Chemical industry

Chemistry and petrochemical industry based on oil and gas processing plays an important role in the economy of the country. Enterprises involved in this sector are located close to raw material sources like Baku and Sumgait, but also Ganja, Salyan and Neftchala. Oil and gas, salt, iodine-bromide mine water, waste of ferrous metals are the basic materials used in chemical industry. Last year, the value of chemical products produced in Azerbaijan constituted 200.1 million AZN.

The first chemical plant was built in Baku in 1879. In the 20th century Sumgait became the center of chemical industry of Azerbaijan. The main chemical products are: synthetic rubber, car tires, polymers like polyetylene, propylene, isopropylene, plastics, synthetic fiber and mineral fertilizers, soda, chlorine, iodine, washing powder, soap, medicines etc.

The main chemical factories are: “Organic Synthesis” (1960), “Superphosphate” (1961), “Household Chemistry” (1978), “Synthesis Rubber” (1935) plants in Sumgait and “Baku Car Tire” (1959), “Baku Iodine” (1930), “Baku Chemistry and Pharmaceutics”, “Baku Rubber Products” (1929) plants in Baku, “Industrial Rubber” (1970), “glass Fiber” (1965) plants in Mingechevir, “Iodine-Bromide” plant in Neftchala (1972) and “Plastic Mass” (1972) plant in Salyan. Besides that, “Azerkimya” State Scientific Research Institution plays an important role in the development of chemical industry in Azerbaijan. Over the recent 15 years Azerbaijan made significant progress in upstream and midstream sectors of the oil and gas industry. This laid a firm basis for the development of downstream sector. In consequence, a new project on commissioning the brand new Oil Gas Processing and Petrochemical Complex in Azerbaijan has been launched recently. The complex will consist of 4 production sites: a refinery (to be commissioned at the end of 2020), a gas processing plant (to be commissioned in 2017), a petrochemical plant (to be commissioned in 2018) and a thermal power center (to be commissioned early 2017).

               

                                                           Volume of production of chemical products (million manats)

 

 

2009

2010

2011

  2012

    2013

Chemical products

132.1

120.3

186.7

  157.1

   187.7

 

 

 

 

 

 

Sumgait Chemical Industrial Park              

Sumgait Chemical Industrial Park was established in 2011. The main goal of establishing the Park is to ensure necessary environment for the development of industrial production on the base of competitive and innovative high technology as well as to promote and support entrepreneurship and stable development of non-oil economy in the country.  The area of the Park constitutes 167.66 hectares and resides nearby Sumgait city that is 32.5 km away from Baku. 

The appropriate external and internal infrastructure (electricity, heating, water supply, communication and other systems) with offices, training centers, offices, laboratory, etc. will be established within the Park to enable profitable activity and development of entrepreneurs and produce competitive products and render services through the application of modern technologies.

The Administration of the Park will be implemented by "Sumgait Chemical Industrial Park" LLC established under the Ministry of Economic Development. The Company is responsible for granting of permits, preparation and coordination of projects, infrastructure maintenance and other general activity of the Park.

A number of tax and customs incentives as well as concessional loans will be granted to investors in the Park. 

Generally, the petro-chemical derivatives will dominate overall production. But other priority industrial goods such as final polymer products will be also manufactured and processed in the Park. 

 

Outlined Incentives Portfolio of SCIP

  • Exemption from custom duty for technical equipment for 7 years
  • Exemption from property tax for 7 years
  • Exemption from a land tax for 7 years
  • Exemption from an income tax for 7 years

 

"Tamiz Shahar" joint Stock Company

"The Complex Plan of Measures for Improvement of Ecological Situation in the Republic of Azerbaijan for 2006-2010 years" was approved by the President of Azerbaijan on September 28, 2006 with the purpose of settling the existing ecological problems systematically in Absheron region. This complex plan of measures has a great importance for the enhancement of environment in Baku and Absheron peninsula. The Complex Plan of Measures reflects all major activities aimed at enhancing the existing environmental situation. So, the measures and other issues related to the improvement of ecological situation of Baku Bay, Bibi-Heybat area, surrounding area of International Airport named after Heydar Aliyev, the lakes of Absheron peninsula, oil-contaminated lands, groundwater-flooded areas and other lands polluted with industrial wastes have been reflected in the Complex Plan of Measures. The settlement of issues related to collection, transportation and placement of solid household waste in Absheron are among the duties approved in the Complex Plan of measures.

According to the Decree of President of the Republic of Azerbaijan "On Improvement of Management of Solid Household Waste in Baku city" as of August 6, 2008, the collection, transportation of all kind of solid household wastes, regardless of its origin of generation remains under the competences of Baku city Executive Power. According to the Decree the newly established "Tamiz Shahar" JSC carries out the works related to improvement of ecological situation of the city through placement and disposal of the solid household wastes in accordance with the modern standards.

"Tamiz Shahar" JSC was launched on March 12, 2009. The supervision of its management and activities is carried out by the State Committee for Property Issues and the Ministry of Economic Development of the Republic of Azerbaijan as well as by a Supervisory Board functioning under the auspices of the Ministry of Economic Development.

"Tamiz shahar" JSC was entrusted with the function of management, placement and disposal of household wastes in accordance with modern standards, carrying out this process in an organized manner, as well as improvement of environmental situation of the city and development of this field based on the principles of market economy. 

 

Waste to Energy Plant

The construction of Waste-to-Energy Plant was decided within the framework of "The Comprehensive Action Plan about the improvement of ecological situation in the Republic of Azerbaijan for 2006-2010 years".. Plant construction costs reached 346 million Euros. It was built on the territory of 20 ha in the settlement named Balakhani. Balakhani Waste-to-Energy Plant consists of 2 incineration lines, each line with 250,000 ton capacity and a turbine producing electricity. The amount of electricity obtained as a result of burning of waste will be equal to 231,5 million kWh/year. 

The President of the Republic of Azerbaijan Ilham Aliyev laid the foundation of Waste-to-Energy Plant on November 3, 2009 and participated in the Plant's inauguration ceremony on December 19, 2012.It is considered to be the biggest Waste-to-Energy Plant in Eastern Europe and CIS countries. The plant was constructed using 4G technologies and completely complies with local and European standards of environmental protection. Fly ash generated during the incineration process is caught by the special filters and does not pollute the environment. Concerning the bottom ash which is heavier and less harmful could be utilized as a construction material for road construction. And finally, industrial water used for cooling during waste incineration is discharged to sewerage only after treatment. Monitoring of emission level at the plant is conducted and controlled daily. Before launching the construction of the plant Environmental Impact Assessment was done and presented to various public discussions.

 

The Integrated Solid Waste Management Project

The purpose of the "Integrated Solid Waste Management" Project which is being carried out within the framework of "Absheron Ecological Rehabilitation Program" funded by the World Bank and the Republic of Azerbaijan is to support reforms conducted for systematic and continuous organization of solid municipal waste collection and utilization.

The loan agreement between World Bank and Azerbaijan Republic was signed on May 20, 2009. The document has been signed by Shahin Mustafayev, the Minister of Economic Development of Azerbaijan Republic and Gregori Yedrjeychak, the manager of World Bank in Azerbaijan. The activities outlined under the project are being conducted in 5 components. Thus, according to the project component on institutional reform, raising the potential and project management, the development of strategic planning, establishment of "Tamiz Shahar" JSC and its performance and development is being supported.


The control of environmental impact on MSW management, increasing the efficiency of existing landfill, the purchase of up-to-date equipments and technologies (weigh bridges, bulldozers) and the construction works (fencing, waste dumping, laying internal roads and etc.) are being financed within the framework of the project component on the rehabilitation and management of Balakhani landfill. Parallel to the rehabilitation and improvement activities of Balakhani landfill, preparatory activities for its total closure in future are also being conducted today. In addition to the above mentioned activities the preparatory works for building new modern landfills are also being conducted today.

Under the project component on closing and management of other landfills, the closing and cleaning of other unofficial landfills in Baku city, the improvement of other landfill's management (or closure) will be financed.

Within the frame of the project component on equipment provision for waste collection, the measures will be taken for expansion of service quality in Baku districts and in other areas where solid municipal wastes are not collected effectively, in order to increase the efficiency of the service and scale of solid municipal waste collection in most demanded areas there will be financed purchasing of lorries and waste trucks.

The Final- under the component of technical preparation of post project investments there will be carried out the feasibility study and environmental impact evaluation necessary for designing of new landfills, and establishment of transfer stations for increasing the efficiency of waste collection system.

As a result the mentioned measures will provide an opportunity to solve the problem of solid municipal waste, to improve the ecological condition in Baku and Absheron, to eliminate the factors causing danger for the environment, for potable water and peoples' health due to harmful wastes.

The total amount of the project budget planned for 5 years is 41.5 million US dollars. The amount of the loan provided by The World Bank on this project is 29 million US dollars, and it is planned to be provided through the International Reconstruction and Development Agency. The rest of amount is the contribution of Azerbaijan Government and the VAT obligation. 

 

Waste Sorting Project in Old City

With the intention of more efficient management of solid municipal waste formed in the territory of "Icharishahar" State Historical-Architectural Reserve, a series of measures are being realized by "Tamiz Shahar" JSC's support since February of 2010.

Provision of fascinating appearance of Old City as a territory included to "World Heritage" will be realized step by step.

Sorting of organic and non organic wastes has started. In order to sort the wastes, the Reserve has been provided with special marked containers and city residents were distributed multicolored packages. Within the framework of Plan of Measures elaborated by "Tamiz Shahar" JSC, realization of enlightenment activities are being realized among Old City residents, organizations located in that territory and guests of Reserve. Conducting public actions and distribution of various enlightening agitation materials serves to increase people's awareness in the sphere of solid municipal waste. 

 

"Tamiz Gala" Project

Gala settlement is regarded one of the oldest dwellings of Azerbaijan. The settlement is located in the northeast of Absheron Peninsula. There are plenty of architectural and archeological monuments in the settlement of Gala and in the surrounded regions. "The first Outdoor Archeological and Ethnographic Museum Complex" was established in the territory of Gala Historical and Ethnographic Reserve by the initiative and support of Heydar Aliyev Foundation in 2008. The Complex has attracted local and foreign tourists' attention since its establishment and it has also become the must-see in all tourist programs. Everybody is responsible to keep Gala Historical and Ethnographic Reserve which is regarded the historical and cultural heritage of Azerbaijanis clean and tidy all the time.

Regarding this purpose "Tamiz Shahar" JSC is implementing "Tamiz Gala" Project in order to create proper waste management system as a pilot project in the territory of Gala settlement by the initiative of Heydar Aliyev Foundation.

The purpose of the Project is to set up collection and transportation of waste, as well as its further utilization procedure in accordance with up-to-date standards. Over 120 waste fields for waste collection have been installed in the territory of the settlement and constant transportation of waste has been organized within the Project scope. Moreover, waste containers are washed and disinfected continuously in accordance with sanitary and hygienic norms. All the technologies operating in the settlement were connected to the GPS navigation system, and it provides opportunity to observe and control operation of the technologies at any time.

Waste sorting system under organic and non-organic wastes is being carried out with the purpose of proper and efficient implementation of waste management. Containers in two various colors, green and blue have been provided for this purpose. Wide scale propaganda campaign is being carried out among the people in order to provide active participation of settlement dwellers in the sorting process. Sorting and recycling of wastes leads up to saving of natural resources and energy, as well as rapid growth in cheap raw material market.

 

Eco-Industrial Park

Balakhani Industrial Park was established by a decree of the President on December 28, 2011. Along with the primary goal to sustain the improvement of ecological situation in Baku, this industrial park shall offer favourable conditions for the investors interested in recycling industry. State will ensure the required internal and external infrastructure like roads, electricity, gas, water, drainage and communication. 

The main objectives of Eco-Industrial Park are:

  • To create unique waste recycling infrastructure in one area;
  • To reduce environmental impact as a result of activity of green business;
  • To establish enterprises of recycling/reusing and production;
  • Sale of obtained raw material and extension of market of produced goods.

Investment incentives of Eco-Industrial Park:

  • exemption from corporate and income taxes for 7 years after registration
  • exemption from land taxes for 7 years after registration
  • exemption from real estate taxes for 7 years after registration
  • exemption from VAT for 7 years after registration for equipment, facilities and goods imported for production purposes

Target Industries:

  • Plastic recycling
  • Tire/rubber recycling
  • WEEE recycling
  • Lead batteries
  • Non-ferrous metal and cable recycling
  • Municipal hazardous waste (battery pills, light tubes, mercury containing goods, etc) recycling

Advantages:

  • The opportunity to obtain long-term and short term credits with favorable conditions
  • Favorable costs for renting lands and industrial facilities
  • Application of tax and customs incentives
  • Very good location with easy access to highway, railway, international airport, sea port
  • Close proximity to important export markets of Russia, Caspian Sea, Caucasus and Central Asia countries
  • Highly skilled labor force
  • Common infrastructure, facilities and services
  • Simplification of procedures/one-window service for administrative issues

 

Material Recovery Facility

Material Recovery Facility with annual capacity of 200 thousand tons constructed to develop segregating household waste and recycling business in the country began to operate in test mode. It completely started to operate after the inauguration ceremony in which the President of the Republic of Azerbaijan Ilham Aliyev also participated on December 19, 2012.

Designing Material Recovery Facility was carried out by "Aztech Project Construction" LLC. Contractor is "M-Naf" Company, and supplier Company is "Adelmann". 

As a result of sorting paper, glass, plastic, non-ferrous metal, iron, and other recyclable materials are segregated and as a result, total volume of waste is reduced, cheap raw material market will be formed, background for establishment of recycling industry in the country is created, energy is saved, and negative impact on environment is reduced. Additionally, hazardous waste as batteries, accumulators, and electronic waste are segregated from general waste and are sent to proper places.

The main objectives of the project are:

  • Reduction of negative impacts on the environment and human health;
  • Saving natural resources and energy;
  • Cheap and recyclable raw material market;
  • Stimulation of the recycling industry;
  • Reduction of the amount of final waste;
  • New workplaces.

 

Urea Plant in Sumgait

SOCAR is building a urea plant in Sumgait that will have a designed capacity of 2,000 tpd. The groundbreaking ceremony held on 19 December 2011. The plant would be built on an area of 24 hectares. Plant construction is expeted for completion in 2014. The plant's production capacity will be 1,200 tons of ammonia and 2,000 tons of urea per day. The plant would operate units for the production of ammonia, urea liquid and commodity urea. The project will be environmental effective as it is expected not to emit the produced carbon dioxide into the atmosphere, but to use it as additional feedstock in the urea manufacturing. 3,000 people would be provided with jobs during the construction and 500 after the plant is put into operation.

Chemistry and petrochemical industry based on oil and gas processing plays an important role in the economy of the country. Enterprises involved in this sector are located close to raw material sources like Baku and Sumgait, but also Ganja, Salyan and Neftchala. Oil and gas, table salt, iodine-bromide mine water, waste of ferrous metals are the basic materials of the chemical industry.

The first chemical plant was built in Baku in 1879. In the 20th century Sumgait became the center of chemical industry of Azerbaijan. The main chemical products are: synthetic rubber, car tires, plastics, synthetic fiber and mineral fertilizers, soda, chlorine, iodine, washing powder, soap, medicines etc.

The main chemical factories of are: "Organic Synthesis" (1960), "Superphosphate" (1961), "Household Chemistry" (1978), "Synthesis Rubber" (1935) plants in Sumgait and "Baku Car Tire" (1959), "Baku Iodine" (1930), "Baku Chemistry and Pharmaceutics", "Baku Rubber Products" (1929) plants in Baku, "Industrial Rubber" (1970), "glass Fiber" (1965) plants in Mingechevir, "Iodine-Bromide" plant in Neftchala (1972) and "Plastic Mass" (1972) plant in Salyan. Besides there are scientific unions and institutions working in the field of chemistry such as: "Azerizolit", "Azerkimya Professional Development" Institution, State Scientific Olefin Institution, "Azerkimya" State Scientific Research Institution.

Over the recent 15 years Azerbaijan made significant progress in upstream and midstream sectors of the oil and gas industry. This laid a firm basis for the development of downstream sector. In consequence, a new project on commissioning the brand new Oil Gas Processing and Petrochemical Complex in Azerbaijan has been launched recently. The complex will consist of 4 production sites: a refinery (to be commissioned at the end of 2020), a gas processing plant (to be commissioned in 2017), a petrochemical plant (to be commissioned in 2018) and a thermal power center (to be commissioned early 2017).