A LOCAL BLEND

Kazakhstan 2015 | INDUSTRY & MINING | VIP INTERVIEW

TBY talks to Richard Parratt, General Manager Central Asia at Imperial Tobacco, on trends and habits and recruiting local talent.

What is the importance of Kazakhstan for the company?

For the region, Kazakhstan is a sizeable tobacco market, but from a global perspective, it not the biggest. Imperial Tobacco is represented in about 160 different countries. Kazakhstan is a growing market for us. We recently reached a record market share of 9.3%, and have been growing for the last three years.

What are the main trends, and habits, of smokers in Kazakhstan?

Tobacco consumers are very similar no matter where you go in the world. A consumer buys a pack of cigarettes, smokes it, and then goes back to the store and buys another one. But there are differences as well. In Kazakhstan, around 86% of smokers consume reduced-strength products. In Western Europe and other places, a lot of people smoke full-flavor products. Also, the Kazakhstani culture is different; people like to dress well, especially women. There is a bit of a showoff culture and people like to show what they're doing. This tendency relates to every FMCG company because consumption is a statement here. People put their car keys on the table next to their bags, and so on. These things are noticed, and they send a message. I try to build my organization around understanding why adult consumers choose and how they make their choices. We don't do anything to encourage non-smokers to start smoking or to prevent smokers from quitting. As a business we compete to ensure that adult smokers choose our brands over those of the competition.

“We don't do anything to encourage non-smokers to start smoking or to prevent smokers from quitting."

What brands are driving your growth in Kazakhstan?

We have a very focused portfolio. It's basically Davidoff, West, and Imperial Classic. The larger the portfolio, the more complicated the strategy. It is much easier to run a focused portfolio. We separate our bands into strike SKUs and secondary. The strike SKUs are the ones that are everywhere. These are products that mass market and the secondary ones are more niche.

What challenges does your business face here in Kazakhstan?

The challenges that we face are no different from those in any other country. I have worked in Spain, Russia, Belarus, Macedonia, Kosovo, Albania, the UK, and more. FMCG is all the same—you make a product, sell a product, get it to a consumer point of sale, and the consumer buys it. We are a tobacco company, so there are challenges inherent to our sector to which we strictly adhere. As a company, we then find where the opportunity lies within the legal framework, and make that our focus.

What challenges are there when recruiting quality human capital in Kazakhstan?

Recruitment is always a challenge. Right now the only position that we are recruiting from abroad is our intelligence manager, and he is tasked with developing local talent here in our organization. About seven or eight expatriates have left and been replaced by local talent since I have been here. I have tried to grow people from within the organization, give them the opportunity, and nurture them to build some sustainability. I want to recruit people not for the job they are doing, but for the job they can do in three to five years' time. I always recruit people who challenge me on the basis of intelligence as this pushes me to increase my performance. We run a very open and non-hierarchical organization. I enjoy the people coming in and giving me their point of view as long as they are doing it in the right way. This relationship allows employees to actively contribute. Anyone can come and bring ideas. There is an open-door policy. We especially try to involve the more junior members of the organization.

© The Business Year - February 2015