EXPORT-ORIENTED ZONE

Last week passed under the sign of the development of Azerbaijan's chemical industry which is marking its 70th anniversary. President Ilham Aliyev attended the commissioning of a number of new facilities, predominantly related to chemical production, in the country's main industrial centre Sumqayit. 

An event devoted to the 70th anniversary of Azerbaijan's chemical industry was held at the initiative of the SOCAR company (State Oil Company of the Azerbaijan Republic). Speaking at the event, SOCAR Head Rovnaq Abdullayev said that the company is planning to fully modernize the domestic chemical industry by 2020, including enterprises that are part of the Azerkimya production association. "We have a lot of work to do to modernize this sector and implement new projects with support from the state budget. Our major tasks also include provision of raw materials for the new plants to be built under the SOCAR Polymer project being implemented in the Sumqayit Chemical Industrial Park," Abdullayev said. 

Efforts launched in 2013 to form the infrastructure of the Sumqayit Chemical Industrial Park (SCIP) have entered an active phase. Petrochemistry is identified as a priority sector in the new technopark set up in the form of a limited liability company under the Ministry of Economy and Industry (MEI). Its formation is going on with active support from the SOCAR company. The new technopark will occupy an area of 296 ha predominantly on the grounds of a dismantled plant of surface active agents (SAA) which used to be part of the Azerkimya production association. At the moment, efforts are under way there to form the utility, transport and energy infrastructure of the future industrial zone. The park territory is divided into 43 plots earmarked for building up to 40 modern enterprises which will provide 10,000 new jobs. In particular, the park will provide for the production of polymer articles and chemical items for construction, agriculture, consumer needs, motor vehicles and medicine. 

About 30 per cent of the SCIP area will be allocated for training and administrative needs and the remaining 70 per cent for production facilities. All the expenses involved in the formation of the infrastructure will be covered using funds from the budget or from state agencies and companies. As regards the commissioning of the facilities, it will be provided by local and foreign investors. In order to attract portfolio investors to the technopark, SCIP residents are exempted for seven years from taxes on profits, land and property; while equipment imported from abroad is VAT exempt.

In fact, the process of recruiting investors in the SCIP has already started: four residents have already been registered there. Moreover, a few enterprises have already been commissioned there. Thus, at the initiative of one limited liability company, a plant making spiral-welded pipes has started operation. The annual production capacity of its three lines is 0.2m t. The company's second functioning facility is a plant making mechanical products, such as steel-reinforced pipes, metal fencing and plastic joints. Notably, these products are not only meant for the domestic market but are also actively exported. In particular, a SCIP resident has won a tender held in Turkmenistan for the right to modernize Turkmenbashi Port. Sumqayit will send 60,000 t of piping products worth 45m dollars to the neighbouring country. 

A few days ago, President Ilham Aliyev attended the inauguration of the company's third enterprise - a technical equipment plant. Metal casting and manufacturing areas have been arranged at the new plant. They are equipped with up-to-date melting furnaces with an output capacity of 10 t of steel per hour and other equipment. Altogether, the plant is supposed to turn out 6,500 t of high-pressure hydraulic engineering equipment annually. 

"Sumqayit's industry is rapidly developing and these processes reflect a general trend towards a new industrialization of the country and building up the export potential of its non-oil sector," the head of state said assessing the process of rehabilitating the industrial cluster of the "chemical workers' town". New enterprises of the chemical technopark will shortly be working at full capacity here and it is planned to invest over 1bn dollars in them," he said.  

It is notable that the role of industrial flagship in the SCIP has been assigned to SOCAR-Polymer. President Ilham Aliyev also took part in the ceremony of laying the foundation of a new SOCAR-Polymer plant for making high-density polyethylene. This is the first such large-scale and capital-intensive project carried out in the country's petrochemical industry over the past 40 years, SOCAR head Rovnaq Abdullayev said during the foundation laying ceremony. The estimated cost of the project is 750m dollars. Two production facilities with an annual output capacity of 0.18m of polypropylene and 0.12m t of polyethylene will expectedly be commissioned by 2018. As the new plant is put into operation, it will be possible to give up expensive imports and meet in full the domestic needs for these high-demand products.  Moreover, it is planned to export some 70 per cent of the high-density polythene to the markets of Turkey and Europe. 

Simultaneously with setting up new production facilities in the chemical industrial park, SOCAR is putting as much effort into modernizing petrochemical enterprises built in Sumqayit in the past. In particular, the process continues of reconstruction and upgrading of equipment made in 1994-2001 on the basis of EP-300 and Polymer-120 units at the ethylene-propylene plant. Over the past five years, large-scale work has been done at this plant to renovate its equipment and introduce new production cycles. The plant's power system has been completely modernized; uninterrupted power supply has been set up and steam and gas loss has been prevented, thereby reducing the cost of end product. 

In 2013, a nitrogen-oxygen complex and a modern-type water-cooling system were commissioned. One of the new production areas put into operation has made it possible to produce dehydrated isopropyl alcohol. Quite recently, the plant's lab was thoroughly overhauled and furnished with modern equipment. It is planned for next year to build a wastewater purification system with a daily throughput of 2,600 cu.m. at the ethylene-propylene plant. It will provide for high-level removal of waste from sewage discharged into the Caspian Sea and its use for irrigation. Recently the plant accomplished the construction of a process area for removing sulphides from liquefied gases. With a design capacity of 87,600 t annually, it will ensure the high quality of initial propylene products.    

The Azerbaijani president launched the unit for hydrogenizing butylene-butadiene fraction and desulphurization of liquefied gases. The annual design capacity of this unit will be 0.12m t at the first stage and it will be more than doubled in the near future. 

A large proportion of the output of Sumqayit's enterprises is meant for export, in particular, to Europe, Turkey, China and CIS states. The remaining primary products of its basic plants - Organic Synthesis and Ethylene-Propylene - will be processed into final products at small and medium-sized enterprises being built under the third phase of the technopark. Such enterprises are meant to produce competitive articles from primary polymer and other products of the petrochemical sector. 

The SCIP management has already quite a number of requests today from companies of Germany, South Korea and Canada for building enterprises to process hydrocarbon raw materials. However, preference will be given to companies specializing in the production of final products in view of our plans to build a new giant petrochemical complex in Qaradag District in 2020-25 where facilities will be concentrated for the production of basic primary and semi-finished products. 

FIRSTHAND

"Our 70-year-old domestic petrochemical industry has already quite a lot of experience and glorious traditions. Today we can see a recovery of chemical enterprises in the 'chemical workers' town'. Modern technologies are being introduced here ensuring the competitive and export-oriented development of the sector,"

Ilham Aliyev, president of AZERBAIJAN