PARK LIFE

Azerbaijan 2015 | INDUSTRY & MINING | INTERVIEW

TBY talks to Nazim Talibov, Acting Director of Sumgait Chemical Industrial Park (SCIP), on the non-oil sector, the fostering of entrepreneurship, and incentives offered to resident companies.

Nazim Talibov,
BIOGRAPHY
Nazim Talibov graduated from Azerbaijan State Oil Academy and Azerbaijan State Economic University. In 2003, he worked for Caspian Group Construction as General Director and, in 2008, he joined the Ministry of Economy and Industry (previous named the Ministry of Economic Development). In addition to this, he assumed the position of Deputy Head of the Finance and Maintenance Department, Head of State for Investment Policy and Programs Sector of State Department, and Head of Monitoring of the State Investment Project Sector of the State Investment Department. He has also been Acting Director of SCIP since 2013.

Industrial parks play a significant role in the growth of non-oil sector of the country and the successful implementation of industrialization policy. What are your plans for the development of industrial parks?

The main line of the socio-economic development strategy that has been successfully implemented by President HE Ilham Aliyev is economic diversification and non-oil sector growth. One of the important steps taken in this field is the building of modern industry and stimulating innovative production. Today, there are three industrial parks (Sumgait Chemical Industrial Park, Mingachevir Industrial Park, and Balakhani Industrial Park) and two high technology parks (Pirallahi High Technologies Park, Mingachevir High Technologies Park). SCIP is an administrative organization of two of these industrial parks. SCIP was established by Presidential Decree in December 2011 in order to successfully implement the strategy for economic diversification. The main purpose of SCIP's establishment is to ensure the sustainable development of the non-oil sector, to develop competitive industrial production based on innovative high technology, and support entrepreneurship in this area. In 2013, the foundation of SCIP was laid with the participation of the President. Taking into consideration the prospects and interests expressed to the industrial park the territory of the SCIP, which owned 167.76 ha in the initial stage was extended up to 295.62 ha. With 10,000 people expected to be employed, the industrial park is supposed to house 35-40 production parcels based there using innovative and up-to-date technology. Measures on organization, management, and promotion of SCIP, as well as the attraction of foreign investors are being taken. As a governing organ of SCIP, the Ministry of Economy and Industry contributes to the activities carried out in this field. It is commonly known that most (nearly 35-40%) of any investment into an industrial project is spent for the building of infrastructure network. SCIP will provide its residents with a technical infrastructure network in the latest style and based on the system of direct connection (plug & play). Mingachevir Industrial Park was established by the Presidential Decree dated February, 2015 in Mingachevir city. The area of the Park is 14.8 ha. The main purpose of Mingachevir Industrial Park's establishment is to ensure the sustainable development of the non-oil sector, to develop competitive industrial production based on innovative high technology, development of the regions of Azerbaijan, and support entrepreneurship in this area.

One of the main goals of SCIP is to support entrepreneurial activity in the field of innovation and technology. How does this demonstrate its value in practice and what benefits do you have as a result?

The Steel Pipe Factory, Hydroengineering Equipment Factory, PE Products Factory, and Metal Construction Plant of Azertexnolayn are operating here. Between 2017 and 2018, SOCAR Polymer's polypropylene and high-density polyethylene factories will start operations. Another resident of SCIP, AzerFloat, will construct a Sheet Glass Making Plant on float technology in the industrial park. The design of the new entity, its provision with modern equipment, and advanced technologies in this field will be ensured by Germany's HORN Glass Industries AG, who have 125 years of experience in the field of glass melting technology. According to the MoU signed between SCIP and the US-company Southwest NanoTechnologies (SWeNT), the manufacturability of carbon nano-tubes will be investigated. All the above-mentioned projects will in turn provide conditions for the introduction of new and innovative technologies in Azerbaijan. Another facade and roof coating production line of Azerbaijan Fibro Cement, which is based on Austrian technology and meets modern requirements, will be commissioned on the site of SCIP.

Certain success has been achieved in attracting investments to SCIP. What are your expectations for this area?

Although only a short time has passed since the establishment of SCIP, there are now four residents engaged in production of pipes of various diameters and special-purpose polyethylene pipes of different diameters, hydraulic equipment, polypropylene (PP), high density polyethylene (HDPE), and the production of different types of glass plates. A number of well-known companies in the chemical industry are interested in investing in SCIP, which in turn lays the groundwork for the future development of the Park. More than 20 potential investment proposals have been received from Canada, Germany, Japan, France, Italy, and Turkey-based companies, and they have expressed their desire to become residents of SCIP. The projects mostly provide for packaging, construction, agricultural chemistry, pharmaceuticals, household chemicals, glass production, electronics, automobile, and intermediate chemical products, as well as the production of basic polymers.

Many industrial parks offer discounts and bundled services. Does SCIP consider this kind of practice?

SCIP offers the most attractive incentives portfolio in the region for investment projects. Thus, the residents of SCIP are exempt from property, land, and income taxes, while techniques, technological equipment and devices imported to the SCIP are exempt from VAT for the period of seven years. At the same time, a plot of land is leased for the long term in exchange for minimal payments. The expansion of incentives portfolio is under consideration. In addition, the industrial park's operator offers residents a wide range of services. All the services, including data collection, marketing research and analysis, responding to investors requests, the organization of various events, the acquisition of licenses and permits, and support for the selection of local partners and representatives, as well as consulting, training, and other services will be offered free of charge to SCIP residents.