Samruk-Kazyna cuts spendings by $1.83 bln in 201523 january 2015, 01:37
The National Welfare Fund Samruk-Kazyna, is a sovereign wealth fund and joint stock company in Kazakhstan which owns, either in whole or in part, many important companies in the country, including the national rail and postal service, the state oil and gas company KazMunayGas, the state uranium company Kazatomprom, Air Astana airlines, and numerous financial groups. The state is the sole shareholder of the fund. Umirzak Shukeyev is Chief Executive Officer and Chairman of the Management Board of Samruk-Kazyna. Independent directors are Alexander Mirtchev, Sir Richard Harry Evans and Nigel John Stapleton.
On January 20, the company quoted the Chairman of the Management Board Umirzak Shukeyev’s statement from his meeting with the government of Kazakhstan: “Amid the negative global economic trends, our holding company's business plans are going to be revised. It is planned to reduce the spendings by 337 billion tenge ($1.83 billion) from the approved target: direct expense will be cut by 249 billion tenge ($1.35 billion), general administrative expenses – by 64 billion tenge ($0.35 billion), or 16.6 percent. Capital expenditures will be cut by $1.3 billion, or 18 percent.”
According to Shukeyev, the Funds investment program will also be cut - by 18%. These cuts will affect its chemical, mining, construction, transport and oil and gas companies, but will not affect the major projects that are part of the State Program of Industrial and Innovative Development of Kazakhstan: Nurly Zhol Project, EXPO-2017 venues and other “strategically important projects”.
He said that Samruk-Kazyna will focus on transforming businesses. "The transformation process initiated by the President of Kazakhstan on October 6, 2014 is the axis of the Fund's development. It is called to make the Fund's companies more shock resistant. And despite the current deterioration in the economic parameters we are determined to continues this program,” Shukeyev said.
The Fund has already developed and approved detailed 3-year transformation action plans for all of its companies, started reengineering it business-processes and transitioning toward a model of strategic holding/active investor based on the most successful international examples.
“In 2015, we will launch operations transformations in 10 large companies, analyze and revise more than 8 thousand processes in the companies. We will introduce a new KPI (key performance indicator) system, graded wage system, 10 HR-initiatives. It is planned to create a common IT servicing center for the entire group, this would save almost $70 million. The number of companies will be reduced from 600 to 500,” Shukeyev said.
Samruk-Kazyna has been betting rid of non-core assets since last year to improve its focus and reduce the involvement of the state in the market. The Chairman gave an update of on the Fund's privatisation efforts:
"In 2014, 64 assets were put on the sales list as part of the privatisation progress. 12 assets were sold in 2014 for a total of 4.1 billion tenge ($22.27 million) (their assessed value was 2.5 billion tenge ($13.58 million)). Sales contract totally worth 20.3 billion tenge ($110.26 million) are being made for another 12 companies. 10 large companies and 24 smaller assets are being sold. Auctions of 5 assets have been postponed to 2016. This year the Fund plans to sell 17 more assets," Shukeyev said.
Writing by Dinara Urazova, editing by Tatyana Kuzmina