World investors show interest in Georgia

Prime Minister Irakli Garibashvili and other Georgian Government officials held meetings with several international companies focused in different areas who expressed their interest in Georgia’s economy and potential for doing business.

Representatives from international businesses Agility Logistics, OAO Lukoil, Jumeriah Group, The Blackstone Group, Lafarge, Tata Sons Ltd, Lazard, AGCO and Moller-Maersk met with Georgian leaders at the Forum in Davos, Switzerland.

Energy & Construction: Tata Sons Limited, Lukoil & Lafarge

At the meeting with Lukoil chief executive Vagit Alekperov, both parties acknowledged that foreign direct investments were one of the driving powers for the Georgian economy.

Lukoil is one of the largest international oil and gas companies and is already represented in Georgia. According to company reports, in 2002-2005 the company invested 15million USD in Georgia.

In Davos, Georgia’s Prime Minister, Economy Minister and Co-Investment Fund chief executive also met with Tata Sons Ltd representatives. The company first became interested in Georgia when former PM Bidzina Ivanishvili participated in the World Economic Forum in Davos last year.

Currently, Tata Sons Ltd are implementing several projects in Georgia, including Cascade Hydropower Project Adjaristskhali (Adjara Water), which was created to utilize the resources of the river Adjaristskali and its tributaries.

The project is significant and there were plans to develop four 400 megawatt Hydro Power Plants. The first, Shuakhevi Hydro Power Plant, is on target to begin construction in summer 2014.

Plans are open for investors until summer 2016 before the next project, the Koromjheti Hydro Power Plant, is expected to be finished by summer 2018.

Prime Minister Garibashvili’s press service said Tata Sons Ltd had already invested 33.4 million USD into the projects. Consequently, the company representatives discussed these projects and future plans in their meeting with representatives of the Georgian Government.

At the meeting with the French construction company Lafarge’s CEO Bruno Lafont the parties discussed the issue of entrepreneurship development in Georgia.

Lafarge is a French industrial company specializing in four major products: cement, construction, aggregates, concrete and gypsum wallboard. The company is the world’s largest cement manufacturer, as well.

As Irakli Garibashvili said, increased activities in the construction sector during the last decade have lead to a significant rise in building materials industry including sales of them. He also mentioned that construction of the large hydro power plants is planned in the nearest future what in turn will lead to a rapid increase in the level of cement and concrete consumption.

Financial services & Asset Management: Lazard & Blackstone

Similarly, the chief executive of global financial advisory and asset management firm Lazard also expressed interest in the Georgian market at a meeting with PM Garibashvili, Economy Minister Giorgi Kvirikashvili and Georgian Co-Investment Fund chief executive Giorgi Bachiashvili.

PM Garibashvili promised Lazard’s Matthieu Pigasse that the Georgian Government would support the company’s investment decision in Georgia.

The Doing Business 2014 report, issued by The World Bank and International Finance Corporation, ranked Georgia in 8^th of 189 countries in terms of the simplicity of doing business.|/

At the various meeting, the Georgian delegates stressed that Georgia’s rating was close to countries’ such as the USA, Singapore, Denmark, Norway and Great Britain.

Meanwhile The Blackstone Group chief executive officer Stephen Schwarzmanwas interested to learn more about conditions for investors in his meeting with the Georgian delegates. The Blackstone Group is an American multinational private equity, investment banking, alternative asset management and financial services corporation based in New York, America.

At the meeting, the parties also discussed the Georgian Co-Investment Fund – the brain-child of ex-PM Bidzina Ivanishvili which launched in September last year – with the Fund’s CEO at the Davos meeting.

The Blackstone Group representatives expressed their interest in how the fund worked, while the Georgian side explained that the Fund’s total budget was 6 billion USD, out of which 1 billion USD was invested by Ivanishvili. The Fund was available for projects that invested in the Georgian economy, as well as offering support the country’s capital market development.

The main investors of the Fund are Abu Dhabi Group, RAK Investment Authority, Calik Holdings A.S, Milestone International Holdings Group Ltd and the State Oil Fund of the Republic of Azerbaijan.

Logistics: Møller-Maersk & Agility Logistics

Another global company to meet with the Georgian delegation was Møller-Maersk- a daughter company of which APM Terminals is operating the Poti Black Sea Port in the province of Mingrelia, Georgia.

Maersk Group is a Danish business conglomerate which has activities in a verity of business sectors, primarily within the transportation and energy sectors. It is the largest container ship operator and supply vessel operator throughout the world.

The company CEO Neil Andersen was interested inGeorgia’s maritime shipping perspectives and potential.

A representative of APM Terminals, which operate a global network of container terminals and owns shares in 74 ports including the Poti Sea Port at the Black Sea coast, met with PM Garibashvili in Tbilisi earlier this month.

The company’s chief executive officer Kim Fejferthe company was not only interested in developing the existing infrastructure of the Poti Port but had long term plans for the port. He said container shipping had increased by 16 percent during 11 months in 2013 and transit shipments had increased as well.

APM Terminals purchased 80 percent of Poti Port shares from the Arabic RAKIA in 2011 and currently, the two companies operate the port jointly. However, upon purchasing the majority of shares, APM Terminals took an obligation to invest 65 million USD in the port and employed many locals.

Agility Logistics was one of the last companies to meet with the Georgian delegation in Davos.The publicly traded global logistics company, headquartered in Kuwait, provides freight forwarding, transportation, warehousing and supply chain management services to business, governments, international institutions and relief agencies worldwide.

The company’s CEO Tarek Sultan Al Essa, was given information about the Georgian business environment and it showed interest in the fact that Georgia’s strategic location gave it a possibility to gain benefits from increasing trade streams from Europe, the Caspian region, Central Asia and China.

Furthermore, investors were also particularly impressed that about 71 percent of transit cargos went through Georgia, since the country represented the shortest itinerary of TRACECA corridor between the Black Sea and Caspian Sea regions. Georgia also provides strategic infrastructure for oil transportation to the West through railway, pipelines and sea.

Georgian delegation also informed the Agility representatives that Georgia has flows of different grains and other agricultural products, as well as ore metals, constructive materials, etc.; Black Sea ports under private or state ownership; Caspian and Black Sea ferry lines.

Also in Davos, the Georgian delegation also presented the deep sea port construction investment project to the CEO of Agility Logistics. It was said that the ports will be the gateway for Europe to Caucasus and Central Asia.

Agriculture: AGCO

The meeting with AGCO, a global manufacturer of agricultural equipment, was significant since the Georgian Government named 2014 as the year of agriculture and domestic production in Georgia.Accordingly, the Georgian Government are planning to support agriculture and domestic production with different subsidiary programs.

PM Garibashvili and other officials discussed specificities of the Georgian agriculture system with the AGCO chief executive Martin Richenhagen. The potential investor said he would be interested with production perspectives after Georgia signed the Deep and Comprehensive Free Trade Area (DCFTA) Agreement with the EU, and expressed his readiness to be involved in the process.

The parties also discussed ways to raise the export of the domestic product and increase agricultural productivity, including providing supplier farmers with high tech decisions. 

Richenhagen shared some knowledge about this topic, as his company AGCO is one of the world’s largest producer of agricultural equipment.

Hotels & Resorts: Jumeirah Group

The company operates luxury hotels worldwide and was especially interested in the potential of developing hotels and resorts, as well as touristic potential.

Tech: Royal Philips

Meeting with the Royal Philips commonly known as Philips representatives could be named as the most successful since it ended with the most touchable outcome among all other meetings.

Particularly, Philips decided to open a regional head office in Georgia. To agree on the further details the company’s CEO Harry Hendiks will arrive in Georgia on April 23-25.

Georgian PM welcomed the decision and pledged full support for the idea of the company.

Philips is a Dutch diversified technology company headquartered in Amsterdam with primary divisions focused in the areas of Healthcare, Consumer Lifestyle and Lighting. It is one of the largest electronics companies in the world represented in more than 60 countries which will be joined by Georgia soon.

The Minister of Economy Giorgi Kvirikashvili stated all the companies the Georgian delegation met expressed high interest in Georgia and in some cases, concrete negotiations had already begun. He said the companies’ representatives began negotiating by presenting particular investment initiatives.

PM Garibashvili expressed his satisfaction following the meetings. He said he was sure participation in the WEF this year would bring as much success for Georgia as it did last year.

The Georgian delegation, which took part in the WEF in Davos on January 22-25,was comprised of Prime Minister Irakli Garibashvli, Minister of Economy Giorgi Kvirikashvili, Minister of Foreign Affairs Maia Panjikidze, CEO of the Georgian Co-Investment Fund Giorgi Bachiashvili, head of the National Investment Agency Giorgi Pertaia and CEO of the Georgian Railway, MamukaBakhtadze.

The delegation finished the various meetings with international companies and potential investors yesterday and arrived in Georgia last night.