Daniel Kunin of Kusto Group Discusses the Company, Investment Strategy and Fostering Sustainable Growth
- (Photo : Courtesy)
Before joining Kusto Group, Daniel Kunin served as a senior advisor to the Government of Georgia during a time of transition from failed state to emerging economy. It was in this position that Kunin was introduced to the Kusto Group team.
"We quickly became friends," says Kunin of Kusto's administration. "What attracted me to join their project was my friendship with the owners and their genuine entrepreneurial spirit, which runs right through the business."
Kusto Group's global perspective
Soon after joining the company as a managing director, Kunin helped initiate and spearhead the process of moving Kusto Group's headquarters to Singapore. The company had already established numerous ventures in the Southeast Asian region and the new location afforded the company a renewed global perspective that could potentially open up the company to larger and more diverse markets
"Singapore is obviously in and of itself a thriving financial centre too, which we felt would give us greater access to capital markets."
The next challenge for Kunin came when Kusto Group continued its global expansion with the purchase of Israeli paint manufacturer, Tambour, in 2014. The move of buying an established, leading market competitor was a bit out of character for the company which had grown by reforming existing businesses into profitable ventures.
Yet, Kunin insists the company's acquisition of Tambour was not a change of strategy but rather an opportunity that was recognized and acted upon.
According to Kunin, "Kusto Group's investment strategy is founded upon entrepreneurship that is also opportunistic - that doesn't necessarily have to be acquisitions - but it is almost always about transformation. Today, Tambour looks very different from when we acquired it - not only has it grown it is also more focused. I expect it to look different in five years as well as we continue transforming and growing it."
Kusto Group's efforts to modernize Kazakhstan's protein industry
Kunin is enthusiastic about Kusto Group's latest project to implement an integrated protein strategy in the company's native Kazakhstan. The country, supported by the government, has initiated a process of diversifying its economy. Kazakhstan has long been dependent on the extraction sector to sustain its economy, making it vulnerable to market shifts.
For its part, Kusto Group has concentrated its efforts on transforming Kazakhstan into a global leader in agriculture. The company has been party to several public and private partnerships aimed at introducing the newest technologies and best practices employed by leading American companies to Kazakhstan.
"Our recent projects with Tyson Foods, Valmont Corporation and others to bring state-of-the-technology to Kazakhstan are, as the Kazakh Prime Minister Askar Mamin himself has said, a major step forward for the country. They bring jobs, know-how, increased efficiency, better yields, enhanced predictability and, perhaps most importantly, a commitment to sustainability that is fundamental for agriculture to succeed. By better managing and using water for example, not only do crop yields have better performance, but the entire resource is better utilised. The future in agriculture is all about sustainability and if this is not on the top of the list, this business cannot succeed.
"Kazakhstan is already a major exporter of wheat - a legacy of the Soviet period - and the next step is to diversify crop exports and expand and develop Kazakhstan's protein production, particularly beef and lamb. What is required is capital, hard work and entrepreneurs who are willing to deploy it effectively. That's where we come in, together with our partners and the other stakeholders."
Embracing new technologies
Kunin believes that these new technologies are key to enabling Kazakhstan to achieve its agricultural potential, which is essential for the future of Kazakhstan and Kusto Group.
"Precision agriculture, which we're championing in Kazakhstan, helps to cut down on water use and doesn't deplete the land in the way that mechanised agriculture elsewhere does," says Kunin. "Kazakhstan's natural advantage of land also means its more sustainable. No forests need to be cut down to support agriculture in Kazakhstan! Rather, the culture has a unique strength in land management, animal husbandry and sustainable practices towards nature."
Foreign direct investment in Kazakhstan has increased in recent years and the country has risen on the World Bank's Ease of Doing Business Index to a ranking of 28th. Kunin says that all of these factors indicated that Kazakhstan is experiencing a critical moment as an emerging economy.
"As our agriculture efforts demonstrate, the signs are positive that international investors are placing their trust in the country," he says. "In my experience, emerging economies discover there is a threshold they need to cross before investors will place their capital in the country long-term. This requires institutional maturity in the country's governance structures and a predictability around the rule of law that comes after long periods of stability. Kazakhstan has reached that stage. It is now the stand-out leader in this neighbourhood."
Looking to the future
Kunin and Kusto Group are constantly looking to the future for the next investment opportunity on the horizon.
"You never know what might be around the corner; that's always been the Kusto way and it's why I'm here," he says. "We're lucky that we can take a medium to long-term view on our investments. When you're not required to perform based on quarterly results, you can afford to make larger, more complicated investments with larger rewards over the longer term. That suits us. It may sound like a cliché, but Kusto is all about long term value creation, establishing sustainable retained earnings, reinvestment and constant growth - rather than quick or timed exits."
According to Kunin, Kusto Group is a company that has sought to maximize its value through long-term investment decisions. Kusto's rapid growth, its methods of embracing new technologies and its focus on investing in its people make the company one to watch now and into the future.
