Russia’s Chelyabinsk trades and invests in Azerbaijan

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A delegation from the Russian Chelyabinsk Oblast, together with Russia’s Trade Representative in Azerbaijan Ruslan Mirsayapov and the Head of the Representative Office of the Russian Export Center in Azerbaijan, Nuri Guliyev, sought ways to increase the direct trade with Azerbaijan.

Chelyabinsk is located in the Russian region of the Ural Mountains, on the border of Europe and Asia. Its capital is also called Chelyabinsk, while the region’s population is about 4.2 million. Chelyabinsk is Russia’s seventh largest city and made headlines in 2013 when a 10,000 tonne meteorite exploded overhead and caused extensive damage. To the south, Chelyabinsk Oblast also borders Kazakhstan, which means it can function as a trade corridor between Kazakhstan and Azerbaijan in addition to increasing bilateral trade between Chelyabinsk and Baku. As the flag of the Oblast and its camel show, Chelyabinsk has a long history as a former hub of the Silk Road.

Meetings were held at the Russian Export Center in Azerbaijan. The Chelyabinsk delegation included CEOs of major local companies such as Oil Service, Industrial Milling Systems, Sotis, Intersvyaz Ural, Ural Automobile Plant and Ural Oil and Gas Industry Equipment.

Chelyabinsk has a Muslim population of around 10% and has long had trade ties with Islamic and Eastern nations – residents also practice Russian Orthodoxy in addition to Hinduism and Buddhism. In terms of business relations with Azerbaijan, the largest companies in the region include Magnitogorsk Iron and Steel Works, Chelyabinsk Metallurgical Plant (Mechel group), Chelyabinsk Pipe Rolling Plant, Chelyabinsk Electrometallurgical Plant, Chelyabinsk Zinc Plant and Ashinsky Metallurgical Plant – this which means that Azerbaijan is a primary market for oil and gas drilling equipment as well as other metal product work.

Chelyabinsk is connected to the Russian seaports of Astrakhan and the Caspian region by existing air, road and rail connections, making it a well-established corridor that can easily reach Baku by ship.

Baku industries may also be interested in importing products from Chelyabinsk to add value – Baku is at the center of the new Middle Corridor between Europe and Asia and can access markets in Turkey and the Western Europe, as well as Iran, the Middle East and South Asia via INSTC.

Movements by Russian republics and regional governments to directly encourage new trade corridors are a growing sign of the need to break from previous dependence on European trade and seek new alliances as Russian trade flows are redirected elsewhere.

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Briefing Russia is written and produced by Dezan Shira & Associates. In times of uncertainty and sanctions imposition, our firm helps Russian companies relocate to Asia and provides financial and sanctions compliance services to foreign companies operating in Russia. We also provide market research and advisory services to foreign exporters interested in Russia as the economy seeks to replace Western-sourced products. Please contact us at [email protected] or visit us at www.dezshira.com.

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