**THE ADJARA REGIONOF THE REPUBLIC OF GEORGIA**

 

September, 1999

By David Chantladze,BISNIS Representative in Tbilisi, Georgia

 

General Information

 

The Adjara Autonomous Republic, one of themost attractive regions of Georgia, is situated in the southwest part of thecountry.  From the western side itis washed by the Black Sea. The  capital, Batumi, is oneof two Black Sea port cities in Georgia. The Republic occupies 2,900 sq. km., and has a population of over400,000.   

 

The southern and eastern parts of Adjara aremountainous, with an average altitude of 2,500 meters, while the western andnorthern parts are low lying plains. On the coastal area, the climate is warm, very humid and subtropical,and in the mountains the climate is humid, and ranges from moderately warm tomoderately cold. 

 

Adjara has unique flora with up to 1,700species.  Its forest resourcesoccupy about 18,696 hectares of land, making up 65.1 percent of its territory,while the total amount of forest land in Georgia is 39.6 percent and for theworld,  27 percent.  The widely spread forests have beech, oakand coniferous species of trees.

 

Adjara is rich in mineral resources.  Deposits of copper, polymetals,heat-proof clays, decorative wall-facing stones, and mineral waters, can befound there.

 

The major economic sectors in Adjara aretourism-recreation, transportation, and agriculture.  In the summer, Adjara hosts thousands of people from otherparts of Georgia and the former Soviet Union, seeking to spend their vacationsin this beautiful region.  TheBatumi Trade Port and the Batumi-Istanbul highway are the principal gatesthrough which the major portion of Georgian products and other neighboringcountries’ products are imported and exported.  As a result of its geographical location, Adjara mostlyspecializes in cultivating subtropical crops such as tea, citrus, tobacco, andfruit.  The food processingindustry is quite developed there. 

 

Due to a supportive local government, astrategic location, and a well qualified and cheap labor force, several foreigncompanies from Italy, the U.S., Russia, the U.K., Turkey, and Germany arerepresented there.  Adjara’s localgovernment is very powerful and if American companies want to successfullyconduct business in this region, they should at least inform the governmentalstructures of their business plans.

 

American business people interested in comingto this region can stay in Adjara hotels both in Batumi, the capital of Adjara,as well as other cities such as Kobuleti, Chakvi, etc.  The average hotel price ranges fromUS$50 to US$120 per night, and usually includes breakfast.

 

Adjara has a small airport, however, due toirregular flights, the best way to get to Adjara is by car.  Roads are in good condition and ittakes a maximum of 5 hours to get to Batumi from Tbilisi and about an hour fromTrabson, Turkey.   

 

A driver and interpreter can be arrangedthrough the Gold Key Service provided by the U.S. Embassy’s commercialsection.  Car rentals usually costUS$60-80 per day and an interpreter is about US$70-80 per day.

 

Economic Overview

 

Adjara has several different industry sectorsrepresented.  There are oilrefineries, machine-building, electromechanical, shipbuilding, and other largeindustrial factories.  

 

By January 1999, 221 enterprises wereregistered in Adjara, of which 147 are active (among them 91 are private and 56are state owned), others have ceased production due to problems raised afterthe breakdown of the Soviet Union in the late 1980's.

 

There are 22 banks operating in Adjara.  The strongest bank is the"Georgian Maritime Bank," which has opened its correspondent accountsin more than 20 countries: the U.S., Germany, Great Britain, Japan, and Turkey,for example.  

 

Adjara is rich in mineral resources.  Deposits of non-ferrous metals,chemical raw materials, construction materials and colored stones are foundthere.  This region also hassignificant mineral and spring waters. There is also the possibility of revealing oil, gas, and thermal waters.

 

The Adjara region is famous for its spas andrecreational resorts.  Tourism,especially in summer, plays a big role in the entire economy of the region.

 

Together with the tourism industry,agriculture also has a significant share of Adjara's economy.  The region specializes in cultivatingsubtropical crops such as tea, citrus, tobacco, and different kinds of fruit.These products are mainly exported to Russia.

 

The Autonomous Republic of Adjara is thejunction for sea, railway, motor and air transport corridors in Georgia.  In 1998, a new railway ferry fromBatumi to Ilichevsk was opened in Batumi. Specialists believe this is a very important project not only forGeorgia, but for other Black Sea countries, as Georgia is a transport routejoining Europe to Asia.   

 

Positive Trends

 

Marubeni, a company from Japan, has a very ambitiousproject for the Batumi Oil Refinery. Operations will start very soon. 

 

The Batumi Shipbuilding factory producessmall-sized, comfortable yachts, bay-watch crafts etc.  Along with an American investor, theyare working on a project to build 2,000 ton container vessels and docks torepair ships in the Georgian Black Sea. On the basis of the Batumi Shipbuilding factory, a newly createdGeorgian-Turkish joint venture company, Agordzineba-N Ltd., started successfullymanufacturing yachts, different kind of motor boats, water cycles, and sailingand fishing boats using German technology and American Evinrude brandengines.  

 

The construction company Agordzineba-M wasrecently established in Batumi in cooperation with the German company Rinova inorder to satisfy the demand for construction in the Reuplic.  Using modern technology, this companycan construct one floor of a standard European house in only 7-8 days.Agordzineba-M produces 3.5 times more products than the whole Adjarian industrydid during Soviet times.  

 

Besana & Georgia is a Georgian-Britishjoint venture, that has been in operation for 3 years.  Its main activity is nut and dry fruitprocessing and packaging.  Thecompany is using local raw material and exporting its final products to Italyand other CIS countries.  

 

In addition to the previous companies, 3cellular phone companies are operating in Adjara.  Two of them are American- Georgian joint ventures (MegaComand MagtiCom) and one is a Georgian-Turkish joint venture (Geocell). Conocoalso has a small office in Batumi, and conducts its operations through itsdaughter company Conoco-AdjGaz.

 

ACDI/VOCA and the World Bank are assistingfarmer unions in this region. Under the World Bank project, 20 credit unions were recently establishedand are successfully functioning in Adjara.  There is also a local consulting company InformService whichcan assist enterprises with writing business plans and business proposals.  At the same time they can assistforeign businessmen in organizing business trips in this region.

 

Some Useful Contacts

 

Giorgi Tsintskiladze, Chairman of the Councilof Ministers of the Autonomous

Republic of Adjara

Tel: (995 222) 7 20 60

Fax: (995 222) 7 20 80

 

David Japaridze, Deputy Chairman of theCouncil of Ministers of the

Autonomous Republic of Adjara

Tel: (995 222) 7 20 60

Fax: (995 222) 7 20 80

 

David Kldiashvili, Minister of Trade andForeign Economic Relations of the

Autonomous Republic of Adjara

Tel/Fax: (995 222) 7 35 60

 

David Siradze, PR, Rep. Office of the AdjaraAutonomous Republic to the

Central Government

Tel/Fax: (995 32) 92 13 86

Mob: (995 32) 97 01 75

 

Galina Lomadze, Manager of the ConsultingCompany "InformService"

Tel: (995 99) 56 65 72 (mob.)

 

Hotel "Tanamgzavri" 

Tel: (995 222) 7 60 63

Fax: (995 222) 7 13 45

 

Hotel "Oasis" 

Tel: (995 222) 7 07 40

Fax: (995 222) 7 63 21

 

Hotel "Monpellier"

Tel: (995 222) 7 69 52

Fax: (995 222) 7 69 50

 

Hotel "L-Bakuri"

Tel: (995 222) 7 69 20

Fax: (995 222) 7 69 30