TBY talks to Farid Asadov, Chairman of the Executive Board of AtaHolding, on the various sectors his holding company is active in, and the prospects for growth in the local economy.
TBY What is the background of AtaHolding, and how did it develop into such an important local corporate entity?
FARID ASADOV AtaHolding has been operational since August 2003. We initially started in the finance sector, and after a short period of time we penetrated other sectors of the economy. We took deliberately careful steps, because we are familiar with Azerbaijan’s economy, and we have a responsibility toward the development of its private sector. The holding started to expand and set up industrial, tourism, IT, and service companies. At present AtaHolding is one of the largest groups in Azerbaijan and it consists of eight subsidiaries: AtaBank, AtaInsurance, AtaLeasing, AtaTourism, AtaTechnology, Ata Industry, and Ata Sport. As we have benefited from the favorable business climate over the last eight years in Azerbaijan, the holding went on to invest in various spheres of the economy. In 2008 AtaHolding became a 49% shareholder in VTB Bank in Azerbaijan, opened by one of the largest financial groups of Russia—VTB Group. It should be noted that AtaBank and AtaInsurance are the largest financial institutions in the country. In the tourism sector, AtaTourism’s Excelsior Hotel Baku is the only 5+ star hotel in Azerbaijan. On October 18, 2011, Azerbaijan will celebrate 20 years of independence. After gaining independence, the economy required significant renewal. As a result of the far-sighted policies of the late President Heydar Aliyev, oil contracts were given a breath of life and Azerbaijan’s economy seized onto this renewed buoyancy. As a result, the oil sector gave impetus to the non-oil sector’s development and made it possible to invest in a number of various fields. AtaHolding was established as a result of these emerging needs.
To what extent is AtaHolding present in the finance sector?
Three of Ata Holding’s subsidiaries are represented in the financial sector. One is in banking, one concerns insurance, and one is a leasing company. These are AtaBank, AtaInsurance, and AtaLeasing. Successfully operating since 1993, AtaBank is one of the largest commercial banks in Azerbaijan. The main operating strategy is to develop corporate and retail banking through competitiveness and the provision of a wide spectrum of high-tech bank services. Currently there are 19 branches and four departments of AtaBank operating. AtaInsurance has been active since 2004. The sole founder of the company is AtaHolding. Today, AtaInsurance is a leading company, performing high-quality services at an international level. It provides 27 types of insurance services, among which 22 are voluntary and five compulsory. Currently, AtaInsurance cooperates with the most prestigious insuring and reinsuring companies in the world. Ata Leasing was set up in 2004 by Ata Holding, with a 64% share, and AtaBank, with a 36% share. The main purpose for creating Ata Leasing was to provide entrepreneurs participating in the rapid development of Azerbaijan’s economy with the right equipment and resources under favorable conditions. Since 2008 AtaHolding has partnered with VTB Bank. At present, the corporate clients of VTB Bank in Azerbaijan represent small, medium, and large-scale enterprises. As far as future financial projects are concerned, I would like to mention AtaLife, an insurance company that will specialize in life insurance.
Do you believe Azerbaijan has the potential to become an IT hub for the region? What would be needed to achieve this goal?
Today, technical progress, technological development, modern technologies, and achievements in the field of information communications, electronics, and the aerospace industry define the level of a country’s development and its power. In Azerbaijan there are state programs designed to develop ICT and develop the aerospace industry. The government of Azerbaijan is cooperating with leading international IT companies and an e-government project is being implemented. The private sector sets up the most modern technology enterprises, and there are new solutions based on modern scientific achievements. New special economic zones are also being established in Azerbaijan, and a well-developed IT sector is of vital importance to this. The attention paid by the government as well as the private sector to the development of IT will undoubtedly lead to Azerbaijan taking a central regional position in this field. I believe that Azerbaijani IT companies will be able to create the most modern software programs and new computer technologies, which will transform Azerbaijan into an IT exporter.
AtaHolding owns the Excelsior Hotel Baku. What sort of regulatory reforms would you like to see to encourage more investment in the tourism industry?
There have been a number of successful projects implemented by AtaHolding. Our first project was the construction of the Excelsior Hotel Baku. In Azerbaijan, 2011 has been declared the “Year of Tourism”, and there are great opportunities for the development of tourism in Azerbaijan. There are nine climatic zones in Azerbaijan out of the 11 zones existing on the planet. Azerbaijan, or the “Land of Fire”, is rich in historical monuments, sights, spas, and resorts. The state sponsors the development of infrastructure and the construction of roads and airports, which in turn helps improve this field. Today there are all the right conditions in Azerbaijan for tourists to have an enjoyable vacation. New hotels are opening every day. In 2012, Azerbaijan will host one of the most prestigious international song contests: Eurovision 2012. Visitors arriving for the event will see the attraction of our capital and the advantages of its tourist offering.
What is Ata Holding’s ongoing international strategy?
We attach great importance to the development of our international relations. AtaHolding is closely cooperating both with the head offices and affiliates of various companies around the world. For example, we have very close relations with VTB Group of Russia and AtaInsurance company co-operates with Slovenian re-insurance company Sava. The main target of AtaHolding in the field of international relations is to attract foreign investment to Azerbaijan. At the same time, AtaHolding has successfully participated in projects outside the country. Domestic growth has urged us to penetrate new markets. We need to be attentive to new markets to develop our economy as well as our company. The investments put into foreign countries will ensure our business interests, expand Azerbaijan’s international possibilities, and strengthen our international positions. Currently, the most attractive markets are those of our neighbors in the region.
What is your general outlook for Azerbaijan’s economy over the medium term?
The government has created a favorable environment for the private sector as well as for investments. In particular, the number of state programs focused on the development of the non-oil sector has led to a steady improvement in the country’s economy. The favorable credits provided by the state to SMEs led to an increase in the share of the private sector, and most importantly, Azerbaijan has started to satisfy its internal needs for consumer products. The course of economic development initiated by Heydar Aliyev, which is successfully being continued by President Ilham Aliyev, resulted in a 15% economic growth rate over the course of 2009-2010. There are large state investments in the economy as well as investment from the private sector. The private sector invested more in the non-oil sector than the oil sector over that period. Of the $15.5 billion invested in Azerbaijan’s economy in 2010, $9.3 billion went to non-oil sector investments. The development of the growth of the non-oil sector in the year 2010 continued and its real growth triumphed general growth to comprise 7.6% of all growth. The comprehensive economic policy, as well as economic reforms, will provide for the steady development of our economy in the years to come. The rate of the national currency stays very stable, the income of the population of the country will be higher than the rate of inflation, and the level of the population’s welfare will significantly improve. These sorts of tendencies give us the ground to note that we are surely going to witness future economic growth.
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