Publish dateSaturday 10 March 2012 - 14:13
Story Code : 3922

Azerbaijan ready to become external investor

Ellada Khankishiyeva, Trend Analytical Centre Head
Azerbaijan ready to become external investor

The achievement of the financial stability allowed Azerbaijan to become a serious participant in investment projects abroad.
Azerbaijan invested $۶ billion in foreign countries from ۲۰۰۳ to ۲۰۱۱. Azerbaijani Minister of Economic Development Shahin Mustafayev said that Azerbaijan has become a country exporting investments. The accelerated pace of developing Azerbaijan\'s economy allowed to enhance the financial opportunities of the country and to create favorable conditions for making investments in foreign countries.

At present, Azerbaijan actively invests in the economy of such countries as Turkey, Georgia, Russia and Ukraine. The participation in the joint major energy and infrastructure projects, transport, agriculture and tourism is the priority of the country\'s foreign investment policy. Thus, Azerbaijan allocated big loans for road construction to Serbia and Georgia. Azerbaijan allocated a loan worth $ ۳۰۰ million to Belarus.

Azerbaijani companies headed by SOCAR invested $۴.۵ billion in Turkey\'s economy. SOCAR Turkey Enerji bought a ۵۱-percent stake of Petkim chemical concern, offering it $۲.۰۴ million. This is the largest investment project. The investments in Star oil refinery in Izmir are rapidly increasing. About $ ۱۰۰ million have been already spent for this project.

Azerbaijani large investments are planned to be made in Turkish economy within the construction of a new port in the Turkish city of Izmir and an electric power station. The cost of these projects will hit about $ ۱ billion.

At present, about ۹۶۷ Turkish companies were registered in Azerbaijan and ۸۴۴ Azerbaijani companies in Turkey. Last year, about ۱۹۰ companies with the Azerbaijani capital were created in Turkey. At present, Azerbaijan ranks third on the number of the companies in Turkey.

Over the last five years, Azerbaijani businessmen created ۲۷۲ companies in Georgia and investments in Georgia\'s economy exceed $ ۸۰۰ million. In particular, SOCAR invested more than $ ۷۰۰ million in Georgia\'s economy. SOCAR\'s subsidiary company - Socar Georgia Petroleum was the largest taxpayer in Georgia in ۲۰۱۰ and ۲۰۱۱. It became its largest investor by investing $۳۲ million in the country in ۲۰۱۱.

Besides expanding the network of filling stations, the company invested in two major projects - the construction of multifunctional complex "SOCAR - Goodwill Auto Lounge" on the highway Batumi-Tbilisi and construction of the centers "SOCAR - McDonald\'s" in Batumi and Marneuli.

SOCAR has invested more than $ ۸۵ million in Ukraine\'s economy since ۲۰۰۹. A number of SOCAR petrol stations were opened in different regions of the country. It is planned to increase their number to ۷۰ this year. A number of major joint projects with Azerbaijani companies - the construction of gas pipelines, oil pipelines, railways are being implemented in the country.
As we can see, at present, SOCAR conducts an active investment expansion and successfully develops markets in Georgia, Turkey, Ukraine, Romania, Switzerland. It implements major projects associated with the construction of oil refineries, construction and acquisition of petrol stations, etc. The markets of Central Asia will be another direction of SOCAR\'s activity in the near future. In particular, the agreement was launched to start constructing the refinery with a capacity of ۲ million tons per year in Kyrgyzstan.
Azerbaijan is also greatly interested in intensifying the investment activity of private domestic companies abroad. This is clearly ensured in Russia, particularly in the Northern Caucasus.

At present, a number of Azerbaijani companies operate in the North Caucasus. So, Azersun Holding built a tea plant in Stavropol. Holding plans to open a cannery. The products of this holding are sold through a distribution network in various cities of the North Caucasus, including Makhachkala, Derbent, Nalchik.

Karat Holding created a subsidiary "Agrolider" in Stavropol. A land plot was acquired. The grain facility is under construction. ANT Inshaat company completes constructing the academic building, designed for ۱,۰۰۰ students, Derbent banch of the Azerbaijan State Economic University and the Lyceum for ۳۰۰ places and the gymnasium. The company is also actively involved in building schools, hospitals, homes and other facilities in the city of Derbent.

Caspian Service Company builds residential buildings in Yessentuki and Stavropol through its subsidiary "Stroyservis". Karvan L company participated in designing and providing the plant producing coatings for roofs with equipment. Moreover, it plans to expand its activity in the construction sector in Dagestan. Matanat A company intends to build a plant producing paints in the city of Sochi. The company is also interested in acquiring gypsum deposits in the Karachai-Cherkess Autonomous Republic and manufacturing the products.

At present, it is important for Azerbaijan to expand the geography of foreign investments. Entering the foreign markets with its investments is a key issue for the development of the Azerbaijani business. When there is a shortage of funds in the world, Azerbaijani companies must adhere to the principle of "being at the right time at the right place."

Moreover, Azerbaijani business circles have capital. This allows them to find new niches in foreign countries\' markets. But even if we maintain the current pace with which Azerbaijan is seeking to conduct the investment expansion abroad, perhaps, the WB forecast that Azerbaijan will become a net foreign investor in the medium term prospect will be fulfilled.
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