Georgian Rockefeller’s Business Empire that Started with a Sweater
20 March, 2015
Georgian Rockefeller’s Business Empire that Started with a Sweater
Soso Pkhakadze, president of Wissol Group shared his business history, future plans and other interesting details in his conversation with Palitra TV. Our readers have an opportunity to learn about the story of his success and yet unknown first steps of his career.

"When establishing my first oil company, I named it Standard Oil – in Rockefeller’s honor."

– As we know, your business career has its roots in the murky and messy 1990s. How did it all begin?

That’s hardly the first time I reply to this question, for friends and journalists alike. This is what you are usually most interested in. My organization, just like many others currently operating in a variety of Georgia’s business fields, trod through a long road in the 90s.

– Do you mean that it was difficult or, on the contrary, easy to do business back then?

– When crime runs unchecked, 70-80 percent of all goods in the country are smuggled, corruption reigns and other equally unpleasant things happen, doing business is far from easy. Personal safety issues popped up way more frequently than I’d like them to. And when personal safety is compromised, economic gain is forced to take a back seat. Many companies that used to be my direct competitors or major players in other fields do not exist today. Thankfully, Wissol Group managed to make it, and along with many others that did, we are very successful nowadays.

– Still, how did your relations with both the government and criminal groups play out?

– We had an approach – completely unique back then – that we never strayed from. It was a simple postulate of always doing our work with clean hands. We wanted to be clean before the country’s budget as well as the country itself, not to mention clients, employees and the general society that we did business with. This is the reason why we never engaged in any illegal, improper or prejudicial activities. Back then there were many companies taking their first steps, and due to us being far more powerful than them, we could have negotiated deals that would be beneficial to us and detrimental to them, but we didn’t. We tried to be just and honest to any party that we had relations with.

– Your first steps in business had nothing to do with the import and sale of oil and oil products. You started by selling sweaters, no?

– Yeah, that’s how we began; it was our first deal. My friends and I bought some sweaters in one district of Tbilisi and sold them in another, making some money.

– Did this first deal give you any insights in the world of business?

– We became absolutely determined to find success. On one hand, it was merely a whim and on another, it was self-confidence – a belief that we could achieve something. If the sweater deal turned out well, tomorrow we would go and try to sell pens, and the day after we would buy and sell a car. I grew up in a family of doctors and my parents wanted me to become one as well. Most of our relatives were connected to medicine in some way, too, which apparently made me absolutely obliged to follow in their footsteps. However I was still in the 9th or 10th grade when I decided that I would not enroll into a medical university and instead become an economist. Back then this choice of profession was so unpopular that I had quite a few hurdles to jump to make my wish come true. My parents’ opinion was very important to me and it wasn’t easy for me to turn my back on it. Still, some interesting books captivated me and set me firmly on my path.

"If you want to be successful, you should notice things months or years before anyone else does."

– Unless I am mistaken, these books included Rockefeller’s business history. Do you think of yourself as a Georgian Rockefeller?

– No, this never was my main goal. We don’t count our pennies day and night. What matters for us is the business being successful and profitable and this profit being honest. We want to contribute to the development of our country’s economy. As for similarities with John Davidson Rockefeller, he also started his business from scratch, went through a difficult period and became a major businessman. In the 70s and 80s of the 19th century he became the first man to become a world-class businessman. His company Standard Oil was the first company to control 70 percent of the world’s total jet fuel production. By the way, when establishing my first oil company, I named it Standard Oil – in Rockefeller’s honor.

– What does it take to control a big business? What role does intuition play?

– There exist rational and irrational factors for success. Rational ones include good education, determination, willpower and so on. And irrational factors include intuition, among other things. Every day I am visited by people who expect me to make a decision on this or that issue. Imagine a bunch of managers who have trouble making decisions and are trying to weasel their way out of every problem, with all this visible to their employees. I am not like them and I am not afraid of scrutiny, either. I can’t tell you how many of my decisions were dictated by intuition and how many by experience and knowledge, but intuition has its time to shine in all of my decisions. My definition of intuition is simple: If you want to be successful, you should notice things months or years before anyone else does.

– Nowadays, all market sectors seem to already be occupied. If you were starting a business now, what would you invest into?

– Wissol Group is an organization that creates and controls retail networks. Starting with Wissol Gas and ending with Wendy’s and Dunkin’ Donuts – no matter what they deal in, all these are retail networks. We also own Alma, an advertising company, which is a very interesting business in itself and does a fair share of our own marketing; however, 80-90 percent of work it does is for third parties. There is also the construction company Vellagio. You ne­ed a construction business to start a network, because you cannot start one without real estate. Despite receiving many offers of investing our capital into this or that field, we have always toed a simple line of sticking to the retail networks. Restaurants, supermarkets, car workshops – all these are retail networks, and if there are other business fields where such networks can prosper, we expand into them and start new projects after 2-3 years of studying them. For example, just recently we started developing Dunkin’ Donuts in Georgia. This means we have to build 35 joints for the network, which in turn will be complemented by several Wendy’s joints and Wissol gas stations. As you can see, we are going to be quite busy in the next few years and then we’ll see about future investments.

– This is probably going to be the most relevant question to our audience: Are you going to reduce prices on fuel?

– Don’t worry, we are used to questions like this one – we’ve been answering them for 15 years, after all. If I was a consumer, I’d want prices to decrease, naturally. However, we have already cheapened it ten or eleven times, reducing its price by a total of 50 tetri. Unfortunately, the overall trend at the market has changed for the worse and we will take this into account and make decisions accordingly. Actually, we are far more interested in reduction of prices than the clients are, for two reasons: lower prices increase demand for oil products and make them far less costly to import. Our imports come from the Greek company EKO, and ordering a supply ship from there isn’t cheap. However, if the price of oil decreases, the amount of resources we have to spend on importing it does the same. And the less “crutches” we need to import oil, the bigger the company’s profits become.
The overall trend towards cheapening of oil products began at the international market. The price was approximately 2.20 GEL, while now a liter of regular petrol costs 1.60. We also have non-brand gas stations that do not bear the logo of Wissol, which allows us to drop the price to 1.50 GEL. If we consider the fact that recent devaluation of the lari was caused by a variety of factors, it becomes obvious that the current price very precisely reflects the processes taking place in the country.

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