Powering Up

In which segments is ATEF involved in Azerbaijan?

Our predecessor, the Baku Transformer Plant (BTP), was founded in 1961 and was relatively small; it employed about 50 people and solely manufactured dry-type transformers. This type of transformer was in high demand because of all the nuclear power plants at that time in our country, while other plants, which were built with the support of the USSR and other friendly countries, also used dry-type transformers. In 1995, after taking up a position on the Board of Directors, other members of the board and I developed a new model to develop the company. As a result, BTP dramatically increased its product range and, in 2002, was transformed into ATEF Group, which now consists of more diversified production lines and consists of five plants. Nowadays, ATEF Group employs more than 1,000 employees to develop and manufacture goods, plan and implement various complex projects, and tailor a wide range of services both for individual orders and for large-size orders. The list of countries receiving our export products exceeds 20. We used to produce only dry-type transformers, but now we also produce oil-type power transformers and switchgears. In addition, we have built another factory for heavy metals production. Our company is involved in transmitting and distributing electricity, but is currently not engaged in power generation. Thus, in 18 years ATEF Group has undergone the kind of radical changes it takes other companies 30-40 years to emulate. Today, ATEF Group is one of the major companies in the Southern Caucasus, which in addition to producing and supplying the entire spectrum of electrical products, also deploys turnkey projects.

What is ATEF Group’s position in the power sector?

ATEF Group is one of the key companies in Azerbaijan, and is completely specialized in the productive sector. ATEF Group is one of the major companies in Azerbaijan and provides turnkey projects for the construction, design, manufacture, and installation of electrical products. We are currently producing power and distribution oil transformers up to 100 megavolt-ampere (MVA) with voltage up to 110 kilovolt-amps (kVa), dry power and converter transformers as well as molded epoxy insulation with power up to 12.5 MVA and voltage up to 35 kVa, complete distribution devices, open and closed-type switchgears, complete transformer substations (CTS), traction substations for above- and below-ground railways, and metal production of any complexity.

What do your international operations consist of?

We have offices in 11 countries, and export to 20 countries. Exports formerly accounted for 70% to 80% of our production. However, since winning the contract for the Baku-Tbilisi-Kars project, they now account for approximately 50%. We have commenced the construction of a new distribution transformer plant in Kazakhstan in the Economic Free Zone, and in the future we will expand to build factories in Russia, Turkey, and maybe within the GCC region.

How do you identify potential customers?

Apart from doing business with our regular customers, we also attract customers from international expos. In 2013, thanks to the efforts of Samruk Energy, ATEF Group is involved in building power lines and substation projects in Kazakhstan. The Azerbaijani government is our major customer and we have contracts with such government agencies as SOCAR, the Baku Electric Network, the railway network, and the Social Fund for the Development of Internally Displaced Persons (SFDI). ATEF Group has provided substations to towns built for internally displaced persons by the SFDI. We find that clients return to us having experienced our ability to deploy projects.

What projects have you been working on in recent years?

One of our biggest projects to date has been the Baku-Tbilisi-Kars railway connection, which runs from Baku to Boyuk Kesik in Azerbaijan over a distance of 500 kilometers. The project consists of 12 traction substations and catenary lines. Baku—Boyuk Kesik is a work in progress. In addition, rehabilitation works are also being carried out by ATEF in Georgia on the Tbilisi-Kars section of the project.

To what extent do you feel that your company is representing Azerbaijan itself in the international arena?

Until recent years, Azerbaijan has been known as an oil and gas producer and exporter and as an agricultural country. Recently, Azerbaijan’s high-tech equipment in the energy sector has been gaining a worldwide reputation. The Azerbaijani government pays special attention to the development of the non-oil and gas sector, and at the same time facilitates the production and export of domestically produced products. We are expanding our production and we are now finishing our fifth plant, a state-of-the-art facility where the production of large power transformers up to 500 MVA with voltages of 220-500 kVa will take place. The factory is equipped with the high-tech machinery of leading manufacturers such as GEORG, Hedrich (Germany), Sagma (Italy), and Highvolt (Switzerland). We will gear the production at this plant toward larger markets and at the same time boost the country’s demand for strategic goods.

How do you go about using raw materials and commercializing your products?

We import raw materials from the UK, the EU, the US, Turkey, Russia, and Kazakhstan. For example, we import H1-grade magnetic steel from AK STEEL (US), which is a high-grade steel produced at very few facilities in the world. It is a major component of transformers, and thus quality manufacturing is of the essence. Good quality comes at a premium, but for us there is no option but the best available. The main goal of ATEF Group is to get good market shares in places such as the UK, Europe, and the US.

How would you define the skill level of your employees?

We have many excellent engineers from the Soviet period. At the same time, we heavily invest in our employees by sending them abroad to develop their skill set, improve their know-how, and ramp up their experience. Our employees attend monthly and annual seminars and training programs. Moreover, we also participate in cooperation programs with companies such as Siemens, ABB, and GE.

© The Business Year – April 2014