CONNECTING NORTH - SOUTH & EAST - WEST An interview about the place of Azerbaijan in the world logistics hub with Mr. Eugene Seah IPOs in Azerbaijan: a new era is here Why logistics and supply chain management is important for an organization OFFICIAL PUBLICATION OF AMERICAN CHAMBER OF COMMERCE IN AZERBAIJAN ISSUE 23 (2016) New to AmCham Regular Members Associate Members A Word From Executive Director of AmCham Dear AmCham members and friends, Welcome to the 23rd edition of AmCham’s magazine – IMPACT Azerbaijan. Issue 23 In recent period, logistics has been a hot topic in Azerbaijan. Changes to legislation, public and academic discourses, as well as infrastructure development provide a room to zoom world attention Credits to this sector. It should be mentioned that existence of an excellent geographical condition creates an opportunity for Azerbaijan to be a AmCham Executive Director: hub – connecting China and India to Europe. Hence, a spillover effect Natavan Mammadova for further development of the business sector and strengthening bilateral relationship with European and Asian companies are highly expected. Editor: Bearing this in mind, the current edition of IMPACT is devoted to logistics in Azerbaijan. With Aykhan Nasibli contribution of field experts and member company representatives, the content shares best practices, provides various solutions and fresh vision. At the same time, within this edition, you Design: will be able to enjoy reading member contributions about various issues, including taxation, IPOs, Crazy Innovations pharmaceutical market, improving operational efficiency, etc. Lastly, recent activities of AmCham, contribution of committee meetings, short information about research outputs have been indicated. Articles contributed by: As AmCham it was our pleasure to invite member companies to “Trans-Caspian East-West Asif Zeynalov Trade and Transit Corridor” forum in Washington D.C. on April 28-29, 2016, co-organized Cigdem Duru by the Embassies of Azerbaijan, Georgia, Kazakhstan and Turkey to the USA. The Forum Parviz Azerelli brought together public and private senior executives in the fields of transportation policy, Nuran Kerimov transit, customs, logistics and value-added services from the regional countries, along with Ulvia-Zeynalova Bockin & Kamal representatives of the international freight forwarders, EU-based companies, China and Mammadzada Central Asia-based US manufacturing companies. We look forward to have this event the next Nargiz Karimova & Orkhan Rajabov year as well and hope to see more Azerbaijani companies. Prof. Dr. N.J. Delener Hokuma Karimova Overall, I appreciate to our members with contribution to IMPACT Azerbaijan magazine. I am sure you will find it interesting and informative! Advertisers: Port of Baku Kind regards, PASHA Insurance Natavan Mammadova Yapi Kredi Bank Azerbaijan GRATA Azerbaijan Editor’s Comment: Hyatt Regency Baku Dear friends, Azerfon YOM Logistics Welcome to the 23rd edition of IMPACT Azerbaijan magazine, ITECA Caspian devoted to “Logistics in Azerbaijan: connecting East-West and North-South”. Printing: Existence of expertise within AmCham enabled us to develop a fresh Bestpack view for logistics. “In Focus” section will drive to various interviews and articles. Our authors cover deep analysis about the current situation with Publisher: development of logistics in Azerbaijan, as well as indicated best practices. American Chamber of Commerce Herein, the topics will be useful for the business sector of Azerbaijan to in Azerbaijan further develop their vision and goals for the upcoming years. Furthermore, within “Member Contribution” section our members contributed with articles Tel: (+994 12) 497 13 33 about the reforms in taxation system, IPOs, conditions on pharmaceutical market, improving Fax: (+994 12) 497 10 91 operational efficiency and other subjects. As usual, we provided a snapshot of Q2 and Q3 www.amchamaz.org of AmCham activities, with an emphasis to business events, internal committee meeting discussions, research outcome, as well as legal update. Advertising opportunities: Herein, it is also my pleasure to appreciate one more time to companies who see deep value Please contact the Editor at in IMPACT on advertising their business – Port of Baku, Azerfon, Yapi Kredi Bank Azerbaijan, [email protected] PASHA Insurance, GRATA Azerbaijan, Hyatt Regency Baku and YOM Logistics. Tel: (+99412) 497 1333 Enjoy reading and keep contributing! The articles in IMPACT Azerbaijan Sincerely, express the opinions of the authors Aykhan Nasibli and do not necessarily reflect the position of the American Chamber of Commerce in Azerbaijan contents IN FOCUS DEVELOPMENT AND EDUCATION 4 22 An interview about the place of Why logistics & supply change Azerbaijan in the world logistics hub management is important for an Mr. Eugene Seah Chief Operating Officer of “Port of Baku” organisation Prof. Dr. N.J. Delener Dean, School of Business, ADA University 8 24 International and local experiences in YARAT logistics at a glance Hokuma Karimova Head of PR & Communications Asif Zeynalov YARAT Friends Membership Platform Regional Director of Logistics & Infrastructure, BP Azerbaijan-Georgia-Turkey 10 AMCHAM AZERBAIJAN Green corridor: win-win for customs 26 and trusted companies Cigdem Duru About Us Azerbaijan and Georgia Supply Network Operations Leader, Procter & Gamble 11 An interview with the General Director of YOM Logistics 27 Salih Tufekci Business Events 12 Azerbaijan: new re-export hub of two continents – opportunity for entrepreneurs 30 Parviz Ilyasov Crazy Innovations - CEO & Co-founder Committee Highlights MEMBER CONTRIBUTION 14 Azerbaijan embarks on major tax 33 Trans-Caspian East-West Trade and Transit reforms Corridor Forum Nuran Kerimov 34 Managing Partner Deloitte & Touche LLC AmCham Legal Update 16 IPOs in Azerbaijan: A new era is here Ulvia Zeynalova-Bockin - Senior Associate of Baku office of Dentons 39 Members’ News and Events Kamal Mammadzada - Partner of Baku office of Dentons 40 18 An interview on pharmaceutical Social Events situation in Azerbaijan Askar Talipov Head of Representative office Sanofi in Azerbaijan AmCham Calendar of Events 20 42 Standards as a tool to improve operational efficiency and promote your 43 Seminars & Projects business Nargiz Karimova Partner, Assurance services 44 (M2M) Discount Program Orkhan Rajabov Manager, Ernst & Young Azerbaijan 5 in focus An interview about the place of Azerbaijan in the world logistics hub with Mr. Eugene Seah Chief Operating Officer of “Port of Baku” re-exported with minimal bureaucracy intervention as FTZs are prerequisites for generating trade and attracting Foreign Direct Investment (FDI). Thus, planned Alat Free Trade Zone will attract investors from around the world and bringing profits to the government. Over course of this year, the Port of Baku has hosted many foreign dignitaries. What’s impact of the Port and FTZ to the regional collaboration between the Caspian states? Due to the increasing economic and social dynamics of Caspian economies, stronger transport infrastructure, including vital port developments that make up the Silk Route, will accelerate the trade of goods between Europe and Asia. In fact, the East-West international transport corridor aims to realize an effective, competitive road-rail- sea transit system among Turkey, Kazakhstan, Azerbaijan, Georgia, Turkmenistan and China. Today, ten major ports in the Caspian Sea including Aktau, Turkmenbasi, Astrakhan and Baku offer significant opportunities not only for national economies, but also for region’s sustainable development. The signing ceremony for the advisory service agreement Furthermore, thanks to the unique location of the Caspian on the creation of Alat Free Trade Zone was held on Sea, Caspian Ports have also adequate capacity to create September 7, 2016. In your opinion how this will impact their own economy provided that ports are developed in on Azerbaijan economy in future? tandem in terms of procedures, productivity and efficiency. In I think it’s going to have tremendous impact on Azerbaijan’s this way, there will be no bottlenecks or chokepoints and by economy in terms of its further diversification. We should keep in mind that the advisory service will be provided by renown DP World which operates the largest marine terminal in the Middle East- Jebel Ali Port. Along with Jebel Ali, DP World’s portfolio includes over 65 marine terminals across six continents. DP World has interest in "Baku International Sea Trade Port" CJSC (aka Port of Baku) and in Alat Free Trade Zone (AFTZ). The company believes in its prosperous future. Alone with AFTZ, DP World provides advisory service to the Khorgos Special Economic Zone and Inland Container Depot in Kazakhstan making this route more interesting for the world logistic and transportation companies. (+99412) 599 00 03 The future business hub is planned to become part of a network of free trade zones to develop the economy and to form part of the Eurasian trade corridor. From the strategic 72, Uzeyir Hajibeyov str. point of view, the core of a successful hub policy for Azerbaijan must include Free Trade Zone development, where goods The Ministry of Economy, the Port of Baku and DP World group of companies signed an may be landed, handled, manufactured or reconfigured and agreement to provide consulting services for the establishment of a Free Trade Zone in and fb.com/BakuSeaTradePort around of the new Port of Baku at Alat www.portofbaku.com 6 Issue 23 (+99412) 599 00 03 72,