Tag Archives: business

Georgian olive oil producer wants to break into market

TBILISI, JUNE 12 2017 (The Bulletin) — Georgia’s first home-grown and home-processed olive oil is now being sold across the country, the culmination of a Turkish-inspired ambition.

In an interview with The Bulletin, George Svanidze, Georgia Olive CEO, said that he had always wanted to return from Turkey, where he lived, to develop a business in Georgia.

“We, the diaspora, wanted to bring something good, new investments to Georgia,” he said. “Our Turkish partners have three generation experience in olive oil production, so we decided to bring back this culture to our country.”

And it is this entrepreneurship, this ability to assimilate knowledge abroad and bring it home that makes the Georgian economy resilient and open, analysts have said. It has recovered quicker than its neighbours from a sharp economic downturn over the past three years.

Mr Svanidze said that he and his partners planted their first olive trees in Georgia in 2010. Since then, with the help of a government sponsored scheme called Produce in Georgia, the olive grove has grown to around 350 hectares – roughly the size of 350 rugby pitches. They have now set up a processing plant near the village of Sakobo in Kakheti.

And Mr Svanidze said that the soil quality in Georgia was superior to Italy, Turkey and Greece, the three main traditional makers of olive oil.

“We have such high-quality olives that we produce 1 litre of olive oil from 3.5kg of olives,” he said, comparing this to the usual 5kg needed.

Part of the challenge is tapping into the domestic market. Not many people cook, or eat, with olive oil, preferring to use cheaper oils from nuts.

Zura, the director of a wine shop, said as well as being more expensive, olive oil was too pungent for local palates. “I know Europeans really love it, but it’s no good for our kitchen. The taste is too strong,” he said.

But Mr Svanidze has heard this all before. “First we will take the Georgian market, after that the Trans-Caucasus market and afterwards we will export to Europe and Asia,” he said.

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(News report from Issue No. 332, published on June 12 2017)

Georgia plans to build a trade hub

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JUNE 8 2017 (The Bulletin) — Georgia’s government said that it plans to build two new logistics hubs, one at Kutaisi and one outside Tbilisi, in an effort to brand itself as a transit hub between Asia and Europe. Economy minister Giorgi Gakharai said the Tbilisi hub would cost $82m to build and the Kutaisi hub would cost $72m. This year Georgia signed a free trade agreement with China which it said it would use to promote itself as a trading bridge between China and the rest of the world.

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(News report from Issue No. 332, published on June 12 2017)

Azerbaijan plans to close Shah-Deniz

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JUNE 8 2017 (The Bulletin) — Azerbaijan plans to close gas production for a month at the Shah Deniz offshore in August to fix a faulty export pipe, Azerbaijan’s deputy energy minister Mariam Valishvili told Reuters in an interview. Shah Deniz is operated by BP, although it has not commented on Ms Valishili’s comments. It exports its gas via a pipeline that runs through Georgia and Turkey. Shah Deniz 1 has been producing gas since 2006. Shah Deniz II is due to come onstream by the end of 2019 and form the basis of a new flow of gas to Europe from the Caspian Sea.

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(News report from Issue No. 332, published on June 12 2017)

Investment boosts for Uzbek car making

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TASHKENT, JUNE 5 2017 (The Bulletin) — Looking to give the Uzbek car-making sector a boost, President Shavkat Mirziyoyev unveiled a series of investments and tax cuts specifically aimed at boosting production and job numbers.

The uzdaily.uz website reported that on June 1, Mr Mirziyoyev had signed into law an investment scheme worth $800m for Uzavtosanoat. It reported that it was hoped that production would jump by 300% and the number of people employ would also surge accordingly.

The Uzbek auto sector has been heavily hit by a collapse in the Russian car market. Data released in April showed that the number of cars produced in Uzbekistan had halved in 2016 to around 92,000. This year, though, there are signs that the the Uzbek car making sector is beginning to rebound.

French carmaker PSA, which owns the Peugeot and Citron brands, has signed a deal to assemble 16,000 cars in Uzbekistan.

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(News report from Issue No. 332, published on June 12 2017)

Azerbaijan’s SOCAR eyes more deals

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JUNE 5 2017 (The Bulletin) — Azerbaijan is eyeing up investing another $3b into an energy project in Turkey, SOCAR Turkey CEO Zaur Gahramanov said. Azerbaijan is already a major investor in Turkey, with an estimated $11b worth of projects. The main projects are the Star oil refinery near Izmir and the Petkim wind farm. This year SOCAR failed in its bid to buy a network of petrol station in Turkey from Austria’s OMV. Mr Gahramanov said SOCAR was considering building a network of petrol stations from scratch or potentially another wind farm.

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(News report from Issue No. 332, published on June 12 2017)

Stock Market: Central Asia Metals

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JUNE 12 2017 (The Bulletin) — Shares in Central Asia Metals (CAM), the Kazakhstan focused miner, stayed steady this week on the London Stock Exchange despite some early calls by stock analysts to buy into it.

At the end of the week it was trading at 220p, roughly the level it has been anchored to since the start of May.

Still, some analysts said that now was a good time to buy into CAM. Peel Hunt has a target price of 290p against CAM, up from 270p. Canaccord Genuity also gives the stock a buy rating.

Across the Caspian Sea, Bank of Georgia, has also been given a lift by analysts. Investec raised its target price for Bank of Georgia to 4,000p from 3,950p. Several other brokerages moved their guidance to a ‘buy’ rating too.

Last month it issued the first ever corporate debt in Georgian lari, attracting widespread publicity. The IFC, part of the World Bank, said that it would step into support the lari issues, agreeing to buy up to a third of the $250m bond sale. Reports said that 20 other institutional investors had applied to buy a total of $207m of the bond, meaning the the IFC ended up with a smaller stake than it had offered.

Kaha Kiknavelidze, Bank of Georgia CEO, said: “IFC’s bid gave us great support in building investor confidence and creating early momentum in book build.”

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(News report from Issue No. 332, published on June 12 2017)

Azerbaijan’s plant to double Methanol

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JUNE 11 2017 (The Bulletin) — Azerbaijan’s methanol plant aims to double sales from 2019, the CEO of SOCAR Methanol, Elnur Mustafayev, said in an interview with ‘Consulting and Business’ magazine. Methanol’s main use is in the refining process of natural gas. The plant was built by AzMeCo and started production in June 2014. Mr Mustafayev said that it was the only methanol plant in the region and that it aimed to increase production to 500,000 tonnes per year, still some way short of its 750,000 tonne limit.

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(News report from Issue No. 332, published on June 12 2017)

Car imports to Kazakhstan drop

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MAY 29 2017 (The Bulletin) — Car imports from Russia into Kazakhstan dropped by 11% in the first quarter of the year to 4,700 cars, media reported. Reports said the drop in Russian car imports was mainly due to a sharp rise in prices linked to a drop in the value of the Kazakh tenge. In the first quarter of 2014, Kazakhstan imported 32,400 cars from Russia.

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(News report from Issue No. 331, published on June 5 2017)

Kazakh Banks make deal

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JUNE 2 2017 (The Bulletin) — Halyk Bank will buy Kazkommertsbank’s two largest shareholder’s combined stake of 54% for a nominal fee of $1, Reuters reported. The nominal fee highlights the state-sponsored natured of the merger, agreed in March, between the country’s two largest banks. Under the deal, a government unit set up to buy banks’ bad debt will buy 2.4 trillion tenge ($7.5b) of bad debt from the new bank. Kazkommertsbank’s two biggest shareholder are Kenes Rakishev, a financier close to the elite, and Samruk Kazyna, the sovereign wealth fund.

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(News report from Issue No. 331, published on June 5 2017)

Polymetal raises stake in Kazakh mine

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ALMATY, JUNE 1 2017 (The Bulletin) — Russian gold miner Polymetal increased its stake in the Kazakh mine Dolinnoye to 50% by buying a 25% stake for $1.6m.

Polymetal bought its original 25% stake in the gold mine, based in northern Kazakhstan, in 2015. Polymetal is one of Kazakhstan’s biggest mining companies.

“This transaction further expands and strengthens our Varvara hub concept,” said Vitaly Nesis, Group

CEO of Polymetal. “We expect first ore to go through the mill in Q3 2017.”

The so-called Varvara hub is the collective term that Polymetal uses to describe its group of gold mines in Kazakhstan centered around the processing plant of the same name.

Polymetal’s assets in Kazakhstan include, the Kyzyl project in north- eastern Kazakhstan. In 2015, it bought the Kyzyl project for $620m from Sumeru, a private group owned by Timur Kulibayev, son-in-law of Kazakh President Nursultan Nazarbayev.

In the first quarter of the year, Polymetal said that its gold production had increased by 8% compared to the same period in 2016, helped partially by a rise output at the the Varvara hub.

It also said, though, that its Kazakh operations had required more capital investment than expected.

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(News report from Issue No. 331, published on June 5 2017)