Bogatyr Komir LLP: results and plans
31.03.2017
Past week in Bogatyr Komir LLP a series of reporting meetings of the company management with the labor collectives of the structural subdivisions of the enterprise was held. Taking into account the busy work schedule of General Director of the company Serik Raipov the final meetings were held under the chairmanship of Deputy General Director-Director for Production Sergey Platonov and Executive Director Kairat Rgaibek.
In the course of the meeting with the labor collectives of Bogatyr coal mine, Bogatyr Loading and Transportation Department, Chief Power Engineer Service, Railroad Equipment Maintenance Department, and also Executive Apparatus General Director of the company Serik Raipov pinpointed attention at the most important moments of the activity of the enterprise. At the same time for the full and objective understanding of the current state of affairs General Director took the total results of the financial and economic activity of Bogatyr Komir LLP for 2015 as a starting point.
- In 2015 the company shipped 33 million 923 thousand tons of coal to its customers, 34 million 500 thousand tons were mined. The size of the proceeds made about 55 billion tenge, – Serik Raipov said. - At the same time the enterprise attracted additional financial assets from the second-tier banks to replenish circulating funds. For the past 8 years Bogatyr Komir LLP spent 41 million dollars total to pay bank interests only. All that together deteriorated the financial condition of the company. Understanding the complexity of the situation, which the company found itself, the first thing we did was the development of a set of measures (beginning from 2016) on reduction of costs; in addition to that one of the purposes of the measures taken was and remains - to get rid of dependence of the banks. One must say the policy has already started to fructify. For example, if in 2015 the company attracted 33,4 billion tenge then in 2016 - 17 billion tenge only. We have significantly reduced the debt of the enterprise to the banks. If the debt to the banks was 14,6 billion tenge as of January 1, 2016 then as of January 1, 2017 it was reduced down to 9,7 billion tenge. I want to state firmly - our company is self-efficient, and if we learn to plan and use existing resources correctly we will be able to get rid of credit dependence. We will move to a principally different, quality level. Our main purpose is to restore the health of the enterprise, galvanize a new life into it. It is worth noting that in 2016 the company paid penalties in the volume of KZT3,5 billion for 2009-2015 although no funds had been envisaged in the business plan for this purpose. KZT1,9 billion of the amount was used to pay penalties to JSC National Company Kazakhstan Temir Zholy for use of rail cars and KZT2,1 billion to pay a fine by the results of the tax review for 2009-2012. The main payment made KZT1,1 billion, KZT0,5 billion - a fine, and KZT0,5 billion - penalty reserve. By my instruction the recalculation of tax liabilities was made to avoid additional penalties for 2013-2015; as a result, the amount of corrections made about KZT1,6 billion.
We are fulfilling all the obligations taken by the administration and shareholders in front of the labor collective. From my side I ask for your support and active cooperation to the policy pursued by the company.
Having outlined the general state of affairs Serik Raipov started to describe the results of the company's activity for 2016 in the course of the meeting:
- You saw what complicated conditions we had to work in last year, and nevertheless having a plan for 32 million 500 thousand tons we were able to mine and ship 35 million tons of coal. I think the big merit in the achieved result is of all of you. At the same time one needs to take into account that we did not manage to ship 2 million 400 thousand tons of coal because of interruptions in rail cars feed, which started from September last year.
As Serik Raipov explained, it became possible to achieve the over-fulfillment of the planned parameter thanks to the active negotiations with potential coal customers. So, among the main buyers of Bogatyr coal in Pavlodar region there is JSC Pavlodarenergo with a guaranteed volume of coal consumption on the level of 2,5 million tons per year. Speaking about the production parameters of the past year Serik Raipov also mentioned about the plans for 2017. The forecast for 2017 is 33 million 900 thousand tons. The management of the company managed to conclude agreements for shipment in the volume of 40 million tons of coal. The efficiency of the negotiations held was demonstrated by General Director using Refta Power Plant, with which Bogatyr Coal LLP concluded the contract with a guaranteed volume of 9 million tons. Taking into account a 10% option the total volume of shipments should come close to 9 million 900 thousand tons. Together with customers the work is carried out on forming a balanced schedule of coal shipments for the current year.
The head of the coal mining enterprise also spoke on the measures on cost reduction implemented in each of the structural subdivisions of the company. For example, at Bogatyr coal mine alone the total economic effect received from optimization of production costs made 575,596.8 thousand tenge in 2016. The process of drilling and blasting works was significantly improved at the mine. Basing on the analysis made and economic calculations the decision was made to use hole valves of in-house manufacture, the price of which was by 2,5 times lower than of market ones, and also the so called "kolkhoznitsa" - ammonium nitrate of in-house manufacture, the cost of which was by 30% lower than that of the Russian analogue. Thanks to the painstaking work of Chief Power Engineer Service in the reporting period 26 companies were revealed, which has been illegally connected to the power lines belonging to Bogatyr Komir LLP and using the coal mining enterprise's power under no control. The total amount of savings received from the power saving measures developed by Chief Power Service made over 194 million tenge. 175 million tenge of savings total brought the measures on costs reduction in Bogatyr Loading and Transportation Department. The appreciable effect was achieved by the solutions made in Technological Transport Department. For account of the change of a subcontracting organization only, which was specialized in technical maintenance of large trucks, the cost of major overhaul of one unit of machinery was reduced from 214 million tenge down to 160 million tenge. The positive result was also brought by the negotiations of General Director with some companies on loading free capacities of the oxygen compressor station at Mining and Transportation Equipment Maintenance Plant.
The great attention is given by the company management to the process of personnel training and retraining. Having a purpose not to cut staff when introducing a cycle and flow technology it is presupposed to arrange training of employees on several specialties. Particularly, it was stated that taking into account an additional lot of large trucks and traction units in the future transportation specialists will be in demand. By the way, the total volume of investments into technical modernization of the enterprise for the reporting period made KZT3,217.1 million; this year the managing shareholder - JSC Samruk-Energy - approved the plan of investments to the amount about KZT14 billion. Currently the plan it under consideration of the controlling shareholder - United Company RusAL. In many ways the conclusion of contracts for coal shipment in the volume of 40 million tons of coal stipulated to the proposal to increase the volume of investments. The growth of investments will allow to renew a technical fleet of the enterprise significantly. So, it is presupposed to purchase new dump-cars, mining equipment and vehicles using the allocated funds.
The sponsorship activity of the company was also reviewed in favor of the social sphere of Ekibastuz. The new management of Bogatyr Komir LLP found it expedient to redirect funds earlier allocated to finance the local football club called Ekibastuz to beautification of streets and yards of houses, and also construction of children playgrounds. For example, by coordination with Ekibastuz town akim (head of town administration) 18 million tenge will be allocated for restoration of illumination along Kunayev street. As General Director assured Bogatyr Komir LLP was intended to allocate about 70 million tenge per year for the needs of the town. 199 million tenge total were directed by Bogatyr Komir LLP for 2016 for various social projects of the town and the region. General Director expressed his readiness to continue the policy in the future. The enterprise invests significant funds in the development of Zhasybay own recreation area. Annually about 200 free vouchers to Karlygash children health center are allocated to children-orphans and children from lower-income families. The significant support is rendered by Bogatyr Komir LLP to young specialists. In 2016 the volume of funds allocated in the form of loans for purchase of apartments and improvement of living conditions made 70 million tenge; this year the budget of this program was increased up to 100 million tenge.
Concluding the meeting Serik Raipov expressed his gratitude for the wisdom and understanding displayed by Director of Bogatyr Loading and Transportation Department Aleksandr Grigoriyev and handed a memorable watch to him as to the best manager of the company by the results of 2016. General Director thanked the whole labor collective of the coal mining enterprise for the successful joint work. At the same time he expressed the confidence in further fruitful cooperation. The pleasant news for the company employees was the intention of General Director to apply to the shareholders for payment of a bonus for the professional holiday - Miner's Day - in the volume of 100% of a base payment under the condition of fulfillment of announced production parameters. One more surprise for the miners was that General Director gave the assignment to encourage two families of the best workers in each structural subdivision with free vouchers to Beryozka rest house for high work achievements. In the final part of the meeting head of the enterprise answered the questions of the participants.
In the similar atmosphere the meetings with the labor collectives were held under the chairmanship of Deputy General Director-Director for Production Sergey Platonov and Executive Director Kairat Rgaibek. That time they were the meetings with Technological Transport Department, Automobile Base, and Mining and Transportation Equipment Maintenance Plant. In the meetings the top managers reminded about the assignments given by President of the country in his regular Message to the people of Kazakhstan called "The Third Modernization of Kazakhstan: Global Competitiveness". Basing on this policy document the management of Bogatyr Komir LLP builds its prospective plans of the coal production development. As Kairat Rgaibek underlined during the meeting with the plant employees the savings of funds on drilling and blasting works alone made 250 million tenge in 2016 thanks to the measures implemented for reduction and optimization of costs. The great work on increase of energy efficiency is carried out by Chief Power Engineer Service. Kairat Rgaibek gave the real examples of the wide use of energy-saving lamps, and also introduction of spotlights. By the information of Executive Director it is planned to allocate about 42 million tenge for electric equipment modernization this year. Kairat Rgaibek paid the special attention to the fact that the management of Mining and Transportation Equipment Maintenance Plant needed to renew equipment and machine tools timely.
The top managers of Bogatyr Komir LLP are sure the growing demand in electric power generated by Ekibastuz power plants ## 1 and 2 and other power plants will provide the sustainable demand for Bogatyr coal at the market.
Kanat ALDABAYEV
Photo by Oleg MALCHUK.
