Feb. 2, 2015


Raimbek Batalov

Kazakhstan

Raimbek Batalov

Chairman of the Board of Directors, Raimbek Group

"We have been focusing on the resource base, and also believe that vertically integrated holdings are not the right way to go."

BIO

Raimbek Batalov was born in Almaty in 1970. He graduated from the Kazakh Leading Academy of Architecture and Civil Engineering. He is one of the most prominent entrepreneurs in Kazakhstan. The Raimbek trading company he founded in 1992 had a long and eventful development history before it ultimately evolved into the Raimbek Group; a major, successful, and diversified corporate holding. Raimbek Batalov is well known in Kazakhstan as not only a successful businessman but also a public figure.

For more than 20 years Raimbek Group has been one of the leading holdings here in Kazakhstan. What are your recent milestones and highlights?

The company has been in the market for more than 23 years, and is one of the few companies that started in the 1990s and is still here today. This stability and longevity is one of our key achievements. Naturally, having been around for more than 20 years, we have reached a period of sustainable growth. A decade ago, Raimbek Group was heading in more than 10 directions, and now we are focused on only three areas of operation. We have gone through rapid growth, as well as post-crisis growth, which describes our current growth. At the moment we are focusing on food, agro, and retail. We have an understanding of these sectors. This is conscious, stable, and pragmatic growth.

The activity of the Group's subsidiaries—Raimbek Bottlers, Food Trade House, and Raimbek Agro (dairy products)—make Raimbek Group an active player in Kazakhstan's FMCG segment. How do you compete with international holdings that are also consolidating their presence in the country?

The market here is very competitive. The fact is that we have held a leading position for 15 years along with Coca-Cola and PepsiCo. We have been focusing on the resource base, and also believe that vertically integrated holdings are not the right way to go. Instead, we focus on what we know, and create infrastructure around our line of work. Raimbek combines the kind of work that I do as businessman and as an advisor to the Prime Minister. This helps the company evolve, and is what we are focusing on right now.

The government is currently working on diversifying the economy and increasing industrial production. What is the importance of increasing your production here in Kazakhstan?

Diversification has been very important for our economy since the first day of independence, but unfortunately the problem has not been solved yet. Oil and gas is something that Kazakhstan is known for. However, we don't give up and we are still looking for the possibilities for diversification. At this point we have identified agriculture, processing, and transit potential, as well as ecotourism. Of course, it is always better to sell petrochemical products as opposed to crude oil, or heavy equipment as opposed to metal. In terms of Raimbek Group, our strategy does not revolve just around Kazakhstan. We also have facilities in China, as well as CIS countries and the Caucuses, and our products are being sold in these regions as well. Kazakhstan has potential for zonal expansion as it is politically stable, and its geographical position is also very good. Raimbek is focusing on its resource base, and concentrating on three areas.

How will the recent establishment of the Eurasian Economic Union support the expansion of your operations?

The Eurasian Economic Union is a very complex matter. I am a part of the Council for Russian, Belarusian, and Kazakh Businesses, which is a part of the Commission for the Eurasian Economic Union. I am also monitoring some of the Kazakh businesses, and I have the experience of knowing how things are done with Kazakh businesses and other countries. Of course, the Eurasian Economic Union will introduce increased competition with Russian companies, but it will also allow Kazakh companies to enter the Russian market, which was previously not allowed. The new union will allow Kazakhstan to enter these markets, and barriers are being removed. Now the ball is in Kazakhstan's court, and the country has to realize the competitive advantages that have been identified by McKinsey and the Boston Consulting Group. Can businesses in Kazakhstan actually realize all of these competitive advantages? That will depend on their resource base, and management. Obviously the Eurasian Customs Union will be a challenge both for the Kazakh government and businesses, but it is much more interesting to work in a market of 170 million rather than just 17 million. It all depends on whether Kazakhstan can create an environment that fosters the expansion and development of companies.

Since 2002, you have co-chaired the Council of the Forum of Entrepreneurs of Kazakhstan, which promotes the development of SMEs. In your experience, what has to be done to support entrepreneurial skills in the local community, and the growth of SMEs in the country?

There are two things that we should focus on, and the first is the reduction of administrative barriers. This is something that President Nazarbayev has been advocating for a long time. It is a results-oriented process. These barriers impede the emergence of SMEs. The eradication of administrative barriers is very important. Secondly, we need infrastructure in place, and not just in terms of engineering, but also in terms of creating conditions for the development of various sectors, training, and support for the peripheral businesses and the transit economy. This is something that the government should work on and invest in, in order to create a good business climate.

Can you share with us your business outlook for 2015? Do you have a specific goal?

Our priority is the development of the resource base. We want to increase our international base in China and in the CIS.

“We have been focusing on the resource base, and also believe that vertically integrated holdings are not the right way to go."

© The Business Year - January 2015

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