MAY 29 2015 (The Conway Bulletin) – Kazakhstan wants to increase its meat and poultry exports to neighbouring countries over the next three years, media reported quoting agriculture minister Asylzhan Mamytbekov. Mr Mamytbekob said that meat exports increased by 300% in 2014.
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(News report from Issue No. 234, published on June 4 2015)
MAY 26 2015 (The Conway Bulletin) – Kazakhstan extended a ban on the import of higher grade oil- products from Russia until June 20, the ministry of energy said, potentially enflaming a growing trade row between the two neighbours.
This is the second extension to the ban on A92/93 diesel fuel, first imposed for 40 days on March 5 to protect domestic producers against cheap Russian imports.
The Russian rouble has roughly halved in value over the past year, mainly because of the slump in oil prices, while the Kazakh Central Bank has defended its currency vigorously.
This created a large imbal- ance in prices.
This year Moscow and Astana have banned various products under the guise of breaking health regulations. In reality, though, Commentators have said the various ban on foodstuffs has been a low-level trade war.
The irony is that Kazakhstan and Russia are supposed to have reduced trade barriers after the creation of the Eurasian Economic Union which also includes Belarus, Armenia and Kyrgyzstan.
Separately, the Kazakh energy ministry also announced it was increasing petrol prices slightly.
The government controls petrol prices. It has previously reduced them.
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(News report from Issue No. 233, published on May 28 2015)
APRIL 30 2015 (The Conway Bulletin) – Dominoes Pizza, arguably the most recognisable pizza brand in the world, opened its first store in Tbilisi on April 26, the company said in a statement. US fast food chains have been piling into Georgia.
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(News report from Issue No. 230, published on May 6 2015)
ASURETI/Georgia, APRIL 5 2015 (The Conway Bulletin) — Manfred Tikhonov moved from Berlin to Georgia in the early 2000s and for the last 11 years he’s been making wine in Asureti, a former German village 40km south east of Tbilisi. (April 22).
Tikhonov, 67, spends his days slowly restoring his German-style timber Fachwerk house, built in the 1870s, and making wine the Georgian way, in clay vessels (kvevri) buried in the ground.
He has learnt everything about wine from his neighbours and produces up to 2,000 litres of wine a year. “It’s not enough to make profit,” he said. “But I get a pension from Germany.”
Asureti has long winemaking traditions. Formerly known as Elisabethal, it was founded in the early 19th century, when Russian Tsar Alexander I invited Germans from Swabia, a region in the southwest of Germnay, to settle. Tikhonov said Asureti Swabians were producing red wine for the high rank officials in Tsarist Russia and then the Soviet Union, until they were deported to Kazakhstan in 1941 when Soviet leader Josef Stalin worried that they may side with the advancing Nazi armies in World War II.
Barely any of them returned. The only reminders of the past are shabby Fachwerk houses, ruins of an Evangelical Church and overgrown gravestones engraved with old Swabian.
“Maybe one day I will also be buried here,” said Tikhonov, closing the graveyard gates.
Later, at home, Tikhonov poured a glass of his 2013 red. He apologised as this was not his best wine. There had been no running water and he had not been able to clean the clay vessels for the new grapes that year.
It has been hard to adapt to the local way of living. “Everything goes slower than I want,” he said. But he is not sorry to have exchanged buzzing Berlin to a quiet life in Asureti. “Free- range cows, chicken and dogs remind me of my childhood in the East Germany sixty years ago. Time stands still, and I love it.”
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(News report from Issue No. 228, published on April 22 2015)
APRIL 3 2015 (The Conway Bulletin) – Alcohol prices in Georgia have increased by 10% over the past year, the national statistics agency said.
Alongside the rising price of food (3.7%) and healthcare (6%) the cost increase in Alcohol is a major driver of overall inflation. Annualised inflation for March measured 2.6%, up from 1.3% in April.
Analysts blame a fall in the value of the lari currency for this price rise but new taxes slapped on alcohol from March 1 have also driven up prices.
The government increased tax on beer by 50% and on hard liquor by 100%. It has said the tax will bring in an extra 100m lari ($45m) and harmonise Georgia’s tax laws with the EU.
And for now, it appears, thirsty consumers and bar owners in Tbilisi are shouldering the price rises.
Cory Greenberg, owner of Dive Bar in Tbilisi said distributors wanted more for a litre of beer but he has promised to keep prices steady.
“Not so much for charity, but because it is smart,” he said. “Let the others raise their prices and business will come to us.”
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(News report from Issue No. 226, published on April 8 2015)
MARCH 27 2015 (The Conway Bulletin) – Following a clutch of other US fast-food chains, Domino’s Pizza expects to open its first store in Tbilisi in mid-April. Geopizza, which owns the Domino’s Pizza franchise in Georgia, said it wanted to set up 12 stores within five years.
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(News report from Issue No. 225, published on April 12015)
APRIL 1 2015 (The Conway Bulletin) – Kazakhstan has banned sales of some pork products from Russia for health reasons, media reported, although some analysts said the real reason for the ban was worsening trade relations. Kazakh producers have complained of a flood of Russian goods. The devaluation of the Russian rouble has made Russian goods very cheap in Kazakhstan.
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(News report from Issue No. 225, published on April 12015)
MARCH 2 2015 (The Conway Bulletin) – The collapse in oil prices forced Max Petroleum, a British-Kazakh oil and gas company, to suspend trading on the London AIM stock exchange.
In a statement, Max Petroleum said it was in negotiations to restructure its debt with Sberbank and other creditors.
“If current negotiations are unsuccessful, or if other events outside the control of the Company require that the Company ceases trading while such negotiations are ongoing, then the consequences will be negative for all stakeholders in the Company,” the company statement said.
Last month Max Petroleum squarely blamed the slump in global oil prices for its problems which wiped out profit margins and deterred potential investors.
The Max Petroleum’s troubles are a microcosm of the problems facing Kazakhstan-orientated companies trying to weather an economic downturn linked to the oil price drop and the turmoil in Russia’s sanction-hit economy.
Almaty-based confectionery plant Rakhat, which South Korea’s LOTTE bought in 2013/2014 in a multi-million dollar deal, also said that it had had to lay off 500 of its 3,800 workers. It blamed unfair competition from cheaper Russian sweets.
Once feted as one of Kazakhstan’s most famous companies outside the extractive industries, Rakhat is now trying to eke its way out of the economic storm — just like most other Kazakh companies.
Max Petroleum, listed on the LSE since 2005, is a small Kazakhstan oil producer with an output of around 200,000 tonnes of oil a year.
In August 2014, AGR Energy, linked to the prominent Assaubayev family, made a deal to buy 51% of Max Petroleum for £37m ($62m), promising to embark on a significant investment to revitalise the company. The slump in oil prices, though, appears to have deterred AGR Energy from follow through with the deal and the promised investment.
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(News report from Issue No. 221, published on March 4 2015)
MARCH 19 2015 (The Conway Bulletin) – Forced to look for alternative markets because of sanctions on Russia and war in Ukraine, Uzbekistan has become a major target for Lithuania’s dairy exports.
In December, dairy exports from Lithuania to Uzbekistan recorded a 19-fold increase compared to the same month in 2013, according to Russia’s Soyuzmoloko, a milk industry group.
Uzbekistan now represents over 12% of the Lithuanian dairy export market, becoming a key target for Lithuanian cheese and butter. Only Poland and Italy now import more dairy products from Lithuania.
Soyuzmoloko said there may be an alternative motive for sending products to Uzbekistan.
“Dairy products exported from Lithuania to Uzbekistan are then sent from Uzbekistan to Russia directly or via Kazakhstan, which is part of the Customs Union,” the Soyuzmoloko said in a note on its website.
The reference to the Customs Union is to an old Kremlin-led economic group. It is now called the Eurasian Economic Union.
While relations between Uzbekistan and the EU have been strained over the past few years because of rows over human rights abuses, Uzbekistan–Lithuania bilateral relations have been improving.
Last year, Lithuania’s foreign minister travelled to Tashkent for direct talks with his Uzbek counterpart.
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(News report from Issue No. 224, published on March 25 2015)
FEB. 9 2015 (The Conway Bulletin) — In a major boost for the retail market in Tajikistan, Auchan, the French supermarket brand, has agreed to open up its first franchise in Dushanbe later this year.
Media said that Auchan had signed a deal with French distributor Schiever to manage the stores.
It did not report where exactly the store would open but it did say that it would stock mainly Russian produce and open in 2015.
Schiever already runs Auchan’s stores in Poland.
The news is, obviously, good for Tajikistan which has been short on positive economic news lately. It’s also a departure from the norm.
Headlines from Tajikistan recently have focused on major Chinese expansion but little investment from European retailers.
It will also shake up the Tajik retail sector which has been dominated by small shops selling goods of variable quality. The Auchan store will, according to press reports, be roughly the size of a football pitch.
The Auchan store project is partly financed by the European Bank for Reconstruction and Development (EBRD) which has expanded its portfolio of projects across the region. In 2014, the EBRD said, it invested 100m euro into Tajikistan.
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(News report from Issue No. 219, published on Feb. 18 2015)