One of Azerbaijan’s few lubricant producers is a three-year-old start-up that is using just a fraction of its manufacturing capacity. But Technol officials say the company is growing and that it aims to become a major player in its home market while also developing an export business.
Located in the industrial town of Sumqayit, on the Caspian Sea near the capital of Baku, Technol’s blending plant has annual production capacity of 50,000 metric tons. Last year the plant produced 4,400 tons of finished products, up from 3,353 tons in 2018.
“Technol makes a wide range of products, including synthetic, semi-synthetic and mineral [oil-based] engine lubricants, transmission gear and hydraulic oils, as well as marine and industrial oils, brake fluids, engine cleaners and antifreeze. In 2019, we also started to produce lithium and calcium greases,” Elvin Hajiyev, Technol’s managing director, told Lube Report in an email interview.
Since its inception in 2017, the company has focused its efforts both on the domestic lubricant market and on expansion in neighboring markets. According to Technol’s estimates, Azerbaijan consumed around 70,000 tons of automotive and industrial lubricants in 2019.
“Technol’s share in the domestic market is from 6 to up to 8 percent, and we aim to increase it to up to 25 percent by 2025. In addition, expansion of our export sales is among top priorities. We look forward to resume our international activities in the post-Covid-19 pandemic period,” Hajiyev said.
Last year the company exported around 10 percent of its total produced volumes, primarily to the neighboring countries of Georgia, Turkmenistan, Turkey, Iran and Iraq, as well as Uzbekistan, Tajikistan and Syria.
Back home, it looks to become a key player in a market very much dependent on imports. Technol estimates that up to 90 percent of the lubricants consumed in Azerbaijan are coming from foreign suppliers, mostly from Russia, Turkey and Europe.
“Our mission is to analyze the market and understand the needs of our customers in order to provide the best value for them. We seek to build a deeper customer relationship whether with the companies or with the individual end users … Considering this, very recently we have launched an online sales website and are working on expansion of distribution channels throughout Azerbaijan,” Hajiyev said.
In the past three years, the company landed contracts with government agencies like oil company Socar, State Railways, the Baku Metro transport, state water utility Azersu, the Caspian Shipping Co. and the national defense and health ministries.
One year after Technol opened its plant, Azerbaijan’s National Academy of Science established a 50-50 joint venture blending facility with British lube marketer Millers Oils, located in Baku, called Millers Oils Azerbaijan. Aminol, another lubricant producer active in the country, started operation around the same time.
According to Hajiyev, Socar – which operates a 2,900 barrels per day API Group I base oil plant – recently launched a line of its own branded lubricants using Aminol’s blending facility. He claims that Technol, however, operates the first privately owned, independent “modern lubricant blending plant” constructed in Azerbajian.
Technol’s plant is operated by a work force of 80, and the company is supported by government incentives such as tax breaks and exemptions from duties on equipment imports.