TBY talks to Natalya Kulagina, Managing Director of M&M Logistics, on the company’s core activities, operating sectors, and prospects for the Customs Union.
TBY What led M&M Logistics to set up in Kazakhstan?
NATALYA KULAGINA As a company, we’ve been operating for more than 120 years, and operate in over 36 countries. It was logical to set up in Kazakhstan, and our company has always been successful here. We brought in the European style of doing business, and have learned local expertise throughout our 17 years here. Now, the combination of these two qualities makes us successful.
M&M has a broad international reach. What is the core focus of the company’s activities in Kazakhstan?
Our core business is the transportation of cargo. We operate with all automotive transport methods, offering air, rail, and sea freight. Of course, we are a land-locked country, so that is why sea freight is always in combination with another mode of transport: mostly rail or truck. We provide a full package of services to our customers. We also have good experience in serving the project business, and this involves the special transportation of extra-large cargo, such as oil rigs.
How would you describe the sectors with which you are working most closely?
A lot of our customers are now from the non-prime sectors, such as fast-moving consumer goods (FMCG), mining, and retail, which are growing very quickly. I would say that retail and FMCG have been the fastest growing sectors over the last decade. Of course the mining, and oil and gas sectors represent a good portion of our customer base, and were traditionally our main customers, but now we service a wider range of sectors.
How will the recently enacted Customs Union affect your operations and the economy in general?
Overall, this is a very good initiative. We have already seen the first positive effects of introducing the Customs Union. We see that a lot of customers who had quite limited relations with Russian buyers and producers now have more relations with Russian companies following the Customs Union. It will only be positive for us, and the economy as a whole.
Where would you place your company among the main players in the goods transport sector in Kazakhstan?
Of course, we have a number of rivals. The competition is high, but I would say that our business model is different. We are very successful in this market because we have a different approach. We are not here just to make money. We are here to give our competence and expertise to local customers in Kazakhstan, to support their business, to consult them on how they can perform better, and optimize their expenses. This is what makes us different. We appreciate true partnership with our customers, not just based on finances. We try to help them be successful in the business they are pursuing. That is why I cannot say we are number one or number 10. We are completely different, and this is our core competence. For instance, we offer customs services. Due to changes in our customs legislation, only a number of companies were able to reapprove the license for customs brokerage services, and we are one of them, and so this is also part of our business. We see the possibility of expanding to other regions of Kazakhstan as well. There are a lot of opportunities. We are thinking about investing into different regions in Kazakhstan where we might establish warehouses in the future.
What issues do you feel need to be addressed to improve the efficiency of freight transport into and out of Kazakhstan?
There is a lot to be done to improve legislation and infrastructure. We used to struggle with HR challenges, but those issues are being overcome. We also contribute to this because it’s a commitment of our company to educate our staff. We have a budget and plan for education. We not only rely on the resources already available in the market, but we strive to maintain a team of growing professionals within our organization. Additionally, we are an ISO-certified company. It’s very important to pay attention to high standards of service, and this is where the ISO system helps.
How do you insure your transactions?
All of our liabilities are covered by an insurance company that is a part of TransInvest Holding—the owner of M&M group worldwide. If a mistake is made, our customers can be sure that these mistakes will be covered by our insurance company. We are the only company in Kazakhstan using this model.
How does M&M’s experience in Kazakhstan reflect the changing nature of international trade and investment?
Traditionally, we are more focused on international transportation than the domestic business. Throughout the years, Kazakhstan has gained a lot of trade partners besides its traditional ones, like Germany, Russia, and China. As the economy grows, we develop our knowledge base, and our portfolio grows. We now have the experience and ability to transport goods to any place in the world. It only depends on how much cargo Kazakhstani companies will purchase from those countries.
Have you worked on any government projects in addition to your work in the private sector?
Yes, we also participate in government-sponsored projects. We’re registered as a sub-contractor for governmental supply. We are not limited to commercial organizations, but work with governmental organizations as well. Also, we have an office in Afghanistan where we are working quite actively. We supply goods from Kazakhstan to Afghanistan for its government and other authorities.
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