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Italian exporters rush to a growing Azeri building market

Companies from all over the world are getting involved in Azerbaijan’s growing construction sector, especially Italy – a delegation of 70 Italian firms has returned home from the BakuBuild building and interiors trade show in the Azerbaijani capital with new contracts, stronger relations with the region’s buyers, and great potential to capitalise on the building sector’s growth.

“The Azerbaijani market is growing quite rapidly, which is very interesting for Italian companies,” said Simone Pavan, Export Manager at CCE, a fire protection equipment supplier based outside Venice that took part in the show this year. “We have had very positive contacts, meetings and discussions (at BakuBuild) and have been able to find a few key distributors with whom we intend to cooperate.”

The Azerbaijani market certainly is growing rapidly. Construction was always a major part of the country’s strong economic performance, but a falling oil price means even more attention is being paid to boosting the sector. 13% of Azerbaijan’s entire GDP is accounted for by construction, higher than China, Qatar and India, and massive projects like the $100 billion Khazar Islands and a tower that is one whole kilometre high are helping to drive the headline figures.

But Azerbaijan’s building sector growth is built on stronger foundations than headline-grabbers. Hotel construction is performing well – upcoming sporting events like the European Games, the European Grand Prix are estimated to grow tourist numbers by 40%, so Azerbaijan is scrambling to increase its current low number of rooms. The luxury sector is benefiting, with a 33-storey Trump hotel the latest high-end development to begin construction, and many new two and three star hotels are appearing across the country.

Another area driving growth is housebuilding. A law was passed this month to reduce the amount of tax housebuilders need to pay on their projects, while the latest government statistics show that, in terms of square metres, there was an 11% increase in housing construction over the whole of last year.

All this adds up to a market that exporters can’t ignore, and it is not just Italians capitalising on its potential – this year’s BakuBuild brought exporters from 30 countries to the capital.

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