How does the new
ownership of the port by Severstaltrans change the
management and developmental strategy of VP?
After the establishment of the Vostochny port joint-stock
company in 1992, shareholders hoped to develop a
perspective strategy of the port development to
strengthen business development and dividends. However,
no effective strategy was elaborated; in my opinion
the foreign company which owned shares in the port
had purely speculative interests. "Severstaltrans"
then became general shareholder last year and defined
the strategy of the port development during the
first days.
Vostochny port is unique in the Far East, not only
because it is the only port that works with large
volumes of coal, but because it is situated very
favorably geographically. The port is situated out
of the city (unlike ports of Nakhodka and Vladivostok)
and it benefits from deep shore depths, with no
surrounding hills or mountains to prevent our expansion.
New projects include the development of oil and
chemical terminals, further development of the coal
terminal as well as increased work with various
cargos which have sensitive chemical properties
the cannot be handled in the surrounding city ports.
This year we reached maximum productivity of the
coal complex, which was designed for 12.5 million
tons. Yet market needs for coal are growing, and
next year we plan to build the third stage of the
coal complex in order to increase its capacity up
to 18 million tons. Also, in accordance with full
technological adjustment programme, we began operations
of the Vostochny Urals Terminal which offers highly
mechanized facilities for handling of mineral fertilizers,
for 100,000 tons of simultaneous storage for mineral
fertilizers with a throughput of 2 million tons
per year.
Last year the port's clear profit ran up to an
excess of $7 Million, earning a profitability rate
of 38,6%. What is your strategy to increase profitability
of the port, which is already one of the most profitable
ports in the region?
Profitability up to 40 % is ideal to plan future
work. We believe it is not correct to try and blindly
increase profitability to levels of 50 or 60 %,
since this would involve a large cuts in expenditures
at the expense of production rates, repairs and
maintenance, modernization and purchase of new machines
and equipment.
We will increase rates if our profitability decreases,
yet now it is 40% profitability suits both our shareholders
and us.
As oil supplies from the Middle East become more
and more uncertain, and oil discoveries in Sakhalin
continue to grow, would you say that Vostochny Port
could become one of the main LPG export terminals
of Russian oil to Asia and the U.S.?
The national strategy is for Vostochny port to act
as a bridge to the Asian market. All kinds of cargo
transferred or planned for transferring in Vostochny
port will be in demand in Southeastern Asia within
the next few decades.
We are finishing building a terminal for methanol
transferring which should be operational in March
2003. We plan to build an LPG (liquid petroleum
gas) export terminal for oil products transfers
in a year and a half and terminal for liquid gas
transfer in 2006 - 2007. I agree with Federal Minister
of Railways, Mr. Gennedi Fadeyev, who visited our
port and emphasized the strong balance of relationships
in development between our port and the railroad
infrastructure.
The Vladivostok Commercial Port says that: "our
rail rates are cheaper as compared with the adjacent
ports. " Is this true, and if so, how can you
reduce this cost difference and compete directly
with Vlad Port?
Nomenclature groups and producers are situated in
different places. We worked with ferrous metals
using a so-called "special tariffs institute"
and the tariffs were the same for all metallurgical
plants in the Urals and all ports in Primorye no
matter how far they were. Then these special rates
were canceled and railroad tariffs were counted
on the base of the price-list 10.01.
Vladivostok port is situated closer geographically
than Nakhodka port or Vostochny port and formerly
its rate was lower. But since the 1st of August
last year railroad management put into operation
a differentiation of tariffs depending on distance
- the bigger distance the cheaper. So now it is
96 cents less expensive for plants such as the Chelyabinsk
metallurgical plant, for example, to transport cargo
by the railroad to Nakhodka or Vostochny ports,
than to Vladivostok port.
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In the light of the
possible connection of the Trans-Siberian Railroad
and the Trans-Korean railroad, do you see role of
Vostochny port as a transitway for cargo transportation
from North Korea to Russia?
Russian ports will not take part in these transportations
as the cargo will be loaded in Pusan and then unloaded
in Moscow if Trans-Korean and Trans-Siberian main
lines are used. As a port specialist the port will
suffer some losses - today we transfer containers,
70 % of them are Korean ones. But as a patriot and
Russian citizen, I would like the Trans-Korean main
line to connect with Trans-Siberian line in Khasan,
so that the cargoes are transported through Primorye
and Russian Far East instead of going through China
and bypassing Primorsky Krai.
Nevertheless, I do not believe that transportation
of containers through the Pusan railroad will be
cheaper than through Vostochny port, since this
project will also enable us to re-examine the level
of stevedore services provided today and raise quality
of our services.
You are linking the Russian Far East to Pacific
Rim markets such as Korea, Japan, China, the U.S.
and Australia. How are you increasing business relations
with these markets?
We have social links with sister ports and our port
is a member of international association of ports
and harbors. Saint Petersburg, Vladivostok and Nakhodka
ports are also members of this association. It is
non-profit, consultative association, which conducts
conferences every two years where we can develop
single policy of port services.
We also have a rather wide spectrum of nomenclatures
which are transferred to Pacific Rim countries.
We process coke for India, we are partners and coal
exporters with Australia and we are learning from
their experience. Moreover, the methanol complex
is intended for quick and cheap transfers to South
Korea, China and Japan, which currently export methanol
from the South African Republic at higher prices.
Do you agree that, as the leading port of Primorsky
Krai, you have a direct responsibility for the future
economic development of the region?
Undoubtedly, we do as the main volume of railroad
transportations is sent to our port. We transfer
the greatest volume of the region - this year we
will process 16 million tons of cargo, while both
Vladivostok commercial port and Nakhodka port will
not process together even 10 million tons of cargo.
In 1984 you had graduated Far Eastern High Naval
Engineering School (FEHNES) for specialization "Sea
transport Management". Would you say that this
has given you an edge to manage the complex logistics
of managing a huge port like VP?
I graduated from Sakhalin Nautical College with
specialization on Exploitation of Water Transport
in 1973, then I graduated from the Far Eastern Higher
Engineer and Marine College in 1984 and attended
the Academy of National Economy in 1996 with specialization
in Economics and Management.
The knowledge and experience I acquired in Nakhodka
port was very important. It was the only open port
in the region and managed both export and import
transportations in Russia for some time. Only later
were Vladivostok and Vostochny ports were opened
to commercial activities.
Today I rely on my team, my crew, and the professionalism
of my assistants to orient myself in the management
of Vostochny Port.
You have been general manager since January of
2002. What has been your greatest achievement during
this time?
I took up this post at inconvenient time, after
the former general manager was assassinated. It
will be a year since his assassination on the 26th
of November. The company management was under stress
during all that time and my first task was to relieve
stress and to make a team of like-minded people
in order to work together and leave our emotions
aside. It seems to me that I managed to do it. Today
I have a full understanding and support of my colleagues,
and I practically do not have to use my power which
is my main achievement.
Secondly, I am focused on the dynamics of the port's
business. Today we reached the maximum capacity
of our coal terminal and we can grow only with development
of additional capacity. The port has never processed
more than 10 million tons of coal, 1,5 million tons
of containers and 750 thousand tons of mineral fertilizers
per year, yet this year we are processing above
these amounts. There is only a month left before
the end of the year and I am confident that all
our goals will be fulfilled.
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