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5 opportunities in Azerbaijan's building sector

As the oil price recovers, construction in Azerbaijan is starting to look up - some large-scale projects are coming in the next few years. Here, we look at some of the news to come out of the sector in the past couple of months, and the opportunities they can offer for sellers of building materials, products and machinery.

1.    Azerbaijan launches $500 billion housebuilding plan to 2025 

Azerbaijan’s government recently launched a Strategic Road Map for the Development of Housing Provision at a Reasonable Price – a plan to spend over $500 billion on improving the country’s housing stock. The plan will run in three stages –reducing Azerbaijan’s housing deficit between now and 2020, and then a full-scale urban redevelopment of Azerbaijan’s cities up to the year 2025.

A specific part of the plan is to attract foreign investment into Azerbaijan’s construction sector, which will bring extra participation from material suppliers as well. Also in focus will be energy efficiency – the new houses will be encouraged to meet green standards, a sector that international suppliers are strong in.

2.    $400 million spent on housebuilding in 2016

Around the time this huge new plan was announced, the figures for Azeri housebuilding in 2016 were released - $400 million was spent in total, mainly on multi-apartment residential units. Most of the work was funded by non-governmental organisations, showing the health of Azerbaijan’s building sector. Now, demand is high for interior finishing materials as these developments enter the final stages of work.

In other construction news in Azerbaijan, the government has promised to spend $1.3 billion on building new houses for long-term internally displaced people in the country.

3.    Hotel construction to rise in Azerbaijan 

Azerbaijan has a shortage of hotels across all price segments – and with tourism growing 11% last year, the need for new hotels is greater than ever. This is why Azerbaijan’s tourism department director recently announced plans to build more hotels, focusing on high-end rooms as well as two and three-star accommodation.  

2.2 million tourists came to Azerbaijan last year, nearly a quarter of the country’s entire population, but only 36 hotels were built in 2016. This is about to change, though – with a drive to build more hotels, there will be plenty of opportunities for building and finishing material suppliers.

4.    $545 million plant for Sumgait Chemical Industrial Complex

Oil, gas and energy is an enormous part of Azerbaijan’s economy, and one of the main reasons why its construction industry has been able to grow so strongly over the past two decades. But this sector is not just about drilling and oil production – projects like refineries, factories and petrochemical plants are announced regularly. The latest news to come from the sector is a new carbamide plant in the Sumgait Chemical Industrial Complex, a huge industrial park for refining and petrochemical facilities. $545 million will be spent on the plant, including all spending on construction services, building materials, and the interior finishing of the plant.

5.    Azerbaijan’s basic building material output grows

As construction activity in the country grows, Azerbaijan’s production of basic building materials like cement, concrete and lime has grown substantially this year. In the first two months of 2017, cement production grew 15%, lime production grew 210%, and an incredible 740% more concrete was produced in Azerbaijan compared to the same period in 2016.  This is another area that can give opportunities for foreign suppliers – most of the machinery and production lines used in Azeri production plants comes from abroad.

Want to learn more about Azerbaijan? The WorldBuild Baku exhibition is the leading trade event for Azerbaijan’s building and interiors sector - visit the website to find out more.

Cover image: Abbaszade via Wikimedia Commons

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