Tag Archives: business

Alstom increases stake in Kazakh train-maker

ALMATY, DEC. 22 (The Conway Bulletin) — French train-maker Alstom, bought another 25% stake in Astana-based EKZ, from Kazakhstan’s Temir Zholy, to bring to 75% its ownership of the locomotive manufacturer.

This is an important deal for Kazakhstan as it shows increased confidence in its manufacturing base by major Western companies. Kazakhstan is trying to show it is serious about diversifying its economy away from oil, gas and minerals.

Didier Pfleger, Alstom Senior Vice-President for Middle-East and Africa, said the deal highlighted the success of the EKZ project and also Alstom’s commitment to the region.

“By increasing once again Alstom’s share in EKZ, we show our confidence in the attractiveness of Kazakhstan and we contribute to the development of new expertise and skills locally to address not only Kazakhstan’s needs but also regional ones,” he said in a press statement.
The value of the deal was not declared.

EKZ was set up to assemble the Prima range of locomotives in 2010 by Alstom (25%), Russia’s Transmashholdings (25%) and Temir Zholy (50%). Alstom bought a 25% stake from Temir Zholy in 2016 too. It now owns 75% of the company and Transmashholding owns 25%.

As well as assembling the Prima locomotives at its factory in Astana, EKZ now also assembles passenger wagons. Outside the extractive industries, EKZ is one of Kazakhstan’s headline companies. It employs 420 and is seen as critical in diversifying the Kazakh economy.

Kazakhstan has become a major hub in China’s Belt and Road infrastructure strategy giving its railway system a boost.

The Kazakh government has also committed itself to upgrading its network. There are 20,000km of railway tracks in Kazakhstan, the third largest railway network in the world using the 1,520mm gauge.

ENDS
— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

BGEO signs $11.6m contract to build shopping mall in Tbilisi

Leave a Reply

DEC. 28 (The Conway Bulletin) — BGEO, part of the Bank of Georgia group that is listed on the London Stock Exchange, said that its real estate unit m2 had signed an $11.6m contract to build the shell of a new shopping mall in Tbilisi (Dec. 28). This is the first major third-party contract for m2 since BGEO bought it in June. Bank of Georgia is spinning off BGEO into a separate company with a separate London stock listing in 2018.

— This story was first published on Jan. 5 2018 in issue 356 of The Conway Bulletin

Comment — Bugs are destroying Georgia’s harvest

Leave a Reply

SEPT. 24 (The Bulletin) — Farming in Samegrelo, Western Georgia, in the last months has been ravaged by a new pest, the brown marmorated stink bug.

The bug attacks hazelnut and fruit trees, feeding off their leaves. Precise numbers are not yet in, but many farmers report that they lost their entire crop. One hazelnut factory in Zugdidi says that while last year they processed 300 tonness of hazelnut per month, they are now down to 50 tonness. Many people have said more than 60% of the harvest has been lost.

The loss is likely to have grave consequences. One farmer reported that his neighbours would struggle to buy food, as their only major source of income had been wiped out. Thousands of families in Samegrelo are affected. Hazelnut, too, previously was Georgia’s largest agricultural export. One Georgian businessman said Georgia will export $66m of hazelnut this year compared with $166m in the bumper year of 2016. Corn has been hit, too.

The mood in Samegrelo is grim.

People are protesting. Farmers and opposition activists say that they had warned since April, but that the government only started spraying program on June 21, after most experts had concluded that this year’s crop was lost.

The crisis has showcased the structural weaknesses of the Georgian Dream government — the reaction was sluggish. The spraying was haphazard, and in part done before rainy days, which washed out the pesticide, a mistake they could have avoided by consulting a specialised forecast, according to an expatriate agronomist. In this context, too, local protesters say that it does not help that the 6,000 employees of the Ministry of Agriculture primarily are rural activists of the Georgian Dream. The ministry has not proven to be an apparatus that can conduct an effective containment campaign.

The bug is reported to have crept in from Sochi, as an invasive species that came with building materials for the 2014 Winter Olympics and people on social networks now are discussing the arrival of the bug in Tbilisi.

If the government does not stem its advance in the next year, the consequences could be severe.

>>Paul Scott is a pseudonym for a Georgia and South Caucasus analyst

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Mirziyoyev tells forced cotton labourers to go home

Leave a Reply

TASHKENT/SEPT. 22 (The Bulletin) — Uzbek President Shavkat Mirziyoyev ordered forced labourers working in the country’s cotton fields to return home, taking a step towards banning the practice altogether.

A Conway Bulletin correspondent said that the order for forced labourers — mainly teachers, medical staff and students — to leave the fields didn’t impact the wider mass mobilisation of the workforce to pick Uzbekistan’s cotton, a mobilisation that is characterised by low wages and poor conditions.

The Conway Bulletin, through its Silk Road Intelligencer newswire, had been one of the first news agencies to the report the news. The next day, on Sept. 23, Uzbek PM Abdulla Aripov confirmed the order.

“It’s forever,” he was quoted by Reuters as saying. “Students should study, state employees should work.”

The use of forced labour in Uzbekistan’s cotton fields has infuriated human rights groups who successfully lobbied for Western clothing companies to stop buying Uzbek cotton.

In the last few years, though, Uzbek officials and officials from the UN’s International Labour Organisation (ILO) have said that the use of forced labour has been cut back.

Human rights groups have published evidence that dispute this.

Under Pres. Mirziyoyev, Uzbekistan has appeared to lurch towards a more free and open society, rejecting the authoritarian tendencies of Islam Karimov who ruled from the 1991 break-up of the Soviet Union until his death in Sept. 2016.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Air Cairo to fly regularly to Tbilisi

Leave a Reply

SEPT. 22 (The Bulletin) — Air Cairo, Egypt’s low-cost airline, will launch a regular flight to Tbilisi from November. The flight will connect Egypt and Georgia directly by air regularly for the first time. This year, airlines from the Middle East have been rushing to boost connections with Georgia. Georgia is increasingly popular with Middle Eastern tourists wanting a cool, pseudo-European escape from the summer heat and also with businessmen looking for improved access to the EU and Russia.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Kazakhstan reduces Kashagan output expectations

Leave a Reply

SEPT. 22 (The Bulletin) — Kazakhstan’s Kashagan oil field will produce 270,000 barrels of oil per day during the last quarter of the year, Kazmunaigas told Reuters, less than a previous figure of 300,000 – 370,000 barrels suggested by energy minister Kanat Bozumbayev. Kashagan is the major Caspian Sea oil field that Kazakhstan hopes will propel it into the Premier League of global oil producers.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Swedish prosecutors charge ex-Telia CEO with corruption in Uzbekistan

Leave a Reply

SEPT. 22 (The Bulletin) — Swedish prosecutors charged former Telia CEO Lars Nyberg, former deputy CEO and head of its Eurasia division Tero Kivisaari and a third unnamed senior executive with authorising bribe-paying to access Uzbekistan in 2007/8. The charges came a day after Telia agreed to pay a fine of $965m to settle the bribe-paying allegations.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Central Asia Metals agrees deal to buy Macedonian zinc mine

Leave a Reply

ALMATY/SEPT. 22 (The Bulletin) — Kazakhstan-focused Central Asia Metals agreed to buy Lynx Resources, which owns a zinc mine in Macedonia, from Bermuda-based fund Orion Co-Investments III and Swiss firm Fusion Capital for $402.5m.

The deal is the biggest merger or acquisition in the Central Asia region this year and highlights the boom year that metal producers and miners have enjoyed.

Nick Clarke, CEO of Central Asia Metals, said that buying Lynx was a perfect fit and the result of extensive research on how to expand.

“We believe that this transaction is an exceptional opportunity for Central Asia Metals to acquire a high quality asset which complements our existing business,” he said in a statement.

The deal will be financed through a mixture of equity and debt.

Kenes Rakishev, a Kazakh investor with close ties to Kazakhstan’s elite, has been the biggest stakeholder in Central Asia Metals with a 19% stake. Under the deal, he will have to sell around half his stake.

The London-listed Central Asia Metals has performed well this year, rising 10.4% to 254.5p before trading was suspended on Sept. 4 following rumours of a takeover.

When trading begins again on Monday, Central Asia Metal’s share price is expected to rise.

Central Asia Metals’ main assets have been a copper slag heap in Kazakhstan. Analysts said buying up Lynx would mean diversifying its portfolio, an essential move.

“The transaction serves to diversify Central Asia Metal’s jurisdictional and commodity exposure and whilst it appears they have paid full price, they have also acquired an asset with good economics and long life,” the Telegraph quoted analysts at Numis as saying.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Telia agrees to pay $965m fine to US authorities over Uzbek corruption

Leave a Reply

SEPT. 21 (The Bulletin) — In a settlement with the US authorities, Swedish telecoms company Telia agreed to pay a fine of $965m for bribing its way into the Uzbek mobile market in 2007/8. The fine is smaller than had first been mooted. Telia paid a Gibraltar-based company ultimately owned by Gulnara Karimova, the daughter of former Uzbek leader Islam Karimov, at least $330m.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.

— Copyright the Central Asia & South Caucasus Bulletin 2017

Azerbaijan to finance train line to Iran

Leave a Reply

SEPT. 21 (The Bulletin) — Azerbaijan agreed to lend Iran $500m to complete a railway line between Rasht and Astara, north Iran, that it deems essential for a North-South Transport Corridor that should, according to the plan, transport products from India to Russia by sea and rail. The rehabilitation of relations between Azerbaijan and Iran have been key to getting this project off the ground.

ENDS

— This story was first published in issue 344 of The Conway Bulletin, now called the Central Asia & South Caucasus Bulletin, on Sept. 24 2017.