Erlik biography

Against this background, the purchase of the Japanese Nippon Raint Holdings Co. And the fact that at the same time, the company belonging to the summer Erlik also chose from several applicants for the purchase, inspires some optimism regarding the prospects of the domestic manufacturing industry as a whole. Her ALINEX brand, created in M, became a household name, meaning dry construction mixtures in Kazakhstani finishes in general.

At first, the production was carried out on rented areas, but in the year the company launched its first plant with an annual capacity of 10 thousand. The businessman admits that the closed policy was a conscious strategy directed against possible unfinished absorption. And we promoted not a company, but grocery brands. The task of marketers and PR managers was to create a certain phantom, to make us invisible.

By and large, until the last few years, only narrow industry experts knew about Alina. But then we became so large that we began to get out for all disguise - then the trunk will stick out, then the tail, ”Balfanbaev laughs. The grocery brands of the group in the industry are called a marketing miracle-in the Kazakhstan market they managed to squeeze the transnational leaders in the premium segment.

Localization - approximately in the countries of the world. And they have products everywhere either the most expensive, or the second in cost. In fact, Alina Group not only imported building mixtures, but also reduced prices in the domestic market. This policy is very difficult to keep, including inside the company, because still there is pressure from the financiers, logistics, and so on.

But for the last 10 years it has somehow settled down. Builders are generally conservative people. In the cost of general repair or decoration, our products occupy a very small share - compare with the cost of reinforcement, brick, parquet, linoleum, plumbing and so on. And therefore, saving on building and finishing materials is simply stupid-if expensive tiles fly away due to poor glue, it will be sad.

This is understood by both professionals and ordinary citizens. This is trust. And for Alina Group, an important task is to not lose confidence, ”the source explains. The company is developing five deposits of gypsum, marble and sand in Aktobe, Karaganda and East Kazakhstan regions, it has 15 factories, six production sites and four logistics centers in Almaty, Taraz, Aktobe and Semey.

Since the year, the holding began to grow in infrastructure, a network of centers of floor coverings and Domsad electronic hypermarket has appeared. The war in Ukraine, which began in M, broke the debugged logistics. For six months, a fever was being searched for other suppliers and built alternative routes. If the premium still perceives changes normally, then for the economy segment any price increase is very critical, ”the entrepreneur comments.

Nevertheless, in August of the year, Alina Group launched the first automated plant for the production of grooves of PGP - a gypsum panel used to install interior and other interior partitions in Taraz. At the enterprise, the capacity of thousands of square meters of PGP per year produces four types of plates, 3.5 billion tenge are invested in the project.

There are advantages - stoves are cast, perfectly even, quickly gather, but there is a drawback - the screw cannot be screwed anywhere, you need to get into the profile. The Russians, for example, who started us before, took five to six years to promote, and now there sales of PGP have been equal to drywall, ”Balfanbaev explains. Since the year, the holding has been included in the top of the largest private companies Forbes Kazakhstan in the year - e.

Presenting the purchase based on the results of Due Diligence, Nippon Paint Holdings Co. The roads that we choose about the fact that the company has matured for sale, Balfanbaev was thinking earlier, but the final decision, according to him, took shape in the year before last. Firstly, the businessman admits, it became clear that his children were not burning with the desire to engage in Alina Group-in any case, three older, adults.

He is 25 years old, he is engaged in cinema, and his interests are far from the problems of the construction industry. I’m still making a bet on the younger ones, I have plans to start carrying them with me everywhere to reach 10 years. Let them delve into, work with their hands. It didn’t work out with the elders, ”he regrets. But this, apparently, will already be another business, and in the “construction site”, Balfanbaev believes, he gave “the duty to society”: “We did the recipe and tuned the production so that any Kazakhstani, if he has at least some work, could afford good repairs.

And we did our job - the market is filled with a high -quality product of domestic production at a price affordable to the overwhelming majority of the population.

” But there were no Japanese on this list, they learned as a result of some kind of leak. Before them, we have already been negotiating with the two largest concerns, European and Chinese. The Japanese also interested us, so that three potential buyers came to the finish line, ”says Balfanbaev.In addition, our work is to offer not only “obvious players”, but also actively watching the creation of a new S Curve for its customers, where there is a potential of good growth.

Nippon Paint was one of the interested buyers on Alina Group, they liked that the group was growing not only in vertical, but also deepens into different segments related to construction. Alina Group has a division of colors, but it is not as large as a mixture, so the partnership with Nippon Paint clearly opened up new prospects for growth and quality development. ” The seller himself preferred the Japanese company of Chinese.

On the one hand, it seems to be a singing, and on the other, fears, and this would still be affected by work, ”Balfanbaev explains. China has a very stringent vertical, in Japan - the system is more open and free. The Singapore “daughter” of Nippon Paint worked with us, where the main team is Singaporeans, that is, in fact, the same ethnic Chinese, but this is a completely different political and human culture.

And we watched in which case there will be a greater effect of synergy. We need money, of course, but not in the first place. Because the company is my child. Even if he grows up and leaves the house, he will still remain my child. ” In the year, Kusto Group began to invest in a new logistics nab of our two states, an excellent relationship and in fact “visa -free” visa for Kazakhstanis to Japan is free.

But the business projects of the Land of the Rising Sun in Kazakhstan, with the exception of the raw material sector, are modest and spot, like a Tokyo Rope Almaty factory for the production of steel mesh and a metal cable are the necessary things, but not to say that especially technological or capital-intensive ones. About 15 years ago, the head of one of the quasi-fingers, while signing a small agreement with Toshiba, complained to me about the unprecedented nit-heartedness of Japanese business to details and reputation risks, which is why negotiations go on for years and often end in nothing.

In our region, we also helped and help Japanese investors consider different assets for the purchase. They show a high level of professionalism, ethics and deep knowledge of the industry, in which they are interested, moreover, they openly share their knowledge. As for the presence of Japanese investors in the region, it depends on the individual risk of the investor-appetite and what the country is doing to attract such high-class investors, since the transparency of the entire process for the Japanese is important and is not subject to discussion, ”they comment on the PWC.

They talked a lot with people, watched the documents. A team of 30 people worked for more than six months, ”says Balfanbaev. They carefully carry out Due Diligence in all areas including market analysis, regularly communicate with the seller’s team to evaluate their professionalism. Alina Group also, for its part, noted for itself a high level of corporate governance of Nippon Paint, a huge production international experience, which is important for partnership, since trust in business is very important.

Negotiations were actively held, there were no unresolved questions in a healthy and professional atmosphere on both sides, ”comments PWC. The results of Due Diligence quite satisfied the buyer-the current top management remains to lead the company for at least three years. Three quarters from the amount of the transaction will be paid in January if the Alina Group has time to settle the remaining formalities with the akimats of the regions where it works.

The remaining quarter - three years later at a floating rate. The transaction can grow based on financial results that management will tell during this time. He himself has not yet finally decided whether he wants to completely get out of this business. And they leave us, as management, a fairly great freedom. They say that they will try not to climb much, because local people better understand local business conditions.

Much will depend on how comfortable we will work together. The second - will I need additional money for my other projects. And the third - you can just remain a shareholder, because Nippon Paint shares are growing - not very fast, but stable, and it seems to me that this is also a good investment, ”says Balfanbaev. The Betek team knows the Kazakhstan market well, so they will continue this work as part of the integration of the Nippon Paint group with Alina Group.

In our opinion, this is a reasonable and logical solution that is aimed at developing and growing business. We also met with the Turkish team Nippon Paint from Betek and want to note that these are experienced managers and businessmen, ”they comment on PWC. We are the key to which the market of the entire region opens, it was not for nothing that they were primarily interested in brands, distribution and market position.

Some complex professional compositions will come from the maternal company, and we will localize consumer products. For example, if we talk about the paintwork, we are now engaged in the very top of the iceberg. There are specialized professional paints, industrial and so on. Nippon does all this, we will complete it. In terms of technology, we expect a recipe from them. We have developed it all these years ourselves, it took years for this, now all this will accelerate due to interchange, ”Balfanbayev reveals the details.

But there is a scale effect - one thing on behalf of Alina Group negotiations, and another thing is from Nippon. ” We are very proud of this deal, because it has created value for both parties, and also this is a qualitative contribution to the development and diversification of the economy of Kazakhstan, ”they comment on the PWC. The technological market of Kazakhstan in the spirit of world trends from year to year, the buyer will save all brands - they are included in the amount of the transaction.

Be that as it may, but in new export areas, if any, even a discreet inscription that the manufacturer is a Japanese company will be expected to save time to make a market trust. Of course, you will have to adapt, Balfanbaev admits. We are slowly grabbing the head slowly - we will need to hire a separate team of financiers and accountants. On the other hand, there is IFRS, why don't we do everything on it without additional costs?

I plan to raise this issue until we closed the deal, ”the businessman reveals some strokes. He already managed to defend an irregular work schedule. I asked: “Do you need to comply with the rules or result? If compliance with the rules, then this is not for me, because I physically cannot, I have other projects. It seems to have agreed. "