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