Corum Group is affiliated to one of the largest financial and industrial groups in Ukraine, SCM. Core competence of Corum Group is its experience in the mining business: development of modern technological solutions for mining operations, designing and manufacturing of the equipment for the mining companies, its servicing, and also servicing of equipment manufactured by other companies. The equipment manufactured by Corum Group company is used for mining bituminous coal, iron and nickel ores, potash salts and other solid minerals. The new direction of Corum Group business is shaft building. 15 largest mining holdings which assets include more than 100 mines and quarries, concentrating mills, metallurgical and machine-building factories are among key customers of the company.
Evgeniy Viktorovich, until recently your company was called "Mining machines", but you have decided to rebrand it. Why?
The name "Mining machines" that we hold dear, not very accurately reflects our strategy and the essence of our current activities. It is not limited to manufacturing of mining machines: we are building mines in Vietnam, develop and implement turnkey projects, create customized solutions for each client, provide the round-the-clock service of equipment. Furthermore, since our old name was written in Cyrillic, it was not readable in foreign markets and was unclear, accordingly. To be closer to customers in all our target markets, including, in addition to the CIS countries, Poland, Vietnam, India, China and South Africa, we have decided to create a new name. It should be easy to read and pronounce, as well as should display the philosophy of our company: customer-oriented approach. We strive to integrate into the business of our key customers and solve their key manufacturing tasks sharing our common responsibility for the final result. Thus, we achieve one of the key objectives of holding: ensuring a decent standard of living in the cities where we operate.
Why Corum Group?
Word “Corum” is derived from the English word “сore”, a multiple-meaning word, which means, for example, the Earth's core. It most accurately reflects the essence of our business: we provide the fastest, efficient and secure access to resources. In addition, English has a steady expression 'Core competences'. This term reflects our conscious choice: to be experts and suppliers of system solutions only in the mining business. We have made significant efforts to select the best name. We have considered several dozens of other options, and in the end we stayed unanimously on Corum. Our logo represents a symbolic image of an auger. An auger is a mechanism for disrupting solid rocks, a part of cutter-loaders and tunnel borers which are used for underground operations. Also the new logo is similar to a rotor in rotary bucket excavators which are used in opencast mining. This sign a feeling of strength, agility, focus on the result.
Are you satisfied with the results of work in 2013? May you deliver figures on the volume of sales?
In 2013, we are about at 2012 level by sales volume. Financial result and profitability will show a slight decrease compared to 2012. But, alas, all our market falls now. If to look reports of the global world companies of our branch it is possible to see that all of them have essential decrease of a sales volume for the year, approximately by 15 %. And if to compare results of operation in the second half of 2013 to results of operation during the same period in 2012, falling of sales volumes of the equipment in some companies has made 45 %. So preservation of sales volume in the falling market is increase in a market share. But we should not relax. We have to work to increase sales volumes in the long term.
Which were the reasons that you have managed to maintain sales volumes?
We focus on clients building up long-term relationships with them, and we try to offer integrated solutions to their problems. Today many companies face with difficulties in access to capital market, and it is the world trend. We expect that this year the situation becomes even more difficult in this aspect. Accordingly, customers not always have the money to buy the necessary equipment. Realizing this, we develop partnership programs with the banks which make it possible to attract funding for projects of clients such as leasing programs. We also began to practice the transfer of equipment under operating lease. In addition, we developing such a direction as commodity trade finance: we accept from the client the goods which were produced using our equipment, and sale it by ourselves using our distribution network. This essentially reduces financial burden of the client, and this form of operation will be actual also in the future.
You have started to develop the new activity, shaft sinking. Will you continue to deal with it in 2014?
We are interested in it, and we will increase our capacities in shaft sinking. It is important for our customers who want to obtain ready-to-use integrated facilities. For example, we are interested in such orders when a customer provides a mineral estate and says: "Build a mine here starting from a shaft and up to fitting it with equipment at all stages of delivery of minerals to the surface".
What main trends in the industry are expected in 2014?
The equipment market will continue to shrink about by 10 % under our forecast. We are based among other things on conservative expectations of our clients. In 2014 companies will put greater emphasis on service: investment programs are minimized, and the equipment is ageing, and it is necessary to make efforts and invest money increasingly to keep it in working condition. This situation makes even more urgent for us the development of the service: equipment repair, as well as full service. This is when our staff maintains equipment directly within the mine during the repair shift in a format of an external service. This mode of operation is well-proven, since the technical readiness coefficient of the equipment is higher when it is served by our staff armed with expert knowledge and a full arsenal of necessary tools, and not the repair staff of the client itself.
How much comfortable is the export policy of the state today?
First of all, it would be desirable for the help in financial support of sales from the state. In my opinion, it is a critical problem. When in the markets of the third countries we compete to the companies from those states where such mechanism is available, the game is tough for us. There are export credit agencies here which undertake risk pooling for commercial loans and therefore banks willingly disburse loans credits to business. In point of fact, this is a guarantee from the state. In the case of loan default the state through such agency covers this risk completely or almost completely. It becomes almost zero risk crediting for commercial banks. Sometimes export banks make loans to buyers of products manufactured in territory of this state. These mechanisms could help very much to the Ukrainian exporting companies. We have already submitted offers concerning development of this direction and have seen certain interest from the state bodies. This practical step could increase volumes of export of the Ukrainian goods essentially.
What markets are you going to develop in 2014?
First of all, we plan to extend sales in Poland where we have provided our constant presence last year. Our purpose is during several years to take up to 30 % of the Polish market on our basic products. Also, we will develop the markets of China and India. The Chinese market is interesting to that recently the legislation on protection of mineral resources was changed there. The state is concerned that coal reserves are rapidly being depleted because of an intensive coal mining. And they have decided to make mining development in the republic of Chins more rational. They have made more severe responsibility at legislative level of the companies which carry out extraction, and have obliged them to mine the reserves which are located in thin layers. Meanwhile, we are an expert No.1 in the world on mining in thin layers because the main part of coal stocks in Ukraine is located in thin seams. And nobody has such a tremendous experience in this area as the Ukrainian companies. This gives us a very good prospects. Already now we are busy in preparation to enter the Chinese market, in particular, the choice of a partner since entering the Chinese market requires localization of production. That is we will manufacture a part of equipment in China. In this connection, this process will take a certain time, and we have already got down to preparation to that process.
All businesses, large and small, start-ups or already successful, always looking for the answer to one question: "What is the secret of success in business?" Do you think whether it is possible to program a company to success?
We recently discussed our corporate values. In particular, we have argued what is primarily: pragmatic things such as efficiency, or more subtle, intangible matters, such as justice? And we came to the conclusion that justice is more important than efficiency because pragmatic actions are always based on an idea. If you look at the biographies of many great people, all of them had an idea, a mission. It was fundamental, it defined their deeds, their actions, and it ultimately helped them to achieve results. For example, the Carthaginian warlord Hannibal, his role in history is, unconditionally, ambiguous, but he followed his mission: he kept inviolate his oath which he has given to his father being 9 years old and has performed the greatest deed, has managed with several thousand strong army and elephants to pass through the Alps and to make a Carthaginian blitzkrieg. An idea is always at the heart of great achievements and success, and the pragmatist and efficiency are only the next.
And how to save this idea and not to lose enthusiasm with time?
The Russian singer Andrey Makarevich have the song " While the candle burns " where there are the words: "Sometimes there happen the days when I turn face to the wall, and there are no words, no music, no power ... but I believe: the game goes on until the light is on, until the candle burns". And I sometimes face with the situations when I give up and it’s hard to me to keep the same motivation. At this point it is important to be surrounded with like-minded people. When I see that excitement with which my colleagues continue to go stay the course, when I can see how they are dedicated and with what self forgetfulness they work ... That is an inspirational example and motivating in itself. This is my "candle". So the secret is to have like-minded people close to you which believe in you and in the general idea.