The FINANCIAL — A total of 62 companies founded by Russian citizens were registered in Georgia between October and December 2012.
The FINANCIAL — A total of 62 companies founded by Russian citizens were registered in Georgia between October and December 2012. The number for the same period of the previous year was 48. Entrepreneurs interviewed by The FINANCIAL claim that their decision to launch business in Georgia was not directly influenced by the victory of the Georgian Dream Party, which promised to restore relations with Russia. Still, the first steps in the restoration process between the two countries are mainly being made by Georgians.
In two weeks a new car wash and café called ‘Barry White’ will be opened in the locality of Station Square. Dual citizenship-holder David Jichonaia and Russian citizen Giorgi Mdivani decided to start up this business with investments of USD 15-20,000.
“We will offer an innovative system of car washing that is without analogue in Georgia. We first saw such a car wash in Russia and decided to bring the same principle to Georgia. We plan to serve approximately 30-40 cars a day,” said Jichonaia.
Jichonaia lived in Russia for eleven years. He left Georgia when still at school. He then completed his higher education in the field of economics. Jichonaia returned to Georgia in 2007, one year prior to the Russia-Georgia War.
Anzor Tsintsadze, a Georgian from Batumi with Russian citizenship, founded the cargo transportation company LTD Alex. With around GEL 30,000 he bought one cargo transport and is now ready to serve customers from every point of the earth. “I have not served any customers yet as there is currently a state of total stagnation in Batumi. It is a common thing to occur in the post-New Year period. I am optimistic, however, that from March business will become more active,” he said.
“Many people start laughing when I say that it was a sense of nostalgia that encouraged me to return to Georgia. I came back here two years ago. I liked the situation and decided to come back and start business here before the market became totally saturated. My spouse is Russian and I wanted to bring up my child in a Georgian environment. Next year he will be going to school. I have been living in Ural, Russia, for twelve years. I was involved in the cargo service there for all of that time,” said Tsintsadze.
Konstantin Rojdestvenski established the LTD International Logistic Agency. “We will be offering our customers a cargo transportation service from and within Georgia. It will incorporate air, sea, road but mostly railway transportation. I have been involved in the cargo business for a long time and accordingly decided to start up this business. I will be serving three of the biggest companies on the Georgian market. Unfortunately I cannot name them at this stage,” he said.
“My decision to start business in Georgia was not due to the political changes that occurred in Georgia following the 1 October elections,” Rojdestvenski assured us.
“Georgia is a relative green field and is promising soil for new enterprises offering high ROI. The political environment is important for investors but not the most crucial factor involved in the decision-making process,” Yulia Akinfieva, Managing Director at Skopos Group LLC, told The FINANCIAL.
Yulia Akinfieva is one of 62 Russian citizens who recently registered businesses in Georgia. Akinfieva together with her husband and partner, Youssry Saleh, Supreme Court lawyer, brought the investment consulting company Skopos Group LLC to the Georgian market.
The main mission of the company is to bridge investors from the Middle East with the business opportunities in Georgia. With its objective to establish a strong, collaborative business bridge between Georgia and Middle East countries to build a strong economy though attracting investment, financing businesses, establishing manufacturing facilities in various industries, encourage capital inflow to the country, Skopos Group LLC provides consulting services to investors as well as offers a wide business network.
“We see many business opportunities in Georgia, which is as yet considered a green field compared to many other countries. Our partners and customers in Egypt have serious interest in Georgia and see real potential here, however due to cultural, linguistic and time constraints they have been unable to penetrate the market. They require feasibility studies, market research, networks and connections, management consulting, legal support etc. Therefore, synergy between our experience, connections in Georgia and wide business network in the Middle East, allowed us to fill the gap and satisfy demand. Moreover, Skopos is focusing on bringing investments to Georgia and is planning to invest itself. Eventually it should be acting as an investment house and a consulting firm,” said Akinfieva.
Akinfieva said that the majority of their customers are based in Egypt and other Middle Eastern countries. “These are investors planning to invest in manufacturing, real estate and agriculture in Georgia. So far, we are talking about no less than six major projects and investments,” she added.
“A wide business network in Egypt, the Middle East and Georgia, cross-cultural approach and synergy created by professionals coming from various backgrounds, countries and fields of expertise are the main advantages of our company,” said Akinfieva.
Akinfieva holds a Bachelor of Arts Degree (B.A.) in Psychology with minor concentration in Cultural Anthropology; Master in Business Administration (MBA) with double concentration in Marketing and Management from the American University in Cairo. She brings to the team her management consulting expertise and experience in various business fields across the Middle East and Russia. She speaks Russian, English, and Arabic.
“The amount of my working hours per day….difficult to say since most of it is spread between travelling, business presentations, management, backstage work…..I would say it’s more than a full time job. 24/7. Business does not wait,” she said.
Against a background of a significantly increased number of registered Russian companies the total number of new businesses in Georgia has dropped since the 1 October elections. The amount of registered companies from October till January 2012 was 10,001, while for the year before it was 14,071. This statistical data was provided to The FINANCIAL by the National Agency of the Public Registry.
The total number of companies registered in Georgia in 2012 was 43,934 while in 2011 it was 54,081.
Power in Georgia peacefully changed hands after a tense parliamentary election in October 2012. The new government is under billionaire Bidzina Ivanishvili who gained his fortune in Russia and has been accused by rivals as a man backed by Russia.
Russia and Georgia had severed diplomatic ties as a result of the armed conflict over South Ossetia in 2008. However when it came to business dealings the two sides often chose a more pragmatic approach.
Telasi, an electricity distribution company of the Georgian capital of Tbilisi, has been controlled by the Russian company Inter RAO UES.
Also, only a few months after the 2008 conflict, Inter RAO UES and the Georgian Government agreed to work towards collaborating in managing the Inguri hydropower plant on the border with the breakaway territory of Abkhazia.
Among other large-scale Russian companies doing business in Georgia are Itera, which owns several regional gas distribution companies there, VTB Bank and mobile operator VimpelCom.
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