Tatiana Serafin

Billionaire Post Office

On Jul 05 2010

I recently read Mrs. Adams in Winter, a wonderful historical biography that took me on a carriage ride from Russia to France along post roads in 1815 (the upkeep of roads was not for individual travel per se but to ensure swift and efficient mail communiques). Not only were the roads she travelled important in ensuring her safety in a resurgent Napoleonic period, but the stations she passed to get fresh horses and rest said a great deal about the wealth and politics of the land.

History yes. But present as well. Prince Albert von Thurn und Taxi, the billionaire German prince whose fortune Forbes estimates at $2.2 billion, has ties back to these post roads. His diversified family fortune can be traced back to being to general postmasters of the Holy Roman Empire and the postal services in Europe in the 16th century.

The horsepower the billionaire postmaster today uses is race cars not equine. The avid racecar driver took delivery of a Chevrolet Corvette ZR1 last year. Nice one for those old post roads.

Ukrainian Billionaire Akhmetov Tries For Another Steel Mill

By admin

On Jun 17 2010

In Steel

After recently losing Ukraine’s fourth largest steelmaker, Zaporizhstal, to an unnamed group of Russian investors, Rinat Akhmetov, Ukraine’s wealthiest (with a fortune estimate by Forbes at $5.2 billion) is at it again.

Akhmetov’s Metinvest, Ukraine’s largest vertically integrated steel group, is negotiating a merger with Mariupol Ilyich Steelworks, the country’s largest flat rolled steel producer.

According to a note from financial services firm, Millenium Capital, the merger is a win-win for both parties and will help Akhmetov as he tries to take Metinvest public. “[Mariupol] will get access not only to the raw materials but also to the Group financial resources for modernization implementation and will improve the corporate governance too. On the other hand, Metinvest will also benefit from the impending merger. Firstly, it will joint the top 20 biggest steel producers in the world, with a crude steel production capacity of more than 17m tonnes/year, which will have a positive effect on the prospects of its long discussed IPO. Secondly, the assortment of the Holding production will increase and, thirdly, the capacity utilization will increase.”

Akhmetov’s holding company confirms the negotiations, stating, “Both the parties are considering possible scenarios of co-operation and of combining resources in order to strengthen the position of Ukrainian steelmakers on international markets.”

The obstacle: who owns the mill? On May 26, two men claiming to represent offshore companies registered in Cyprus, Boris Podolsky and Ilya Gorn, announced the sale of Mariupol to an unknown investor. Meanwhile, Volodymyr Boyko, Mariupol’s chief executive officer and manager of its shares, has stated to Ukrainian press that he “took part in no oral or written agreement to transfer their ownership.”

Russian giants like Severstal (owned by Russian billionaire Alexei Mordashov) are said to be in the mix. Will the Russians again foil Akhmetov’s bid to create a Ukrainian steel giant?

Polish billionaire buys Ukrainian gas firm in middle of Naftogaz debate

By admin

On Jun 15 2010

In energy

Polish richest man, billionaire Jan Kulczyk, whose fortune was estimated by Forbes to be $2.1 billion in March, is increasing his energy investments in Ukraine.

His Kulczyk Oil Ventures, through its subsidiary, Loon Ukraine Holding, bought a 70% stake in of one of Ukraine’s largest private producers of natural gas, KUB-Gas, for $45 million; the deal was completed last Friday. Kulczyk Oil Ventures, which went public in May on the Warsaw Stock Exchange (symbol: KOV); used part of the proceeds from the IPO to close deal in Ukraine.

Dariusz Mioduski, the president of Kulczyk Oil Ventures, told the Polish press that, “We plan to increase production in Ukraine and KUB-Gas has enough potential to at least double its current production.” Kulczyk Oil is also exploring opportunities across Central and Eastern Europe as well as in other hydrocarbon basins in the Middle East and Southeast Asia.

Poland’s foray into Ukraine comes in the midst of news from Russia that its Gazprom gas monopoly has offered to merge with Ukraine’s state energy firm, Naftogaz. Ukraine has significant gas resources that need development investment.

New World (that is China, India) Outpaces Old World 2 to 1

By admin

On Jun 10 2010

In Uncategorized

Greece, Spain and Hungary once spawned mighty empires (8th to 6th century BC, 15th century AD and 19th century AD respectively), but now their crumbling economies are far outshined by cousins in the East – particularly China and India.

Yes we all know China and India are giants but today consulting firm BCG came out with its report on Global Wealth trends which has some very interesting empirical data.

Wealth in Asia (excluding Japan) will grow at twice the global rate and in China and India, wealth is expected to grew more than three times the global rate from 2009 to 2014. Another interesting statistic: in China – communist China that is – there are approximately 670,000 millionaire households. There are more millionaires in China that in the old world countries of the United Kingdom (485,000 millionaire households), Germany (430,000 millionaire households), Italy (300,000 millionaire households), Switzerland (285,000 millionaire households) and France (280,00 millionaire households). Only the US and Japan have more millionaire households with 4,715,000 millionaire households and 1,230,000 millionaire households respectively.

But the Old World still has something of an edge – Europe is the wealthiest region overall with $37.1 trillion in assets under management. It will need it for all those bailouts.

Building Argentina

By admin

On Jun 08 2010

In Investing Ideas

I recently wrote two pieces for the Project Management Institute that focused on infrastructure project opportunities in emerging markets outside the BRICs – Chile, Vietnam, Nigeria, Poland, Turkey, Costa Rica and Kenya were the countries that made it into the final edit. I also did research on Argentina and I’d like to publish that here because the country is fascinating and José D. Esterkin and Ana Maria Rodríguez had interesting insights.

The Argentinian economy deflated with the global recession, and its current president, Cristina Fernández de Kirchner, has had a rough couple of years. But if you look at where the project management demand is you can see which sectors will lead Argentina out of its slump (and which sectors you may consider investing in).

One is information technology. “The industry is growing rapidly because fees are lower than in other places of the world and professional level is very high,” says Ana Maria Rodríguez, PMP, executive manager, ERA Project Management, Rosario, Argentina.

Petrochemical, cereal (biodiesal plants), steel, and food companies are also requesting project management at global standards.

According to José D. Esterkin, PMI Buenos Aires, Argentina Chapter Esterkin awareness of project management in Argentina has grown exponentially over the past five years as companies focus on project management methodology to have predictability in their plans. This is especially true when dealing with an economy in flux, and changing regulations. “The challenge is to develop successful projects in spite of government measures,” says Ms. Rodriguez.

Technical skills are very high in Argentina. The need now is to combine the hard skills with soft skills like negotiation, leadership and communications. Ms. Rodriguez adds companies will need specialized training in certain areas of PM such as Program and Portfolio Management and Risk Management.

“We don’t have many project managers who are certified, we need to make project manager as a profession like lawyers”, posits Mr. Esterkin.

Ukraine’s Richest Loses Deal for Coveted Steel Mill

By admin

On Jun 02 2010

In Steel

Rinat Akhmetov, Ukraine’s wealthiest man with an estimated $5.2 billion steel and coal fortune according to Forbes, lost his bid for Ukraine’s fourth largest steelmaker, Zaporizhstal, in a surprise twist according to reports from Ukraine.

This week a group of undisclosed Russian investors took control of Zaporizhstal for a reported UAH 1.7 billion (about $220 million) supposedly financed by Russia’s state-owned Vneshekonombank (VEB Bank). That’s just over a month since the news broke back in April that Akhmetov’s Metinvest steel and mining holding company and Korea’s steel producer POSCO were on track to complete the deal to acquire a controlling interest in the steelmaker for $2 billion (according to Ekonomicheskaya Pravda).

The unexpected loss for Akhmetov and the rumors on price discrepancy are raising concerns about Russia’s influence in Ukraine under the new presidential administration of Victor Yanukovich who has been known to favor Russia. Also curious: Akhmetov is a member of Yanukovich’s Party of Regions.

Back in October, Metinvest and POSCO signed a memorandum of cooperation which called for the two firms to “exchange information and technologies to cooperate in seeking steel and mining business opportunities in Eastern Europe and former Soviet Union countries including Ukraine.” If the deal for Zaporizhstal had closed, Metinvest would have had an expanded product line, Zaporizhstal would have had access to Metinvest’s raw materials and POSCO would have become the second largest steel producer in the world according to investment bank, Millenium Capital.

In a research note, Millenium wrote “withdrawal of Metinvest from the deal undermines the market’s expectations of the dividend payout to have been approved at the next general meetings of Azovstal and Avdiivka Coke Plant. It is an open secret that Metinvest has started earlier to concentrate cash funds for the Zaporizhstal purchase, which funds are no longer needed after Metinvest failed to close the deal.”

Ukrainian Billionaires Bilking Investors on Energy Asset?

By admin

On May 20 2010

In energy

Ukrainian billionaires Henadiy Boholyubov and Ihor Kolomoyskyy are involved in a lawsuit recently brought by Austrian Raiffeisen Zentralbank Osterreich AG against Ukraine’s largest oil company Ukrnafta for nonpayment of dividends. Boholyubov and Kolomoyskyy through their Privat holdings control a 42% stake in the energy company, but according to one analyst “effectively control the oil company through loyal management.”

The Austrian bank, which has significant investments across Eastern Europe, filed a lawsuit with the Commercial Court of the city of Kyiv in April demanding that Ukrnafta pay them a dividend in the amount of UAH 3.164mn.

Claims have also been presented to Ukrnafta by Kazimir Partners Investment Fund represented by Kazimir Ukraine Convergence Fund Limited for the dividends payout for 2005 amounting to UAH 7.6mn.

Analysts at research firm Millenium Capital write, “We see this news as negative. Information that the dividends were not paid to all shareholders confirms, once again, the lack of transparency in the management of the company.”

Back in January it was reported that Ukrnafta’s shareholders decided to pay 5.08 billion hryvnias, or $635.8 million, in dividends for 2006-2008. The government, which owns a majority stake in UkrNafta, was unable to recover its share of dividends due to a shareholder conflict with Privat’s owners who had been said to be resisting the government’s attempts to hold a shareholder meeting amid fears that the management would be reshuffled. Prior to the presidential elections, then Prime Minister and presidential candidate Yulia Tymoshenko had said she would return control over Ukrnafta from Privat back to the government if she won.

May is Energy Month – BP, wind, Jack Manning, India & more

By admin

On May 04 2010

In Uncategorized

BP continues to make headlines for its abysmal failure in containing the oil spill that is wreaking havoc on Louisiana’s coastline, leading some to call for a stop to offshore oil projects. But Jad Mouawad in the NYT’s Week in Review (The Spill Vs A Need To Drill) interestingly writes, “whatever the magnitude of the spill…it is unlikely to seriously impede offshore drilling in the Gulf.” We need energy and oil is a big part of that need.

Alternatives like wind will not replace oil overnight, if ever; add that to the fact that the U.S. is slow to embrace alternatives like wind – note the battle over Cape Wind, the plan for windmills in Nantucket Sound (see piece in NYT). Some are big believers. I wrote a piece on one-time billionaire Jack Manning who five years ago began the big push to get wind credits because he believed windfarms would be ubiquitous. Though he caught an initial gust of support — in a report from the American Wind Energy Association, the U.S. led the world in wind power installations and had a record year last year, by installing over 10,000 MW — so far, for the first quarter of 2010, the US installed 539 MW of new wind capacity, the lowest value since 2007.

The fight over power generation is being fought worldwide. Author Megha Bahree starts off our guest writer series this month with her look at what is going on in one section of India where billionaires are battling locals.

Table Talk – Mombasa; seals; the culture of “I”

By admin

On Apr 29 2010

In Green

I have become history obsessed of late. I am writing a piece for a trade organization, The Project Management Institute, and came across this interesting factoid which I though I’d share. It is about the Port of Mombasa in Kenya which is a transport and trade hub for East Africa “The port traces its history back many centuries to a time when dhows (traditional Arab sailing vessel) called at the Old Port on the north side of Mombasa Island. The Old Port is next to Fort Jesus,which was built by the Portuguese navigator Vasco da Gama. This was during the famous spice trade between the Arabian Gulf,the east coast of Africa,the Indian subcontinent and the Far East when navigators were looking for a new route to the Far East.” It’s not usually how we think of Kenya with its recent turbulence, but it’s good to remember.

As we close the business of green month, I want to give a shout out to the New York Aquarium. I was recently there on a school trip with my daughter and was really impressed with the exhibits, and with the seal show. Throughout all they sent the message of saving the environment, an important message children should hear from early on.

Finally, I read an interesting piece in the New Yorker, “Go West” by Peter Hessler. I originally thought it would be a cowboy story, but it turned out to be a look at America’s culture of “I” (in which by writing this blog I am unabashedly participating) – how most people like to tell the story of themselves and the contrast to the culture in China where no one talks about “I”. Is there something we can learn from holding back?

Paving the way for sustainable business in Latin America

By admin

On Apr 29 2010

In Green

Many years ago, when I first began doing research for Forbes billionaires, I ran across Swiss billionaire Stephan Schmidheiny. He had inherited his fortune, but had taken his thoughts on business to the next level after starting businesses in Latin America and seeing their environmental impact. He started the World Council for Sustainable Business Development by personally travelling around and getting fellow CEOs to sign up to be a part of developing sustainable programs for their companies. Check out the website, it’s a great resource.

I was more impressed with his idea to dedicate the profits of his GrupoNueva business to his non-profit, Avina, and create a symbiotic relationship with the goal of promoting sustainable development in Latin America. What does that mean? Is it more than words and nice websites? I wrote about it in my piece, “The Bill Gates of Switzerland.” Up to $30 million in profits from GrupoNueva is transferred to Avina annually and dedicated to developing leaders in Latin America who are striving for solutions to the continent’s problems.

I spoke with Martin Burt, Executive Director of Fundación Paraguaya, for the piece and he told me a story about Schmidheiny that never made it into the story. Burt had met Schmidheiny when he came to open an Avina office in Paraguay’s capital, Asuncion. He went with him to the Mburicao stream which flows into the Paraguay River. Slaughterhouses (Paraguay is a beef producing country) were dumping untreated water full of blood into the river. “There were falls of red water. It was grotesque,” Burt told me. He recalled Schmidheiny stepped into the pools of blood, and started to brainstorm ways to solve the problem. Eventually he helped support the eco-efficient solution to take the dried blood and export hemoglobin.

Avina has granted upwards of $400 million to date finding such solutions. GrupoNueva also does its part, not only by funding Avina, but also by acting in a socially responsible way.

I asked Roberto Salas, the new CEO of GrupoNueva, to write about what he sees as GrupoNueva’s goal and message, and you can find that in this week’s Speakers’ Corner. A nice way to end our Business of Green month!