Akkord Corporation rapidly comes out to the international arena - PHOTOS

Khagani Guluzadeh, the Chairman of Board of Directors, the General Director of “Akkord Industry Construction Investment Corporation” OJSC.

Guluzadeh Khagani Zahid was born on August 6, 1977 in Marneuli region, Georgia. He has been leading Akkord Corporation since August 2010. Before he held executive positions in biggest banks of Azerbaijan as the Head of ALCO, the first deputy chairman and the chairman of the Board. He led the Task Force which managed to implement successful placement of Eurobonds. He has rich experience in working with financial institutions, investment funds as well as the world’s leading banks.

In 1999 he graduated from the Azerbaijan State Economy University as the Master of Finance. In 2003 he successfully defended dissertation on “Priorities of State Investment Policy in the Process o formation of National Economy”. He is a candidate of economic sciences, a laureate of the “Manager of the Year” award presented by European Business Assembly in June 2011 in Oxford (Great Britain). He is married and has three children.

Akkord Corporation:  our aim is to expand beyond the borders of Azerbaijan and turn into internationally competitive transnational corporation.

Caspian Energy (CE): Mr. Guluzadeh, what do you believe is the main mission of Akkord Corporation?

Khagani Guluzadeh, the Chairman of Board of Directors, the General Director of “Akkord Industry Construction Investment Corporation” OJSC: Our corporation is among the leaders of construction sector in Azerbaijan and South Caucasus. The idea of establishing the corporation was promoted by the decrees of Ilham Aliyev, the president of the Republic of Azerbaijan, on the measures aimed at accelerating social-economic development in Azerbaijan and approval of the State Program for Social-Economic Development of the regions. Assisting in the improvement of non-oil sector of Azerbaijan, Akkord has managed to establish new standards in implementing civil and infrastructural construction projects, contributed to the development of different industries.

In a short period of time the corporation gained leading position in civil and infrastructural construction, as well as construction of other public objects, production and processing of construction materials. Alongside with residential construction, Akkord, playing considerable role in economic development of Azerbaijan, has achieved great success in supplying the country’s rapidly developing construction sector with construction materials.

We intend to leave a noticeable trace in the history of modern construction sector of Azerbaijan, to take part in important regional projects and strengthen our authority in construction, production and also investment sectors of Caucasus and Eurasia. Our mission is to expand beyond the borders of Azerbaijan and turn into internationally competitive transnational corporation. Thus we plan to contribute to the economic development of Azerbaijan and increase the country’s export potential.

CE: What innovations were introduced with the new registration of the company as corporation?

Khagani Guluzadeh: We have completed establishing new organizational structure. The operation of the General Meeting of Shareholders, Board of Directors and Management Boards, Audit Committee, Risks Management Committee and other structural units in the new structure are based on international best practices.
To improve risk management system Akkord has strengthened and expanded its internal control. The mechanisms of evaluation and management of financial, IT, operational, project management and other risks have been applied as well. Investment policy of the company has been also improved, open tender procedures implemented.

Internal audit function has been considerably improved within the corporation. This function is quite developed today and it evaluates decision making process, effectiveness and rationality of expenses, risks management, compliance with the laws and procedures in finance, construction, production and other areas, evaluates effectiveness of financial-economic activity of the corporation and provides relative recommendations. The corporation also intends to conduct joint projects with international financial organizations on implementation of corporate governance standards.

CE: What large infrastructural projects the corporation is involved in today?

Khagani Guluzadeh: Recently we have won the tender for traffic regulation, improvement of road infrastructure for eliminating jams and providing traffic-lights-free traffic on Galaba Square near Ganjlik metro station and adjacent crossroads.

The second large project is construction of a tunnel in Ziya Bunyadov Avenue for traffic-light-free traffic. Implementation of this project will ensure uninterrupted movement of vehicles from the centre of Baku up to International Airport named after Heydar Aliyev, alongside with Binagady highway from the airport to the centre of the capital.

Today we are involved in realization of infrastructural projects not only in Baku, but in the regions as well. In particular, our company is engaged in reconstruction of asphalt pavement of 37.5 km (0-37.5km) long 4-lane Ganja circle road implemented within East-West Highway Improvement Project, as well as construction of 23.5 km (31-54 km section) long Alyat-Masally asphalt road. 
Besides the abovementioned, we continue the works for reconstruction of water supply and sewerage system in Agstafa, Tovuz and Shamkir within the framework of the State Program on Development of Regions.

In connection with the execution of the decree of the government of Azerbaijan, dated March 07, 2011, Akkord Corporation successfully completed the construction of 34 km long dikes alongside Kur river ordered by the Department for Exploitation of River Dikes of Melioration and Water Industry OJSC of Azerbaijan within the Project for Strengthening and Constructing Dikes along Kur and Araz rivers.

CE:  When shall the cement factory constructed by the corporation in Gazakh region of Azerbaijan be commissioned? 

Khagani Guluzadeh: As I have already mentioned, on February 11, 2004 the President of the country signed the decree ‘On approval of State Program (2004-2008) for Social-Economic Development of Regions of the Republic of Azerbaijan’. To my opinion the cement factory, we are constructing in Gazakh region, is one of the largest projects the corporation performs within the framework of execution of measures arising from the document. Initially the production capacity of the factory, constructed on the area of 54 ha, will be 1 million ton of cement a year.

The adjustment of project to Azerbaijan standards was executed by «AzDövlətMaşLayihə» (Azerbaijan State Machinery Project) Institute. The project consultant is SC Endustri A.Ş. Company. The feasibility study of the factory was prepared by internationally known Deloitte and Touche LLC audit and consulting company.

The equipment of the factory meets all European standards and ISO requirements. Local and foreign specialists are involved in construction of the factory. Information on ecological impact of harmful atmospheric emission, technical condition of gas and dust catchers, plan to decrease emissions under unfavorable weather conditions have been prepared, maximum allowable norms of harmful atmospheric emission, analytical emission control plan and other instructions developed under the project. Based on the abovementioned documents the maximum allowed emission has been calculated for the enterprise.  

Dry method cement production factory is to be commissioned in two stages. Cement production and packing lines will be commissioned during Stage 1 in March, 2012. Clinker and raw material sections will be set in operation in May 2012. 1000-1500 new work places will be opened by the time of full operation of the factory.

Due to realization of new infrastructural projects 2 thousand new employees were hired by the Corporation during last two months.

CE: In addition to large local infrastructural projects Akkord has also gained fame as a contractor of infrastructural projects in foreign countries. What other new projects are to be realized in near future?

Khagani Guluzadeh: As you have truly mentioned “Akkord Indsutry Construction  Investment Corporation” OJSC expands cooperation with world’s leading construction companies and participation in international projects. Currently we are engaged in infrastructural and business projects in Georgia, Kazakhstan, Afghanistan, Turkey, Ukraine and Uzbekistan. 

Georgia was the first foreign country where we gained authority. The number of projects of Akkord Corporation in that country is currently increasing. Achievements in Georgia and other countries demonstrate reliability of projects delivered by Akkord. On July 9, 2009 we were included in the list of winners of the tender for asphalt-concrete paving of Sveneti-Ruisi road in Georgia. The project is executed in 3 lots and covers the part of the road of 15 km. On lots 1 and 2 Akkord-Georgia acts as a direct contractor.

The first lot includes construction of: 5 bridges with total length of 4,500 m, 26 pipe crossings, 2 culverts, 2 asphalt pavements; lot 2 includes construction of: 1 jetty-bridge (877m) with total length of 1,450m, circle road, 1 bridge (160m)/2,154m, 5 pipe crossings (1,500mm in diameter), 500 mm diameter 78 m long pipe crossing; lot 3 includes construction of: two-way tunnel 750x2 with total length in 8300m, 2 culverts, 3 pipe crossings. The project is not only a strategically important project, referred to as the 1st class autoban roads, but it is also a part of general highway that will join the capital of Georgia with Russia and Turkey.

Today 90% of works on lot 1 has been completed. The road is open for vehicles. The lot 2 has been completed by 30% and the lot 3 by 60%. The road along the tunnel in both directions is open for traffic. Concreting works are ongoing .
Another large project was completed in Georgia on November 15, 2010. The opening ceremony was held on completion of construction of asphalt pavement of 15 km section of 224km long Samtskhe-Javahetiya road passing through the territory of Tsalka-Nardevani to the border with Turkey. Other important projects are construction of 8.3 km long Tbilisi-Tianeti road, 10 km Kutaisi-Tskhaltubo-Lantekhi road and 12.23 km Kutaisi-Tkibuli-Ambrolauri road.

Another country, where Akkord successfully operates, is Kazakhstan. Within the international “Western Europe-Western China” road project the company won tender on two lots for construction and asphalt paving of 107 km long roads. Hereby the Corporation has achieved the recognizability of its brand in the republic. To date 50% of embankment works have been completed.

Recently the Corporation has won another tender. On August 20, 2010 Ukravtodor, the State Service of Ukraine on Motor roads, announced tender on total restoration of M06 Kiev-Chop motor road. The project is financed by European Bank for Reconstruction and Development and is realized within the framework of preparation to European soccer championship to be held in Ukraine in 2012.

Companies from Italy, Slovenia, Azerbaijan, Turkey, Korea, China, Austria, Ukraine and other countries, with great experience in realization of infrastructural projects, competed in the tender. Akkord Corporation participated in the tender within a consortium with Italian companies. The consortium of Akkord Cand Italian companies was announced the winner by Ukravtodor in the begining of August this year.

The project for total restoration of M06 Kiev-Chop motor road (14-128 km) is executed in 4 lots. Ukravtodor and the Akkord-Italian companies consortium signed two contracts on 2 lots each. Total cost of contracts is 204.5 million Euros.
The next new project will be introduced in Uzbekistan. Here we won two lots in the tender for construction of Dashkend-Termez road. According to the first two lots, 179 km long road is referred to category 1-b. Realization of new infrastructural projects allowed employing 2 thousand new employees during last two months.

CE: Taking into consideration rapid appearance in international arena, does Akkord plan to obtain international rating? Does accountability of the Corporation correspond to international standards of financial accounting?

Khagani Guluzadeh: It is true, we are negotiating with the world leading rating agencies of to obtain rating. We plan to receive the rating late this year. The relevant rating will be presented after the evaluation of business areas, strategic planning, corporate governance, experience on preparation and disclosure of financial reports of the company and other criteria. The obtained rating will enable to objectively evaluate the Corporation’s current condition and reveal areas to be improved,identify deficiencies. This valuable initiative will increase the Corporation’s access to international markets and the confidence of investors, banks and other stakeholders.

Currently we have successfully completed the annual report for 2010 and semiannual one for the first half of 2011 prepared in compliance with international financial reporting standards (IFRS). They have already been verified by auditing company, the member of Crowe Horwath Business Alliance, which is ranked in “the big ten” of audit and consulting companies according to global ranking. To audit IFRS compliant annual report for 2011 Akkord plans to attract one of the “big four” audit companies. The selection process among these companies will be fully completed by the end of this year.

It is important to underline that for the last 4 years Akkord Corporation prepares its financial reports in compliance with IFRS and successfully  discloses its audited annual reports.

At present 16 employees of the Corporation involved in finance and accounting attend qualification courses on IFRS, which is held by international audit company Pricewaterhouse Coopers, which is  in the “big four” list of audit companies. According to the results of the training the employees will receive relevant international certificates.

CE:  What is the image of the Corporation in international arena? As we know European Business Assembly (EBA) presented you the diploma “For professional achievements in commercial activities”, as well as the medal “Manager of the Year”.

Khagani Guluzadeh: It shall be mentioned that wide scale projects of Akkord, successfully implemented in neighboring and distant countries of the region, have been under attention of influential business organizations of the world. Highest international awards the Corporation received in 2011 prove the abovementioned once again. One of those awards was presented to the Corporation in May 2011 in Paris at the 23rd ceremony of rewarding “New Millennium Award” founded by “Trade Leaders Club” and “Editorial Ofice”.

Here Akkord Corporation was awarded “International Construction Award” and gold medal for “Business Leadership”. Another highest reward was presented by European Business Assembly (EBA), one of the leading business researchcentres in Europe, headquartered in London. According to the decision of EBA, Akkord Corporation was awarded the diploma of one of the “Best Enterprises” in the field of building and construction at Oxford Leaders’ Summit held in historical Oxford city of United Kingdom of Great Britain and Northern Ireland.

CE: What role does the corporation have in support of social projects?

Khagani Guluzadeh: We finance “Akkord” men grass hockey team, one of the strongest in the country. It earned the Cup of Azerbaijan Grass Hockey Federation. “Akkord” team also won the medals of the 7th and the 8th country championships. In 2011 in Bratislava “Akkord” gained the victory at the tournament for European Champions Cup “Challenge IV”.

We try to take active part in social life of the country, we finance ‘Gyzyl Eljek’ (Golden glove) sport club. In August 2011 the club won the first Azerbaijan Cup among the youth and adults. The sport club was founded in 1998. It has special sections on boxing, wrestling, karate, kickboxing, wushu, taekwondo and judo. These years the club took active part in all state events. Since 2008 the club has been an organizer of international tournaments, held in Azerbaijan. The athlets of the club  achieved great results in European and World championships within the national team of Azerbaijan.

Five athlets of the club became world champions on kickboxing, one became the world’s boxing champion, 4 European champions, 8 champions of Asia and 15 champions of Eurasia. At the same time 10 boxers and 40 kickboxers became the winners of international tournaments. In 2010 a boxer of the club was awarded “The youngest and the best boxer of 2010” by International Boxing Association. 4 masters of sport of international level, 10 masters of sport and the honored trainer of Azerbaijan have been trained during the operation of the club.
We also provide financial and organizational support in conducting traditional tournaments on mini-football among mass media dedicated to the birthday of the national leader of Azerbaijan Heydar Aliyev.

Akkord Corporation gives particular importance to the families of IDPs and refugees. In holidays the refugee families and orphanages receive presents.
We take active part in realization of projects of Oncological centre on attracting German doctors and specialists to Baku to treat cancer patients.

During the last 5 years Akkord, actively participating in social life of the country, gained the fame as the best company implementing sponsorship and charity activities. We do not prefer advertising such activities but we are very sensitive about and pay particular attention to them. Our general aim is not to benefit from work we do, but serve the society and the state.


/Caspian Energy/

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