Posted: 4 years ago

Businessmen Abstain from Investment Projects Amid the COVID-19 Pandemic

Businessmen are abstaining from implementing investment projects amid the COVID-190 pandemic. They are laying off staff and taking various radical measures to overcome the damage from declining incomes. 

The Caucasus Business Week (CBW) has inquired as to how the long-term investment indicator has declined, and whether the business sector has a specific plan to cushion the crisis burden. 

The Telavi Wine Cellar founder Zurab Ramazashvili has analyzed the problems in the winemaking industry that arose after the government announced the state of emergency and restaurants and cafes suspended operations. 

“In general, times of crisis are considered to be the best for making investments. However, now we have partly reduced investments. Everything depends on resources. If these resources are attainable when trying to make long-term investments, we will not lower the pace of work. At this stage, we are thinking of reducing investments to a certain degree”, Ramazashvili noted, and added that the winemaking industry is one of the business sectors that has most closely tracked the coronavirus pandemic and the closure of various facilities. 

“People should determine their expected risks when starting a business. The government cannot assist in everything. We should agree that in this case, all of us will bear certain losses, and we should share the burden. As for the winemaking industry, consumption has declined, because restaurants, cafes and public places are closed. Therefore, this crisis has badly hit the winemaking industry. Consequently, we will bear serious losses. To be frank, we turned out unprepared for such a scenario. Amid the current developments, we will take appropriate decisions; however, our business activities will not be halted. We have not laid off staff, however, we have fired older employees because of the existing risks”, the businessman pointed out. 

As noted by Irakli Iashvili, founder of the Vaziani winemaking company, paused investments, and the uncertain prospects for future development have essentially frustrated businesses, and the number of employees will inevitably decline. 

“Naturally, the number of jobs will decline. I have no idea how businessmen can maintain staff. Shopping malls are closed. Our facilities were also closed. At this stage, there is no income, investments are paused. If anybody has a bit of cash, they should buy real estate or securities. I think the situation will further worsen in stages. Everything depends on how long this crisis will last. For example, China is demonstrating positive trends. The main thing is that we should also find a positive thing, and inspire positive economic moves”, Irakli Iashvili noted. 

“In March the product's sales will be far lower than we planned. As for salaries, our employees will not be hurt this month”, DIO Co-Founder and Executive Director Tamaz Daushvili noted, and added that the consumers’ activities have dramatically declined, and the company is trying to prepare a plan for maintaining staff. 

Based on recommendations by the World Health Organization (WHO), together with many other organizations, DIO has carried out disinfection in its offices and showrooms, while the company staff serves consumers with special equipment. 

As noted by Tamaz Daushvili, amid efforts to thwart the virus, consumer interest is declining, and this factor complicates operations on the market, and it is unclear what situation the month of April will see for the business sector. 

‘Everybody turned out unprepared for such a crisis. We have done our best to continue operations. We have taken all decisions for ensuring safety, carried out disinfection at our offices and equipped the staff with all the necessary equipment. 

We were ready to fulfill every recommendation, however, the more regulations in our business, the more difficult it is to operate. Consequently, the consumer shows lower activity. Our key task was to continue operations and protect our staff, company, family members and society. At this stage, our company has partly moved to working remotely. Employees come to job places in shifts. Incomes have also decreased. 

As for April, we are longing to resume operations, because our company is not included in the list of industries that were banned from doing business. As for April salaries, everything depends on the development of the pandemic. If the consumers’ interest reaches zero, we will have an absolutely different reality; however if we manage to continue operations, we will maintain a maximum number of employees so as to receive guaranteed incomes. 

I urge everybody not to give up and follow the recommendations, and we will manage to continue operations, and prevent the suspension of business ’, the DIO founder noted. 

Our investment plans were temporarily postponed, including projects involving expanding plants in Tbilisi and Kutaisi, he added. 

“We have already implemented several investments, built new enterprises, and we are waiting for the new season. We had plans for the official inauguration of new enterprises in Kutaisi and Tbilisi. Regretfully, these plans have been suspended. Nevertheless, we hope that thanks to coordinated efforts together with commercial banks, we can overcome this crisis, because these investments were carried out thanks to commercial service bank credits, which is a key challenge”, Tamaz Daushvili noted.