US com­pany plans to take the Silk Road to reach China’s mar­kets

China Daily (USA) - - ACROSS AMERICAS - Con­tact the writer at williamhen­nelly@ chi­nadai­lyusa.com

For one New Jersey com­pany, the road to the Silk Road and the riches of China goes through the for­mer Soviet repub­lic of Ge­or­gia.

On Oct 3, Conti In­ter­na­tional of Edi­son, New Jersey, signed a deal with Ge­or­gian fi­nan­cial firm TBC Hold­ing to build and run a $2.5 bil­lion port and free in­dus­trial zone in Anaklia, Ge­or­gia, de­signed to serve as a Black Sea hub for China to Europe.

“We’re de­lighted to be break­ing ground,” Conti CEO Kurt Conti was quoted on Forbes.com. He said Anaklia will be a path “from China to Europe and (will) ex­pand trade and in­vest­ment for all of China”.

The Belt and Road Ini­tia­tive, or the Silk Road Eco­nomic Belt and the 21st Cen­tury Mar­itime Silk Road ini­tia­tives, con­sists of trans­porta­tion in­fra­struc­ture projects link­ing Asia and Europe; it was launched by Pres­i­dent Xi Jin­ping in 2013.

Conti part­nered with Ge­or­gian fi­nan­cial firm TBC Hold­ing to form the Anaklia Devel­op­ment Con­sor­tium. The project is ex­pected to be com­pleted in 2020, and the gov­ern­ment of Ge­or­gia has said it will in­vest $100 mil­lion in the project.

Anaklia Deep Sea Port will be con­structed on nearly 1,000 acres; the depth and in­fra­struc­ture of the port will pro­vide ac­cess to Pana­max and Post-Pana­max (larger ves­sels that could be ac­com­mo­dated by the ex­pan­sion of the Panama Canal in June) ships that can­not be served by any other port in Ge­or­gia.

Af­ter com­ple­tion of the first phase, the port will fea­ture two con­tainer ter­mi­nals that will be able to re­ceive con­tain­ers from 700,000 to 800,000 TEUs (20-foot equiv­a­lent units).

ADC is the byprod­uct of a 20-year friend­ship be­tween the com­pa­nies’ pres­i­dents, Conti’s Kurt Conti and Ma­muka Khaz­aradze, ADC co-founder and TBC Hold­ing chair­man.

A Har­vard Univer­sity re­union din­ner hosted in Ge­or­gia in 2013 set the stage for the en­deavor; Conti was im­pressed with the Cau­ca­sus na­tion and was look­ing for ways to work on a project there, ac­cord­ing to Lit­tle­gate Pub­lish­ing, a cor­po­rate ex­ec­u­tive news web­site. Khaz­aradze sug­gested the port, and that’s how the Anaklia Devel­op­ment Con­sor­tium was born.

The port fa­cil­ity not only will pro­vide space for lo­gis­tics com­pa­nies, fi­nan­cial and train­ing ser­vices and light man­u­fac­tur­ing, it also will fea­ture a free in­dus­trial zone with restau­rants and tourist at­trac­tions.

“With­out the free in­dus­trial zone, the port would just be a place to ex­change cargo,” said Paul Force, Conti In­ter­na­tional vi­cepres­i­dent of pur­chas­ing and con­tracts. “The zone should be a cat­a­lyst for eco­nomic growth in the sur­round­ing area, cre­at­ing re­gional devel­op­ment and in­creas­ing em­ploy­ment.”

By 2020, the Ge­or­gian gov­ern­ment also plans to com­plete its east-west high­way, one of the largest sources of for­eign di­rect in­vest­ment into the coun­try.

“We see tremen­dous op­por­tu­nity for US firms in Ge­or­gia,” Conti told Forbes. “The mar­ket is grow­ing quickly, and gov­ern­men­tled re­forms are mak­ing this growth sus­tain­able.”

ADC also said it will mon­i­tor the en­vi­ron­men­tal im­pact of the devel­op­ment.

“Ge­or­gia is al­ready a very green coun­try,” said Le­van Akhvle­di­ani, ADC and TBC Hold­ing CEO. “TBC Hold­ing al­ways go above and be­yond ex­ist­ing reg­u­la­tions when we make our im­pact as­sess­ments. ADC is do­ing the same.”

For­mer Ge­or­gian prime min­is­ter Irakli Garib­ashvili told China Daily in Septem­ber 2015 that af­ter the new port is built, it will take only 17 days for Chi­nese goods to be de­liv­ered to Europe, com­pared with the cur­rent route, which takes about a month.

“This will be one of the most ef­fi­cient routes in the Silk Road project,” he said.

And China and Ge­or­gia moved one step closer to their own free trade agree­ment (FTA) on Oct 5 when Min­is­ter of Com­merce Gao Hucheng met with Ge­or­gian Prime Min­is­ter Giorgi Kvirikashvili to sign a mem­o­ran­dum of un­der­stand­ing for a pre­lim­i­nary FTA.

As a re­sult, Chi­nese en­ter­prises and con­sumers will have bet­ter ac­cess to high­qual­ity prod­ucts like wine and fruits from Ge­or­gia, while Ge­or­gians will ben­e­fit from less-costly in­dus­trial prod­ucts, Gao said.

Dim­itry Kum­sishvili, Ge­or­gian min­is­ter of econ­omy and sus­tain­able devel­op­ment, said that “the sub­stan­tial end­ing of the FTA talks will pro­vide a bet­ter op­por­tu­nity for the Ge­or­gian prod­ucts ... to en­ter the vast Chi­nese mar­ket with com­pet­i­tive prices, which will greatly pro­mote the ex­port of our coun­try and ben­e­fit the eco­nomic devel­op­ment of Ge­or­gia”.

Wil­liam Hen­nelly NEWYORK JOUR­NAL

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