First Cargo Company: Progress and Problems

31.07.2008 (11:06)

First Cargo Company OJSC accelerates rate of work, purchases rolling stock and summarizes results of the first half of the year. Salman Babaev, General Director of the company, tells about it in his interview to IA “RZD-Partner.Ru”.

– Mr.Babaev, could you tell about structure of the cargoes carried by the company? What are the results of transportation in six months of 2008? What about positive tendencies of the first half of the year?

– In the first half of 2008 the volume of First Cargo Company OJSC transportation exceeded 31.2 mln tons. Our company transported 10.3 mln tons of oil cargoes, 8.7 mln tons of coal, 6.7 mln tons of cement, 2.1 mln tons of construction materials, 1.7 mln tons of ore and 0.6 mln tons of non-ferrous metals. The volume of other transported cargoes amounts to 1.2 mln tons.

As to positive results of the half year, I can mention client base increase, professional management formation and establishment of the regional network which includes 14 branches in Russia and one representative office in Ukraine. Despite competition with private companies, First Cargo Company OJSC concluded several important contracts with Russian largest industrial enterprises: LUKOIL, Rosneft, TNK-BP, Mechel, Severstal, Kuzbassrazrezugol, SUEK, Evrocement, Inteko etc.

– What is the share of First Cargo Company OJSC in the total volume of most important cargoes carried along Russian Railways network?

– The share of coal transported by the company amounts to 5.2%, cement – 30.7%, oil cargoes – 8.2%, ore – 2.1%, construction materials – 1.7% and ferrous metals – 1.1%.

– Could you tell about the company’s plans on increasing its influence in high profitable freight transportation sector?

– The volume of the first class cargoes amounted to 66.7% from the total volume of transportation, second class cargoes – 29.9%, third class cargoes – 3.4%. We plan to decrease the share of first class cargoes and increase the volume of second and third classes.

– What is the ratio of export and import?

– The volume of internal transportation amounted to 21.1 mln tons, export – 9.5 mln tons, import – 0.5 mln tons and transit – 0.1 mln tons.

– Did you execute plans on rolling stock purchasing?

– Nowadays, we purchase new rolling stock according to the approved business plan. In the first half of the year we concluded contracts on 2,000 cement hoppers, 3,500 railcars for oil transportation, 4,000 gondola cars and 1,000 covered wagons. We received 2,700 wagons and put them into operation.

We carry on negotiations with Uralvagonzavod to conclude the four-year contract. 20,000 gondola cars, 2,000 oil cars and hoppers may be supplied according to this contract.

– What are the problems which the company faced?

– We can’t shirk difficulties on the development stage. There are no companies which control such a large park as ours. The First Cargo Company OJSC develops fast and we purpose to create an effective system of wagons management.

One of the main problems which all operators face including us is the constant growth of prices for rolling stock. For example, in April-June prices on wagons for cement transportation increased by 24%, on gondola cars – by 27%, it also concerns other types of wagons. We had to increase prices for our services to cover costs on rolling stock.

Interviewed by Tatyana Ovcharova