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Food processing in Azerbaijan: where can foreign companies fit in?

In a bid to reduce its dependency on oil, Azerbaijan is keen to diversify its economy with food trade and production a major focus. 
Food processing is helping transform the Central Asian country into a major food & beverage player. Ultimately, this means there are some big opportunities for foreign companies to enter and prosper in this rapidly expanding sector.

A look at Azerbaijan’s food processing sector

Azerbaijan enjoys some key attributes that are turning the state into a food processing powerhouse. The nation boasts 4.8 million hectares of arable land for agricultural production and animal husbandry; a varied climate allowing for the growing of a wide selection of fruits and vegetables; plus, a Central Asian location, making it ideal for exports to Russia, the CIS and beyond.
Food processing accounts for around 38% of Azerbaijan’s total manufacturing output, around $6.2 billion, and covers a selection of more segmented industries. Apart from the growth of crops and livestock, Azerbaijan produces dairy products, wine, fruit and vegetables, canned goods, seafood, tea and much more.

Sector by sector: Where can your company fill a space?

We take a sector by sector look at food processing in Azerbaijan (all data taken from Azerbaijan National Statistics Service & Azpromo promotional body) to give you the a fuller picture and identify the gaps your business could help close.
• 1.8 million tons of dairy products produced in 2014 (most up to date data available at the time of writing)
• Bigger producers unrepresented on the market – focus on smaller, local producers
• 80% of local demand met, meaning extensive opportunities for large-scale processing plants
Fruit & Vegetables
• 1.1 million tons of vegetables produced in 2014, alongside 850,000 tons of fruit
• Caters to domestic & local markets
• Includes farms & canning facilities (20 processing plants & 90 canning enterprises located around Azerbaijan)
• Vital to Azerbaijan economy so government incentives make this sector attractive for overseas firms
• 148 thousand tons of wine grapes produced in 2014
• In demand for both domestic & regional markets
• 210 grape processing plants around the country
• Government investment in increase vineyard acreage means investment opportunities for overseas companies
Sugar Products
• Reliance on raw imported materials
• 411,000 tons of sugar products produced in 2014
• Domestic activity switching to beet production, presenting opportunities in supplying farming and processing equipment on the Azerbaijani market
• Over 40,000 tons of fruit & vegetable juice & alcoholic beverage production in 2014
• 150 production enterprises including 44 alcoholic & 35 beer producing facilities
• Major export products for Azerbaijan – especially pomegranate juice 
• Need for new technologies to expand production & improve quality of products
• Reliant on beef with lamb, poultry & pork severely underdeveloped
• 291,000 tons of cattle & poultry meat produced in 2014
• 12 large-scale meat production plants situated around the country
• Ministry of Agriculture’s Chief of Production, Processing of Animal Products, Pedigree Work & Pastures Chingiz Farajev keen to development Azerbaijan meat production
• No weighted VAT for agricultural equipment provides further incentives
• 50,000 tons of fish & seafood products produced in 2014
• Azerbaijan black caviar recognised as a market leader
• Preferential seafood trade with the EU
• Legislation passed in 2014 to improve the quality of Azerbaijan fisheries, aquaculture & associated facilities – space for foreign fish farming equipment suppliers to expand
• 474 tons of harvested production & 8,040 tons of processed tea products produced in 2014
• Dependent on small farms, so sector requires development of large-scale operations for expansion
• Soviet-era production plants closed down – newer facilities in demand
• Foreign partners welcomed by government to attract new technologies and expertise to improve value of Azerbaijani tea products
Canned Food
• 140,000 tons of canned food produced in 2014
• Local production accounts for 60-70% of domestic demand
• A relatively new sector with a demand for modern technologies to improve quality & value of canned goods produced in Azerbaijan

New technologies needed which foreign firms can supply to Azerbaijan's food processing industry

Given the importance of food processing and production to Azerbaijan’s economy, it is little surprise to see the fact that the country’s government is keen to attract foreign investment and technologies into the sector.
WorldFood Azerbaijan is the best place to get your technologies, products and services seen by vital members of Azerbaijan’s food & beverage production industry. First call for exhibitors is now on. Click here to learn more about the show, and to register your business today.
Image: Lindley Ashline via Flickr

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