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

By William Hennelly (China Daily USA) Updated: 2016-10-13 11:38

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 vice-president 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 government-led 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 high-quality 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".

Contact the writer at williamhennelly@chinadailyusa.com

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