First of all we would like you to give
some brief information to our readers on
why and how you established the company
and what were the main steps that marked
its development in Azerbaijan?
European Tobacco-Baku started its activity
in 1998. In comparison with others companies
with a long history it is a young one, but
we actually started entering this sector
in 1991 and we first started as a trade
company. We had our bases at that time in
Turkey and we were present in two different
countries. Afterwards we started to expand
to Eastern Europe, i.e. Moldova, Romania,
Ukraine, Georgia, Azerbaijan, Tajikistan
till Mongolia. We established a very good
distributing system; we supplied all these
markets with international brands. Since
1995, positive changes have started in the
political life and economic sphere of those
countries and that is why we started thinking
of establishing our own production companies
in those countries. Then we decided to have
a factory in Azerbaijan which is one of
the most important ones as well as in Tajikistan,
Jordan. We have also started small manufacturing
in Romania and we'll soon have a very big
factory in Turkey.
We used to have local partners and we have
different markets. We started to expand
to different markets; we have a market share
in Middle Asia, Africa and in Middle East.
These are the main regions where we are
trying to stabilize ourselves.
What is the reason of your success in
those regions as the competition is really
tough in those markets?
As I mentioned we came to this industry
from trade. We have been distributing it
before and it is very important to have
experience in that. But we were inexperienced
in the industrial side. We have invested
a lot in this side, now we have the know-how
of manufacturing and we have the sales side
so that is the reason of our success.
We have very strong relations with some
of the multinationals that helped us developing
our industrial side. We have very strong
relations with Al-Tadis which is the match
between Tabacalera and Setranse in France.
And we also try to develop our relations
and cooperation with them.
What is the story of that cooperation?
When we were a trade company we were in
this market and were presenting safe products.
We supply those markets with the safe products.
And after we started manufacturing we expanded
our cooperation. We have licences to manufacture
these products now.
As most of our readers are businessmen,
top decision-makers and as you are one of
them could you provide figures in order
to understand how important for the market
this company is?
We have around 1500 salaries. Our market
share is around 53% and according to the
volume we are number one in the country.
We are mainly trying to meet the demand
in the market, so we have some other markets
where we don't have factories but we are
exporting our products. When we start a
project we try to achieve the target capacity
in the market and after that we have an
extra capacity to export our products to
some other markets as well.
What is your production capacity?
Our production capacity is 1.2 bn sticks
which is around 100 ths master case per
month.
What do you think would be the main
benefit of the companies that would like
to produce the same product here?
We are distributing our products to all
the parts of the country. Our quality standards
comply with the European ones and we have
all the facilities from the primary and
secondary side. We are very professional
in manufacturing and distribution. We have
been in this business for a long time and
we know how to run it and we can offer all
services.
What about the government? For example,
in Europe, the tobacco companies are having
a hard time, what is the situation here
with the government?
There are some regulations in Azerbaijan
that are not as strict as it is in America
or Europe. According to the normal procedures
there is health warning and everything,
the government doesn't try to boycott our
activity.
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What about
Pepsi? You are also managing this company?
It is our family business. We have different
businesses besides tobacco but it is our
main business. We have also a bottling factory
here because we believe in Azerbaijan and
we think this market is a very promising
one. We think in the quick and efficient
development of this country. There is also
a political stability which creates a healthy
atmosphere for the foreign investors. We
feel comfortable to expand in Azerbaijan
and that's why we have established a Pepsi
bottling factory and we are increasing our
market share. Things are very promising.
These companies are independent but they
belong to the same group.
What is your personal background? And
how did you reach this position?
We are three brothers. Our professions
are quite different. My elder brother is
an architect by profession, the second brother
is a doctor and I've finished from the architecture
university. Before the cigarette business
we started with beer, Pepsi in the Middle
East market and then we came to the cigarette
market. I was following the operational
side of the company and then I started to
manage the industrial side and I found it
very interesting and challenging. And now
we are going deeper and deeper.
We put our investment in those locations
that we think is promising and we start
to organize each location individually in
order for it to get its own market share.
We try to settle a factory and we have know-how
and our standards comply with the European
standards and our main goal is to organize
each market where we are and to develop
the business inside the country.
Are all the products that you manufacture
your own brands?
We are manufacturing our own product, this
is 95%, then we have cooperation with Al-Tadis
and we have their licence. We are planning
to open new brands and we can update the
technology.
We have already started with the Slims and
we have also introduced the Prestige line,
in the local market these are very successful
products and now we are going to introduce
the brand which is called "Storm"
which is targeting the medium segment of
the market and we are preparing the campaign
for it. In 2004 we have also introduced
Gauloise in cooperation with Al-Tadis. We
are also bringing "Brilliant"
super slim, so we have quite many plans.
What was the process after you arrived
in the country? You made the market research
and made a decision to start your business?
In order to have the right decision you
have to have the right information. First
we analysed the market and after we saw
the economic figures and indicators we made
our decision.
And I think during this period we haven't
had any serious failure. At present we have
53% of the market share which I think is
success.
What is the reason of your success?
You have to understand the market and what
customer wants. You have to decide on which
consumers you are targeting and fulfil their
requirements. There are consumers that target
the low price and those who are targeting
the high price and high image. Now we are
targeting on the high-medium and the premium.
We are leader in the volume compared with
other multinationals in the country. Philip
Morris and other big players are here in
the market. Though the competition is not
easy I think we are doing well.
What would be your message to our readers
particularly about Azerbaijan compared to
the neighbouring countries like Georgia
and others?
Azerbaijan is much more advanced than all
the neighbouring countries. The government
is very well settling the country and it
is very safe here. The economy is developing
and the situation in the country is getting
better and better. So there are great opportunities
for other companies to come to the country
and make investments in different fields.
And I think after the country gets the oil
revenues from the export pipelines the development
is going to speed up.
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