GREAT PROSPECTS OF XIRDALAN

The Baltika-Baku brewery can be considered one of the great success stories of Azerbaijani-Russian business cooperation and even a graphic example of successful foreign investment in the country's food industry today. What is important is that taking one of Azerbaijan's famous brands Xirdalan "under its wing", Russia's Baltika not only decided not to replace it with its well-known brands, but developed and greatly multiplied the popularity of the local brand. It is Xirdalan that became the official beer of Eurovision-2012, which is why sophisticated European consumers were able to appreciate it.

In an interview with Region plus, the director general of Baltika-Baku, Aleksey Skatin, spoke about the dividends received from the successful advertising campaign of beer brands and the future plans of the company.

- Recently, Azerbaijan hosted Eurovision-2012 and Baltika-Baku was its official partner. We also know that the sponsor of the European football championship Euro-2012 is the company Carlsberg, of which Baltika-Baku is a part. How did these events affect the development of the company this year, the increase in output and the increase in sales?

- The holding of Eurovision in Baku can be considered a unique event for Azerbaijan in recent months, and Baltika, especially the Azerbaijanis' "native" brand Xirdalan, could not stay away from this event. I take this opportunity to thank all those who help us work in Azerbaijan, in particular, the Russian embassy in Azerbaijan and the trade representative office of Russia in Azerbaijan. We express our gratitude to all those who helped us to become a partner of this truly national project. We feel proud that we could support such an important event for Azerbaijan. I will not deny that our participation also had a certain commercial effect and bore fruit. First of all, Xirdalan is known all over the world now. We know of many cases when foreigners in supermarkets and restaurants asked for "that same" Xirdalan. "And it is not easy for foreigners to pronounce this word, but they learned it and pronounce it clearly. I believe that all this is a great achievement for the food industry of Azerbaijan.

As for the European football championship, I would note that Carlsberg has always supported such events, but we, as a company that operates in Azerbaijan, were primarily focused on Eurovision. It's no secret that we recently held a large advertising campaign linked with football, but the commercials are also about Xirdalan, not Carlsberg. Maybe someday we'll launch Carlsberg on the Azerbaijani market, but we link our main hope for this year and next year to the local brand Xirdalan, and Azerbaijan can be proud of it.

- What is the situation with export against the background of these events this year and has the interest in it increased in other countries?

- There is, and has always been, an interest in our products, because our company is an industry leader in the region. As regards exports, in this sense, we are primarily interested in countries bordering on Azerbaijan and above all, Georgia. We plan to begin shipping products to this republic next year, and we will mainly focus on the development of the export potential of brands produced at the plant in Azerbaijan.

- How did the share of Baltika change on the Azerbaijani beer market?

- Our market share is over 70 per cent and has remained stable, and this suggests that consumers continue to love our product. To maintain our positions, we plan to launch new products on the Azerbaijani market. What they will be is still a secret. I can only say that when we launch our new products, they will surely please our valued customers.

- Do you plan to develop the non-beer portfolio in Azerbaijan?

- Frankly speaking, we are first and foremost brewers and we like to do what we know best. So when it comes to nonalcoholic drinks, we intend to develop the production of non-alcoholic beer. We will continue to carefully study all other market opportunities in this segment all the time.

- Do you plan to expand the range of Baltika-Baku products in Azerbaijan?

- I won't reveal a great secret if I tell you that our main guide in choosing a range of products is the consumer's opinion. In addition to local brands such as Xirdalan and Afsana, we produce Baltika-7 in Azerbaijan - the best premium beer on the republic's market. In our opinion, Baltika-9 is a strong beer, while Baltika Cooler is for those who like everything fashionable and progressive. Of course, we plan to expand this list in the future.

- How do you evaluate the financial development of the Baltika-Baku brewery this year?

- We are developing according to the plans that were set to us by shareholders of Xirdalan. In other words, we are within the framework that was expected at the beginning of this year.

- Is there a need to expand the production capacity of Baltika-Baku?

- As you know, the production capacity of our factory is 10 million decalitres a year, but given that the pace of the development of the beer market in Azerbaijan is encouraging, we are looking at the further development of production. But mostly, our investments will be aimed at improving the quality of products, because we believe that the Azerbaijani customer deserves the best beer in the world.

- What are the investment plans for the coming years?

- We will have 3 types of investment in the current and next year. As I mentioned, the first type is investment in maintaining and improving the quality of products, for which we are going to introduce the most advanced technology in the production of beer. Yes, our company can rightly be considered the most advanced on the Azerbaijani market today, but there are interesting achievements of global manufacturers in the brewing sector, and I promise that the Azerbaijani consumer will definitely become acquainted with them.

The second type of investment includes expenses on the development of the sales network of our products - we know that there are points of sale and catering facilities (cafes, restaurants, bars), in which our products are not offered to consumers, and we will work to improve the situation in this regard.

As for the third group of investments, they cover new segments in our business. For example, we think of opening a real beer restaurant, where consumers would be able not only to enjoy their favourite beer, but also taste real beer snacks.

Also, we are thinking about a project to cultivate barley in Azerbaijan for the needs of our company. Currently, we use imported barley. However, the tradition of agriculture in Azerbaijan is very rich in order to produce a quality product, including for brewers.

Concluding the topic of investment, I would like to say that we highly value the quality of education in Azerbaijan and would be willing to invest in the development of local expertise for our high-tech company. This will also ensure stable prosperity of our company.

OUR REFERENCE:

The Russian brewery Baltika was founded in 1990 in St. Petersburg. Modern equipment and advanced technologies allowed the company to become the largest producer of consumer goods in Russia and the leader of the Russian beer market from 1996.

The Azerbaijani brewery in Xirdalan was commissioned in 1969. At that time, it belonged to the Baku-Beer production association. In those days, Xirdalan was one of the six largest breweries in the USSR.

In 1997, the plant was taken over by France's Group Castel and two years later, its full-scale reconstruction was completed. The official opening of the renovated plant in 2000 was attended by Azerbaijan's national leader Heydar Aliyev. The production of Xirdalan beer began at the same time.

JSC Baltika has supplied its products to Azerbaijan since 2000. The favourable prospects for the growth of the beer market in the country and Baku-Castel's status as a key player prompted Baltika to acquire the brewery in Xirdalan.

In May 2008, Baltika and Brasseries Internationales Holding (Eastern) Ltd (BIH Eastern) signed an agreement on the purchase of the brewery in Xirdalan. In 2009, the plant was renamed Baltika-Baku.

The modernization of Baltika-Baku was one of the largest investment projects in the food industry in the Azerbaijan Republic in the recent period. The total volume of investment at the end of the investment programme was about $ 20 million.