Ummc – Ural Mining and Metallurgical Company
The second player which we would investigate is UMMC. The company is based in Verkhnyaya Pyshma. It is the second largest copper producer in Russia. The company owns about 50 companies located throughout Russia.
Ownership
The holding company was formed around joint-stock company Uralelektromed in 1999. The main owner of the company is Uzbek billionaire Iskander Makhmudov. It is hard to find direct connection between Iskander Makhmudov. However, according to some sources8, He worked for various Soviet military organizations in Libya and Iraq. His first position in business was with the Trans-World Group, which was at that time the largest metal trader in Russia. Given his Soviet military employment history we could say that he made his first business contacts in state administration during that period. It is possible that those contacts helped him to access Russian market and to acquire UMMC. Furthermore, it is possible that those structures could influence him as owner of UMMC, and in that way they could influence strategy of the company.
Internationalization
In this moment company is present only at the Russian market. The only aspect of its internationalization is export activity. The company exports over 50% copper powder (European market). Nevertheless company has a lot of assets which it plans to invest in this and following years. According to Russia & CIS Business & Financial Daily, the company might budget approximately 60 billion rubles in 2013 for investments. One of future plans is diversification and involvement into another industry - According to SKRIN Market & Corporate News, the company plans to develop a new regional jet by 2015. The aircraft will be manufactured in a Czech Republic-based plant. All tests are planned to be completed in 20139.
In case of UMMC we were unable to find any clear bound between government and the company.
Russian copper company - Русская медная компания
Russkaya Mednaya Kompaniya (RMK) was founded in 2004. It ranks third in cathode copper production and second in copper wire rod production in Russia. Currently, its accounts for 16% of Russia’s total copper production and about 1% of the world copper production. The general strategy of the company is reasonable conservatism including well-thought through decision making, accuracy in innovation risk management and elaboration of prospective lines of development according to emerging market, social and economic trends.10
Ownership
The main owners of the company are Игорь Алтушкин (80 %) и Руслан Байсаров (20 %). There is no evidence that company is influence by the government. We could just make similar assumptions like in the previous cases.
Internationalization
The company operates in four Russian regions and in Kazakhstan. The company is fully vertically integrated. Main clients of the companies are located in Europe and South-East Asia.
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Obviously, company internationalized mostly through the green field investments, in neighboring Kazakhstan. Investments were very successful, and company was able to acquire new sources of raw materials as well as possibility of cost-efficient strategies due to cheap labor force. Company experience and professional management were main advantages during internationalization process. No clear evidences of government involvement in the process. Nevertheless, possible indirect advantage due to the fact that Kazakhstan as CIS country and former SSSR country has close political connections with Russia.