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58 I Eurasia bne October 2018
Singapore’s CG Corp Global to acquire instant noodles production plant in Kazakhstan
bne IntelliNews
Singapore’s transnational corporation CG Corp Global has “concluded negotiations” on buying an instant noodles production plant, dubbed Lotus, in Kazakhstan’s Turkestan region, Kazakh Invest National Company for Investment Support and Promotion said in a statement.
Kazakhstan's newfound focus on food production forms part of its efforts to diversify the country’s economy away from dependence on oil exports. Kazakhstan mostly hopes to export its food products to China, which sees Kazakhstan as a potential source of “ecologically clean” food products.
The CG Corp Global group includes 120 companies and 76 brands, operating in the food industry, hotel business, telecommunications, electronics, among other sectors. Follow the acquisition, the noodles will be produced under the Wai-Wai brand and the capacity of output at the plant will be increased, the statement said.
CG Corp Global hopes to rely on the plant primarily for its exports to Russia and other Central Asian countries.
The estimated cost of upgrading the plant is $15mn.
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uations suffered by Russia in 2014 and Ukraine in 2015, the currency fall was cushioned by the almost complete col- lapse of imports that took the pressure off the current account and so braked the fall of the currency. It remains to
be seen what a de facto leap in import prices will have on imports, and to what extent the cheaper exports will rise, but similar forces will be at work to cushion the pain.
Certainly Georgia’s trade account has been more than robust in the first half of this year with double-digit growth in exports (28.5% y/y), growing remit- tances from Georgian’s working abroad (18.3% y/y), and impressive tourism inflows (+28.9% y/y) that lead to a 5.7% appreciation of the lari against the dollar. The central bank took advan- tage of the balmy climate to add an extra $87.5mn to its gross international reserves (GIR) of just under $3bn, and this cushion can now be used to soften the devaluation pressures if needed.
Azerbaijan
Azerbaijan is much more exposed to Turkey’s woes thanks to its hydrocar- bon-heavy economy. The government has been on a protracted campaign to diversify the economy but the non-oil part remains very small against oil and is more exposed to currency fluctuations.
Moreover, the Turkish crisis will also hit the country’s oil sector, according to Azerbaijani economist Gubad Ibadoglu in comments to Eurasianet.
Socar is one of the biggest investors into Turkey having committed $19bn, but this investment is denominated in lira so the state-owned oil company has been badly wounded by the lira’s loss in value.
At the same time Baku’s sovereign wealth fund, the State Oil Fund of the Republic of Azerbaijan (SOFAZ) has around 0.9% of its holdings in Turkish government bonds, which have also tanked this year, reports Eurasianet.
And finally Azerbaijan is exposed to the Turkish banking sector via the Turkish sub- sidiary of Azerbaijan’s Pasha Bank, which issued $25mn in new bonds this June.