Investor M: We Give You Quality and Reliability
Power is one of the critical industries in which even minor failures might bring about disastrous consequences. The recent breakdown in the United Electric Grids of Russia’s system came as a harsh reminder of that fact, as it affected some four million people in Moscow alone. Modernisation and re-equipment are vital to the stable operation of power systems, and prompt and high quality supplies play an important role in these processes. Investor M LLP is one of the largest suppliers of insulators, reinforcing steel, and other electric products to the domestic power sector. We asked Lyubov Makarova, the company’s Director, to answer our questions.
Ms Makarova, this year your company will celebrate its fifth anniversary. How did it all begin?
In 1996 I was offered a position with Investor, a Moscow company who at that time acted as an official dealer for BelAZ, a giant Belorussian lorry manufacturer. My duties included supervising co-operation with a number of companies from the Ural region. This was a difficult period, and barter practices were widely spread as the main method of payment between business partners. For example, we would ship out tipper lorries to pay coal mining companies, then send coal to pay metallurgical companies, then pay machine, pipe and insulator manufacturers in rolled metal, and finally supply insulators to Russian power grid companies and railroads. Being in charge of this quite complicated system of mutual supplies was really challenging, but it allowed me to gain invaluable experience and to make a wide range of personal contacts in business circles. In late 1999 our company changed its activities, but I did not see any promising opportunities for development in the company’s new core business, nor did I want to lose my extensive partner ties. So I made up my mind and founded a company of my own, naming it Investor M, i.e. Investor led by Makarova!
How did you choose the strategic direction for your business’ development?
I had several private talks with Anatolij I. Rudenko, Deputy Director of the Yuzhnouralsky Insulators and Fittings Plant (YuAIZ), during which he complained that for several years they had not been able to establish a permanent partner relationship with Kazakhstan, despite their position as the leading CIS manufacturer of a wide range of tempered-glass suspended insulators, overhead line accessories, and porcelain supporting and rigid insulators. YuAIZ’s products are used throughout Russia and exported to the CIS, Finland, Sweden, Italy, Spain, Lebanon, Syria, Vietnam, Iran and other countries.
Naturally, when such a well reputed manufacturer proposed that we assist them in promoting their products in Kazakhstan, our company responded enthusiastically. All the YuAIZ departments provided valuable support to us as we conquered the new market. And although our sales in 2001 were as little as US$24,000, our partner put its trust in us, and in that same year Investor M received a dealer’s certificate.
We made our first large transaction for US$970,000 in 2002 with Petroleum Invest Corporation when we arranged a supply for KEGOC. This was the first time Kazakh electric grids received brand new, high quality products which were certified to international standards. Before that they had only had access to the so-called secondary market, i.e. to buy from commodity stocks remaining after the Soviet epoch. This immediately made us stand out among the suppliers.
The main challenge to us was that the secondary market offered products at dumping prices, several times lower than the cost of new products. It took us a lot of effort to convince potential customers that buying from us was beneficial to them. We achieved a turning point in 2002 when our sales increased by dozens. As a sign of appreciation, YuAIZ gave us the exclusive right to sell its products in Kazakhstan.
Step by step we built up a reputation and won many permanent customers who, trusting our reliability, asked us to expand our supplies range with other companies’ products. In response to their requests, we established close contacts with the majority of Russian and Ukrainian manufacturers of reinforced steel and insulators, including the Beloretsk Metal Company. Now we offer integrated packages that include electricity equipment, machines, mechanisms, steel wires, etc. to Kazakh power companies. We hold dealer’s certificates from Energiya-21 (Yuzhnouralsk, Russia), ELIZ (Perm, Russia), TZVA (Tovarkovo, Russia), Uralizolyator (Kamyshlov, Russia), BMK (Beloretsk, Russia), and Stroidormash (Alapayevsk, Russia).
What Kazakh companies do your work with, and why do they choose Investor M?
We sell reinforced steel and insulators under the YuAIZ trademark throughout Kazakhstan, from Aktau to Ust-Kamenogorsk and from Pavlodar to Shymkent. Our main customers are KEGOC, Kulager Corporation, Elektra Corporation, ELMO and its branches, Bogatyr Access Komyr, and Aluminium of Kazakhstan. These companies, like many others, choose Investor M first because we supply all they need and always meet schedules. This is the basis of our reputation as a reliable supplier for electric assembly and grid operating companies. We never divide our customers into big and small ones, and every customer matters. We have an individual approach to each customer, apply a flexible system of discounts, and are ready to supply any quantity of products. We also support our customers who experience temporary financial difficulties by granting them deferral of payment for shipped products. This, however, applies only to companies we know well.
What products offered by Investor M are most in demand in Kazakhstan?
The most popular items are the PS70E and PSD70E glass insulators. Polymeric insulators have proven to be an excellent choice for mines and open pits with highly contaminated and dusty environments, and we offer these products manufactured to international standards by Energiya-21. However, not all Kazakh buyers are happy with the prices of these items. I’ll try to make them change their attitude. Our insulators are indeed more expensive than similar products, but they are definitely worth their price because they are made of high grade polymers from the USA and Germany using hi-tech equipment. Just as importantly, the manufacturer’s quality management system is certified to international standards, which in my opinion should be the main consideration for strategic industries such as the power industry.
What are Investor M’s plans for the next five years?
We will continue to co-operate closely with YuAIZ, our main partner. In order to increase its share in the markets of Kazakhstan and Central Asia, YuAIZ will build a plant in Rudny (Kostanai Oblast, Kazakhstan). This sizeable project will be implemented using Russian investments, including YuAIZ’s own funds, and we will also contribute. There is some local production of overhead line accessories, but these products are of low quality because of primitive technology. In contrast, the products by the new facility in Rudny will comply with international standards and requirements. The main source of employment in the city to date has been the Sokolov-Sarbai Mining Production Association. With this new project, hundreds of people will be provided with jobs, and will be able to look to the future with confidence.
An efficient team is a critical asset for any company. Tell us about the people who have been working with you all this time.
The backbone of our team was mostly formed at the company’s start-up, when we realised that financial problems could not prevent us doing what was important to us or affect our personal relations. Our team is comparatively young, with an average age of 37. A person is in his prime at this age, so it would be right to say that our team as a whole is very strong and energetic. Each of us has an acute sense of responsibility and is willing to work hard, and the excellent communication skills of our managerial staff help them build friendly relationships with business partners.
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