Azerbaijan’s economic successes have laid a solid ground for the development of the non-oil sector, industry in particular. More than 230 industrial enterprises have been established over the last year declared as the Year of Industry in Azerbaijan. Large-scale conferences and forums held in the country, which bring together representatives of governments, private sector and general public from different countries, contribute to the development of diversified economy. On March 11, 2015, Baku is hosting the third International Caspian Energy Forum - 2015 under support of the Ministry of Energy of the Republic of Azerbaijan, SOCAR and the Caspian European Club. Akkord Corporation, which celebrates its 10th anniversary in March 2015 and notably contributes to the development of the non-oil sector and industry in particular, is one of the sponsors of the Caspian Energy Forum and lends a full support to the event.
“The Caspian Energy Forum, which has become a traditional event for the Caspian-Black Sea region, revealed new opportunities for our Corporation, local companies and the country as a whole”, Goksel Aybek, General Director of Akkord Industry Construction Investment Corporation OJSC, said in the interview with Caspian Energy on the threshold of the forum. In his interview, Goksel Aybek shared his view of the Corporation’s development, achievements and long-term plans, spoke about new and ongoing projects.
Caspian Energy (CE): Mr. Aybek, looking back at the Corporation’s achievements of the last year, how do you assess them? What progress has been made during the Year of Industry as declared by President of Azerbaijan Ilham Aliyev? What are the Corporation’s new priorities for 2015?
Goksel Aybek, General Director, Akkord Industry Construction Investment Corporation OJSC: The development of industry is one of the key priorities of the current economic policy in terms of improvement of competitiveness and economic structure.
President of Azerbaijan Ilham Aliyev declared the year 2014 as the Year of Industry and endorsed the State Programme for the Development of Industry in the Republic of Azerbaijan for 2015-2020. All this has become an important ‘push’ factor for diversification of the non-oil sector, fostered industrial potential of districts and boosted the creation of opportunities that accelerate development of innovations-driven industry. Besides, Akkord Industry Construction Investment Corporation OJSC has also made a decision to improve its operation according to the requirements imposed by these documents and programmes. In particular, in order to ensure efficient operation of the Corporation-run production facilities, in late 2013 the Company approved the programme focusing on optimization and reorganization of the institutional and management structure. The first step in this regard was to reorganize the Gazakh Cement Plant built by Akkord Industry Construction Investment Corporation OJSC into a separate entity. Since 2014, it has been operating as a limited liability company, Gazakh Cement Plant LLC. In 2014, other Corporation-run production divisions underwent similar changes. As a result, such newly established companies as Akkord Concrete LLC, Akkord Marble-Granite LLC, Akkord Prefab LLC, Akkord Steel Construction Company LLC, Akkord Asphalt LLC and Deutsche Facade Technologies LLC run as separate entities. In early 2015, Akkord Corporation established Akkord Textile LLC in Agstafa region and Akkord Bricks LLC, which consolidated two brickyards located in Siyazan city and Mushfiq settlement in Baku.
According to its business plan, Akkord Corporation as an industry-leading manufacturer and supplier of construction materials will continue producing cement, concrete and fibre reinforced concrete, precast concrete structures, asphalt, marble and granite, steel structures, roofing materials, gravel, sand, bricks and others with a notable increase in supplies to the Azerbaijan market in addition to satisfying the needs of own projects. This will be possible due to 38 manufacturing and processing plants the Corporation owns and operates across the country. Accordingly, the production facilities in the regions of the country enable the Corporation to make its contribution to the ongoing State Programme for the Development of Industry in the Republic of Azerbaijan for 2015-2020 approved by President Ilham Aliyev.
CE: Could you please provide more comprehensive information about work of the mentioned manufacturing enterprises?
Goksel Aybek: Being not only a construction company but also a production and investment business, the Corporation stays committed to investing heavily in production and processing of construction materials. It should be noted that commissioning the Gazakh Cement Plant is a part of the ongoing State Program on Social and Economic Development of Regions of the Republic of Azerbaijan as it plays an important role in the socio-economic development of Gazakh region and the country as a whole. Besides meeting the domestic demand, the Corporation seeks to expand production capacity and enter the regional market as a manufacturer of high-quality cement. Currently, the Gazakh Cement Plant already manufacturers four different sorts of cement under the brand name ‘Akkord Cement’. It is noteworthy that in addition to CEM I 42.5 R, CEM II/A-P 42.5 R, CEM II/B-P 32.5 R, CEM IV/B-P 32.5 N cement brands, the Gazakh Cement Plant’s portfolio also includes sulphate resistant cement grade PPS 400 meeting the latest standards.
The Corporation has commissioned a modern high-performance asphalt plant erected in Balakhany settlement. The production capacity of this plant is 240 tonnes per hour, whereas the total annual production capacity of the five Corporation-owned asphalt plants now exceeds 1.6 million tonnes. In addition to traditional black asphalt, the Corporation started producing the most in-demand red asphalt.
We have constructed 9 concrete plants to cover the entire territory of Azerbaijan. All plants are equipped with concrete pumps, concrete mixers; the products meet international standards.
The production capacity of Akkord Concrete LLC is 1 million 200 thousand cubic metres of concrete per year.
The operation of Akkord Prefab LLC in Zigh settlement helped to fix all problems with production of reinforced concrete products. Its production capacity is 54,000 cubic meters of different products per year.
We manufacture marble and granite products at Akkord Marble-Granite LLC located very close to Lokbatan settlement. It is the largest plant in the Caucasus. Its production capacity is roughly 20,000 square metres per month.
Our other company - Akkord Steel Construction Company LLC with production facilities in Mingachevir, Khyrdalan and Balakhany enables us to manufacture products from steel structures used in construction, industrial sector, everyday life and other spheres. In 2013, we launched a new manufacturing site to produce Finish roof coatings and accessories to them at the Mingachevir plant. The plant has the total production capacity of 6,000 tonnes per year. All plants are equipped with European-made brand-new equipment.
The Corporation-run textile and brick production facilities, which have been recently reorganized into Akkord Textile LLC and Akkord Bricks LLC, are also expanding their market share as per approved business plans and the growing market demand.
Through developing complementary production branches and the construction sector, the Corporation is building an integrated sustainable growth business model. This year we will continue to follow and develop this strategy, which requires investment in all sectors we are already involved in. In our future operations, we intend to be guided on the State Program for the Development of Industry in the Republic of Azerbaijan for 2015-2020 years. By investing heavily in industry and production and using brand-new technologies and know-how, Akkord Corporation has been contributing notably to the development of the domestic industrial sector and is to adhere to this strategy.
CE: Azerbaijan and Turkey signed the contract to construct TANAP gas pipeline to transport Azerbaijan gas to Europe, while at the end of the last year the Corporation - the only Azerbaijani company - signed a contract to construct a section of the TANAP gas pipeline. What works will the Corporation perform for the project?
Goksel Aybek: The progress of the industrial sector, which accounts for 40% in global energy consumption, drives development of resource-based sectors of economy on the one hand, and industry-oriented services on the other.
The strategy of reforms, initiated by the country’s leadership to focus on development of the non-oil sector, has produced significant positive results within a short time mainly for companies aimed at integration into international markets on the basis of a new national model of economic development of Azerbaijan. This strategy also reflected in the recent success of Akkord Corporation. The internationally recognized brand, which Akkord Corporation has created after several years of hard work, allows the company contributing to projects that will have a big impact on the global energy market. So, according to the results of the tender for construction of the TANAP gas pipeline announced by TANAP Doğalqaz İletim A.Ş., Akkord Corporation jointly with Turkish Yüksel İnşaat A.Ş. and Italian SICIM S.p.A. became one of its winners. Akkord Corporation, inspired by a new strategy implemented under support of the government, became the only Azerbaijani company among 15 international bidders which passed through the prequalification process and selection of contractors for implementation of energy projects of international significance envisaging transportation of natural gas from Azerbaijani field Shah Deniz to Europe across Turkey.
The agreement was signed in Ankara on December 23 between the operator company TANAP Doğalqaz İletim A.Ş, the management team of SOCAR and companies forming the consortium.
This agreement stipulates construction of a 450km long section by Sicim-Yüksel-Akkord consortium, located between 375th and 825th km (Erzurum-Askala-Sivas-Yildizeli) of the 1337km long section of the pipeline laid from the Georgian border to Eskisehir. 56-inch pipes with the wall thickness from 19.45mm up to 28.01mm will be used during the pipeline construction. According to the project, Akkord Corporation is responsible for building 1384 crossings, including 422 crossings across the river (15 of them are big ones), 14 main road and railway passages, 14 block valve stations, pipe cleaners and one shock-resistant facility. 87 points will be built in order to perform regular hydrostatic testing on the gas pipeline.
The implementation of the TANAP project will predetermine a new global dimension for the development of Akkord Corporation for years to come.
CE: On the threshold of the European games in Baku, the Corporation has commissioned large road junctions on one of the main transport arteries of the capital – Ziya Bunyadov Avenue. What progress the Corporation has made in implementation of infrastructure projects? Does the Corporation plan to develop tunnel construction projects?
Goksel Aybek: We deem completion of tunnel road junction on Ziya Bunyadov Avenue in Baku as one of our significant achievements in this area. On December 23, 2014, President of Azerbaijan Ilham Aliyev attended the opening ceremony of the six-lane tunnel road junction built by Akkord Corporation at the intersection of Ziya Bunyadov Avenue with Boyuk Shor Street. This work was carried out as part of the project on traffic regulation and road infrastructure improvement in the city of Baku.
In addition to the construction of the tunnel road junction, Akkord Corporation performed works on laying asphalt on the roads running along the tunnel, installation of lighting poles, construction of a roundabout above the covered section of the tunnel and reconstruction of a road running to Baksol settlement. We are currently completing operations on the road junction project at Galaba square (Baku city).
On February 7, 2015, we successfully finalised construction of a main water pipeline near the Koroglu subway, using brand-new tunnel boring machines in challenging geological conditions.
In 2014, we built and commissioned the Olympic sports complex in Goygol, water-sewage projects in Agstafa and Tovuz regions as well as we completed works on water pipeline laying to the city of Sabirabad.
We established a special company, Akkord Hydro Construction Company LLC, to deal with water and sewerage projects. The new company has all required material and technical resources and qualified staff to implement these projects.
CE: Closely integrated with global leaders, the Corporation has successfully proved itself as a reliable partner on the foreign markets. What markets are of particular interest to the Corporation, and where has it managed to strengthen its positions so far? What large-scale projects implemented by the Corporation are especially noteworthy?
Goksel Aybek: Implementation of big infrastructure projects is one of the main lines of Akkord Corporation’s activity. The Company is currently holding strong positions not only in Azerbaijan but also in several foreign markets including Turkey, Georgia, Kazakhstan, Uzbekistan and Ukraine. In Germany, we have our branch office.
Akkord Corporation has gained a big success in implementing projects financed by the top financial organizations including the European Bank for Reconstruction and Development, Asian Development Bank and Islamic Bank of Development. In recent years, the Corporation also successfully cooperates with well-known construction and production companies such as Bouygues (France), Freyssinet (France), Todini (Italy), Salini (Italy), Condotte (Italy), Herrenknecht (Germany), Sinoma (China), Papenburg (Germany) and others.
As for international infrastructure projects, it must be noted that Azerbaijani-Italian JV “Akkord-Todini-Impregilo” won a tender for construction of the road within the framework of the CAREC III corridor project “Shymkent-Tashkent road”. Akkord Corporation is also involved in reconstruction of the international transit corridor “West Europe-West China” as a general contractor. The portfolio of completed projects includes the construction of a section of Kutaisi bypass road in Georgia, Kiev-Chop highway in Ukraine and a number of other major infrastructure projects.
In general, the Corporation has implemented tens of large-sized infrastructure projects of high complexity across the whole Caspian-Black sea region.
CE: We know that in 2015 Akkord Corporation celebrates its 10th anniversary. We congratulate you on this remarkable date. How would you assess the successes the Company gained for 10 years?
Goksel Aybek: Thank you very much for your congratulations. As you know, in March 2015 the Corporation is celebrating its 10th anniversary. Over these years, the Corporation has been employing up to 20,000 people depending on the number of implemented projects. We have succeeded in forming a professional team of engineers, budget officers, geodesists, project managers and other specialists.
During this 10-year period, Akkord Corporation has managed to become an internationally recognized brand, which allows contributing to the development of industry, energy, construction, infrastructure and other sectors of economy. Over these years, the Corporation has completed projects worth more than $2.5 billion in total and developed into a transnational corporation representing not only itself but also Azerbaijan in the international arena.
