Alexander Abramov

Alexander Grigoryevich Abramov (Russian: Александр Григорьевич Абрамов, born 1959) is a former scientist who became an industrial magnate as one of the two heads of Evraz, Russia's largest steel producer. Beginning in 1998, he has amassed the largest steel and iron empire in Russia, which employs 125,000 people, controls about 22 percent of the country's total steel output and has an annual turnover of $20 billion. A business partner and ally of Alexander Frolov and Roman Abramovich, Abramov was in March 2015 listed by Forbes as having an estimated net worth of $4.3 billion.^[1]

Education

He graduated from the elite Moscow Institute of Physics and Technology.^[2]

Career

EvrazHolding is a product of Russia's growth since the 1998 financial crisis and Abramov is representative of the second wave of Russian magnates who went into business after the best assets had been taken. Unlike the first wave of politically connected oligarchs, such as Mikhail Khodorkovsky and Vladimir Potanin, Abramov had neither political leverage nor financial resources to help him benefit from Russia's chaotic privatisation of the 1990s.

In recent years Evraz-Holding has emerged as one of the most aggressive vertically integrated business groups in Russia. Its assets include three large steel mills, three coal mines and several ore-enriching plants, as well as a large commercial port, Nakhodka, in the east of the country.

Commercial entrepreneurship

Trading

He used his contacts with Russia's steel mills, which used high-temperature technologies, and offered his services not as a scientist but as a metal trader. Trading was a popular and quick way to make money in Russia in the early 1990s. The economy was shrinking, non-payment was a chronic problem and any offer of cash from a trader was welcomed by factories. By 1997, trading was less profitable and many trading companies, including Abramov's, were owed large sums by producers. Abramov began buying factories and swapped debt for equity in the Nizhny Tagil steel mill, while also buying stakes in its rail-producing plant from other shareholders.

Acquisitions, monopolies and factories

While the first wave of Russian oligarchs grabbed whatever assets they could, Mr Abramov acquired them in a much more focused way. He decided to build a monopoly for rail and steel construction products and looked for factories that would give him synergies. The only other big factories making these products were in the industrial region of Kemerovo, also home to Russia's largest coalmines. Using his old trading contacts with coalmine bosses, Abramov was introduced to Aman Tuleev, populist governor of the region.

Pitching job creation in the vacuum of bankrupt factories

The two factories Abramov was interested in were in bankruptcy in 1998. Salaries had not been paid for up to eight months and strikes were breaking out.

The deal: managers for factories

Tuleev needed good managers. Abramov needed the two factories and soon a deal was made.

As a state creditor, Tuleev would help appoint external managers loyal to EvrazHolding to run the steel mills. Abramov would pay salaries and taxes, guarantee jobs and support Tuleev's social projects.

Competition against Alfa Group

This pitched Abramov against Alfa Group, one of the most influential oligarch groups, which controlled one of the factories. While groups such as Alfa were shedding non-core assets, Mr Abramov and his like were building empires.^[3] In June 2005 EvrazHolding was listed on the London Stock Exchange. Five months later, Abramov resigned as group president but remains a member of the board.^[4]

Acquisitions

He has made numerous strategic business acquisitions. For example, in 2007 Abramov acquired Oregon Steel Mills and Claymont Steel.^[5]

Personal life

He is married with three children and lives in Moscow.^[1]

References