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Economical news
Bulletine Economics 

2017 August 02 ( Wednesday )  17:20:39
Print version
Русский Azərbaycan


Qatari Construction Company Established in Baku

Baku / 02.08.17 / Turan: A construction company with Qatar capital has been registered in Azerbaijan. The office has chosen the prestigious business center Port Baku Towers for the company.

According to the Ministry of Taxes, Qatar Building Company International was registered on May 18. Information on the state registration of the company was announced on August 2.

The authorized capital of the new company is set at $ 1,000. The director of the company is a citizen of Qatar, Ali Mohdtayyib Mostafavvi.

Since this year, the trade turnover between Azerbaijan and Qatar has been growing at a rapid pace. In the first half of this year, the volume of exports of goods to Qatar exceeded $ 2 million, which is 87 times higher than in the comparable period of 2016. -08D-

When Leaving, They Did Not Promise to Return

Baku / 02.08.17 / Turan: The Azerbaijani representative office of the Italian company Valvitalia S.P.A, which provides services in the field of deliveries of oilfield equipment, announced its closure. According to the Ministry of Taxes departmental newspaper Vergiler, creditors and interested persons can present claims to the office located in the business center of SAT Plaza. The local office of Valvitalia S.P.A has been operating in the country since the beginning of last year.

A little earlier, Petrowell Caspian Ltd, a subsidiary of the British petroleum service company Petrowell, announced the liquidation of its representative office in Azerbaijan. Petrowell, owned by Weatherford, specializes in the design, development, production and testing of various oil and gas equipment used in the completion of wells.

The withdrawal of foreign investors from Azerbaijan has acquired a massive nature, as evidenced by the data of the ministries. The list of companies that curtailed their activities in Azerbaijan is impressive. It includes such companies as Vamed Engineering GMBH, Vipro UK Limited, Chemonics International Inc., New Dynasty International Group Limited, Arcotrans LLP, Ivor Promotions LLP, Champion Technologies Russia & Caspian BV, the French company Technip Maritime Overseas Ltd that also closed its branches in Baku, the Italian company Maccaferri Azerbaijan LLC, and the German company DEA Deutsche Erdoel AG. In addition, British Airways Plc and Austrian Airlines announced the suspension of flights to Azerbaijan, explaining their decisions with the unprofitable flights to Baku. By the way, in the press release of DEA Deutsche Erdoel AG, "bureaucratic obstacles and corruption" is indicated as the reason for closing the office in Baku.

According to official data, 71 foreign companies and representative offices suspended their activities in Azerbaijan in 2015, and last year this figure was about 80 business structures.

The main factor that prompted international investors to leave the Azerbaijani market is the economic and financial crisis in the country, which negatively affected the country's macroeconomic and social indicators, which provoked a powerful outflow of capital from the country. According to independent research, in the current year, compared to the same period of last year, investors reduced the volume of investments in Azerbaijan by more than two times - by 51%, and compared to 2015 - more than 8 times or 88%. Thus, for the first five months of this year, business structures made investments of only $ 251 million, while in the same period last year this figure was $ 512 million, and in January-May 2015 - $ 2.1 billion.

Analyzing the investment situation in the countries, the economist Natig Jafarli notes that mass withdrawal of foreign investors from Azerbaijan is a serious signal to the government about miscalculations in the implementation of economic policy, which resulted in actual paralysis of the banking sector and a number of industries. To the chronic problems, such as corruption and monopoly, there was added a reduction in business activity after the devaluation of the manat, a decrease in the purchasing power of the population, and a decrease in the interest of foreign companies to work in Azerbaijan.

Another no less important factor is the reduction in oil prices and, in parallel, the decline in oil production from the fields. So, as more than 90% of foreign investments are invested in the oil and gas sector, the income cuts make further work in Azerbaijan unpromising.

Doctor of Economic Sciences Gubad Ibadoglu in his conversation with Turan IA drew attention to a very important point: in addition to foreign companies, Azerbaijan and local investors move their business to other countries en masse. The main reasons for the trend are a decrease in the purchasing power of people, the freezing of bank lending, notorious corruption, illegal interference and checks. All this leads to a deterioration of the investment situation in the country.

Meanwhile, as the chairman of the Center for Economic and Social Development (CESD), economist Vugar Bayramov, stated, the curtailment of the activities of foreign companies in Azerbaijan has led to difficulties in the labor market. After all, this directly affects the level of unemployment. Suffice it to say that about 600 people worked in the closed branch of the Italian company Todini, 480 of which were residents of the Salyan district. All of them were left without jobs.

"Our researches showed that the tension in the labor market in Azerbaijan is to some extent connected with the closure of many foreign companies and their representative offices. In addition, the outflow of foreign investment adversely affects the country's business reputation in the world, as the opinion is formed that the country's economy is not attractive to foreigners," the expert notes. -0-

VTB Joins Program of Social Housing Construction in Azerbaijan

Baku / 02.08.17 / Turan: VTB Bank joined the program of social housing construction in Azerbaijan, becoming the second bank after Capital Bank, which signed a cooperation agreement with the State Agency for Housing Construction (MIDA) under the President of Azerbaijan.

Earlier MIDA appealed to the authorized banks of the Azerbaijan Mortgage Fund (AMF), urging them to participate in the program of preferential mortgage for the population. The AMF includes 25 banks.

The presidential decree on the activities of the State Agency for Housing Construction (MIDA) was signed in November 2016. The decree approved the "Procedure for the acquisition by citizens on preferential terms of apartments in the possession of MIDA LLC" and the Regulations on the "Preferential Housing" system.

Since May 30, registration of electronic appeals of citizens for social housing has started in Azerbaijan. -0-

Two Companies of Accord Corporation Merged

Baku / 02.08.17 / Turan: LLC HGC Group announced on August 2 about the merger of Accord SDI Group of Companies to it. Both companies are subsidiaries of the Accord industrial and construction corporation.

LLC HGC Group is the holder of Gazakh Cement Plant of Accord Corporation. In 2016 a German company entered the capital of this company, which also operates on the Georgian market. The authorized capital of LLC HGC Group is 800 million manats, which is 10.8 times more than the paid-up share capital of the parent company - OJSC Industrial and Construction Investment Corporation Accord.

The corporation does not report anything about the Group of Companies Accord SDI LLC. The corporation includes at least 30 companies operating in Azerbaijan and beyond. The controlling block of shares belongs to Ashraf Kamilov through VIP Estate LLC (51%). The remaining 49% of shares belong to Daria Veliyev, who in 2017 was elected chairman of the Supervisory Board of Accord Corporation. -08D -

Regulatory Requirement for Slope along Width of Highways Changed

Baku / 02.08.17 / Turan: The Cabinet of Ministers has amended the rules for inspection and testing of the design, construction, repair and reception of highways. The changes concern the regulatory requirement for a slope along the width of highways.

According to the new requirements, depending on the category of roads and climatic zone, the slope along the width of the roads will be from 20 to 25 degrees. Earlier, the design of roads with a 15-degree incline was allowed.

Despite this requirement, which has been in force since 2000 (, many motor roads in Azerbaijan, mainly in settlements, are built practically without any slope, which leads to their deformation. -08D-

Sales of Cars in Company Khazar-Lada Decreased by 41.3%

Baku / 02.08.17 / Turan: In 2016, Khazar-Lada's profits from the sale of Russian-made cars amounted to about 15 million manat, and decreased by 41.3% compared to the previous year. The prime cost of sales was 8,000 manat more than revenue, the company's annual report says.

OJSC Khazar-Lada came out on profit at the expense of other operating incomes in the amount of 788 thousand manat. Taking into account operational and other costs, the company's annual profit was 500,000 manat, exactly as much as it was in 2015.

At the general meeting held in May this year, it was decided to send 20% (AZN 80,000) of net profit to pay dividends to shareholders.

JSC Khazar-Lada was established in 1996 by the transformation of the same name CJSC. The company's shareholders are 150 individuals, including Russian citizens. -08D-

SOCAR Cut Shipment of Ceyhan Oil by 4% in January-July

Baku/02.08.17/ Turan: The State Oil Company of Azerbaijan (SOCAR) shipped 9 million 667,066 tons of Azerbaijani oil from the Ceyhan oil terminal in the first seven months of 2017.

According to the press service of SOCAR, in January-July of 2016 SOCAR shipped 10 million 105,879 tons of oil from Ceyhan. So the volume of shipment decreased by 4.4% in January-July 2017.

In July, the company shipped 1 million 540,751 tons of Azerbaijani oil from the terminal in Ceyhan.

According to SOCAR, in July Brent oil was sold in the world markets at an average price of $ 48.56 per barrel (in June - $ 46.53), Urals - $ 47.92 per barrel (in June - $ 45.97 per barrel), and Grade BTC FOB Ceyhan - $ 49.34 per barrel (in June - $ 47.51 per barrel).

* SOCAR shipped 16 million 784,975 tons of Azeri oil from the Ceyhan oil terminal in 2016. -12B

Azerenergy to Build New TPP Sangachal-2

Baku/02.08.17/ Turan: Azerenergy OJSC plans to build a new thermoelectric power plant in the Sangachal settlement of the Garadagh district of Baku.

It should be noted that in Sangachal there is already one modular thermoelectric power plant with a capacity of 300 MW. The projected station Sangachal-2 will become more powerful - 385 MW.

Azerenergy has already started preparing a report on the assessment of the impact of this project on the surrounding and socio-economic environment. Then this report will be submitted to the international financial institutions for project lending.

According to Azerenergy, the construction of the Sangachal-2 power station will allow the growing needs of the capital and the Absheron peninsula for electric power to be provided in fuller scope.

During the construction of the station, it is planned to use the most up-to-date technological equipment of the Finnish company Wartsila.

The station will operate exclusively on natural gas. In addition, the cooling system of the new station will be a closed type, which is efficient from an economic point of view. The new station will employ up to 100 people. -12B-

SOCAR Increased Oil Supplies through Supsa Terminal by 6%

Baku/02.08.17/ Turan: SOCAR exported 1 million 579,673 tons of Azerbaijani oil transported via the Baku-Supsa pipeline in January-July 2017 from the port of Supsa.

As reported in the press service of SOCAR, for seven months of 2016, 1 million 491,744 tons of oil was exported via Supsa. Thus, in January-July, 2017 SOCAR oil shipment from the port of Supsa increased by 5.9%.

In July 2017 the company shipped 264,489 tons of oil from Supsa.

In 2016, SOCAR exported 2 million 383,854 tons of oil from Supsa.

* The Baku-Supsa oil pipeline was put into operation on April 17, 1999. The length of the pipeline is 837 km, and the diameter is 530 mm. The pipeline currently has a capacity of 5 million tons of oil per year. It supplies oil extracted from the Chirag field (operator - BP). -12B

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