Max Sartayev, the Kazakh chairman of Tambour, talks about the acquisition of the company, plans to transform Tambour into a global brand and about our painting habits: "The Israelis paint mainly on Passover, especially religious ones"
(Original article in Hebrew by Navit Sommer Published: 24.04.19, 07:48)
"Israelis don’t use a variety of colors, there is a fear of color, and 90% choose white, maybe because it's the easiest way." This is what Max Sartayev, recently named the new chairman of the paint company Tambour after previously serving as the company’s CEO, said in an interview with “Mamon.” [the financial section of ynet]
Five years ago, the Azrieli Group sold their ownership of Tambour for NIS 500 million to Kusto Group, an international investment corporation registered in Singapore and owned by Kazakh businessmen.
Following the acquisition, Sartayev, a managing partner in Kusto, immigrated to Israel with his family to become the company's CEO. The family lives in Herzliya Pituah and Sartayev’s two children, aged 10 and 12, attend the American school in Even Yehuda. Recently, Sartayev took owners of Tambour shops that excelled in sales of the company’s paints on a bonus award trip to the city of Almaty in Kazakhstan.
Like other similar corporations located in the former Soviet Union, Kusto was built on the ruins of the Communist regime. It was founded by Yerkin Tatishev, a native of Kazakhstan. Today, Kusto’s annual financial turnover exceeds one billion dollars. The organization is active in 11 countries and specializes in agriculture, gas, oil, building materials, and real estate. For Sartayev’s first move as acting chairman of Tambour (Micha Schreier was recently appointed CEO), he granted approval of the plan to build a new plant in Ashkelon, based on cement and plaster manufacturing, with a huge investment of up to NIS 100 million.
From Kazakhstan to Israel
"All the partners in Kusto are Kazakhs aged 40-44 from working-class families," says Sartayev. “I grew up in a kolkhoz (agricultural cooperative farm), a farmer who grew wheat. I was born into a Communist regime, and in my youth, I was the leader of the youth organization in the kolkhoz. After high school, I moved to Almaty to study in a business management school. I met some of the partners of Kusto when they were, like me, students”.
"When I finished my studies in 1996, I joined the National Bank of Kazakhstan and worked in the brokerage department. I worked with the Kazakh branch of the international consulting firm ‘Arthur Andersen’. The branch collapsed after the downfall of the energy company Enron, and one of the partners there suggested that I join Kusto, which was just getting started at that time.
"All my family was against leaving [the bank] because of the good conditions at the bank: I was 25 years old and I had an apartment and a good salary from the bank, but I decided to leave ... My first job [with Kusto] was in the northern part of the country with a former-Soviet company that was acquired by Kusto.. The company is privately owned by four partners and 70% of its business is outside of Kazakhstan. In Vietnam, for example, we own the largest construction contractor company."
How did a Kazakh company, whose owners were not Jewish, come to invest in a local industrial company in Israel?
"We are constantly looking for investments, and in 2012, Yerkin, Kusto’s founder, and company executives came to visit the Technion. It is a tradition for us to visit such institutions, in search of knowledge and innovation. Yerkin said he was looking for opportunities in Israel and someone told him that Tambour was for sale. He arranged for a meeting with Menachem Einan of Azrieli (the former deputy chairman of the company).
"I had been working in Crimea at that time, and Yerkin offered me the opportunity to come to Israel. I told him that I was familiar with the company, because 20 years ago, when I built a house, Tambour was sold as high-quality paint in Kazakhstan. [In the attempt to acquire Tambour] We were competing with Apax fund and Zehavit Cohen. We offered NIS 500 million more, and we agreed to buy the company as is, without an examination. We closed the deal in less than a week.”
What was the goal of purchasing the company?
"Tambour is indeed a small company in global terms, but very strong in Israel. Kusto has building materials factories, construction companies, and cement businesses. Alongside the paint, we were interested in the gypsum and plasterboard factory, which Tambour operated in partnership with Kibbutz Gesher. Recently, we acquired the kibbutz’s share for NIS 16.5 million, and we continue to develop that plant.
We [Kusto Group] have excellent quality gypsum boards and with the acquisition of Tambour, we gained additional knowledge in the field. It is our goal to turn Tambour into a global company and establish factories like it around the world.
When I became CEO, I began to establish order and efficiency in the company. We implemented a digital system that replaced all the paper documents, such as shipping documents, invoices, etc. We also decided to cease unrelated activities such as importing wallpaper, ceramics, car paints, and so forth.
Today, Tambour’s turnover is about NIS 1 billion. Since its acquisition, we [Kusto Group] have managed to improve the company’s profitability. In our desire to transform the company into a global brand, we began to purchase companies abroad for Tambour. We acquired an Italian paint company specializing in paints for the industrial sector. The Juventus football stadium in Turin is coated in our paints, and we will continue to pursue additional acquisitions. "
Is it hard to do business in Israel?
"We are similar in our mentality to the Israelis. It is not surprising that the State of Israel was founded by Russians: Ben-Gurion and Golda Meir, all born in Russia and the surrounding area. In 1991, a million Russian immigrants came to Israel, giving a boost to the Israeli economy. So, when I came to Israel, I did not feel far from my people. This is not an easy country, but I felt comfortable here. As a young woman, my wife worked in an Israeli ‘Aroma’ franchise coffee shop in Kazakhstan. The Israelis are very helpful and family-oriented. We also have big families. You also keep and respect tradition. Israel is a progressive country with a wealth of human capital.”
Does Kusto invest in Israeli start-ups?
"No. We are, by definition, an industrial corporation."
What surprised you about Tambour?
“The Israeli customer. Around the world, people refresh paint every 3-5 years. In Israel, people paint mainly during Passover, especially religious people. The main difference between you [Israelis] and the rest of the world is that you don’t use a variety of colors”.