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INVEST  NIN GIA N G GEORGIA    INV E S TMEN T CLIMATE    INVESTM ENT CLIM ATE & OPPOR TUNITIES OPPORTU NITIES IN GEORGI A ...
www.investingeorgia.org 1  ADVANTAGES OF GEORGIA  »   Business friendly environment with low levels of taxation, simple an...
DOING BUSINESS IN GEORGIACountry’s impressive progress in improving business climate has                                IN...
www.investingeorgia.org 3 CORRUPTION FREE COUNTRY Georgia today is essentially a corruption-free investment VEST   S desti...
ECONOMIC STRUCTURE AND TRENDSGDP: STRONG REBOUND IN 2010 AFTER   RAPIDLY GROWING GDPA RELATIVELY SMALL CONTRACTION IN   PE...
www.investingeorgia.org 5 LIBERAL TRADE REGIMES PREFERENTIAL TRADE REGIMES:                                               ...
TAXATION IS SIMPLE, LOW, EFFICIENT AND FAIR                                IN                            IN GEO           ...
www.investingeorgia.org 7 LEADER IN FORBES RATING (TAX MISERY & REFORM INDEX) According to 2009 Tax Misery & Reform Index,...
LABOR AVAILABILITY» Young labor – 50% of unemployed population are aged between 20-34                                 IN» ...
www.investingeorgia.org 9 FOREIGN DIRECT INVESTMENT » Strong and Rising FDI Stimulates Economic Prosperity VEST » Key Indu...
INVESTMENT OPPORTUNITIES IN GEORGIA                                 IN                             HYDRO POWER HUB        ...
www.investingeorgia.org 11 HYDRO POWER HUB SIGNIFICANT HYDRO POWER POTENTIAL » Installed capacity of > 2,700 MW VEST » Add...
OVERVIEW OF GEORGIA’S (HYDRO-) POWER SECTOR                                 IN                                   • Domesti...
www.investingeorgia.org 13 GEORGIA SURROUNDED BY COUNTRIES WITH A STRUCTURAL POWER DEFICIT OR EXPENSIVE POWER GENERATION V...
HYDROPOWER PIPELINE BOOSTS SEVERAL NEW MEGAPROJECTS ABOVE 100 MW CAPACITY THAT ARE CURRENTLY OPEN FOR INVESTMENT          ...
www.investingeorgia.org 15 TOURISM FAST GROWING SECTOR • Tourism contributes 6.7 % of GDP VEST • Number of visitors increa...
GEORGIA IS EXPECTING SIGNIFICANT GROWTHTRAJECTORY IN TOURIST ARRIVALS                                  ININTERNATIONAL ARR...
www.investingeorgia.org 17 INTERNATIONAL LUXURY HOTEL CHAINS DOING WELL: MORE ARE COMING TO THE MARKET VERBATIMS OF INTERN...
INVESTMENT OPPORTUNITIES IN TOURISM SECTOR                     “SUN-BEACH”           WINTER SKI           SUMMER          ...
www.investingeorgia.org 19 MANUFACTURING SECTOR OVERVIEW:                                                        OPPORTUNI...
TRADE BALANCE IN GEORGIA AND IN THE REGIONIMPORT OVERHANG, USD mln, 2011                     mln,                    TRANS...
www.investingeorgia.org 21 SEVERAL HIGHLY ATTRACTIVE IMPORT SUBSTITUTION OPPORTUNITIES SECTOR              PRODUCT GROUP  ...
SEVERAL OPPORTUNITIES ARISING FROM GEORGIA’STRANS-SHIPMENT FLOWS AND RESOURCESOPPORTUNITY      CURRENT ADVANTAGES TO BE LE...
www.investingeorgia.org 23 AGRICULTURE OVERVIEW: VEST • Over 21 micro-climates - a wide range of grain, vegetables, hard a...
14 POTENTIAL PRIORITIES CROPS/LIVESTOCKTO FOCUS DEVELOPMENT EFFORTSHIGH POTENTIAL PROJECTS           GEORGIA’S COMPETITIVE...
www.investingeorgia.org 25 REGIONAL COMPETITIVENESS AND POTENTIALS MAP VEST                                        C O O  ...
REGIONAL LOGISTICS CORRIDOR                                      INTRANS-CAUCASIAN ROUTE• Latent gateway between Europe an...
www.investingeorgia.org 27       GEORGIA’S TRANSPORT INFRASTRUCTURE             MODE OF TRANSPORT   EXISTING INFRASTRUCTUR...
CARGO TURNOVERTRANSIT FLOWS THROUGH THE CORRIDOR                              CENTRAL ASIA(MILLION TONS PER YEAR)         ...
www.investingeorgia.org 29 ANNUAL CARGO FLOW OF CAUCASUS & CENTRAL ASIA EXPORT VEST                                     EU...
GEORGIA SERVES AS THE ENTRY GATE TO A LANDLOCKEDREGION BOOSTING SIGNIFICANT RESOURCE RESERVES                             ...
www.investingeorgia.org 31 GEORGIA IS IN A HIGHLY STRATEGIC LOCATION FOR TRANSSHIPMENT VEST   STRATEGIC LOCATION: IT SERVE...
REGIONAL SERVICES HUB• Georgia’s service sector achieves leading ranks                                 IN  among regional ...
www.investingeorgia.org 33 OPPORTUNITY TO POSITION GEORGIA AS A REGIONAL RETAIL DESTINATION VEST   ST                     ...
GEORGIAN NATIONAL INVESTMENT AGENCY                                 IN•    State agency    - Promoting Georgia internation...
www.investingeorgia.org 35 WHAT YOU CAN GET FROM GNIA VEST    » INFORMATION    •   General data    •   Statistics    •   S...
INVESTIN GEORGIA    GEORGIAN NATIONAL    INVESTMENT AGENCY       www.investingeorgia.org  E-mail: enquiry@investingeorgia....
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Investment Climate & Opportunities in Georgia

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Transcript of "Investment Climate & Opportunities in Georgia"

  1. 1. INVEST NIN GIA N G GEORGIA INV E S TMEN T CLIMATE INVESTM ENT CLIM ATE & OPPOR TUNITIES OPPORTU NITIES IN GEORGI A Georgian National Investment Agency 2013
  2. 2. www.investingeorgia.org 1 ADVANTAGES OF GEORGIA » Business friendly environment with low levels of taxation, simple and fair tax administration VEST » Efficient, pro-business and corruption-free government » Enlargement of market size by Free Trade Agreements » Solid sovereign balance sheet » Stable and conservatively managed banking sector » Multi-modal maritime, land and air access infrastructure for trade, logistics and manufacturing » Stable and competitively priced energy supply » Flexible labor legislation » Very low crime rateORGIA №1 REFORMER IN THE WORLD OVER THE PAST 5 YEARS – WORLD BANK GEORGIA - SOVEREIGN CREDIT RATINGS BB- Stable (Upgraded BB- Stable Ba3 Stable from B+ Positive in (Upgraded from B+ Positive (Affirmed in August November 2011) in December 2011) 2012)
  3. 3. DOING BUSINESS IN GEORGIACountry’s impressive progress in improving business climate has INbeen well documented in a number of international indices. EASE OF DOING BUSINESS INDEX OF ECONOMIC FREEDOM IN GEO N Up from 112 in 2005 Up from 99 in 2005 Source: World Bank, 2013 Source: The Heritage Foundation, 2013 (Rank out of 183 countries) (Rank out of 183 countries)www.investingeorgia.org 2
  4. 4. www.investingeorgia.org 3 CORRUPTION FREE COUNTRY Georgia today is essentially a corruption-free investment VEST S destination where rule of law have been given the right way GLOBAL CORRUPTION BAROMETER Percentage of users paying a bribe from inORGIA RGIA the past 12 months GEORGIA SOUTHEAEST EUROPE+TURKEY EU Source: Transparency International’s Global Corruption Barometer , 2011 (Rank out of 176 countries)
  5. 5. ECONOMIC STRUCTURE AND TRENDSGDP: STRONG REBOUND IN 2010 AFTER RAPIDLY GROWING GDPA RELATIVELY SMALL CONTRACTION IN PER CAPITA IN2009, ROBUST GROWTH POTENTIAL 4,000 3,000 2,000 1,000 0BROAD-BASED AND DIVERSIFIEDNOMINAL GDP STRUCTURE 2011 IN GEO STEEPER THAN EXPECTED GROWTH TRAJECTORY Initially planned at 6%, Georgia’s GDP real growth in three quarters of 2012, equaled to 7.5% 2011 OUTCOMES: » Tax collection increased 26% y-o-y » VAT turnover increased 26% y-o-y » Commercial bank lending to the real sector increased 24% y-o-y » Trade turnover increased 36% y-o-ywww.investingeorgia.org 4
  6. 6. www.investingeorgia.org 5 LIBERAL TRADE REGIMES PREFERENTIAL TRADE REGIMES: CUSTOMS » FTA with CIS countries: Ukraine, Belarus, Azerbaijan, Armenia, Russia, » Very simple and service VEST Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan oriented customs policy and » FTA with Turkey administration » DCFTA with EU will be signed next year » Almost no custom duty - 90 » Negotiation on FTA with USA is in progress percent of goods free from import tariffs » GSP+ with EU - 7200 products to the EU market duty free or with lower tariffs » No quantitative restrictions » GSP with USA, Norway, Switzerland, Canada, Japan - lower tariffs are applied on 3400 goods exported from Georgia to these countries » Member of WTO OPPORTUNITY - MARKET SIZE KETORGIA A Population of Georgia - 4,5 million Existing FTA +350 million DCFTA + 0,5billion TOTAL ~ 0.9 BILLION orgi Ge a Georgia: 4,5 million population lation Access to the 0,9 billion market
  7. 7. TAXATION IS SIMPLE, LOW, EFFICIENT AND FAIR IN IN GEO O» No payroll tax or social insurance tax» No capital gains tax» No wealth tax and inheritance tax» Foreign-source income of individuals fully exempted» Accelerated depreciation on capital assets» Loss carry forward for corporate profit tax purposes (10 years)» No restrictions on currency convertibility or repatriation of capital & profit» Double taxation avoidance treaties with 40 countrieswww.investingeorgia.org 6
  8. 8. www.investingeorgia.org 7 LEADER IN FORBES RATING (TAX MISERY & REFORM INDEX) According to 2009 Tax Misery & Reform Index, released by Forbes VEST Business & Financial News, Georgia is the fourth least tax burden country after Qatar, UAE and Hong KongORORGIA
  9. 9. LABOR AVAILABILITY» Young labor – 50% of unemployed population are aged between 20-34 IN» Average monthly salary in 2011 – 377 USD» Vocational Education Training Centers around Georgia provide professional courses in different types of practical subjects and most of the course’s fees are financed by the Government of Georgia.GEORGIA - ONE OF THE MOST LIBERAL LABOR ENVIRONMENTS (3RD BESTGLOBALLY), ACCORDING TO THE HERITAGE FOUNDATION, 2012 IN GEO GEOGREATER LABOR FREEDOM GEORGIA FRONTIER MARKETS AVG Source: MOF and Heritage Foundation, 2012 www.investingeorgia.org 8
  10. 10. www.investingeorgia.org 9 FOREIGN DIRECT INVESTMENT » Strong and Rising FDI Stimulates Economic Prosperity VEST » Key Industries Benefit from FDI » Reinvestment 30% (2011) » Georgia has bilateral treaties on investment promotion and protection with the 32 countries (negotiations launched with 24 countries) FDI BREAKDOWN BY SECTORS 2011 FAVORABLE FDI/GDP RATIOORGIA RGIA GIA A
  11. 11. INVESTMENT OPPORTUNITIES IN GEORGIA IN HYDRO POWER HUB TOURISM MANUFACTURING IN GEO AGRICULTURE REGIONAL LOGISTICS CORRIDOR REGIONAL SERVICE HUBwww.investingeorgia.org 10
  12. 12. www.investingeorgia.org 11 HYDRO POWER HUB SIGNIFICANT HYDRO POWER POTENTIAL » Installed capacity of > 2,700 MW VEST » Additional potential > 4,500 MW Generation cost (0.06 USD) among the lowest in the region, ~50% lower than target market Turkey EXPORT CAPACITY » The only net electricity exporter in the region, with rapidly growing consumption rates » Construction of 400 kV power transmission line from Georgia to Turkey to be completed in 2013ORGIA OPPORTUNITIES » Several large scale projects (> 100 MW) » ~ 70 small/medium projects (< 100 MW)
  13. 13. OVERVIEW OF GEORGIA’S (HYDRO-) POWER SECTOR IN • Domestic: Demand growth and increasing share of renewables requires an extension of hydropower generation by around 65% STRONG DEMAND until 2020 GROWTH PROSPECTS • Export: Georgia is surrounded by countries with a projected structural power deficit (e.g. Turkey, Russia South) or expensive power generation, opening up attractive export opportunities IMPORTANCE OF • Power generation accounts for 3% of GDP and ~ 1% of THE SECTOR LOW IN employment but is of high strategic importance to Georgia TERMS OF GDP AND • ~ 10% of power production are exported, but Georgia still needs to EMPLOYMENT IN GEO import power during winter • Georgia boosts significant and economically viable HPP potential – POWER SECTOR WITH already today 75% of power generated via HPP (2,700 MW) – 25% STRONG FOCUS ON via thermal (mainly gas) COST COMPETITIVE HPP • All new HPPs operate in a liberalized market • Cost of hydropower generation is very competitive in the region • FDI inflows amounted to USD 200 million in 2011 and are growing LARGE PROJECTS HAVE • 65% of economically viable potential not yet exploited BEEN PLACED AND PIPELINE IS FILLED • Projects of up to USD 750 million have been concessioned to investors from e.g. India, Turkey, Czech Republic and other counties. • Pipeline well filled with several large scale projects (100-702 MW) as well as 70+ smaller projectswww.investingeorgia.org 12
  14. 14. www.investingeorgia.org 13 GEORGIA SURROUNDED BY COUNTRIES WITH A STRUCTURAL POWER DEFICIT OR EXPENSIVE POWER GENERATION V VEST • Turkey expected to have deficit of up to 80-120 TWh by 2020, with seasonality of its demand matching Georgia’s supplyORGIA R • Russia’s Southern districts will also experience a structural deficit of up to 40 TWh by 20201 • In other markets, Georgia’s hydropower is very cost-competitive compared to local tariffs2 1 Assuming current consumption and supply pattern 2 This does not even include countries with heavily subsidized electricity generation (e.g. Azerbaijan, Kazakhstan) STRUCTURAL DEFICIT BY 2020 NO DEFICIT, BUT CURRENT TARIFFS > AD HOC DEFICITS PROJECTED GEORGIA’S GENERATION COST NO DEFICIT, BUT SUBSIDIZED TARIFFS
  15. 15. HYDROPOWER PIPELINE BOOSTS SEVERAL NEW MEGAPROJECTS ABOVE 100 MW CAPACITY THAT ARE CURRENTLY OPEN FOR INVESTMENT IN N PROJECT CAPACITY FORECAST INVEST. READY TO VOLUME INVEST? USD MILLIONS• NAMAKHVANI CASCADE 450 MW 926• KHAISHI HPP 400 MW 620 IN GEO O• ONI CASCADE 270 MW 599• NENSKRA HPP 210 MW 491• TOBARI HPP 200 MW 310• FARI HPP 180 MW 297• LENTEKHI HPP 120 MW 189• HYDROPOWER PIPELINE ALSO BOOSTS ~70 SMALL/MEDIUM PROJECTS (<100 MW CAPACITY) THAT ARE CURRENTLY OPEN FOR INVESTMENT www.investingeorgia.org 14
  16. 16. www.investingeorgia.org 15 TOURISM FAST GROWING SECTOR • Tourism contributes 6.7 % of GDP VEST • Number of visitors increased 38% in 2011 reaching 2.8 million and 56% in 2012 reaching 4.4 million • Majority of visitors come from : Turkey (34.9%), Azerbaijan (21.2%), Armenia (20.5%), Russia (11.6%) Europe (9.4 %) • Average duration of stay - 9 days, the median visitor stays - 2days / Average spend of USD 330 • Overall capacity of < 15,110 rooms • Already operating international brand hotels - Sheraton, Radisson, Marriot, Holliday Inn, (under construction - Kempinski, Hillton) etc.ORGIA POTENTIAL • Youth Olympics in 2015 • Free tourism zones – summer resorts • Availability of gambling business – gaming is partially or completely banned in Russia, Ukraine, Azerbaijan, Kazakhstan,Turkey, Israel, Iran, Iraq • 8 national parks • 2400 springs of mineral waters
  17. 17. GEORGIA IS EXPECTING SIGNIFICANT GROWTHTRAJECTORY IN TOURIST ARRIVALS ININTERNATIONAL ARRIVALS HAVE SEEN ~40% YEAR-ON-YEAR GROWTHTOTAL INTERNATIONAL TOURIST ARRIVALSNUMBER OF ARRIVALS INTO GEORGIA IN GEO 5.5 4.4 2.8 2.0 1.3 1.5 1.0 1.1 0.6www.investingeorgia.org 16
  18. 18. www.investingeorgia.org 17 INTERNATIONAL LUXURY HOTEL CHAINS DOING WELL: MORE ARE COMING TO THE MARKET VERBATIMS OF INTERNATIONAL HOTEL BRANDS IN GEORGIA VEST UPCOMING INTERNATIONAL HOTEL HOTEL CHAIN HOTELIER’S ASSESSMENT OF PERFORMANCE BRANDS BEFORE 2015 “We have seen significant increases in occupancy rate and financials since 2010. This year [2012] high LOCATION season has seen a very promising start. We have advance reservations booked for almost the whole summer” – Omer Subasi BATUMI General ManagerORGIA “ We are very optimistic as demand has been increasing rapidly. Hotel occupancy hovers around TBILISI 85%. Our guests come from all around the world representing various sectors including business, sportmen and tourists” – Oto Berishvili Sales & Marketing Manager BATUMI “We have seen 7-8% more guests in our hotels every year. Business and leisure travelers are our two biggest client group and they come from all over the world. Best occupancy period is summer TBILISI from May to September” BATUMI – Alexander Kvaratskhelia Marketing Manager TBILISI
  19. 19. INVESTMENT OPPORTUNITIES IN TOURISM SECTOR “SUN-BEACH” WINTER SKI SUMMER SPA RESORTS REGIONAL RESORTS RESORTS MOUNTAINS CASINO CITY IN RESORTSDESCRIPTION Expansion of Master development Four season resort Development of Spa Development of summer ”sun and of winter resorts value preposition Resorts large-scale beach” franchise with unique profile integrated casino focusing on high- equivalent to the complex to Serve end segment Alps regional markets. IN GEO • All inclusive • Government is • Majestic • Include hotels, • Include hotels, summer resorts fully committed landscapes Different casino • New master resort to provision allowing types of Clinics, entertainment,POTENTIAL LOCATION development of basic for a wide range fitness,Outdoor family Services infrastructure of summer activities and shopping tourism activities • Fiscal incentives such as trekking, available horse riding, bird watching and river racing • Batumi • Mestia • Mestia • Tskaltubo • Batumi • Anaklia • Gudauri • Gudauri • Akhtala • Tbilisi • Kobuleti • Bakuriani • Bakuriani • Other locations • Other locations • Other Black Sea • Goderdzi • Goderdzi locations • Kazbegi • Other locations www.investingeorgia.org 18
  20. 20. www.investingeorgia.org 19 MANUFACTURING SECTOR OVERVIEW: OPPORTUNITIES: VEST • Manufacturing and industries account for around 14% • Large import overhang in goods that are usually of GDP and ~ 5% of employment not traded extensively provides regional import • Largest industries are food and beverages (3% of total substitution potential in food processing, construction GDP) and metal products (2.5%) materials, household gods etc • Advantage to process goods - competitive cost of • Georgia’s current advantages in terms of handling power, labor and strategic location large transshipment flows, business stability, low • 2 Free Industrial Zones - In FIZ, businesses are cost of power generation and existing raw materials/ exempted from all tax charges except Personal intermediate products provide opportunities for Income Tax large industrial bets, like production of iron and steel products, aluminum etcORGIA Black Sea Kulevi Poti FIZ Mestia FIZ Kutaisi Russia Tbilisi Batumi Turkey MRN Azerbaijan Railway Armenia
  21. 21. TRADE BALANCE IN GEORGIA AND IN THE REGIONIMPORT OVERHANG, USD mln, 2011 mln, TRANSPORTATION IN COST IN GEO www.investingeorgia.org 20
  22. 22. www.investingeorgia.org 21 SEVERAL HIGHLY ATTRACTIVE IMPORT SUBSTITUTION OPPORTUNITIES SECTOR PRODUCT GROUP PRODUCTS VEST • Articles of cement and steel • Prefabs Construction • Ready-mix concrete - Building • Bricks materials • Finished articles of steel • Articles of wood • Plywood and laminated wood • Tiles Construction • Ceramic products • Sanitary wareORGIA - Finishing • Windows elements • Glass & glassware • Glassware • Furniture • Doors • Living furniture • Beverages and spirits • Bottling Food processing • Fruit juices • Preparations of fruits and vegetables • Jams • Vegetable oils • Dairy and eggs • Milk • Cheese • Butter • Yogurt • Meat • Poultry/Beef/Pork/Lamb Packaging • Plastic packaging • Paper packaging
  23. 23. SEVERAL OPPORTUNITIES ARISING FROM GEORGIA’STRANS-SHIPMENT FLOWS AND RESOURCESOPPORTUNITY CURRENT ADVANTAGES TO BE LEVERAGED POTENTIAL FOR GEORGIA INALUMINIUMINDUSTRY • Large transshipment flows of raw • Value chain integration materials/input (Bauxite) and aluminium - Production of aluminium cross Georgia to/from Tajikistan (largest - Production of aluminium aluminium plant in Central Asia) products (fabricated or end • A lot of water recourses and large products) hydropower plants in the pipelineIRON AND STEEL • Vertical integration of value chain • Georgia mines Manganese orePRODUCTION by adding production of iron and • Georgia produces ferro alloys, largely for export (USD ~250 mn) steel and related end products IN GEO • Large imports of iron and steel products to • Regional import substitution Georgia (USD ~300 mn) and neighboring countriesCOPPER • Georgia and Armenia export copper ores, • Production of copper alloys copper waste and scrap and end products (regional import • Import overhang of copper products substitution) (alloys and final products e.g. wire, tubes, pipes) amounts to USD ~200 mn in the regionPOLYMERS & • Import overhang of plastic products • Plastics and petrochemicalsOTHER PLASTICS amounts to 230 mn in Georgia and 8 bln in production (regional import the region substitution for plastics/rubber) • Georgia transships large flows of petroleum productswww.investingeorgia.org 22
  24. 24. www.investingeorgia.org 23 AGRICULTURE OVERVIEW: VEST • Over 21 micro-climates - a wide range of grain, vegetables, hard and soft fruits, meat and dairy could be farmed • Agriculture accounts for 9% of GDP. It contributes ~53% of employment mostly in subsistence farming (average farm size of 1.22 ha) • Traditionally Georgia has strengths in wine, nuts, fruits which account for more than 60% of agriculture exports • The average gross monthly salary in the agricultural sector in GeorgiaORGIA is USD 220 OPPORTUNITIES: • Import substitution opportunities - meat, dairy products, onions, potatoes etc • Export opportunities - traditional strong sub-sectors, like wine, walnuts, hazelnuts, sheep meat, etc • Productivity gain opportunities – tomatoes, apples, cucumbers, stone fruits, citrus etc
  25. 25. 14 POTENTIAL PRIORITIES CROPS/LIVESTOCKTO FOCUS DEVELOPMENT EFFORTSHIGH POTENTIAL PROJECTS GEORGIA’S COMPETITIVENESS IN ▪  ▪  ▪  ▪  ▪  ▪  IN GEO ▪  ▪  ▪  ▪  ▪  ▪  ▪  ▪ www.investingeorgia.org 24
  26. 26. www.investingeorgia.org 25 REGIONAL COMPETITIVENESS AND POTENTIALS MAP VEST C O O CROP POTENTIALS BY REGION S GOORGIA BASED ON REGIONAL SPECIALIZATION (NATURAL ENDOWMENTS, CULTIVATION HISTORY), PRODUCTIVITY AND SEASONALITY
  27. 27. REGIONAL LOGISTICS CORRIDOR INTRANS-CAUCASIAN ROUTE• Latent gateway between Europe and Central Asia• Around 80% of port cargo and 60% of freight rail are transitsTRANSPORT INFRASTRUCTURE• Rapidly developing road infrastructure IN GEO• Ports are cost-competitive vs. alternative routes• FDI inflows in the logistics sector have primarily targeted transport infrastructureOPPORTUNITIES• Deep-sea port with PanaMax vessel• Containerization and logistical centers• Direct connection with European and Central Asian railway networks www.investingeorgia.org 26
  28. 28. www.investingeorgia.org 27 GEORGIA’S TRANSPORT INFRASTRUCTURE MODE OF TRANSPORT EXISTING INFRASTRUCTURE UPGRADES AND FLOWS VEST RAIL RAIL • 1,500 km (90% electrified) • BTK connection to Turkey Road/Rail • ~7,000 rolling stock, 180 locos • Modernization ROAD • Tbilisi bypass • 1,500 km international road • ~2500 new rolling stock + 20,000 km internal and local roads ROAD • East-West highway upgrade POTI SEAPORT POTI SEAPORTORGIA RGIA • 13 berths, 8-10m depth • New container berth (2014) • Container and bulk (210k TEU) • Owned/operated by Maersk/RAKIA DEEP-SEA PORT Maritime BATUMI SEAPORT • Min. 2 berth of 20m depth • 5 berths, 1 offshore mooring, 11m depth (PanaMax) • 90% petroleum/oil, 10% containers (44k • First phase: Dry bulk (10m tons) TEU) and containers (200k TEU) • Operated by JSC KazTransOil • USD 200 mn investment KUHLEVI SEAPORT volume • Crude oil, petroleum, and lubricants • Owned/operated by State Oil Company Azerbaijan TBILISI INTERNATIONAL AIRPORT KUTAISI INTERNATIONAL AIRPORT Air • ~1 mn passengers (capacity: 3 mn) • Serving 28 destinations • Passenger, incl. low-cost BATUMI INTERNATIONAL AIRPORT airlines • 100,000 passengers • Currently under construction
  29. 29. CARGO TURNOVERTRANSIT FLOWS THROUGH THE CORRIDOR CENTRAL ASIA(MILLION TONS PER YEAR) Kazakhstan IN Uzbekistan Tajikistan Kirgizstan Turkmenistan CAUCASUS: Azerbaijan Armenia APPROXIMATELY 80% ARE TRANSIT FLOWS Europe+Turkey Sender - 2.6 IN GEO Destination - 4.1 Total - 6.7 Central Asia+Caucasus Sender - 9.6 Destination - 4.7 Total - 14.3www.investingeorgia.org 28
  30. 30. www.investingeorgia.org 29 ANNUAL CARGO FLOW OF CAUCASUS & CENTRAL ASIA EXPORT VEST EU 22% IMPORTORGIA A EU 1 U 15% Other Regions 78% Other Regions 85% 8 Export I Import t G dT t l Grand Total TOTAL 255 ml. ton 68 ml. ton 323 ml. ton EU 56 ml. ton 10 ml. ton 66 ml. ton *Source : IGC TRACECA
  31. 31. GEORGIA SERVES AS THE ENTRY GATE TO A LANDLOCKEDREGION BOOSTING SIGNIFICANT RESOURCE RESERVES IN IN GEO O FOR COMPARISON: REGION REPRESENTS ONLY ~1.6% OF GLOBAL POPULATIONwww.investingeorgia.org 30
  32. 32. www.investingeorgia.org 31 GEORGIA IS IN A HIGHLY STRATEGIC LOCATION FOR TRANSSHIPMENT VEST STRATEGIC LOCATION: IT SERVES AS AN ENTRY GATE TO THE CAUCASUS AND CENTRAL ASIA AS WELL AS A STEPPING STONE TO THE REGION LEVERAGING ITS LOCATION, GEORGIA’S TRANSPORT ECONOMY CAN BENEFITORGIA FROM LARGE ADDRESSABLE TRANSIT FLOWS, GROWING ECONOMIES AND LANDLOCKED RESOURCES THE SHORTEST ROUTE BETWEEN EUROPE AND CAUCASUS/CENTRAL ASIA GREAT POTENTIAL OF BETTER INTEGRATION AND DEVELOPMENT OF THE REGION
  33. 33. REGIONAL SERVICES HUB• Georgia’s service sector achieves leading ranks IN among regional economies in terms of value added and trade• Services have major share of FDI inflow of 45% in 2011 with USD 500 million: » Financial services have grown at 19% p.a. since 2009 and is the leading service sub-sector for FDI attraction with 15% of total inflows in 2011 IN GEO » Consultancy services attracted 12% of total FDI inflows in 2011 » Wholesale/retail trade accounts for 40% of service GDP, and strong FDI inflows rebound at 48% p.a. since 2009 » FDI inflows in healthcare/social work have grown at 146% p.a. since 2007• OPPORTUNITY TO CAPITALIZE: » Financial services/headquarters » Retail hub as the destination-of-choice for shoppingwww.investingeorgia.org 32
  34. 34. www.investingeorgia.org 33 OPPORTUNITY TO POSITION GEORGIA AS A REGIONAL RETAIL DESTINATION VEST ST GEORGIA - REGIONAL RETAIL HUB Vision is to develop mega malls in key locations to transform Georgia - into the regional retail hub leveraging high traffic of foreign tourists and strategic geography BATUMI TBILISIORGIA GIA Benefits of destination mega mall development • Complement overall tourism strategy with solid retail value proposition • Retail magnet for foreign tourists and affluent local with longer duration of Tbilisi and Batumi as most potential locations • Established tourist destinations with 80% • of foreign tourist traffic in Georgia Accessible with existing international airports and major transnational highway/ railway visit (1/2 to 1 day), higher share of wallet, • Solid retail, hospitality and other and repeated visits supporting services infrastructure • Presence of flagship brands will drive retail • Integration with other tourism offerings brand cluster growth e.g. sun & beach, casino • Easier to drive investments
  35. 35. GEORGIAN NATIONAL INVESTMENT AGENCY IN• State agency - Promoting Georgia internationally - Supporting foreign investments and investors before, during & after investment process• “One-stop-shop” for investors INVESTORS IN GEO• Moderator between Investors, Government and Local Companies LOCAL GNIA COMPANIES GOVERNMENT Mission - Attracting Greenfield and M&A Investmentswww.investingeorgia.org 34
  36. 36. www.investingeorgia.org 35 WHAT YOU CAN GET FROM GNIA VEST » INFORMATION • General data • Statistics • Sector Researches » COMMUNICATIONORGIA • Access to Government of Georgia at all levels • Local partners (Business Associations, private companies) » ORGANIZATION OF SITE VISITS AND ACCOMPANYING INVESTORS » AFTER CARE • Legal advising • Supporting services
  37. 37. INVESTIN GEORGIA GEORGIAN NATIONAL INVESTMENT AGENCY www.investingeorgia.org E-mail: enquiry@investingeorgia.org
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