ECONOMY > AZERBAIJAN
Wasting less to gain more What does it mean for a company to invest in advisory services? The Baku-based www.enpi-info.eu Sama furniture plant has transformed its business and established a sound management system with clear duties and job descriptions, ad hoc departments, transport and delivery planning and much more. Thanks to the Business Advisory Services (BAS), a programme offered by the European Bank for Reconstruction and Development (EBRD) and funded by the European Union through its Small and Medium Enterprises (SME) Flagship Initiative for the Eastern Partnership countries, Sama has obtained a quality certificate and increased its production efficiency. A journalist from the EU Neighbourhood Info Centre has the story. Text by Shahin Abbasov Pictures by AFP © EU Neighbourhood INFO CENTRE
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BAKU – “We are really happy,” smiles Javad Salimov, director of the Baku-based furni- N Internal premises of the SAMA LTD ture plant of Sama Ltd Company. He is talking about the consulting support and busi- furniture manufacturer ness expertise he has received through the Business Advisory Services (BAS) project, in Khirdalan City in Azebaijan. financed by the European Bank for Reconstruction and Development (EBRD). Thanks to the support provided by the EBRD, he says the company’s operations have considerably improved, the working efficiency has increased and the company’s financial turnover has grown by at least 50%. Supporting small and medium-sized enterprises through the provision of business expertise is an important part of the EBRD’s activity in transition countries, including Azerbaijan. Micro, small and medium-sized businesses are the backbone of a dynamic market economy. By connecting companies to local EU Neighbourhood Info Centre consultancy expertise that can help transform their businesses, BAS Feature no. 107 projects can support the establishment of a sound management within enterprises. “In over ten years, more than 700 companies have benefited from BAS projects,” says Lala Rzayeva, EBRD Business Advisory Services National Programme Manager in Azerbaijan. “Business Advisory Services (BAS) helps companies to work with consultants across
This is a series of features on projects funded by the EU Regional Programme, prepared by journalists and photographers on the ground or the EU Neighbourhood Info Centre. © 2013 EU Neighbourhood Info Centre
EU Neighbourhood Info Centre – Feature no. 107
“The consultancy expertise we received has allowed us to improve the organisation of labour within the plant, reducing the physical load of workers but enabling a higher production volume”
Wasting less to gain more
a wide range of areas,” she adds, “including market analysis and planning, marketing and sales research, searching for business partners, quality control, energy efficiency and beyond.” “We work mainly with private and local enterprises with up to 250 employees, already established in the market but needing support for business development,” explains BAS Project Specialist Emin Guluzade. “In this case the enterprise should be able to contribute 25-75% of the project’s total costs, while the remainder is paid by a BAS grant. The maximum EBRD grant to any enterprise is not more than €10,000.” One of the programme’s many success stories is a recent project with Sama Ltd Company, which has been at the heart of Azerbaijan’s furniture market for 15 years. The company designs, produces and sells home and office furniture.
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N The company’s financial turnover has grown by at least 50%.
“Now we all have clear duties and a job description” At the end of 2011, Sama Ltd approved its strategic plan for 2012. To move forwards in compliance with its plan, the company needed to introduce an Integrated Management System to meet international standards for quality management and occupational health and safety. The EBRD connected Sama Ltd with Zygon Caspian Consulting LLC, a local company with experience in a wide range of industries, to provide the necessary expertise. Training was a crucial part of the project. “Zygon conducted three series of trainings for the managers of the Sama plant, each ten days long,” says plant director Javad Salimov. “There, we received very useful management knowledge and skills. Then I shared this knowledge with my colleagues at the plant. The trainers also visited our plant to train employees from different departments,” he adds. “Before, the activities of different managers often overlapped. Now, each of us has clear duties and a job description,” says head of Sama’s logistics department, Melek Babayeva: “Each manager implements his duties and this work is well coordinated.” Moreover, the logistics department itself was created on the advice of consultants. “In the past,” explains Babayeva, “the process of receiving orders and sending the finished product to clients was largely spontaneous, which often caused uneven loads on production and transportation – there were problems with the lack of cars and timely delivery. Now, the orders are sorted by geographical areas and the time required to manufacture the furniture. The production load is therefore distributed evenly, transport is used with maximum efficiency, and costs are minimised.”
Protective gears, first aid kits, emergencies training N SAMA LTD furniture manufacturer Logistics Manager Malak Babayeva.
Measures to improve occupational health and safety system were another important part of the consultancy support. Employees, who previously had worn no protective gear, were provided with their own uniform and helmets. Those who work on the machines were equipped with special headsets to shield them from high noise levels. The personnel were also trained on safety measures for loading and unloading cargo. Industrial areas were equipped with first-aid kits and the fire safety system was upgraded. Fire boards were installed, in four areas of the production site and were linked with the water tank. Employees whose job placed them close to the fire boards were specially trained to use firefighting equipment. “The consultancy expertise we received has allowed us to improve the organisation of labour within the plant, reducing the physical load of workers but enabling a higher production volume,” continues Salimov. “Now we all have at least one day off a week.”
“Before, the activities of different managers often overlapped. Now, each of us has clear duties and a job description”
Wasting less to gain more
EU Neighbourhood Info Centre – Feature no. 107
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Advisory services to 700 projects
N Thanks to international quality certificates, the company can start looking at improving foreign markets.
Every year, about 60 companies in Azerbaijan receive support through a BAS project. BAS’ work is donor funded and €2.2 million have been allocated to Azerbaijan to support BAS projects by the EU, Canada, Austria, China and the EBRD Shareholder Special Fund and EBRD Transition Countries Fund. A further €1.9 million has been raised through client contributions to projects. “We’ve worked with more than 100 local consulting companies to provide the advisory services for our 700 projects,” reports Lala Rzayeva, BAS National Program Manager for Azerbaijan. Seventy-two per cent of the companies who have worked with BAS increased their financial turnover after a project. Fifty-two per cent improved their productivity, 55 per cent increased their number of employees, and 14 per cent successfully obtained financing from local and international banks.
The Eastern Partnership
http://enpi-info.eu/maineast.php?id=506&id_type=2 The Eastern Partnership (EaP) completes the EU’s foreign policy towards Eastern Europe and Southern Caucasus countries as a specific Eastern dimension of the European Neighbourhood Policy (ENP). Launched in May 2009 at the Prague Summit, the EaP fosters the necessary conditions to accelerate political association and further economic integration between the European Union and Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. The EaP objectives are achieved through the bilateral track, which aims to deepen the relations between the EU and each partner country through the conclusion of bilateral agreements such as the Association Agreement and the Deep and Comprehensive Free Trade Area, and the multilateral track, which advances the EaP objectives through the four policy (thematic) platforms, namely: N democracy, good governance and stability
N economic integration and convergence with EU sectoral policies N energy security
N contacts between people
Business Advisory Service European Bank for Reconstruction and Development www.ebrd.com/pages/workingwithus/sbs/how/bas.shtml
BAS enables micro, small and medium-sized enterprises (MSMEs) to access a diverse range of consulting services by facilitating projects with local consultants on a cost sharing basis. Direct assistance to enhance enterprise performance is combined with systemic market development activities to create sustainable and commercially viable infrastructures of MSME support in the Bank’s countries of operations. Find out more EBRD small business support in Azerbaijan www.ebrd.com/pages/workingwithus/sbs/where/azerbaijan.shtml The Eastern Partnership http://enpi-info.eu/maineast.php?id=506&id_type=2 EU Neighbourhood Info Centre Thematic portal: ECONOMY www.enpi-info.eu/themeeast.php?subject=4
EU Neighbourhood Info Centre An ENPI project The EU Neighbourhood Info Centre is an EU-funded Regional Communication project highlighting the partnership between the EU and Neighbouring countries. The project is managed by Action Global Communications.
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