As the first question
before we get to the services and activities of
your company, I'd like to get a historical background
of your company.
The company was set as a joint venture between
American funds and some European innovation corporations.
The plan was set up in 1998, 51% is owned by Malaysian
company, the other 49% by Kazakhstan Investment
Fund, which is actually owned by American company.
Our share there is $1 mln. The joint venture between
Malaysian company called "Semen Engineering
Consulting LTD" and us. There is a problem.
This plant was built in 1945-1950 with the forces
of prisoners. The first experiment was conducted
at the Soviet times. We had two different classes,
modern dry cement.
What kind of production do you elaborate?
Our production is basically intended on local
market, local environment. To us it is very confusing
- in the Soviet times we had too many variations
of cement. All these types are for Kazakhstan.
What people are used to - is to use one type of
cement. At present, we have 5 types of cement.
Concerning the exports - it is not so easy transport
to China, etc.
What other plants your company has in Kazakhstan?
We do have almost the same capacity as under
the Soviet system.
What about your company's average?
We are in the middle line; we have bigger companies
than ours, as well as the smaller ones.
What about the local market in Uzbekistan?
What do we meet there is mentality of people.
I have been worked there for 5 years. There are
many enterprises that went bankrupt because they
cheat a lot. Today we have the best location -
Kazakhstan. If there is a crisis, prices are stable
more or less. We maintain almost the same output
and prices.
What's your position here, in Kazakhstan?
I think we are the largest company in terms of
services we produce - 600 thousand of cement.
In 1999 we had 260 thousand, 2000 - 384 thousand
and in 2001 - 540. There is a big growth. But
when we came society and economy were in poor
shape. There is a kinked line, you see, in growth
of production.
Do you produce at your full capacity or you
are producing at half of full production capacity?
We are producing 600 thousand tones; it is about
80% of our production capacity. We may produce
more, of course.
How did you achieve that level 600 thousand
tones from 1999?
We have the demand for cement increasing all
the time, not because we cannot produce. Our production
output is based on sales opportunities. The next
year we will have production growth. I would say
the more we produce, the more we sell.
I guess you had some investments made?
Earlier we took some loans. Now it is time to
expand. We managed to do it before; we will continue
to do it further.
Who are the main demands for your cement?
Two our main demands are "Kazakhmys"
- the major copper producer, which uses it in
construction works; the other one is "Kazzink."
The third company is "Ispatkarmet."
Apart from them we sell our product to Astana
and Almaty, which have a lot of retail shops.
Almaty and Astana are the places with demand growing
faster than prices. Especially, Almaty - it has
the big market with extensive cash basis.
What about the natural figures your company
has?
I will start with sale volumes: 1999 - Tg 803 mln.,
2000 - Tg 1203 mln., 2001 - Tg 2071 mln., our forecast
this year is Tg 2025 mln. As you see, it is shrinking.
We sell at the price $20, while the world price
is about $50. We need to survive. It becomes difficult
to reinvest, to modernize. |
Whom do you work
with? What about the other exporting companies operating
here?
We have plants to modernize, it is impossible
to modernize the enterprises that were not repaired
during 20 years unless prices do not increase.
We need at least $30-40 mln. to modernize everything.
There is a market effect prevailing. It is difficult
to collect and go fast.
What is your vision of the local system, your
activities?
We will not let the prices go up. We have the
biggest consumers of our product. Because the
Antimonopoly Committee may always come, it protects
even those 2-3 big manufacturers. The prices are
fixed. This is a kind of demand we face, even
if we have a good competitive product. The prices
are higher when you come to the center of Almaty,
the situation is the same here. It will take long
time to change the mentality of people here. There
are big companies are supposed to participate.
If there is one more producer, they will not be
able to participate efficiently.
What about your long term strategy?
In our company we actually have two directions:
keep the quality as high as possible and to maintain
stable prices. We are the first biggest company
operating here. We need to set up our distribution.
The system we had is already expired.
What kind of investments did you use?
We had investments of $25 mln. in Almaty, which
has an attractive investment climate. We also
have Karaganda. And it is not profitable to produce
too much. The problem actually is that we do not
have a really big strategy in our company. It
is fixed according to the current situation; the
more you sell, the more you get. This is a problem
we have in Astana and Almaty. It is based on culture
and sales.
What about the transportation?
We do not depend really on roads. The difference
is very short the narrow highway between Almaty
and Astana.
What about investing into the road construction,
your partners?
It is difficult to transport, too far, too vast
territory. There is a low density of population,
few towns in Kazakhstan.
Do you have some projects in Astana and Almaty
you would like to work with, may be some accomplished
constructions?
Astana has been invested from the revenues of
oil companies. Potential of plant here is very
good. Karaganda coal mine has a very big potential
too. I guess the next 2-3 years we will expand
hugely.
What is the biggest challenge you have had
during these 5 years?
We had a plan on constructions that should be
submitted to the governing body. This was the
first plan when locals supported foreigners. I
was a bit surprised. All the way to Astana from
Almaty took many effort, we selected special people
to work. As a result I was delayed.
What would be your final message to our readers
keeping in mind that you are the president of
"Central Asian Company"?
Kazakhstan is a very big country. Whoever wants
to come here, there is a lot of choices of investing
here. But you have to be sure where to spend your
money. You need to change people's mentality. There
is a very long way to go. To change mentality though
tourism - many citizens, those of Soviet type people,
were not out of country. They are used that everything
is free. Better control, output, innovations staff,
including local town citizens. It is hard for them
to believe in possibility of changes. The rate of
democracy is tremendous. Everything should be done
to overcome bureaucracy in the next 5 years. If
they do it, the country will succeed. Every action
is costly to perform here. We always have fines. |
