Chairman of the Board of Samruk-Kazyna Fund (hereinafter - the Fund) Umirzak Shukeyev met with the staff of the Atyrau Oil Refinery (AOR) to explain the Address to the nation issued by President Nursultan Nazarbayev, titled “The third modernization of Kazakhstan: global competitiveness.”

The main idea of the Address is the modernization of basic sectors of Kazakhstan’s economy through innovation, digital technologies and, in general, its technological upgrading. These goals should be implemented by the Fund via a transformation program.

As part of the transformation of the Fund and in order to optimize the operating costs, forming a culture of continuous improvement and employee involvement in these processes it was decided to implement the program called Lean 6 Sigma in 2016, within the group of companies KMG-Refining and Marketing (hereinafter – KMG-RM). Refinery workers, fuel station personnel and the corporate center were trained under this program in 2016, and 23 projects (without major investments) were approved. Preliminary annual economic impact of their implementation in the group of companies of KMG in 2017 will be approximately 350 million tenge. In 2017 the AOR will implement five projects with preliminary effect of 77 million tenge.

“Over the past two years of work on the transformation, we designed a new operating model and the simplified organizational structure of the six national companies,” said Chairman of the board of the Fund Umirzak Shukeyev during the meeting with the staff of AOR, which was held on February 22 in Atyrau. 

“The changes affected the activities of portfolio of our companies KazMunaiGas, Kazakhstan Temir Zholy, Kazatomprom, Kazpost, Samruk-Energo and KEGOC. We have streamlined the corporate business processes of our companies, such as book keeping and accounting, treasury management and information technology, and brought them into conformity with the standards. Total during the past period we have reviewed about 30,000 processes, the number of management levels of the national companies has been reduced from the previous nine levels up to four or five. This allowed us to get rid of unnecessary ballast in the form of duplication, unnecessary reporting and outdated regulations. The enterprises of the transformation program are beginning to show the first economic results. For example, in the AOR, the program re-engineering of business processes has improved the productivity to 50 percent.

In addition, the AOR introduced the Manufacturing Execution System (MES). Modern automated system allows one to control the relevant production processes more efficiently. It helps to minimize the influence of the human labor in the process of measuring the amount of petroleum products and further processing of data on the movement of material flows. As a result, quality and transparency of operational information improve and, as a consequence, the effectiveness of managerial decision-making in the workplace.

During the visit Umirzak Shukeyev familiarized himself with the course of the modernization of AOR. To date, the second phase is completed, in which the complex was built for the production of aromatic hydrocarbons, which allows to produce high-octane components of gasoline, as well as benzene and para-xylene in the amount of 133,000 tonnes and 496,000 tonnes respectively, each year.

As part of the third phase of modernization of the AOR, construction of the Advanced Oil Refinig Center (AORC) has been completed, which will significantly increase the production of motor fuels. Thus, the manufactured fuel will meet environmental class K4, K5 in accordance with the requirements of technical regulations of the Customs Union. Mechanical completion of construction and start of commissioning is scheduled for the 2nd quarter of 2017. 

In addition to meetings with the AOR staff, the head of the Fund met with employees of subsidiaries of the National Company KazMunaiGas: West Branch of KazTransOil and KazTransGas - Aimak. The sides discussed plans for the use of modern technologies in the subsidiaries of KMG.