Tag Archives: business

Moody downgrades Kazakh banks

SEPT. 7 2015 (The Conway Bulletin) — Moody’s ratings agency downgraded three Kazakh banks due to their deteriorating asset quality and their exposure to foreign currency lending. Kazkommertsbank’s baseline credit assessment (BCA) was rated caa2, ATF Bank fell to caa3, and Eurasian Bank was downgraded to caa1. Moody’s also changed the outlook of the three Kazakh lenders, together with Halyk Bank, to negative, highlighting the precarious state of Kazakhstan’s banking sector.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Construction starts on $85m aircraft parts plant in Georgian capital

TBILISI, SEPT. 7 2015 (The Conway Bulletin) — Georgia’s PM Irakli Garibashvili officially initiated construction of a factory near Tbilisi airport that will produce structural components for airplanes.

Last March, Israel’s Elbit Systems and Georgia’s Partnership Fund, a state-owned holding, set up a joint- venture called Aero-Structure Technologies to build the $85m plant.

“The fact that Elbit Systems is returning to Georgia means a lot to me personally and to the Georgian government, because this is an expression of confidence towards our government and our country,”

Mr Garibashvili said at the opening ceremony.

The plant will give Georgia’s tech industry a major boost as well as create 300 new jobs. It will open in 2017. A Georgian government press release said the plant’s production was aimed at the major aircraft manufacturers Boeing, Airbus, Bombardier and Sukhoi.

For Elbit, one of Israel’s biggest weapon’s manufacturers, the new factory marks a remarkable turn around in its business relationship with Georgia.

Elbit Systems had previously built and sold Hermes 450 reconnaissance drones in Georgia. In 2011, though, it fell out with the government of President Mikheil Saakashvili.

The government launched a $100m law suit against Elbit which it settled for $35m.

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(News report from Issue No. 247, published on Sept. 11 2015)

Eurasian Economic Union causes problems for Kyrgyz business

BISHKEK, SEPT. 11 2015 (The Conway Bulletin) — Kyrgyzstan’s entry to the Eurasian Economic Union last month has created confusion and extra bureaucracy for businesses, Aziz Soltobayev, founder of the online store svetofor.info, said in an interview with The Bulletin.

Mr Soltobayev, 32, said the Kyrgyz government had failed to give clear instructions on what impact membership of the Eurasian Economic Union would have.

“There is not much to be happy or thrilled about,” he said at his company’s headquarters, a converted house in central Bishkek. “For example if you want to export you have to be on the exporter’s list and this means more bureaucracy and inspections and examinations.”

Kyrgyzstan became the fifth member of the Russia-led Eurasian Economic Union last month. Kazakhstan, Belarus and Armenia are also members. The problem is that when the idea of the Eurasian Economic Union was floated, Russia was in the ascendency. Now its economy has tipped into recession.

“Oil prices were really high and it [Russia] was just booming,” Mr Soltobayev said. “But things have changed. The war with Ukraine, US sanctions and the devaluation of the rouble has made this Union miserable, just the worst place.”

And the costs are growing too. Svetofor.info buys stock from China but Mr Soltobayev said prices for imported goods had already increased significantly.

Regarding svetofor.info, which he started in 2004, Mr Soltobayev said its best-selling products were mobile phone handsets. On the streets of Bishkek, most people seemed glued to mobile phones.

Mr Soltobayev said svetofor.info was going to quit its remaining high street shops altogether in the next few years and move its operation completely online.

“With access to the internet and with the decline (in price) of data packages people are using it more and more,” he said. “We see now that people are buying products on their mobile phones. They don’t have desktop phones any more and we see people doing this not just in the city but also in the countryside.”

Fashion, he said, is all important with the latest smartphone being the number one accessory for Kyrgyz.

“They would certainly rather buy an iPhone and live in miserable conditions,” he said.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Power station extends in Azerbaijan

SEPT. 9 2015 (The Conway Bulletin) – The Trend news agency quoted a source in the Azerbaijani energy market as saying that the long-delayed extension to the Shimal power plant in Baku will finally be commissioned this year. The extension, which will double the capacity of the power station, was supposed to have been commission last year.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Irish Siteserv enters Kazakhstan

SEPT. 8 2015 (The Conway Bulletin) — Irish industrial services company Deborah Services Limited (DSL) and Lancaster Group, a Kazakh private holding company, signed a multi-million euro agreement to form a joint venture to serve oil and gas operations in Kazakhstan. Infrastructure and utility support firm Siteserv owns DSL. The new company, DSL Caspian, will provide protective coatings and fire protection at onshore and offshore oilfields in Kazakhstan. Lancaster Group is closely linked to the Kazakh elite. Yerbolat Dossayev, currently minister of economic development, is a major stakeholder in the group.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Iran and Azerbaijan make deals

SEPT. 10 2015 (The Conway Bulletin) – Iran’s Khazar Exploration and Pro- duction Co. (KEPCO), a subsidiary of National Iranian Oil Company, met with officials from the Azerbaijani state oil and gas company SOCAR in Tehran to discuss how best to work together to explore and exploit oil fields in the Caspian Sea. Iran has has begun to re-integrate into the global community.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Putin gives Armenia $200m

SEPT. 7 2015 (The Conway Bulletin) – After meeting Russian President Vladimir Putin at his villa outside Moscow, Armenian president Serzh Sargsyan said that Russia had agreed to give Armenia a loan of $200m to modernise its military. Russia is one of Armenia’s most important allies and keeps a large military base in the country.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Centerra Gold pays tax to Kyrgyz government

SEPT. 9 2015 (The Conway Bulletin) — Toronto-listed Centerra Gold, owner of the Kumtor gold mine in east Kyrgyzstan, has paid 4.3 trillion som (around $65m) in taxes to the Kyrgyz government in the first 8 months of 2015, the ministry of finance said. In 2014, Centerra accounted for 7.4% of Kyrgyzstan’s GDP.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Turkmenistan to boost import duties

SEPT. 5 2015 (The Conway Bulletin) – Turkmen president Kurbanguly Berdymukhamedov has approved a bill that will increase customs duties on sausages, fruit, vegetable, softs drinks and fruit juice and come into force on Oct. 1. Mr Berdymukhamedov has said he wants a policy of import substitution.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)

Russia cuts gas price for Armenia

SEPT. 11 2015, YEREVAN (The Conway Bulletin) — Russian gas monopoly Gazprom agreed to cut the price of gas it sells to Armenia by 12%, giving the Armenian government much needed economic breathing space.

The economic turmoil blowing through the former Soviet region has hit Armenia hard. Its dram currency has lost around 20% of its value and its economy is stalling.

Inflation is also rising and protesters have become increasingly agitated about utility price increases. Earlier this year, thousands of people demonstrated against proposed electricity price rises, eventually forcing the government into a climb-down.

Now Gazprom, which owns 100% of Armenia’s gas network, appears to have taken pity on Armenia.

Shushan Sardaryan, a spokeswoman for Gazprom Armenia, said that the new price was set at $165, down from $189, for 1,000 cubic metres of gas.

“The current price of natural gas was based on an exchange rate of $1 equalling 416 Armenian drams,” she told reporters. “But the exchange rate significantly differs from this level and the fluctuations damaged the company.”

The dram is now hovering at around 480 against the US dollar.

Ms Sardaryan also made the point that although Russia had reduced the cost of its gas to Armenia, this price reduction would not be passed on to consumers.

Instead, the saving would be made by the government. Armenia has also floated the idea of pricing its gas in roubles, rather than US dollars, a move which would, in theory, protect it from price rises linked to the devaluation of its dram currency.

ENDS

(News report from Issue No. 247, published on Sept. 11 2015)