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Interview with the leaders of Ukrainian business. S-Engineering.

Today we present an interview with Batyr Annaiev, the founder of S-Engineering, a leading Ukrainian Company in the field of automation and industrial power supply.

Within the supply chain system S-Engineering supplies its own products to the countries of Central and Eastern Europe and the MENA region and others. The Company has implemented over 700 complex projects in 17 countries during 15 years in various fields. Among the clients of the Company there are Cargill, Bunge, Cofco International, Posco, Dragon Oil, Eni SpA, Mondelez International, Danone, PepsiCo, Ukrtransgaz and many other famous companies.

L4D: How did your business change since the full-scale invasion? (Changes – from market amendments to those took place in your Company)

Batyr Annaiev: On the 24th of February, enemy’s rocket exploded not far from S-Engineering plant having damaged it. I acknowledge the civic position of all S-Engineering personnel. Even though I asked people not to come to work, not to risk, they came and began to reconstruct what was damaged. The affected façade of the plant building was repaired. We fixed all damages and hope that with the help of the government we will be able to receive reimbursement. 

Doing our best for win, everyone in own place, the employees of S-engineering from the very first days of war help defenders of Ukraine, members of territorial defence be means of materials, equipment, vehicles, production of special-purpose items.

From the beginning of military operations, an emergency operations centre was established in the Company, decisions on the Company’s further actions are adjusted daily, taking into account the military and economic situation in the country. Also from the first day of the war, a daily roll call of employees in Telegram was launched. A prepared in advance work plan in wartime conditions, as well as many years of experience in implementing complex projects using modern online project management systems, allowed us to quickly and legally implement the crossing of employees over to remote work.

Doing our best for win, everyone in own place, the employees of S-engineering from the very first days of war help defenders of Ukraine, members of territorial defence be means of materials, equipment, vehicles, production of special-purpose items. From the beginning of the war, among other things we produce at our plant swirl burners (“mobile oven”) and send them to the territorial defence and the Ukrainian Armed Forces. A couple of our colleagues were called to the Ukrainian Armed Forces. Furthermore, there are volunteers who joined the membership of territorial defence in various cities of Ukraine. Some women employees with children left country, however, kept working online in S-Engineering.

We were afraid of looting and the concern related not to the security companies, but to the agency employees who refused to guard our plant from the beginning of the war. Only a part of the guards remained, and the missing part was compensated by our employees on duty.

From the beginning of the war, volumes have fallen seriously. If in March there was a 100% drop, then the situation improved. According to the results of the year, if we reach at least 40% of the volumes of the previous year, we will consider this an achievement.

The first months there was support from banks, and then everything became difficult: force majeure circumstances do not include military operations. In addition, logistics became more complicated and more expensive.

Also we faced the fact that no insurance is workable in Ukraine in fact. And the government does not act as a guarantor. We are ready to be insured in government-owned company in case of war, but there is no such option in our country. I believe if the government charges taxes it should act as a guarantor in insurance event due to the military operations. 

L4D: Is your strategy focused on the preservation of personnel, exit to new markets, relocation or other variants?

Batyr Annaiev: Prior to the military actions S-Engineering development was streets ahead the market growth rate, over 60% of the Company projects were export-oriented.

Engineering works on the projects in Ukraine and our projects destined for foreign markets were not interrupted even for a single day from the beginning of military actions. We resumed production activity in a week and a half after the beginning of war.

The entire profit of the Company is used to increase salaries of employees to the pre-war standard of wages. The main goal as for now is to preserve personnel. The employees take the Company with the greatest regard and patriotism and the Company could not treat them in another way.

Engineering works on the projects in Ukraine and our projects destined for foreign markets were not interrupted even for a single day from the beginning of military actions. We resumed production activity in a week and a half after the beginning of war.

Well lean business processes, a competent system of project financing and clear planning of requirements planning in wartime conditions allow S-Engineering to remain stable in the market. Our experience in crisis resolution of 2008, 2014 and 2020 assures us in worthy overcoming of current difficult challenge as a war.

When making business plan for 2022 we did not exclude the whole-scale invasion of Russia into the territory of Ukraine, but as far as S-Engineering systemic large-scale business we were unable to cross over to external markets in full. Furthermore, since 2021 we have had plans to relocate business into the western regions of Ukraine, but they were not implemented. Taking into account significant scope of production capacity of S-Engineering that includes a complex of metal and copper processing equipment, an extensive park of machine tools and other equipment, a complex for testing equipment, we simply did not have time to relocate the equipment of all the production lines of the plant. Nowadays we opened a workshop in another country; there are essential additional preferences, free grants. In that country there is easier than in Ukraine.

L4D: Were your relationship with foreign partners changed (and how)?

Batyr Annaiev: Almost all foreign partners called us at the beginning of war and proposed their help both to the employees of S-Engineering and my family members.

It was precisely a wide geography of export projects that allowed us to quickly regroup when customers in Ukraine ceased all their production processes in the first days of the war.

It was precisely a wide geography of export projects that allowed us to quickly regroup when customers in Ukraine ceased all their production processes in the first days of the war.

Nowadays S-Engineering specialists carry out projects in the west of Ukraine and in other regions where there is no high-intensity battlefield. We also continue to implement export projects in a number of countries: we also carry out complex works at some large-scale foreign facilities, and our employees develop software for several factories in Europe. Taking into consideration of positive cooperation experience with our Company and also due to high standards of work of S-Engineering designers, engineers, programmers, setup personnel, and production specialists, we received a couple of new orders from our foreign partners already in wartime. There are also new clients among foreign and Ukrainian companies who trust us and consider S-Engineering as a reliable and systematic partner under any circumstances in the country.

L4D: What fields do you optimize business in and cut down expenses? (are there any areas you increased investments)

Batyr Annaiev: Temporarily we ceased our projects related to patronship and collaboration with engineering higher education establishments. We just help the Ukrainian Armed Forces and territorial defence groups.

L4D: What does your product policy look like – is there is a plan to release new items or solutions? 

Batyr Annaiev: Right, we have new products and technologies. We have been working over for long. For example, we received a patent to one of our invention just a few days before the war. Nowadays this technology works and we have Contracts where it will be implemented. And we do not stop our scientific developments. Initially there is R&D department in S-Engineering where are 7 employees who have a PhD degree in technical and economic sciences. Moreover, we have 4 own patents to S-Engineering technologies. By the way, one of the ways to influence the aggressor nation is imposition of sanctions, restrictions on to the technologies and products of this country. In this regard I believe it is important and needful to develop own technologies in Ukraine. And the key to this is development of sciences in the country, engineering developments, development of R&D departments in companies.

L4D: Did the level of cooperation change in your community? (could we observe consolidation among the Ukrainian companies in your branch and what fields, or vice versa there is a growth of competition)

Batyr Annaiev: S-Engineering come forward with initiative to unite companies with business profile similar to ours. We hope that precisely uniting together efforts will help to overcome crisis in the engineering field of Ukraine connected with the military actions.

L4D: What are your forecasts regarding the development of situation on your markets in Ukraine? In your opinion, Is there a prospect for foreign partners in Ukraine – what does it consist in?

Batyr Annaiev: We suppose growth of engineering branch before the end of war. If there is a prospect for foreign partners in Ukraine, it will depend on the economic policy of the government. We do hope that S-Engineering will be chosen as one of the companies having a huge experience in implementation of infrastructure projects. In our portfolio you can see a few decades of projects related to improvement of port infrastructure, terminals, international airports, railways. Essential experience of S-Engineering in the field of civil engineering includes implemented projects at various-scale objects from hotel complex to administrative and cultural institutions of international importance.

L4D: What are your main cooperation offers for foreign partners?

Batyr Annaiev: Positive experience of S-Engineering in the European market is related to the implementation of complex solutions; engineering and automation system integration (PLC, SCADA and MES levels) as well as services associated with development, testing, commissioning of software on the basis of Siemens products; customized services in development of documentation (engineering); designing and installation of power supply system to 110kV; designing and implementation of integrated energy management systems based on SIMATIC Energy Management; designing and implementation of systems for active management of electrical networks (Smart Grid) of high, medium and low voltage based on the Spectrum Power intelligent system. In addition, S-Engineering offers equipment for automation systems and power supply, services for installation supervision.

One of the original developments of S-Engineering is a unique SENUMAC patented technology that works as artificial intelligence in terminal management and has an opportunity to control bulk material conveyor line uploading.

One of the original developments of S-Engineering is a unique SENUMAC patented technology that works as artificial intelligence in terminal management and has an opportunity to control bulk material conveyor line uploading. SENUMAC technology has already been integrated in Ukraine in sea terminals with total designed capacity of 6,5 mln tons: Posco, Cofco International, “Novotech Terminal”. Besides, a few terminals is currently in progress with total designed capacity of 12 mln tons. 

Comprehensive portfolio of S-Engineering Company includes implementation of EPC projects in food, oil and gas, power, infrastructure and chemical fields, in civil engineering and other branches.

Main advantages of cooperation with S-Engineering for foreign partners are cut of costs to projects, optimization of project management without  increase of personnel and complication of business processes, reduction of investment risks, minimization of human factor, shortening of terms for equipment production. We develop on own high-tech solutions in the field of automation and power supply along with high-quality solutions and services, a balanced pricing policy and a high degree of technology localization from world industry leaders.

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