A Set of Steel Production

Steel industry in Azerbaijan is centralized. President Ilham Aliyev on April 23 ordered the creation of complex steel production.

 According to the document, the complex will be closed joint stock company. Design, construction and management are encompassed in the city of Ganja and the Dashkesan region. The complex, which also includes Dashkesan Mining and Processing Plant (JSC "Daskesan Filizsaflashdirma), will cover all stages - from the mining of iron ore to steel production, the use of new technologies in this field, the modernization of material and technical base and its efficient use, as well as other work associated with the development of the industry - said the ordinance.

The powers of the general meeting of CJSC "Azerbaijani complex for the production of steel," instructed the Cabinet of Ministers, the Ministry of Economic Development (MED) and the State Committee on Property Issues (SCPI).

Recall that the government nominally controls of "Daskesan Filizsaflashdirma and Sumgait plant rolled steel Azerboru. However, at the World Economic Forum on April 8 in Baku guide the private limited liability company Baku Steel Company (BSC) has signed a contract with SMS Simag (Germany) on the exclusive study of the project involving the creation of Ganja integrated steel production and reconstruction of Sumgait Pipe Plant. On the same day the company Siemens VAI signed a memorandum of understanding for the construction of on-site Dashkesan GOK new venture. On April 9, Baku Steel Company signed an agreement on these and other projects with companies Air Liquide (France) and Midrex (USA). According to preliminary calculations, the investment in the project (including the reconstruction Azerboru) amount to 1.4 billion euros.

To the question "Who has authorized a private company to decide the fate of industrial structures with 100% state capital," no one answered. A spokesman GKVI Gulu Khalilov told Turan, that the government, which owns 97-99% of the shares in JSC Dashkesan Filizsaflashdirma and JSC Azerboru has not empowered BSC to conduct negotiations on its behalf and to enter into any agreement." The spokesman for BSC Namik Akhmedov promised to provide leadership position of taking action in respect of Dashkesan Filizsaflashdirma and JSC Azerboru. The answer is still no.

SCPI since 2006 has a contract with the company on Det.Al Limited to attract investment in Dashkesan Company, including the cycle of enrichment of iron ore to the production of marketable products in Ganja. The director of the local representation "Det.Al Holding Limited" Sarhan Babaev said Turan, the company continues to work Dashkesan Mining and investing in steel plant in Ganja. The second entity over which "laid eyes" BSC, JSC Azerboru, is to be privatized by the investment competition and while in this direction are in the research stage of the financial advisor.

LLC Baku Steel Company registered in an offshore territory (Isle of Man, UK), has been in force since May 2001. The number of employees reaches 3600 people. As the ultimate beneficiaries of profits high-ranking officials of Azerbaijan are called. This Ltd. since 2011 often takes place in the scandalous publications in the local media about the seizure and forced to freeze production of steel and rolled metal medium and small enterprises. It is an aggressive policy towards local businesses and industry has a negative image in the business circles of the country.

Interestingly, the JSC Dashkesan Filizsaflashdirma, and JSC Azerboru were almost the same path of privatization. Both enterprises were privatized through investment competition in 2003-2004 by British companies (Aldex Limited and Targol Investment). After 2-3 years the contract with the investors was canceled due to no fulfillment of the obligations on investment.

The order of the President of the country has responded to many questions about the attitude of the authorities to private and public property in Azerbaijan. If earlier between power groups was a struggle without rules for influence in the mining and minerals processing and steel industry, Ilham Aliyev put an end to the disputes, making it clear that the last word belongs to the state, which he heads. - 17D-