New Russian Post CEO targets modernisation as losses rise
The new head of Russian Post, Andrej Kazmin, has unveiled a package of measures to modernise the vast postal service and make it more competitive following increased losses last year. But privatisation is not on the agenda.
Priorities will be to offer a wide range of services, to improve the profitability and quality of mail services, to expand financial services and to modernise the IT and infrastructure, Kazmin said at a two-day high-level meeting of the Russian Ministry of Communications and Information Technologies earlier this month.
Russian Post said it increased mail volumes by 14 pct and parcel volumes by 25 pct last year. Its EMS express shipment volumes increased 42 pct in comparison with express market growth of 37 pct. The company’s 2007 revenues increased by 23 pct due to the higher volumes. However, Russian Post ended 2007 with a loss of RUB 5.8 billion (EUR 158.94 million) compared to a RUB 4 billion deficit (EUR 109.61 million) in 2006.
According to Kazmin, Russian Post’s main goals for 2008 include improving the enterprise’s economic efficiency, providing standard delivery of correspondence and freight to and from any part of the Russian Federation at available tariff rates, establishing modern infrastructure and developing financial services within the postal service system.
In terms of the growth factors and prospects for this year, IT is seen as an important factor for the development of postal services. In 2007, Russian Post extended computer technology with a 35 pct rise in the number of terminals at post offices. In addition, it opened over 3,000 Internet public access outlets increasing their total number to 23,000, the Russian Post said.
The new head of Russian Post, Andrej Kazmin, has unveiled a package of measures to modernise the vast postal service and make it more competitive following increased losses last year. But privatisation is not on the agenda.
Priorities will be to offer a wide range of services, to improve the profitability and quality of mail services, to expand financial services and to modernise the IT and infrastructure, Kazmin said at a two-day high-level meeting of the Russian Ministry of Communications and Information Technologies earlier this month.
“Russian Post has developed its infrastructure. The enterprise is setting up modern equipment. Our goal is to increase the profits of the enterprise,” he said.
Russian Post said it increased mail volumes by 14 pct and parcel volumes by 25 pct last year. Its EMS express shipment volumes increased 42 pct in comparison with express market growth of 37 pct. The company’s 2007 revenues increased by 23 pct due to the higher volumes. However, Russian Post ended 2007 with a loss of RUB 5.8 billion (EUR 158.94 million) compared to a RUB 4 billion deficit (EUR 109.61 million) in 2006.
Among the main reasons for the losses Kazmin mentioned were problems with Russian legislation, higher expenses for the labour compensation funds, socially oriented but loss making services like publicly accessible postal services, and delivery of pensions, grants and periodicals.
According to Kazmin, Russian Post’s main goals for 2008 include improving the enterprise’s economic efficiency, providing standard delivery of correspondence and freight to and from any part of the Russian Federation at available tariff rates, establishing modern infrastructure and developing financial services within the postal service system.
In terms of the growth factors and prospects for this year, IT is seen as an important factor for the development of postal services. In 2007, Russian Post extended computer technology with a 35 pct rise in the number of terminals at post offices. In addition, it opened over 3,000 Internet public access outlets increasing their total number to 23,000, the Russian Post said.
Kazmin said it was necessary to keep a balance between the postal service’s business activities and its social functions. He called for Russian Post to become a state-owned enterprise in order to achieve its aims.
Russian IT and Communications Minister Leonid Reyman told journalists that Russian Post is to remain state-owned, but it was yet to be decided whether Russian Post needed to be converted into a state corporation or into a joint-stock company fully controlled by the government.
Commenting on the possible deregulation of the postal sector, Reyman noted that if private-owned companies were allowed access to the market, it was necessary to ensure that Russian Post did not become an operator of its least efficient segments.
