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Chinese CNEEC to build tire plant in Azerbaijan

3 May 2019 16:16 (UTC+04:00)
Chinese CNEEC to build tire plant in Azerbaijan

By Leman Mammadova

Azerbaijan is going to implement new projects together with the Chinese companies in view of the recently signed contracts worth $821 million covering many fields.

Azerbaijan intends to open two more trading houses in China in 2019, Azerbaijani Economy Minister Shahin Mustafayev told local media on May 2.

“The memorandum on the creation of one of these trading houses was signed during the Зresident’s recent visit to China,” he added. “The second trading house is scheduled to open in Beijing.”

He noted that Azerbaijan opened the trade representative office in China in 2017, adding that Azerbaijani entrepreneurs are greatly interested in the Chinese market.

"Three Azerbaijani trading houses are currently operating in China. This market is especially interesting for us in terms of the supply of alcoholic beverages and agricultural products. Over the past two years, we participated in nine big exhibitions in China and sent six export missions to this country," Mustafayev said.

He noted that trading houses play an important role in promoting Azerbaijani products to the Chinese market. They help the entrepreneurs to establish direct contacts with their customers, get support in promoting their products and analyze the potential sales markets, according to the minister.

“Azerbaijan and China have a great potential for the development of trade,” he added. “For example, the trade turnover between the countries exceeded $1.3 billion in 2018, while it grew by 2.4 times in the first quarter of this year.”

Mustafayev also said that Azerbaijan is China’s main trading partner in the South Caucasus. Thus, 43 percent of China’s total trade turnover with the countries of this region accounts for our country’s share. At the same time, investments between countries are also growing.

"Azerbaijan has invested $1.7 billion in China’s economy, while the Chinese companies made investments worth $800 million in the Azerbaijani economy," Mustafayev noted.

The minister stressed that the Chinese companies are also interested in expanding cooperation with Azerbaijan.

He noted that this year Azerbaijan will transit 43,400 containers from China, which is 900,000 tons of cargo. The minister also added that the new Baku International Sea Trade Port is capable of handling up to 15 million tons of cargo per year and 100,000 containers.

“In June-July this year, we will send our representatives to China to encourage Chinese provinces to transport containers through the territory of Azerbaijan,” he said.

Talking on the joint tire plant with China, the minister stressed that investment in the construction of a tire plant in Azerbaijan will be $300 million. The plant will be built on the territory of Sumgayit Chemical Industrial Park and construction of the plant will be carried out by the Chinese company CNEEC (China National Electric Engineering Co Ltd).

Currently, the share in the project is supposed to be as follows: CNEEC -90 percent, Azerbaijan Investment Company (AIC) – 10 percent. Production capacity of the plant will be 3.3 million tires per year.

“As can be seen, the annual capacity of this enterprise is designed not only for the local market. Tires will be exported to neighboring countries, which will naturally serve to increase the export potential of Azerbaijan,” he added.

As previously reported, Azerbaijani and Chinese companies signed agreements within the 2nd International Forum “One Belt, One Road” in Beijing. In particular, an agreement was signed on the construction of a tire production plant.


Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888

Follow us on Twitter @AzerNewsAz

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