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In the Mix

In a country with a wealth of engineers and advanced technical knowledge due to its close relationship to oil and gas over the past decades, the petrochemical industry seems like another great fit for success in Azerbaijan. Petrochemical products are in constant demand on the world market, ensuring that there will be a steady source of buyers for the increased levels of production that are in progress for Azerbaijan. Polymers are the main product in the vast array of petrochemical creations because products made from polymers offer great durability, low density, aversion to both heat and cold, and enjoy a wide range of application. This makes polymer products ideal and popular for use in heavy industries, such as shipbuilding, machine manufacturing, pipe coating, and the automotive industry, as well as in agriculture and construction. In addition, they are used in a wide assortment of everyday products from rubber, plastics, textiles, packaging, electronics, and more. The attractiveness of petrochemical products is extensive because they are involved in the majority of objects one touches or uses every single day.

The broad application of petrochemical products is capable of helping the economic and industrial output of Azerbaijan overall because these raw materials can be moved upstream and turned into higher-cost consumer goods. From the feedstock, a company can make a petrochemical product. In turn, this petrochemical product can be used to create packaging, which can be applied to a good. In the end, these petrochemical products can go into products such as electronics, cosmetics, and agricultural tools, all of which are high-value products that started from simple feedstock. Thus, the petrochemical industry effectively adds value through the chain of production.

Taking notice of this relatively under-represented market in Azerbaijan, national giant SOCAR has been working on a new joint venture called SOCAR Polymer. Designed with the idea to accelerate the development of the chemical industry of Azerbaijan, this is the first project of this size and scale in the petrochemical industry of Azerbaijan in the past 40 years. SOCAR Polymer plans to offer 30% of the yielded products on the local market, while exporting 70% to international markets, specifically to Turkey and Europe. The anticipated output of the plant is as impressive as the project itself: 120,000 tons of high density polyethylene and 180,000 tons of polypropylene. The plant, built as part of the Sumgait Chemical Industrial Park, is set for a 2018 commission date and its operation will create a large number of jobs in the country as well. As a joint venture, this exciting new project has received the attention of some of the biggest players in the Azerbaijani business world, including PASHA Holding, Azersun, and Gilan Holding. PASHA Holding invested $25 million in this project to obtain a 10% interest, which is more money than they usually allocate for these types of investments. They made this exception due to the high level of project planning and the overall interesting prospects that this new plant offers. Remarking on this project and his confidence in the industry in general, PASHA Holding Director Mir Jamal Pashayev said, “The petrochemical industry is being redeveloped [in Azerbaijan] in accordance with best practices and modern technologies.“

Not to be overlooked, Azerbaijan is also home to the largest methanol plant in the region at AzMeCo. As it stands, AzMeCo is currently the leading petrochemical producer in the country, producing 720,000 tons of methanol per year. Nizami Pieriyev, the Chairman of the Board at AzMeCo stated that “Methanol can be used as a raw material to produce certain products and can drive the development of related sectors, such as furniture manufacturing and plastics, for example.“ As additional proof of how a strong petrochemical sector can increase the export potential of the country, AzMeCo has sent 200,000 tons of methanol to European countries alone. Piriyev also believes that a strong petrochemical sector will help spur growth of SMEs in the country. The healthy development of SMEs will also offer a strong base to the economy of Azerbaijan.

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