New priority: What will creation of processing facilities give our country? –COMMENT

14 February, 12:10 Share on social media:

The diversification of the economy, the development of the non-oil sector in this background and the full realization of the export potential are among the main priorities of the economic policy pursued in our country.

In the period when the competition on foreign markets deepens, ready products are more profitable than raw products, at the same time, the strategic importance of food security, Azerbaijan faces a new challenge: it is the necessity of the creation of processing plants and export of ready products to foreign markets.  

At the conference dedicated to the results of the first year of the execution of the “State Program on the Socio-Economic Developments of regions of Azerbaijan Republic in 2019-2023”, President Ilham Aliyev drew special attention to the strategic significance of this field and noted that the preference will be given to the non-oil sector on industrial production: “Last year, this sector increased by more than 14%; it must grow this year as well. I would like to touch upon several issues here. I consider that more attention should be paid to the processing industry. State institutions should also pay attention to this field. Concessional loans should also be directed to this sphere. Entrepreneurs should also pay more attention to this field. We should do everything consistently. Of course, we supply fruit and vegetables, export them. This kind of export also grows, it is very good. However, processed products have greater value. A value chain must be created. Therefore, I consider that the processing sector in agriculture should be paid special attention. I can give several examples. Now, viticulture is dynamically developing in our country. Thousands-ha grape areas laid in recent years yield results now. Last year alone, the grape supply grew by 34, 000 tons. It creates winemaking, and now, we export our wine products to a number of countries. As well as tobacco cultivation. A new cigarette plant has been created in Sumgayit in the field of tobacco-growing; Baku Cigarette Plant has been reconstructed. We have to fully meet the domestic needs and will meet them and export. Earlier, the countries not supplying tobacco were selling cigarettes to us.

This is nonsense. We have both tobacco and conditions. Therefore, this is the reflection of the development of the processing industry. As well as sericulture, because a chain is also created here – from a silkworm breeder to Shaki Silk Plant. Hundreds of people have already been provided with jobs there. Thousands of people have been provided with jobs in villages as well; they obtain great revenues within 30-40 days and without working very hard.”

According to the Economy Ministry, compared to 2018, the export of agriculture processing enterprises increased overall by 14% in 2019. Within the framework of the plans in connection with the creation of 51 agroparks and local farming enterprises in 33 regions playing a great role in the development of the agrarian sector of the country, works were completed in 16 agroparks or farming enterprises.  

Stimulating steps in the agrarian field, subsidization of agriculture and its exemption from taxes, provision of technique and fertilizers under concessional conditions, promotion of investments and export, steps aimed at the promotion of Azerbaijani goods in various countries of the world and other state support mechanisms promote the development of the processing industry. We should also mention the share of the processing industry in the 2-time increase of general tax revenues from the non-oil sector of regions compared to 2005.

The diversification of the processing industry is the priority in 2020. To achieve this goal successfully, it is planned to deepen the production and processing of goods taking into consideration the specification of regions.

The states expects the diversification of the processing industry, full utilization of resources and export of ready products from entrepreneurs and at the same time, takes encouraging measures.

For instance, there is also potential in the field of cotton-growing.

President Ilham Aliyev: “Cotton-growing makes the processing industry necessary. There is the 46% growth in cotton-growing. The export was 158 mln USD last year. Nevertheless, we can process only 50% of our cotton in our country. What do we need for that? New cotton yarn plants, then, textile plants, later, ready product plants. This chain is connected to each other; for this reason, entrepreneurs should pay attention to this field, and state institutions should give entrepreneurs a direction. Thus, the development of light industry will be ensured, jobs will be created, we will manufacture ready goods, we will not import ready products. It is clear that they are connected with each other. Money will stay here, in our country.”  

AIong with products, it is also desirable to export various products made from vegetables to foreign markets in the field of horticulture, and entrepreneurs should be interested in the establishment of processing industry enterprises in this sphere. President Ilham Aliyev: “The processing industry is very low in the field of horticulture. We collect vegetables, consume and export them. It is good, but there must be processing. For instance, last year, the export in horticulture was 243 mln USD. 190 mln USD of this were tomato export, and the tomato export grew by 7%. However, if there are enough tomato paste factories, it can be sold at a higher price.

It is a product demanded on all markets. Entrepreneurs should pay attention to it. I regularly say these figures so that local entrepreneurs can fill the gaps. Nonetheless, I observe some inaction. Therefore, state institutions should impact entrepreneurs; they should also take initiatives. If we take into account that the state has created all the conditions and holds all exhibitions, takes entrepreneurs abroad. Now, we have increased the wine export. At the cost of what? At the cost of the state efforts, because the participation in international exhibitions has been ensured via the state and at the cost of the state; contracts have been signed there.”

Thus, the expansion of the production chain will be accompanied by the reduction of the import volume, enlargement of export goods and strengthening of the “Made in Azerbaijan” brand at the cost of the processing enterprises created. In turn, it means that the currency spent on import will remain within the country, and additional revenues will be obtained.


Vusal Mammadov