The FINANCIAL — Georgian Railway, Magticom, Bank of Georgia, Borjomi, TAV Urban Georgia and Creditinfo Georgia are among the most important companies who have had a significant influence on Georgia’s social and economic life, so believe experts interviewed by The FINANCIAL last week.
The FINANCIAL — Georgian Railway, Magticom, Bank of Georgia, Borjomi, TAV Urban Georgia and Creditinfo Georgia are among the most important companies who have had a significant influence on Georgia’s social and economic life, so believe experts interviewed by The FINANCIAL last week.
The companies employ the largest numbers of individuals or contribute to totally changing and improving the lifestyle in Georgia. At the same time they pay the largest amount of money to the state budget.
“Some of the most successful companies in the Georgian market are those which influence society in terms of economic development, infrastructure development, paying taxes etc,” the Managing Partner of KPMG in Georgia and Armenia, Mr. Andrew Coxshall, told The FINANCIAL. “To name a few, it’s impossible not to pay attention to the companies which are already internationally listed. They will influence the Georgian capital market and therefore the whole economic system of the country.
Georgian Railway is Georgia’s top employer according to a recent survey made by Iliauni Business Review. The company employs 13,500 individuals.
“For several years Georgian Railway has been continually improving both its international processes and procedures and human resources, but also its infrastructure, track, signalling and rolling-stock. These improvements are ongoing but have enabled the products produced in Georgia, such as copper and manganese, as well as products transiting Georgia, oil, aluminium etc to be transported quicker and more efficiently again helping the economy to expand,” Mr. Andrew Coxshall said.
Georgian Railway has changed the idea fix that trains are working without any schedule in Georgia. It has made travelling more comfortable and safe. The corporate governance and financial background of the company is also very strong, as Georgian Railway is rated “BB -” by Fitch and S&P.
A short while ago Georgian Railway issued USD 500 million 10-year bonds maturing in 2022 with a coupon rate of 7.75%. The notes are listed on the London Stock Exchange. According to the company the proceeds from the bond issue will primarily be used for financing the 2010-2015 notes buyback and for capital expenditure, including the Tbilisi Bypass and the Modernization projects.
Other key employers in Georgia are Bank of Georgia with 8,000 employees, Energo Pro Georgia with 5,500 employees, Wissol Group with 4,500 employees and Liberty Bank with 4,500 employees.
In total the list of the top 30 employers includes 5 banks, 9 energy and industrial companies, 4 oil companies, 4 transport and communication companies, 2 supermarket chains, 2 electronics chains, 2 pharmaceutical chains and 2 insurance companies.
Bank of Georgia holds the biggest share of the banking sector in Georgia. The Bank has been implementing European standard banking sector experience for a long time and this resulted in its success both locally and globally.
“No list of influential Georgian companies will be complete without including Bank of Georgia, the first Georgian company to be internationally listed,” said Mr. Andrew Coxshall. “Bank of Georgia completed its premium listing on the London Stock Exchange and is a constituent of the FTSE 250. This listing will help Bank of Georgia to have greater access to a more diverse funding base which will in turn allow the Bank to continue its impressive growth and innovation in the market. For Georgians this means improved access to financial products and markets to help spur growth, job creation and entrepreneurship. In addition Bank of Georgia’s premium listing on the LSE provides investors with a unique financial growth stock. The success of the listing is a success for the whole Southern Caucasus banking sector, as banks in the region will see that it is possible to list on the international market.”
“Creditinfo Georgia is one of the key companies in Georgia,” believes Aieti Kukava, CEO of Alliance Group Holding.
“Creditinfo Georgia is the first company not only in Georgia but in the region that has implemented an international standard of processing credit information,” said Aieti Kukava. “This has made financial products more accessible and reduced risks related to the credits. Having a developed credit bureau is one of the reasons that Georgia’s credit rating is growing in the global market. It has a significant influence on Doing Business Ratings, where Georgia holds one of the leading places. The company has small budget payments and few employees, but its importance is huge.”
Magticom is another company that has changed society and is one of the largest taxpayers in Georgia, said the interviewed experts.
“From the very beginning it influenced the whole development of the telecommunications market in the country and placed Georgia in a very competitive position in the CIS region, in terms of innovations in the market and high quality. At the same time the company influenced society, as telecommunications are very important for the development of society in terms of the facilitation of many day-to-day procedures and in terms of operations management development in the business sector,” Mr. Coxall stated.
“Magticom remains innovative, most recently with its Magtisat offering but has been an innovator in the past, for example with Magtifix. Magtifix dramatically changed life in the country, mainly outside urban areas, as it brought landline telephones back into use. Taking internet with you wherever you travel throughout Georgia or having satellite television in any region are possibilities presented to society by Magti. Magti is definitely a company which has a large influence on the lifestyle and everyday life of Georgian society,” said Irakli Galdava, analyst at ISET.
“Borjomi is one more prominent Georgian company,” said Tatia Khubulava, Head of the Corporate Communication Unit at Alliance Group Holding. “The water is connected to leading a healthy lifestyle and for lots of foreigners is associated with Georgia in general, meaning it is an aspect which makes them think positively about the country. Another company producing Georgian products is Marneuli-agro. They have managed to negate the idea that Georgian products are low quality. The company helps small farmers to realize their harvest and earn a living from it.”
TAV Urban Georgia is also one of the most successful companies operating on the market. It influenced not only infrastructure development, but created a very good platform for tourism industry growth. Due to the fact that this is an international company which operates in many countries, it helps attract tourists, business travellers and investors to the region. In the future it can play a more significant role in the region.
Another important and globally listed Georgian company is Georgian Oil and Gas Corporation. The rating company Fitch assigned GOGC a “BB” rating. The proceeds from the bond issue will primarily be used to fund GOGC’s plans notably with regard to the construction of a hydroelectric power project and hence to further strengthen Georgia’s energy security.
“Small companies can also have an influence on society,” believes Galdava, ISET. “USA2Georgia isn’t a big company or big taxpayer, but it is providing a service that has totally changed Georgian society,” Galdava said. “What was impossible in the last decade can now be done without leaving one’s home. Access to the US market is what has changed the view of Georgian consumers and might have a small effect on price level decrease on certain types of products.”
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