Azerbaijani economy becoming more diverse through support for SMEs

Craftsmen at an Azerbaijani company benefiting from EBRD advice on how to export successfully.
Azerbaijan
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Ibrahim Alisoy stood at a crossroads in the fortunes of his outdoor furniture firm. There was plenty of interest from abroad for his small company’s innovative products, but he wasn’t sure how to ramp up production efficiently to begin exporting to customers thousands of miles away.

 

So, in February this year, the co-founder and general manager of IDEA LLC in Azerbaijan turned to the Advice for Small Businesses team at the European Bank for Reconstruction and Development (EBRD) for help.

 

IDEA specialises in the production of outdoor metal and wood furniture and architectural structures. It all began in 2003 with small scale production of benches, pergolas and lights with striking, innovative design. Now their products include shelters for public transport, advertising supports and street lighting.

“Our company is different because we don’t do standardised products. Every order is customised, unique,” Ibrahim explained. “The most important things for us are design and quality.”

Urgent need for more efficiency

Until recently IDEA lacked an automated system to ensure accurate and timely information about warehouse and manufacturing operations. This used to delay deliveries to clients and complicate processes.

With orders increasingly coming in from customers in Russia, Kazakhstan and Qatar, there was an urgent need for more efficiency.

The EBRD Small Business Initiative allocated a local consultant to the company to introduce an Enterprise Resource Planning System, in a project supported by the EU through the EU4Business initiative.

The new system has:

• established better operational controls
• cut product delivery times
• provided the necessary confidence to expand, and
• helped secure a large contract with a Russian company for outdoor furniture.

Diversifying beyond the oil and gas sector

IDEA LLC is just one of hundreds of Azerbaijani SMEs the EBRD has helped over the past two decades. Since 2003, more than 850 in the country have received its advisory services, boosting their competitiveness and helping the Azerbaijani economy progress with its no.1 priority: diversifying beyond the oil and gas sector.

Another benefiting from EBRD and EU4Business help is fashion accessory and home care product company, ESSE, led by director Gulnara Hasanova, which received support from the Women in Business (WiB) programme. 

A WiB advisory project, supported by Sweden through the Swedish International Development Cooperation Agency, helped ESSE open offices in Sheki and Ganja in western Azerbaijan, as well as train sales staff better and develop a new marketing plan. The result was a 35% sales increase.

EU4Business/EBRD aid and lending for Azerbaijan SMEs

Last year, the EU announced a new €13.5 million assistance package from its European Neighbourhood Instrument to help Azerbaijan diversify its economy by:

• enhancing the competitiveness of SMEs in the country
• promoting new export opportunities for SMEs, and
• helping government institutions implement business-friendly policies.
The EU also allocated €14.5m to Azerbaijan in 2016 for regional development, which includes support for SME development in rural areas.

With over €294m of finance via direct financing and lending through local banks, alongside business advice operations, the EBRD has been backing small and medium-sized enterprises (SMEs)’s growth in Azerbaijan for decades.

Date

01/01/2003-31/12/2017

Find out more

EBRD Advice for Small Businesses
The EBRD in Azerbaijan