On 31 October 2008 Employers` Confederation of Latvia and the State Chancellery presented award to SJSC Latvijas dzelzceļš (LDz) for effective management in an annual event Effective Management Award 2008.
Mrs. Elīna Egle, General Director of Employers` Confederation of Latvia, acknowledged that this year there were submitted several companies with good management for this award, but the most successful among the companies there were metal trading company Severstaļlat, which had concentrated on talent management in order to expand into new markets; security company Grifs AG, which had improved work quality of employees; and SJSC Latvijas dzelzceļš, which had made significant reforms within the management of company.
For this award SJSC Latvijas dzelzceļš submitted a project Reorganization of Railway Industry and Elaboration of Management Model of Concern Latvijas dzelzceļš.
Mr. Uģis Magonis, Chairman of the Board of SJSC Latvijas dzelzceļš, said: “We have done significant work in company reorganization in recent years; there was made an integrated company management model, which is based upon corporate management policies of concern LDz companies. Implementation of the new model has improved considerably the management of company and results of economic activity. We are satisfied that our achievement is regarded positively not only by experts from railway industry, but also by the State. The acquired award shows that the launched reforms in order to become modern, effective and safe railway have been successful.”
One of the main aims of reorganization was to form LDz a railway infrastructure manager and the holding company of concern. Thus, by forming concern and its dependent subsidiary companies, SJSC Latvijas dzelzceļš has fulfilled the EU requirements for establishing a liberalized rail transport market. In order to continue the reforms it was necessary to separate freight transportation business and to establish separate subsidiary companies, as well as to separate track reconstruction works and to form a separate subsidiary company.
There have been elaborated new strategic development and business plans, and ensured application of railway technological process for passenger and freight transportations. In the reorganization there were involved more than 12000 concern employees; new business operations were planned, legally formed and successfully realized between concern companies in amount of more than 200 million lats.
Concern performance indicators show that reorganization has been effective: compared to year 2006 concern net profit increased tenfold and in year 2007 reached 28.3 million lats; compared to year 2006 net turnover increased by more than 28 % and in year 2007 reached 262.5 million lats. Compared to 2006, amount of taxes paid to the state budget increased by 32.3 % (from 50.7 million up to 67 million lats) in year 2007.
Concern LDz plans to improve its performance also in future, therefore, reforms in finance, organizational, legal and other sectors still are continuing.
Prepared by: LDz Public Relations Division