$12 MLN TO BE INVESTED IN MODERNIZATION OF ARMENIAN POSTAL SECTOR BY 2012

ARKA
10/07/2007 13:58

Exclusive interview of Haypost company’s trustee manager Hans Boon
with ARKA News Agency

"ARKA": Mr. Boon, what impact has the transfer of Haypost Company to
the trust management of the Dutch "Haypost Trust Management" had on
the activity of Haypost Company?

Mr. Boon: The transfer of Haypost to the trust management has led to
the company’s being more commercial. Its activity’s transparency level
has increased, particularly the company’s financial accountability.

Naturally, these are positive changes. We are trying to raise our
standards, to increase their quality, change the company’s mentality
that will impact the cultural level of the Haypost service.

"ARKA": How much does the Dutch experience encourages the company’s
entry to the world market?

Mr. Boon: Netherlands has big experience in the sphere of
commercialization of postal services, and that is the fundament for the
Postfinance International Company (developer of the Armenian Haypost
Company transfer to the trust management of the Dutch Haypost Trust
Management – ARKA) that has been exporting its business concepts
for over 20 years. The company’s employees have working experience
in over 50 countries, including Central Europe, South Asia, South
America, and Africa. They specialize in sharing their experience
in provision of postal services, and this experience demonstrated
through postal banking.

"ARKA": How much investments in modernization of Armenia’s postal
system are expected and what activities are planned to implement
under the modernization program? Are there any priority directions
in this reform?

Mr. Boon: According to the trust management program, the investment
in Armenia’s postal system modernization will total approximately
$12mln for the following five years. We believe, the investments will
have an impact of the company’s performance and progress of postal
services in general.

The priorities in the reform will be improvement of postal services
quality.

It means both collection of mail and correspondence, and provision
of delivery in time. Also, we intend to introduce new technologies
due to which the postal system will be fully modernized and meet the
international standards.

We are going to modernize post offices. About four to ten post
offices will be fully reconstructed during this year. The post office
will become a comfortable store where a customer can come with full
assurance to get quality service. In addition, we are thinking about
expanding the scope of our services.

Post is now associated with letters, packages, or packets, and we
are going to change this stereotype by introducing new services,
such as direct mail, designed for business clients to send out their
products and information to multiple potential clients.

Also, such services as delivery of clients’ letters through their
provision of electronic files for printing and resending them to
addressees will be included. At the same time, Haypost will be
fulfill the function of feedback support, for instance by sending
information to clients with the receipt saying "we would like to
receive information from this organization henceforth".

However, our priority objective remains improvement of services
quality.

"ARKA": Will the modernization of the postal system lead to redundancy
in the company.

Mr. Boon: Of course, changes in the company will tell on the number
of its staff. Today, about 4000 people are employed at the company,
and it makes Haypost one of the largest employers of Armenia. However,
we will have rather considerable changes that will have an impact
on the number and the quality aspect of the staff. However, all the
measures will be taken with a careful approach.

The company will work with such employees who can and want to accept
changes in Haypost in order to increase its performance. For these
people we plan to provide training programs to the end of their
adjustment to changes. We also plan a very careful and farsighted
reorganization of Haypost. We do not pursue the goal to fire many
people.

Conversely, we want our employees to meet our requirements. We
will try to find a socially appropriate model and use it for proper
organization.

"ARKA": What stage is the creation of the specialized Post Bank in
Armenia currently in? When is the bank to open, how much will be the
bank’s authorized capital, and what services will the bank provide
to its clients?

Mr. Boon: The creation of the specialized Post Bank is a very
interesting and important question. Much work on the bank’s
preparation, particularly elaboration of marketing policy and
definition of areas of activity, procedural issues, and information
processing has been done in this direction.

Big practical work related to Haypost Company has been done. We want
Post Bank to be a very reliable organization, so that every citizen
can trust this bank. However, that means that Haypost in its turn
has to meet the high requirements with the streamlined cycle of work.

All of that requires introduction of the best technologies and
procedures.

In order for us not to have problems with clients, we want to make
sure that we will provide high-quality service, meeting the services
provided by international banks. The development of Post Bank is
currently at the initial stage. However, it is hard to call the exact
date of its creation.

As for the bank’s capital, it will total no less than AMD 5bln under
the Armenian law.

The post bank will really become a bank for all. It will work with
post offices, initially providing minor services, but of higher
quality and reliability.

Post Bank will also process money transfers and attract deposits. With
plastic cards it will be possible to make different financial
operations in the bank, for instance, public utilities payment. All
these services will be provided at any post office that will
considerably save clients’ time.

Our package will be especially alluring for those without a bank
account.

One more important part of the bank’s work will be provision of
corporate services to companies and firms, dealing particularly with
electric energy and water supply. They can also benefit from our
services, because they will be able to receive payments for their
services quicker.

This package for them will include bills, deposit and lending services,
and the whole service related to payment of bills.

We believe that Post Bank will be an effective instrument for
companies.

The third aspect of the bank’s activity will be provision of
consumer credits through which we will play a definitive role in the
microfinancing sector.

"ARKA": Will foreign investments participate in the bank’s authorized
capital?

Mr. Boon: Foreign investments will participate in the bank’s capital.

These will be basically funds of foreign firms. However, local
companies will also have an opportunity to invest in the bank.

Management of Post Bank will also be implemented by foreign
specialists, and we do everything to make our activity meet the
international standards of quality. We want people to trust our bank
and use its services.

It is not improbable that Armenian resident organizations will also
be able to make investments, but that will be partial investment,
likely from the funds of an investment fund to be created in future.

Also, we plan to create mutual funds and make other types of
investments, particularly, due to emission of our shares including
bond shares that everyone can buy and sell at the stock exchange. It
will create more competition in the market and stimulate demand.

"ARKA": When signing the agreement on transferring Haypost Company to
the Dutch Haypost Trust Management, the chairman of the Central Bank
of Armenia did not rule out a possibility to privatize Haypost. Is
it planned to privatize the company before the trust management
agreement expires?

Mr. Boon: Our actions today do not imply privatization. The world
experience demonstrates that post is a public organization, part of
the public service.

It can become a commercial organization within the government’s
ownership. Only after that, according to the world experience, post
can be privatized.

Privatization of post is the most complicated process, because it
is very hard to provide a definite answer to the question whether
is necessary to privatize at all. We believe that all steps in
that direction should be made very carefully. As for the Haypost
privatization, it is still early to speak about it. Besides, a decision
on privatization should come from the government.

Today it is necessary to think about the near future of the post,
which consists in creation of a powerful postal sector and development
of cooperation with the private sector. For instance, in the sector of
book publishing: man can visit a post office and purchase a book that
will be delivered to him later. However, it does not mean that will
be a private business, but cooperation with a specific private sector.

The same will be with creation of Post Bank. It will be a private
enterprise, but will be created in cooperation with the public post. It
is worth mentioning that we are forming a powerful private-public
sector, and we believe that at this stage streamlining of its
productive work, not privatization, is our priority goal.