Azerbaijan diversifying industrial clusters From chemistry to automotive manufacturing

In recent years, Azerbaijan has launched large-scale initiatives as part of a new industrialisation strategy, with the development of multi-profile industrial parks and zones across various regions of the country serving as a key instrument. One of the most important areas of activity for domestic industrial clusters has been the localisation of assembly for tractors, trucks, specialised machinery, and passenger cars using imported components. 

This week, with the participation of Azerbaijani President Ilham Aliyev, a launch ceremony was held at the Sumgayit Chemical Industrial Park (SCIP) for a new plant operated by Az-Tex-Import LLC. The plant will produce trucks and specialised vehicles under the Italian IVECO brand.

According to the Agency for Development of Economic Zones (ADEZ), a total of 170 business entities currently operate as residents or non-residents across nine industrial parks and four industrial quarters in the country, with total investments reaching 8.1 billion manats ($4.7 billion). All resident companies benefit from numerous incentives, including tax, customs, utility and other privileges, as well as access to concessional loans. Additionally, government investment has provided the necessary infrastructure, including the construction of production and office facilities and integration with transport networks.

These incentives and state support have stimulated investment activity: 84 enterprises have already been launched, creating over 10,700 permanent jobs. From 2015 to 2024, the total output produced in these industrial zones reached 15.4 billion manats ($9 billion), with about one-third—4.9 billion manats ($2.8 billion)—exported to around 70 countries worldwide. The year 2024 alone is particularly illustrative, with industrial zone sales amounting to 3.3 billion manats ($1.9 billion). Key export products include polymers, urea, lubricants, construction glass, steel pipes, power cables, sulphuric acid, tobacco products, ceramic tiles, yarn, wallpaper, footwear for various uses, and more.

The Sumgayit Chemical Industrial Park, established in 2011, leads the way in both investment volume and the number of operational enterprises. Nearly forty resident companies operate within the park, producing a wide range of semi-finished and finished goods made from polymer and other petrochemical raw materials. Their output includes building materials, energy equipment, household appliances, automotive components, medical supplies, construction chemicals, cables, knitwear, and more.

SCIP has attracted nearly 6 billion manats ($3.5 billion) in investment, currently employs around 7,000 people, and has generated a total output worth 14 billion manats ($8.2 billion) since its inception—about 5 billion manats ($2.9 billion) of which came from exports. The park maintained strong production momentum in the first quarter of 2025, with output increasing by 14.2% and exports rising by 17.2%.

On April 30, during his visit to the Sumgayit Chemical Industrial Park (SCIP), President Ilham Aliyev took part in the opening of a new construction chemicals plant operated by Kartash Kimya LLC. The facility is equipped with seven production lines for manufacturing cement-based dry mixes, waterproofing materials, flooring solutions, cement grinding additives, and concrete admixtures, with a total design capacity of 295,000 tonnes per year. In addition to meeting domestic demand, the company plans to export its products to Türkiye, Uzbekistan, Kazakhstan, Turkmenistan, Russia, and Georgia.

“This year, several more enterprises will be commissioned at SCIP, including facilities for producing aluminium-laminated mirror sheets, cardboard packaging for construction and agricultural products, as well as for processing motor and industrial oils and producing base oils,” said Emil Hajiyev, Deputy Chairman of the ADEZ.

The Sumgayit Chemical Industrial Park is expanding into a completely new sector—automobile manufacturing. On April 30, a launch ceremony for a new plant by Az-Tex-Import LLC was held, attended by the Azerbaijani president. The plant will produce trucks and special-purpose vehicles under the IVECO brand, utilising advanced Italian technologies. In its first phase, the plant will manufacture 100 trucks and special vehicles, as well as 300 vehicle bodies annually. The second phase will focus on further localisation efforts, including the production of truck bodies. Together, both phases are expected to create 150 new jobs. Over time, the plant aims to begin exporting its products.

Additionally, Az-Tex-Import has announced its involvement in a project to build a technical service centre for trucks at the Araz Valley Economic Zone industrial park. In the next phase, the company plans to establish a plant for assembling light trucks with a payload capacity of up to 5 tonnes.

The number of automotive assembly plants in Sumgayit is expected to grow. In particular, this year, the Chinese company BYD plans to establish a bus manufacturing plant with electric engines at the SCIP, investing 29 million manats ($17 million) in the project. The necessary infrastructure has already been created in the park, and work on setting up an electric bus assembly line is planned to begin soon.

Industrial clusters have played a significant role in the localisation of automobile production in Azerbaijan. For example, in the Nakhchivan Autonomous Republic’s industrial zone, the NAZ-Lifan plant has been assembling budget vehicles from Chinese components for over a decade, primarily for government orders. Since 2018, Azermash OJSC has been manufacturing Khazar brand cars in the Neftchala industrial quarter in partnership with the Iranian company Iran Khodro. In September 2021, a production line was established in the Ganja industrial quarter for SamAuto LLC, a joint venture between UzAuto Motors and Azermash, where several Chevrolet models are assembled in the first phase. By the end of this year, further expansion of local automobile assembly is expected: a joint plant with Uzbekistan, located in the Ganja industrial park and valued at 88 million manats ($51.7 million), will be capable of handling welding, assembly, and painting stages for up to 30,000 vehicles annually. This new plant, with significant export potential, will create over 1,200 jobs.

Between 2018 and 2024, domestic industrial parks and zones produced vehicles worth 442.5 million manats ($260 million). In 2024 alone, vehicle production in these industrial zones grew by approximately 34% compared to the previous year. Specifically, in the Ganja industrial park, 3,761 vehicles worth 107.5 million manats ($63.2 million) were assembled, while 2,182 passenger cars worth 54.65 million manats ($32.1 million) were assembled in the Neftchala industrial quarter.

Over the past two decades, Azerbaijan has managed to develop a significant industrial potential for the localisation of tractor, truck, and special-purpose vehicle assembly. The first successful project in this direction began in 2005 with the establishment of a joint Azerbaijani-Belarusian venture based on the production facilities of the Ganja Automobile Plant ("GanjaAZ"). In subsequent years, tractor assembly of six modifications of the Belarusian "Belarus" brand was set up here. With the support of the Belarusian enterprise "DorelElektromash," 15 types of agricultural equipment based on "Belarus" tractors were produced, along with six models of trucks, dump trucks, and special-purpose vehicles for municipal and construction needs, using components from the Minsk Automobile Plant ("MAZ").

The production capacity of the Ganja Automobile Plant is approximately 2,000 tractors and over 1,000 trucks annually, with plans to increase this capacity gradually. In the past year, GanjaAZ signed a tripartite agreement with the Minsk Automobile Plant and the Belarusian enterprise "Pozhsnab" to assemble various types of emergency rescue and fire-fighting equipment in Azerbaijan. Additionally, in 2023, GanjaAZ signed an agreement with the Italian company SDF to begin assembling three models of German-designed tractors—DEUTZ-FAHR 4100 W, 6205 g, and 115 G AGROFARM.

The cooperation with Russian truck manufacturers has also developed successfully. For many years, the Ganja Automobile Plant has been assembling several models of Kamaz flatbed trucks and dump trucks, as well as all-terrain Ural trucks. Several years ago, a plant was established in the Ganja industrial park to produce commercial vehicles and medium-duty trucks, such as the "Gazelle NEXT" and "Gazon NEXT" using components from the Gorky Automobile Plant (GAZ).