Sergej Omeljanjuk, AsstrA for Ukraine
Name: Sergej Omeljanjuk
Vocation: Director at AsstrA for Ukraine
1. Can we start with an introduction of yourself and an overview of your company? How do you position yourselves in the market?
AsstrA Ukraine is a representative office of the International Logistics Holding Company AsstrA Associated Traffic AG, the headquarters of which is located in Zurich, Switzerland. Our Company offers end-to-end logistics services in Ukraine as well as over the world. In short, we carry out international transportation of almost any cargo types and we also render forwarding services.
In Ukraine we work according to the Holding’s mission – AsstrA is a perfect partner in the sphere of Logistics for those, who care for development and flourishing of the society, as well as for environment.
We have been working in the Ukrainian market for more than 12 years already; therefore we can surely declare our company to be one of the leaders of the logistics market in Ukraine.
I have been the Head of AsstrA Ukraine Office since 2009. Previously I worked for other Holding’s Offices.
2. Do you have any plans for expansion? What are your growth ambitions?
Our ambitions are to grow faster than the market does. We are aimed at expansion of our geography and services, including new delivery schemes and new routs development. Besides, we actively develop multimodal (intermodal) delivery schemes, which are getting more and more popular in the world.
3. What key market drivers are positively impacting your business?
The main positive factor is the market growth and the post-crisis revival of foreign economic activity of our customers. All these factors influence our business in a very favorable way. Loan programs have been restarted (although not to full extent). Hence our partners – transporting companies got a chance to renew their parks. Euro 2012 should be mentioned, as preparing for it improves not only sport but also logistics infrastructure. In this sphere we are severely falling behind the European standards. That’s why any improvements are of great importance for us.
Hopefully, even after the championship takes place the existing speed of new objects building will be the same (or even increased). Much attention is now paid to the implementation of mechanisms, increasing the attractiveness of our country for investments. We are looking forward to the results of these efforts. As you can see, for a company, working in the service sphere, it is very important for its foreign economic activities.
4. What are the main challenges for you to overcome?
The sphere of transportation is an indicator of foreign economic activities as well as of economy in general. If FEA grows, the economy grows as well, hence the transportation sphere develops actively and vice versa.
So, the main challenges for us –transportation sphere representatives - are those the Ukrainian economy faces.
For example, a very important factor is the development of the transit capacity of the country. We should finally realize that this is our Klondike. This ability can bring our economy to a new level. There is another example. Carrying cargoes from Europe to Russia at least 10 years ago, the dispatching officers often made a mark ‘Transit through Belarus is banned’. Since that time the situation has drastically changed. Our Northern neighbors have become a much more reliable and convenient transit country, considering roads as well as the regulatory authorities’ work. We are now actively discussing it, writing articles for media, organizing panel discussions. Unfortunately there is little real effect now. Being market players, we, probably, should have greater influence on the state.
5. Have you launched any new initiatives to combat the current challenges?
Following the issues discussed in the answer to the previous question, I should say, that we try to respond to changes with a help of mass media, to estimate new initiatives of the regulatory authorities, offer successful methods existing in other countries ( thanks to our branch offices in many countries we have information about completely different practices). In the future we are planning to increase the intensity of such work.
From the point of own business development, we are in constant search for possibilities, allowing us to get an extra segment of the market – new schemes and new routes development. We try to react to the market changes as soon as possible, to offer the most relevant solutions. For example, foreign economic relations of Ukrainian companies with partners from South-Eastern Europe have been revived. We have interesting offers in this field.
6. How do your latest trading/figures compare to the same period last year? What do you attribute the upturn/downturn to?
The most significant were the results of the first quarter of this year, when AsstrA Ukraine succeeded in increasing the cargo turnover by 40 % compared to the same period in 2010. This figure perfectly reflects the general revival of the economy. By the way, it is higher than we expected, anticipating a 30% increase. We are pleased to declare very good dynamics of Heavy and Bulky Cargo transportation development. It indicates that we do a good job in our major direction and that the situation in the sectors that are customers of such carriages: engineering and building, increased.
Finally, one more pleasing figure – the growth of productivity per head constituted 43%. I express my respect to our specialists, who find ways to increase their productivity. We appreciate their efforts. If talking about the Holding in general, there exists the main financial reference point, the global plan of annual 25 % growth. Preliminary results of the year indicate its fulfillment.
7. What are your top three priorities for the next 12 months?
The top priority is the implementation of a new IT – Software, integrating our system with the systems of our customers and suppliers. This is an absolutely new level of cooperation, enabling to make communication and coordination questions close to perfection. Thereby we cooperate with the world leader – Oracle Corporation. Our partners in the Belorussian Office have already passed the period of implementation. It is Kiev Office’s turn now.
The second priority is financial results. We will try to keep and increase the speed chosen from the beginning of the year 2011.
The third priority is our continual work, aimed at the environmental responsibilities nurture. This is reflected in our mission. We intend to continue further encouragement of paying more attention to environmental problems (from the government’s side and from the side of fleet owners) by showing our own good example and communicating our values.
8. What has been the most important management lesson you have learned?
Like many other people I learned my management lesson in the crisis period. It seems to be natural that we get the most important lessons from the periods of changes and instability, when traditional methods and models do not work. We have to search for something new.
AsstrA has always had a broad motivational system. It concerns not only financial encouragement. Along with competitive salaries and benefits package there have been other elements – trainings for every employee, different corporate activities and many others. In short, we have been trying to make people feel confident and make them understand that the company appreciates their work. During the crisis, the amount of transport orders has considerably decreased; the employees’ salaries were shortened. Non-financial motivation components were in the forefront. We tried to preserve them as much as possible. We have hardly had any migration or discontent of employees. We can say that we passed the crisis through as one united team.
Therefore my simple lesson says when your business grows, when your income is stable, firstly, generously invest into your personnel, secondly, do not forget about non- financial motivation. You’ll be “paid” back a hundredfold as much and it’ll help to keep stability in case of hard times.
By the way, I’d like to point out that current company results afford us to improve the financial aspect as well. This is another important priority along with the stated above ones.
9. Who do you most admire as a business leader and why?
In a global sense most of all I admire Google and its founders. These people established not only an extremely successful business; they established it in a practically new segment. When you come into any markets already functioning you may face serious competition. However you can refer to existing successful models and practices, you have certain basis and therfore everything depends on your persistence and skills. The founders of Google nearly established the market themselves without any previous examples, without any guarantees. They were a 100% goal-oriented and they reached impressive results. There is a book revealing the success story of Google. I recommend it to everybody as a source of inspiration and examples of successful business approaches.
Besides, as far as I know the atmosphere in the company is very democratic, initiative of employees is always supported. It’s very close to me as the atmosphere in AsstrA is exactly the same.
10. What do you foresee as the next big trend in business climate of Ukraine?
In the nearest future establishment of a free trade zone with EU is expected, therefore Western companies will be more actively entering the Ukrainian market. Thereby I think and I hope that further exclusion of semi-professional and outdate methods for running and managing business will become our main trends. These methods will be replaced by western models considering local specificity. Besides, I expect that medium businesses will communicate their will to the state more persistently, demanding improvement in the quality of regulatory and supervisory authorities.
11. The EBA focuses its actions on 7 vectors of economic development- Corruption fighting, Court system and Land reform, Currency regulation, VAT refund activation, Customs Procedures simplification and Technical barriers to trade elimination. Which one(s) so you foresee as the most vital and why?
Everything mentioned above is important and interrelated. Corruption is undoubtedly at the forefront. There is no business in Ukraine that has not faced this problem. Corruption is the main foe of economic growth.
It’s definitely very important for us to simplify customs clearance procedures. I’ve already mentioned the transit potential of Ukraine which has not been realized yet.
Besides, efficient currency exchange control, stability and transparency of this issue are essential for us and for our partners. Frankly speaking, I’d like to single out each of the mentioned points. It is quite obvious that Ukraine is in need for complex transformations rather than reforming certain sectors.
12. How do you assess customs clearance procedures effectiveness in Ukraine and customs system regulatory framework?
It will be unfair to say that there are no problems at all. I would not like to discuss certain problems in detail. Much has been written and spoken about it. I will rather just name them: incorrect formation of customs value of goods (which often makes them uncompetitive in our market), unjustified delays at the borders, complicated bureaucratic customs clearance procedures, corruption. We’d like to be optimistic, so let’s add something positive –customs authorities have been lately demonstrating unusual openness and desire to correct their mistakes; they try to carry on dialog with businesses. Although drastic changes in their work have not yet occurred, such vector can not but give us hope for the better. Hence, I’d like to thank EBA for the efficient work, aimed at improving the dialog between the customs and businesses. It obviously works.
13. What are the main hurdles, in your opinion, on the road to installing a speedy transparent and effective customs system?
First of all, another system, unfortunately a corrupt one, which has been developing for years, does not allow installing it. Not only are certain employees of the customers service, but also certain FEA operators used to work in such conditions. They feel comfortable that in its turn decreases the level of pressure on the customs concerning the necessity of reforming.
Another point is outdated technical support, insufficient IT-infrastructure development. It hinders efficiency and transparency of customs service work.
One more important point, the main priority of the customs should be assistance to FEA operators. Nowadays it often seems that the customs and exporters are enemies. This approach should be changed because it harms business and state budget.
14. May the turmoil in global financial markets threaten the economic recovery in the European Union and affect Ukraine's business activities?
Today we should first of all think about the influence of such turmoil on the situation in the domestic market. Unfortunately, Ukraine can hardly be called a mature economic organism, that’s why any economic turmoil influences our economy and business a lot. It’s like a virus, which is likely to do harm to a child rather than to an adult, whose immune system is stronger. From the point of view of Global Economy, Ukraine of Today is a kid. We are still suffering from heavy economic diseases, coming from the 90ies and earlier. The treatment is well-known – global economic reforms. This is the only way to get better prepared for the world turmoil as well as ensure stable development of our domestic business.
