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#3' 2005 print version
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HATCH AIMS AT BRIC COUNTRIES
In June, on the occasion of the 50th anniversary of HATCH, the grand ceremony was held in Moscow. Chairman of the Board of Directors Ron Nolan as well as President and CEO of this Canadian engineering company Kurt Strobel came over to Russia’s capital to participate in the ceremony. Eurasian Metals used the opportunity and asked Mr. Nolan a few questions, including the one about business plans of HATCH in Russia.




E
M: How was Hatch created? Due to what factors has the company succeded to relatively quickly come to the front at the world market of engineering and consulting services?
-Hatch had its beginning in Toronto, Canada as a civil engineering company doing local infrastructure work such as airport hangars and subway projects. Early in its existence the company was joined by Dr. Hatch who had worked for Quebec Iron and Titanium where he was successful in solving difficult process engineering problems. Dr Hatch was convinced that to be successful an engineering company must bridge the gap between Research&Development and operations in the metals industry. I think that our devotion to the concept of bridging this gap led Hatch to success and allowed us to set up operations and be successful around the globe.

EM: What are the main business lines of the company now, what is its organizational structure, specialization, main business units, activity scales and performance rate?
-Our main business lines are Mining&Metals, Infrastructure, and Energy. We provide consulting services (both management and process), project execution and operations support. This means that we support projects from the conceptualization to their completion through operations and ultimately to their final decommissioning. We currently have about 15 billion USD worth of projects and over 6 000 engineers working around the world. We are organized on a business unit basis with geographic operations offices that support each of their business units around the globe. The largest group is Mining&Metals
EM: Due to which factors does Hatch ensure high competitiveness of its projects?
-By concentrating on bringing added value in all aspects of our work and by understanding and putting clients’ business goals first, we achieve competitiveness for all of our projects around the world.
EM: What did your cooperation with Russian business start with? Could you tell about the first Hatch’s projects in Russia. What Russian companies is Hatch working with now and on what projects?
-Business in Russia started with consulting assignments and supply of technologies for the Iron&Steel industry in the early 90s. We are working with Severstal, Mechel, Oskol, Magnezit, Rusal, SUAL and a number of other major metallurgical companies.
EM: Your opinion of the level of training of Russian top managers. To what extent does this level correspond to the world practice? What is your estimate of the joint work with young Russian business?
-Many of the Russian top managers that I have met are very well educated and trained and now they are gaining experience in free market economies. Based on the interaction I have had, these managers are quite capable and are very rapidly learning how to be competitive in the global market place.
EM: Does the fact that Hatch’s business in Russia has been developing relatively successfully reflect, in your opinion, positive processes in Russian economy? How has investment climate in Russia changed recently?
-It does in fact reflect the positive changes in the Russian economy and the fact that the investment climate is improving. However there have been some political setbacks recently that may take time to overcome. The investment climate in Russia, as everywhere, is driven as much by perception as hard economics.
EM: Last year was quite successful for the world metallurgy. For example, in steel production 1 billion ton record was achieved and exceeded and we were witnessing substantial growth in prices for steel and non-ferrous metals. What factors, in your opinion, influenced the growth in world metal production. How long-term is this trend?
-The increased market demand for metals combined with the lack of increased production capacity in the last few years has caused a supply shortage and hence a price increase. Although there has been a drop-off in steel demand recently, I think the shortage of commodities is a long-term trend. Thus, overall, I expect metal markets will remain strong and trend upward.
EM: What is your estimate of the China phenomen – unprecedented rates of metallurgy development, production growth and permanent increase in consumption of steel and other metals? How long, in your opinion, can this situation last? Does Hatch implement projects in China?
-We feel the growth in consumption of metals will be in the BRIC countries (Brazil, Russia, India and China) with Brazil and Russia receiving a big part of the growth in production and India and China – a big part of growth in consumption. Hatch does have offices in China and Brazil and is implementing projects there.
EM: Can the accession of Russia in the WTO affect the activity of your company in Russia?
-Russia’s joining the WTO should improve the investment climate in Russia and hence the growth in primary production and internal demand, which will affect Hatch’s growth prospects positively.
EM: What are Hatch’s plans and prospects in Russia?
-Our plans are to grow the company in Russia by hiring Russian specialists and new graduate engineers to provide the same level of service that we do in countries like Canada, Australia, South Africa and Chile. Our ultimate goal is to have a large local consulting engineering company staffed and managed primarily by Russian personnel.
EM: Does your company engage Russian specialists and experts in the implementation of projects in Russia?
-Yes, we engage Russian specialists and experts for Russian projects and for projects outside Russia, as appropriate opportunities arise.
EM: Can you, based on your experience, give the assessment of the status and prospects of Russian metallurgy development?
-The level of Russian technology in metallurgy is very high and with importing complementary technologies from other parts of the world, the prospects for growth in the metallurgical industry are very bright as resources become more scarce elsewhere.
EM: What does the four-quadrant analysis methodology based on the use of innovation and allowing to lower both the cost and impact of a project on the environment consist in?
-Sustainable development and the environment are of primary importance everywhere in the world and must be treated equally, thus only innovation, cost of labour and energy should have impact on project costs in terms of differentiating producers in the metallurgical industries.  

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