Berik Kaniev (No. 46 on the list “50 richest businessmen in Kazakhstan”), Co-founder and Chairman of the Board of Directors of Lancaster Group spoke in a video interview with Anastasia Novikova, editor-in-chief of Forbes.kz, about why, despite the coronavirus crisis, the number of billionaires in Kazakhstan and the world has increased, when it is easier to do business - in the 90s or today, and whether he hopes that the next generation will continue the work of their fathers.
Anastasia Novikova's first question was about a paradox: despite the coronavirus pandemic, the number of billionaires around the world, according to the recent Forbes ranking, increased immediately for 500 people.
Berik Kaniev replied that, of course, all businesses, without exception, have experienced difficulties. It had a negative impact on some sectors of the economy, such as air transportation, HoReCa and retail. But a number of other areas - the IT industry, pharmaceuticals, fintech, etc. - have grown significantly, and it is due to these sectors that the number of rich people has increased.
- We should also not forget that the states of many countries around the world have supported their enterprises and economies through various monetary instruments and incentives. The US Federal Reserve and central banks became the biggest issuers of money. Of course, a certain transformation has also taken place. Technology companies have transformed faster in one year than usual. In the traditional format, this could take 5-10 years for such companies to do so. And it is precisely because of these businesses that, first of all, there are more rich people, - explained the businessman.
He added that this is also clearly seen in the example of Kazakhstan, where last year, 2020, a number of successful cases were also noted and new prominent business representatives appeared. For example, two companies in the banking sector of the economy, Kaspi and Freedom Finance, “shot”.
— This suggests that IT companies and fintech companies that are engaged in digital technologies have achieved great results. In addition, as a country that produces and extracts a lot of mineral resources, we have also generally made good progress, as markets are recovering. The resources we extract today — copper, nickel or cobalt — are raw materials for tech companies like Tesla, for example. Plus, in the near future, our companies plan to supply tin, a valuable product in a number of IT industries, to the markets. Thus, we have gained a foothold in both the mineral market and the fintech market. We produce a lot of raw materials, and the world is not going away from them. But, on the other hand, over the past 15-20 years, we have seen how the world has already been transformed 2-3 times. The trends will be aimed specifically at technology, digitalization, and the niches that our world, the economy, and people urgently need today, - added the speaker.
The entrepreneur spoke about 2020 for Lancaster Group, and especially for the oilfield services business, which accounts for a significant share in the group of companies. Last year was not the most profitable year for the entire petroleum products market. Moreover, in the spring of 2020, the oil price reached negative values. Under these conditions, oil companies are primarily trying to cut oilfield service costs. However, well-organized organizational work made it possible to overcome this crisis with minimal damage. As for the entire structure of Lancaster Group, the holding's main advantage is that it focuses not only on oilfield services, but also on other areas.
- We are engaged in pharmaceuticals, logistics, mining, and gold mining. We have an investment division that works with various biotech companies, etc. So we are quite diversified in this regard, which helped us overcome the difficult situation both in 2008 and 2020. We have created a good airbag in oilfield services, but in other areas, such as pharmaceuticals or the mining industry, we grew and were able to show good results, - said the Chairman of the Board of Directors of Lancaster Group.
The interlocutors also touched upon the question of when it was easier to do business - today or in the 90s, when the country was accumulating initial capital.
As Berik Kaniev noted, at first glance, it seems that it was easier to do business in the 90s: markets were open, almost all niches were unoccupied, everyone was on equal terms, and it was a little easier for an enterprising person with leadership qualities to start a business from scratch. However, we should not forget that at the same time, we had to deal with the inexperience of the businessmen themselves (many eventually failed) and the same racketeering.
- Today, business development requires other competencies and other knowledge, including other leadership skills. Today, the market itself has become more niche, more sophisticated, and more technologically advanced. These are very different situations... I think that today, business in this regard has narrowed down, while companies and corporations themselves have become global, online markets and new destinations have appeared. But at the same time, if you have a champion idea, you can earn much more than you did then. At that time, five hundred thousand or a million was some kind of unbelievable, crazy money. Today we see a large number of billionaires: money inflation has been quite serious during this time. However, I am sure that if you have good ideas and are focused on this, you can still create and develop your own business today, - the entrepreneur noted.
The topic of how interesting it is for children growing up in business families to continue the work of their parents did not go unnoticed either. How do the businessman himself, his associates and big entrepreneurs in general look at how their descendants will manage and develop the business they have built?
- Of course we're thinking about it. But young people are completely different now than we used to be. They have different opportunities, different education, and they live in a completely different world. After all, there is the Internet, with which you can implement many of your ideas. Young people choose what they like. And it is a great happiness when a person is passionate about what they use to make money. I would be very happy if one of my children would continue in the same field that we have been doing all these years. And we have been organizing everything for a long time in such a way as to transfer all this to them structurally and organizationally. At the same time, we are creating a foundation for them to implement their ideas. I'm not going to judge if one of my kids becomes a big blogger or rapper. The main thing is that they will like it. We will support them in everything and at the same time do charity work and spend money to be useful to society, - Berik Kaniev said.
The guest of the issue also talked about why he pays great attention to social and charitable projects. According to him, in any person's life, when they achieve something in life (not necessarily in material terms), the moment comes when they realize that they can be useful not only to their family or their business, but also to society. And everyone chooses a direction where they are trying to apply their strength and knowledge. Berik Kaniev has chosen three areas for himself: education, sports and environmental protection.
- We will be a competitive country only when our children are able to become educated and get a chance to learn well. This is a fundamental thing. We have talented young people. I am happy when we have winners of Olympiads or competitions. Kazakhstan's future lies precisely in educated young people. After all, we cannot be a country of raw materials all our lives. It is good that we have the opportunity to extract natural resources, but, for example, in 10-15 years it will be unclear what the situation on the oil market will be and what will be the structure of the economy? If you look at the list of the country's largest taxpayers over the past 20 years, you can see that it's on 80% consists of mining companies. And when the whole world is transforming, we cannot be in the same condition as we are today, because tomorrow the mineral resources will be exhausted. If we don't study today, we won't be able to catch up with the world and keep up with the times, - the businessman emphasized.
Read more about this and much more in an interview on the Forbes Kazakhstan YouTube channel.
Interview link https://www.youtube.com/watch?v=0ne5Y1SYgoI&t=203s
Link to the article https://forbes.kz/leader/berik_kaniev_myi_ne_mojem_vsyu_jizn_byit_syirevoy_stranoy/
