Supporting strategic development of the company with industry experts and financing
In Turkmenistan, a country highly reliant on oil and gas exports, thoughtful diversification of economic activity and the development of solid small and medium-sized enterprises is key to ensuring sustainable growth. Leveraging assistance from the EBRD and European Union (EU), the evolution of one local enterprise, Ak Hunji, struck the perfect balance between these priorities.
Established in 2009, Ak Hunji (meaning ‘white beads’) is a leading company providing decorative mouldings, insulating panels and other building materials made of expanded polystyrene (EPS).
When Begmuhammet Charyyev, the 61-year-old Owner and General Director of Ak Hunji, launched his business, no Turkmen companies were making polystyrene products. He had to travel to Europe, Turkey and China to learn the secrets of production.
The early years were challenging. The company had few employees and relied on manual labour to produce a narrow range of products, often resulting in waste and inefficiency. However, learning from its mistakes, the company started investing in new equipment.
From 2013-2015, Ak Hunji went through a major modernization process using a loan from a local bank, updating facilities and adopting new technologies from Germany, Turkey and China. This enabled the company to meet higher quality standards and satisfy the exact design requitements and quantities of customer orders. Since then, the company has grown by 30 per cent each year.
This year, although the coronavirus pandemic stalled the company’s export operations due to closed borders, sales within Turkmenistan nevertheless grew by 14 per cent.
Such resilience has its roots in several years of strategic development that mobilised international partnerships and assistance. In last three years, the EBRD and EU helped the company introduce ISO 9001:2015, a quality standard required to start exporting its products to Kazakhstan, Georgia and Ukraine, and provided support to introduce a financial reporting system in accordance with international principles.
A few months ago, the EBRD provided US$ 1.8 million in financing to expand Ak Hunji’s business through construction of new production facilities and the launch of a new XPS (extruded) polystyrene product line. The new product commands a higher price due to better water resistance and insulation qualities, and higher demand in internal and export markets. The material is stronger, more flexible, and enhances the visual appeal of final products.
“The improved accounting system led us to analyse every step in setting our strategic goals. The quality management system helps us to communicate with customers and identify the areas where a malfunction in the production may have occurred,” says Mr Charyyev.
Today the company has grown to hold the leading position in Turkmenistan, with over 90 per cent of the market share, helping the country achieve almost total import substitution. In addition to an old factory in the Baýramaly district, Ak Hunji has a new plant with office headquarters on a 5.1-hectare location in the city of Mary. The enterprise has created over 100 jobs and currently produces more than 200 varieties of exterior design elements, four types of insulation sheets and over 100 varieties of interior mouldings.
In early 2020, the company set an ambitious goal to access new export markets. It will be helped by the international industry experts provided through an ongoing assistance programme of the EBRD and European Union.