Alijan Ibragimov: Oil and Metallurgical Business

By  //  April 3, 2020

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Alijan Ibragimov: Oil and Metallurgical Business

Alidjan Ibragimov has been in business for 30 years. During this time, he led the production and sale of plastic bags, the management of automobile repair and spare-parts selling companies, reanimated factories, and developed the Eurasian Bank and Eurasian Resources Group.

Having achieved success in all these areas, the entrepreneur concentrated his effort on the oil refining and metallurgical business.

Despite the fact that the management of such enterprises is loaded with risks and “shocks” associated with continuous geopolitical changes.

Alijan Ibragimov- the first major purchase and substantial profit

For several years of managing the production of granite and marble, polyethylene products, auto parts, reselling TV sets with video recorders, Alidjan Ibrahimov decided that it was time to earn big money.

It was then that at his own risk he made a major purchase – 100,000 tons of oil from Bashneft for the purpose of further resale. This deal cost a very serious amount – 300 million rubles.

There were problems how to transport it: trade-permitting documents were issued in Kazakhstan, and Transneft could not be obtained access to the consumer delivery system. Then Alidjan Ibragimov asked Patokh Shodiev for help.

At that time, the latter served in the Ministry of Foreign Trade of the USSR. Therefore, he managed to suggest a solution to this question – he was well versed in document management and logistics, and also had extensive connections not only in the Russian Federation, but also abroad.

Alidjan Ibragimov was able to sell petroleum products through the KazMetallExport cash desk, owned by Transneft. The selling price was nevertheless favorable.

The entrepreneur liked working with oil. In his opinion, this energy resource is one of those that brought and still brings the greatest profit.

Of course, the businessman made a lot of efforts to achieve a satisfactory result: he traveled to different parts of the Republic of Kazakhstan to negotiate with oil refineries and oil traders.

Negotiations were going quite difficult because few could help with the transportation of “black gold”. This problem completely fell on the shoulders of a Kazakhstani entrepreneur.

In addition, almost all oil companies wanted to receive cash payments: in order to pay wages to employees of their enterprises.

Only the presence in Transneft helped organize the transportation of petroleum products to the necessary places.

Other oil refineries had problems with delivery to the final consumer: Transneft did not want to let anyone into the transportation system, because it was not clear where to store oil extracted in the Russian Federation.

Alidjan Ibragimov: development and formation of the metallurgical business

In 1994, Alidjan Ibragimov read in the newspaper “Kazakhstanskaya Pravda” information that the leading enterprises of the state industrial sector – Sokolovsko-Sarbaisky aluminum and Aksu ferroalloy plants can go bankrupt at any time.

Then the entrepreneur told his business partners (Patokh Shodiev and Alexander Mashkevich) that they all had a chance to create a powerful business.

Then the future “Eurasian troika” made a plan on how to reanimate those weakened enterprises. For this purpose, it was necessary to turn to the leadership of Kazakhstan so that it would allow entrepreneurs to tackle the salvation of industrial giants.

By agreement, if successful, a trio of entrepreneurs would have at their disposal control packages of securities of the flagships of Kazakhstani enterprises.

Businessmen have done a lot of work to improve the factories:

• paid wages to workers who had not seen living money for half a year already;

• repaid debt to suppliers of raw materials and consumables;

• paid the cost of rail transportation.

At that time, the debts of the Sokolovsko-Sarbaisk and Aksu factories amounted to 100 and 300 million US dollars, respectively. The leadership of Kazakhstan accepted the proposal of the “Eurasian trio” to help the plants without much enthusiasm.

But they said that it is still possible to consider the application. The decision-making process involved even the Kazakh president personally, connecting to the solution of the issue the then Prime Minister Akezhan Kazhegeldin.

After a thorough analysis of the situation, the president gave to three business partners Aksu Ferroalloy Plant for rehabilitation.

At the end of 1994, Alidjan Ibrahimov, together with his colleagues, arrived at the enterprise and launched a vibrant and efficient activity there.

There were many unpleasant moments, including provocations, sabotage and opposition. But a team of entrepreneurs, by a willful decision, changed the managerial staff of the plant and began to manage the enterprise’s finances themselves.

Then the businessman, together with Alexander Mashkevich and CEO Almaz Ibragimov, literally lived for several months at the factory. They used to spend the nights then in a room intended for the director’s relaxation.

By the middle of the next year, the ferroalloy plant was firmly on its feet. The debts were paid off, people received salaries, the production of alumina rose to levels comparable to those in the Soviet era.

For the work done, Alidjan Ibrahimov and his business partners received a controlling stake in the enterprise as agreed.

Rescue of Sokolovsko-Sarbaisky aluminum plant

Then the “Eurasian trio” revived the Sokolovsko-Sarbaisky aluminum plant. This one took even more effort. The implementation of the resuscitation package of reforms at the enterprise took about nine months.

They had to face a lack of understanding on the part of the management of the Magnitogorsk Iron and Steel Works. But in the end, the enterprise was restored, and a team of entrepreneurs received at their disposal a controlling stake of the shares.

Alidjan Ibrahimov and his two partners now own almost 60% of the shares of Eurasian Resources Group. The group of companies is constantly growing and developing, while bringing a stable profit.

Geopolitical upheavals did not shake her, although, of course, brought a lot of problems. But hard-working shareholders are not afraid of any political cataclysms.