Ilham%20aliyev

Azerbaijan Export and Investment Promotion Foundation

A ZERBAIJAN: BUSINESS AND INVESTMENT OPPORTUNITIES

Azerbaijan Export and Investment Promotion Foundation

S N A P S H O T

Establishment:

28 May 1918

Independence:

18 October 1991

Area:

86.6 thsd km2

Population:

9.48 million

OfHicial Language:

Azerbaijani

Government system: Presidential Republic Membership in:

UN, Council of

Europe, OSCE, OIC Highlights: 1st democratic republic in the Islamic world 1st Opera in the Islamic world Women voting rights in 1918 (Italy -­‐ 1946; Switzerland -­‐ 1971; France – 1944) Currency:

Manat: 1 AZN = 0.95 USD

Azerbaijan Export and Investment Promotion Foundation

B U S I N E S S C L I M AT E

Developed legal framework Top reformer of business regulations worldwide according to the WB Doing Business reports 2009 and 2015

Easy business start-up One-­‐stop-­‐shop system for business registration requiring 2 business days for start-­‐up

Competitive tax regime E-­‐tax system. Corporate tax – 20%, VAT – 18%, SimpliVied tax – 4% or 2%. Tax holidays for agriculture, industrial and technological parks

Government e-services 454 e-­‐services by state authorities

Azerbaijan Export and Investment Promotion Foundation

I N V E S T M E N T C L I M AT E

Welcoming policy National regime for foreign investors with no restrictions for any type of foreign investment and no local content requirement

Guarantees for investors Guarantees against adverse changes in the legislation, nationalisation and requisition. No restrictions for repatriation of proVits

Legal framework Sophisticated domestic legislation in addition to the international mechanisms for protection and promotion of foreign investment (New York and Washington Conventions, 46 BITs and 45 DTTs)

Institutional support mechanisms AZPROMO, Azerbaijan Investment Company, One-­‐stop-­‐shops at industrial and technology parks

Azerbaijan Export and Investment Promotion Foundation

ECONOMY IN BRIEF

GROWTH IN LAST 10 YEARS GROSS DOMESTIC PRODUCT

FOREIGN DIRECT INVESTMENT

FOREIGN TRADE

2014

75,2 bln. USD

8,0 bln. USD

31,0 bln. USD

2010

52,9 bln. USD

3,3 bln. USD

28,0 bln. USD

2005

12,2 bln. USD

4,2 bln. USD

8,5 bln. USD

Source: State Statistics Committee of Azerbaijan, Central Bank of Azerbaijan

Azerbaijan Export and Investment Promotion Foundation

C O M P ET I T I V E N E S S

Global Competitiveness Report 2014-2015 1st among CIS countries (7 times running, 40th among 140 countries

Major indicators:

InVlation – 1st Macroeconomic environment – 10th Government budget balance – 16th General government debt – 14th Labour market efViciency – 30rd Capacity for innovation – 43rd Technological readiness – 56th

The report assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources.

Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-­‐term levels of economic prosperity.

E C O N O M I C D I V E R S I F I C AT I O N

Azerbaijan Export and Investment Promotion Foundation

Structure of GDP

DiversiHication of economy and

43

development of non-­‐oil sectors are 59

key strategic priority

32 68

of economic policy

34 66

48 52

57 43

40

41

2003 2004 2005 2006 2007 2008

non-­‐oil Non-­‐oil GDP, growth %

14

14.9 13.6

4 2

2009 2010

oil

47

52

2011 2012

57

61

2013 2014

5.7 5.3

11.9 10

10 6

49

15.9

12 8

51

48

51

Foreign investments in non-­‐oil sectors, bln. USD

18 16

49

60

53

39

11.4 9.4 8.3

7.9

4.6 3.5

9.7 7

0.3 0.5 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

4.8

3

2.4

3.2

0

4.5

0.8

1.3

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Azerbaijan Export and Investment Promotion Foundation

Output Structure of Non-oil Industry January – June 2015

Non-­‐oil Processing Industry 69.3%

Sector'Contributions'to'Non/Oil'Output'

Food$and$beverages$ 37.4%$

Mining 1.6%

Water, Waste management 3%

Construc)on* 6.4%$

Electric Energy, Gas and Steam 26.1%

Metallurgy$ 4.5%$

Electricals$ 1.4%$

Other$ 11.8%$

Chemicals$ 5.6%$ Machinery$and$ plants$ 2.2%$

Azerbaijan Export and Investment Promo6on Founda6on

Agriculture in Azerbaijan: inputs for food processing

Production of main crops (thousands, tonnes) 3500 3000 2500 Cereals

2000

Potatoes

1500

Vegetables

1000

Fruits and berries 500

0 2007

2008

2009

2010

2011

2012

Azerbaijan Export and Investment Promo6on Founda6on

Production of main animal products (thousands, tonnes)

2012 2011

Wool Eggs, mln.

Milk Meat

2010

2009 2008 0

200

400

600

800

1000

1200

1400

1600

1800

GOVERNMENT SUPPORT

Tax exemptions (Profits Tax, VAT, Property and Income Tax), except Land Tax

Import VAT and Customs Duty exemptions for equipment and machinery

Extremely generous subsidies, discounts and other privileges to producers – up to 70%

Soft loans and other financing – NESF USD940,000,000 (to end 2014)

AGRICULTURE IN NUMBERS

57.7%

Agricultural lands constitute 57.7% of Azerbaijan’s land area

Agriculture engages 38% of the employed population

Rural inhabitants account for 46% of the total population

99.7% of agricultural produce generated in private sector Average growth of 5%-6% over the last decade

AGRICULTURE IN NUMBERS Current share in total GDP: around 6% Investments up x17 over the past decade Capital investments: approx. USD 826 000 000

EXPORTS

Main Export Products:

- canned fruits and vegetables - fresh fruits and vegetables - fruit juice - raw cotton - tobacco

Main Export Destinations: EU, Turkey, Russia, Ukraine‌ .

Azerbaijan Export and Investment Promo6on Founda6on

FDI Opporunities in Agriculture

The main segments of the food processing industry in Azerbaijan: I Meat processing I Production of dairy products I Canning of fruits and vegetables I Beverages Food products are high on the Government’s agenda for import substitution and export orientation Azerbaijan is a traditional supplier of agriculture and food products to CIS market of around 300 mln. population

Azerbaijan Export and Investment Promo6on Founda6on

Opportunities for FDI in Agriculture

I Production of fresh fruits and vegetables I Pedigree cattle farms I Poultry-farming I Seed farming I Floriculture I Horticulture I Apiculture I Silkworm breeding I Medicinal herbs

Azerbaijan Export and Investment Promo6on Founda6on

Opportunities: Food Processing

I Production of tomato paste I Production of fruit juices

I Production of meat and dairy products I Production of plant and animal oils I Honey production I Production of mineral and natural water I Potato processing (production of potato chips, potato flour etc) I Bakery and Confectionery production I Canned and frozen fruits and vegetables, dried fruit production I Nuts processing and Production of hazel chocolate oil I Production of baby food I Production of olives and olive products I Wine production and other alcoholic drinks I Production of mayonnaise, ketchup and other sauces

Azerbaijan Export and Investment Promo6on Founda6on

Opportunities: Infrastructure

I Cold storages I Greenhouses I Grain storehouses I Slaughterhouses I Logistics centers I Agricultural equipment I Packaging and labeling facilities I Agro-industry services I Veterinary and phytosanitary services

Azerbaijan Investment Company Supporting Non-Oil Sector Development

PORTFOLIO DISTRIBUTION 5.40% 11.00% 3.30%

Sub - Funds - 5.4% Agriculture - 11% Food Processing - 3.3%

80.30%

Industry - 80.3%

DAVACHI BROILER OJSC STAKEHOLDER STRUCTURE:

PURPOSE: Renovation and capacity expansion of one of the largest poultry production farms in Azerbaijan PROJECT VALUE: $14,475,000 (part of over $60mln. venture) LAUNCH: 2010 STATUS: Current

37,31%

25%

37,69%

AIC - 25% Local Private Investors - 37,69% Baku Investment Company - 37,31%

DAVACHI BROILER OJSC

Territory:

135 ha

Payroll:

800

Capacity:

13,000 tonnes/year

AZERTOKHUM LLC PURPOSE: Construction of the first modern seed processing plant and granary, and cultivation of highly reproductive, elite and super-elite seeds using advanced technologies

19,78% 17,46%

PROJECT VALUE: $24,030,000 LAUNCH: 2010 STATUS: Current

STAKEHOLDER STRUCTURE: AIC - 17,46% Local Private Investors - 62,76%

62,76%

Azeragro LLC - 19,78%

AZERTOKHUM LLC

Drying Capacity:

108 tonnes/day

Cleaning Capacity:

216 tonnes/day

Packing Capacity:

216 tonnes/day

Territory:

70,000 sqm

Storage Capacity:

60,000 tonnes

Production Capacity:

86,400 tonnes/year

AGSTAFA AGROSERVICE LLC PURPOSE: Establishment of an advanced agrotechnical services facility to help improve productivity and efficient use of the soil

STAKEHOLDER STRUCTURE: AIC - 25%

PROJECT VALUE: $5,934,000 25%

LAUNCH: 2012 STATUS: Exited 2014 75%

RAO Global Group GmbH - 75%

AGSTAFA AGROSERVICE LLC

CLAAS KGaA mbH

Fligl Agrartechnik

HORSCH Maschinen GmbH

Grimme Landmaschinenfabrik GmbH & Co. KG

RAUCH Landmaschinenfabrik GmbH

Schmotzer Agrartechnic GmbH

Azerbaijan Export and Investment Promotion Foundation Baku Business Center, Neftchilar ave. 44, Baku AZ1000 Azerbaijan www.azpromo.az Tel.: (+99412) 598 01 47/48; Fax: (+99412) 598 01 52 office@azpromo.az

Azerbaijan Investment Company 37 Khojali Ave. Baku, Azerbaijan AZ1025 TEL: (+99412) 488 8010 FAX: (+99412) 488 8012 info@aic.az www.aic.az