Farid Mammadov: Interest of foreigners to Azerbaijan’s non-oil industry grows14.03.2012 16:02
Recently at a meeting of the Caspian-European Integration Business Club (CEIBC) Minister of Industry and Energy of Azerbaijan Natig Aliyev, said Azerbaijan’s economy is built on oil and gas industry.
“Although we also have a growing non-oil sector, I believe that before the middle of the 21st century no alternative to the oil sector in Azerbaijan’s economy will exist,” he said. The opinion of the Minister is also confirmed by statistics showing that most of the domestic economy is still formed by the oil sector. Thus, according to the State Customs Committee of Azerbaijan on the basis of January 2012, 91.13 percent of the country’s exports were oil and petroleum products, and the share of public sector in export operations amounted to 94.86 percent, and its share in the imports was 30.38 percent.
But along with that, Azerbaijan’s non-oil sector actively develops every year.
To comment on issues of interest of international organizations, as well as local and foreign companies to the non-oil industry of our country, we asked the Director of Iteca Caspian LLC Farid Mamedov. This company is a Caucasian partner of the British Exhibition company ITE Group PLC.
Q: Recently, even the representatives of government agencies recognize that in the Azerbaijani economy there is a major shift in the direction of the oil sector. Can you, as the head of the company that organizes the country’s and region’s largest oil and gas exhibition and the exhibition of non-oil sectors of the economy, comment on the presence or, conversely, the absence of such a disparity?
A: Indeed, to date, a large part of our economy is formed by the oil and gas sector at such high oil prices. Last year they exceeded the price of 90 dollars per barrel, which is a normal situation, where the oil industry brings major revenues to the budget. But I would not say that in the economy there is bias towards the oil sector. On the contrary, thanks to the revenues that come from oil and gas industry, significant funds are invested in the development of infrastructure projects and in the non-oil sector of Azerbaijan. For example, if we look at the statistics, we see that one of the features of 2011 was the rapid growth of the non-oil sector in Azerbaijan, grown by more than 10 percent.
We see how rapidly food industry, agriculture, tourism, telecommunications and services evolve. I would like to emphasize that the exhibitions are a clear demonstration of the capacity of this sphere of the economy, or, in other words, a mirror of the economy. This thesis is confirmed by the growth of our trade by more than 37% last year, primarily due to the exhibits that affect the non-oil sector. Therefore, I believe that a shift in the trend towards the oil sector in Azerbaijan’s economy is not observed.
Q: Can we say that the backbone of the major exhibitors is formed by the same Azeri companies, or do they constantly change?
A: In terms of our regular participants, among them are some who are with us literally since the founding of these exhibitions and this is more than 15 years. Of course, in general, there are large Azeri and foreign companies that are leaders in their sectors. However, in addition to this, there are always companies that decide to participate in exhibitions, on the basis of specific marketing objectives for the current year.
It should be remembered that an exhibition as a living organism, which is in constant development, with new members involved in the exhibition events continuously, but intermittently. While some participants increase their presence in the area, others do not take the stand, but sponsor the exhibitions so as to emphasize their participation. In short, there is a backbone, as you say, but there are those who are involved depending on their marketing objectives. But the most important thing I see in recent times is that companies have begun to realize the importance of exhibitions in the presence of a marketing strategy. For companies’ management, the exhibitions gradually become an indispensable marketing tool, and it is really good.
Q: Usually, the exhibitions involve big companies that have something to offer to consumers or other business entities. How actively can the local entities of small and medium-level catch up with this process?
A: I have already pointed out that the big companies in Azerbaijan actively participate in exhibitions. However, for small and medium-sized businesses participation in the exhibition is one of the methods of competition, of course, with proper working. This is a unique opportunity to show the advantages of a neutral territory of its offer in the market.
At the exhibition all are equal and it all depends on the correct set of marketing objectives and integrity of their execution. Now a trend emerges of thoughtful and pragmatic participation in the exhibition because of particular tasks. Companies related to medium and small link business, understand it and also try to be creative and increase their participation in these events.
Q: Then I will make the issue even narrower: what kind of entrepreneurs of small and medium caliber is most active at trade shows?
A: First and foremost I would like to note the activity of small and medium companies in the food and construction industries. Here is an example. This year, such exhibitions Iteca Caspian as WorldFood Azerbaijan and BakuBuild have been performed for 18 years and I can say that over the years a tangible part of their exposure was formed by relatively small companies that know how to use the tool and use the exhibition successfully along with holdings. And often their involvement is more successful than their larger competitors.
Q: Is the activity of the European participants of your exhibitions affected by the economic difficulties in Europe? Did the global financial crisis of 2008-2009 affect the work of Iteca Caspian?
A: Of course, in connection with what is happening in the economy of Europe, where there is a real danger of default in Greece, we cannot exclude the possibility that it will affect the economy of the entire euro area. Moreover, we believe that it will be so. Many companies have reduced their advertising budgets and, in particular, it is reflected in the shows too. But the paradox is that the reduction in the advertising budget is observed mainly in the domestic markets of these countries.
Given the crisis unfolding, the companies begin to look at more prosperous markets from the economic point of view. In this context, dynamic Azerbaijan, where for several years there has been continuous growth of main economic indicators, of course, refers to one of them.
In addition, the exhibition industry in this region is active and supported by the state. Therefore, many companies from Europe want to be here to take an active part in exhibitions.
As for the exhibitions of Iteca Caspian LLC, then, as we have already noted, Azerbaijan coped very well with the difficult situation created by the global financial and economic crisis of 2008-2009.Therefore, we did not have a fall of the results, and all the exhibitions in 2011 saw significant growth.
Q: Every year you add some innovations in your exhibition program. Is there any change in the calendar of exhibitions for 2012 and if so, could you justify them?
A: In 2012 we plan to hold 21 exhibitions in Azerbaijan. Among them are our traditional exhibitions AITF, WorldFood Azerbaijan, BIHE, BakuBuild, BakuTel, Caspian Oil and Gas and others.
As you can see, today we have covered many sectors of Azerbaijan that experience dynamic growth. Our goal is to consolidate the projects and to develop quality exhibitions to reinforce the status of regional leader of Azerbaijan exhibition industry.
For new projects, we always try to respond to the situation in the market and run the projects carried out in accordance with the relevant country programs and the economic situation in general.
This year was declared by the President of Azerbaijan Ilham Aliyev a Sports Year in Azerbaijan. We have asked the Ministry of Youth and Sports of Azerbaijan to initiate the 1st Azerbaijan International Exhibition “Sports, Sports Equipment and Apparel» SportExpo within the Sports Year and the agency has apprehended our offer with interest.
The dates of SportExpo are scheduled for the end of the year, from 4 to 6 December. I hope that this exhibition will be another step in the implementation of the plans of Iteca Caspian to attract new business opportunities to Azerbaijan and develop new exhibitions.
I invite you to visit our exhibitions to be held in the Baku Expo Center.