FROM DREAM TO REALITY

Kazakhstan 2018 | TRANSPORT | INTERVIEW

TBY talks to Hicham Belmaachi, Chief Operating Officer of DP World at SEZ Khorgos East Gate, on ensuring Khorgos becomes a multi-modal hub, unlocking the SEZ's true potential, and turning good concepts into hard facts on the ground.

Hicham Belmaachi
BIOGRAPHY
After 10 years of managing major global trade routes in the shipping industry for CMA CGM, Hicham Belmaachi learned a great deal of valuable transferrable skills applicable to DP World’s effort to help the SEZ Khorgos become a world-class rail, logistics, and industrial hub as part of the larger multibillion dollar One Belt One Road project re-launching the ancient Silk Road. After a career based in the Far East and Europe, his communication skills enable him to executive effective results in a variety of environmental challenges. He holds a master’s from the Kedge Business School in Paris.

What have been your major objectives over the past 12 months?

The main objective has been to continue to train the people inside the company, meet with investors, and make the project known, not only in Kazakhstan, but also globally to attract foreign investment. We need to explain our long-term strategy and ambitions because this is clearly a project built with a transformative impact for the supply chain. We highlight the value proposition of the project and respond to the concerns that investors might have. When we meet with investors, they request clarifications about regulations, and sometimes we have to raise recommendations to the Ministry of Investment and Development based on the feedback received. We do this intermediary work between investors and the ministry, which is in charge of creating a favorable environment for attracting investors. There is also constant interaction with the rail operator, namely Temir Zholy (KTZ), since we are connected by rail and the idea is to build services and improve the connectivity of Khorgos to any destination in Central Asia or Europe. The next point that we are working on—given that a new border crossing between China and Kazakhstan will open soon—is to connect it efficiently with the special economic zone so that Chinese logistics operators are encouraged to cross over, come to the special economic zone, and do trans-shipment operations without facing visa issues or road limitations. We are trying to create an environment where Khorgos will be a multi-modal hub connected not only by rail but also by road. The most significant development in the past six months was the implementation of a paperless IT platform where all the people involved in the trade and supply chain can do their transactions and will include customs, the special economic zone, rail operators, banks, and truck operators all on a single platform.

What are some of your recent achievements in terms of volume and attracting investors to Khorgos?

A crucial landmark for the new Silk Road is that the number of container trains passing from China to Kazakhstan has increased by 46% in the first eight months of 2017, whereas Khorgos itself has increased by 119%. The growth of the market is a result of the fact that there is a need to use this new mode of transportation, and a growing number of logistics operators believe in this route. Projects such as Khorgos contribute significantly to bringing attention to the trans Sino-Kazakh route, and more companies are looking to base their model on rail transportation. In terms of attracting investors, the logistics zone is where we will give land to investors to build warehouses, around 65% of which are foreign. Of this 65%, the majority comes from either Dubai or Europe. The other 35% in the logistics zone are mainly SMEs from Kazakhstan. In the industrial zone, the majority are local SMEs that take three to four hectares of land to test the market for assembling. In this sense, they are shifting from being pure traders to also becoming assemblers.

What are your overall expectations of the new Silk Road?

This new concept of the Silk Road started in 2013 and by having two visions—one from China with its clear, far-sighted ambition and one from Kazakhstan's strong leadership—we can see that concrete steps have been taken in only a few years. We have a special economic zone that is ready and operational; with cargo increasing and a new highway, border, and city, it is no longer a concept but becoming reality. This is excellent and reassuring for investors, and having those promises delivered has had a positive effect on the project. We now need the first investors to start construction for the next phase to begin; then new things will start to happen in the supply chain, which will then attract more people to the project. The new Silk Road is no longer a dream but very much a reality.