Analysis of Strengths, Weaknesses, Opportunities and Threats
Strengths. Over the last years the Company has achieved powerful successes. First of all, it is necessary to note major investment projects under implementation which provide construction of new network facilities and upgrading of the Company’s equipment with overall investment volume of more than KZT 100 bln.
The Company has gained unique experience of operation with large international contractors and financial institutions (EBRD, IBRD) and currently the Company is one of leaders among CIS transmission companies.
The functions of System Operator of Kazakhstan UPS define a high status of the Company and its significant role for development of the sector and country.
The Company has absolute support of the Government and the Shareholder.
The Company has progressive management aimed at developing a world-class company in the future. The Company has achieved high standards of corporate governance, efficiently realized outsourcing possibilities, implemented Integrated Management System, implemented SCADA dispatch control and management system, are implementing advanced IT-solutions. The Company’s employees are in great demand on the labour market.
As of 2010 KEGOC is a backbone electricity company with unique experience and high management competencies.
Weaknesses. However, the Company’s position shows weak points relating to both external environment and internal factors.
The required reliability level of NPG is insufficiently formalized by the Government, as well as financial purposes for long-term outlook – by the Shareholder.
The following system risks remain in power system of Kazakhstan:
· UPS of Kazakhstan has highly deteriorated equipment (particularly, in distribution networks and generation);
· Lack of effective mechanisms to maintain the sufficient level of backup generation;
· Market segments on accumulation and spread of knowledge and competencies, as well as of engineering are not developed.
9 transmission lines with the 500 km total length have fully served their lifetime (over 50 years). 92 transmission lines with the 6,349 km total length are approaching lifetime expiration.
Opportunities. Taking into account large capital investments attracted to raise reliability level of NPG, KEGOC can considerably increase reliability and effectiveness indices and reach the level consistent with the level of the best world transmission companies in the long term future. This is possible if the Company implements advanced managerial methods, applies to the best world practices in equipment operation, upgrades skills and optimizes number of personnel.
The Company has substantial potential to become a Centre of managerial competences for Kazakhstan, Customs Union and Central Asia countries (with regard to asset management and implementation of advanced technologies), to strengthen its backbone influence in power industry, particularly by core business development.
Threats and risks. The threat of quality degradation risk of services rendered and delay in re-equipment of production facilities can occur in case of insufficient tariff level.
Growth rate reduction in power consumption due to world crisis can lead to profit downside risk that can adversely affect and decrease financing opportunities for investment programs and KEGOC operating activities.
Change in KZT rate against the dollar and the Euro bears risks with regard to the Company’s loans in foreign currency.
High risk of the Company’s human resources loss should be noted due to limitations in remuneration system in comparison with other branches of economy.
The opportunities listed above will be implemented with assistance of the Government and the Shareholder.
MISSION. VISION
KEGOC’s Mission is to ensure reliable operation and efficient development of UPS of Kazakhstan in line with the up-to-date technical, economical, environmental, occupational health and safety requirements.
The Vision is that in 2025 KEGOC will become a world-class company and centre of competences in power industry within the region.
The main strategic goal is to develop a competitive company in global economy.
GOALS AND OBJECTIVES OF LONG-TERM DEVELOPMENT STRATEGY
The main strategic goal is achieved by fulfilling top-level goals:
- Meeting the requirements of the Government regarding assurance of reliability and quality of operation of UPS of Kazakhstan;
- Achievement of the best companies’ level in the sector on performance of the System Operator functions;
- Stable growth of the Company’s shareholder value due to core business development, efficiency raising in operation of NPG transit potential, providing of necessary conditions for realization of export potential of UPS of Kazakhstan;
- Leadership in the sector, Kazakhstan and CIS with regard to the Company’s corporate development.
Top-level goals are achieved owing to implementation of the following strategic objectives:
1) ensure operation reliability, qualitative maintenance and operation of existing assets in accordance with the established standards;
2) meet growing electricity demand of economy and people by constructing new transmission lines and substations;
3) provide power saving and innovative development;
4) ensure compliance with the requirements in occupational safety and health protection;
5) minimize the Company’s activity impact on the environment;
6) use transit potential of NPG to the maximum, provide necessary conditions for realization of export potential of UPS of Kazakhstan;
7) develop international cooperation;
8) develop business;
9) increase corporate governance level;
10) improve human resources management system;
11) bear social responsibility.