Speech by Ilham Aliyev at the opening of tobacco factory in Sumgayit Chemical Industrial Park

Three new enterprises are starting to operate at Sumgayit Chemical Industrial Park. I greet and congratulate the teams of these enterprises on this occasion. I am sure that these enterprises will work very efficiently and make a great contribution to the country's economy.

These enterprises meet the highest standards and will significantly strengthen our industrial potential. The plants of ferroalloys and building chemical admixtures and the cigarette factory are starting to operate today. At the initial stage, more than 400 jobs have been created at these enterprises. In the future, this number will reach 700. I am told that at the current stage $35 million has been invested in the cigarette factory, $25 million in the ferroalloy plant and $3.5 million in the building materials plant. However, it has just been mentioned in the presentation that additional funds will be invested in the cigarette factory and the volume of investment will reach approximately $50 million. Investment of $100 million will be made in the ferroalloy plant. This suggests that the decision on the establishment of Sumgayit Chemical Industrial Park was correct and timely.

At the end of 2011, I signed an executive order and we embarked on the establishment of this park. The situation in this area was disastrous. The clean-up of the area from the remains of the dilapidated enterprises with rusty equipment built earlier, the improvement of the soil cover and remediation work required a lot of effort and money. After that, communication and infrastructure projects were carried out, and an area of more than 500 hectares was completely cleared and made available to the private sector. This is yet another manifestation of state support for the private sector. It shows that the partnership between the state and the private sector is organized at the highest level in Azerbaijan.

There are currently 18 residents at Sumgayit Chemical Industrial Park. Nine enterprises are in operation. Five enterprises will be launched this year and three of them are starting up today. Four more enterprises will start operating next year. So the park will have 18 enterprises meeting the highest standards.

Sumgayit Chemical Industrial Park is essentially an industrial city within the city. In the future, the boundaries of the park will expand and, of course, new residents will be accepted. After all the 18 enterprises start working at full capacity, a total of 6,000 jobs will be provided. Of course, the park is of great importance for further maintaining the rate of unemployment at a low level in Sumgayit. In total, $2.2 billion has been invested in the establishment of Sumgayit Chemical Industrial Park and the launch of the enterprises. At the next stage, this figure will reach about $3 billion. If we had not created this park and provided entrepreneurs with preferential conditions, if the state had not rendered such great support, these funds would not have been invested and jobs would not have been created. Therefore, we see a successful industrial policy in the example of Sumgayit Chemical Industrial Park, and this policy will be continued in the future.

It is no coincidence that the non-oil industry of our country grew by 10 per cent in 10 months of this year. This is an excellent indicator. Agriculture has grown by 5 per cent. Of course, Sumgayit Chemical Industrial Park accommodates industrial enterprises, but some of them, including the cigarette factory, are closely associated with agriculture. I am sure that as a result of the operation of this factory, the development of tobacco-growing in Azerbaijan will go faster. We are restoring tobacco growing. Whereas 3,000 tons of dry tobacco were picked last year, 4,500 tons have been picked so far this year, and this figure will exceed 5,000 tons. Of course, this factory will use even more of our local tobacco in the future. In other words, this gives a major boost to agriculture.

The construction of a spinning and dyeing factory is currently under way at Sumgayit Chemical Industrial Park. This will give a great impetus to the development of carpet weaving. Carpet weaving is developing today, and there are plans to set up 30 carpet factories. The key raw materials for carpet weaving are wool and silk. At present, centers of wool harvesting are being established. A great impetus has been given to cocoon breeding. The Shaki Silk Company works with large volumes and farmers receive a decent income from the production of cocoons. In other words, the development of industry and agriculture must go in parallel. They should complement and support each other, and we are seeing that. At the same time, of course, our main goal is to develop the non-oil sector, eliminate the dependence on imports and increase non-oil exports, and we are seeing that here. After the cigarette factory reaches its full capacity, it will produce 11 billion cigarettes a year. As reported today, the domestic demand is 14 billion. I am sure that this factory will completely replace imports because there is local production now and there will also be extensive export opportunities in the future. I would like the domestic demand to be at zero level, people not to smoke and avoid this bad habit. I am sure that as a result of the measures taken, including the steps taken in the legislation, we will achieve this goal. I would like the cigarette factory to fully export its products but it is not yet possible. We must provide people with high-quality local cigarettes. However, at the same time, everyone, especially the state, should try to reduce the number of smokers in Azerbaijan to the minimum, because exports bring us additional currency and extra opportunities. The products to be manufactured by the ferroalloy plant will be exported by 90 per cent, while 10 per cent will be turned into finished products after re-processing at Azerbaijani enterprises.

The development of the non-oil sector and the increase of non-oil exports are the main objectives. In 10 months of this year, our non-oil exports have increased by 12 per cent and total exports by 37 per cent. As exports grow, our economic situation improves. This has a positive effect on macroeconomic stability and the rate of the manat. It is no coincidence that macroeconomic stability in Azerbaijan is at a very good level. Inflation was only at 2.4 per cent in 10 months. The creation of these enterprises is yet another signal to local and foreign investors – come and invest in Azerbaijan. The World Bank’s recently released Doing Business report confirms Azerbaijan’s historic success – Azerbaijan is in 25th place on a global scale in terms of the business environment. Last year we were in 57th place. In other words, such an impressive leap is the logical result of our reforms, of course. Doing Business is one of the key factors for local and foreign investors to decide whether or not to invest in a country. The Doing Business report, the opening of such excellent enterprises, the overall situation in Azerbaijan, stability and development further stimulate local and foreign investors, of course. It is no coincidence that investment of $250 billion has been made in the country's economy over the past 15 years.

I want to once again congratulate you on the opening of these factories and plants. I am very delighted that we have created such a great industrial park in Sumgayit. Sumgayit is the second biggest industrial city of our country and the South Caucasus. A lot of work is being done to develop Sumgayit. Major projects are being implemented. Social projects, infrastructure projects and gasification are practically at the level of 100 per cent, drinking water is at the level of 93 per cent, roads and schools are being built and remarkable improvement work is being done. The Sumgayit boulevard has been created. It is a wonderful recreation area our people. An ASAN xidmət center, an Olympic sports center and a hospital have been commissioned. Of course, Sumgayit will successfully develop as an industrial city. I am sure that we will continue to successfully fulfil all the tasks before us.

I congratulate you once again and wish you continued success. Thank you.