Ruslan Uteev gave an exclusive interview to The Eurasian magazine.
For almost two months, from March 16 to May 11, the state of emergency was in effect in the country. In the conditions of strict quarantine, companies had to completely rebuild their work. Premium Oil Trans LLP (part of PTC Holding) is one of the first companies that managed to switch to a remote format quickly, and by 100%. Managing online was not easy, says CEO Ruslan Uteev, but the company coped with all the tasks without allowing any production disruptions or loss of human resources.
– Ruslan, with what achievements has your company entered a difficult 2020?
– We have been working in the Kazakhstan market since 2011. Today, Premium Oil Trans LLP is the largest operator of freight railway rolling stock in the oil and gas sector. We provide three domestic refineries (Atyrau, Shymkent, Pavlodar) with the availability of tanks. On average, we transport about 15 million tons of oil and petroleum products in Kazakhstan per year.
And last year they declared themselves in Russia. This is a significant and historic event. In July 2019, for the first time, a Kazakh operator began loading from the Orsk oil refinery. And that was us. Now every day up to 1,500 tank cars are used on the territory of the Russian Federation.
The geography of transportation has changed, and with it logistics. We had to redistribute the park and actively involve the regions bordering Russia, these are the West Kazakhstan, Aktobe and North Kazakhstan regions.
Also in 2019, Premium Oil Trans LLP became the “Best Exporting Enterprise of Kazakhstan” for positioning its services in foreign markets. About 30% of the structure of our transportation is export.
– How long has the company been preparing to enter the Russian market? What was needed for this?
– We went to it gradually, systematically. The process took about three years. We were known and heard about in Russia. In addition, the factories that are located near the Kazakh-Russian border are convenient for us, and we are convenient for them.
– And why did the Russians give you preference?
– It’s simple. We offer the best transportation conditions in the region. Russia exports petroleum products to Central Asia. When returning wagons, we have the opportunity to offer our foreign customers more profitable logistics chains and save partners’ money on an empty tariff. This is due to the fact that Premium Oil Trans has a huge number of optimal routes in Kazakhstan. And this is our main competitive advantage over Russian operators.
– And how do you plan to further develop the Russian direction?
– For the huge Russian market, of course, we are a drop in the ocean. Today, due to the pandemic, the state of emergency that operated in Kazakhstan, quarantine in Russia, a difficult situation has developed. April and partly May there was no loading. About 1000-1500 tanks were idle. Kazakhstan gradually, not as quickly as we would like, but began the process of restoring the work of enterprises and returning to the pre-quarantine period. Therefore, it is still difficult to talk about plans. But we are optimistic about the future. There are already a lot of cars on the streets, traffic jams have appeared in the city, the demand for petroleum products has gone, cars have gone.
– The coronavirus pandemic has covered the Earth and plunged the world into another global crisis. How is your company coping with the economic consequences of COVID-19?
– The word “pandemic” speaks for itself. Many times we went through low oil prices, the growth of the dollar, but no company was ready for the coronavirus. This crisis is more global and more complex. Of course, when cities and countries plunged into isolation, demand plummeted. If the cars don’t go, it means they don’t earn. We managed to agree with almost all partners on more loyal conditions for the period of emergency. This made it possible to save the entire park and not to terminate contracts.
– How much have your traffic volumes decreased during the quarantine period?
– Intra-republican transportation of petroleum products decreased by 30-40%. For example, the Pavlodar Oil Refinery used to load 250 wagons on average per day, and now it loads only 30 wagons.
Against the background of a decrease in consumption in the country, the shipment of light petroleum products in the direction of Central Asian countries – to Afghanistan, Tajikistan, Uzbekistan – from Atyrau and Shymkent refineries has increased. This affected the increase in the average turnover of the company’s car from 10-12 days to 24 days. The reason is longer transportation distances and an increase in time when crossing border points.
However, we assume that when the consumption of petroleum products in the country is restored to the level it was before the pandemic, the routes and logistics of petroleum products will also recover. The volume exported to the countries of Central Asia will remain small.
– How did you organize the work in remote mode? Were there any difficulties?
– It should be understood that the management of the transportation process and interaction with customers is carried out using special software, which in quarantine conditions allowed us to quickly switch to remote operation. Our task was to provide all employees with computer equipment and continuous access via software to the company’s servers. IT departments have made a significant contribution to ensuring the efficiency of the company.
The company switched to 100% remote. But it’s harder to work in quarantine. The working day lasted not 8-12 hours, as usual, but all 24.
Perhaps in the medium term we will draw conclusions from this situation and reconsider some approaches to work with an eye to introducing more effective digital products.
Of course, the admission of employees at loading stations was tightened. It was necessary to provide people with special respiratory masks, gloves, disinfectants, but all these issues were resolved promptly.
– Have jobs been saved? How has the pandemic affected the incomes of your employees?
– We know that many companies have gone to forced optimization. As part of anti-crisis measures, as a rule, the staff is reduced first of all. And this is probably the most emotional and painful procedure. Despite the decline in profitability, we have retained all employees, which is more than 150 people. Today we can afford to continue working as our friendly, cohesive team. Employees’ incomes also remained at the same level as they were before the quarantine.
– Are you already making any forecasts for this year’s recovery?
– Yes, of course. We have previously determined for ourselves that everything will be fine from July. Everything will return to normal in terms of work and turnover.
– So you have quite optimistic plans?
– Yes. Freight traffic suffered less than passenger traffic. This will allow you to catch up faster.
– And if we consider the transport industry as a whole? What’s the situation there?
– It is obvious that the performance of the transport industry directly depends on the indicators of trade. Kazakh experts consider these two industries to be the most affected by the restrictions imposed during the pandemic. And in general, world trade has also declined, which also affects the economy of Kazakhstan. If, in particular, we look at the volume of rail traffic in Kazakhstan for the first quarter of 2020, then we do not observe significant changes compared to the same period in 2019.
The rates for freight cars were leveled in the same price segment. In order to predict something based on changes in the transport industry, it is necessary to take a deeper look at trends in trade and, in general, the purchasing power of the population.
– And now the transportation with China has been restored?
– It’s a matter of time. As I understand it, China has freed itself from the coronavirus. All factories, factories have already fully earned.
– What are your forecasts for the post-crisis period?
– I think the amount of oil entering the refineries of Kazakhstan and Russia will not decrease.
The price of oil on the world market has fallen, therefore, it makes no sense to reduce refining within the country. On the contrary, it is necessary to increase and sell the finished product for export. We hope that in the second half of the year the loading of oil to the plants will increase.
– Do you think the refineries will fulfill their production programs by the end of the year, and you, respectively, too?
– The refinery will not fulfill, we, respectively, too. But we hope that the second half of the year will allow us to catch up. And then, perhaps, we will come to what we have planned.
https://www.eurasian.press / Issue #7 (pages 193-200)