Azerbaijani market has good potential to develop: INTERVIEW with Baltika company top-manager

Azerbaijani market has good potential to develop: INTERVIEW with Baltika company top-manager

Azerbaijan, Baku, Nov. 7 / Trend , U.Ismayilova/

Baltika Brewery OJSC Vice President for Corporate Affairs Daniil Briman spoke with Trend in an exclusive interview.

Trend : How do you assess the activity of Baltika-Baku in the last summer season?

Daniil Briman: In January-September 2009, the volume of sales of the Baltika products declined slightly in Azerbaijan - about 1.5 percent. But if assess the overall beer market of the country, which experienced an 11-percent-fall in this period, it is quite a bit. There are three key reasons for a decrease in Azerbaijan's beer consumption. They are:

- the first and most basic is the impact of the global financial crisis, as beer refers to consumer goods and is a quick indicator, responsive to changes;

-the second factor is due to a seasonal period, this year's summer in Azerbaijan was relatively cool and the beer is a seasonal soft drink. This fact also negatively affected sales. In summer, beer is sold by 10 times more than in winter and summer sales can be estimated at 80 percent of total sales per a year;

- and the last factor is a religious holiday of Ramadan, this year it began in August and caused a significant fall in beer consumption among the population.

These are three key factors that affect the volume of the Azerbaijani beer market.

Q: Which place does Baltika-Baku occupies on the Azerbaijani market, and what does the plant plan for the near future?

A: At present Baltika Baku comprises 73 percent of the Azerbaijani beer market. This market has a very good development potential, as the country's economy is stable. Azerbaijan is among the countries which have undergone a slight impact of the global financial crisis. GDP in the country continues to grow. For us, as investors, it is very good information, because we operate on this market. And a key factor for future development for us is the stability of the economy and forecasts. Forecasts for Azerbaijan are very good, and we hope that next year, growth will replace a short-term decline caused by the global crisis.

Q: Has Baltika-Baku gained a profit projected for 2009?

A: No. Due to the current situation, the plant has not gained the expected profit. The plant's financial indicators have declined slightly, but we were able to work on cost. It is quite possible that indicators will improve in late 2009. Only few Russians work at the plant and we rely on local staff to improve the activity. A seasonal number of the plant is increased by several times, while the permanent staff numbers over 200 people.

Q: Do you plan to cut prices for your products?

A: No, the plant's strategic plan does not envisage a price cut, as a cut is a result of overstocking. We have a stable price for products and all other financial parameters that determine the activities of the company are stable, as well.

Q: Will Baltika-Baku become a regional enterprise or are its products designated only for Azerbaijan's domestic market?

A: The Baltika-Baku plant has become regional. The plans for the product export were made at beginning of investment. Since summer, we have already started to export beer to Georgia, which is the most convenient partner due to the logistics infrastructure indicators and geographical position of Azerbaijan. Transport logistics is much cheaper than those plants, which are in Russia. So far, the plant has exported over 40,000 liters to Georgia and this figure will reach 400,000 liters in late 2009. If the plant continues to develop in the planned pace, the plant can export the Baltika beer from Azerbaijan to the countries bordering with Azerbaijan through the Caspian Sea, and even to other countries via the Caspian Sea.

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