Since 2004 the industry of Azerbaijan has entered a new stage of development. In this year implementation of the State Program on socio-economic development of the regions commenced as well as other targeted measures, which resulted in a solution of the issues of particular importance to the industry; e.g. the industry's infrastructure was significantly improved. In the said period along with infrastructure projects several public investments had been made into manufacturing, in areas such as oil and gas production, oil refining and petrochemical fields, alternative energy installations and equipment, aluminium processing, ship building and defence industry. At the same time favourable investment climate had been created in the country, soft public loans had been provided to the private sector for their projects, and in necessary cases state’s participation in these projects had been provided.
In recent years the development of the industrial sector in the economy has been targeted and achieved, so that the volume of added value in the industry reached 27 billion manats in 2012, and the share of industry in GDP structure reached 50%.
The realization of oil and gas strategy contributed to sustainable increase of financial resources of the country and to expansion of the effective use of existing industrial potential. Mining industry is one of the well developed areas in the industry of the Azerbaijan and its share in industrial output in 2013 was 74%. Crude oil and natural gas production is pioneer in the field of mining industry and in 2013 the volume of production in this sector reached 24 billion manats, increasing by 10.8 times compared to 2003.
Successful socio-economic policy has a positive impact to the development of other sectors of the economy, as well as on the increase of the economic activity in the non-oil sector. These achievements conditioned entrance of the Azerbaijani industry into the new stage of development; in the last 10 years industrial output increased by 2.7 times, 2.3 times in the non-oil industry. As a result of the series of activities carried out within the framework of industrialisation, high growth rate had been observed in various sectors of the industry in 2003-2013, namely in metallurgy 2.2 times, finished metal products 2 times, production of electrical equipment 2.5 times, food production by 30%, production of clothing 2,2 times, leather, leather products and footwear 62%, production of rubber and plastic products 69%, production of construction materials increased by 2.5 times. Compared to 2003 in 2013 the industrial output in manufacturing increased by more than 3 times reaching 6.8 billion.
Generally, within the framework of industrialisation carried out in recent years, in several areas such as oil-gas, gold and other achievements had been made; the diversification of the industry expanded and new productions powers put into commission. In a short period of time competitive enterprises had been established in non-oil industry based on modern technologies. In recent years, major industrial enterprises had been created which are important for the overall industrial development of the national economy.
Increasing production capacity of cement plant and construction of a new plant in Garadagh, construction of cement plants in Nakhchivan and Kazakh, aluminium production complex in Ganja, shipyard plant, gold-copper refinery in Dashkesen and Gadabay, steel pipes in Sumgait, establishment of Azerbaijan Steel Production Complex creates wide opportunities for diversification. In addition, the modernisation of the petrochemical sector in Sumgait and foundation of urea plant will contribute to the diversification of non-oil sector in the future.
Significant progress had been achieved in machine building and equipment production, which forms the basis of the non-oil industry. Establishment of automobile plant in Nakhchivan and tractor production in Ganja would play an important role for the increasing demand for transport vehicles. Also ceramic products in Hajigabul, precision engineering and ICT in Shamakhi, electronic equipment factories in Ganja and Mingachevir had been established. Along with these, metal constructions in Garadag, concrete stands in Mingachevir and new plants have been put into production, which produces a wide range of products in regions of the country.
Creation of the appropriate institutions to accelerate the process of industrialisation in the country and expanding their activities play an important role in modern period. Factories equipped with modern technology in newly created Sumgait Technology Park and Sumgait Chemical Industrial Park along with the development of non-oil industry, giving a significant contribution to the diversification of the economy. In addition to these, solid waste sorting and incineration plant had been built in Balakhani (“Temiz Sheher” JSC) and Balakhani Industrial Park established in order to develop recycling in this area.
At the same time, an increase of alternative and renewable energy potential in terms of renewable generators and equipment production is playing an important role for diversification of energy sources, in addition to reduction of emissions in the country. In this regard, solar panels producing plant began operating near Sumgait City.
As part of the industrialisation process, special attention should be paid to the establishment of the defence industry in the country. In a short period of time about 50 new production facilities had been created and production of more than 900 defence products had been organised. In addition to military products, production of civilian goods by the defence enterprises had been increased twice in recent years.
In the past 10 years the light industry had developed as well; textile, furniture and other essential production facilities had been built in Baku, Nakhchivan, Ganja, Sumgait, Yevlakh, Guba and other regions of the country. In the area of food production, sugar plant in Imishli began operating, the salt plant in Absheron, milk and milk products plant in Agjabadi, canning plants in Gabala and Khachmaz, food industry enterprises equipped with new and modern facilities in Oguz, Agsu, Shaki and other regions had been put into operation.