Tag Archives: business

Georgian flour mill workers call off strike

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JUNE 10 2021 (The Bulletin) — Workers at the Gulistani flour-milling plant in western Georgia have ended their 38-day strike after agreeing terms with management, said Georgia’s Trade Union of Agriculture and Industry. The trade union didn’t give any details of the terms and conditions reached. Georgia has been hit by a wave of industrial disputes this year.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Armenia to drop cognac branding on brandy exports

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YEREVAN/JUNE 10 2021 (The Bulletin) —  Armenia’s government agreed to stop marketing its premium brandy products to Europe as cognac from 2032, part of a trade deal that it signed with the EU four years ago.

The announcement that Armenia would finally drop using the cognac brand came 10 days after PM Nikol Pashinyan had been in Paris meeting with French President Emmanuel Macron to lockdown France’s support for Armenia over its ongoing border rows with Azerbaijan. 

France, a key ally of Armenia, has been pushing for the cognac title to be used only by brandy produced in its Cognac region. In return for dropping the term cognac, the EU promised to spend 3m euro helping Armenia build up a new brand for its brandy exports to Europe.

The TASS news agency quoted Armenia’s deputy PM Mger Grigoryan as saying that a new brand for Armenian brandy had not yet been decided upon.

“I am not ready to disclose such details so far because major market players have no consensus so far,” He said.

Armenia had appeared to drag its feet over imposing a ban on the cognac branding after signing an Enhanced Partnership Agreement with the EU in 2017 that improves trade relations and enforces European standards. 

EU law protects regional names on European food and drink products, although Armenia will still be able to market its brandy as cognac in Cyrillic on bottles sold to Russia, its main export market. The EU struck a similar deal with Moldova in 2014 when it agreed to drop using the cognac term too. Premium Moldovan brandy is now called Divin.

Brandy is an important part of Armenia’s branding and it is famed across the former Soviet Union. Its most famous producer is the Yerevan Brandy Company which markets its products under the Ararat brand and is owned by France’s Pernod Ricard.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Kumtor row will damage Kyrgyzstan’s GDP, says MF

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BISHKEK/JUNE 9 2021 (The Bulletin) — The IMF said that without a quick resolution to the row between Toronto-listed Centerra Gold and the Kyrgyz government over ownership of the country’s largest gold mine, Kyrgyzstan will miss its GDP estimates.

Conspicuously avoiding naming Centerra Gold or Kumtor, the gold mine at the centre of the row, the IMF also said in a statement that the expropriation of the mine undermined foreign investor confidence.

“Directors also stressed the criticality of political stability, policy predictability, and a market-friendly business environment,” the IMF’s executive said in comments on both a consultation session with Kyrgyz officials and also its GDP growth estimates for Kyrgyzstan of 3.8% this year and 6.4% in 2022.

“A speedy and transparent resolution of the ongoing commercial dispute with the largest foreign investor would be critical to ensure uninterrupted gold production while protecting the environment.”

The Kumtor gold mine is the lynchpin of the Kyrgyz economy, contributing up to 15% of its GDP.
Western investors based in Bishkek have said that the expropriation last month of the mine by the Kyrgyz government had turned Kyrgyzstan into an “investment pariah”. The government has justified its expropriation because of alleged environmental damage at Kumtor, an accusation that Centerra Gold disputes. Centerra Gold has launched international arbitration.

Despite the growing pressure, neither Pres. Sadyr Japarov nor senior Kyrgyz officials appear to be too concerned. Mr Japarov has not commented on the expropriation and has instead promoted the official who steered it to be the Kyrgyz economy minister. Officials have taken journalists on a press trip to Kumtor to show them how efficiently it is now being run.

ENDS

— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

 

Georgian PM says he wants new terms on controversial dam

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TBILISI/JUNE 9 2021 (The Bulletin) — After months of protests, Georgian PM Irakli Garibashvili said that he wanted to renegotiate the terms that Turkish construction company Enka and Norway’s Clean Energy Group were given to build and run the Namakhavani Hydropower Plant in the Rioni Valley in the west of the country. 

Protesters have said that the project, slated to be Georgia’s biggest hydropower plant, damages the countryside and is too lenient towards the foreign investors. The government has said that the Namakhavani Hydropower Plant is vital for its future energy generation projects as it will boost energy production by 15% and must go ahead.

Protesters have blocked access to the site for the past seven months and staged rallies in both Kutaisi and Tbilisi which have attracted thousands of people. Police have made several arrests at some of the protests in the Rioni Valley after clashes with demonstrators.

Enka Renewables, in which Enka owns a 90% stake and Clean Energy Groups owns a 10% stake, signed an $800m deal to build and run the Namakhavani hydropower plant with Georgia in April 2019. 

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Fitch gives Kazakhstan’s Jusan Bank a rating

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JUNE 9 2021 (The Bulletin) — Fitch, the ratings agency, gave Kazakhstan’s First Heartland Jusan Bank an investment grade rating of B1 only a couple of weeks after Bloomberg reported that it had used government grants to pay dividends to shareholders. The bank is closely linked to former Kazakh president Nursultan Nazarbayev. Jusan Bank has denied any wrongdoing and said that the Fitch rating is a reflection of its strong liquidity.

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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Port of Baku to build fertiliser terminal

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JUNE 9 2021 (The Bulletin) — Baku Port said that it had started construction work on a fertiliser terminal. The plan is to have the terminal up and running by the end of 2022 to ship fertilisers from Kazakhstan, Uzbekistan and Turkmenistan across the Caspian Sea, the South Caucasus and the Black Sea to Europe. 

ENDS

— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

IMF says that Kumtor row could damage Kyrgyz economy

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BISHKEK/JUNE 9 2021 (The Bulletin) — The IMF said that without a quick resolution to the row between Toronto-listed Centerra Gold and the Kyrgyz government over ownership of the country’s largest gold mine, Kyrgyzstan will miss its GDP estimates.

Conspicuously avoiding naming Centerra Gold or Kumtor, the gold mine at the centre of the row, the IMF also said in a statement that the expropriation of the mine undermined foreign investor confidence.

“Directors also stressed the criticality of political stability, policy predictability, and a market-friendly business environment,” the IMF’s executive said in comments on both a consultation session with Kyrgyz officials and also its GDP growth estimates for Kyrgyzstan of 3.8% this year and 6.4% in 2022.

“A speedy and transparent resolution of the ongoing commercial dispute with the largest foreign investor would be critical to ensure uninterrupted gold production while protecting the environment.”

The Kumtor gold mine is the lynchpin of the Kyrgyz economy, contributing up to 15% of its GDP.

Western investors based in Bishkek have said that the expropriation last month of the mine by the Kyrgyz government had turned Kyrgyzstan into an “investment pariah”. The government has justified its expropriation because of alleged environmental damage at Kumtor, an accusation that Centerra Gold disputes. Centerra Gold has launched international arbitration.

Despite the growing pressure, neither Pres. Sadyr Japarov nor senior Kyrgyz officials appear to be too concerned. Mr Japarov has not commented on the expropriation and has instead promoted the official who steered it to be the Kyrgyz economy minister. Officials have taken journalists on a press trip to Kumtor to show them how efficiently it is now being run.

ENDS

— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Kashagan to start work on building gas processing plant

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JUNE 8 2021 (The Bulletin) — Kazakh PM Askar Mamin inaugurated the construction of a gas processing plant at an onshore plant linked to the Kashagan oil project. The Kashagan oil field is in the Caspian Sea but it pumps oil and gas to an onshore processing site. The gas processing plant will start production from the end of 2023 and will have a capacity of 1m cubic metres of gas per year.

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— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

China to build Belt and Road terminal in Kyrgyzstan

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BISHKEK/JUNE 7 2021 (The Bulletin) — China signed a deal to finance the development of a $100m industrial sector in Kyrgyzstan a few days after Pres. Xi Jinping telephoned Kazakh Pres. Kassym-Jomart Tokayev to talk up the prospect of deeper relations.

The industrial sector deal highlights China’s status as Kyrgyzstan’s biggest financial backer and cements the importance of its Belt and Road Initiative (BRI) for Central Asia.

According to press reports, “investors” from China will pay $20m initially to develop the Silk Way Industrial Park with subsequent payments pushing up total investment to $100m.

The 70 hectare site on the border with Kazakhstan, 30km from Manas International Airport, is considered by China to be a key part of its BRI project to boost East-West trade. The BRI hinges on building infrastructure across the region which has allowed China to increase its influence. In May, China said that it would boost aid to Kyrgyzstan and this week media reported that, in a phone call, Chinese Pres. Xi told Kazakh Pres. Tokayev that relations needed to “advance in the right direction”.

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— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021

Russian airport operator eyes up Central Asia

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JUNE 7 2021 (The Bulletin) — Russian regional airport operator Novaport is still interested in signing deals with airports in Kazakhstan and Uzbekistan despite the drop in footfall caused by the pandemic, billionaire owner Roman Trotsenko told Russian media. He said that he expects auctions to run airports, including the airport at Nur Sultan, to come up in 2020. Turkey’s TAV signed a deal in May to buy Almaty airport and has also said it will invest in Uzbek airports.

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— This story was published in issue 487 of the Central Asia & South Caucasus Bulletin, on June 9 2021

— Copyright the Central Asia & South Caucasus Bulletin 2021