The Turnaround

Turnaround stories have a clean arc: things were bad, someone fixed them, now they're good. The reality at Makmal was messier.

The period as translator, before the board appointment, turned out to be the most useful preparation. Nobody performs for the translator. Meetings where people said what they actually thought, not what they thought the board wanted to hear. By the time a vote came, the problems were already mapped.

The numbers

Makmal Gold Company is a 100% state-owned subsidiary of Kyrgyzaltyn. The operation extracts ore, processes it into gold doré at the mine site, ships it for final refining to 99.99% purity. The National Bank of Kyrgyzstan buys it. The core process is simple. The complications are everything around it.

Seven years of losses. Around 200 million som in cumulative deficit. Structural causes, not geological — the deposit was producing, but the organization was consuming more than the gold was worth.

What changed

Procurement reform came first. An audit of every major supply contract found what audits usually find in organizations that haven't been examined in a while: prices above market, sole-source contracts that should have been competitive, delivery terms that nobody enforced. Competitive bidding was introduced. Terms were renegotiated. Significant money recovered.

Second, decision-making got restructured. The company had a culture where mid-level managers avoided decisions because accountability flowed upward. A shift supervisor needing to adjust a process would wait for approval from two levels above. The reversal: operational authority to the people closest to the work, accountability for outcomes instead of compliance with procedure.

Third, investment in maintenance. Sounds contradictory — spending money to save money — but years of deferred maintenance had created a cycle: equipment failures caused production stops, which caused missed targets, which caused budget cuts, which caused more deferred maintenance. Breaking the cycle required front-loading repair and replacement.

Fourth, and hardest: some personnel changes. Not mass layoffs. Targeted changes in key positions where performance had been poor for years and nobody had addressed it. Politically difficult in a state-owned enterprise where employment functions as social guarantee. But necessary.

The result

The 400 million som profit is real. A swing of about 600 million from the worst loss years. The people who did the actual work — miners, operators, engineers who kept aging equipment running — deserve most of the credit. The chairman's job was clearing obstacles.

A turnaround in a state enterprise differs from a private-sector one. No selling divisions, no venture debt, no pivoting the business model. There's the mine, the people, and the government watching. Working with what's there and making it function.

The mine is still operating. That's the measure that matters.