KAZAKHSTAN
A giant at the heart of the Central Asia





Mr. Lloyd Paxton,

Interview with
Mr. Guerassimov,
Director of Aktau Plastics Plant
September 6, 2002

 
Could you give us a brief background of the history of Aktau Plastics Plant?

The decision to build this plant was made in 1974. The construction started in 1976. Saint-Petersburg Company "PlasPolymere" and engineers from French Company "Litvin" developed the general project. We received equipment from Europe and we paid for it later on, after the production of goods started. The technological base was foreign. The first goods were produced in 1985. The quality was very high and still is. Right now we are penetrating the European market, countries such as Spain, Italy and Holland, and since we have not had any problem regarding the quality of our products. Business was stable till 1995. The weak economic situation in 1996 started worsening our business. In 1997-1998, the plant was completely closed. Reason for that was that our main markets were Russia, Ukraine, and Byelorussia. During Soviet period, we produced 60% of polystyrene and 40% of styrene for them. We were bankruptcy but in March 2001 a Russian Company "Extra Class" bought our plant. After finishing all the paper work, we hired new people and started strong training. In Nov 2001, the production started. Today, we are gradually increasing the production. We are trying to get back our markets in Russia, Ukraine, and Byelorussia. Today we are only using only 50% of our capacity. Our first products were those that could be easily sold. Today, we are trying to bring back the production of styrene. We also deal with the development of the oil industry of Aktau.

Could you please elaborate more on the services that you offer? How many people do you employ? Who do you work with?

Since we started our operations, we have 2000 employees. Last year, we just had 300 people, basically security guards and firemen. We serve different sectors: railways, energy sector and construction. We have our own transportation system as well as medical system as production can be very dangerous and we take care of our employees.

Could you give our readers some financial figures?

We just started our activity and it is difficult to give exact figures. Until now, we just invested money. The Russian Company invested about 16 million dollars. Right now we are 100% private company. And we are expecting to recover our investment next year. We spend 10 million dollars for training our personnel and for fixed assets. That's why it is difficult to evaluate profits. We are very positive about our future due to the following reasons: the Government and the development of oil and gas sector. Kazakhstan has only two basic companies in Atyrau and Aktau, and ours is the biggest.

What kind of strategies do you use to be competitive?

Right now we have plans for developing the production of our own gas. Previously, Kazakhstan imported many goods. Therefore, we are trying to be part of the oil and gas sector.
How do you maintain the competition with Atyrau?

There is another Polypropylene Plant in Atyrau. It has the same owner as us, therefore, we are not competitors. Besides we work with Agip, for supply Атырауского of a factory resources between ours by 2 factories - kinds of production.

Do you have new contacts with investors?

I am not dealing with this kind of questions. As far as I know, we already have some contacts with banks of Russia and Kazakhstan and the United States. Investments in production are usually very high like 150 million dollars. It is very expensive. Without outside partnerships, development is not possible.

Do you have any other plans, maybe with Asian countries?

Today, we are selling our products to Turkey. We have already sold about 2000 tons of polystyrene. Two weeks ago, I met with an Iranian company. We have been working with Uzbekistan, Kyrgyzstan, Russia, Byelorussia, and Ukraine. Moreover, we are planning to export to China, India, and Pakistan.

What is your total production?

Till now we produced 12000 tons of polystyrene and by the end of the year we are planning to produce another 6000 tons polystyrene and 15000 tons of styrene. In July and August we had to stop our production due to work maintenance. We have done a lot of work in environment preservation; we decided to do this in summer because it is much more difficult to do it in winter.

Could you tell us more about your exports?

We export 97% of our goods. Only 3% is consumed in Kazakhstan. Most of our goods go to Russia, Turkey, Spain, Holland, and Italy. We are also planning to export to France. In the past, France consumed 10000-15000 tons of our polystyrene. We hope that we will achieve these levels. We will work closely with Sea Port of Aktau because in the future it will be more comfortable to transport our goods by sea. There is a new plan for transport "The Great Silk Road" where all kind of road as well as routes will be developed.

Could you give a final message to our readers?

The potential of companies operating in Kazakhstan is not well known to the world yet. New partnerships should be staled by modernizing the processes. The potential of our market is huge and I think it will be very interesting for investors.
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