Agriculture
Azerbaijan was the first former Soviet country to undertake dramatic reforms of its agricultural system after the collapse of the Soviet collective system, including instituting a policy allowing private ownership of farmland.
Outstanding potential for production of fruits, vegetables, wine and more
Irshad Aliyev, Minister of Agriculture and Food
While the shift to a free-market approach has been understandably difficult for Azerbaijan, faced with restructuring the sector to make the country more self-sufficient and to meet market imperatives, the private sector now accounts for 99 percent of Azerbaijan’s agricultural production. Agriculture employs 35 percent of Azerbaijan’s working population and is res-ponsible for 20 percent of the country’s GDP.
As Irshad Aliyev, Minister of Agriculture and Food, explains, “All the land now belongs to the local people and all state machinery and property has been allocated to the farmers. All food-processing companies and service enterprises producing agricultural chemicals have also been privatized,” he says.
A primary source of agricultural products for the former Soviet Union, Azerbaijan supplied around 600,000 tons of fruits and vegetables per year to the Soviet Union’s All Union fund. The country also supplied a major share of the Soviet Union’s wine and cotton; around 80,000 hectares of land were developed as vineyards in Azerbaijan during the Soviet era. In fact, the Soviet Union invested heavily in stimulating the production of vegetables and fruits, wine and cotton in Azerbaijan to the exclusion of other agricultural products that also flourish there, including grain, in order to maintain the country’s dependence on the Soviet Union. Raising animals for meat, for example, was restricted in Azerbaijan in Soviet times.
Today, Azerbaijan is in the process of developing its full agricultural potential. The country has long been known for its rich farmlands and varied climatic zones; of the 11 climatic zones in the world, nine are found in Azerbaijan, so that an exceptionally wide variety of crops can be grown, including oranges, passion fruit, grapes for wine production, all types of vegetables, tea and tobacco, in addition to the production of dairy products, meats, eggs, wool, raw silk, cotton, grain (in the 1970s and 1980s, Azerbaijan produced around 1 million tons of grain per year), and much more.
Key areas for the production of agricultural products include the Lankaran region near the Iranian border, known for its vegetables, tea and rice, as well as Guba, Khachmaz, and Masalli, all top sources of vegetables, and Shaki, known for its rice.
The minister points out that among the problems the sector is facing are a lack of well developed infrastructure, conservation systems for land and water, disease protection for crops and livestock, and the occupation by Armenia of a significant portion of the country’s prime agricultural land. In spite of these challenges, Azerbaijan has made remarkable progress in its agriculture sector, with production rising each year. “What we need now is investment, technology and expertise in Azerbaijan,” Minister Aliyev says.
Value-added processing and packaging are other agricultural activities with enormous growth potential. As
Minister Aliyev says, “There is no doubt that Azerbaijan produces some of the best fruit and vegetables in the world, and with a suitable modern facility, it would be easily possible to, for example, grow fruit in Azerbaijan, make it into a juice concentrate, package it and then export it throughout the former Soviet Union, to Europe or even to the United States.”
Other promising investment opportunities in the agriculture sector include viticulture and winemaking and the production of grain, tea, tobacco, meat and poultry. The Minister welcomes American investors to Azerbaijan and is more than willing to speak directly to anyone interested in opportunities in the agriculture sector. Investors will find a wealth of natural resources and a supportive government.
Food & Beverage
Aqua Vita
“We welcome closer American business ties.”
Dr. Fuad Mekhtiyev, President
By the end of the 1990s, with a more positive and stable business environment emerging in Azerbaijan, Dr. Fuad Mekhtiyev thought the time was right to create a high quality beverage and food company- “Aqua Vita”, to supply the local market, with an eye towards future exports.
The company’s flagship product “Aqua Vita” water, is recognized as the highest quality brand in the country, and has already achieved a valid market share. “Our spring water comes from the Khudat region from the northern part of Azerbaijan, and its quality is tested every four hours for purity and taste,” notes Dr. Mekhtiyev. “The Management System of the company has been assessed and certified as meeting the requirements of ISO 9001:2000 by SGS group. We are the only local water company with such a distinction.” In addition to water, the company produces 40 other food and drink products in its modern facilities.
With ISO certification, the company will focus more on the potential export market and expanding
operations within the country. This is in line with the Azerbaijan government policy to grow the economy and increase employment. “Our most interesting expansion will be in juice production and building a fruit processing plant in the southern part of Azerbaijan”, says Dr. Mekhtiyev, pointing out the company already uses some of the most high tech and efficient bottling equipment available. “Initially, the main market will be Russia, though we are also very interested in the United States, Canada and the European Union,” he continues. General Director of the Company Ms. Gulnara Gasanova believes that “the success formula of the company is professional staff and quality products.”
“Aqua Vita” values its relationships with American political and business organizations in Azerbaijan. Dr. Mekhtiyev is passionate about development opportunities in the country, and urges investors and businesses from the United States to come and see for themselves. “You’ll be surprised when you come here,” says Dr. Mekhtiyev. “It’s a safe and good place to do business.”
Azersun Holding
“The potential returns are huge.”
Abdolbari Goozal, President
Azersun Holding, founded in 1994 as a tea-packaging plant, has steadily diversified its operations and today has become a leader in the local economy, having evolved into a dynamic group of companies active in distribution, finance and investment services, trade, construction and packaging materials.
Abdolbari Goozal, President and founder, has had extensive experience in the local market, having worked with his father concerning trading activities in the region beginning in the 1960s. Very confident about his country’s future, Goozal has ensured that Azersun employs the highest possible quality standards to guarantee long-term growth. As he points out, “Azersun is one of the few companies in the country to have achieved the ISO certification for quality.”
The group continues to move into new areas. Azersun is currently constructing a major sugar-processing plant and also plans to invest in animal feeds, an activity in which Goozal sees particularly strong growth potential. The group also has business interests in Georgia and oil-related activities in Dubai.
Thanks to his outstanding local knowledge, strong network and proven success, Goozal has positioned Azersun as the ideal partner for United States companies wishing to move into the high-potential Azerbaijan market. Goozal is also seeking to broaden his group’s distribution network and says, “Naturally, any potential distributor in the United States is more than welcome to open discussions with us.”
Azersun Holding employs 1,500 people, with another 1,000 employed as sub-contractors. Goozal believes that his loyal staff is one of the keys to Azersun’s success, and he has invested extensively in staff training.
Urging United States investors to take a look at Azerbaijan, Goozal says, “The infrastructure, well-educated people, mild climate and a safe and stable economy all add up to fantastic investment possibilities. With a long-term and ethical approach to business, the potential returns are huge.”
