The Nectar Flows

How has Kazakhstan’s energy scene changed during your time with Honeywell in the country?

I have been working exclusively for Honeywell since I finished university. I have worked in many places, including around the Middle East and the US. Kazakhstan is an interesting place. GDP has grown 13 fold over the last 10 years, which is rather unique. There is a big difference between how cities like Atyrau look now compared to 1999. Astana is also a huge achievement—I have never seen a country develop such a city in so short a time. I have also never seen so many big and small changes in the business environment.

In which areas have your operations centered?

We started with oil and gas, and, because of Kazakhstan’s focus on this area, oil and gas is still the biggest part of our operation. However, Honeywell is quite a diversified company. We have thousands of industry solutions, from thermostats to aviation and avionics and much more.

How are your relations with the smaller producers and how do you see their role in the oil sector?

In the market it is accurate to talk about segmentation. There is a big market with major players like KMG and Chevron, and lately Chinese companies coming into the market. There is another group of small- and medium-sized customers that have different buying behavior, different requirements, and different budgets. We see quite a lot of potential in this market because, while they are not that big, there are a lot of them. If you had asked me about this 10 years ago, I would have said that these companies were not ready to invest in this kind of modern technology and automation. Previously, their focus was just on producing small amounts of oil, but now I see a considerable change. They have started to understand that it is not just a matter of producing oil, but that you need to consider other things such as the cost of production, efficiency, and safety.

How do you see activity in the non-extractive industries?

We are not just involved in the oil and gas business. Now we are also involved in residential business, in partnership with construction companies. Over the last few years we have seen good growth here. We are working with alternative energy sources, such as green energy. I am particularly trying to push a new product, a home wind generator. It is a unique product with about 52 worldwide patents. It has no gear box, and it is very cheap and easy to maintain. It is a big step forward because each generator at a big wind farm costs about $500,000 to $1 million, but this home generator only costs $10,000. There is a lot of potential for these individual generators, and we are working on how to make them widely available. There are a lot of small villages where they could help. They could also be installed on the top of commercial buildings.

What is Honeywell’s take on renewable energy generation in Kazakhstan?

We can easy save 20%-30% on anything that is consuming energy if we apply modern technologies to optimize and control consumption and distribution. Of course, it is easier with Western businesses in Europe and the US. Here, you need to convince people a bit more. Now, we are starting to propose performance contracts to customers so that instead of paying for the solution, they just pay us a percentage of the amount they save. They then start to trust the concept. And, finally, on January 13, 2012 the President has signed into law new energy efficiency legislation. If there is no legislation to support energy saving it is hard to get anything done. I believe there will be big changes after this law because it spells out what should be done. We are taking baby steps. Generally, if someone feels hot, they open a window. Something as simple as a $20 thermostat could save energy and money. Of course, large industrial operations are more complex. There is a lot of software, a lot of advanced solutions, and a lot of revision to be done at plants.

© The Business Year – February 2012