«Samruk-Kazyna» JSC within the framework of the transformation program changes the functional management model, CEO of «Samruk-Kazyna» JSC Umirzak Shukeyev told during the annual meeting on the transformation of the fund’s group, which summed up the first results of the program and priority tasks for 2016.

«Commercial unit of the fund will be significantly enhanced: 60% of employees will deal with the creation of new industries and the management of the current portfolio of strategic assets,» he explained.

According to Mr. Shukeyev new functional model of the fund includes three main areas: commercial functions (portfolio management of existing assets and development of new companies or industries), corporate functions (finance, human resources management, operational support) and monitoring functions (including new compliance function).

The new organizational structure abolished positions of the Deputy Chairman of the Management Board and the number of top managers has been reduced from 16 to 9.

Current activities will be regrouped and distributed taking into account the Fund's mission to maximize profits and the concentration on core activities, he said. New organizational model designed with the participation of consultants, BCG, Deloitte on the basis of international best practices used for similar multi-sovereign holdings and sovereign wealth funds with a similar mandate.

«Thus, the fund of the future is no longer a predominantly administrative superstructure to the activities of portfolio companies and will be more focused on value creation. The fund will operate primarily as a commercial organization, » CEO concluded.

In addition, the first interim results of the transformation of the Fund and its portfolio companies were presented. Thus, JSC «NC» KazMunayGas» has successfully implemented 7 projects in such areas as optimization of operating conditions of wells, inefficient fund management, optimization of drilling and other capital expenditures. The growth of production since the beginning of the implementation of these projects amounted to 31 thousand tons, and the total expected financial impact - 300 billion tenge.

The fund critically evaluated and revised two thousand processes, developed a system of key performance indicators. Currently it is planned to introduce a new procurement concept including pre-qualification tools, categorizing and centralizing the procurement process at different levels proved by experience of international companies. It is expected that the new initiative will help to save 380 billion tenge per year.

The meeting was also attended by Kazakh and international experts who shared their vision of the future transformation of the fund’s group and expectations of its results.