SEA SPECIAL PORT NIKA-TERA» – NEW STAGE

When in 2017 Mr. Alim Agakishiev, financier, who was far to the port industry at that time, headed «Sea Special Port NIKA-TERA», the Company ranked established 9th place on cargo turnover in the top list of eight dozens of Ukrainian port operators. Following the results of 2019 «NIKA-TERA» managed to improve this parameter by occupying 3rd place having increased the cargo turnover more than twofold.

What have furthered the Company to achieve such results? Our correspondent has met Mr. Alim Agakishiev, Harbormaster of «SSP NIKA-TERA» and asked him to enlarge upon the point.

 

One of the three biggest ones

 

- In 2019 we achieved the all-time record: the Company`s cargo turn-over amounted to 8,637 mln.tons. In comparison with 2018 the increment was of 2, 8 mln.tons or 48%. Our Company has been one of the fast dynamically growing ports. We have been growing two times faster than on the average in terms of the market. The Port`s berths handled 410 vessels. Year of 2018 showed all-time record results as well.

Year of 2019`s cargo turn-over structure the grain, leguminous as well as oil-bearing cargoes and products after their processing totaled 6,7 mln. tons or 77,9% of total volume, bulk cargoes – 1,7 million tons (19,7%), liquid bulk cargoes – 204, 7 thousand tons (2,4 %).

Two factors exerted influence on the good result. First of all, with the shareowner`s assistance we have implemented several capital investment projects aimed at increase of the customers service speed. It is not that we have just increased the speed of loading and unloading process; we have improved the entire production process, have revamped the work method in the Port and logistic activities.

The second factor, important one– there have been adopted sufficiently successful managerial decisions. It pertains to investments, production, personnel, sales and marketing. Now I may state with certainty that it is the concerted efforts of all the colleagues that produced the result.

- Which features of your previous work experience were of the greatest avail in the capacity of the Harbormaster?

Practically all my previous work experience is connected with financial and economic sector of the large-scale iron and steel plants both in Ukraine as well as abroad, including ones in India and Nigeria. I used to evaluate different projects` investment attractiveness, economic analysis of risks of every kind, development of financing strategies and business plans of companies as well as cash flow management.

Many large-scale companies functioning algorithm is in many respects alike. Hence, for that reason, I find that the experience and skills I previously gained have enabled me to promptly comprehend the production process so that to deal with planning, follow-up management and control.

- Please elaborate on investment projects implemented in 2019.

- Completion of construction and launching of the second stage of oil-trans-shipment complex of simultaneously stored 30 thousand tons capacity. Due to the new stage the trans-shipment capacity of cargo area №4 has reached 600 thousand tons per year and simultaneously stored liquid bulk cargoes volume has reached 63,4 thousand cubic meters.

Besides, we have constructed and commissioned the new pipe-line to load liquid bulk cargoes onboard tankers.

These two projects implementation has resulted in increase of oil trans-shipment volume in Port of «NIKA-TERA» for more than twofold in comparison with 2018.

To optimize the Company`s logistic activities, improvement of quality and speed of loading and unloading process in 2019, the Port has made investments in the fleet of specialized machinery. For instance, in the Port they now have begun to operate new re-loading machine of «Sennebogen» Company production, new mobile automatic tipper equipped with own chassis enabling to unload cargoes from motor vehicles at any point of the Port near the required ground-level storage. We have invented and successfully applied «Telestack» mobile transporters which over a number of years have not been in use to connect 2 storehouses to store potassium to the existing motor vehicles unloading station; this enabled us to open up the new possibilities of their use for any types of cargoes that require having motor vehicles unloading facilities.

Taking into consideration the motor vehicles flow of traffic has been steadily increasing, we have constructed the additional external accumulation motor vehicles parking area. Currently the Port can accommodate the truck haulage of a quantity that equals to the daily rate of unloading.

Also, in the previously year we have completed construction of sampling platform on dead end railway tracks. This enabled us to significantly increase the rate of safe sampling from a bigger number of wagons, furthermore, to curtail time for re-delivery the wagons into Port using our shunting diesel locomotives, there through cutting our production processes expenditures.

And please note that we make such investment in the development on a yearly basis.

 

- And now please specify other successful, from your perspective, managerial decisions. The point is that «NIKA-TERA»`s main facilities, primarily hydraulic engineering structures were constructed some time ago, however explosive growth of cargo turn-over is seen for the very latest two years. How «NIKA-TERA» has managed to bring in the cargo traffic with very fierce competition amongst Mykolaiv region`s port operators?

- I have already mentioned the whole team concerted effort and it is not for nothing. When I became the Company Manager with no experience in the port industry then more than 20 persons of managerial staff were changed within the first 7 month. Many people did not believe in the new management and the offered strategy. We were to select personnel; we looked for look for fascinated, ambitious people. And this diligent personnel management set a stone rolling to the today`s successes, because Cadres are a key to everything).

The skill to match the requirements and daily urge to surpass a customer expectations – these are the recipes for our vigorous growth. It is possible that we have perceived that before the rest and have given the customer oriented approach the highest priority.

The customer oriented approach is our highest priority

 

- Please expound the term of the customer oriented approach is our highest priority, how does it work?

- We have tried to look at our Port and its operation as if from outside and- to be more specific as if we were our customers and their suppliers. We have meticulously asked them of what they consider to be amended in our Port to better the service quality. And we have got the answer – rate of rendering services, improvement of intra-port logistics with specific attention to qualitative characteristics of cargo.

We have implemented record-keeping system and very soon obtained statistical data that can hardly be challenged. We have comprehended at which stage we need to amend the production process.

We have even minimized the automobile transport problem which in previous years, especially in peak seasons of taking grains used to make lots of problems on Mykolaiv`s roads.

To eliminate the occurrence of queues from grain carriers, we have clearly worked out the dispatching system. Firstly, cars that have passed the weight control at the entrance to Nikolaev in the presence of «State Service of Ukraine for Transport Safety» inspectors are allowed to enter the city only after receiving information about the availability of free places in the port parking lots. In addition, the port today operates four storage areas for grain carriers, which are able to simultaneously receive up to 500 vehicles.

Previously we used to unload quantity of up to 200 motor vehicles a day but as a consequence of all the taken measures, since August 1, 2020 we, for example, have unloaded 578 motor vehicles.

Customers are always aimed at rate of vessels handling, in particular, loading of oil. As from the complex launching the loading rate was of 500 tons/hour and last year the maximum    loading rate was of 1000 tons/hour. It became possible through the pipes diameter enlargement of up to 400 mm used to pump up liquid cargoes. We used to load a vessel of DWT 30 000 for some four-five days but at currently the loading time is curtailed by almost half that period.

 

Railways problems and the solutions

 

- What other shortcomings did the clients see at «NIKA-TERA»? Railway ones?

Railway logistics situation was also the one requiring our prompt involvement. We have improved cooperation with «Zhovtnevaya» railway station.  Together with our commercial department we have in early season very meticulously selected the cargoes classification, giving preference to railway block train shipments, improved the promptitude, time of drawing up and receipt of railway consignment notes as well as railway cargo quality certificates. Eventually, it furthered to keep the railway transport cargo delivery problems to practical minimum.

So that not to depend on «Ukrzaliznytsia» that much, during the course of the latest seven years we have established our own railway complex in the Port. «NIKA-TERA» has constructed and commissioned the tracks of length exceeding 23 km equipped with 14 centralized and 25 manual railroad switch units. To load wagons the Company operates 5 special weighing complexes.

The Port also owns 9 locomotives and locomotive depot for their maintenance and repair. It is this very month that we have purchased the tenth locomotive – ČME-3.

Our railway complex enables us to independently operate the wagons within the Port`s bounds and handle them in due time and in the due sequence. Then we ourselves return the empty train/wagons to the station.

However, still there are railway problems which we are not able to solve using our own resources.

Currently, railway connection of marine economy complex companies in Korabelnyi district of Mykolaiv City with «Zhovtnevaya» railway station is run with the use of single-track railway line passing through residential area. The companies have been actively developing. Unless measures are taken, then in the near future the infrastructural collapse would occur. Even now it is absolutely necessary to have additional railway track along the existing one to «Zhovtnevaya» railway station as well as tunnel automobile through bridge down Bogoyavlenskiy Avenue under the railway tracks.

Electrification of the existing railway branch to «Zhovtnevaya» railway station would much facilitate the region marine economy complex.

Independence and universality advantages

 

- It is also likely the customers recognize «SSP NIKA-TERA»`s advantages? What do they specify?

«NIKA-TERA» is the independent and universal operator of developed port infrastructure, main link of logistical system that provides rendering of the entire cycle of services from the planning stage till implementation and freight traffic flow development, enabling us to be one step ahead of the state sea ports of Ukraine. Our Company was established as the private port but the current legislation defines legal nature of the state owned ports only. And it is the form of ownership that is the principal difference of «NIKA-TERA» from the system of the state sea ports of Ukraine.

We service our own water area to exchange vessels. We have eight own berths of total length of 1900 m. This gives us the wide range of possibilities to promptly handle vessels at any time, by many-folds, curtailing time of waiting at anchorage until the berth is vacated and this is one of the main economic parameter for an affreighter and a ship-owner. Besides, the Port has possesses anchoring berth that minimizes time of the vessels at the berths from period of 12-13 hours to period of 2-3 hours. This enables to promptly make mooring operations and commence cargo handling operations without time restrictions.

Besides, «NIKA-TERA» is able to simultaneously load grain crops onboard of 4 vessels of length of up to 230 m each, making use of 4 loading machines of capacity of up to 1500 tons/hour.

In the past marketing year we have mastered technology of roadstead transshipment of cargoes on vessels of «Panamax» type. Out of 26 «Panamax» type vessels loaded at the Port "Panamax", 20 vessels have been additionally loaded at anchorage up to their maximum draft.

We have a very great advantage – the Port`s largest storage facilities for simultaneous storage of grain crops – 6 store-houses of floor storage of 195 000 tons capacity and silo type grain storage of 320 000 tons capacity. In all, total volume of grain crops simultaneously stored in the Port amounts to 515 000 tons. This advantage of the rest market players enables to consider «NIKA-TERA» as like-kind grain hub and platform to realize its commodity directly here at our Port. Besides, these are our customers who have much more opportunities in comparison with other ports to conclude spot transaction and nominate a vessel for loading two days before she arrives, because we encourage and we have developed commodity swopping system due to big freight traffic flow. The Port also has storage yards for bulk cargoes of some 170 000 ton total capacity.

- Are all the store-houses to simultaneously store 510 000 tons belongs to you?

- The port enables to provide such storage volumes – this is what a customer is really interested in. As to the ownership thing, then «NIKA-TERA» Company owns store-houses of 345 000 tons of simultaneous storage.

Adjacent to our port`s territory there is the private complex owned by Bangladeshi owners and of similar name- «Grain Terminal «NIKA-TERA». The complex has not got access to the sea but it has capacities for 170 000 tons. We have been closely working together and having the appropriate agreement, it is mutually advantageous cooperation. Moreover, it is due to cooperation with us that the complex has manifold increased their storehouses loading, providing turnover of their Company and engaging their personnel.

Besides, it is worth noting the interesting technical solution we used to deliver grain from the neighboring complex. Many persons who run terminals think of the method to connect port siloes with long-distance storages. As is customary, they construct hanging overhead galleries. But we have constructed underground gallery connecting silo`s machinery of our neighbors with our production process.

But while on the subject of «NIKA-TERA»`s advantages, I would like to specifically emphasize that the Port`s great advantage is its high-qualified personnel providing high-level service and our customers are also of that opinion.

- To the best of my recollection, Group DF purchased «SSP NIKA-TERA» in 2011 to export fertilizers produced by the Group`s companies. But the Port`s statistics does not contain information of transshipment of fertilizers.

- Actually «SSP NIKA-TERA» was originally established as Mykolaiv terminal for potassium. Life goes on. It is he who eventually wins who is able to promptly evolve and adapt to any changes. Alas, price increase for gas over the last years as well as occupation of the part of Donbass`s territory have very negatively influenced the fertilizers production market in our country. And it is this factor that urged us to actively search for other types of cargoes at the market.

However, today when prices for gas decreased, the situation at the market is changing. And after the sustained interruption we have again commenced to transship fertilizers. It is for the first time for the latest five years the Port has commenced to ship export consignments of domestically produced ammonium nitrate.

- Private terminal sector development experience in Ukraine has shown that the logic of business itself urges the stevedores to diversify its activity, establish forwarding firms, agency companies and even acquire its own marine fleet...

- This logic of business is well known in our Group DF. In addition «Nika Trans Logistics», forwarding and Agency Company has already been successfully working.

From day one when our team headed «NIKA-TERA» we felt that lack of our own tug-boats is our weakest point. It is no secret that over the last years the tug-boat topic is very hotly debated topic in our industry. The tug-boat theme was connected with lots of conflicts and lots of speculations. Therefore, one year ago we have purchased three tug-boats, namely: «Izmailets», «Tour» and «Konstantin Ol`shanskiy». And having obtained them we now feel that we are at last absolutely independent and we can offer to shift vessels at the berths at any time of day as well as we can offer this service to the third parties. This is our additional advantage that makes «NIKA-TERA» more engaging to the customers.

 

Dreams on Bug-Dnieper-Lyman Canal`s depths

 

- Are there any real hopes for dredging of BDLC and engaging larger vessels to the Port?

- We had and we still have our dreams and hopes. Otherwise we would not have done what we have managed to do for the latest 3 years. It is the long-felt need in our region to provide conditions for two-way day-and-night traffic of vessels along the canal with simultaneous phased increase of specified depths of BDLC. Unfortunately, as of today the matter is still at the level of discussions.

We experience worse competitive conditions in comparison with ports of Big Odessa, because BDLC the canal draught is just 10,3 meters. And this means that we cannot load «Panamax» type vessel of DWT 65-70 000 up to the maximum draft at the berth. At first we load 45-50 000 tons and then we take the vessel out to the roadstead and additionally load 15-25 000 tons resulting in increase the total vessels handling time of up to 5-6 days instead of 3 days in deep-water port and the cost increases due to double transshipment of the same amount of grain firstly from the berth onboard the barges and then from the barges onboard the vessel at the roadstead.

We are lucky that significant part of grain traffic passing through «NIKA-TERA» is bound for Middle East countries, North Africa  and Europe, because logistics does not require to have «Panamax» type vessel to ship the cargoes in these countries, «Handysize» type vessels of deadweight of up to 35 000 will be sufficient.

If BDLK is dredged and today it is just no more than our dream, then the possibilities of all the region`s ports and terminals would be drastically increased. Unfortunately, still the dredging issue remains open.

- Furthermore, competitive capability is influenced by heavy canal dues as well?

- The dues are very heavy ones. It is for the long time that Mykolaiv region must re-consider economically unjustified and non-competitive canal dues in comparison with the deep-water port dues. We have calculated that only those ship-owners who within the year transported the cargoes through our Port have paid some USD 10 mln.as the canal dues. And all the ship-owners that transported the cargoes through BDLC for the last year have paid some USD 40 mln. Had the funds only been used for BDLC improvement, and then if I were a harbormaster then I would certainly understand the canal dues amount but still there are lots of questions and not so many answers to them. Over the last years we see that no one is willing to improve the canal but technical characteristics of BDLC must be amended.

In connection with the new extensively discussed method of the port dues computation, it would be right decision to reduce the canal dues. It would also be right decision to adjust level of dues charged in different ports but within one country.

In spite of pandemic and economic crisis

 

- How much the coronavirus pandemic problems complicated this year`s activity?

- COVID-19 coronavirus infection pandemic has significantly influenced on everyone. I totally agree with the saying that the world will never be the same again. We have taken all the recommended measures for the disease prevention. The Port used to work and currently works in its regular operation mode. I would like to specifically mention and express my gratitude the Ministry of Infrastructure. When the matter of suspension of a number of companies due to the quarantine has been discussed in March 2020, it is our line ministry that has not allowed closing the ports. All the obligations to the partners, sub-contractors and the state have been performed and will be performed in full. And our production figures for the first half of the year have practically remained at the last year`s level, except for clay transshipment figures. This product is of Ukrainian production and it is actively used at factories manufacturing ceramic products in Spain and Italy that suspended their production for several months due to the pandemic.

Furthermore, our Port actively renders assistance to Mykolaiv medical treatment facilities to fight the coronavirus by way of purchasing and handing over of different medical equipment and personal protective equipment.

- «NIKA-TERA» is one of the port construction leaders in Ukraine. Which investments have been made for the years of its construction? And what are the developments plans for the years to follow?

- It is true, that «NIKA-TERA» used to be just the small terminal to transship fertilizers and has now grown up to the country`s largest logistics hub. Actually it is quite difficult to name precise amount of investments made into the port for 25 years since it was established. Nevertheless, no one changes the fact that due to our Port`s activity the state annually receives almost USD 13 mln. Assignments to the all-level budgets, furthermore, that figure does not include significant port dues as well as charitable contributions. Can one name lots of companies in Ukraine of number of employees of 1350 persons which would make such assignments with assets arranged in the territory of just 79 Ha?

Since autumn 2011 «NIKA-TERA» has become incorporated into Group DF group of companies. Dmitriy Firtash, the Company`s Shareholder has invested UAH 1,56 mln. Into the Port improvement, what enabled us to significantly enlarge simultaneous storage facilities and the Port`s throughout capacity.

Currently we estimate the Port`s capacities at the level of 9 mln. per year and year of 2019 has shown we have practically worked at the peak of our technical capabilities. Naturally, we go the extra mile and in confirmation of my own words I would like to share the news on signing in May 2020 of the engineering agreement with «Adept-Project» Company for another grain complex of storage capacities of up to 140 000 tons that can be stored simultaneously. The project implementation would enable to build up «NIKA-TERA»`s capacities for additional 2 mln.tons of cargoes per year. We have also already concluded the detailed design development contract to construct the new modern laboratory facilities enabling to increase traffic capacity in the Port and improve quality and rate of servicing of our customers.

Besides, we have been modernizing our Port; one of the demonstrative examples can be completion of the modern berthing-weighing complex construction this year. This project will enable us to fully complete conversion of the second cargo area for transshipment of grain crops and extraction cakes. Furthermore, as circumstances may require, we can easily and promptly switch to transshipment of fertilizers. Investments in the new weighing complex in the second loading area have amounted to more than UAH 27 mln.

The Port`s Shareholder closely follows our activity results and pays great attention to investments into the Port development. And for me personally it is not unimportant the fact that Dmitriy Vasil`evych Firtash cares for our employees` wishes. For example, in commemoration of «NIKA-TERA»`s 25^th anniversary which we will mark in September this year, three new comfortable motor-buses have been purchased to carry our Port`s employees. Things of that nature are of favourable influence on our corporate team psychological micro-climate – the very team which «NIKA-TERA» Company cannot do without to build up its success and prosperity and I all heartedly proud to belong to that team.

Kostyantyn Ilnytskyi, the Interviewer