Petersburg is the most beautiful city in Russia. Before the communist revolution of the year 1917, it was the capital of the Russian Empire. In contrast of many other Russian cities, the Communists did not completely destroy the entire old part of Petersburg.
The numerous churches and palaces were converted into museums and administrative buildings. I love this city more than any other city in Russia.
Our company supplied many factories in the Petersburg region with paper, pulp, paperboard and wood. To manage our business well, we established our headquarters in this city.
The first months we rented the office of a school, then we bought our own building in the center of the city. Our family moved to Petersburg, but our parents and siblings stayed in Novodvinsk.
The company grew faster with headquarters in the second largest city in Russia. There we hired the best professionals, had better communications with the whole country and expanded our contacts.
Very soon, after our relocation, there was a serious crisis at the paper mill in Kamenogorsk, which is located about 200 kilometers from Petersburg on the border with Finland. We supplied this factory with pulp to produce paper.
One day, the director, who was the largest shareholder of the factory, disappeared. Unknown people took over the factory. The factory had a great debt to our company because of the pulp.
I contacted the new director and he told me he has order from the new shareholders to not pay our debt. It was a hard blow for us. It was millions of dollars.
I began to investigate what happened. It was clarified that the new shareholders were a criminal structure, which threatened to kill the director and legitimate owner of the factory so he escaped to Israel.
The new shareholders falsified the documents to take over the factory and filed a bankruptcy proceeding to pay no debt. Their plan was to sell the factory later. It was a series of serious crimes with the purpose of winning several million dollars.
We became other victims of this crime. We decided to fight to recuperate the money and get justice.
It was almost impossible to win against a powerful criminal structure, which acted against us in its own region, where we had just arrived.
It is difficult to imagine that even the judges refused to accept our complaint against this criminal structure that acted in that brutal manner and had a certain level of power in the region. But the ways of God are divine.
I happened to met some people who had their security agency in Petersburg, one of the strongest in those days. They were not bandits, like most. They were veterans of the army and the police.
We created a friendship. When I told them what had happened in Kamennogorsk, they decided to support us in this struggle.
Our lawyers filed the complaint against the fraud that was made. I managed to persuade the legitimate owner of the factory to return to Russia and testify in court. We give him guarantees of his safety. The fight was dramatic.
At one point they kidnapped one of our leaders. We release it, showing the bandits our effectiveness in defending our interests. Several years later we spoke in a private situation with an FSB officer.
He told me that his organization was watching our war and no one believed that “the young man from another region could beat such a powerful structure.” He asked me curiously, “How did you do it? “. I replied:
“Sincerely, it is not our thing, it is God’s thing”
In the end we won the legal process and the shares were returned to the legitimate owner. He was still in danger, that the bandits were going to take revenge, so he proposed us to buy his shares.
It was not our initial purpose, but we accepted it. The fight against the criminal structure was won, but they left the factory without financial resources and with a great debt. The machinery was worn and ruined.
The new stage of our career began. We had to learn to manage the industrial plant of paper production. It was not easy, I had no experience and I needed to learn many things to achieve the new goal.
In spite of everything, we found an original idea. At that time, no one in Russia produced special paper to print books for children with many paintings.
An important publisher proposed me to produce this kind of paper saying that at that time they bought it abroad.
Together with a good engineer, who studied with me at the university, we were able to adopt the technology to produce this special paper in the factory and we started production.
The result was excellent; many children’s books producers became our consumers. In the period of the conflict the factory stopped.
In a few months we managed to make it work again and increase its production. Thus our company began to become an important producer of paper in Russia.
In 1997 we changed the name of the company. Its new name was more symbolic – SZLK, which meant: The company of the forest industry of the north-west.
We chose this name because our company usually operated in this region of Russia and its specialty was forestry production.
We continued to manage the supplies of forest industry companies with raw materials, machinery, chemicals, wood and other products.
I must say that the Kamenogorsk factory, which we bought, was one of the oldest in Russia and needed complete modernization. It had no waste treatment plants, the whole machinery was 50 years old on average.
There was no automation and a lot of manpower was used. We discovered that the USSR industry Ministry had plans to close this factory in the year of 1992. The bankruptcy of USSR let to live this old factory.
We realized that in a short time all the machinery was going to be ruined and, in addition, at that time, the technological level was so delayed, that would not allow us to compete in the free market.
Many people told me that I had to sell that old factory for someone else to solve this problem.
But, we made the decision to stay with the factory and do a rebuild. This forced us to spend all our gains on rebuilding.
We formed a good team of engineers to work on the reconstruction project. Our profits were not enough to do the whole project at once. We did it in parts.
In the first stage, we build waste treatment plants and close the circle of water. Thus we finished messing up the precious river Vuoksa in which the factory used to throw its dirty waters.
In the following stages we did the modernization of the machinery and automation of the process. To learn what to do, I traveled extensively to modern factories in developed countries, such as Finland, Germany, Sweden, Austria.
The paper industry in these countries – was the best in the world. Watching their factories, I realized, the huge delay in industrial development Russia had compared to these countries.
This was how I recognized the great work that had to be done to get closer to them, at an industrial level.
To achieve this goal, we direct our company, hire the best professionals, create the employment links with scientists and industrial institutes.
By learning the new technologies and working methods of the developed countries, their systems of economic management, I changed my opinion about our economic and political system so delayed and inefficient in Russia.
The idea was born, that managing our company we can create a good example of the development and contribute to improve the country.
Our financial results were impressive. The company was successful. We began to be invited to professional conferences and meetings with regional and state authorities.
Irina was appointed as head of our board of directors and represented it at meetings with the government and at conferences, also covering sociological, environmental and later infrastructural development. Her role was vital in forming a safe climate with social support. She liked advertising.
She is an excellent speaker and makes good speeches. She has a knack for convincing people and maintaining the public image.
I was general manager and dedicated myself to manage the company in production, trade and development. Thus we divide our responsibility and functions.
Our business grew fast, despite all the problems, but the country in the time of Yeltsin was sinking in the new crisis. Corruption drowned the country. Oil prices were at their lowest levels. The first war against Chechnya was lost.
The State increased its debt and was unable to repay. In August of 1998 the Russian state declared its default, which meant that it could not pay its obligations.
Many private banks, which lent money to the State, broke. The same thing happened with many companies.
The Russian currency-rubble, lost its value four times for a few days. Most of the Russian companies filed for bankruptcy. We lost a lot of money at that time because many of our debtors broke and never returned anything.
What saved us in that crisis was our factory. Many consumers wanted to buy our paper, because the imported paper became too expensive. So production increased and that allowed us to overcome the crisis.
Practically, our company was one of the few that continued to thrive during this difficult period. In the midst of crisis, we bought several companies – suppliers of wood in the region of Arjanguelsk increasing our ability to supply our customers with wood.
The Roller Coasters – Chapter V