Melnichenko, Andrey Igorevich

Education

Andrey Melnichenko was born on March 8, 1972 in the city of Gomel, Belarus, in a family of teachers. Being a gifted child, he entered the specialized educational and scientific center of Moscow State University named after MV Lomonosov ( SUNTs Moscow State University ), and in 1989 - at the Physics Department of Moscow State University. Later he transferred to the G.V. Plekhanov Russian University of Economics , and he graduated with a degree in Finance and Credit ^[1] .

Banking and investment in industrial assets

While studying at the university, he began to do business with fellow students, opening a currency exchange office directly on the territory of the hostel. In the early 1990s, amid the collapse of the Soviet Union and the emergence of a new market economy, Melnichenko and his partners earned the first 50 thousand US dollars from the activities of currency exchange points, which allowed them to obtain a license from the Central Bank of Russia.

In 1993, he became a co-founder of MDM Bank , which later became one of the most successful and largest Russian private banks. In 1993-1997 - Chairman of the Board of Directors of MDM Bank. The bank switched to buying foreign currency in the interbank market, developing the market for derivative financial instruments and debt instruments. The bank expanded through mergers and acquisitions, integrating the business of seven regional banks. At the same time, he did not take part in post-Soviet privatization programs or collateral auctions of the 1990s. In 1997, he bought back the shares of MDM Bank from its partners, became the sole shareholder and chairman of the bank. From 2001 to 2005 - Chairman of the Board of Directors of MDM Bank. Gradually, it became one of the largest private banks in Russia in terms of total assets and the first in the issue of Russian corporate Eurobonds. Under the direction of Melnichenko, MDM Bank was recognized as the Bank of the Year by The Banker magazine in 2002-3, and Euromoney (in 2003) and Global Finance (in 2004) called it "the best Russian bank." ^{[1] [2] [3] [4]} .

In 2000, he became a co-founder of MDM Group for investments in industries:

• coal mining and processing,
• mineral fertilizer production,
• pipe production.

This strategy was implemented through the acquisition of more than 50 joint stock companies, factories and mines. Melnichenko identified private enterprises owned by various owners, which allowed him to form three separate companies: SUEK , EuroChem and TMK (he left the latter's business in 2006 through an IPO). In 2001-2004 - President of the MDM Group ^{[1] [2] [3] [4]} . In 2007, he sold the remaining shares of MDM Bank to MDM Group partner Sergey Popov, concentrating on the development of industrial assets in the field of fertilizers and coal. Having completed its asset consolidation mission, the MDM Group ceased to exist ^{[1] [2]} .

Eurochem

Melnichenko became chairman of the board of directors of the mineral and chemical company Eurochem in April 2004. In 2007, became the main shareholder of Eurochem. When the company was founded, the assets acquired consisted of several nitrogen plants with Soviet-era equipment and a phosphate mine under threat of closure. Under the leadership of Melnichenko, EuroChem has evolved from a set of scattered, suffering from a lack of financing of Russian assets into one of the world's largest high-tech producers of mineral fertilizers ^{[2] [19]} .

One of EuroChem’s key enterprises, Novomoskovsky Azot, has become Europe’s largest urea plant, where granular urea production was launched for the first time in Russia. New modern production facilities were built from scratch in Nevinnomyssk (including the first melamine plant in Russia) and Kovdor (including the apatite-staffelite ore processing complex). EuroChem assets have been certified according to international ISO standards. Modern terminals were opened in the port of Sillamae (Estonia) and the port of Murmansk was modernized. Laboratories acquired in Germany in 2011 complement similar facilities in Russia and other countries and are engaged in the development of second-generation fertilizers, including innovative delayed fertilizers that help reduce the environmental impact of the agricultural sector ^[19] .

Eurochem acquired licenses for the development of potash deposits in Volgograd (2005) and Perm (2008) to create two large potash plants ^[19] .

In 2015, Eurochem moved its head office to Switzerland to raise capital for investment projects and ensure international growth. The company has production, logistics and distribution facilities in Russia, Belgium, Lithuania, Estonia, China, Germany, Kazakhstan and the USA. At the same time, the company continued to pay taxes in Russia, where its many production assets are located. Eurochem sells its products in more than 100 countries. The Group raised funds in international capital markets for investment. In 2016, Eurochem made an investment in Agrinos, an organic plant nutrition company, as part of a research and development investment plan that will lead to the creation of a new generation of products. In addition, Eurochem continued to expand its distribution network in the world, acquiring units in the United States, Argentina, Brazil and Hungary. The company is developing second-generation eco-friendly fertilizers, including long-acting fertilizers, to help minimize environmental impact in the agricultural sector. One of Eurochem’s fertilizers, Entec 26, was the only product of its kind recognized by the carbon exchange in Switzerland, that is, the contribution of advanced specialized fertilizers to reducing greenhouse gas emissions from agricultural sources was first recognized ^{[19] [20] [21]} .

EuroChem is the largest Russian producer of nitrogen and phosphate fertilizers and one of the world's largest exporters of fertilizers. The company produces specialized premium class fertilizers, including long-acting fertilizers, and launches two large potash projects with a planned production of more than 8.3 million tons of potash fertilizers per year, which corresponds to 10% of their world production, and is also considering plans for the production of ammonia and carbamide in the state of Louisiana (USA). According to Melnichenko, Eurochem's goal is to become a company that “creates and promotes high-tech fertilizers” ^{[3] [19] [22] [23]} .

Since April 2015, Andrey Melnichenko has been Chairman of the Strategy Committee of the Board of Directors of Eurochem Group. According to data for 2019, it controls 90% of the company's shares ^{[6] [14]} .

SUEK

Melnichenko became a member of the board of directors of the Siberian Coal Energy Company (SUEK) in February 2005, and chairman of the board of directors in June 2011. In the same year, the creation of the Siberian Generating Company (SGK) energy assets based on the energy assets allocated from SUEK took place. In 2013, Melnichenko became the main shareholder of SUEK and SGK ^{[2] [14]} .

The assets acquired during the formation of SUEK were problematic - the production capacity of enterprises did not exceed 30 million tons per year, 70,000 miners were employed at the enterprises, but productivity was low and coal export was practically absent. Equipment wear averaged 90%. In the first years of the company’s existence, SUEK assets were modernized, debts were paid off, wages and taxes began to be paid, a modernization program was launched with the re-equipment of all production units of the company with modern equipment. Old mines and worn-out equipment were transformed into modern enterprises. Several enrichment plants and modules using the latest coal processing technologies were commissioned, which enabled SUEK to produce highly enriched coal with a low content of impurities. SUEK has built new modern bulk terminals and modernized seaports, as well as Russia's first station for the conversion of mine methane into thermal energy as part of the implementation of the Kyoto Protocol agreements. The first intelligent dispatch center in Russia was built, which monitors the work of all enterprises and monitors the whereabouts and well-being of miners underground ^{[1] [24]} .

After the consolidation of energy assets, Melnichenko created the Siberian Generating Company (SGK) - initially as part of SUEK, and then singled it out as an independent generating company. SGK provides from 35% to 78% of electricity consumption in the regions of presence in Russia. It is the fourth largest producer of thermal energy in the world ^{[24] [25]} . In 2018, SUEK consolidated SGK, strengthening the position of SUEK as one of the largest energy coal companies in the world ^[5] .

Under the leadership of Melnichenko, SUEK has become the leading coal producer in Russia, operating in seven Russian regions, and the third largest exporter of coal in the world (in reserves and sales) with a distribution network in 38 countries, including in the Asia-Pacific region, where Coal plays a key role in improving people's access to energy. SUEK produces more than 100 million tons of coal per year, and its proven coal reserves amount to 5.4 billion tons. SUEK is the largest coal producer in Russia and one of the world leaders in the supply of high-quality steam coal ^[26] .

According to the Financial Times in 2017, according to the Center for Clean Coal of the International Energy Agency (IEA), “SUEK, a leading Russian exporter of high-quality steam coal, has invested in modern, powerful coal purification plants and has dust control technologies in all coal ports” ^{[27 ]} . According to Bloomberg, SUEK is Russia's largest producer of high-quality steam coal. According to Melnichenko, SUEK focuses on “high-quality coal, which gives less emissions” ^{[3] [28]} .

Andrey Melnichenko is the main shareholder of SUEK (which directly owns SGK). According to the data for 2019, it controls 92.2% of the company's shares ^[14] . Chairman of the Strategy Committee (non-executive director) of the Board of Directors of SUEK - since April 2015 ^[7] .

In 2019, Andrey Melnichenko took the eighth position in the ranking of “20 richest Russian businessmen” published by Forbes magazine ($ 13.8 billion) ^[29] .

According to Bloomberg, it has a fortune of $ 13.9 billion ^[14] .

Among the assets of Andrey Melnichenko:

• Eurochem Group is one of the world's largest producers of mineral fertilizers and the largest producer of mineral fertilizers in Russia. The beneficial share of Melnichenko in Eurochem Group is 90%. ^[thirty]
• OJSC Siberian Coal Energy Company is one of the largest coal energy companies in the world, the leading producer of coal, heat and electricity in Russia (LLC Siberian Generating Company is directly controlled by the Russian company SUEK). The beneficial share of Melnichenko in OJSC SUEK is 92.2%

Melnichenko is the main shareholder and chairman of the strategy committees of the boards of directors of EuroChem ^[31] and SUEK ^[25] .

According to the data for 2019, Eurochem and SUEK invested more than $ 21 billion in the economy and development of the industrial sector of Russia. ^{[8] [9]} More than 100,000 people are employed in companies ^[8] . According to the rating of Expert magazine, Andrey Melnichenko is the most active private investor in the non-oil sector of Russian industry (20% of the total volume of investments made by all non-oil and gas companies in Russia in 2012-2017) ^{[10] [11]} .

Investment style - building leading companies in the relevant market segments and creating an environment within such companies that ensures long-term value creation. Risks are offset by the construction of a balanced corporate governance system ^{[2] [26]} .

Since 2007, he has been a member of the board of directors of the Russian Union of Industrialists and Entrepreneurs (RSPP). Andrey Melnichenko is the chairman of the RSPP Commission on the mining complex. ^[32]

The activities of the Andrey Melnichenko Foundation are aimed at creating scientific and educational centers for natural sciences, supporting talented youth in the regions where his companies are present, and creating social elevators in Russia ^{[1] [33]} .

According to RIA Novosti, Andrey Melnichenko is one of the main social investors and philanthropists of Russia. ^[17] Melnichenko companies are recognized as leaders in the annual Leaders of Corporate Philanthropy contests and have invested about $ 500 million in charity and social programs ^[16] . In 2016, Andrei Melnichenko for his charitable and social activities received the Russian state award - the distinction "For beneficence" ^[17] . According to Bloomberg , it is one of the largest philanthropists in Russia, its companies are in 5th place in the ranking of corporate charity (102 million US dollars) ^[18] .

The main areas of charity for companies are sports development, health care support, programs in the field of science and education, development of social initiatives in the regions where the enterprise operates ^{[34] [35] [36]} .

In 2005, Melnichenko married Serbian citizen Alexandra Nikolic, a former Serbian singer and model ^[37] . They have two children - daughter Tara, who was born in 2012, and son Adrian, who was born in 2017 ^[14]

Andrey Melnichenko owns the motor yacht “A” , designed by Phillip Stark and built by ThyssenKrupp Marine Systems at the HDW shipyard (Kiel, Germany). It was launched in the summer of 2008 after four years of construction. The displacement of the yacht is 6,000 tons, length 119 m, width 18.87 m, two engines of 12,000 liters are installed on it. with., on a yacht 14 berths. In 2017, the new sailing yacht “A” left the slipway in Germany . Its displacement is more than 12,000 tons, width 25 m, length 143 m. The largest sail area is 1767 m² ^{[38] [39]} According to media reports, the sailing yacht A and motor yacht A reflect “the same commitment to high technology and attention to the details that helped him become one of the youngest entrepreneurs of the new generation in Russia ” ^[3] , and represent“ significant investments in the design of marine vessels, marine engineering developments and technical solutions, and stimulate innovation and scientific achievements in the shipbuilding industry, overcoming gr Nitsa potential and opening up new horizons " ^[40] . It is expected that part of the costs incurred will be reimbursed by licensing the technologies developed during the design for subsequent commercial use ^[41] .

• 2016 - The distinction "For Good Deed" (June 11, 2016) - for his great contribution to charitable and social activities. ^[17]
• 2019 - Order of the Star of Italy of the Commander degree (June 7, 2019) - state award of the Italian Republic, "for special merits in the development of dialogue and economic cooperation between Italy and Russia." ^{[42] [43] [44]}

• Eurochem Group
• SUEK Group
• Andrei Melnichenko Foundation