IN MANY PIES

Azerbaijan 2014 | ECONOMY | INTERVIEW

TBY talks to Riyad Huseynov, Chairman of the Supervisory Board of Synergy Group, on operations in Azerbaijan, the subsidiaries, and growth opportunities.

Riyad Huseynov
BIOGRAPHY
Riyad Huseynov was born in 1982 and graduated from the Azerbaijan State Economic University’s Finance and Credit Department. Prior to joining Synergy Group as Chairman of the Supervisory Board in 2012, he worked in the Ministry of Taxes. In 2006, he became Assistant to the Minister of Taxes and was later promoted to the position of Head of the International Relations Department.

Given the breadth of Synergy Group's operations, how would you evaluate its overall performance in 2013? What has been the increase in its turnover, number of projects, and which sectors of activity stood out?

In 2013, Synergy Group completed several large-scale projects with a strong focus on the social and economic development of the outlying regions of Azerbaijan. Overall, 2013 was productive for our businesses in construction, manufacturing, hotel management, agriculture, and ICT. A number of grand openings in Shamkir city, such as Excelsior Hotel Shamkir, Shamkir City Park, and WestGate Shopping Avenue, provide strong evidence of Synergy's diversified development strategy. By launching successful new projects, the number of subsidiaries within our Group has doubled to 28. This was accompanied by a two fold increase in staff.

How have the developments associated with the Year of ICT in 2013 benefited Synergy Group's ICT operations?

One of our strategic goals was to establish an innovative IT company, which took the form of Cybernet, today a success story in the ICT sector. The e-Government Information System, Automated Tax Information System (AVIS), and Mobile Signature (ASAN imza), are just some examples of the company's achievements. Offering a number of reliable solutions to banks, public institutions, large organizations, educational institutions, and business communities, we continue to play a creative and innovative role in the ICT sector in Azerbaijan. Moreover, Cybernet is a flagship company of Azerbaijan, which shares its best practice in tax administration with other CIS countries. In 2013, we successfully implemented an ICT tax administration project at the State Tax Committee of the Republic of Tajikistan. Expanding its services abroad, Cybernet is also negotiating with European countries like Estonia and Slovenia on the implementation of similar projects. In 2013, the Year of ICT in Azerbaijan, Cybernet was awarded the title of “IT Company of the Year" for its innovative e-government solutions.

What are the main growth opportunities in the construction sector in 2014-2015?

High-quality contemporary construction projects require world-class professional expertise. In 2010, Synergy Group partnered with leading regional contractor Renaissance Construction to establish Renaissance Construction Azerbaijan LLC. The target is nothing less than to become Azerbaijan's leading construction contractor with highly skilled construction, design, and engineering teams. In 2014, we intend to complete Galaalti Hotel & Spa construction in Shabran, which is situated about 120 kilometers to the north of Baku. Located on the Siyazan and Shabran mountains, the venue will feature high-class wellness, hospitality, and recreation centers where guests will enjoy breathtaking Caspian Sea views from all areas and rooms of the hotel. The entertainment center boasts facilities like an infinity pool, outdoor sport activities, and therapeutic activities with spa waters and Galaalti spring, which is as good as Truskavets in Ukraine.

“ The regions of Azerbaijan have enormous potential for development in the non-oil sector, especially tourism. "

Elsewhere, a new building for the Inland Revenue, which is quite challenging from an engineering perspective, is shortly due for completion. Our construction materials production factory AAC is expanding through a huge project involving a two fold increase in production capacity to be completed this year. In addition, audits conducted by TÜV Austria, the leading service provider of integrated safety, quality, and technical resource management in Central Europe, confirmed that AAC operates in compliance with international requirements. Being the main player for almost all megaprojects in our country, we know that AAC will continue to meet the rising demands of the local construction market by increasing its production capacity. Currently, we are designing a fiber cement plant, which will be the first such facility in Azerbaijan. The plant would also be the first to manufacture construction products such as roofing materials, facing panels, and sidings made from fiber cement. Located in the Garadagh district, it is likely to come online in mid-2015.

What projects does Synergy Group have in the agricultural sector?

We are involved in the development and modernization of agricultural production in Azerbaijan. We are also channeling strategic investment into the restoration of the country's winemaking traditions. In 2010, Synergy Group modernized its winery in Siyazan region. I am delighted to note that in 2013 we reaped the first harvest from our vineyard in the Hamya Valley. Known for its finest and most authentic Azerbaijani wine brands, Caspian Coast Winery & Vineyards also presented a new brand of cognac, the “City of Winds." Consequently, we expanded our portfolio to 21 wines and four cognac varieties. We export our products to the Russian Federation. In its agribusiness business, Synergy Group also produces Dutch roses. Located in Shamkir region, Azagro grows the finest ranges of world-renowned rose types, such as Avalanche, Fiorenza, Red Naomi, and Spray Rose. As of March 2013, the company started distribution to flower stores all over the country under the brand name SBuket. It is worth noting that Azagro is also expanding its business abroad. We have already entered the Georgian rose market and, according to an initial agreement with Kazakhstan and Russia, the first shipments have already been sent.

Synergy Group oversees hospitality properties in numerous provinces of Azerbaijan. What is the Group's contribution to regional development through these operations, as far as creating employment and attracting tourism is concerned?

We at Synergy Group are inspired by the development of large-scale tourist infrastructure projects in Azerbaijan. By acting locally, we aim to contribute to decreasing the gap between the regions and the capital Baku, where all major industries are concentrated. The regions of Azerbaijan have enormous potential for development in the non-oil sector, especially tourism. To create new job opportunities and improve the quality of life in the regions by developing the tourism industry, we invest in the construction of hotels and recreation destinations. One of our remarkable accomplishments in 2013 was Excelsior Hotel Shamkir, which was inaugurated by the President during his last visit to Shamkir in September. We also own and successfully operate Caspian Sea Resort Hotel in Nabran, known as the “choice of good taste." Another major project we are currently implementing is the construction of Galaalti Hotel & Spa in Shabran, which will be managed by Synergy Group upon completion. Along with that, we are already operating Chinar Hotel & Spa in Naftalan.

In 2013, President Ilham Aliyev was voted in for a third term of office. What do you expect this new era to bring to the economy in general, and the business sector in particular?

Due to the strategic vision of President of Azerbaijan, a favorable investment climate has been created in the country, which bolsters investment inflows into the economy. As the architect of Azerbaijan 2020: Outlook for the Future, President Aliyev encourages the development of non-oil sectors and promotes opportunities for small-, medium-, and large-scale businesses. Those policies ensure sustainable economic growth and ensure greater prosperity for future generations. We consider Synergy Group to be one of the most successful entities to be enjoying a favorable investment climate. On behalf of the Group, I had the opportunity to participate in various international business forums held both locally and internationally. During meetings with international partners, we have observed the growing attractiveness of Azerbaijan's economy for investors and their active search for local business partners. Various efforts made over recent years have played a decisive role in shaping a positive image of Azerbaijan, and thus further expanding bilateral relations with foreign countries. I strongly believe that President Ilham Aliyev's election for a third-term will give him an opportunity to successfully realize his economic policies that foster a sustainable and favorable investment climate in Azerbaijan.

For all its accomplishments, Synergy Group is relatively new in the Azerbaijani business environment. What are your goals for the Group's fourth anniversary this year?

The President has declared 2014 the Year of Industry. Synergy Group considers the industrial sector as one of its strategic investment priorities, and so far we have made substantial investments in this area. We have launched the construction of the fiber-cement plant in Azerbaijan in cooperation with Austrian Maschinenfabrik Liezen und Gießerei Ges.m.b.H. (MFL) based on bilateral agreement signed at the Austrian-Azerbaijan Economic Forum held in Vienna on May 13, 2013. Furthermore, we are planning to open Zayam Technologies Park, featuring a plant specialized in the manufacturing and production of metal structures used in the construction of factories, buildings, and bridges. Synergy Group is also set to expand its activities in the non-oil economy. At the moment, we are conducting geological studies in the limestone bed located in Gazakh region. To discover the rich potential of the regions, another subsidiary of ours, Ecolime, will be engaged in the production of slaked and burnt lime. It is worth pointing out that the construction of a plant adjacent to the natural resource itself is a sound strategic move from a logistical perspective. The plant will be launched in 2015. Our slogan is “For a Sustainable Future," and thus, we aim for excellence, value teamwork, and apply innovative approaches to our business activities, ensuring the sustainable development of our country.