Caspian Energy (CE): Mr. Rasulov, how would you assess the activity of the company since its establishment?
Elshad Rasulov, Chairman of the Board, Atropatena: Our Company was created in 1992 and has been operating in the market for almost 22 years. We have completed the process of establishment and now we may move forward boldly. As you know not only our company but the whole country managed to make a big leap in development over the past 20 years. A number of examples can be made in this regard. Say, there were very few people knowing about existence of such a state as Azerbaijan 15 years ago. Today Azerbaijan is known almost everywhere. We very often meet with guests from different countries, and our country is known in all parts of the world, that is very nice to hear. However, it was not achieved so easily. In comparison with other neighbor countries, we managed to considerably succeed in our development within a short period of time.
In parallel, our company developed throughout these years, especially over the past 10 years when the economic situation of the country improved and big financial resources were flowing into the infrastructure projects. So, we also joined this process. As you know, a state program on development of regions has been underway in Azerbaijan for 11 years. The main objective is to create in regions the same conditions that are provided in the center. It is what the distinctive feature of the developed countries is. Living conditions, communications, working places must be the same throughout the whole territory in developed countries so that to prevent the necessity of moving to a center.
The appearance of our regions is changing along with their infrastructure. All areas are supplied with gas and electricity. Roads are under construction. Water supply projects are being implemented currently. Thus, the state is creating favorable conditions for business development. These conditions concern the taxation field as well. As a business entity, we also must invest mainly into our country since it creates conditions for further development. We are also actively engaged in these processes. Since 2008 we have joined the state program on development of regions and launched the milk production project that was completed in 2011. Within three years we managed to turn into a serious player in the market of dairy products. We are developing the crude products base in parallel. We commissioned a large stock-raising facility where over 2000 milch-cows provide more than 50 tons of the cleanest milk on a daily basis. It was the hardest period. When we opened the plant we realized that it is difficult to find a qualitative crude product. This is the reason why we launched this process. We understood that we are on the right path.
CE: What are main achievements of the company over the past year?
Elshad Rasulov: This issue must be considered from two aspects: development of the country and our company. Favorable conditions ensuring economic development of the country are contributing to the rapid development of the business as well. 2013 was the year of presidential elections and our President Ilham Aliyev paid visits to regions throughout the whole year. At the governmental session held on February 5 and dedicated to the development of regions, he said that he attended the opening of 1300 facilities within 10 years. This support makes us strong. The head of the state visited our facility in 2013. He took part in official opening of our farm on August 29. He gave advice, expressed his support and added that we were on the right path and proceed with the development. A maximum rate of investments made into the economy of Azerbaijan both by the state and the business was fixed in 2013. A total amount of investments reached $28bln that is a very stunning sum. We see the results of these investments both in the capital and in the regions of the country. 2013 was successful for the company too. Firstly, as I noted we held an official opening of our farm. Secondly, we concluded an agreement with the French company Danone for producing its products in our plant. It is of great importance for us especially when we speak about the development of the non-oil sector of the country.
Now, the state is attaching big importance to the development of this sector of the economy. Besides, the task is to supply the country with qualitative products and set a ground for export. Therefore, the contract we signed with the Danone Company is very important for the development of the non-oil sector. We have created a good platform. Qualitative products meeting standards of Danone are produced. In this way, we gradually move away from import. We plan to launch production late in March. Markets of Georgia, Turkmenistan and Western Kazakhstan are mainly considered for export. At the same time, we plan to commence export of our brand products Atena. Thus, we are accessing the external market that the head of our state always speaks about. President Ilham Aliyev emphasizes the necessity of bringing new technologies into the country, producing high-quality products, evading import and switching to export. The work that we are currently doing fully conforms to the development of the non-oil sector.
CE: Which innovations does the company introduce in the field of dairy products?
Elshad Rasulov: Many enterprises on production of dairy products were opened in Azerbaijan. It is good since no markets are developing without competition. On the other hand, we also have a trade network developing. In general, all of it leads to the development of the market. Innovative technologies and innovations must be regularly introduced for maintaining positions in the market and always being one step ahead. Therefore, we are now commencing production of Danone products including implementation of other plans.
CE: Entrance into external markets requires high production volumes and quality of products? What can you say about progress in this area?
Elshad Rasulov: Considering opportunities of our production, it makes 250 tons of milk per day. Our present production makes only 50 tons. We have to increase production volume up to 250 within two years. Apart from the quality of crude milk, it is necessary to produce qualitative products. Our enterprise meets all international standards, we received ISO 22000 standard (hygienic and management standard) as well as British standards BRC. We considered them as early as at stage of planning in order to be able to receive them. The Danone Company which has big experience in this direction supported us in this process.
Besides, our lab received international accreditation. I.e. we managed to create a platform, introduce technologies and train the human resources. We will manage to enter other markets through production growth and support of such strong partner as the Danone Company.
CE: What are the prospects of development for coming years?
Elshad Rasulov: Considering the milk market, it consists of different segments. It is production of traditional milk products that we are currently engaged in, it is production of modern milk products that we are going to launch together with Danone. There are also other niche products that concern cheese products, cheese in particular. We will continue developing in this direction as well, especially in the field of production of the Dutch cheese which is currently imported to our country.
Creation of the food reserve is another important issue that is also to be solved. Now we are thinking of construction of the plant for production of forage in order to reduce production cost price. It will improve the condition of animals since the composition of forages is controlled that results in growth of the output ratio. As far as other projects are concerned, we are currently conducting the market analysis.
CE: How successful was your entry to the distribution network?
Elshad Rasulov: We are developing this area in a special way. The matter concerns the chain of Fresco and Sabat stores that we are developing now together with our partners. We believe we should be involved in this segment because at present the market conjuncture is considerably changing.
CE: Could you please tell about successes in the distribution market?
Elshad Rasulov: As you know, at first we built up our activity as a distribution company. Up to now we represent the interests of large western companies. Among them are such world brands as Danone, Nestle, Kimberly-Clark, GlaxoSmithKline, Reckitt Benckiser, Henkel, Schwarzkopf, 3M and others. We cover all regions with main office in Baku and 9 regional offices. In addition, the infrastructure was built and our personnel perform trade operations every day. We trace this process in the online mode. Our sales are successful because of the skills and expertise of our marketing personnel and distribution network. We are progressing in both directions. Also, products should be of high quality. All this has played its role also in sales of our dairy products. With competitive prices, good distribution and marketing support, you gain success in the market. Progress cannot be achieved if one of those elements is missing.
With regard to dairy products, we have a high-level logistics. It is fully “cold” starting from milking up to store shelves, we try to provide the temperature conditions of 2-4 degrees Celsius. We would recommend our consumers to observe this thermal regime since we manufacture fresh products. Milk is a very wholesome product if it is fresh. It should be used for food only if it is fresh.
As far as the distribution is concerned, I would like to emphasize that we do our best to render our services on the highest level. With regard to dairy products, we attend large stores every day and small ones every other day. We make sure that there are always fresh products on the shelves of stores. Our motto is freshness.
