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Lifelong Construction
The Director General of Imstalcon, Vladimir Kananyhin, answers questions from our magazine
Vladimir KANANYHIN was born in 1940 in the Krasnodar Territory. He graduated from the Armavir Mechanics and Technology technical school and Pavlodar Industrial Institute with specialisation in industrial and civil engineering. In 1964 he began working in MontazhSpetsStroy of Kazakhstan. In 1984 he became the head of KazStalMontazh trust, and five years later the head of the specialised production and installation corporation KazStalMontazh. The latter was converted to the Imstalcon joint stock company on his initiative.
In 1999 the Constructors' Union and Social Fund for the Development of the Construction Industry in Kazakhstan declared Vladimir Kananyhin to be an outstanding constructor and manufacturer. He is a full member of the International Informatisation Academy.
At the official opening of Astana-Baiterek, the President of Kazakhstan Nazarbayev called Kananyhin "an experienced and scrupulous constructor".
Mr. Kananyhin, this year your company celebrates its fiftieth anniversary. Could you tell us about milestones in its history?
Imstalcon has been in the construction business in Kazakhstan and the CIS since 1992. It was then that the specialised production and installation corporation KazStalMontazh was reformed to become the Imstalcon joint stock company. KazStalMontazh in turn was established in 1989 as the successor to three trusts: KazStalKonstruktsiya, KazMontazhStroyDetal and KazStalMontazh.
This story began 50 years ago, on 7 April 1956, when the Council of Ministers of the Kazakh SSR decreed on establishing a trust for the production of steelwork and large concrete structures. It was called KazStalKonstruktsiya. Later on KazMontazhStroyDetal was founded for steelwork production, and then KazStalMontazh was created. That was the way the Ministry of Construction encouraged the establishment of specialised departments for the production and installation of extra complex metal and concrete structures and large-scale manufacturing equipment. This was necessary to meet the needs of the rapidly developing economy of Kazakhstan. It was a time when construction projects in ferrous and non-ferrous metallurgy, machinery, chemical production, power plants, agricultural, social and cultural facilities were being launched at a rapid pace. Soon Kazakhstan became the biggest construction site in the former USSR. Kazakh professionals were involved in the construction of almost all large industrial projects in the country. Kazakhstan itself at that time lacked engineering manpower and skilled labour, so workers were sent here from Russia, Ukraine, Byelorussia and other states. Later on, graduates from all over the USSR helped to solve the problem of staff shortages. Kazakh universities also participated from the 1960s. It was a period of production and manpower capacity building in the construction industry…
By the 1980s the process was already working at full power. Kazakh builders had unique experience of industrial project construction and were considered the most skilled in the USSR. They were the most in demand at a time when the main tasks were improving management methods, reducing delays, tightening up overall checking procedures and raising economic performance. To that effect, we developed and introduced a weekly and daily planning system for construction and installation on site. Then we switched over to the so-called second form of self-financing, when the total income (except for fiscal charges) remained at the trust's disposal. However, supply of metal structures was our weak point. A complicated multi-level planning system led to missed delivery schedules, failure to carry out construction and installation on time and overall delays in project implementation. We suggested that the planning of metalwork production and installation should be done by the same entity. The management of MinMontazhSpetsStory of Kazakhstan was quite favourable to the initiative. On 15 June 1989 the specialised production and installation corporation KazStalMontazh was established. The consolidation of the three trusts, which I have mentioned, helped to reduce construction time. Thus, by the early '90s we managed to improve the use of operating assets, reduce delays and raise economic performance. In other words, we really “got a handle” on the business. Our corporation was one of the first construction companies to be privatised under the President's decree of June 1992. At the company’s general meeting, we took the decision to convert it into the Imstalcon joint stock company.
As you know, transition to a market economy caused a decline in the construction sphere, and many big companies went into liquidation. How did Imstalcon survive?
The period from 1992 to 1998 was indeed the most difficult for us. Decreased investment in industrial facilities in Kazakhstan resulted in drastic reduction of capital construction. That is why we began to seek contracts in Russia. We designed and built ready-to-operate workshops at the Nijni Tagil and Magnitogorsk iron and steel works, at the Kama automobile plant and at the Chebarkul and Tuapse machine factories. Of course, they paid no cash – we received rolled metal products and building cranes instead. At least it was a solution.
At that time many construction companies were forced to sell their concrete-steel construction plants, equipment and truck fleets for trifling sums; afterwards they turned themselves into small co-operatives or limited companies. But we decided not to break up the business. We agreed that Imstalcon's strategy for all job offers, even for non-core activities, would be based on corporate unity and mutual support. We preserved all of our operational units, facilities and skilled personnel. It means that along with economic stabilisation, we achieved personnel stabilisation as well.
In the late 1990s there was an economic upturn in Kazakhstan, mostly due to foreign investment, expansion in the oil and gas sphere, recovery in the non-ferrous metallurgy sector and construction of industrial enterprises. We focused on the engineering and technological modernisation of our company. The income was accumulated and spent on the purchase of new foreign-made equipment. In the course of co-operation with Japanese companies, we provided almost all plants with programmable drilling machines. We purchased welding equipment from ESAB and Lincoln, as well as lifting machines, construction equipment and tools from Germany and Russia. At present, we invest about 70-80% of our income in modernisation.
Under the new market conditions, with foreign investors as the main customers, the introduction of international quality management standards became vital. We began preparing in 1999, and it took us two years to specify the responsibilities of each technician, engineer and manager. We worked out procedures and regulations. We held training for executive personnel, production workers and construction crews. We carried out reorganisation, modernisation and computerisation of our facilities, enhanced labour safety and our corporate culture. In November 2001 representatives of the international agency BM TRADA Certification conducted an external audit of our quality management system. In accordance with the audit results, Imstalcon received ISO 9001:2000 certification, which we reconfirm every year.
Thus, we overcame the problems caused by differences in Soviet and Western approaches to production management and application of standards. We became equal participants, and even winners, in international contests. And you can be sure that we will continue our modernisation: we are now analysing the international standards of project management systems and we have a special department to introduce them.
What kind of company is Imstalcon, and what are its achievements?
Nowadays Imstalcon is a large, stable, dynamically growing company. It comprises 20 branches in all regions of the country and 14 subsidiary organisations that produce and install metal structures and carry out general construction. They include seven factories, 26 installation agencies and a planning and design office. There are 8,500 employees, and 60% of them have about 15 years of work experience. I can say without exaggeration that we can build any project from scratch in any location within Kazakhstan with minimal mobilisation expenses. Over the last eight years, our build-up rate has increased by 18-20% per year, and the annual turnover is up to $200bn. I would like to note that we use only 70-75% of our production capacity for the received orders, that is 160,000 tonnes of metalwork per year. Kazakhstan is getting too small for us, and Imstalcon is planning to approach foreign markets.
Could you point out the most promising areas of the company's activities?
Firstly, I would like to draw attention to our increased construction activities in the oil sphere. From 1994 to 2005 we manufactured and installed hundreds of tanks for oil companies, such as UzenMunaiGaz, MangistauMunaiGaz, KarazhanbasMunaiGaz, EmbaMunaiGaz and the Atyrau refinery. We mastered the production and installation of tanks with 50 – 100,000 m³ capacity. Having ousted Russia from the local market, we cover 70-80% of the demand for tank installation in Kazakhstan.
In 2001-2003 we built a ready-to-operate oil rail loading terminal at Druzhba station for Hurricane. From 1999 to 2005 we carried out a large amount of work in the oil and gas fields of Karachaganak and Tengiz. At present we are engaged in large-scale activities in the Caspian Sea, I am referring to the Kashagan, Atyrau and Bautino projects.
Imstalcon is also successful in civil construction. Well-known examples in Almaty are the international airport, the Almaty Megacentre, Adem, and Promenade shopping centres, and Rakhat Towers among others. In Astana we participated in the construction of the Parliament building, Republican Palace, Eurasia trade centre, sports palace, new international airport and a bridge across the Ishim River. The unique monument, Astana-Baiterek, is our pride. Given the increasing demand for real estate, we are occupied with residential construction using metal frameworks, which proved very reliable in the regions of high seismic activity.
We have also begun production of new construction materials. PolymerMetal-T Ltd. located in Kapchagai has launched a workshop for sandwich metal building panels with mineral wool insulation.
At present we are expanding high-quality production of light-weight and quickly-built constructions for agricultural sphere and food industry.
Nowadays much emphasis is on the lack of personnel. How do you solve this problem?
When the workload increased, our branches felt the lack of engineering and technical personnel with work experience in construction, such as estimators, design engineers, economists, welders, crane operators, maintenance fitters etc. It is a paradox – we lack professionals, while the country suffers from unemployment! The thing is that during the economic crisis many universities and colleges limited admissions to industrial and civil engineering departments. Because such professions were not in demand, some technical vocational schools were closed. But we found a solution. Our installation and metalwork factories developed training, reeducation and advanced education plans for 2002-2006. The majority of our branches signed contracts with educational establishments to ensure the availability of qualified personnel; they also provide assistance to improve their training facilities. We spare no expenses to provide our staff with a substantial social package.
We appreciate the continuity of generations – our staff includes many families. I am grateful to all the managers and engineers, fitters, welders and other professionals who were there from the beginning of the Imstalcon. Not all of them withstood the heavy-duty operation. But those who passed all the tests remain faithful to their profession and pass their experience on to new generations. So it has always been, and so I hope it will always be in our company.

Table of contents
Lifelong Construction  Vladimir Kananyhin 
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