Caspian Energy (CE): Mr.Nuri, Veyseloğlu Group of Companies is a branched company engaged in production of confectionary products. What success has been achieved at the local market?
Ilgar Nuri, Adviser to the President for Finance and Strategic Development of Veyseloğlu Group of Companies: Veyseloğlu trade and distributing company, which started operating in 1994 as a wholesale sales center, imported food products at first. It was mainly confectionary products solely from Turkey. With the lapse of time the number of countries, where the company imported from, has increased. Basically, they were CIS, Europe, India, Korea and other countries.
Developing year by year and creating a branched trade network within a short period time, equipped with modern technologies meeting high standards, Veyseloğlu distributing company has become a modern trade company with a high service level delivered at all sales centers.
Nowadays Veyseloğlu is importing food sector products from 200 factories of the world and arranging their sale in Azerbaijan. At the same time we are purchasing products of local producers and arranging their sale as well.
Actually, it is very difficult for entrepreneurs to organize both production and sale of products. In this regard, now local entrepreneurs are most of all in need of arranging the sale of their products on the local market. Our company lends them support at this stage, distributing their products at the market. In general, over 2,500 employees are at present working for Veyseloğlu Group of Companies.
‘Ulduz’ chocolate factory was established in 2001. The main line of activity of the factory is the production of confectionary products.
The start of the operation of the chocolate factory gave a strong impetus to the development of the industry of confectionery and food products in the economy of our republic.
Now ‘Ulduz’ factory is producing a broad assortment of confectionary products. Noteworthy among them are familiar brands ‘Khoncha’, ‘Tango’ and others which gained a market niche owing to high quality. At present the factory is operating three chocolate production lines and one caramels production line. The factory has managed to lower prices for caramel and chocolate products by 25% since September and February 1 2016 respectively. It has been the first step taken by the national brands in present hard realities of the local market.
CE: President Ilham Aliyev has assigned the business a task to establish production of export-oriented products. To what extent are the products sold successfully at external markets? Do you plan to increase the capacity of the factory?
Ilgar Nuri: Following the order of President Ilham Aliyev, we intend to increase investments into the economy and expand export of ready products.
Having gained our niche in the local market, we have already arranged some export to foreign markets as well. They are mainly CIS, Baltic and Near East states. At present we are considering possibilities to expand the geography of export of products. Therefore, we have signed new contracts to increase production capacities. New production lines will be purchased from Europe. The contracts have been signed, which tells about increase of the volume of investments into the Azerbaijani economy. In general, over 10mln manats were invested into the factory. This sum includes purchase and assembling of the equipment, construction of new production sections, purchase of raw material for production. It is our contribution into the economy of Azerbaijan.
Now the production capacity of the factory totals 1,300 tons of products per month. After the launch of new production lines, we will be able to increase the diversity of products and bring the production capacity up to 3,000 tons per month. Thus, we will substitute imported products with local ones and increase out export potential. It in turn also means an opening of new and in the meantime permanent working places in the country.
CE: What problems do you face while exporting Azerbaijani products?
Ilgar Nuri: Entrepreneurs felt comfortable with recent orders given by the head of state of Azerbaijan in this field, which gave an incentive for investments and export. Our country is not big which makes it impossible for production to compete with products of large world brands. Export is exactly the missing link which makes it possible to ensure profitability of production.
We have been involved in the confectionary industry for over 15 years and competing both domestically and internationally with world producers. We often face different difficulties. World brands have been dispersed around us – in Russia, Turkey, EU countries. Therefore, we need a support in foreign countries. However, discounts for promotion of export of confectionary products have not been reflected in the rules applied on exported goods. We are seriously competing with large world brands, we continue developing, but any kind of support is an incentive for us, increases our power, while preferential funds return back to the national economy.
CE: Branched supermarket networks are operating within the Group. What is the difference between them and which niches do they target?
Ilgar Nuri: The country has recently focused on development of local production and agriculture. It is of big importance not only to ensure production but also deliver products to consumers. One of the goals of opening supermarket chains is to build partnership with local producers, farmers and provide broad presentation of their products on the shelves of these supermarkets.
At present the Group includes Araz, Spar and Oba supermarket chains. Each new supermarket opening within our networks means creation of new permanent working places.
Araz network, established in 2011, now holds the leading positions in the market in terms of the quantity of supermarkets – over 50 supermarkets are providing high quality services to our citizens. In the meantime, we offer favorable prices at the market. To reach this goal we maintain permanent contact with producers and suppliers whom we find favorable for the market.
We are also representing the Dutch supermarket chain SPAR in the Azerbaijani market, which operates stores in 41 countries of the world. We opened the first SPAR supermarket two years ago and have increased it to 4 units by now. It is the European brand that we are broadly introducing in Azerbaijan, including the European quality of the global network service. Such concepts as high quality, high service level and favorable prices have top priority.
I also would like to note that Veyseloğlu Group of Companies has recently opened an Oba market chain. The major mission is to provide consumers favorable products for affordable prices. As I have mentioned, we are working actively with local producers and farmers in order to reach this goal.
Three networks imply three different formats. Araz and SPAR are supermarkets offering a broad range of products while Oba offers a small range of products meant for meeting daily needs of citizens.
CE: Which other areas does Veyseloğlu Group of Companies cover?
Ilgar Nuri: Sirab mineral water plant is our partner company. This brand enjoyed wide popularity as early as the Soviet Union owing to its quality and mineral composition. We bought the plant in 2004 and reconstructed it thoroughly. New equipment was purchased. We have managed to restore the popularity of the brand. A plan of development has been worked out. Products are being exported.
I would like to note that businesses of the Group of Companies were one of the first to pass ISO and HACCP standardization in the field of food industry. A specialized lab equipped with modern technology checks the quality of products with participation of high-skilled specialists.
Our company is heading along the path of permanent development together with the staff consisting of professional sales managers, skilled marketing managers, as well as competent and experienced specialists who got education in local and foreign universities. Our mission is to ensure the highest level of sales and service at all trade points, operating in the market of Azerbaijan. Veyseloğlu is developing continually. It is the company not only of present but also of tomorrow.
