TBY talks to Michael Gerlich, CEO and Chairman of the Executive Board at Synergy Group, on the group’s wide subsidiary portfolio and expectations for the future.
TBY How does the name of the company highlight its motivation and operations?
MICHAEL GERLICH With the rapid development of Azerbaijan into a modern economy and a leading economic hub in the region, our shareholders realized that the time had come for the generation of a new business group. This dynamic and strong company would be led by young, highly qualified, and experienced staff, motivated to observe international standards and core principles. This was what our shareholders had in mind when they created the idea of Synergy Group. This new group would combine local and international experience to be the perfect partner for developing businesses. Synergy Group got its name for a good reason. The key ingredient for positive business development is the combined strength of units, departments, companies, and partners. In our daily work we promote synergies in our own structure and with the best partners in the world. Our name is our slogan.
How has your portfolio of companies and services developed over the years?
Even though we are only two years old, Synergy Group has already developed a large and strong portfolio. We have invested in every sector of the economy to ensure sustainable development into the future. We are now active in the industrial, construction, hospitality, agriculture, ICT, finance, and education sectors.
How has the agribusiness sector developed? Is there potential in the viticulture sector?
Agriculture is a very important sector. Azerbaijan is one of the few lucky countries boasting very good conditions for agriculture, a very favorable tax regime, and distinction for its excellent fruits and vegetables. Nevertheless, the standards for agricultural products have to be raised and food processing must be developed, because many agribusinesses are not efficient. Synergy Group companies aim to be an example of an efficient modern agribusiness. Although Azerbaijan has a long tradition of wine making, much of its viticulture was destroyed in the Soviet era. However, Azerbaijani wine is of high quality, and the Caspian Coast Winery competes with the best brands in the international wine market.
What role does the construction materials sector play in expanding the industrial base?
Many construction materials are imported into the region, although the demand in the construction sector is large and the cost of imports is high. The import of such materials results in higher construction costs. As Azerbaijan’s economy is developing further and further, and the ongoing urbanization process gains speed, the demand for high-quality construction materials is increasing as well. In the near future, we will see more investment in local production facilities.
What should be done to improve the tourism sector? Do you foresee the hosting of the Eurovision Song Contest having an impact on the hospitality and tourism industry?
The tourism sector can contribute to the economic development of Azerbaijan. Very often, people focus on international tourism and forget about local or regional tourism. Concerning local tourism, the country has already heavily invested in the development of infrastructure, hotels, and attractions in regional areas. In terms of international tourism, Azerbaijan was a virtually unknown country for most of its history. Over the past few years, Azerbaijan has become internationally visible due to its excellent athletic performance and the amazing development of the city of Baku. The Eurovision Song Contest will attract more tourism and positively influence the development of the sector.
One of Synergy Group’s aims is to build the company’s presence not only nationally, but also regionally and internationally. What opportunities do you see for Synergy Group outside of Azerbaijan?
We are already working with international partners in Azerbaijan as well as outside of the country. The positive synergy we have with our partners is beneficial in Azerbaijan and internationally. We operate in the global market, and we have to think and act globally. With our international team, partners, and companies, we do not define geographical limits. Our experiences and contacts make us a strong partner in the region, Europe, and Central Asia. Furthermore, some of our companies and investment projects have been focused solely on foreign markets.
What challenges does Azerbaijan have to overcome to become more attractive for FDI?
Over the past few years, Azerbaijan has improved its legislation and regulations considerably. International investments are safe, and not limited or restricted by government regulations. However, Azerbaijan competes for international investment. A free economic zone and further strengthening of the regulatory reforms for businesses would make Azerbaijan a more attractive investment destination for various industrial investors.
What is your outlook for the Azerbaijani economy, and what does this signal for the future of Synergy Group?
Azerbaijan is still one of the fastest-growing economies in the world. The ongoing efforts of the President to make Azerbaijan one of the most attractive places in the world to do business and live is supported by huge government investment into all sectors of the economy. I strongly believe that Azerbaijan will be an economic hub between East and West. More and more international companies will come to Azerbaijan, and combined local and international business experience is needed. Synergy is vital, and that is how we can help. We were established to focus on and participate in the shaping of this future economy.
© The Business Year