Kamran Gulamov is the CEO of AKFA Group Holding, the largest aluminium extrusion manufacturer in Uzbekistan. The top executive began his career in 2012 with a job in the company's warehouse and then engaged in procurement. Since 2015, he led the construction of the BENKAM plant for the production of aluminium profiles. Following the launch of the site, he started managing the enterprise. In 2020, Kamran Gulamov was appointed as Chief Executive of AKFA Group Holding and is responsible for the company's development strategy.

AlCircle: As the largest aluminium extrusion company in Uzbekistan, how would you rate your performance for 2021?

Kamran Gulamov: 2021 was a record year for AKFA Group in terms of production and sales. The reasons for such indicators are related to COVID-19 and the Republic of Uzbekistan’s response to it. During the first half of 2020, the Uzbek government busied itself with the implementation of a set of measures designed to limit the spread of the pandemic and, at the same time, prevent further economic stagnation.

As a result, the pandemic was stopped, and from the second half of 2020 to the end of 2021, sales of aluminium extrusion and finished profiles were quite successful.

I also cannot help but touch on the cost of aluminium on the LME. In 2021, even though we were breaking all our records in terms of sales volumes and turnover volumes, profit margins fell sharply as aluminium prices began to rise sharply starting from Q3 2021.

We were unable to raise the cost of sales both on the local market and for export by the same percentage, due to a decrease in the purchasing power of the population. Therefore, in this case, we set ourselves the goal of striking a balance between volume and marginality. There are both pluses and minuses here. Summing up, on a 10-point scale, I would rate the result of 2021 at 8 points.

AlCircle: How do you visualize the year 2022 for the global aluminium industry keeping in mind the sector is countering operational cost and environmental and sustainability challenges?

Kamran Gulamov: In principle, every year it becomes more difficult, and the issue is not only environmental problems and sustainable development, which, in my opinion, have faded into the background. The world community’s response to events in Ukraine has led to difficulties in the field as a whole. Certain economic sanctions are being adopted concerning the Russian Federation, and RUSAL is one of the main suppliers of raw materials, which creates some volatility in comparison with the situation in 2021.

In addition, there is China's Zero-Covid strategy, which has had the effect of disrupting all possible supply chains connected with that particular country.

Against the background of these events, the environmental problems of sustainable development have faded into the background a little. To all this must be added the high rate of inflation in Europe, America and Asia, which reduces the purchasing power of the population and creates certain difficulties for the implementation of large private and public projects around the world.

I believe that there will be a marked increase in environmental problems from 2023 and that this will, in turn, lead to higher production costs due to a sharp increase in energy prices. From my perspective, 2022 will be the beginning of some kind of economic stagnation, while the market will demand more affordable goods.

AlCircle: The LME aluminium price fluctuation, primary aluminium production curb, the soaring gas price and geopolitical tension in Europe has put an impact on the aluminium sector. In light of the raw material source and business perspective, how is it affecting your business?

Kamran Gulamov: These problems started for us just in the third quarter of 2021, when there was a severe shortage of aluminium. This is primarily due to working capital, the so-called working capital. Since LME prices almost doubled, we could not provide capital for the turnover in time, and therefore lost a certain amount of sales. It also had a direct impact on the supply chain. Due to military tensions, all railway lines were overloaded, which made it very difficult to transport goods—and this is to say nothing of the influence of China relative to other sectors in our business.

It is also worth noting the economic influence of the Russian Federation on Uzbekistan and, in general, the global integration of Uzbekistan, which has been very active since the 2008 crisis.

The beginning of the so-called recession now has a strong impact on Uzbekistan, leading to budget deficits and the inability of the state to fully cover the needs of the population for subsidies through mortgage loans. This greatly affects the construction market, and, in particular, makes life difficult for developers in terms of cash liquidity, construction and sales of their residential premises.

AlCircle: Which European nations does AKFA Group export its products to? What is the present situation in the terms of business?

Kamran Gulamov: AKFA Group exports its products to Germany, the Baltic countries and Eastern Europe. Today in Europe, we are seeing strong government support in terms of stimulating new projects, so demand in Europe continues to grow despite the pandemic, which creates new opportunities for us. However, we expect some stagnation in export countries due to inflation.

AlCircle: What are the new areas of investments and expansion AKFA Group is considering for 2022?

Kamran Gulamov: During the current phase of geopolitical and economic uncertainty, AKFA Group has suspended some investments in production, and at the moment we are focusing more on increasing the competence of employees, marketing, optimizing production and operating costs. In the future, we have planned investments in the expansion of aluminium extrusion, and processing of aluminium profiles. But these are already longer-term plans: 2023-2024.

AlCircle: Why do you think aluminium will be one of the most demanding commodities in the construction sector?

Kamran Gulamov: First, returning to the issue of environmental issues and sustainability, aluminium, if produced in an environmentally friendly way, is, in fact, an environmentally friendly product, as it is 100% recyclable. Therefore, I believe that it has already become a sought-after product in the construction sector.

However, let's say that our RND center is already developing not only new products for translucent structures but also solutions in other areas of construction, which accordingly also creates conditions for sustainable development for this sector. If we look at the automotive industry, we see the trend towards electric vehicles, which again opens up new opportunities for the aluminium sector. In the construction sector, we also see a trend towards the renovation of old buildings using new technological solutions made of aluminium. We see this trend quite clearly in Europe, where aluminium is almost the only viable solution that exists on the market today in terms of value for money.

AlCircle: Could you share AKFA’s journey of innovation in the world of extruded aluminium? In what ways has it changed the dynamics of your business?

Kamran Gulamov: Current circumstances are pushing us more towards the orientation of each stage of the entire aluminium extrusion processing chain, from casting to conventional window-door or other light-transparent structures. One consequence of this is that our contact with clients is becoming increasingly direct and less the business of intermediaries and handlers than previously. Now even large corporations must be sensitive to the needs of actual consumers and contact them directly. If a few years ago it was enough for us to supply semi-finished products to processors, today's circumstances oblige us to listen, feel, understand and offer optimal solutions for the end consumer. We are moving in this direction.

 If we talk about the industrial sector, here we are considering the expansion of production towards the fabrication of aluminium profiles and metalworking. We are already planning to focus more on other sectors, except for architectural and transport areas. This is the direction of industrial profiles, extrusions, etc.