Rinat Akhmetov is Ukraine’s richest businessperson. For years he’s been a very controversial figure on the Ukrainian political, economic and media scene – the quintessential oligarch and power broker for many, a leading employer, investor and benefactor for others. How has Russia’s savage war against Ukraine affected him, his business and his views?
In order to find out about this, the connection with Mariupol and thoughts on the prospects for the future, Kyiv Post obtained an exclusive interview with the key long-serving spokesperson for Akhmetov’s SCM investment group, its Chief Reputation Officer, Natalya Yemchenko.
The interview was conducted on 6 May 2022 by Kyiv Post’s correspondent Aleksandra Klitina.
Klitina: We are all horrified by the death and destruction that Russia's war against Ukraine has brought. But for your company and its owner, Rinat Akhmetov, with your significant interests in the Donbas region, especially Mariupol, what has happened in the last two and a half months must have been a particularly devastating blow?
Yemchenko: Maybe I should begin with the story of how we met this war. On February 23, in the late evening hours, a big meeting was held between the president of Ukraine and representatives of big business in his office. It started at 06:00 p.m. The 50 most important entrepreneurs were present at the round table. The meeting lasted one hour, and we received very detailed information from the president, that the situation was very complicated. Russia could invade Ukraine at any moment. But we did not believe that it would happen. This was less than 12 hours before the invasion. SCM delivered our message to the president as the biggest national investor in Ukraine, that we are with our country, government, and people. That we will support our country. After 12 hours had passed, we all experienced the start of the war at home in our beds. The top management of SCM, workers, and our shareholders were all in Ukraine at that time.
It was not the first invasion of Ukraine; it's the second cycle of the war which began in 2014. I would call it the bloody turbulence which began eight years ago. From the point of understanding what was going on, we were ready. We have dramatic, but essential experience of relocating our enterprises, acting under uncertainty. On February 24, we began to act.
Klitina: How did your boss and SCM respond to this apocalyptic challenge?
Yemchenko: From the very start, SCM’s shareholder took a principled position which Mr. Akhmetov shared with Radio Liberty in the first few days – this is military aggression from the Russian Federation against Ukraine. It's a war crime, and Putin is a war criminal. We will support Ukraine and the Ukrainian people, our cities, the territorial defense, and the Armed Forces of Ukraine.
Everything was clear from our side from the very beginning. SCM sticks to this position every single moment and acts as a patriotic business group supporting Ukraine in every possible way.
SCM has a strong voice in international markets as a global player and explains what is going on in Ukraine. It's crucial that we do not allow the world to forget about this war, normalize it, or accept it as something normal. It’s not normal. It’s a tragedy for Ukraine and for the entire civilized world. This became even more evident for the civilized world after Bucha and Irpin. It’s not just a war crime; it’s a tragedy on a world scale. The same story with Kramatorsk railway station. It was a very cynical attack. But the biggest tragedy in the south of Ukraine is Mariupol. We regard it as a genocide of the Ukrainian nation. We’re sure that the main aim of this war is to exterminate the Ukrainians as a nation.
Klitina: Regarding the Russian siege and destruction of Mariupol: SCM owns the Azovstal [iron and steel] plant, which has remained the center of Ukrainian resistance in the city and the main target of the Russian invaders. What is the official position of SCM on this?
Yemchenko: From the very beginning, Mr. Akhmetov stated that Mariupol was and will remain a Ukrainian city. Our plants Azovstal and the Illich plant in Mariupol will never operate under Russian occupation. Mariupol is virtually destroyed. It’s destroyed much more than it was after World War II. It’s destroyed in a very cynical and obnoxious way.
The main aim of the Russian army's operation was to punish the city for its patriotic position in 2014. Mariupol was one of the cities that were attacked in the spring of 2014. At that time the people of Mariupol decided to defend their Ukrainian identity. After that, the city experienced eight years of development and prosperity. Mariupol became the symbol of how great a Ukrainian city can look in Donbas under good management and support from its population.
Klitina: Did the workers of the Azovstal enterprise manage to evacuate themselves before Russian troops blocked the plant? Has SCM assisted in the evacuation of any of its staff from Mariupol?
Yemchenko: From the first days, we tried to evacuate our workers from Mariupol, organized special buses that were ready to collect people, and ran hundreds of bus routes in the first couple of days of the war, which were possible. After Russian troops did not allow us or anybody else to evacuate people by bus, we continued evacuating people using private cars unofficially with volunteers ready to take the risk and rescue people.
Unfortunately, we didn't have the chance to organize a large-scale evacuation process. SCM management wasn't ready for such a blockade of Mariupol from the first days of the war.
There are 11,000 people who used to work in Azovstal, and it is a fortress.
Since 2014, we have begun to restore bomb shelters that have been left over since Soviet times. There were dozens of them under each division at the plant. There could be 12,000 people at the same time. We realized that in the event of danger, we could save people from the city. The five bomb shelters were designed to withstand a single direct nuclear strike.
SCM organized a strategic reserve – water, food, medicine, and generators. We created the infrastructure for people to stay in Azovstal shelters for weeks.
At present the SCM group has contact with only 4,500 Azovstal workers out of 11,000. At least 150 people have died, and thousands are missing. There are entire families of employees in bomb shelters at Azovstal.
In cooperation with the Russian military, UN and the Ukrainian government the first official evacuation from Azovstal was organized. There are 500 people who have already been evacuated. I hope to find some of our workers alive and safe in a couple of days in Zaporizhzhya.
SCM will offer employment to Azovstal employees. 4,000 vacancies have already been prepared at the group's enterprises and 6,000 places for temporary migrants.
Unfortunately, most workers remain in Mariupol, and according to the Mayor of Mariupol, 25,000 or even 30,000 people have died. These numbers are correct - the scale of the tragedy is unbelievable.
Klitina: What impact has the war had on the SCM group? Has the company calculated financial and asset losses since the war began?
Yemchenko: It’s too early to make precise calculations while the war is in progress. The war could take time to end. People first – this is what we are focused on now: helping people, cities, and our country. We have already donated more than $72 million to the Ukrainian people since the beginning of the war—we transferred this money to the government and people in the form of humanitarian aid and defense. Since the beginning of the war, SCM has been donating approximately $1 million per day. Before the war, SCM transferred $9 million in prepaid taxes to the state to help the government. Our potential losses in Mariupol could, however, be assessed at approximately $10 billion. We will sue Russia.
Klitina: Almost the entire metallurgy industry in eastern Ukraine has been blockaded or destroyed by Russian troops due to the hostilities. Will it be possible to restore it after the war? Does SCM have a forecast for the investment needed to enable this sector to recover?
Yemchenko: The Ukrainian economy is shrinking, and our business is working at one-third of its capacity. A considerable part of the uncertainty is logistics - a massive issue for the Ukrainian economy. The workforce is the other important issue. More than five million people - women and kids - are out of Ukraine now. More than half of the Ukrainian population has moved from their homes. That is why it is impossible to make any projections so far. It's too early.
The situation has changed in all sectors – workforce, infrastructure, and markets. SCM will work to the maximum possible capacity to pay salaries and taxes and stimulate economic activities.
After this there will be the new challenges. It will be impossible to do many operations in the same way as they were done before the war. So, we cannot even talk about how much money we need to return to the previous "normal" situation for SCM as the biggest investor [in Ukraine].
We will build something new based on what we have. We are looking for new opportunities in the changing economic environment. After this war, SCM should become an even more substantial company.
After 2014 we lost 30% of our business, and eight years on, we became stronger, flexible, competitive, and more technologically advanced.
On February 24, the Ukrainian energy system unbundled itself from the Russian energy system, and on April 16, Ukraine became part of the European energy system. After excluding Russia from the EU energy market, Ukraine has become a significant player. The EU will look for new energy sources, and Ukraine has a lot to offer. It’s a historic opportunity to bring our resources and technologies as a partner of the EU.
The same situation exists in the steel sector. SCM already has a presence in EU countries: we have a factory in Bulgaria and the UK, and we compete effectively in these markets. The strategy of SCM is to become a strong global player on the steel market.
European integration is the most relevant and vital for Ukraine right now. Ukrainian enterprises will be forced to compete in European markets and become stronger.
The judicial system of Ukraine should be reformed, and EU ecological norms and decarbonization should be introduced. SCM is ready to play by European rules, support all the necessary institutional changes here in Ukraine, and be a reliable partner. SCM's future is an international one. European integration is not just a political decision. It's essential economically for Ukraine, and it will create a real positive change.
Klitina: Because the war brought massive destruction, our partners, the EU, US, and others are proposing a "Marshall Plan" for Ukraine. How do you see the implementation of this plan? In what ways could SCM help Ukraine to recover in a faster and more efficient way?
Yemchenko: Post-war rebuilding will create many opportunities. The goal of Ukraine is to use this opportunity most effectively. SCM and Mr. Akhmetov will not miss this chance to help Ukraine become a better country.
I am sure that SCM will play a big role in postwar rebuilding. It's not just Western partners working on a "Marshall Plan" for Ukraine. I already know of nine local business initiatives. It’s crucial to create a platform for cooperation and coordination. SCM is ready to support and provide our expertise, especially in the energy market. According to our government, $1 trillion should be invested in Ukraine after the war.
Mariupol is an exceptional city. Mr. Akhmetov said that he is ready to invest in rebuilding Mariupol. Mariupol is not only a symbol of tragedy. It has a story of a legendary defense and providing a very big contribution to our common victory.
From that point of view, there should be a separate "Marshall Plan" for this city. SCM is ready to cooperate with international partners. For example, Italy has offered to rebuild the destroyed Mariupol Drama Theater and make this fantastic city dream again.
Klitina: Has this terrible war brought Mr. Akhmetov and President Zelensky any closer?
Yemchenko: Mr. Akhmetov has no disagreement with the president. He has said publicly that "President Zelensky conducts his constitutional duties in a powerful and dignified way." SCM is a partner of the Ukrainian government and the president. It will do everything possible and impossible to stop this war and bring victory to Ukraine. Ukraine has done a fantastic job of stopping Russia. Our common goal with the president is to build a European, economically competitive and solid country. Hopefully, Ukraine will become part of the EU.
Klitina: Thank you for this interview. Slava Ukrayini!
Yemchenko: Heroyam slava!