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How sport is boosting Azerbaijan's construction industry

The changing nature of Azerbaijan's economy has been tough for some of the country's industries. However, the construction sector is doing well out of it, and it is currently one of the nation's success stories. New building works are ongoing across the country, especially in the capital of Baku, and to a large extent this is due to sport.

Azerbaijan's economy has for a while relied heavily on oil and gas. However, this is becoming less viable as the price of these resources drops, so the nation has found an alternative: tourism, boosted by major sporting events. The nation has committed to hosting a number of these over the next few years, raising its profile internationally and attracting more and more people to its hotels.

With the European Games, hosted in Baku, having just finished, it is a good time to look at how this focus on major sporting events has affected Azerbaijan's construction and building materials industries.


Upcoming events

The European Games, which finished on June 28th, are far from the only sporting event Azerbaijan is set to hold. However, as the first major competition the nation is hosting, they are a fitting sign of what is to come. This was the first ever European Games, with over 6,000 athletes travelling to Baku to take part.

Next up is the 2016 Baku European Grand Prix, which is scheduled for next July. Next year will also see the 42nd Chess Olympiad and the football under-17 European Championship held in Azerbaijan. Following that, 2017 will see the Islamic Solidarity Games come to Baku, featuring athletes from over 50 countries.

Even further in the future, four matches of the 2020 UEFA European Championships are being planned for Baku's Olympic Stadium. Patrick Hickey, head of the European Olympic Committees, has also said that he expects Azerbaijan to bid for the 2024 Olympic Games. However, the nation has already been turned down from hosting the 2016 and 2020 Olympics.


Hotel construction

While these sporting events have obviously led to the construction of major structures such as stadiums and the 6.007 km racetrack needed for the Baku Grand Prix. However, less-specialised projects are also underway, especially in the hospitality sector. The growth in visitors to Azerbaijan has led to an increase in hotel construction.

The Azeri Ministry of Culture and Tourism anticipates an increase of between 30 and 40 per cent in the number of tourists visiting the country over the next few years, predicting up to five million per year by 2020. This means more hotels will be needed, especially in Baku, where most of the city's luxury accommodation sold out during the recent European Games.

As a result, large hotel chains such as the Absheron Group are constructing new buildings. For example, the Dinamo Hotel Baku is opening in 2016, hopefully in time for the Grand Prix. It will offer 29 new luxury rooms and studios. A larger offering is being constructed by the Trump Organization.

The Trump International Hotel & Tower Baku will be 33 storeys tall when constructed, boasting a total of 75 ultra-luxury residences and 190 hotel guestrooms. Donald Trump, chairman and president of The Trump Organization, said: "When we open in 2015, visitors and residents will experience a luxurious property unlike anything else in Baku."


High demand for building materials

Of course, all this construction means material sales are also expected to rise over the next year. One good example is Azerbaijan's cement industry, where Norm Gizildash Cement - the largest cement plant in the region - expects to increase production by an impressive amount.

Hasan Yalcinkaya, the plant's CEO, said: "The company plans to produce 1.1 million tons of cement and 240,000 tons of clinker in 2015." This is more than double what it produced in 2014, and equates to almost a third of the 3.8 million tons Azerbaijan is predicted to need this year. Mr Yalcinkaya expects this number to rise significantly in 2016.
Next year, the Norm Gizildash Cement CEO predicts Azerbaijan will need up to four million tons of cement, which would be a year-on-year increase of five per cent. This could well rise by even more in coming years, as Azerbaijan solidifies its place in the world of international sport.

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