We Can Confidently Export Azerbaijani Qualitative Beer to Russia: Interview with President of Baltika Company (video)

Azerbaijan, Baku, 14 October / Trend corr. U.Ismayilova / Trend interview with Anton Artemyev, the President of Brewing Baltika Open Joint Stock Company (OJSC).

Question: Does Baltika co plan to preserve the current brands of the Azerbaijani plant or will names of Khirdalan and 33-Export beer be changed?

Answer: We plan to preserve local sorts of beer. Despite of popularity of the imported sorts, local beer always covers considerable part of the market. Azerbaijan is not exception on this matter, as well.

Question: Will you produce specific sorts of beer for Azerbaijan?

Answer: If we feel its demand, we will produce specific sorts, which will be spread not only in a local market, but also in all markets, where the company takes part.

Question: How do you assess the current state of the beer market of Azerbaijan?

Answer: At present the beer market of Azerbaijan is at the beginning of development. The Azerbaijani people drink beer too little - only 6l per a man, which is one of the lowest indicators amongst many countries. The Azerbaijanis drink beer very little, because strong drinks prevail in pattern of use of alcoholic drinks. Each country has national peculiarity in the use of alcohol. Despite this, there are definite prospects of development of the market through reduction of use of strong drinks.

Question: What will the equipment modernization program at the Azerbaijani beer plant include and when do you plan to realize it?

Answer: Changes will concern practically all production sections and re-equipment will be realized at all stages, including cooking, filtration of bottling. In other words, practically, the whole plant will be re-equipped. We plan to invest $20mln in re-equipment of the plant, though this amount may be increased. These means will be invested and the plant will be re-equipped by beginning of beer season in Azerbaijan in 2009. After modernization and re-equipment of the plant, the Russian specialist will work at the enterprise to teach local employees only at the first stage and in future only Azerbaijani specialists will work at the plant.

Question: According to your estimations, use of beer will rise 14 times in Azerbaijan in the season. How do you explain such a sharp jump?

Answer: Really, it is too big difference, taking into consideration that difference between seasonal and non-seasonal period amounts to only two times in Russia: this fact is connected to culture of use. In the case of its rise, use of beer also rises at cafes and restaurants, which smoothes out seasonable transfer of beer use.

Question: Which priorities has Baltika co in sale of the Azerbaijani production: interior or more export markets?

Answer: Surely, the Azerbaijani market is priority for us, because economy says: sell beer, where you produce it. This is useful for consumers, because we offer them fresh beer and transport expenses, which cover considerable part of expenditures, are reduced. Despite this, we will analyze all opportunities to export beer to Georgia, Central Asia and, perhaps, to Russia in the case of incomplete use of local opportunities. We can confidently export the Azerbaijani beer to Russia, since the beer, which will be produced here, will not yield on any of characteristics.

Question: How is the price policy getting on, do you plan cut beer prices?

Answer: We expect that we can prevent price rise through transfer to local production and raising productivity of labor. We even can cut the prices on some positions subject to elements, such as inflations ratio, cost of energy and transport services. However, local beer will cost cheaper than the imported ones.

As to competition at the local market, our task is not to displace local producers, since there is always affection to local sorts. However, they have to compete with use on quality, price and contemporary methods of work.

Question: Do you plan to produce beer in other CIS countries?

Answer: At present we have not purchased similar plant in any other CIS countries - this is our first similar plant. We produce beer on license in the United Kingdom and Ukraine, as well as plan to produce in Uzbekistan by the end of 2009.

Question: How did the world financial crisis influence on activity of Baltika?

Answer: The world financial crisis did not dramatically influence on us, whilst we felt it in our activity. The crisis had an impact on liquidity of our customers - distributors. Despite this, we find out a decision to prevent interruption of flow of our production to market. Weather the financial crisis will be important for ultimate consumers, it will depend on its volume, as well as its influence on purchase capability and it is too early to speak about it.

The correspondent can be contacted at [email protected]

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