Kazakhstan 2017 | ECONOMY | INTERVIEW

TBY talks to Erlan Ospanov, Managing Partner & CEO of Verny Capital, on the importance of environmentally friendly strategies, international partnerships, and plans for a diversified expansion.

Erlan Ospanov
Prior to the foundation of Verny Capital, Erlan Ospanov served as Deputy Director General of the ATF Group Holding Company in Kazakhstan, which managed the non-financial assets of ATF Group and was responsible for corporate finance and investment activities related to non-financial assets. Before joining ATF, Ospanov worked for several years at Narodnyi Bank, where he became Deputy Director of the bank’s treasury operations. In the late 1990s, for three years, he also managed GRK Balkhas’s gold trading, processing, and refining and short-term pre-export financing operations. He graduated from Moscow State Technical University’s department of robotics. He also received a degree in finance and credit from KIMEP University and an MBA from the University of International Business in Almaty.

Talan Towers, developed by Verny Capital, was the first green construction project in Kazakhstan. As a pioneer of sustainability, how do you contribute to establishing a new culture of environmental friendliness?

We do not follow trends or implement green technology just for the sake of it. We will only implement a feasible solution that makes sense, which is why we have a strict selection of what we will use. For example, we use waste water-to-water plants, trees, and bushes or façade glass that prevents heat loss in winter and deflects heat in summer. We widely use light bulbs that save energy. Even our new elevator systems in our buildings reduce energy consumption due to the optimal organization of people flow in the building. We seek to promote all these with our business partners and counterparts as much as possible for our real estate developments and what we will implement.

Could you tell us about the importance of establishing large global conglomerate partnerships in the sectors you invest in?

Typically, private equity firms do not have partners, but Verny Capital is not typical. It is important to have professional strategic partners in the industries we are involved in, like telecoms, gold mining, education, and hotel management. It makes us bring professional expertise and experience into the country without wasting time or making mistakes, and increasing the efficiency of our activity.

How do you seek potential partnerships and where?

There are some objective criteria and subjective criteria. Talking about subjective criteria, there should be some sort of chemistry between the partners and they should understand one other and have the same vision and core values. Objectively, a partner should be professional and have experience and a great track record of success. Our target is first to establish partnerships within Kazakhstan; however, at the same time we are open to international cooperation. We have realized it is not easy to manage businesses from afar so it is always a matter of management and control of the business, which is why global companies always have local partners in different countries.

How can Verny Capital's expertise and knowledge of the local market be useful to large companies that want to do business in Kazakhstan?

We have great experience being a local partner for global players. In developed countries the business environment is strict, competition is high, and yields are low so there are fewer opportunities to start businesses. New opportunities are in emerging markets such as Kazakhstan and CIS countries. That is quite obvious, which is why we mostly look at Kazakhstan for investment opportunities and we would be happy to enter new partnerships with respectable, professional, experienced, and successful global players. We know how to do business here and that is our competitive advantage.

What are your expansion plans for the next few years?

Firstly, we will develop and expand our existing businesses such as gold mining through RG Gold, through which we just finished the first phase of exploration. In the last three years, we have increased exploration activity and found new reserves. As for the telecoms business, we understand that we need to expand our product line because of global trends in the telecoms industry. We also need to turn around the banking business because of the need for new technologies. The banking business is becoming more technological and we have to be ahead and play this game well or else we will lose. We will complete Talan Towers, which is a substantial development, and will follow with new opportunities, such as a wheat processing plant and many others. Gold mining is part of our diversification strategy but there are also great opportunities in agriculture. This opportunity should be assessed properly as Kazakhstan has a large territory with a small population and we have neighbors such as Russia, China, and India, which consume a large amount of food for which Kazakhstan has a great opportunity to supply.