Azernews.Az

By Nigar Abbasova

A foundation stone for the long-awaited Azerbaijan-Iran pharma plant was laid in the Pirallahi Industrial Park on January 16.

Project partners are "Tamin Pharmaceutical Investment Company" (Iran, 49%), "Azersun Holding" (26%) and Azerbaijan Investment Company (25%). The project will consist of 3 stages. In the first phase there will be production of pills and capsules, ampoule and vial - in the second stage and production of antibiotic drugs will be in third stage.

The event was attended by Azerbaijan’s Economy Minister Shahin Mustafayev and Iranian Cooperatives, Labor and Social Welfare Minister Ali Rabiei, Deputy Economy Minister Niyazi Safarov, Director General of Azersun Holding Savash Uzan and head of Azerbaijan Investment Company Rovshan Nadjaf.

Mustafayev said that the construction of the Caspian Pharmed will be completed in the third quarter 2018.

“Over $20 million will be invested in the new plant, where German and Italian equipment will be installed. Construction of the plant will take around a year and a half, while the plant will start producing 84 kinds of medicines in the third quarter of 2018. The major part of drugs is planned to be sold on Azerbaijan’s domestic market, while a certain part will be exported. The business plan envisages supplying drugs to Russia, Kazakhstan and Georgia,” he said.

Mustafayev went on to say that the drugs produced at the plant will meet the highest standards, as well as the GMP (Good Manufacturing Practice) standard. Besides, since the plant will be built in the Pirallahi Industrial Park, it will receive the same benefits as the residents of other industrial parks.

“The payback period of investments in the plant will amount to seven years and two months, and the internal rate of return will amount to 17.24 percent, which is quite a high indicator,” he clarified.

The minister added that 90 persons will work at the plant, and their minimum wage will be 700 manats ($ 367.9).

Mustafayev went on saying that the construction of the third pharmaceutical plant will be launched in March 2017. The plant is expected to be constructed by a private investor, while Azerbaijan Investment Fund will possess a share in the enterprise.

“A number of pharmaceutical plants will be operational in the country within the next three years. We are taking weighty steps to provide pharmaceutical security in the country. Next years will mark a turning point in the sphere,” he said.

Rabii, in turn, said that the plant will export drugs worth up to $100 million a year, mentioning that with the lapse of time the country will bring import of medicines to nought.

The Iranian side will invest some $11 million in the plant, while the total volume of investment is estimated at $20.6 million.

Today, Azerbaijan produces only a minuscule share of the medicines that it consumes, while the overwhelming majority of pharmaceutical production is being imported.

The import of drugs in 2016 increased by 20 percent compared to 2015. In 2016, some 80 percent of drugs were imported from Europe and other developed countries. The remainder of the imports came in Russia, Ukraine and Belarus. In late 2015, the government of the country announced that it will create own enterprises on manufacture of medicines to cease dependence on imports.

In November 2016 construction of the first Hayat Pharm joint plant has already been launched. The Azerbaijani-Russian project will be built in the Pirallahi Industrial Park.

Besides, Egypt, Pakistan, Turkey and some European countries also seek to take advantage and enter the promising pharmaceutical sector of Azerbaijan.

A for further development of bilateral cooperation between the two countries, Rabii said that the countries will expand ties in industry, tourism, transport and other sectors.

“I would like to emphasize that Azerbaijan is not only our neighbor. We have a common culture, religion and our cooperation bears a strategic importance,” the minister stressed.

Moreover, Mustafayev said that the sides are also discussing t construction of a joint plant for production of agriculture equipment and busses, mentioning that the countries may discuss implementation of joint projects in other spheres.

He said that the pharma plant became the second project jointly implemented with the Islamic Republic, reminding that the construction of the joint automotive plant was launched last year in Neftchala Industrial District.

Iran Khodro, Iran’s giant carmaker and Azerbaijan’s Azeurocar will jointly manufacture Dena, Rana, Soren and Samand series within the project, which is estimated at $15 million. Capacity of the enterprise is expected to stand at 10,000 per year, while the outputting will be launched in May 2017.

The trade turnover between Azerbaijan and Iran amounted to $175 million in January-November 2016, with some $130.13 million accounting for import from Iran.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

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