INTEK -- BACKGROUND ON A UNIQUELY SUCCESSFUL

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 001065

SIPDIS

STATE FOR SCA/CEN, EEB

E.O. 12958: DECL: 08/13/2017
TAGS: PREL PINR EIND TX
SUBJECT: INTEK -- BACKGROUND ON A UNIQUELY SUCCESSFUL
COMPANY IN TURKMENISTAN

Classified By: Charge d'Affaires Sylvia Reed Curran for reasons 1.4 (B)
and (D).


1. (C) SUMMARY: Intek is a successful information
technology, printing, and technical education company that
was founded right after independence by Artur Ovezmuradov. A
FLEX alumna is head of Corporate Sales discussed the
company's long and impressive list of government, corporate,
and international community customers. Although it is
commonly assumed that Turkmenistan is technologically behind,
Intek installed satellite dishes for the State Migration
Service and Turkmenneft (Turkmenoil),linking all of their
provincial offices with headquarters. Intek has contracts
with the Ministry of Education as well as with the
Presidential Apparatus. It is one of a very, very few
companies that operate on this level in Turkmenistan and may
be the best in terms of product and service offering and
staff competence. Questions about the founder failed to
uncover information about his background or connections, but
it would be hard to believe that he would have been allowed
to continue to run such a successful company without ties to
the leadership. Intek is in a good place to become even more
successful as Turkmenistan continues to open up to the wider
world. END SUMMARY.

COMPANY BACKGROUND


2. (C) FLEX (high-school) exchange alumna Maral Ilyasova is
head of Corporate Sales for Intek, a Turkmen company that has
fashioned itself as an "information systems integrator" over
its 16-year history. Intek is the official distributor of
Hewlett Packard, Xerox, Sanako (language laboratory equipment
from Finland),Legrand Electric Limited (electrical equipment
from France),APS/MGE (uninterruptible power supply
manufacturer),1S (Russian accounting software),Microsoft
Office software, Kaspersky anti-virus software, and Ideal
(German shredders and staplers). Intek has several offices
in Ashgabat: a headquarters; a "Turkmenxerox" printing
center that prints business cards, documents, and publication
for corporate customers; a service center that sells
computers and printers; and an education center that offers
training in computers, accounting, and English. At a meeting
on August 12, Ilyasova said that most of Intek's 150
employees are young and energetic, and have studied abroad.
Ilyasova said that the company plans to hire more ambitious
young people, targeting candidates with English-language
skills and a desire to work. Artur Ovezmuradov created Intek
after Turkmenistan's independence and continues to lead the
company. Previously, Intek had a freestanding retail shop,
but decided to focus on corporate projects. The company has
long-term plans to get back into retail. Although the
company used to sell computers under the Intek label, since
it is cheaper to buy hardware from Hewlett Packard, they
discontinued this practice.

CURRENT CONTRACTS AND CUSTOMERS


3. (C) Intek's list of current contracts and customers is
impressive:

-- The company installed Gilat satellite equipment (Israel)
on top of the State Migration Service headquarters, which
links all provincial offices throughout the country. Intek
also sold the State Migration Service a local area network
system and computer equipment.

-- After seeing what Intek did for the State Migration
Service, state oil company Turkmenneft wanted a similar
system that would assist in tracking gas extraction. Intek
installed a satellite dish that links all Turkmenneft offices
throughout the country, as well as a private branch exchange
(PBX) phone station manufactured by Iskarateling (Denmark).


ASHGABAT 00001065 002 OF 003


-- The Ministry of Education awarded Intek a contract for
12,000 computers. This contract was subsequently split into
two parts in order to accelerate completion of the project.
Lenova (China) supplied about half of the computers, and
Intek delivered 7,000. Also, Intek is in the middle of its
second contract to supply interactive SmartBoards to schools
around Turkmenistan. According to Ilyasova, due to President
Berdimuhamedov's familial connections to Esenguli, the
Ministry of Education purchased 114 computer stations and 14
SmartBoards manufactured by Promethian (U.K.) for Esenguli
schools. Ilyasova also said that three companies won a
tender for computer equipment and SmartBoards. Intek will
supply SmartBoards manufactured by Interride Learning (U.S.)
and Promethian, as well as Hewlett Packard computers and
Hewlett Packard Laser Jet printers. Local Hitachi
distributor Infotech will supply SmartBoards as well. Intek
supplied NetOp software to the Ministry, which links student
computers to the teacher's computer. Intek is expecting to
win a fourth tender in December. Ilyasova said that
education is "under the president's direct supervision and he
is watching carefully."

-- Intek supplies Hewlett Packard and Xerox cartridges to the
Presidential Apparatus. According to Ilyasova, the president
is a "constant client." Intek also serves Ashgabat's
diplomatic community, as well as Turkish construction company
Polimeks, for which Intek is working as a subcontractorfor
equipment on the new parliament building.

-- Buried Hill Serdar Ltd. awarded two tenders to Intek for
Systemax equipment and for Hewlett Packard servers. Oil and
gas industry-specific software that unifies the local system
with the headquarters in Canada was also a part of this
tender.

-- Russian cellular service provider MTS purchased equipment
manufactured by Legrand and Hewlett Packard, as well as Sun
Microsystems servers.

-- The Central Bank, Vneshekonombank, and Dayhanbank
purchased de la Rue bank note counters.

-- Intek plans on participating in the upcoming passport
tender.

BUSINESS CHALLENGES ABOUND, INCLUDING LACK OF CAPACITY


4. (C) When prodded, Ilyasova mentioned several business
challenges. The lack of a courier service such as DHL makes
shipping broken parts difficult, and customers must wait up
to two weeks for replacements. The State Customs Service
asks for proof that parts are for a computer and makes it
difficult to send out old parts, and changes rules and
regulations on a whim. The lack of an international banking
system is also problematic, but better now that the exchange
rate is unified. The company has written contracts just in
order to facilitate currency exchanges, as Turkmenistan will
allow currency exchange only for the amounts listed in
contracts. Senagat Bank can provide a bank guarantee or a
letter of credit, but since Turkmenistan is not a trusted
trade partner in many places, this remains a challenge.
Ilyasova believes that the situation is getting better, but
noted the lack of bureaucratic capacity as another
significant challenge that will be difficult to overcome.


5. (C) COMMENT: Intek is one of a very, very few companies
that operate on this level in Turkmenistan and may be the
best in terms of product and service offering and staff
competence. Questions about Ovezmuradov (unsurprisingly)
failed to uncover information about his background or
connections, but it would be hard to believe that he would
have been allowed to continue to run such a successful
company without significant connections. One local contact

ASHGABAT 00001065 003 OF 003


said that Ovezmuradov's father was reputably a well-placed
apparatchik during the Soviet period, which proved valuable
as Artur opened Intel -- and his brother, Eziz, opened
TurkmenXerox. This company is one to watch, because if
Turkmenistan eventually opens more to the rest of the world,
Intek will be well placed to become even more successful very
quickly. END COMMENT.
CURRAN