Tag Archives: business

Azerbaijan’s AZAL to create low- cost carrier

FEB. 22 2016 (The Conway Bulletin) — Azerbaijan’s flagship airline AZAL will create a new low-cost company to service short-haul destinations in the South Caucasus and Central Asia. Azaljet, the new airline will start operations on March 28.

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(News report from Issue No. 269, published on  Feb. 26 2016)

 

Business comment: Refinery deals

FEB. 19 2016 (The Conway Bulletin) — Dealings at Kazakhstan’s state-owned energy company Kazmunaigas can give a deep insight into the country’s oil sector.

Last week, KMG EP, Kazmunaigas’ subsidiary dedicated to exploration and production, said in a statement it obtained a price increase for the oil it shipped in 2015 to the refineries of Atyrau and Pavlodar.

KMG RM, another Kazmunaigas subsidiary which manages the refineries, will now pay 37,000 tenge (around $105) per tonne of oil delivered to both refineries in 2015. This represents an increase of 74% in the case of the Atyrau refinery and 16% for Pavlodar, compared to an earlier agreement, which had not been approved by KMG EP’s independent directors.

KMG EP, which produces around 12m tonnes/year, sends around 2m tonnes to the Atyrau and Pavlodar refineries annually.

But the picture seems much less rosy for 2016. KMG EP said it will receive only 17,100 tenge/tonne ($48) from Atyrau and 31,923 tenge/tonne ($91) from Pavlodar this year, a steep fall from 2015’s revised prices. Although the company said these figures are not yet approved by its independent directors, this foreshadows another set of lengthy negotiations to bring the price back up.

The internal battle for profit margins within Kazmunaigas in this era of low oil prices looks like a battle for scraps. And in 2016, Kazakhstan forecasts a fall in production and lower prices for crude oil to be refined.

This may dent the budget of KMG EP, although it will be bolstered, overall, by a devaluation in the tenge. It earns cash in US dollars and pays most of its workers in tenge.

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(News report from Issue No. 269, published on  Feb. 26 2016)

CPC boosts oil from Kazakhstan to Russia

FEB. 24 2016 (The Conway Bulletin) — Oil transport company Caspian Pipeline Consortium said it will increase the volume of oil it ships from Kazakhstan to Russia by 20% in 2016, to 51m tonnes. Nikolai Brunich, the company’s CEO, said it plans to receive around 2.5m tonnes of oil from Kashagan this year.

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(News report from Issue No. 269, published on  Feb. 26 2016)

 

Hotel to open in Georgia

FEB. 23 2016 (The Conway Bulletin) — Georgian company RED-Co said it will build a $15m five-star Radisson hotel in the Gudauri ski resort. The new hotel will open in 2017 at the bottom of the Gudauri ski gondola. Together with the Georgian government, several private companies are developing the Gudauri ski resort, 30km south of the border with Russia. It will be the first five-star hotel at Gudauri.

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(News report from Issue No. 269, published on  Feb. 26 2016)

Kyrgyz businesses say the odds are stacked against them in the EEU

BISHKEK, FEB. 25 2016 (The Conway Bulletin) — Kyrgyz farmers and exporters of agricultural products have said that the Eurasian Economic Union (EEU), a group centred around the Kremlin that was supposed to boost its members’ economies, has undermined their businesses by exposing them to unfair competition.

The insight collected by The Conway Bulletin’s correspondent in Bishkek, undermines claims by President Almazbek Atambayev that joining the EEU in August was a positive move for Kyrgyzstan.

Sergey Ponomarev, head of the business lobby group AMTSS and a former PM adviser, said that cheaper Belarusian goods had hit Kyrgyzstan’s key export market in neighbouring Kazakhstan.

“In Belarus, prices for animal feed are largely subsidised by the state, which makes their products cheaper on the Kazakh market,” he said. Mr Ponomarev said that the Belarus government subsidises its farmers’ animal feed, something the Kyrgyz government doesn’t do.

Data released by Kyrgyzstan’s state statistics committee last month showed that in 2015 exports of clothes fell by 50%, fruit and vegetables exports fell by a third and tobacco exports by 28%.

This has partly to do with the worsening economic conditions in the region but also because of the more competitive export markets created by the EEU.

Tilek Toktogaziyev, the owner of a greenhouse in Bishkek. which sells various fruit, vegetables and berries, said: “Local farmers cannot trade their vegetables, and some of them have stopped farming altogether.”

Previously, business owners have complained of extra red tape after joining the EEU but they hadn’t complained of excessive competition.

One business owner, though, was more positive. Dastan Omuraliev, the manager of Organic, a company producing fruit juices, said: “With entering the Eurasian Economic Union, it became easier to pass our goods through the Kazakh border.”

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(News report from Issue No. 269, published on Feb. 26 2016)

 

Electricity price to rise in Armenia

FEB. 25 2016 (The Conway Bulletin) – Armenia’s Public Services Regulatory Commission (PSRC) approved a 1.5b dram ($3m) investment in its Soviet-era nuclear power plant Metsamor. Also at the press conference, the PSRC chairman, Shiraz Kirakosyan, said the controversial issue of raising electricity prices would be revisited in April. Last year proposed electricity price rises triggered street protests.

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(News report from Issue No. 269, published on Feb. 26 2016)

 

Kazakhstan’s ArcelorMittal worries

FEB. 19 2016 (The Conway Bulletin) — Vijay Mahadevan, CEO of steel maker ArcelorMittal Temirtau which is one of the biggest employers in Kazakhstan, said his company will be looking at a drop in net income (EBITDA) of 13% in 2016, from $5.2b to $4.2b because of low global commodity prices. At the beginning of February, ArcelorMittal Temirtau scrapped plans to raise workers’ salaries in June because of worries about continued weak market conditions for its products.

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(News report from Issue No. 269, published on  Feb. 26 2016)

 

Kazakh companies struggle with bills

FEB. 12 2016 (The Conway Bulletin) – Kazakh companies are struggling to pay for the electricity they are using because of a general downturn in the economy, the deputy minister of energy Bakhytzhan Dzhaksaliyev told media. His views are another indication of the problems that Kazakh companies are facing as they try to counter the worsening economic conditions.

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(News report from Issue No. 268, published on Feb. 19 2016)

 

Wizz Air expands to Georgia

FEB. 17 2016 (The Conway Bulletin) – Hungarian budget airline Wizz Air will expand its services to and from Kutaisi, Georgia’s second largest city, across Europe. Wizz Air has been flying from Poland to Kutaisi since 2012 but will now add routes to Berlin, Munich, Dortmund, Milan, Larnaca in Cyprus and Sofia in Bulgaria. The extra routes will give tourism and business in Georgia a boost.

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(News report from Issue No. 268, published on Feb. 19 2016)

 

Uzbekistan suspends Khamkorbank

FEB. 16 2016 (The Conway Bulletin) – Uzbekistan’s Central Bank said it had suspended commercial lender Khamkorbank’s licence to trade in foreign currencies for six months due to unspecified violations of banking rules. The World Bank’s IFC and the Netherlands’ state-owned FMO both own stakes in Khamkorbank, 14.5% and 15% respectively.

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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 268, published on Feb. 19 2016)