The interview published on these pages is just an excerpt from EvrazHolding president Alexander Abramov‘s conversation with Eurasian Metals staff writers Evgeny Shashkov and Yuri Adno. For the first time the company‘s head is telling about the history of his business. The full text of the conversation will be included in the book "Corporation with no secrets", which will soon come out in English as well.

EM: Events of the last decade in Russia have, one way or another, influenced the life of its every citizen and in particular of those, who are over 30 today. Was there anything that predetermined your choice of metallurgy for business? Metallurgy has little in common with your previous activity, does it not? We would like to get more details about your personal life: where did you grow up and get your education? Where and how you as a person were formed?
– Generally speaking there is nothing in particular about my biography, it is quite common. I was born in Krasnodar in 1959. My parents were working class folks. The father died in 1983, my mother still lives in Krasnodar. My sister is also there, she heads a secondary school. In 1976 I graduated from school with an honorary diploma. After graduation exams I went to Moscow and got enrolled in the Moscow physics and engineering institute (MPEI). In 1982 I graduated from the institute and became a post-graduate student. In 1985 I defended my dissertation and received a scientific degree. By the way, I did the dissertation at the Academy of Sciences‘ Institute of high temperatures (IHTAS). And I got there to work. My wife is also a graduate of the same institute. We have three children: a 20-year old daughter and two sons.
I should mention that IHTAS was a leading research institute specializing in energy problems. The institute‘s scientific research and applied works were closely connected with power-consuming industries, first of all, with the military industrial complex and metallurgy industry. Subjects, which my laboratory was working on, required very complicated and expensive tests on unique test benches. With the start-up of perestroika the institute‘s State-budget financing fell down sharply and soon academic sciences began experiencing a very hard time. Though, as you might recall, in 1988 there came a market legislation, the first one in the Soviet era, named "On co-operative system in the USSR". It gave a chance to earn money on applied research.
My colleagues and myself got interested in industries and enterprises making products that were in high demand on the market. By then we had already had some experience of working with metallurgical plants. For example, IHTAS designed one of the first sets for direct restoring of iron at Tcherepovets Integrated Iron-and-Steel Works, conducted applied studies of refractories, electrodes, etc. And it is no wonder that trading in metal products became one of the areas of operations by the IHTAS commercial center set up in the late 80s with my direct participation. The main direction of our activities was to market results of scientific and design researches but it practically did not pay. Anyway, we did not exactly succeed and money, which we managed to earn, was not enough for a big science.
So, I faced a choice: either to become a scholar (and that was rather difficult for a 30-year old) or to go on with an administrative job in the obviously stagnating science. Frankly speaking I did not like the administrative path at all. Leaving the country was also of no particular interest. You know, it was impossible to get a job with leading US laboratories and universities, which were doing the most interesting research on my subjects, because of their secretiveness. So, a career abroad would be, one way or another, restricted by barriers that I could not overcome. But the most important thing was that that by the early 90s I clearly realized that Russia‘s transformations were giving a unique chance to find your own place in business, earn money and live normally. This way I got into the metallurgical business becoming one of the cofounders of Evrazmetal public limited company in February 1992.

EM: During these ten years Evrazmetal has traveled a long way from being a small metal-marketing firm to becoming the largest industrial holding in Russia‘s metallurgy industry. What, in your opinion, played a decisive role in forming the company?
– The start was quite trivial. We began establishing business relations with plants. By 1995 I got acquainted with directors of leading enterprises personally. Together with my business colleagues (and they were mainly graduates of MPEI and, as you understand, not that stupid) I gained certain experience and came to know the specific of economics, finances and organization of metallurgical production processes as well as of being a trader. In my opinion, the most important thing that allowed me to secure a niche in the metallurgical business was a strict observance of one simple principle: fulfill all your obligations totally and in time. If force majeure circumstances, something unforeseen, happen, tell your partners about it immediately, start negotiating with them and find a mutually acceptable solution. During that time we were rather critical of the voucher privatization potential, we did not believe that it could solve economic problems of our industry and, thus, we did not invest in it. And we felt afraid – even now we continue to feel this fear sometimes – that everything would be taken from us.
We were gaining experience, expanding the scope of our operations and steadfastly increasing the company‘s turnover. At the same time we, of course, were feeling on ourselves all the absurdities of the market reforms including downfall of the domestic demand, disintegration of the financial system, non-payments. The country‘s economy was going through the acute crisis.
By the end of 1995 we collected big debts of metallurgical plants, about $50 million, and so as to somehow put them to use we exchanged those debts for enterprises‘ stock. But having shares did not mean much in itself without real access to managing property. The same was true for other trading companies, such as Duferco and Century Holding Ltd., which became our partners in acquiring the controlling stock in Nizhniy Tagil Integrated Iron-and-Steel Works (NTMK). By that time we mastered export operations well enough and could successfully compete with foreign traders.

EM: Did your company do business with that infamous Trans World Group, which was active in the Russian metallurgy industry then?
– No, our interests never crossed. We were getting start-up money from trading operations with Ukraine's metallurgical enterprises.

EM: How did your company happen to be in Kuzbas?
– Originally we came to Kuzbas because of coal. We started purchasing it for metallurgical plants as well as for marketing, 6-7 million tons a year. One of local leaders introduced me to Kuzbas governor Aman Tuleev. At our first meeting we discussed problems of management at Zapadnosibirsky Integrated Iron-and-Steel Works (ZSMK), which was bankrupt then. The governor consulted with us on changing ZSMK top managers. We made an offer to set up a managing company, helped it with finances, formed turnover capital and provided assistance in strengthening ZSMK positions on the market. We got convinced that with sensible management and right strategy the Works had a good chance to become a highly profitable enterprise. It was necessary to get rid of outside threats coming, in this case, from creditors. Our company decided to buy out its debts to major creditors and that took about a year and a half.
Then the question of ZSMK technical reequipping arose. At present we have been working out its modernization program with participation of leading Russian and Western consulting as well as engineering companies. The key element of this program is to construct six advanced highly productive sets of bar continuous casting (SBCC).

EM: The property repartition is the most acute problem. The Holding‘s history for sure had some dramatic situations?
– Maybe the most difficult ones took place at Nizhniy Tagil Integrated Iron-and-Steel Works. As soon as we replaced the ineffective top management, the threat of bankruptcy sprang up, a suit demanding outside management was filed with a court. A peace agreement was needed at any price. To this end it was necessary to get support of the Sverdlovsk region‘s leaders or at least to secure their neutrality and buy out the controlling share of creditor debts in just a few months. We succeeded.
Soon constructive relations with governor Edward Rossel were established. To a large extant it became possible thanks to the fact that the team of NTMK general director Sergei Nosov managed in a short period of time to radically improve economic situation at the Works, significantly raise its prestige in the eyes of the region‘s industrial leaders, that is power industry people, transportation folks, machine-builders, miners. Today NTMK is one of the major players in the Sverdlovsk region‘s politics and economy.

EM: Did you manage to avoid scandals that often accompanied reforms in the metallurgy industry?
– Acute problems happened only at Kachkanarsky Vanadiy Integrated Mining-and-Beneficiating Works (KMBK), which is the chief supplier of raw materials to NTMK. The crises at the NTMK could not but cause production decrease at KMBK. Uralskaya Mining-and-Metallurgical company became its owner with the support of the region‘s authorities. There was a hard struggle, of course. The conflict was considered by courts several times. The local as well as central press added fuel to the fire. Later it became clear that the protracted struggle would lead to unnecessary expenses having no obvious economic sense. Finally NTMK and KMBK reached an agreement under which the former would pay for supplies of raw ores by metal products using negotiated coefficients. The relations became sensible economically. Simultaneously, partners got more interested in developing business by joint efforts since the better the conditions at the metals market, the better off both metallurgists and miners are.

EM: The Nizhniy Tagil and Zapadnosibirsky Integrated Iron-and-Steel Works‘ story proves that you are a pragmatic person. But EvrazHolding actions with respect to Kuznetsky Integrated Iron-and-Steel Works (KMK) are not exactly pragmatic: a profit-oriented Western businessman would hardly like to get involved with an outdated enterprise. What guided you?
– This question has a background that is not that simple. Since we came to Kuzbas with serious intentions and for long, since we were determined to get ZSMK out of crisis, we had to help KMK. The more so that both are located at the same industrial site. KMK is a kind of compensation, if you wish, for our strategic positions in Kuzbas. Tuleev acted as a pragmatic manager conducting a constructive dialogue with EvrazHolding. And in the end he got an economic partner, who tries not only to breathe a new life into the Kuzbas metallurgical complex but also to ensure social stability in the region. For all that we are categorically against participating in political games. By the way, Kuzbas is still feeling aftereffects of the authorities‘ conflict with well-known MIKOM of the Zhyvilo brothers. I believe that participation in political clashes distracts from the task of solving economic problems, disorganizes the management team and, as a result, it significantly reduces business effectiveness. But being pragmatic I do not object to a healthy lobbying of our company‘s interests.