As the geopolitical core hub of the "Middle Corridor" across the Caspian Sea, Azerbaijan is taking advantage of the deepening of regional cooperation and the adjustment of the global supply chain to accelerate the four large-scale projects of energy resource development, infrastructure expansion, reconstruction of the Karabakh region, and upgrading of port hubs. Under the superposition of multiple strategic dividends, the country's demand for imported mining machinery, engineering machinery, construction machinery, and specialized equipment continues to explode, and has risen to become the core growth pole of machinery imports in the Transcaucasian region, opening up a huge market space for global equipment enterprises.

High end machinery becomes a must-have

Azerbaijan has abundant mineral resources, with proven oil reserves exceeding 4 billion tons and natural gas reserves exceeding 400 billion cubic meters. Its resources such as bauxite and iron ore rank among the top in the region. The mining market size has steadily grown from 2.5 billion US dollars in 2022, and is expected to exceed 3.5 billion US dollars by 2028, with an average annual growth rate of 8%. Key development projects such as deep-sea oil and gas fields in the Caspian Sea and aluminum mines in the Altai region have directly stimulated the demand for imported high-grade mining equipment.

Currently, the market demand presents distinct characteristics of "greening+intelligence" transformation. In response to global environmental initiatives, the Azerbaijani government is promoting the mining industry to replace clean energy, reduce emissions, and improve production efficiency and operational safety through automation technology. International companies have taken the lead and Anglo Asian Mining has introduced Caterpillar underground mining equipment for its Gilar copper mine project, including three R1700 underground loaders and two 980 UMA wheel loaders. This is the first time Caterpillar underground equipment has landed in the Azerbaijan market, with intelligent safety configurations such as remote control and multiple fire suppression systems, accurately adapting to the complex working conditions of underground mining.

The demand for diversified machinery is exploding

In order to consolidate its position as an international transportation hub in the "Middle Corridor", Azerbaijan has increased investment in transportation and energy infrastructure. Core projects such as railways, highways, and energy corridors have been intensively implemented, and the construction machinery market has experienced explosive growth. These projects are mostly led by the government or implemented by state-owned enterprises, and can rely on the EU's 10 billion euro "Middle Corridor" special financing support, ensuring stable funding and strong certainty in equipment procurement needs.

In the railway field, the capacity improvement and renovation of the Baku Tbilisi Kars railway, as well as the encryption project of the Caspian Sea coastal railway network, are advancing. There is an urgent need for electric locomotives, container flatcars, railway maintenance machinery (tamping machines, screening machines), and train control systems. At the same time, the demand for supporting technologies such as track inspection and dispatch management is becoming increasingly urgent. In terms of highway construction, the upgrading of east-west highways and the widening of border port roads continue to advance. Compaction machinery, asphalt mixing equipment, and lifting equipment have become essential, and the demand for supporting facilities such as intelligent transportation systems and electronic toll collection equipment has also been released simultaneously.

Construction machinery welcomes an incremental blue ocean

With the signing of the regional peace agreement, the Karabakh region has entered a stage of comprehensive reconstruction, with systematic projects such as residential buildings, public facilities, and energy projects starting one after another, bringing new growth to the construction machinery market. The terrain in this area is complex, and the existing infrastructure is severely damaged. The demand for small and medium-sized machinery that can adapt to complex working conditions is particularly prominent, including small excavators, bulldozers, loaders, concrete mixer trucks, etc.

Currently, international brands have entered the market through flexible models. Azinvest, an Azerbaijani construction company, has selected two second-hand Potsdam MC 120B tower cranes for the Karabakh New Health Center project. With stable performance and high cost-effectiveness, they meet the construction needs of the project, while relying on the after-sales service of local distributors to ensure construction progress. The market has significant growth potential, and it is expected that by 2030, the size of the construction machinery market in the Karabakh region will increase from 3 million US dollars in 2024 to 8 million US dollars, with an average annual compound growth rate of 12%.

Hub iteration empowerment

As a key node in the "Middle Corridor", Azerbaijan is making every effort to promote the modernization and upgrading of Baku Port and Alat Port, and to build a core freight hub in the Caspian Sea. The demand for importing and upgrading port machinery is particularly urgent. The upgrading project of the two major ports not only focuses on improving transportation capacity, but also pays more attention to digital and intelligent transformation to meet the development needs of railway, highway, and maritime multimodal transport.

The third phase expansion project of Baku Port aims to increase its freight capacity to 25 million tons, and there is an urgent need to supplement equipment such as large shore cranes, yard cranes, container front-end cranes, and automated guided vehicles; At the same time, in order to cope with the problem of channel siltation caused by the decline of the Caspian Sea water level, Baku Shipyard has cooperated with Damen Group to build the first CSD 650 cutter suction dredger. The ship is equipped with a cutting power of 700 kW and a dredging pump of 1825 kW, which can operate at depths of 3-18 meters. After being put into operation, it will effectively ensure the navigation capacity of port berths.

The resonance of demand in the four major fields has made Azerbaijan a "growth highland" for the machinery market in the Transcaucasian region. With the continuous promotion of the "middle corridor" strategy, the demand for various types of machinery will be further released. For international equipment companies with technological, cost or service advantages, it is currently the golden period to layout in this emerging market.Editor/Bian Wenjun