According to preliminary estimates, the volume of the new grain harvest in 2019 will be about 20 million tons. The export potential considering production volumes, stocks, forecast of grain quality and market conditions, can amount to up to 10 million tons of grain and flour in grain equivalent. Currently, 740 thousand hectares have been harvested in a number of regions and grain traders have begun to conclude contracts and plan transportation.
Astyk Trans is a system operator of grain wagons in Kazakhstan, providing most of the domestic railway transportation of grain and up to 50% of export traffic in grain wagons. The fleet managed by the Company comprises over 6,300 grain wagons. Let us remind that a few years ago the grain wagon fleet in Kazakhstan did not exceed 4 000. The wagons are fully operational and ready for transporting the new harvest.
Astyk Trans annually invests in the purchase of new wagons and modernization of the existing fleet.
So in 2018, the Company invested 11.9 billion tenge, acquiring 721 grain wagons and carrying out major repairs with an extension of the life cycle of 682 own grain wagons.
In 2019, Astyk Trans plans to invest up to 15 billion tenge for these purposes. For 7 months of 2019, the company acquired 250 wagons, carried out major repairs with an extension of the service life of 310 wagons. In addition, 898 depot repairs and 2 898 current repairs were carried out.
Repair is the Company’s main expense and the main factor in managing the transportation cost. Unfortunately, for the second year in a row, production inflation in this segment has shown significant growth. The cost of repair work in general and the cost of spare parts for wagons significantly increased.
So in 2019, the cost of side frames of wagons increased by 42% compared to 2018. In 2018, compared with 2017, the growth was 100%. The price of a sprung beam increased in 2019 by 45%, in 2018 - by 120%. The cost of overhauling wheel sets in 2019 increased by 79%, in 2018 - by 100%. The price of new wheelsets in 2019 increased by 75% and amounted to 2,250,000 tenge.
The cost of the wagon repair process itself has risen due to a sharp increase in prices for spare parts, as well as an acute shortage of used spare parts and components. The cost of repair work was also affected by the depreciation of tenge, since the parts used in the repair are made in other countries.
Given the shortage and the cost of spare parts and, accordingly, the increase in the cost of wagon repairs, in the near future, the Company will be forced to cancel a number of discounts and index tariffs (not higher than inflation expectations).
At the same time, the Company's tariffs, even considering cancellation of discounts, remain the most affordable among all operators working in the grain market of Kazakhstan. The Astyk Trans’s policy will continue to be aimed at maximally keeping rates below production inflation, updating the fleet and improving the efficiency of grain logistics infrastructure. Provision of discounts on the tariff will resume in the second half of the grain season, as a mechanism smoothing high volatility of the grain cycle.
