VLADIVOSTOK/
PRIMORSKY KRAI
Where Russia meets Asia





Alexander D. KIRILICHEV

Interview with Mr. Alexander D. KIRILICHEV

Mr. Alexander D. KIRILICHEV,
President of PRISCO

 
Your revenues for last year amount $150 millions US. What have been the growth factors for Prisco over the past years? Has it been Sakhalin?

It's not only the Sakhalin projects but also the results of our work during the past 5-6 years. We understood and managed to achieve our main goal: to become the partner of all the main oil companies around the world. Our wish to become partner of all these companies is connected with the fact that they have 70% of the oil cargo turnover. But of course it is also the result of Sakhalin; revenues of Sakhalin have reached 17,20% of the revenues of the company as they used to be around 4-5% before!

Will that include in the near future your new tank structure? Will you be ready for LNG (Liquefied Natural Gas) deliveries in 2006?

We will manage to do and finish everything by 2006, but we still need to work a lot. Our main task is now to find money or investments but to find "works". If we want to become a reliable partner of the most prestigious international companies, we have to struggle for work! Our main task is to be a highly organized company that can meet all the requirements of companies such as Exxon, Shell and British Petroleum. We of course have already achieved good results but a lot of tasks are still waiting us!

Is it a charge sometimes to show multinational companies that you are a credible organization to be partner with?

There is one negative feature in the Russian's characters: it is laziness. In our company, we are at the stage where we are getting rid of this feature. It is not a challenge anymore for us. But of course I have to recognize that some times work is not easy and we had to use new methods in the management and we know, now, how to face difficult tasks in relation with our business. In order words, we use the same language as leading companies! and all the doubts we had have disappeared.

Now you are investing in 6 new tankers. Is this a preparation for a major increase in the volume of cargo transported by PRISO?

Yes, we are now building 2 tankers but in the very near future we are going to start with 3-4 other tankers, all of them will be used in relation with the Sakhalin Project. Probably will need more vessels but everything depends on the volume of work will get or the volume of work we are going to struggle for!

Why the name of St Nicholas for one of your tanker?

First we are going to use St Peter, St Paul and all the apostles!

So while you are investing in new ships, are you also investing in order to increase your relation with Asian market, which is also going to be your major destination as business increases?

Of course we are investing in the Asian market. The situation is changing. The fleet used to be managed 100% from Nakhodka, but now 80% come from Singapore. Probably will have to manage our fleet from China but I don't really think it's going to happen soon. Nevertheless we don't have to ignore these changes and that's the reason why we open our representative office in Shanghais. As for the construction of our fleet we are oriented to Japan and South Korea but I hope that, as we are building two steamships in Croatia, Europe will not loose its 10% market share in the sector of the fleet construction in order to see the competitiveness between these two important markets (Asia and Europe). It's very important because you should not concentrate the entire sector on the same continent.

You are at the same time diversifying your business. We have PriscoCapital Bank, Prisco Forest. Now you are looking to the construction of housing in Sakhalin. What is the next step for your company?

We going to involve us seriously into crewing work and prepare our specialists for working with the leading companies in the world. It can be objectively understood: if we don't do it soon we're going to have only Chinese seamen in all the oceans. That's why we have to work on this field in order to forestall the others. I have an other point of view than a usual entrepreneur who would search the cheapest labor forces. But we cannot let this labor become one nationality. It should consist of different nationalities, a kind of "good balance". Either you agree or no, the genetic funds of nations are mixed, we have to learn from each others and compete constantly in order to get rid of the negative "things" we have inside. Otherwise we are going to be all with crooked legs!  
What is your opinion about the rumors that FESCO wants to take over the majority in PRISCO?

I am the seller and I am NOT going to sell anything! so it is not true! PRISCO cannot be bought.

Sometime ago you said that Primorsky Region should be run like your company! What is your vision for Primorsky Krai and should it be managed?

There is a lot of positive changing that has happened during the last year in our country and our region. But there is one thing we have not considered. We are talking about democracy forgetting our .....about the laws. But these things cannot be divided. But in order to combine them, we need to prepare people. 50% of the persons who manage the region are totally unprepared, because they managed to come to power via an incorrect way using only their PR skills. That's why it should have been better not to elect people but to point them and of course choose persons who know what management means! Within this situation of poor management you can easily understand why even if we spoke about investments we only have a few successful examples. There is no guarantee that they will be paid back!!! and you can also understand that foreign investors will not go where laws are weak and were managers are more interested in getting investments than in the reimbursement of these.
For Primorsky Krai, I think we need some times to create a normal management environment, stable opportunities and to show foreigners that the region is resourceful. It is of course my personal point of view and many people do not share this opinion but I am sure that time will come when the leaders of the region will be appointed.

Will you run for Governor's office again?

No. I have a wonderful job and the mood I used to have 4 or 5 years ago has passed and my efforts should be directed to fulfill tasks in the company and in the shipping sector in general.
We have a lot of questions to solve in the shipping sector in Russia. They are very serious. As in Russia we lost two thirds of the fleet. We have to begin to solve this problem. Otherwise foreign ships soon will carry the hydrocarbon fuel volumes we have begun to export.

I can give you an example in the year 2001 only 5% of the export potential of Russia was delivered by Russian fleet. The minimum we should have is at least 50%. And only high-qualified persons should deal with this target! America an other countries have of course already reached this objective but it took a lot of time to get where they are now. For our company and our country we need to use our experience and pass this objective in a short period of time. We will reach it only by means of education and study, especially if we are speaking about the leaders of the region. They need to be tough. If the work without studying they will never know about the mistakes of the people who passed this way and we will pass again through the same mistakes!!!

I always give the example of the mobile phone, which was invented a few years ago. It is not an invention of the former Soviet Union or Russia. Nevertheless we now use it and we have positive results and we obtained these results in a short period of time! Even shorter than other developed countries! The same can be said about the ability to manage. The same approach should be used, we should use the experience of others.

Let meet us in three years and our figure will be 70%, when we will work on our own cargo base. Now we have 20%, maybe in 3 maximum 4 years it's going to be 70%. And my dream is to retire when we'll reach 90%. In this dream we will have BP, EXXON working here with us. The main goal of our company is as I said before to become a reliable partner of all these leading multinational companies. Let us be small but still next to them. We are ready to study and study again!!!
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