Interview with Move One Group Director, Jay Cziraky, about the company’s expansions
The following interview with Jay Cziraky was published in the LOG newspaper, reporter was Kathryn Semcow.
When I visit Jay Cziraky at Emaar Businss Park in Dubai, his office is looking a little bare. The Group Director for Move One, after all, has just moved into the new facility, the company’s new global headquarters, and is yet to decorate. It may take some time before he is as comfortable in this space as his previous office, Move One’s former global headquarters in Budapest, which now serves as the company’s European regional headquarters.
Although the company already has offices in Dubai Airport Free Zone, Dubai Industrial City and Jebel Ali, Cziraky says a slowdown in the emirate made moving the headquarters to Dubai make sense. “I think that the collapse, or whatever you want to call it, in the UAE was an advantage to us,” he affirms. “Earlier, it was inappropriately expensive to have staff here. When you are paying US$2,500 per month for a studio apartment it becomes cost-ineffective to have staff here. Not only for us, but for a lot of customers, the slowdown has been an advantage.”
He says the UAE now outshines Hungary as a home base. “What we saw in Eastern Europe several years ago was the same as what we see here now,” he explains. “It made sense to keep regional back offices and headquarters there. The tax structure was great and there were skilled and educated workers at a reasonable cost. All those advantages are gone now in Eastern Europe and that required a regional shift.”
Move One is in Dubai not only to serve the local market, but to serve the region around it. “The fact is that the UAE is the technological backbone into North Africa, Middle East and Asia, Central Asia and even Sub-Saharan Africa,” he says.
Since the company’s foundation in Eastern Europe in 1993, it has followed an organic mode of expansion, trailing key clients such as the US military into new territories. “We have been a logistics supplier to the US military since Bosnia in 1996,” says Cziraky. “Post September 11, our customer then pulled us into Central Asia. We handled the early logistics for the US forces in Uzbekistan, which included the first convoy into Afghanistan.”
He says the Iraq war brought the company’s focus to the Middle East, estimating that Move One is now the country’s third largest transport operator. Work for the military includes projects such as recently delivering the COB Basra’s Air Defense Command and Control Radar system, which monitors airspace and warns of incoming artillery and mortar fire in the worst of weather conditions.
This summer they also delivered a number of diplomatic vehicles to the British and Egyptian embassies in Baghdad and shipped a consignment of nearly 50 containers of furniture from Kuwait to Baghdad for the US embassy. For the Swedish embassy in the country, Move One’s pet team delivered a team of military working dogs.
Cziraky prefers not to talk publicly about his company’s military work, but rather the infrastructure and oil and gas-related projects it participates in in the country. “We have started working on projects in the southern oilfields,” he says. “We predominantly serve subcontractors of the main oil companies. We do not ship for Shell, for example, we ship for Shell sub-contractors. Our focus is primarily moving equipment and camp-building supplies – all kinds of support services.”
One such project involved shifting a private clinic from Victory Base Complex in Baghdad to Camp Anaconda in Balad – a shipment that required 30 40-foot trucks in less than a week.
The company currently has seven offices in Iraq, including a new 600 sq meter facility in Erbil in the North, a 250 sq meter bonded facility at Baghdad International Airport, a 9,000 sq meter area at Camp Victory and more than 3,000 sq meters at Camp Anaconda.
With US troops pulling out and many government-related infrastructure and oil and gas projects planned, Cziraky says investing in the country makes sense – at least for those willing to take the risk. “It is a situation of hurry up and wait,” he says. “Lots of contracts are getting awarded and everyone is looking at Iraq, but I think no one has fully jumped into the investment yet, because of the security situation. We see a lot of inquiries and not a lot of action.”
He says he is positive about the country. “It will pick up,” he says. “I think Iraq has a very, very good future. I think the security situation will get in line. I think it has got the necessary commitment from the government and from oil companies and it will go forward.”
Security, he says, is a constant challenge when working in countries such as Iraq, as well as the need to adapt to new ways of doing business. “The challenge is in a new democracy like Iraq is everything is continuously changing,” he says. “The rules and regulations today, six months from now, will probably have changed. That is not a bad thing. It is just a natural progression of the development of rules and procedures and how to move forward. Whenever things are being done for the first time, there is a lot of unknown. I think that creates a higher risk environment, especially for investment.”
For security reasons, Cziraky is hesitant to discuss operations in Afghanistan, although he believes his company is the largest transport operator in Afghanistan. “We do our own aircraft handling on four military bases and we have our own staff in seven other cities,” he says. “We were the first company to move anything for the US forces into Afghanistan in 2001, right after September 11.” The company is also the approved service contractor for UPS in Afghanistan, as well as Iraq.
Move On, he says, also has its eyes on Central Asia, particularly the ‘Stans‘, where he sees plenty of untapped potential. “Through Central Asia you have a lot of mining,” he says. “As the world grows, natural resource stocks are just getting harder to get at. There are a lot of resources in Central Asia.”
The countries, he admits, can be difficult to access, for example with Uzbekistan being entirely landlocked. “We move a lot of food, a lot of perishables to support camps, whether they are military or reconstruction or mining camps,” he says. “The challenge of Central Asia is you have to fly everything in.”
Of course, the cold winter weather poses a challenge. “It can drop to minus 40 in the Stans,” he says. “It is not uncommon to see drivers lighting fires under the gas tanks because all their fuel is frozen.”
Still, he sees the Central Asian countries as financially worth entering. “They are small markets, but they are niche markets,” he says. “If you start right, it is worth going there. We see it as a long-term strategic interest for the company.”
But, then again, challenge is what his team thrives on. “That has always been our niche, to go into hard-to-reach, austere environments,” he says.
Cziraky says his company’s expansion strategy has been about bringing a western business model and the latest technology to emerging hotspots. “It is not that hard,” he says.
“It is just about having the right lines of communication. We have strong internal software and investment in technology that allows us, for example, to adapt to all time zones and currencies. We also essentially run a paperless system, which is good for the environment.”
When entering a new country, the company imports its own management, yet focuses heavily on training local staff. “In Central Asia, we have a Canadian regional manager,” he says. “All our other country managers are local nationals that we have trained up since we went in there. Five years ago, we probably had seven expatriates in central Asia, now we have one.”
“That is the key to success,” he adds. “In fact, in all countries you have to invest in local staff. We have a firm commitment to investing in local staff, investing in local infrastructure and investing in these countries.”
Once established in a country, the company tends to commit to developing the market further. “When it comes to project logistics, we stay in the places that we go,” says Cziraky. “As opposed to going in there, working on a project and then pulling out as soon as it is done.”
He says this is an entirely different strategy from many competitors. “I think a lot of project companies stick to hubs like Houston, Aberdeen, Singapore and Dubai,” he says. “They will go into places to do a project and just use agents and pull out.”
“We put in permanent footprints and invest into that culture and I think that is that makes us different.”
This, he says, is one reason why the company has chosen to develop its corporate and residential relocations business. He gives the example of Albania, where Move One served on a project from 1998 to 1999 during the Kosovo War. “We still have a healthy well-functioning office in Albania,” he says proudly. “We didn’t have to lay anyone off and we have local management. We also still have a very strong operation in Bosnia, which we went into after the Dayton Peace Accords.”
This unique strategy has been with the company from its beginnings. “Since Hungary, everything starts with the freight side of the business,” he explains. “As that drags us into areas we bring the mobility section and the technology and everything else and set up those companies as well. We are probably the largest corporate relocations company in East Europe and probably amongst the largest in Central Asia, if not the largest. In this region, we are still young.”
He says Move One plans to expand throughout the GCC and the rest of the Middle East, as well as East Asia, which is managed out of the office in Shanghai. In fact, the company has been investing quite heavily in Mongolia to serve companies involved in the mining of what is said to be the largest untapped copper and gold deposit in the world. The project has attracted more than US$7 billion and is slated to start later this year, with production expected to begin in 2013.
Source: Move One Inc