Azerbaijan enhancing agriculture technicalisation Review by Caliber.Az

Azerbaijan is gradually implementing comprehensive reforms in the agricultural sector and its most important component is designated the organisation of agricultural machinery production. For almost 17 years Baku and Minsk have been implementing a joint project of assembly of tractors and other agricultural machinery in Ganja.

At yesterday's (May 15) meeting of the Azerbaijani-Belarusian Intergovernmental Commission on Trade & Economic Cooperation the sides stressed the intention to expand the range of machinery assembled in Azerbaijan. On the same day, an agreement was signed in Baku on the localisation of the assembly of tractors of the well-known Italian SDF group at the facilities of the Ganja Automobile Plant - "GanjAZ".

Since gaining independence Azerbaijan has made several attempts to organise its own production of agricultural machinery and equipment. For example, as far back as 1998, an enterprise established in Baku, Azertractor, started assembling tractors from components supplied by one of the Turkish manufacturers. However, after assembling about two dozen machines, this enterprise soon ceased to exist due to the high prices of the final product and the low profitability of the production.

Another joint tractor project, which was promoted by the Turkish partners, remained on paper - with the company Ibrahim Ors, which planned to set up an assembly enterprise on the basis of the Baku plant OJSC Elevatormash in 2002. Alas, but in the 90s and at the beginning of the noughties in the country there were just no preferential programs for bank lending to farmers, and there were no agricultural leasing companies - the main financial instrument for the technical equipment of the countryside.

The real breakthrough in the technical equipment of rural producers began in 2005, after the state initiated the establishment of a service structure JSC "Agroleasing", thereby providing a solid basis for the financing machinery and equipment purchases for their leasing to farmers or provision of services at land treatment, harvesting. Here it is worth mentioning that due to the decree "On improvement of leasing activities in agricultural sphere and state support to agriculture" signed by the head of the state four years ago, the system of preferential sale of agricultural machinery to Azerbaijani farmers was radically changed.

The decision made by President Aliyev significantly simplified the mechanism of purchasing agricultural machinery by farmers and from now on contracts began to be registered not in "Agroleasing", but in authorised banks, directly with suppliers. Moreover, the state-owned leasing company is not involved in the sale of agricultural machinery at all. As a result, the process is transparent, conditions have been created to expand the number of suppliers, and competition in the agricultural equipment market has increased, which in the long term contributes to lower prices.

In addition, Azerbaijan intended to do more than just import tractors, combines, and attachments since the priority was to localise the production of agricultural machinery within the country. The state policy in this area logically continued with all-out support for local industrial enterprises that were ready to establish assembly facilities within the framework of international cooperation. The first successful project of this kind was the creation of the Azerbaijani-Belarusian joint enterprise on the basis of the capacities of the Ganja Automobile Plant (PA) - "GanjAZ" in 2005.

In the following years, Belarus tractors of six modifications were assembled there. Another 15 modifications of agrarian attachments based on Belarus tractors were launched with the support of the Belarusian enterprise Dorelectromash, and six models of trucks, dumpers, and special equipment for housing and public utilities were produced based on spare parts manufactured by the Minsk-based MAZ Plant. Due to the localisation of some parts here, it has been possible to reduce the cost of production of attachments.

A significant portion of tractors and mounted machinery has been purchased through Agroleasing with subsequent preferential sales to farms and farmers. At the same time, successful Azerbaijani-Belarusian cooperative developments envisage the organisation of exports of joint products to the markets of Türkiye, Iran, Georgia, etc. in the future. In this context, a joint tractor-assembly facility will be set up in the Turkish town of Kırıkkale, where one of the Belarus-1221 tractor models for the Turkish market will be assembled.

The coronavirus pandemic and subsequent economic and geopolitical crises made changes to those plans. However, despite all the difficulties of recent years, GanjaAZ is developing consistently and is confident about the future. Last year the plant capacities produced goods for a total amount of $46 million, which is 1.8 times more than last year: 588 tractors, and hundreds of units of various agricultural equipment. This trend has only intensified in the first quarter of this year - 228 tractors were produced, which provided an increase of 82.4 per cent.

"Over the 17 years of joint work at the Ganja plant, more than 12,000 Belarusian tractors, as well as about 4,000 units of other machinery (MAZ, MZKT, AMKODOR) have been assembled. We are determined to continue joint work to expand the range of jointly produced machinery, including combine harvesters and modern passenger vehicles that meet high environmental standards," Deputy Prime Minister of Belarus Igor Petrishenko said at a meeting of the Azerbaijani-Belarusian Intergovernmental Commission on Trade and Economic Cooperation held in Baku on May 15.

Speaking on key tasks that were guided by the heads of state and heads of governments of the two countries, the Belarusian Deputy Prime Minister recalled plans to expand the range of assembly equipment on the PA Ganja Automobile Plant, including the resumption of joint production of special vehicles on truck chassis MAZ and joint production of electric passenger transport - electric buses.

"To do this, it is necessary to determine the models and quantity based on the available full catalogue of Belarusian equipment and form an appropriate order for the Azerbaijani enterprise. Secondly, we need to continue work on systematically increasing the production of tractors from Belarusian tractor kits, including for the markets of third countries," Petrishenko stressed.

Meanwhile, the expansion of Azerbaijani-Belarusian cooperation is not the only vector for boosting the production of agricultural machinery in our country, where today, due to the creation of a network of agricultural parks, specialised enlarged grain farms, agricultural clusters in the Karabakh region is in high demand for tractors of various capacities and other performance characteristics. This task will be solved through a new project, which is being launched by GANJAZ Software in partnership with the world-famous Italian company SDF.

According to the agreement signed on May 15, the plant in Ganja will start assembling three German tractor models - DEUTZ-FAHR 4100 W, 6205g, and 115 G AGROFARM, characterised by reliability and quality of components, durability, and high performance.

"According to a survey conducted by GanjAZ's Service and Marketing Department, taking into account the demand for high-quality German tractors in the Azerbaijani market, the enterprise plans to assemble about 300 tractors during the initial stage of the year", says the press service of the plant. Under the terms of the agreement, in the future, it is planned to expand the range of tractors, which will be assembled in Ganja within bilateral cooperation with the Italian group SDF.