LOGISTICS KAZAKH

Kazakhstan 2018 | TRANSPORT | B2B

With greater trade in the coming years to come, logistics companies expect excellent potential within the Customs Union and the New Silk Road.

Alexander Matveev
ALEXANDER MATVEEV
Executive Director
DPD Kazakhstan
Anuar Shalkarbekov
ANUAR SHALKARBEKOV
CEO
IFC Colos

What has been your strategy to build the company further?

ALEXANDER MATVEEV When I arrived in March 2017, my main goal was to continue to develop our business and keep our healthy growth trend. Another goal is to provide stability in the market by means of widening our range of products and improving the quality of service. In the last 12 months, we increased our volumes almost 1.5 times. We have successfully delivered over 800,000 shipments and the objective is to reach more than 1 million, with weight of 15,000 tons. In addition to focusing on business growth, we are also implementing a strategic investment program to help us optimize costs and make further service enhancements. We are investing in equipment and have upgraded our operations facilities where our shipments are consolidated scanned, sorted, processed, and routed to their destinations. In July, we opened a new sorting facility with capacity of about 2,500 shipments per hour, which is a significant improvement in terms of service. Our efforts are driven by growing customer requirements.

ANUAR SHALKARBEKOV IFC Colos used to be a freight forwarder for project cargo, with extensive experience in providing logistics solutions to mining companies and the oil and gas sector. Specifically, we have a great deal of experience working with railway logistics. The main operator is Kazakhstan Temir Zholy (KTZ); however, the customer cannot directly contract it and this gives private companies room in areas such as freight forwarding and clearance to make logistics affordable. Our strategy requires another level of business development as we need to work with large companies in the mining sector such as Arcelor or Kazzinc, and this is one area that we would like to develop. In 2015 we were chosen by North Caspian Operating Company (NCOC) as its logistics and freight-forwarding partner. In Kazakhstan, such contracts are typically given to international names such as DHL or Kuehne & Nagel. We have more than 200 customers that are mostly corporates; we have 10-12 customers that generate 80% of our business.

How are you adjusting your growth strategy in response to developments with the New Silk Road?

AM B2B is the bigger part of our business, which at the same time provides a stable platform for long-term investment and integration with our clients. What is meant by integration is the cooperation with large companies with which we can standardize shipment processing and delivery as well as other related business processes. The B2C sector accounts for around 30% of our portfolio. Within this, we are focusing on e-commerce volumes to and from Russia and the CIS countries. Furthermore, in Kazakhstan we see a great deal of e-commerce traffic from China and are preparing operations for huge players like Alibaba. For example, we recently piloted a project with Alibaba and confirmed that we are able to process several thousand shipments a day in Kazakhstan to meet its requirements. We are looking into opportunities related to the New Silk Road that could have an enormous impact due to shorter transit times. Kazakhstan is the first country that has declared that its section of the project is completed but when it is completely finished overseas, container deliveries to Western European ports will be also reduced two- or three-fold.

AS These are new opportunities as many companies are exploring alternative methods of logistics. Companies all seek new ways to transport their products and demand is moving from east to west, which creates new transportation routes. Demand and logistics between Russia, Kazakhstan, and Belarus, meanwhile, is increasing because of the Eurasian Economic Union (EEU); this is not only because of the cost but also because it is easier to buy and sell products and do a better forecasting as the volatility between the tenge and ruble is not as high as the tenge to the euro or dollar. There is also growing demand for organic and meat products from the Middle East and other regions in the world and those in the agricultural sector have never been in such a favorable position as they are today with the low cost, the huge demand from abroad, and government support on financing. The equipment coming into Kazakhstan is mainly related to agriculture, such as minerals and fertilizers. We need to adapt our strategy accordingly to these new customer needs.