020. 800 Despite the major decrease in the amount of TEUs handled at the ports, the amount of vessels accepted 600 sustained a less severe, -8% YoY decrease during the 400 pandemic, with tankers and bulk carriers even posting 20 0 growths of 16% and 25% YoY, respectively, in 2020. - TJK AZE TUR RUS UZB KGZ KAZ CHE TKM ARM Batumi and Poti port container throughput Other (‘000 TEUs) The short term, TBC Capital writes, looks good for the ܚãÉØŵ–šÜÕ­ãš㪚–­¤ğç¼ã­šÜ‚çܚ–ù㪚Ղ֚­Ŷ 900 and the decrease in the sector’s 2020 turnover is likely to 800 rebound as international and domestic demand recov- 70 0 648 ers. 600 As for the medium and long term, one of the most press- 490 500 447 454 ing questions is how recent events in Karabakh will 404 395 358 380 400 329 shape out for Georgia in terms of its continued position 299 300 as a transport corridor. But TBC Capital’s Tvaliashvili is

200 optimistic, noting that “the numerous amount of invest- ments poured into the Baku-Tbilisi-Kars railways project, 100 as well as the numerous pipelines that connect the coun- 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 tries, provide a solid expectation that Georgia can remain a transit corridor for Azerbaijan and the greater Caspian Containers in Poti (LHS) Containers in Batumi (LHS) Maximum capacity of both ports Basin region in the medium to longer term.”

See more at www.tbccapital.ge and subscribe to our news- letter for more information: https://tbccapital.ge/?subscribe with similar market characteristics have PDQDJHGWRVXFFHVVIXOO\¿HOGDWOHDVW one or two local competitors, though, so it wouldn’t be surprising to see at least one success story emerge.

ELVIS: LIKE LIGHTNING

Elvis (ʬʲʭʰʹ) alludes to the word Georgia delivers: “lightning” in Georgian, a hint as to how it hopes to differentiate itself from other the food-delivery startup boom services with speedy point-to-point de- livery. Its couriers only handle one order FIVE NEW FOOD-TECH and a third multinational competitor, at a time, making their trips more direct SERVICES HAVE APPEARED ON %ROW)RRG and, theoretically, faster. GEORGIA’S DELIVERY SCENE Due to COVID-19-induced bans on ,WDOVRVHHPVWRRIIHUVLJQL¿FDQWO\ IN THE PAST YEAR. WHILE THEY in-person dining, already-growing deliv- larger delivery areas than the big players, FACE FIERCE COMPETITION ery markets across the world have seen allowing diners to choose from a wider FROM MULTINATIONALS, revenues doubling and tripling, inducing range of restaurants. And, crucially for THEIR NICHE STRATEGIES AND INNOVATIVE OFFERINGS MEAN new suppliers to enter. restaurants, delivery fees are lower than THEY MIGHT NOT ONLY HOLD Georgia was no exception: by early competing multinationals like Wolt, OUT UNDER PRESSURE, BUT WKHUHZHUHDWOHDVW¿YHQHZ*HRU- *ORYRDQG%ROW)RRG MAY POSSIBLY EVEN HAVE THE gian delivery-focused foodtech services Currently, Elvis operates solely via a CHANCE TO EXPAND ABROAD RQWKHVFHQHDVZHOODVDÀRRGRILQGL- smartphone app (developed by Tbilisi- THEMSELVES. vidual restaurants working to set up their EDVHGVRIWZDUHFRPSDQ\/HPRQGR  own online systems. while most of its competitors maintain While Wolt and Glovo are still cur- both web and app interfaces. That said, ANDREW BRAUN rently the biggest players by far, the the app functions fairly well and, as of Georgian companies believe that their lo- May 2021, is the most downloaded local here were just three food delivery cal market focus, more restaurant-friend- delivery app. platforms operating in Georgia ly terms, and innovative features can give Elvis responded to requests for com- Tat the beginning of 2020: Wolt, WKHPDQHGJH²DWOHDVWGRPHVWLFDOO\7KH ment, but hasn’t released any informa- Glovo, and Menu.ge. By the end of the international food delivery market is tion on their growth plans. However, year, the only Georgian company on that largely going through consolidation, so it’s probably the best-executed Glovo/ OLVW²0HQXJH²KDGJRQHXQGHUEXWKDG expansion beyond Georgia may be a dif- Wolt/Bolt competitor on the Georgian EHHQUHSODFHGE\DÀRRGRIORFDOVWDUWXSV ¿FXOWSURSRVLWLRQ0DQ\RWKHUFRXQWULHV market at the moment, so if it can gain

28 | Investor.ge ‡ JUNE-JULY 2021 DVXI¿FLHQWIRRWKROGE\RIIHULQJEHWWHU WKDQRUGHUSHUFHQWDJH²DVLJQLILFDQW OFOODO: GEORGIA’S terms to restaurants and users, differenti- potential draw for restaurants tired of RESTAURANT MARKETPLACE ate itself, and implement a plan for the paying 30 percent or more to delivery post-COVID-19 slowdown, it stands a platforms. good chance of surviving. So, what does a Kovzy restaurant look like? At its core, it has a website KOVZY: TURNKEY RESTAURANT with a menu, an ordering system, and DIGITALIZATION online checkout. Customers can visit the site, order, and receive tracking in- formation for their order. Restaurants receive the payment immediately and can coordinate with a courier to make the delivery. And after a successful order, Want an app that does everything? as Darsavelidze says, “they have the op-

JUNE-JULY 2021‡ Investor.ge | 29 platform, so they can get more guests at What sets Mally apart is that most The name pretty much tells you a place as well.” That not only includes of its activity is currently centered in everything you need to know about Te- QR menu systems, table reservations, Tbilisi’s northern suburbs, especially livery: it’s a food delivery service located and event booking, but even an infor- Gldani and Dighomi. Investor.ge reached in, wait for it . . . Telavi! Most delivery mational resource on restaurants, so that, out for comment but weren’t able to ob- services thus far have only shown up in XOWLPDWHO\.KDWLDVKYLOLVD\V³2)22'2 tain any information from the company, Tbilisi, though some have expanded to will be the guide and planner for food- apart from the information that their tech Kutaisi and Batumi and a few are target- lovers and travelers.” is being developed by local software ing even smaller cities. Telivery is one :KLOH2)22'2LVGLUHFWO\FRPSHW- company Softgen. FLW\¶VDQVZHUWREHLQJRYHUORRNHG²DQG ing with other food delivery services Mally’s terms of service seem to de- depending on how it goes, it could end that run courier networks and charge scribe a third-party app system similar to up either expanding as a small-city solu- restaurants a commission on orders (by Wolt and Glovo, though what sets them tion or becoming a model for startups in far the most popular approach), it sets apart from these services, apart from be- other areas. itself apart by integrating in-person din- ing local (and claiming to be the cheapest Telivery started up in response to the ing, restaurant discovery, and self-service and fastest on their social media pages), COVID-19 pandemic as a phone service, pick-up options. isn’t completely clear. taking orders from customers via phone Given that delivery will likely take Mally started as a phone service, with and dispatching couriers. Since then, it a dip as people begin to physically visit customers calling in orders to Mally, has released a smartphone app, though restaurants again, this is a smart move which would then dispatch couriers. In it’s still very much under construction. on the company’s part and may give it )HEUXDU\WKRXJK0DOO\UHOHDVHG Nonetheless, it seems intent on expand- an edge. a functioning version of its website and ing with what the team describes as Khatiashvili says they saw a 30-40 smartphone app, signaling its plan to join “ambitious plans.” “Our goal,” they say percent drop in delivery volume in the the broader app market. It has been add- on their site, “is to introduce a high stan- summer of 2020, but, “we have another ing restaurants and maintaining a social dard of delivery service in the [Telavi] VROXWLRQ²EXVLQHVVGLYHUVLILFDWLRQ« media presence since then, though its region.” because then [after COVID] people will VRIWZDUHVWLOOGH¿QLWHO\KDVDEHWDWHVWLQJ The platform is unlikely to face a lot start table reservations.” feel to it. of competition in its hyper-local market, Already working in Tbilisi, Kutaisi, Mally has demonstrated an intent to though whether it will be sustainable and Batumi, with over 200 restaurants, move down into the more active Vake- after the likely post-pandemic drop-off 2)22'2KDVLQWHUQDWLRQDODVSLUD- Saburtalo area of Tbilisi, which will put in orders remains to be seen. There WLRQV²LWV450HQXZHEVLWHDOUHDG\OLVWV its viability to the test. Hopefully, as it isn’t any mention of expanding to other phone numbers for seven countries, and continues to improve, the app will be small cities, but if Telavi turns out to be the team plans to expand into Georgia’s able to clarify its value proposition to DSUR¿WDEOHPDUNHWLWPD\HLWKHUEUDQFK neighboring markets in 2022. consumers and restaurants. out or inspire other cities to follow its lead. Investor.ge reached out for further MALLY: SERVING TBILISI’S TELIVERY: FOOD DELIVERY IN information on Telivery’s business model SUBURBS TELAVI and plans, but was unable to establish contact.

COMPETITION STRATEGIES There aren’t that many different ways for delivery drivers to drop off food at doors, but everything that makes that completed order possible is a potential point of competition. Georgian startups are, currently, catering to a single market, enabling them to react and innovate more

30 | Investor.ge ‡ JUNE-JULY 2021 TXLFNO\DQGWKDQNVWRWKHLUKRPH¿HOG customer relationships by increasing tion, local food delivery startups have advantage, operate at a lower minimum the points of direct contact between the managed to survive all around Europe, HI¿FLHQWVFDOH+RZHYHUDV2)22'2 restaurant and the customer. from Armenia to Portugal. This bodes CEO Beka Khatiashvili says, one of the As Wolt and Glovo take at least 30- fairly well for Georgia’s prospects to major challenges is that “on the Georgian 35% of every order, fees are another big have at least one local app in the running, market we have world-leading compa- pain point for restaurants. Elvis, Mally, though international expansion will be nies who have more money, and they are DQG2)22'2DUHFRPSHWLQJKHUHE\RI- much more of a challenge. spending a lot on marketing.” fering lower fees, while Kovzy calculates Startups that are working to set them- Mally and Telivery are avoiding the fees based on distance. selves apart from the crowd, like Kovzy competition to some extent by getting According to 2021 data from Second- DQG2)22'2FRXOGEHWKHPRVWOLNHO\ ¿UVWPRYHUDGYDQWDJHLQ*HRUJLD¶VXQ- Measure, the majority of U.S customers to make it in the long run. Ultimately, derserved areas. According to a Univer- use multiple food delivery apps. Switch- though, this is a quickly shifting market sity of Oxford study, delivery services ing costs in Georgia are currently even that may be set to shrink in the next one WHQGWRHQWHUODUJHUPDUNHWV¿UVWVRORFDO lower, thanks to the crowded ecosystem, to two years as the Covid-19 pandemic startups could potentially gain and retain so providing a smooth customer experi- fades, so where it will end up is anyone’s small market dominance. ence is basically table stakes at this point. guess. The one thing these apps almost Improving the experience of res- That makes competing on price, features, certainly indicate, however, is a thriving taurants is another way local apps are DQGXVHUH[SHULHQFHYLWDO²XQWLOWKHPDU- VWDUWXSHFRV\VWHPLQ*HRUJLD²JRLQJ FRPSHWLQJ.RY]\DQG2)22'2IRU kets consolidate, at least. IURPDOPRVW]HURORFDOVROXWLRQVWR¿YH example, offer opportunities to recapture Despite the multinational competi- LQXQGHUD\HDU²LVIDLUO\LPSUHVVLYH

JUNE-JULY 2021‡ Investor.ge | 31 Mtatsminda makeover – reviving Tbilisi’s iconic ridge for generations to come

he pine forests of Tbilisi’s iconic Mtats- to plant pine trees. Each generation in Starting In the 1920s-30s, foresters minda Ridge are turning brown. The the modern era has left a mark on the planted pine trees, selected for their abil- Tculprits include fungi, pests, and mountain. In this generation, the forest will ity to grow quickly in poor soil conditions, climate change, but work is underway to be diverse and climate-adapted. throughout the city and its periphery. revitalize the urban forest, led by the De- “In the past, there were oak trees in Planting later accelerated throughout velopment and Environment Foundation, the immediate vicinity of the city”, the the 1950s-60s, and it is these plantations under an agreement with Tbilisi City Hall Development and Environment Founda- that are dying due to infestations of pests and funded by the Cartu Foundation. This tion’s Executive Director Gocha Koberidze and fungi. four-year project will enhance the forest’s told Investor.ge, “but multiple razings of In addition to the pine forests, these resilience, reduce natural hazards, and the city–a step taken by many an enemy essential landscape infrastructures are improve recreational infrastructure. because Tbilisi forests provided shelter in poor condition due to lack of mainte- In the coming years, between 500,000- WR JXHULOOD ÀJKWHUV²DQG GHIRUHVWDWLRQ IRU nance, investment, climate change and 800,000 trees of nearly 40 different species timber have hampered green growth.” urban encroachment. will be planted on Mtatsminda Ridge, As Tbilisi grew in the 20th century, So- “But there is no tragedy here”, Ko- including diverse understory plantings to viet planners moved to ‘ameliorate’ Tbilisi’s beridze explains. “At the time, the decision HQKDQFHWKHIRUHVWÁRRU surroundings by setting aside several large- to go ahead with pine trees was correct. scale landscapes such as Lisi Lake, Tbilisi They have a life expectancy of up to 120 A MOUNTAIN WITH A MULTI- Sea, and Mtatsminda mountain to provide years, but given the harsh conditions, this LAYERED HISTORY ecosystem services. They prescribed forest 60-70 year life-span we are seeing is not Mtatsminda’s contemporary forests plantations to reduce wind speed and unexpected. are the result of mid-20th century climate improve air quality, limit summer tempera- Throughout the years, these trees have amelioration projects. Few trees are tures, and reduce landslide hazards; they stimulated the growth of a humus – a adapted to the mountain’s dry, exposed VHWDVLGHVZDWKHVRIODQGIRUWKHÁRZRI solid, nutrient-rich layer of topsoil, thanks slopes and limited soil cover, so foresters IUHVKDLUDQGUDLQZDWHULQÀOWUDWLRQ]RQHVWR to which we will be able to plant other used dynamite to create “soil pockets” SUHYHQWFDWDVWURSKLFÁRRGLQJ trees that will make the landscape more

32 | Investor.ge ‡ JUNE-JULY 2021 interesting and be more durable in the local environment.”

PLANNING AND BUILDING THE FOREST OF THE FUTURE Work to protect and bolster the resil- ience of Mtatsminda is backed by 16 mil- lion GEL (nearly 5 million USD) in funding. This large-scale investment in the forest will ensure the survival and enhancement of this vital natural resource for future generations. A resource for both humans and wild- life, Mtatsminda has great biodiversity due to its steep slopes, meadows, plateaus and wooded ravines. The Tbilisi Urban Forest project will join the work of scientists and designers together to grow a truly Geor- gian landscape over what will span nearly 700 hectares. Experts have gathered data for over a This photo from the burial of famous Georgian writer Ilia Chavchavadze from 1907 \HDUXVLQJERWKUHPRWHVHQVLQJDQGÀHOG depicts the mountain’s more usual appearance. data to generate a master plan. The team includes geographer Giorgi aries of the project to limit further urban and rest spots, erosion mitigation, and Gotsiridze of Geographic, biologist Irina encroachment. separate trail systems for hiking and Danelia, botanists Nikoloz Lachashvili, mountain biking. A new environmental zoologist Niko Kerdikoshvili, environmen- NEW TRAILS AND center will be built near Tsavkisi that will tal scientist Gia Sofadze and economist INFRASTRUCTURE include interpretive exhibitions about the Etuna Munjishvili.The team analyzed this In addition to the reforestation project, urban forest. data to identify areas of critical concern, workers are rehabilitating Mtatsminda’s such as landslide-prone slopes and wildlife mult-iuse trail system. Improvements in- THOUSANDS OF SEEDLINGS zones requiring protection and reduced clude rubbish removal from trailheads, This summer, the project is in full swing. KXPDQLPSDFWDQGGHÀQHGWKHERXQG- QHZ ZD\ÀQGLQJ DQG VLJQDJH RYHUORRNV At Kakheti’s Karibche, a tree nursery in

Karibche nursery in Sartichala

JUNE-JULY 2021‡ Investor.ge | 33 JUDWHEURDGVFDOH*,6ZLWKÀHOGVRXUFHG data such as soil depth and composition. Dubbed ‘Okrokana’, the tool produces rapid visualizations of the patches at differ- ent scales, optimizes plant quantities, and allows designers to simulate the interaction of diverse species over time. “Our practice is engineered to ad- dress these exciting urban landscape rehabilitation projects, and we can ap- ply the methods and technologies we applied to Mtatsminda to afforestation projects throughout Georgia”, says Ru- deral’s Cowles, noting the same model could be implemented throughout Tbilisi’s large-scale open spaces like the Tbilisi Sea, Khudadovi forest, and the Lisi Plateau.

ENCOURAGING PUBLIC PARTICIPATION The Mtatsminda Urban Forest aims to exemplify a new direction of environmen- tal imagination in Georgia. Public works of this scale are meaning- ful to young people, including those who At the Ruderal studio, physical models reveal the spatial and atmospheric impacts of moved abroad for work or education, like proposed planting schemes. Here, paper trees and pins capture the different plant Natia Kapandaze of Gori, who is now a communities that will be used to revegetate the Narikala Ridge. landscape architect in Austin, Texas. Sartichala, director Vakho Tsulikidze and for birds and wildlife and provide vi- “I decided to study landscape archi- his team are propagating the thousands sual interest. Unlike the pine and cedar tecture in the US, where a professional of seedlings required to reforest the moun- monoculture planted in the late 20th landscape architecture education in- tain. On the slopes of Okrokana, workers century, the new patches create varied cludes the study of large-scale urban are digging holes to prepare for fall plant- conditions and experience. They include landscapes. The Mtatsminda project is a ing and installing irrigation to support the texture-rich open shrubland (the ‘Savanna huge step forward for our community to seedlings through the dry summers. The Edge’ patch) to silver-canopied mountain address climate change and the quality of planting project for the entire mountain woodland (the ‘Celtis Forest’ patch) to the life in Tbilisi. We have already experienced will take at least four years. immersive, colorful, bountiful forest (the the consequences of several ecological Urban forestry specialists at Ruderal, ‘Fruit Grove’ patch). Each of the patches and environmental mistakes. I believe a landscape architecture and planning is distributed across the mountain in mas- this project will be the turning point and studio in Tbilisi, collaborated with local sive drifts. become a model for future projects”, experts to develop species mixes to re- “Planting in large groups, rather than said Kapanadze. The Development and place the monocultural plantings of the scattered fragments, increases the eco- Environment Foundation’s Koberidze past. Mtatsminda features a wide range logical potency and regenerative poten- agrees, who hopes the project will enable of exposures, moisture levels, and soils, tial of each patch type,” said Christian thousands to ‘leave their mark’ on the so each “forest patch” is adapted to a Moore, landscape architect at Ruderal. mountain for centuries to come and de- VSHFLÀFHFRORJLFDOQLFKH ´7KH ODUJH GULIWV ZLOO DOVR KDYH D VLJQLÀ- velop a stake in the city’s greener future: “In Tbilisi, most public spaces are cant aesthetic impact, both from within “We’re keeping a list of everyone in- planted with a generic palette of trees the forest and from far away, especially volved. We have tried to include students and shrubs imported from abroad. Our when the trees will bloom and the leaves in forestry, biology and other faculties in hope is the new plantings on Mtatsminda change color.” the project in order for them to learn some- will bring attention to the form, beauty, thing. Right now, we’re busy digging holes and function of Georgia’s endemic tree SCRIPTING FOR DIVERSITY AND [for the trees] on the south slope between and shrub species. Ultimately, we hope this ADAPTATION Okrokana and Mtatsminda, and 90% of work will increase demand for the use and The scale and complexity of the ur- those involved are from Okrokana itself, propagation of local species for civic and ban forest project required innovation in and they tell us that their grandparents commercial projects”, said Sarah Cowles, design technology. Ruderal’s designers ZHUHLQYROYHGLQWKHFUHDWLRQRIWKHÀUVWIRU- director of Ruderal. developed a custom planting design est. It’s so gratifying to see the joy they feel The patches include low-growing tool in Grasshopper, a digital modeling that their own grandchildren will be proud shrubs and taller trees to provide cover software, that allows designers to inte- of them for giving new life to the city.”

34 | Investor.ge ‡ JUNE-JULY 2021

are needed to develop a thriving farm. American-Canadian nursery expert who Such quality plants, however, are barely lives in Tbilisi and has been working in the available in Georgia right now. What can Caucasus region for more than ten years. be bought locally is often of uncertain There are several problems with pedigree and uneven quality. many of the plants that were used in To address this problem, nursery entre- the past, according to Ricard. Some of preneurs, with support from the Food and the plant stock is physically damaged or Agriculture Association, have established underdeveloped. There are phytosanitary the Georgian Seed and Sapling Associa- concerns of all kinds—microbial prob- tion (GEOSSA, also referred to as the Nurs- lems, infestations of small worms called ery Association), which seeks to contribute nematodes, or of insects. Inexperienced to the agriculture sector by ensuring that nurseries have struggled to manage their Georgian farmers can get better and herbicide and insecticide application. healthier plants, at a reasonable price. Both too little and too much can do long- The director of the Nursery Association, term harm to their plants. Entrepreneurs Aleksandre Sakandelidze, says this is “the also report that they get plant seedlings right time for fundamental changes in that are not “true to type.” agriculture in Georgia.” Informing farm- It is hard to create a successful orchard ers and entrepreneurs about the Nursery when your fruit type and size is inconsistent, Association’s activities and contributions is as it comes from a diverse stock. There Plants for one key focus in this initial phase, following is, therefore, much to do for the Nursery the founding of the Nursery Association at Association. the end of last year. PROPAGATION AND the future EXTENSIVE IMPORTS, UNEVEN INTELLECTUAL PROPERTY LOCAL QUALITY To ensure sustainability, the Nursery — improving Currently, most entrepreneurs seeking Association is seeking to work as a mem- Georgia’s nurseries to develop quality orchards bring their bership-driven association. The Nursery seedlings from abroad. Hazelnut rootstock Association is governed by a board, with a SOURCING QUALITY PLANTS AND has been brought from Italy or even Swit- full-time executive director. Sakandelidze, SEEDLINGS IN GEORGIA REMAINS A zerland, almonds from Spain, blueberries its founding director, says that he wants to SERIOUS HURDLE TO THE EXPANSION from Poland or the U.S., plums from Arme- promote nurseries as a cluster of businesses OF AGRI-BUSINESS. TO ADDRESS THE QLDDQGDVPDOOIHLMRDRUFKDUGKDVÁRZQ and institutions that help each other thrive. PROBLEM, NURSERY ENTREPRENEURS in plants from New Zealand. Customs data One major focus of collaboration is with HAVE ESTABLISHED THE NURSERY shows that these imports have grown con- the packaging cluster, as seedlings and ASSOCIATION, WHICH WILL WORK siderably in recent years, reaching a total saplings require good packaging for sales, TO ENSURE GEORGIAN FARMERS value of $15 million in 2019. transport and to ensure traceability. Ricard HAVE ACCESS TO HOMEGROWN, For Georgia, importing seedlings and points out, too, that in the U.S., plants are HEALTHY PLANTS AT REASONABLE saplings in great quantities is suboptimal. usually grown in containers, rather than PRICES. Money that could be earned in the coun- planted in local soil and dug up. WU\ ÁRZV DEURDG ZKLOH ÀHOGV LQ *HRUJLD 7KHÀQDQFLDOVXSSRUWRIWKH(XURSHDQ HANS GUTBROD that could grow these plant stocks remain Union has made it possible for the Nursery idle. Many people in rural areas would be Association to set its initial membership fee n recent years, parts of Georgian glad to have permanent employment that at a nominal amount. Eventually, the work agriculture have gained significant could otherwise be generated. Imports of the association should be supported Imomentum. There are more and more can also bring in disease—viruses and by fees, which will be the major test for its exports to Europe and Asia. Blueberries are bacteria—that are not in the country ability to serve members’ interests. Sakan- emerging as a thriving sector. Drive from yet. Transport takes time and has its own delidze brings extensive experience from Sagarejo to the David Gareja monastery, hazards: one importer in Samegrelo found other industries, having previously worked and you will look out over hundreds of that a strike by harbor workers in Alexan- in the insurance industry, with transporta- hectares of newly planted almond or- dria, Egypt, delayed a refrigerated con- tion and logistics, and with Sarajishvili, the chards. The Georgian government, in turn, tainer with his seedlings for an additional Georgian brandy producer. Sakandelidze has been running a ‘Plant the Future’ pro- 10 days. The plants survived, but he recalls holds an MSc in Business Administration gram, which, since 2016, has helped more it was a tense time. from Jönköping International Business than 1,000 farmers set up a total of 6,000 “Agriculture is already laced with School in Sweden. KHFWDUHVRIÀHOGVRUFKDUGVDQGYLQH\DUGV terrible uncertainty even under the best With this background, why did he join Entrepreneurs in the sector, however, conditions. The last thing farmers need is the Nursery Association? Sakandelidze face a major problem: how to source unpredictable crop outcomes from sub- replies that he “got very excited to join the quality plants. Healthy and vigorous plants standard plants,” says James Ricard, an Georgian seeds and saplings association,

36 | Investor.ge ‡ JUNE-JULY 2021 as seeds and planting material represent beyond agriculture. Landscape archi- control bacteria, disease, and pests are the base of agriculture, and their quality tects such as Sarah Cowles, an American enforced “from the wholesale side all the can be [the key] determinant for success- EDVHGLQ7ELOLVLVD\WKDWWKH\ÀQGLWKDUG way through to the retail end,” he says. ful agriculture” overall. to get the right trees and plants in Geor- One encouraging aspect is that the ,QLWVÀUVWPRQWKVWKH1XUVHU\$VVRFLD- gia. Currently, they source some of their QXUVHU\VHFWRUKDVGHYHORSHGVLJQLÀFDQWO\ tion held a series of training sessions via trees abroad, which adds considerable in recent years. One farmer in western Zoom on plant propagation with an expert expense, especially if trees already have Georgia says that now windbreak plants from CREA, the leading Italian agricultural a well-developed crown, making them are available in Georgia that two or three research organization. Growing plants just harder to transport longer distances. Dur- years ago simply were not on the market. from the seed can produce inconsistent LQJWKHFRQYHUVDWLRQLQKHURIÀFHLQ9HUD He hopes that, with these saplings, he can results for farming purposes. To achieve one of her colleagues leafs through a recreate the windbreak lines required for consistency, nurseries employ various clon- catalog from a Spanish nursery and casu- successful agriculture, which were cut ing techniques, in which the same plant is ally mentions that a single well-developed GRZQIRUÀUHZRRGLQWKHHDUO\V replicated. Nurseries often use cuttings (in tree can cost more than $10,000 , before it There is more awareness of varieties, ZKLFK\RXFXWDEUDQFKRIWHQÀQJHUWKLFN even begins its journey. At this price point, says an almond farmer in Kakheti, though dip it into a growth solution, and then plant few real estate projects in Georgia can he thinks more attention should be paid it into substrate, hoping that it will develop afford comprehensive landscaping. to rootstock. Gone, too, are the days in roots), or grafting (for which branches are Some entrepreneurs in the agricultural which one farmer bought hundreds of grafted onto rootstock, which sometimes sector are only moderately enthusiastic seedlings, grew them for three years, only can even be a different variety, selected about the increased regulation of plant to realize, eventually, that he had been for vigor or heartiness). propagation, which will come with the sold all-male plants with zero prospect Another recent training, again with PDQGDWRU\1DWLRQDO6HHGOLQJ&HUWLÀFDWLRQ of ever bearing a single fruit. Ricard says an expert from the Italian CREA, focused scheme to be introduced in 2024. They that he has “seen Georgian smallholders on Intellectual Property and Plant Variety fear overreach and intrusion, and have accomplish miracles with limited tools and 3URWHFWLRQ ,Q PDQ\ ÀHOGV RI DJULFXOWXUH concerns that even propagation for use few resources at their disposal”, but they research institutions develop new varieties on one’s own farm may be regulated. would of course be served better if there WKDWDUHRSWLPL]HGIRUVSHFLÀFFOLPDWHVIRU “Why should they mess with what I do was more consistency in the sector. increased disease resistance or for longer here, on my own farm?,” is one oft-heard Sakandelidze and Ricard agree that, storability. Yet developing a variety, which comment in this context. Yet they, too, in principle, the prospect for nurseries in may well be done with the traditional pa- concede that current standards in the Georgia should be good. For grape vines tience of plant propagation rather than sector fall far short of what is needed, alone, some estimates say that demand JHQHWLF PRGLÀFDWLRQ LV H[SHQVLYH DQG and hope that the Nursery Association will be as high as ten million grape vines can take years. The developers, including can contribute to a sensible balance, per annum, as plants need to be replaced some state-funded institutions, often seek and bundle entrepreneurs’ interests vis- regularly. Next to consistent quality, di- to recoup their investments by licensing à-vis government agencies. Moreover, versity of supply would be a big help. As new varieties, which in turn can fund fur- WR DFKLHYH FHUWLÀFDWLRQV VXFK DV *OREDO Ricard puts it: “There are thousands of ther development. G.A.P., the plants need to come from fruits and vegetables that are perfect for When it comes to plant varieties, the FHUWLÀHGVRXUFHVWRR our climate, but to which Georgia has protection and enforcement of intel- Government representatives have only recently gained access .” It would lectual property rights in Georgia is still pointed out that this increased regulation be transformative, he says, “if many small evolving. For agricultural entrepreneurs, of nurseries is part of the Deep and Com- farmers would have a clear, affordable it matters that Georgia is recognized as prehensive Free Trade Agreement (DCFTA) way to acquire and experiment with such a reliable partner in which intellectual with the European Union. The upside is that plants.” In these ways, the Nursery Associa- property rights can be enforced; without Georgian nurseries will be able to sell into tion can play an essential part in helping VXFK D UHSXWDWLRQ LW ZLOO EH GLIÀFXOW IRU the European market, but, in exchange, agriculture, and Georgia itself, thrive. entrepreneurs in Georgia to obtain the need to meet minimum standards, which licenses for newer varieties. In this regard, ultimately serve the purpose of providing Dr. Hans Gutbrod heads the agribusi- too, intellectual property rights—and their healthy and safe food at an affordable ness committee at AmCham, and also enforcement—matter beyond just the sec- price to citizens of the European Union works as the Regional Representative of WRUVWKDWPRVWSHRSOHÀUVWWKLQNRIVXFKDV and its partner countries. Berlin Economics. software or the pirating of movies. Some Nor is regulation just a feature of EU ag- The Georgian Seed and Sapling As- blueberry experts, for example, estimate riculture. Ricard, who gained some of his sociation e-mail is [email protected]; its that proprietary varieties will dominate ÀUVWZRUNH[SHULHQFHLQDQXUVHU\LQ$UL]RQD website is still under construction. Alexan- the European market by the end of the highlights that the United States also “sets dre Sakandelidze, its director, can also be decade. detailed horticultural standards prior to reached at 599121274. sale: propagation conditions, plant size re- James Ricard, a Canadian nursery BROADER IMPACT AND TXLUHPHQWVDFFXUDWHLGHQWLÀFDWLRQSUXQ- consultant resident in Tbilisi, can be con- INTERNATIONAL STANDARDS LQJ VSHFLÀFDWLRQV URRWEDOO GLPHQVLRQDO tacted through his website at https:// Having good nurseries is of relevance rules” and more. The protocols on how to ricard.carrd.co

JUNE-JULY 2021‡ Investor.ge | 37 it. A country’s freedom isn’t enough if you’re not free inside. I mean personal liberation, the ability to speak, be heard and not face repercussions. In Georgia we still haven’t understood that freedom of speech means that when a person says something with which you disagree, you at the very least have to listen until the very end and let them speak. But I think the generations growing up in today’s Photo: Forbes Georgia / Khatuna Khutsishvili Georgia should be able to achieve this freedom fully. ‘The law will set you free’ – Another thing I took away from this trip to the U.S. concerned the speed of lawyer Zviad Kordzadze on the life in America, and the effect it has on WKHFRXQWU\¶VZHOIDUH*HRUJLD²DVGRHV WKHUHVWRI(XURSH²PRYHVDORQJDWDQ origins of the legal profession entirely different pace. I realized that it’s important to keep up the momentum, in Georgia because if you ever lose it, getting back LQWKHVDGGOHEHFRPHVYHU\GLI¿FXOW KORDZADZE LAW OFFICE HAS BEEN OPERATING ON THE GEORGIAN In my opinion this dedication to work LEGAL MARKET FOR MORE THAN 25 YEARS, DURING WHICH TIME IT HAS ESTABLISHED ITSELF AS ONE OF THE COUNTRY’S LEADING FIRMS. has contributed much to America’s suc- INVESTOR.GE TALKED TO MANAGING PARTNER ZVIAD KORDZADZE cess in the sense that it has turned into a ABOUT THE ORIGINS OF THE FIRM, THE IMPORTANCE OF THE LAW IN lifestyle, and everyone knows that work- THE DEVELOPMENT OF A FREE COUNTRY AND WHAT FREEDOM REALLY ing hard is the rule of the game. I don’t MEANS. think Georgia will be able to live at this speed, and I’m not saying it has to. But :DUDQGLQVWDELOLW\UXOHGWKH¿UVW Embassy for local professionals. there are some takeaways from this: you part of the 1990s in Georgia. Why open Imagine what it was like. The war must apply yourself. Without hard work, DOHJDO¿UPDWWKDWWLPH" here had recently ended, but there was nothing will happen. You have to use Graduating university in 1994, I went still no electricity, no hope for the future: \RXULGHDV\RXUHQHUJ\IRUWKHFDXVH out into the world and saw there was even the airport from which we left was nobody will do it for you. nothing out there. Becoming a member dark. And straight out of this situation I Another thing I found interesting RIWKH*HRUJLDQ

38 | Investor.ge ‡ JUNE-JULY 2021 ÀRDWZKHQ\RXZHUHMXVWVWDUWLQJRXW" :KDWDERXWDGYHUWLVLQJ" more about responsibility. If you lose /DZ\HUVDWWKDWWLPHZHUHPRUHOLNH Billboards and the like don’t help. when you’re young, it’s not much of a mediators who went between the pros- Advertising is done more by word of SUREOHP²QRERG\UHDOO\QRWLFHV1RZ ecutor, the police and the court to move PRXWKDQGVDWLV¿HGFOLHQWV,QWHUYLHZV we don’t have that luxury. When you a case along to its end. on the other hand, aren’t so much about are on a certain level, you must maintain I knew I wasn’t going to follow this advertising for me. It’s more about allow- that level. That’s how I’d divide our path. We knew what being a lawyer LQJSHRSOHWRVHH\RXU¿UP¶VSKLORVRSK\ development into stages, both based on PHDQWHOVHZKHUHWKURXJK¿OPVDQGRWKHU and to learn about the people with whom the country’s development and my own depictions. So that’s what we started they’d be working. It’s one thing to be aging. doing. To tell you that back then we DSURIHVVLRQDOLQ\RXU¿HOGDQGDQRWKHU In the past eight years I’ve been knew what the future held, that we’d be thing to gain the trust of clients. You must giving lectures, and I’m not seeing the where we are now 25 years later, would have some values in common. generation I brought up is already open- be wrong. But there was enthusiasm.

JUNE-JULY 2021‡ Investor.ge | 39 rural] communities in terms of its direct consequences such as new constructions in accommodation and catering units, ski trails, etc.” Campaigns for mountain tourism, it continues, “should be directed towards encouraging local, traditional, authentic and innovative production rather than promoting a mass-tourism market with simi- lar product chains in every destination.” Mountain regions, with their extreme complexity, require more integrated eco- nomic development than the lowlands, and it would be better “to build on the strength of their assets, such as traditional knowledge and niche production.” The view that tourism must be handled with care has also been shared by 7,000 Tush and other locals. This was the number that signed a petition several years back against mass tourism plans and a $88 mil- IF YOU BUILD IT, THEY lion mountain road project to connect Georgia’s northern Khevi region with the northeastern Tusheti region, going through MIGHT NOT COME the Khevsureti region, and linking up with the Pankisi gorge. Georgia’s mountain tourism conundrum The Tush petition stated that motorized mass tourism was not at all what the peti- MIGHT GEORGIA’S PUSH TO TRANSFORM ITS MOUNTAIN tionerswanted and that the new road go- VILLAGES INTO HOLIDAY GETAWAYS FOR TOURISTS BE DOING ing through virgin territory would degrade MORE HARM THAN GOOD? the region’s habitat. Thus, it would dam- age highly successful niche adventure, SALLY WHITE future.” This speeds up the exodus of the equestrian, trekking and eco-tourism busi- population and further increases poverty. nesses that they had been building, aimed everaging tourism as a strategy to en- Mountain villagers have been quick to at high-spending international tourists. sure the livelihoods of Georgia’s 1,731 latch onto tourism opportunities—“[E]very “We strongly believe that repairing Lmountain villages, and the quarter of second family has built a guesthouse,” existing roads is the solution,” the petition a million people who live in them has been is the comment in “Is Tourism the Begin- stated. Subsequently, this new road proj- taken for gospel in recent years, with most ning or the End? Livelihoods of Georgian ect was dropped on the grounds of the recommended solutions to the decline in Mountain People at Stake,” published in complexity of the physical terrain involved. local populations and the economy focus- the journal Mountain Research and Devel- For the World Bank, skill building is a vi- ing on the development of tourism, new opment at the end of last year. tal component in mountain development, roads and hotels. However, what needs to be over- for everything from landscape manage- But could it be doing more harm than come, the report states, is “a narrow view ment to tourism, farming, forming enter- good to the country’s fragile mountain of the opportunities that tourism offers.“ For prise structures and encouraging women regions? example, local residents “mostly associate entrepreneurs, all of which is set out in its A conundrum presented in a report tourism with agriculture, neglecting alter- report “Development of High Mountain from academics at Tbilisi State University native non-agriculture activities.” Regions of Georgia 2019-23.” and University of Zurich voices this view What is vital, says the report, is “un- The World Bank’s aim has been to en- that is now being heard more often: while derstanding the transformation of rooted sure that any short-term responses create WRXULVPEULQJVDVKRUWWHUPHFRQRPLFÀ[ livelihoods.” greater resilience and avoid exacerbating tourism could do long-term damage. Another report on mountain develop- existing system failures. The World Bank has The danger is, this group of tourism spe- ment, “Supportive Tourism,” this time from thus been funding training and grants and cialists says, that for mountain livelihoods a group of Georgian, German and Austria incentives for small- and medium-sized any decline in tourism “leaves local resi- academics and published in Annals of enterprises (SMEs), strengthening all the dents with an underused tourist infrastruc- Agrarian Science, also voices concerns national and regional government agen- ture, developed mainly at the expense of about the narrow focuses of tourism devel- cies that touch on tourism, from cultural agricultural land—and hence rootless and opment program: “[. . . ] strategies mostly heritage to municipal development and without resources and prospects for the consider tourism’s impact on [mountain, mountain resources, improving tourism

40 | Investor.ge ‡ JUNE-JULY 2021 management, destination management, done their homework. Tourist preferences, The World Bank also sees communica- branding, marketing, and promotion and according to Geostat and the Georgian tion as vitally important and wants to help training for the development of skilled National Tourism Administration, indicate the small mountain entrepreneurs “in- workforces. that while overall international tourists crease their capacity to be globally (and The World Bank report is wide-ranging are mostly interested in shopping (67.0%) virtually) connected [. . .] to offer relevant and detailed on integrated development and in eating and drinking (66.6%), those and authentic experiences that would and focuses mainly on niche tourism and coming from “high-spending countries” allow them to take full advantage of the its spin-offs. (around 20%) want to “visit nature.” The growing demands of higher-spending However, it states that “success de- mountain destinations come near the travellers.” pends on concentrated investments in top on the bucket-lists of high-spending The World Bank wants to “expand the transformative improvements of core tourists. tourism industry to more remote areas of tourist hubs; connections between these There is no shortage of ideas to en- the country” but realizes that this requires hubs and secondary attractions and hance local production in the reports. “more integrated and innovative ap- any supplementary tourist infrastructure/ “Supportive Tourism” lists the following proaches to tourism development along services in peripheral locations should be ideas, which are designed primarily for selected value chains (e.g., nature and carefully assessed and ranked.” While the building up the local food industry and or- adventure, ecotourism, arts and heritage, project does incorporate spending on in- ganic production to widen the market and educational.” frastructure, it is mainly small-scale, such as farmers’ sales networks for local tourism, One area in which it is hopeful is in the restoration of historic buildings, water as well as ideas for the products, digital helping to remedy the depopulation of the systems, hospitality structures and tour- markets and e-platforms for local farmers mountains. “International experience [. . .] ism facilities (including huts along trails), that could be developed locally. shows that young urban entrepreneurs are improved solid waste management, and The creation of agri-bazaars and willing to move out of cities and back to rehabilitation of selected access roads festivals, delivery services for local agri- the countryside when new opportunities (rather than building major new ones). foods, and cold storage for meat and for tourism-related businesses and services Its concept “aims to promote a sus- dairy products are some of the other emerge in remote areas. Previous World WDLQDEOHJUHHQDQGHIÀFLHQWXVHRIWKH ideas, including the promotion of the Bank–financed regional development available natural and cultural assets to construction of greenhouses to produce projects in Georgia also provide evidence leverage mountainous regions for niche a variety of products and to overcome that the tourism industry is particularly tourism sectors and related economies seasonality—a practice already in place amenable to creating employment for (e.g., adventure, homestays, gastronomy, in Mestia, Svaneti. women (in Georgia there is evidence that agrobusiness, handicrafts, etc.).” Also Proper branding and labelling, it con- an estimated 55% of guesthouses are run included is the building of strong partner- tinues, especially for organic products, will by women).” ships with local government and NGOs as help overcome resistance to the higher- Assistance for women is particularly well as with the private sector. than-mass-produced prices. welcome, as a high number of mountain Another angle, in the report “Sup- “Ecologically clean products will be- households are led by women, the men portive Tourism,” is the need for “under- come distinctive and demanded in the having left. In addition to guest houses, standing and utilising tourism as a starting market, which will ensure their recognition women have been adept at starting new point for other local economic actors,” to by consumers and increase their competi- tourism-related businesses that have wider increase demand for local services and tiveness.” appeal—another Mountain Research and products and as a supportive platform for Better communication was a plea from Development report, “Is Tourism the Begin- the local economy to enter into new mar- the writers of the Mountain Research and ning or the End? Livelihoods of Georgian kets. For example, tourists wanted regional Development journal’s report “Issues with Mountain People at Stake” lists one newly dishes and local produce, and often these Applying the Concept of Community- established, women-run, small local en- were not available, with supplies having to Based Tourism [CBT] in the Caucasus” terprise producing quality linen in Mestia. be brought into the mountains. published by the International Mountain There are signs of other businesses Studies in the Kazbegi region showed, Society after surveying mountain villages: growing out of tourism, ones which are the report states, that “[. . . ] while ad- “Better communication with locals also transplantable elsewhere in the country vancement of tourism is rapid, the indica- helps them to promote and preserve both if local demand fails. The same report WRUVRIDJULFXOWXUHDFWLYLWLHVDUHVLJQLÀFDQWO\ tangible and intangible culture in moun- describes woodworking, stone and block decreasing in the region.” tainous areas. Farmers’ associations and workshops, ice-cream making and con- The absence of professional food pro- rural tourism development organizations fectionery among them. cessing infrastructure made it challenging spoke about the role of CBT in the valori- However, it concludes that this is for local small-scale farmers to deliver sation of traditional products, particularly mainly in the larger settlements, and it will agrifood products that conform to safety organic, locally produced products.” be necessary to introduce measures to standards. Lack of price competitiveness They noted that the involvement of “soften existing barriers” (for example, with compared to mass-produced, low-quality CBT practices encourages farmers to grants and training) to other economic goods available from outside the region restore forgotten traditions, because it sectors to prevent mountain residents depressed local demand.” increases their awareness of and access from relying on tourism as their sole source The Tush tourism entrepreneurs had to the market. of income.

JUNE-JULY 2021‡ Investor.ge | 41 VSDQQLQJÀYHFRQWLQHQWVZLWKPRUHWKDQ 48,000 employees globally. The company provides customer services to various brands in 36 languages. The company’s Georgian branch start- HGRSHUDWLQJLQZLWKDVLQJOHRIÀFHLQ 7ELOLVL,QWKHSDVWÀYH\HDUVWKHRUJDQL]D- WLRQKDVH[SDQGHGWRIRXURIÀFHVLQ7ELOLVL Kutaisi, and Batumi, and its team currently consists of some 2,000 employees. Notably, Majorel created approxi- mately 900 new jobs during 2020 despite the recession caused by the pandemic, which saw shrinkage of jobs in many industries. Majorel operates on a customer relationship management (CRM)/call- BUSINESS PROCESS center basis, providing customer support outsourcing for major international brands OUTSOURCING IN GEORGIA in industries such as travel, IT, and online VDOHV 7KH FRPSDQ\·V RIÀFHV LQ *HRUJLD the sweet spot in the back room mainly cater to German companies; thus, they are most often looking for German speakers in Georgia. Other languages in GEORGIA HAS MORE its offerings from customer service and IT demand include Italian, French, Russian, WRÀOPLQGXVWU\DQGDUFKLWHFWXUDOVHUYLFHV Spanish, and Dutch. THAN 130 BPO PROVIDERS, The advancement of technology and Interestingly, the company does WITH ANNUAL REVENUES globalization has fostered cross-country not employ a large number of English CURRENTLY AMOUNTING business outsourcing, transforming some speakers, which is explained by an over- TO 20.5 MILLION USD AND of the traditionally non-tradables, i.e., saturated market of English-speaking services for which the producer and the customer service providers from many PLENTY OF ROOM FOR customer were previously required to be other countries. GROWTH. in the same location. The company’s management attri- Since many jobs nowadays are loca- butes its interest to expand in Georgia to tion-independent, it is possible for, say, the business-friendly investment climate ALEKSANDRA SHALIBASHVILI a German brand to employ a customer DQGVLPSOLÀHGIRUPDOEXVLQHVVUHJLVWUDWLRQ service operator based in Georgia at a procedures, which are on par with the hile a call-center operator might relatively smaller cost, while at the same similar operations in the EU. The company’s not seem like a lucrative job time offering a competitive wage for the management also emphasizes the en- Wto many, on the Georgian job worker, thus driving local salaries up. thusiasm and motivation of local staff to PDUNHWLWLVVHHQDVDVXFFHVVIXORIÀFHMRE According to Deloitte, Georgia has provide high-quality service to Majorel’s and offers highly competitive pay. more than 130 BPO providers, with annual clients as one of the keys of their growth Salaries at some of the largest local revenues amounting to 20.5 million USD. in the country. companies average 1,500 GEL [440 USD] On top of affordable salaries, Georgia “I personally have worked on several monthly for an entry-level position that has a number of advantages that make Majorel sites, and I can say that the en- only requires the knowledge of a foreign it attractive for the BPO industry to set up ergy, enthusiasm and dedication of local ODQJXDJHZLWKRXWDQ\VSHFLÀFZRUNH[SH- camp. employees is unmatched to some loca- rience. This is about 30% higher than the These include the widely cited World tions I have been part of. People truly take supposed national average monthly salary Bank ease of doing business index–in ownership of their tasks and deliver good of 1,150 GEL [335 USD]. which Georgia currently ranks 7 out of 190 results. Besides growth on the market, our This is made possible by Georgia’s countries–a low tax burden, and a gener- objective is to create a top work environ- growing BPO (Business Process Outsourc- DOO\RSHQHFRQRP\&HUWDLQÀHOGVVXFKDV ment, healthy leadership, and offer tan- ing) sector—the practice of contracting FXVWRPHUVXSSRUWDOVREHQHÀWJUHDWO\IURP gible development opportunities for our an outside group to perform the standard the high number of Georgians who speak employees,” notes Alexander Mironenko, corporate operations of a company. at least one foreign language. Country Manager of Majorel in Georgia. Most commonly outsourced services One of the largest players in the BPO Another large outsourcing company in include customer support, accounting, sector in Georgia is Majorel—a global the CRM category is Evolution Gaming—a payroll, and HR management. The inter- BPO services provider headquartered in company providing live-stream solutions to national BPO sector in Georgia ranges in Luxembourg. It operates in 29 countries casinos across the world. Evolution Gam-

42 | Investor.ge ‡ JUNE-JULY 2021 ADVERTISEMENT

ing was established in Sweden in 2006, and entered the Georgian market in 2018. The company currently employs more than 3,000 SHRSOH LQ LWV 7ELOLVL RIÀFHV ZKHUH LW SURYLGHV VHUYLFHV LQ (QJOLVK Turkish, and Russian, among other languages. The company was forced to close down temporarily in March 2020 due to the pandemic, but reopened along with the rest of the economy in following months, during which time, as part of a CSR campaign, Evolution Gaming announced its openness to partnering with local businesses who had to cut their staff due to the pandemic, and provide openings for those businesses’ former employees. “This kind of partnership does not require any responsibilities from the partner companies’ side. This is a partnership based on the exchange of information, which will create a brighter future for many people,” explains Nato Gvazava, HR Manager at Evolu- tion Gaming. Another booming BPO industry in Georgia and elsewhere is IT. Some IT companies in Georgia initially catered to the local market, for instance in the banking system, and later started exporting their services or products. One of these examples is Azry, which was founded in 2006 by a group of Georgian entrepreneurs. Azry, whose name in Georgian means “idea,” has developed a number of products, including a public transport payment system, and has introduced some of them to the Central Asian market. Other IT companies mainly work with clients in the U.S. and Europe, providing coding or web-development services. These include MaxinAI, a Georgian company founded in 2017 providing custom AI and machine learning solutions; Asseco, a Poland- based international tech company operating from 60 countries, including Georgia; Qarva, a software company founded in 2004 providing solutions for Internet Protocol Television, TV and Over- The-Top media services, and many more. The BPO sector in Georgia also includes other areas, notably WKHÀOPLQGXVWU\)RUWKHODVWGHFDGHORFDO*HRUJLDQFRPSDQLHV have been providing production support to Bollywood movies, as well as, more recently, the Hollywood blockbuster “Fast & Furious 9.” The success in this industry is attributed to the “Film in Georgia” program of Entreprise Georgia, which aims to bring revenue from WKHÀOPLQGXVWU\DQGVKRZFDVH*HRUJLDDVDWRXULVWGHVWLQDWLRQ 2QHRIWKHPRVWDWWUDFWLYHIDFWRUVIRUIRUHLJQÀOPLQJFRPSDQLHV is the 20-25% cashback option, which allows foreign companies to get partial reimbursements for their local costs. It is a commonly shared opinion among BPO companies’ man- agement that the biggest challenge in operating from Georgia LVWKHGHÀFLWRIDQDGHTXDWHO\HGXFDWHGZRUNIRUFHSDUWLFXODUO\ regarding technical knowledge needed in IT, architectural design, DQGRWKHUVSHFLDOL]HGÀHOGV While BPO companies working for the international market and providing competitive wages generally easily attract highly PRWLYDWHG DQG DEOH HPSOR\HHV PDQDJHUV VD\ LW LV GLIÀFXOW WR source staff with technical skills. Many companies have had to incorporate an internal training program to teach new employees to use relevant software. Such training has time and scale-bound limitations and is associated with additional costs. Equiping more young people with skills that are in demand, particularly in STEM-related professions, could further stimulate the sector, and could be achieved by opening more educational institutions providing technical skills, as well as minimizing the infor- mation asymmetry between college applicants and the market.

JUNE-JULY 2021‡ Investor.ge | 43 SPONSORED CONTENT ¿UVWWZRPRQWKVRI Meanwhile, in the Abkhazia region, electricity consumption was up a whop- ping 23.9% y/y in 2020, and 18.6% in Q1 2021. The picture of energy consumption in the past year is not one of decreased consumption across the board, however. “The pandemic showed us just to GALT & TAGGART: what extent the electricity system is dependent on the commercial sector for as the power comes back demand. The downtowns we saw in 2020 are in fact more demonstrative of the ef- online, so does the economy fect shutdowns had on businesses,” G&T Senior Analyst Mariam Chakhvash- Decreased electricity consumption, CONSUMPTION vili told Investor.ge. In fact, residential struggling electricity providers and the If energy consumption is a measure electricity consumption increased 4.2% impending temporary shutdown of the by which to measure the awakening of y/y in 2020 as many workers were kept Enguri hydro power plant (HPP) were the economy, the report reads, the Geor- away from the office and ‘took their just some of the many topics that rose gian economy seems to be stirring. work home with them.’ This turn of to the top of the public agenda last year In 2020, electricity consumption in HYHQWVEURNHD¿YH\HDUWUHQGRIDQRQ when Covid-19 saw the lights go out in the entirety of Georgia including the average 0.1% growth rate in residential shops, restaurants and other public spots. breakaway Abkhazia region plummeted consumption. But the relative degree of stability 4.9% y/y to 12.1 TWh due to Covid-19 G&T’s Electricity Market Watch re- and predictability in regards to the pan- lockdowns and the subsequent reduction port highlights another interesting trend demic in recent months has allowed the in economic activity. brought to us courtesy of the pandemic: OLJKWVWREHÀLSSHGEDFNRQ In the rest of Georgia without the the electricity consumption of residen- Responding to the trend, Bank of Abkhazia region, consumption was down tial subscribers of Energo-pro Georgia Georgia’s brokerage and research arm a full 10% in 2020. However, the same increased by 7.4% y/y, while Telasi Galt & Taggart (G&T) recently published data set for Q1 2021 shows that electric- subscribers’ consumption decreased by a report highlighting the most interest- ity consumption was down just 1.4%, PHUH\\LOOXVWUDWLQJDQRXWÀRZRI ing trends the energy sector exhibited in LQGLFDWLYHRIVLJQL¿FDQWUHFRYHU\JLYHQ the population from Tbilisi to the suburbs 2020 and Q1 2021. the height of pre-pandemic activity of the and regions.

44 | Investor.ge ‡ JUNE-JULY 2021 GENERATION AND IMPORTS energy,” Chakhvashvili explains. this direction has now become the norm. Nearly two-thirds (64.6%) of elec- Georgia remained a net importer Georgia’s installed power generation tricity demand was met by hydro gen- RIHOHFWULFLW\LQZLWKWUDGHGH¿FLW capacity increased 432 MW in 2020, in- eration, 22.1% by thermal generation, down 16.8% y/y to U.S. $58.7 million in cluding a 230 MW thermal power plant 0.7% by wind generation and 12.6% was value terms and up by 5.3% y/y to 1.4 in Gardabani, the 178 MW Shuakhevi imported in 2020. TWh in volume terms. In 2020, Georgia HPP in the Adjara region, and six small While wind and solar continue to imported 1.6 TWh (-1.0% y/y) electricity HPPs with a total capacity of 23.4 MW. have negligible contributions to Geor- and exported a mere 0.2 TWh (-36.8% +33VFRPPLVVLRQHGLQVDWLV¿HG gia’s domestic energy production, there y/y), resulting in a net import of 1.4 TWh 2.2% of electricity demand of 2020, out DUH¿YHZLQGSRZHUSODQWSURMHFWVWKDW (+5.3% y/y). of which 2.0 percentage points fell on the are ready to commence the construction 7KHUHGXFWLRQRIWKHWUDGHGH¿FLWLQ Shuakhevi HPP. phase, G&T’s Chakhvashvili notes. value terms is explained by the compara- )ROORZLQJWKHVKXWGRZQRIWKH(Q- ³)HDVLELOLW\VWXGLHVKDYHEHHQFDU- tively low cost of electricity imports via guri HPP situated on the administrative ried out, and the projects are ready to the Salkhino line for the Abkhazia region boundary line between Georgia and its go. Several barriers remain, however. (22.8% of total imports), decreasing Russian-occupied region of Abkhazia, Companies interested in implementing the total cost of imports. Revenue from which underwent urgent renovation work such projects would like to see incentive exports was also down (by 25.4% y/y to that promises to bolster the capacity of mechanisms from the government, such U.S. $5.8 million) in line with the reduc- the country’s largest HPP by up to 30% as power purchase agreements (PPAs). tion of electricity exports. in the coming years, the volume of elec- Moreover, there are limitations from Despite decreased consumption in tricity imports nearly doubled in (+93% the state electrosystem, which limits the 2020, the import of electricity and ther- y/y) in Q1 2021, with Abkhazia receiving volume of variable renewable energy that PDOJHQHUDWLRQUHPDLQHGÀDWWR¿OOLQIRU energy from Russia via the Salkhino line. can be hooked up to the network. WKHZLQWHUGH¿FLWDQGFRPSHQVDWHIRUWKH With the extra capacity of the Enguri )RUWKLVGLVWULEXWLRQDQGWUDQVPLV- drop in HPP generation caused by less- HPP coming online, Georgia will cut sion grids will have to change, or power than-ideal weather conditions. back on some of its need for imports. plants will have to have higher reserve In 2020, 45.1% of imported electric- But as the economy continues to recover, capacities. ity came from Azerbaijan, 35.4% from G&T’s Chakhvashvili points out, con- These issues are directly written into Russia and 19.5% from Turkey. Turkey sumption will also be on the rise, and the 2020-2030 development plan for was until recently an export market for Georgia will need to boost the offerings Georgia, which provides for a tripling of Georgian production, but in line with on its renewables market to ensure a the currently allowed volume of variable decreased market prices, import from degree of energy security.

JUNE-JULY 2021‡ Investor.ge | 45 plastics help ensure food safety and reduce food waste. Combined with 3D The case for waste printing, biocompatible plastic materials can save human lives by enabling medi- Georgia’s new strategy on plastics cal innovations. As for more immediate consumables, PLASTICS AREN’T ALL BAD. BY INCENTIVIZING there is money to be made in the process COLLECTION AND SORTING WITHIN THE CONFINES OF of recouping plastic waste and recycling A CIRCULAR ECONOMY, A SIGNIFICANT PORTION OF it to make new products. In the circular PLASTIC WASTE CAN BE REDUCED AND EVEN TURNED economy, plastic is treated as a resource INTO CASH. and recovered in a closed loop to avoid waste. Currently, the so-called linear system NANA TAKVARELIA, CENN It will be a step-by-step process. In (production, purchase, use, disposal) of addition to the already existing plan for how Georgia consumes and disposes of unicipal waste in Georgia waste management, a targeted National plastic fails to capture these economic piles up to 1.1 million tonnes Plastic Waste Prevention Program is in EHQH¿WVRISODVWLF Mper year, of which nearly the works, which will largely mirror To gather the environmental and 14% is plastics, statistics from the Cau- the EU’s own Plastic in the Circular HFRQRPLFEHQH¿WVRISODVWLFDQRYHUKDXO casus Environmental Knowledge Portal Economy Strategy. of the value chain is needed, in addition show. 83% percent of marine litter found The initiative to develop the national to a redesign of products that takes into in Georgia’s Black Sea waters is plastic. program in Georgia is being supported by account the product’s end of life stage. On average, one person consumes 85 the Embassy of Norway in Georgia and In 2018, the EU developed its Strat- plastic bottles per year in the country, implemented by CENN in tandem with egy for Plastics in a Circular Economy, PRVWRIZKLFKHQGVXSLQODQG¿OOVDQG the Ministry of Environmental Protection which aims to transform the value chain rivers, where they can last and languish and Agriculture of Georgia. and ensure minimal leakage into the for hundreds, if not thousands of years, 7KHSODQLVVHWWREH¿QDOL]HGODWHU environment. if action is not taken. this year with the Ministry of Environ- The strategy addresses things like $QGDFWLRQPXVWEHWDNHQ²LQDGGL- mental Protection and Agriculture. product design, e.g., avoiding over-pack- tion to purely environmental concerns, In bringing the country’s stance on DJLQJDQGVLQJOHXVHSODVWLFVGHVLJQLQJ for a country whose tourism sales pitch plastics into alignment with that of the SURGXFWVWRLQFUHDVHWKHLUUHF\FODELOLW\ is much dependent on its natural wonders (8*HRUJLDVWDQGVWRUHDSPDQ\EHQH¿WV strengthening the recycling industry by and agriculture, it is imperative that the from a circular approach to the plastic VWLPXODWLQJPDUNHWVHVWDEOLVKLQJPXOWL country work on keeping its grounds economy. VHFWRUDOFRRSHUDWLRQVHWWLQJRXWLQYHVW- clean. ment priorities. The strategy integrates Action plans to this end do exist in WHAT IS THE PLASTIC CIRCULAR Extended Producer Responsibility (EPR) Georgia, such as the 2016-2030 National ECONOMY? schemes and sets out targets to be met Strategy and Activity Plan of Waste Man- Plastics aren’t necessarily a pest to by 2030. agement, with which the state hopes to be entirely eliminated as is often por- The EU has been pushing its stance achieve the ambitious task of reaching a WUD\HG²WKH\FDQKDYHWKHLUSODFHLQ on plastics beyond its own borders and 50% plastic recycling rate by 2025 and the economy too. After all, they have is closely examining global value chains, an 80% plastic recycling rate by 2030. been vital in the development of light particularly since waste flows have However, given that the recycling and innovative materials in automobiles changed following China’s late-2017 de- industry is rather new in Georgia, the and planes to save fuel and cut CO2 cision to ban the import of plastic waste. country is developing an action plan that emissions. Plastics can form high- Single-use plastics and over-pack- looks at the entire value chain in order to performance insulation materials, which aging and how to deal with them will reach these numbers. help save on energy bills. In packaging, feature prominently in Georgia’s national

46 | Investor.ge ‡ JUNE-JULY 2021 plan, as they are the most problematic ZKHWKHU*HRUJLDFDQEHQH¿WHFRQRPL- design and lack of trust in recycled materials, and are a major source of lit- cally by re-exporting material that is in consumables. tering and environmental pollution. They demand and avoid contaminated waste The EU has come up against these are not easily recyclable, are often used imports. last two issues in recent years, with con- on the gom and quickly discarded. They Product design will be another aspect ¿GHQFHDQGGHPDQGLQUHF\FOHGSURGXFWV are among the items most commonly of the program, as arguably the most remaining low. found on beaches, including on the coast widely discussed issue when it comes In response to this, the EU has of the Black Sea. to transitioning to a circular economy. pledged to stimulate and strengthen the And yet these plastics have become The reality is that most of our prod- market through investments, brokering so deeply ingrained in modern life so as ucts are designed to become waste, cooperation between companies, and to make their extraction from it practi- and the combination of chemicals and increasing the demand for recycled cally impossible. This, however, is not materials used in most products make materials. a tragedy, but rather, an opportunity. them harder to recycle. Per the plan, In Georgia, the recycling industry is While one does have to ask how much of during the design process producers will relatively new and is only just beginning such packaging is really needed, one can have to think about the entire lifecycle to gain momentum. Plastic recycling in DOVRUHYLHZLWVEHQH¿WVIRUH[DPSOHLQ of their product and design materials Georgia mainly consists of collection reducing food waste and carefully assess ZKLFKPDNHVWKHPUHXVDEOHUH¿OODEOH and export, with actual processing on a existing alternatives so that society does repairable or recyclable. This also means limited scale. not move the problem of pollution from looking at the chemical composition of Georgia has a relatively small do- one wastestream to the other. the materials and regrouping to ensure PHVWLFSODVWLFLQGXVWU\LPSRUWHGSODVWLF The role of the private sector in the product’s recyclability. products rank ahead of the in-country this aspect of Georgia’s national plan, In Georgia, ‘ecodesigns’ will be en- production of raw materials. But Georgia in reviewing their plastic footprint and FRXUDJHGKRZHYHUVLQFH*HRUJLDKDV has potential to develop the industry in a making reductions where possible with- fewer plastic producers, Georgia’s main positive direction through recycling. At RXWFRPSURPLVLQJWKHEHQH¿WVRIVRPH strategy will be focused on ensuring that this stage, reusing and recycling end-of- packaging, is an important one. packaging placed on the local market can life plastics remains quite low, rates of Excess packaging is an area in which be reused or recycled. ODQG¿OOGLVSRVDODUHKLJKDQGGHPDQGIRU VLJQL¿FDQWUHGXFWLRQVFDQEHPDGH)RU The plan also sets out to improve the recycled plastics is also quite low. example placing fruits and vegetables traceability of chemicals and address the Targeted investments can play a key in separate plastic-covered packages is issue of legacy substances in recycling role in strengthening the recycling sector. often unnecessary and has no storage streams. There are industry guidelines Georgia’s strategy will mimic that of the EHQH¿WV7RDGGWRWKHSUREOHPPRVWRI already in place that help manufacturers EU, which underlines the cardinal com- the excess packaging currently used in and other companies in how to design ponents of what those targeted invest- this way is either non-recyclable or not for recyclability and what to avoid to ments could look like: improving product easily recyclable. simplify the recycling process. GHVLJQWRLQFUHDVHUHF\FODELOLW\UDWHV Both the EU’s and Georgia’s strate- The program will also include an expanding and improving the separate gies will be looking at how to phase out examination of the short, mid and long- FROOHFWLRQRISODVWLFZDVWHH[SDQGLQJ this problematic and often unnecessary term investments necessary to achieve and modernizing sorting and recycling packaging. The EU strategy also explores what is set out in the strategy. FDSDFLW\DQGFUHDWLQJYLDEOHPDUNHWVIRU opportunities for reusing packaging and Plastic recycling has much more recycled and renewable plastics. refers to EPR schemes that can help potential than what is being currently Similarly, Georgia will also be focus- set up deposit schemes that can boost exploited. However, compared to other ing on creating viable markets by incen- recycling. waste streams, the rate of plastic recy- tivizing the uptake of recycled content. The program will also consider trends FOLQJUHPDLQVVLJQL¿FDQWO\ORZ5HDVRQV Among other things, Georgia’s national in imports, exports, and re-exports to for this range from the lack of proper program will look at international prac- UHJXODWHWKHÀRZDQGWKHTXDOLW\RIWKH sorting infrastructure and a lack of de- tice, EPR schemes, collection system, plastic coming in, which will dictate mand for recycled products to product policy design and investments.

JUNE-JULY 2021‡ Investor.ge | 47 Armenia already produces four times DVPXFK¿VKDV*HRUJLDSHU\HDUDS- proximately 12,000 tonnes, Partsvania says, and it accomplishes this in artesian waters since, unlike Georgia, Armenia does not have seaboard access, nor does it have the numerous rivers or lakes Georgia enjoys. *HRUJLDQ)LVKDQG&DYLDU¶V6KXE- alidze says Georgia has other advantages Something smells fishy RYHU$UPHQLDLQWKH¿VKPDUNHWQDPHO\ that of quality, thanks to its water re- but that may be a good thing for sources. Armenia’s main market, Shub- alidze points out, is Russia, and Russian distributors are allegedly dissatisfied the Georgian seafood industry ZLWKWKHTXDOLW\RI$UPHQLDQ¿VKDQG ZURA KHACHAPURIDZE likely to increase the appetites of the Eu- are eagerly looking for new partners in URSHDQPDUNHWIRU*HRUJLDQ¿VKJRRGV Georgia. However, Georgia continues to or a country with thousands of “This law provides a roadmap to the lag behind in the infrastructure needed to rivers and lakes, the fact that possibility of unobstructed entrance to produce the necessary quantities. )Georgia has to import nearly the European market. The trustworthi- 7KH&KDLUZRPDQRIWKH)LVK3URGXF- RILWVFRQVXPHG¿VKDQGVHDIRRG QHVVRIRXU¿VKVKRXOGLQFUHDVHDQG ers Association of Georgia, Nino Cho- products might raise more than a few Europe will know that if, for example, banyan, says low production capacity is eyebrows. ,IHHGP\¿VKZLWKIHHGSURGXFHGLQ largely attributable to the currently low In 2020, Georgia spent $31 million Georgia, it will comply with European VNLOOVRI¿VKIDUPHUVDGH¿FLWRILQGXVWU\ RQWRQQHVRILPSRUWHG¿VKSURG- standards,” Shubalidze says. VSHFLDOLVWVDQGODJJLQJLQIUDVWUXFWXUH)RU ucts, exporting just 4,200 tonnes worth The Georgian Ministry of Agriculture H[DPSOHVKHVD\VWKHFRXQWU\ODFNV¿VK $6.82 million. But plans have been set in is particularly interested in the develop- pathologist experts, which means there PRWLRQWRUHYHUVHWKHÀRZRI¿VK DQG ment of storage, refrigeration and pro- are few specialists who can identify and capital), with the government hoping that cessing facilities. WUHDW¿VKGLVHDVHV&KREDQ\DQVD\VLW LQWKHQHDUIXWXUHWKHFRXQWU\¶V¿VKHULHV “This requires a complex approach, is common for 30 to 40 percent of fry will be able to both satisfy domestic and will need support at every stage of purchased for reproduction to die. demand and, perhaps, even export their the production process. The state will Chobanyan adds that a study on the own catch on a larger scale. continue to actively support private price chain of aquaculture in Georgia is The 26,000 rivers, 860 lakes and 12 initiatives, as close cooperation with the in presently process with EU assistance, reservoirs in Georgia, experts say, could private sector will enable us to develop and as soon as the study is completed, be capable of producing between 40- both aqua[culture] and mariculture in an additional long-term action plan for WRQQHVRI¿VKDQQXDOO\ Georgia,” Minister of Environmental this industry will be developed based on Much excitement in the industry was 3URWHFWLRQDQG$JULFXOWXUH/HYDQ'DYL- its results. JHQHUDWHGE\WKHUHFHQW/DZRQ$TXDFXO- tashvili notes. 3UHVHQWO\WKHUHDUHQHDUO\¿VK ture from 2020, which was drafted with 7KHDLPRIUDLVLQJWKHFRXQWU\¶V¿VK SURGXFWLRQVLWHVRI¿FLDOO\UHJLVWHUHGLQ WKHSDUWLFLSDWLRQRI81)$2H[SHUWV production more than 20 times over may Georgia. The main focus of these sites on 7KH&(2RI*HRUJLDQ)LVKDQG&DYLDU seem ambitious, but Ministry of Agri- carp, trout, salmon, and sturgeon. Malkhaz Shubalidze, says that the regu- culture Rural Development Head Archil *HRUJLDQ)LVKDQG&DYLDUVD\VWKDW ODWLRQVODLGRXWLQWKHSODQIRU¿VKDQG Partsvania says it is enough to look at the ZLWKTXDOL¿HGPDQDJHPHQW¿VKHULHVLQ seafood production in line with European example of Armenia to see just what is the country could easily compete with standards and market expectations are achievable in Georgia. imports, and described to Investor.ge its

48 | Investor.ge ‡ JUNE-JULY 2021 own growth as an example: *(/IRUDUHVSHFWLYHNLORJUDPRIEODFN up in terms of quality against European ,QWKHFRPSDQ\¶V¿VKIDUPKDG or red caviar. options, it will be a big boost to farmers. 15,000 sturgeon fry, rising to 75,000 )RU*HRUJLDQ)LVKDQG&DYLDUWKH This year the Tsnori feed production in 2020. In 2021, the farm was already cost to raise one kilogram of sturgeon is facility increased its production from 300 counting 240,000 fry. Malkhaz Shub- DSSUR[LPDWHO\*(/RIZKLFKDURXQG to 1000 tonnes. Manana Metreveli says alidze states that such growth has sig- JRHVWR¿VKIHHG that this is related to the high demand QL¿FDQWO\LQÀXHQFHGLPSRUWDQGUHWDLO Increased production of feed in for her product. However, she notes, SULFHV)RUH[DPSOHELJSURGXFHUVLQ *HRUJLDZRXOGEHYHU\EHQH¿FLDOWRWKH she faces hurdles in convincing farmers Georgia that supply sturgeon to trade market, Shubalidze says, with quality to switch from traditional methods of networks have started getting their sup- feed already available in the country feeding milled barley and wheat. She SOLHVIURP*HRUJLDQ)LVKDQG&DYLDU but at a hefty price (up to 35,000 euros hopes this attitude will soon change, as Correspondingly, no more sturgeon fry per tonne). the nutritional value of two kilograms is imported from Armenia and Russia, of extruded feed equals nearly eight and the wholesale price for sturgeon *HRUJLDH[SRUWHGWKHPDMRULW\RI kilograms of traditional feed. Besides, GHFUHDVHGIURP*(/WR*(/LQWKH LWVILVKSURGXFWVWRWKHIROORZLQJ LWLVGLI¿FXOWIRUWKH¿VKWRGLJHVWVXFK past year. In other conditions, given the FRXQWULHVLQ traditional feed, which can often lead devaluation of the lari, 1 kg of sturgeon  7XUNH\wWRQQHV to fry losses. Metreveli points at this FRXOGKDYHJRQHXSWR*(/RQWKH  $]HUEDLMDQwWRQQHV dynamic as one of the major reasons for market, Shubalidze says, however, the the country’s dependence on fry imports. increase of production that the company  5XVVLDwWRQQHV While in Metrveli’s opinion it is still achieved caused a correction in the other  $UPHQLDwWRQQHV a bit early to be discussing prospects for direction. H[SRUWLQJ¿VKIURP*HRUJLDWKHSURVSHFW A similar situation exists for black It was the high cost of imported of displacing imported products at a DQGUHGFDYLDU%HIRUHWKH*HRUJLDQ)LVK feed that convinced Manana Metreveli competitive price is real. and Caviar produced its own caviar, to open her own feed production facil- Industry specialists say that simply black and red caviar of Moldovan and ity in Tsnori, which has been operating IXO¿OOLQJWKHQHHGVRIWKHGRPHVWLFPDU- Italian production was sold at Georgian for nearly a year. Partially supported NHWZRXOGDOUHDG\JHQHUDWHVLJQL¿FDQW VXSHUPDUNHWVIRU*(/DQG*(/ by a cheap loan, she purchased equip- income, despite the country’s rather 350 per kilogram, respectively.. Today, ment and produces 20 types of feed for ORZHUDQQXDO¿VKFRQVXPSWLRQSHUFDSLWD customers have the option to choose SRXOWU\¿VKDQGRWKHUDQLPDOV (eight kilograms) compared to the Euro- caviar produced in Georgia, and instead of the raw materials for production are pean average (24 kilograms). But given RISD\LQJ*(/IRURQHNLORJUDP sourced from Poland, Turkey, Belgium the market is just beginning to take its RIEODFNFDYLDURU*(/IRUNLORJUDP DQG)UDQFH6KXEDODG]HVD\VKHKDVXVHG ¿UVWVWHSVQRZWKHUHLVSOHQW\RIURRP of red caviar, customers can pay, if they this feed as well, and that if it turns out for growth in the near term, and larger IHHOVRLQFOLQHGDPHUH*(/RU that the feed produced in Georgia holds prospects may be on the horizon.

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JUNE-JULY 2021‡ Investor.ge | 51 NEWS

CONTENT

AmCham holds online meeting with US Ambassador 54 Kelly C. Degnan to Georgia

53 AMCHAM TALKS WITH FORMER US 55 NEW MEMBERS AMBASSADOR TO GEORGIA JOHN F. TEFFT ABOUT BIDEN’S POLICY 56 MEMBER DIRECTORY TOWARDS THE REGION 60 BOARD OF DIRECTORS 54 UK AMBASSADOR MARK CLAYTON ON UK-GEORGIA RELATIONS

52 | Investor.ge ‡ JUNE-JULY 2021 NEWS CLT COMMITTEE MEETING

AmCham hosted a virtual CLT Committee meeting on April 12 to discuss employment dispute prac- tice in Georgian courts. AMCHAM MEETS WITH FORMER US AMBASSADOR TO GEORGIA JOHN F. TEFFT AmCham Georgia organized a virtual meeting with Ambassador John F. Tefft, former Ambassador to Georgia, Ukraine and Russia on Biden’s policy towards the region on April 21. The meeting involved a lively Q+A

TOURISM COMMITTEE MEETING WITH USAID mittee with the USAID Economic Security project team who pre- sented their tourism support pro- grams on April 27. In addition, Am- Cham Executive Director George Welton reported on the meeting he recently had with the Deputy Minister of Economy and the head of the GNTA. Members had an op- AmCham Georgia organized a vir- portunity to update each other on tual meeting of the Tourism Com- FXUUHQWFKDOOHQJHVLQWKHÀHOG

JUNE-JULY 2021 ‡ Investor.ge | 53 NEWS

AMCHAM HOSTS LUNCH WITH ACTING ASSISTANT SECRETARY PHILIP REEKER

The meeting included Ambassador Reeker and US-Am- ticular, highlighted AmCham’s gratitude for the recent pledge EDVVDGRU.HOO\'HJQDQDVZHOODV,UDNOL%DLGDVKYLOL)LUVW9LFH by US President Biden to provide Covid vaccines to Georgia President of AmCham and high-level business guests. and also thanked Ambassador Kelly for her help in securing the The discussion was wide-ranging. The group discussed UHFHQWSDUOLDPHQWDU\DJUHHPHQW$PEDVVDGRU5HHNHUFRQ¿UPHG opportunities and challenges in the Georgian marketplace and that this support represents the continued importance that the ways that the US can continue to help. Mr Baidashvili, in par- United States places on its relationship with Georgia. ONLINE MEETING WITH US AMCHAM GEORGIA HOSTS AMBASSADOR TO GEORGIA UK AMBASSADOR TO KELLY C. DEGNAN GEORGIA MARK CLAYTON

AmCham Georgia hosted Her Excellency, Kelly C. Degnan, UK Ambassador to Georgia Mark Clayton spoke with Am- US Ambassador to Georgia, at an online meeting with members Cham members on May 27 about UK-Georgia relations, the idea on May 4. The ambassador discussed the current situation in Geor- of a Global Britain and what it means for the rest of the world. gia, the United States and the region and US-Georgia relations. The presentation was followed by a dynamic Q+A.

54 | Investor.ge ‡ JUNE-JULY 2021 NEWS NEW MEMBERS

Clean Place Ltd. Georgian Outlet & Meama Ltd. Salvation Army Corp B Resorts Group Corp B Non-Profit Full range of high qual- Corp B Meama is a Georgian The Salvation Army, an ity laundry service. Clean Georgian Outlet & Resorts company that produces high- international movement, de- Place Ltd. meets the best Group is the developer of the quality coffee capsules and scribes itself as an evangelical practice laundry standards ÀUVW UHJLRQDO RXWOHW YLOODJH LQ offers innovative services to movement and part of the for small or large, individual or Georgia - Tbilisi Outlet Village its customers. The company “universal” Christian Church. commercial customers. The (TOV). TOV is allocated over brings coffee beans from 17 It has a quasi-military structure brand name “Clean Place” 10ha territory, with carefully countries all over the globe and was founded in 1865 in alludes to the reliability of selected 120 brands and 2000 to create unique aromas. the United Kingdom as the East handling linens and assurance car parking. It will become a Meama factory simultaneously London Christian Mission by of providing quality of service destination for shopper not produces both - European and William and Catherine Booth. to customers. Items that to only within the country but American coffee capsules It is well known for its evan- be laundered include: bed also of entire region and the alongside unique blends of gelical, social and charitable linen, towels (various sizes), world. Numerous new globally capsule tea. The full process of work. The Salvation Army seeks bathrobe, full set of the table recognized fashion brands will capsule creation takes place to bring Christian salvation to covers, staff clothing, clothing be introduced, enhancing in the high-tech factory of the poor, destitute and hungry of the hotel visitors and other Georgia’s touristic attraction Meama in Tbilisi. The company by meeting both their physical items. and potential. Also putting built a diverse and user-orient- and spiritual needs. www.cleanplace.ge Georgia on a global fashion ed sales ecosystem consisting www.salvationarmy.org map. of E-commerce and innova- After successful opening tive coffee vending machines of the TOV, the company VXFK DV 'URSSHU IRU RIÀFHV  plans to continue develop- and Outdropper (for outdoors) ing unique destinations and and brand spaces, where business in the real estate and visitors have the chance to retail industries, bringing vari- experience the brand more ous worldly renowned retail, closely, discover their favorite fashion and hospitality brands. tastes and buy various Meama www.tbilisioutletvillage.com products. Meama also offers innovative Take-away spots - Meama Collect where coffee lovers can taste coffee-based unique cocktails. The company is oriented toward progress and imple- menting unconventional ideas on the market. Meama has its hardware, engineering, and software team so all the innovative machines and de- vices are created in the Tbilisi factory. With the help of state- of-the-art digital platforms, Meama creates a cutting- edge delivery service and a modern company manage- ment system. Meama’s mission is to change the centuries-old tradition of drinking coffee and transform the culture with the power of innovation. www.meama.ge

JUNE-JULY 2021 ‡ Investor.ge | 55 AmCham Company Members as of June 2021

PATRON MEMBERS Budget Rent a Car - Otokoc Dressler Consulting GULF Georgia Georgia LLC 35 Besarion Jgenti St. by Sun Petrolium Georgia LLC 37 Rustaveli St. Tel: +1-5169081444 Pixel Business Center, Tel: 2234112 www.dresslerconsulting.com 34 Chavchavadze Ave. BP Exploration Georgia www.budget.com.ge Tel/Fax: 2496444 24, S. Tsintsadze St. www.gulf.ge Tel: 2593400 EY LLC www.bpgeorgia.ge Caucasus University 44 Kote Abkhazi St. .RVWDYD6W%OGWKÀ Tel: 2439375; Fax: 2439376 Hilton Batumi Tel: 2377777; Fax: 2313226 www.ge.ey.com 13 Takaishvili St., Batumi KPMG Georgia LLC www.cu.edu.ge Tel: 292092 5th Floor, GMT Plaza, www.hilton.com 4 Freedom Sq., 0105 Tel: 2935713; Fax: 2982276 Chemonics International F H Bertling Georgia Ltd. www.kpmg.ge Room 3, 4th Floor, 9 N.Ramishvili St, 1st Dead End,0179 Iberia Refreshments, JSC 154 Agmashenebeli Ave. Tel: 2227495 Tetri Khevi Hesi District, Orkhevi Tel: 2252287 www.chemonics.com Tel: 2241091; Fax: 2241090 PwC Georgia www.bertling.com www.pepsi.ge 12 M. Aleksidze St., 0160 King David Business Center Coca-Cola Company Tel: 2508050; Fax: 2508060 114 Tsereteli Ave. www.pwc.com FINCA Bank Georgia ICE Ltd. Tel: 2941699, 2942609 9D]KD3VKDYHOD$YHUGÀ Chavchavadze Ave. #33b www.coca-cola.com Tel: 2244949 Tel: 2990172 TBC Group ZZZ¿QFDJH www.ice.com.ge 7 Marjanishvili St. Colliers International Tel: 2272727; Fax: 2228503 Georgia LLC www.www.tbcbank.ge Gazelle Finance Georgia LLC IT Consulting Georgia LLC 37/39 Kostava St.,Grato Business Tatishvili st. 3/5 (Melikishvili Ave. Irakli Abashidze 36-34, Terminal Center 7th Floor Gate 13 Tel: 2224477 $ZRUG%XVLQHVV&HQWHUWKÀRRU  UGT Tel: 2904304 Tel: 599231313 www.colliers.com D&KDYFKDYDG]H$YHWKÀRRU ZZZJD]HOOH¿QDQFHFRP www.spotcoin.net Tel: 2220211; Fax: 2220206 www.ugt.ge Conformity Assessment Kavkaz Cement JSC International (CAI) LLC General Electric 29 Andronikashvili St., 0189 11 Giorgi Saakadze Descent 5th Floor, Pixel Bulding, Tel: 2619090 Tel: 595690008 34 Chavchavadze Ave. CORPORATE A MEMBERS www.kavkazcement.ge www.ca.international Tel: 2259516 / 2259505 www.ge.com Adjara Group Hospitality KFC / Iberia Food Company 1, 26 May Sq., 0179 &XVKPDQ :DNH¿HOG*HRUJLD 29 Chavchavadze Ave. Tel: 2300099 4th Floor, 34 l. Chavchavadze Ave. Geomedica Ltd. Tel: 577043769 www.adjaragroup.com 0179 12 First Lane, N.Bokhua St, 0131 www.facebook.com/KFCGeo Tel: 2474849 Tel: 2520035 ZZZFXVKPDQZDNH¿HOGJH www.geomedica.ge Alliance LLC 135 King Parnavaz St., Batumi Le Meridien Batumi Tel: 591555757 DAI Global (Implementer of the Intersection of Ninoshvili/Zghenti www.alliancegroup.ge Georgian American University USAID Economic Security) Streets, Batumi 8 Aleksidze St. 7th Floor, 29 l. Chavchavadze Ave. Tel: 422 299090 Tel: 2206520; Fax: 2206519 Alta LLC Tel: 577465059 www.lemeridien.com www.gau.edu.ge Beliashvili st. 104, 0159 www.dai.com Tel: 2510111 www.alta.ge M² Development LLC Dasta Records Management GMT Group 15 Al. Kazbegi Ave., 0160 American Hospital 15 Grigol Lortkipanidze St. 4 Freedom Square Tel: 2444111 17 Ushangi Ckheidze St., 0102 Tel: 2900112 Tel: 2988988; Fax: 2988910 www.m2.ge Tel: 551851101 www.drm.ge www.gmt.ge www.ahtbilisi.com Maersk Georgia LLC Deloitte 12 Aleksidze St., King David Anaklia Development Grant Thornton LLC King David Business Center 54 Ketevan Tsamebuli Ave. %XVLQHVV&HQWUHÀ Consortium Tel: 248 66 70 6 Marjanishvili St. WKÀRRU0HUDE$OHNVLG]H6W Tel: 2604406 Tel: 2244566; Fax: 2244569 https://www.maersk.com/local- Tel: 2959910 www.grantthornton.ge www.deloitte.ge information/georgia www.anakliadevelopment.com

Avon Cosmetics Georgia LLC Dentons Georgia LLC Greco Group Marriott Hotels, Resorts & Suites 37/39 Kostava Street, Grato Business 10 Melikishvili St. 1 Nutsubidze St. 13 Rustaveli Ave. Center 7th Floor Tel: 2509300; Fax: 2509301 Tel: 2393138; Fax: 2311107 Tel: 2779200; Fax: 2779210 Tel: 2203175 www.dentons.com www.greco.ge www.marriott.com www.avon.com

BAT/ T&R Distribution Diplomat Georgia GT Group Mars Georgia LLC 2 Chirnakhuliani St., Samgori district 10 Chantladze Turn, Orkhevi 48 B. Cholokashvili St. 71 V. Pshavela Ave; “BCV”, 0186 Tel: 2157500/01/02; Fax: 2157503 Tel: 2919293 Tel: 2740740 Tel: 2207507 www.bat.com www.diplomat.ge www.gtgroup.ge www.mars.com

56 | Investor.ge ‡ JUNE-JULY 2021 Mastercard Radisson BLU Iveria Hotel CORPORATE B MEMBERS BGI Legal Gate 08, Floor 5, 37M Ilia 1 Rose Revolution Sq. 5XVWDYHOL$YH,,ÀRRU Chavchavadze, Axis Towers, 0179 Tel: 2402200; Fax: 2402201 Tel: 2470747 Tel: 2900815 www.radissonblu.com AE Solar LLC www.bgi.ge www.mastercard.com 88 Avtomshenebeli St. (Hualing .XWDLVL)UHH,QGXVWULDO=RQH .XWDLVL Tel: 2300099 Biltmore Hotel Tbilisi www.ae-solar.com Meridian Express RE/MAX Capital 29 Rustaveli Ave. 15-17 Ketevan Tsamebuli Ave.0103 43 Irakli Abashidze St. Tel: 2727272 Tel: 2745199 Tel: 2222424 http://www.millenniumhotels.com/en/ www.ups.com www.remax-georgia.ge tbilisi/the-biltmore-hotel-tbilisi/ Akustiko 93 Shalva Nutsubidze st. Microsoft Georgia LLC Tel: 568299559 BLB Law Firm Business Legal Axis Towers, 37M Ilia Chavchavadze Bureau Sheraton Grand Tbilisi Metechi www.akustiko.ge $YHWKÀRRU7HUPLQDO 8]QDG]HVW,,ÀRRU Palace Hotel Tel: 2970123 Tel: 2995797 20 Telavi St. www.microsoft.com www.blb.ge Tel: 2772020; Fax: 2772120 www.sheraton.com/tbilisi APM Terminals Poti 52 Aghmashenebeli St., Poti %/&/DZ2I¿FH 0RQGHOƝ]*HRUJLD//& Tel: 0493 277777 4th Floor, BC “Avenue”, 29 129a D. Agmashenebeli Ave., 0102 www.apmterminals.com Chavchavadze Ave., 0179 Tel: 2922491; Fax: 2934526 Tel: 2200180 SICPA Security Solutions www.blc.ge www.mdlz.com Georgia 6 Akaki Bakradze St. Tel: 2434580 Aptos Caucasus Online LLC www.sicpa.com 2I¿FH7HFKQRORJLHV6WHHOFDVH 20/4 Orbeliani St. 160 Tsinamdzghvrishvili St. Dealership Tel: 2 2920371 Tel: 2480000 4 Freedom Sq., 0105 www.aptos.ge www.co.ge Tel: 2999980, 2688229 ZZZRI¿FHWHFKQRORJLHVJH Simetria LLC 70b, Vazha-Pshavela Ave. Channel Energy (Poti) Limited Tel: 2420692 Aversi Pharma Georgia LLC, By Petrocas Energy www.simetria.ge Optimal Digital 148/2 Aghmashenebeli Ave. Group 35 Razmadze St. Tel: 2987860 52, David Agmashenebeli St., Poti Tel: 595001889 www.aversi.ge 7HO   www.optimal.digital www.petrocasenergy.com Strada Motors/Jeep-Chrysler 191 Ak. Beliashvili St. Oracle Nederland B.V. Tel: 23073007 Château Mukhrani, J.S.C. Baker Tilly Georgia Ltd. 5HSUHVHQWDWLYHRI¿FH www.strada.ge 6 Samgebro St. Meidan Palace, 44 Kote Abkhazi St. Kievskoe Shosse, 22nd km, bld Tel: 2201878; Fax: 2201878; Tel: 2505353; Fax: 2505353 6/1,10881, Moscow, Russia www.mukhrani.com www.bakertillyinternational.com Tel: +74956411400 www.oracle.com T&K Restaurants (McDonald’s Georgia) Clean Place Ltd. 1 Dzmebi Kakabadze St. 13 Gvirilebi St., / 12th. km David Orient Logic Ltd. Tel: 2921246; Fax: 2251422 Bank of Georgia Agmashenebeli Alley, 0159 18 Bochorma St. www.mcdonalds.ge 29a Iuri Gagarin St. Tel: 2479939 Tel: 2541818 Tel: 2444282 www.cleanplace.ge www.orient-logic.ge www.bog.com.ge

CMC LLC TMC Global Professional Pace International LLC 33 I. Chavchavadze Ave. Services Abuladze st. First Lane 8, 0162 Tel: 2240717 )UHHGRP6TUGÀRRU6XLWH Basis Bank JSC Tel: 2914701 www.cmc.ge Tel: 599379783 1 Ketevan Tsamebuli Ave. www.pace.ge www.tmcservices.com Tel: 2922922; Fax: 2986548 www.basisbank.ge Crosscountry Georgia PepsiCo Wimm-Bill-Dann Floor 4, Entrance 1, Village Ponichala, Tbilisi 0165 29 Chavchavadze Ave. Tel: 2475290 Tel: 790420015 Batumi International Container www.wbd.ru USAID Economic Governance www.cross-cap.com Program Terminal 5, Levan Mikeladze St., 0162 11, Baku Street, 6010, Batumi Tel: 599585122 Tel: 422 276452 Crowne Plaza Borjomi Philip Morris Georgia www.bict.ge Saarbrucken Square, 0102 37 Rustaveli Ave. Tel: 2439003 Tel: 995 367 220260 www.pmi.com www.cpborjomi.com Visa International Service Association BDO LLC ProCredit Bank 900 Metro Center Boulevard, Foster 2 Tarkhnishvili Str. Crystal, MFO JSC 154 Agmashenebeli Ave. City, CA 94404, USA Vere Business Centre, 0179 Expo Georgia, Tsereteli Ave. Tel: 2202222; Fax: 2202222-2226 Tel: 599374877 Tel: 2545845; Fax: 2399204 Tel: 431253343 www.procreditbank.ge www.visa.com www.bdo.ge www.crystal.ge

JUNE-JULY 2021 ‡ Investor.ge | 57 AmCham Company Members as of June 2021

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

Georgian Beer Company Herbalife Nutrition Liberty Bank JSC 3311 Saguramo, Mtskheta District Domsons’ Engineering & Bld. 4a Tamarashvili St., 0116 74 Chavchavadze Ave. Tel: 2437770 Construction Tel: 2202929 Tel: 2555500; Fax: 2912269 www.geobeer.ge 23 Polikarpe Kakabadze St. www.herbalife.com www.libertybank.ge Tel: 2050303 www.domsons.com Georgian Hospitality Group Lisi Development 22 Peritsvaleba St., 0103 Hyundai Glovis 2 Tiripebi St. 0159 Tel: 2987789 37/39 Kostava St. Tel: 2002727 Duty Free Georgia www.ghg.ge Tel: 2233625 www.lisi.ge UGÀRRU%HVLNL6W www.glovis.ge Besiki Business Center Tel: 2430150 Luca Polare www.dfg.ge Georgian Industrial Group LLC 54 Oniashvili St. GIG Plaza, 14 Gazapkhuli St., 0177 Tel: 2990399 Imperial Tobacco Production Tel: 2210187 www.lucapolare.com www.gig.ge Ukraine 35 Akademika Zabolotnoho St. Kyiv Efes Brewery in Georgia - Lomisi JSC M & M - Militzer & Munch Georgia Village Natakhtari, Mtskhta Region Georgian Integrated Systems 39 Ketevan Tsamebuli Ave. Tel: 2357225 (GiS) Insta Tel: 2748240, 2748941 www.natakhtari.ge 2I¿FH$EDVKLG]H6W 8, Zakariadze St., 0177 http://ge.mumnet.com Tel: 2243724 Tel: 2202020 www.gis.ge www.insta.ge Element Construction Ltd. Maqro Construction 13 S.Mgaloblishvili St. 22 Panjikidze St. Tel: 2374737 Georgian Outlet & Resorts Tel: 2000909 www.ec.ge Group International Black Sea www.maqro.ge 3 Kavsadze Str. 0175 University 7HO  David Agmashenebeli Alley 13 km, www.tbilisioutletvillage.com 2, 0131 Meama Ltd. Tel: 2595005 2 Givi Amilakhvari, Kakheti Highway Enka Renewable www.ibsu.edu.ge Tel: 2800808 Apartment 74, Floor 4, Block 4, 3 www.meama.ge Arakishvili St. Geo Steel LLC www.enka.com 36 Davit Gareji St., Rustavi, 3700 Tel: 2243794 ,úEDQN*HRUJLD-6& Mercure Tbilisi Old Town www.geosteel.com.ge 140/B Agmashenebeli Ave., 0102 9 Gorgasali St., Old Tbilisi, 0105 Tel: 2006060 ExpoGeorgia JSC Tel: 2310515 www.mercure.com 118 Tsereteli Ave., 0119 www.isbank.ge Tel: 2341100 GeoWel Research www.expogeorgia.ge 36a L. Asatiani St. 0*/DZ2I¿FH//& Tel: 2226792 WKÀRRU3L[HOEXLOGLQJ www.geowel.org JTI Caucasus VII Floor, Pixel Business Center, 60 Chavchavadze Ave. 34 Chavchavadze Ave. Tel: 2206633 Foresight Investment Group www.mglaw.ge 2I¿FH%HVLNL6W Tel: 2604111 Gergili www.jti.com Tel: 595 559966 Apt. 13, Block 3, Building 7, Vaja- Pshavela Ave. MKD Law Tel: 2323145 36, K. Khetagurovi St. 0102 www.gergili.ge Tel: 2553880 KK & Partners Gebrüder Weiss LLC www.mkdlaw.ge Airport Adjacent Territory, 2I¿FH1LQR5DPLVKYLOL6W Kakheti Hwy Tel: 2432227 Tel: 2710011 Globalink Logistics LLC www.kkpartners.ge Moped Depot www.gw-world.com 60 Sh. Nutsubidze St., 0186 139 Nutsubidze St. Tel: 2000238, 2208147 Tel: 595 211111 www.globalinkllc.com www.mopeddepot.ge .RUG]DG]H/DZ2I¿FH GeoEngineering LLC 44 Petre Kavtaradze St., Block A, 15a Tamarashvili St. Floor 1 GlovoApp Georgia Mosmieri LLC Tel: 2311788; Fax: 2311787 Tel: 2380322 5 Mikheil Asatiani St., Floor 6 4 Besiki st. Fl.4, Room 404 www.geoengineering.ge ZZZNRUG]DG]HODZRI¿FHJH www.glovo.ge Tel: 2970420 www.mosmieri.ge

Geomill LLC GM Capital LLC Kordzahia, Jgenti Law Firm Murphy Kazbegi 4, Chirnakhuli St. 2 Tarkhnishvili St., 0179 10 Petriashvili St. 2I¿FH0DUL%URVH6W Tel: 2400000 Tel: 2912626 Tel: 2921878 Tel: 2007107 www.geomill.ge www.gmcapital.ge www.kjlaw.ge www.murphyshipping.com

58 | Investor.ge ‡ JUNE-JULY 2021 MyGPS Rooms Hotels University of Georgia Eastern European Centre for 6 Bokhua St., 0159 14 Merab Kostava St. 77a Kostava St. Multiparty Democracy (EECMD) Tel: 2180180 Tel: 2020099, 2730099 Tel: 2552222 7 Luarsab Sharashidze St. www.mygps.ge www.roomshotels.com www.ug.edu.ge Tel: 2915650 www.eecmd.org

NCC Ltd. VBAT Law Firm RSM Georgia LLC Europe Foundation 9, Erekle II turn 2I¿FH*1LVKQLDQLG]H6W 85 Paliashvili St., 0162 3 Kavsadze St. Tel: 2725088 Tel: 2305777 Tel: 2558899 7HO)D[ H[W www.ensisi.ge www.vbat.ge www.rsm.ge www.epfound.ge

Vinotel (“Aigvinissakhli”) LLC Georgia Red Cross Society Nexia TA 4 Elene Akhvlediani Ascent 55 Egnate Ninoshvili St. Merab Aleksidze str. 12, King David SavvY Tel: 2555888 Tel: 2961092 Business Center 1st Pavilion, Expo Georgia,118 www.vinotel.ge www.redcross.ge Tel: 2242559 Tsereteli Ave., www.nexia.ge Tel: 2421342; www.savvy.ge Wings and Freeman Capital Georgian Waste Managment Green Building, 6, Marjanishvili St. Association Nodia, Urumashvili & Parnters Tel: 2940051; Fax: 2940053 36 Mnatobi St. Tel: 599 224070 2I¿FH,9%ORFN SEA www.wfcapital.ge 71 Vazha-Pshavela Ave. www.facebook.com/wmageorgia 44 Kote Apkhazi St. Tel: 2207407 Email: [email protected] www.nplaw.ge Wissol Georgia Good Governance Initiative 74b Chavchavadze Ave. Pixel Center, 8th Floor, 34, Tel: 2915315; Fax: 2915615 Chavchavadze Ave. Nutrimax Ltd. Silknet Ltd. www.wissol.ge Tel: 2243111 67b Ghoghoberidze St., Zemo 95 Tsinamdzgvrishvili St. www.ggi.ge Ponichala Tel: 2910345; Tel: 2471242 www.silknet.com Zarapxana LLC MAC Georgia www.nutrimax.ge 15 Lubliana St. Tel: 2510001 3 Lado Kavsadze St, 2nd Floor www.zarapxana.ge Tel: 2197378 SRG Investments LLC www.macgeorgia.org PASHA Bank Georgia JSC D&KDYFKDYDG]H$YHUGÀRRU 2 Leonidze St. / 1 G.Tabidze St. Tel: 2253581 Zinc Network LLC PH International Tel: 2265000 www.silkroad.ge 4 Tamar Chovelidze St. www.pashabank.ge 17D Chavchavadze Ave., 1st Floor, Tel: 555 424 090 Apartment # 1 www.zincnetwork.com Tel: 2990049; 2233338; www.ph-int.org PMO Business Consulting Suknidze & Partners LLC 16 Raphiel Eristavi St., 2 Floor 30 Khvichia St. / 24 University St. Tel: 2377307 www.suknidzeandpartners.com QSI International School of www.pmo-bc.com Georgia NON-PROFIT ORGANIZATIONS Village Zurgovani, Tbilisi Tel: 2537670; Fax: 2322607 www.qsi.org Policy and Management T3Concept Ltd. American Councils for Consulting Group (PMCG) 13 Radiani St., 0179 International Education - Georgia $JKPDVKHQHEHOL$YHWKÀRRU Tel: 2434455 Chavchavadze Ave. Lane I, Building Research Triangle Institute Tel: 2921171 www.turner.com, www.t3concept.ge 6, Entrance II, Floor II (Formerly Branch in Georgia www.pmcg.ge D&KDYFKDYDG]H$YH 6 Saakadze Lower Hill, Unit 12 Tel: 2594901 Tel.: 577991197 www.americancouncils.org www.rti.org Prime Concrete TBC Leasing JSC 76b Ilia Chavchavadze Ave. 222 Apt. 11 Vazha-Pshavela Ave. American Friends of Georgia San Diego State University - Tel: 2224870 Tel: 2272727 www.tbcleasing.ge 77 Nutsubidze St. Georgia www.primeconcrete.ge Tel: 2397174; Fax: 2388495 5 Kostava St. 0108 www.afgeorgia.org Tel: 2311611 www.georgia.sdsu.edu Qebuli Climate Tbilisi View CENN 4 Eter Botsvadze St. 0159 Amagleba III Dead-end #3 27 Betlemi St., 0105 The Salvation Army Tel: 2022222 Tel: 2999980 Tel: 2751903 16 Ikalto St. www.qebuli-climate.ge www.tbilisiview.ge www.cenn.org Tel: 2333785 www.salvationarmy.ge

Rentals LLC (CiDA) Civil Development Terabank JSC 46 Rustaveli Ave.; 36 Griboedov St. Agency Transparency International 3 Ketevan Tsamebuli Ave. Tel: 2454567 / 2996412 ,$EDVKLG]H7HUPLQDO2I¿FH Georgia Tel: 2507700 www.rentals.ge Tel: 341258822 61 Agmashenebeli Ave. 0102 www.terabank.ge www.cida.ge Tel: 2932129 www.transparency.ge Resolution Insurance Brokers, Georgia LLC Transporter LLC CNFA Union of Busines Ladies 28 A. Griboedov St., 0108 113b Beliashvili st. 47 Kostava St., 0179 8 D. Gamrekeli St., 0194 Tel: 599906374 Tel: 2147171 Tel: 2980722 Tel: 2308661 www.rib.ge http://www.transporter.com.ge www.cnfa.org www.ubl.ge

JUNE-JULY 2021 ‡ Investor.ge | 59 NEWS

Board Of Directors 2020

SARAH SARAH PRESIDENT

IRAKLI BAIDASHVILI R. MICHAEL COWGILL RADOSLAV DUDOLENSKI FIRST VICE PRESIDENT VICE PRESIDENT AND TREASURER DIRECTOR

COLIN DONOHUE OTAR KIPSHIDZE SERGI KOBAKHIDZE DIRECTOR DIRECTOR DIRECTOR

AmCham Executive Director Writers George Welton Sally White, Hans Gutbrod, Ana Mezvrishvili, Gela Mamulashvili, Zura Khachapuridze Copy Editor Alexander Melin Special thanks to all the contributors to the magazine, especially our member Marketing & Promotion companies for their contributions, AmCham Georgia staff and all our Nini Kapanadze contributors. Promotional Design This magazine would not be possible without your help. Levan Baratashvili Magazine Design and Layout Giorgi Megrelishvili

60 | Investor.ge ‡ JUNE-JULY 2021 NEWS

JORDI KUIJT KETTI KVARTSKHAVA SANDRO SHELIA DIRECTOR DIRECTOR DIRECTOR

GOGA TKHELIDZE GEORGE WELTON DIRECTOR EXEC. DIRECTOR

BETSY HASKELL, EX-OFFICIO ADVISOR

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 2021 ‡ Investor.ge | 61

Challenging the status quo in Infrastructure.

Dentons, the law firm of the future, is here.*

Otar Kipshidze Georgia Managing Partner [email protected]

Avto Svanidze dentons.com Partner © 2020 Dentons. Dentons is a global legal practice providing [email protected] client services worldwide through its member firms and affiliates. Please see dentons.com for Legal Notices. Dentons Georgia *Acritas Global Elite Law Firm Brand Index 2013-2020. 8a Melikishvili street, Tbilisi 0179, Georgia T: +995 32 2509300 F: +995 32 2509301