Tag Archives: business

Ukraine’s civil war hits Georgia’s winemakers

TBILISI/GEORGIA, MAY 13 2015 (The Conway Bulletin) — The second Saturday of May is an important date in Tbilisi’s calendar, as the New Wine Festival and its rivers of free wine kick off the capital’s summer party season.

But, although there were a record number of participants, this year’s festival was set against the backdrop of falling Georgian wine exports.

The 6th annual New Wine festival, organized by the Wine Club of Georgia, attracted thousands of visitors to sample 72 different types of local wine produced by more than 100 different companies and small family wineries.

“It is a great place to introduce people to different wines and to attract future customers,” Alex Rodzianko, an American who started his own winery in Georgia a couple of years ago and participated in the wine festival for the first time, said as he poured full glasses of amber wine to a circle of Georgians.

But life is less rosy for bigger companies, which target foreign markets. Last week the National Wine Agency released a report, which said that Georgian wine exports dropped by 58% in the first quarter of 2015 compared to the same period in 2014.

In total, in 2015 Georgia exported over 6m litres of wine worth $23m to 26 countries but the two biggest markets, Russia and Ukraine, reduced their Georgian wine consumption by 76% and 57% accordingly. Blame war in Ukraine and an economic recession in Russia.

Teliani Valley, one of the better-known Georgian winemakers, exports 80% of its produce. However their export sales are dwindling. Media representative Nutsa Avalishvili said that the company is now trying to expand into other countries such as Poland, Kazakhstan, China and the US to compensate for losses.

“The main reason for dropping sales in Ukraine is the political situation and crisis in that country,” she said.

ENDS

(News report from Issue No. 231, published on May 13 2015)

Uzbek President says wants to sell stakes in state companies

MAY 8 2015 (The Conway Bulletin) – In what could be a potential game-changer for Uzbekistan, President Islam Karimov has ordered the government to sell stakes in 68 large companies to strategic foreign investors.

Media quoted a presidential decree which said that stakes in companies such
as Navoiazot, a cement maker, and Turonbank would be up for sale.

“It is time to carry out a full-scale critical analysis of the availability and effectiveness of the presence of state shares in the economy, in other words, ‘the state’s presence in the economy’, and on this basis, to define our actions for a significant increase in the private sector’s presence in the economy,” media quoted Mr Karimov as saying.

It’s unclear from the decree and the media coverage who this apparent relaxation of state controls over Uzbek industry and commerce is actually aimed at.

Western business has generally had a strained relationship with Uzbekistan. There have been a number of instances where Western companies — generally metals companies — have accused Uzbekistan of grabbing their assets.

Instead, Uzbekistan may be thinking of Chinese companies, which have been making in-roads over the past few years, or even businesses from South Korea and India.

Uzbekistan’s economy, like other countries in the region has been struggling to cope with a downturn in global energy prices and a sharp fall in the performance of the Russian economy. Remittances from Russia have dropped considerably.

ENDS

(News report from Issue No. 231, published on May 13 2015)

BP confirms that Azerbaijani oil output rises

MAY 13 2015 (The Conway Bulletin) – Oil produced by BP’s Azeri- Chirag-Guneshli (ACG) fields in the first quarter of the year inched up to average of 661,000 barrels per day from 645,800 barrels per day during the same period last year, BP-Azerbaijan said.

This increase, although small, is important. BP has been under increasing pressure from Azerbaijan to reverse a decline in output at ACG, the principal driver of Azerbaijani oil production.

For the past couple of years BP has spent millions and replaced various management teams trying to stem the decline in output at ACG.

It now appears to be working, and overall Azerbaijani oil production is rising as a consequence.

Earlier this month BP also said that it was going to suspend operations at one of the ACG platforms for repairs. This should dent ACG output in the short term.

ENDS

(News report from Issue No. 231, published on May 13 2015)

Azerbaijani gas company states ambitions

MAY 8 2015 (The Conway Bulletin) – The chairman of Azerbaijan’s state energy company Rovnag Abdullayev said the country could produce up to 40b cubic metres of gas a year, state- linked media reported. This would propel Azerbaijan into the top tier of global producers.

ENDS

(News report from Issue No. 231, published on May 13 2015)

UAE and Kazakhstan agree to financial deals

MAY 11/12 2015 (The Conway Bulletin) – Kazakhstan and the United Arab Emirates (UAE) laid the groundwork for more collaboration in the financial sector with a couple of deals.

At a meeting in the UAE, the Dubai International Financial Centre and the Kazakh Central Bank agreed to exchange expertise and coordinate strategies, while Nasdaq Dubai and the Kazakhstan Stock Exchange (KASE) inked an agreement to link their financial instruments.

Luca Anceschi, professor of Central Asian Studies at Glasgow University said: “These new financial links between Almaty and Dubai open another avenue besides construction and trade in non-state sectors.”

ENDS

(News report from Issue No. 231, published on May 13 2015)

Armenia negotiates gas discount with Russia

MAY 13 2015 (The Conway Bulletin) – Armenia has negotiated a reduced price for gas from Russia’s Gazprom but the government will not pass this saving on to consumers, energy minister, Yervand Zakharyan, said. Instead, Mr Zakharyan said, consumers will pay the same price.

ENDS

(News report from Issue No. 231, published on May 13 2015)

Uzbekistan launches metering project

MAY 11 2015 (The Conway Bulletin) – KT, the second largest South Korean mobile network, said that it had won a $110m contract to build an advanced electricity metering system. The project is in partnership with the Asian Development Bank. The plan is to install 1m metres in Uzbekistan’s three biggest cities by 2017.

ENDS

(News report from Issue No. 231, published on May 13 2015)

Kyrgyz FDI drops by 37% in first four months of year

MAY 12 2015 (The Conway Bulletin) – The National Statistics Committee of Kyrgyzstan said foreign direct investment (FDI) fell by 37% in the first four months of 2015, figures which highlight the current difficult economic climate.

This marks the second year of decreasing FDI in Kyrgyzstan after a jump in 2013. Most of the loss this year can be attributed to the construction sector, impacted by economic sanctions and crisis in Russia, and to the mining sector, due to the Kumtor gold mine stalemate.

Alex Nice, Central Asia analyst at the Economist Intelligence Unit, said: “Economic and political uncertainty may have depressed foreign investment and of course relatively weak gold prices may also depress new investment in Kumtor, the biggest source of FDI.”

With the fall in remittances from migrant workers abroad and low GDP growth for the next couple of years, Kyrgyzstan needs to improve its business climate in order to attract more, rather than less foreign investors interest.

But as the head of the Association for Foreign Investment, Kairat Itibayev, told media, infrastructure in Kyrgyzstan needs improving.

“Businessmen from Turkey, for example, lament that there is a lack of storage space, unstable electricity, and unusable roads,” he said.

ENDS

(News report from Issue No. 231, published on May 13 2015)

Kazakh President backs EEU

MAY 9 2015 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev said the Kremlin-led Eurasian Economic Union had a strong future despite current trade problems. Mr Nazarbayev made the comments after meeting Russian president Vladimir Putin in Moscow. Kazakhstan and Russia have erected trade barriers over the past few months.

ENDS

(News report from Issue No. 231, published on May 13 2015)

Azerbaijan to receive loan from EBRD

MAY 8 2015 (The Conway Bulletin) – The European Bank for Reconstruction and Development (EBRD) said it will give a syndicated loan for the second phase development of the Caspian Sea Shah Deniz gas project. EBRD President Suma Chakrabarti said on a visit to Baku that the size and timeframe were undecided.

ENDS

(News report from Issue No. 231, published on May 13 2015)