Albert Shigabutdinov: ''TAIF style, in essence, is creation of new generation of people''
On 12 November, Albert Shigabutdinov, Director General of TAIF PSC, celebrated his 65th anniversary. Realnoe Vremya online newspaper has outlined the top 10 major achievements of TAIF director general that influenced the development in Tatarstan of petrochemical, oil refining, construction and other industries. Large-scale projects are implemented not in a vacuum, they first arise in the minds of extraordinary people, leaders with unbending will and determination. This can be said about Director General of TAIF PSC Albert Shigabutdinov, whose experience and talent of an entrepreneur helped to create the largest investment company of Tatarstan, bringing together key petrochemical enterprises of the republic.
From Kazan VTNPO to TAIF PSC
Albert Shigabutdinov already in childhood sought to achieve goals despite all the difficulties. As a child he had to deal with the consequences of a serious illness. The obstacles built his character — it is impossible to count them how many they were then. In the dashing 1990s, when the country was shifting to the building of new ownership relations, Albert Shigabutdinov with partners founded the Foreign Trade Scientific Production Association Kazan (Kazan VTNPO).
In times of total deficit, the company served the needs of Kazan in food and industrial products. Budding entrepreneurs were engaged in the import of office equipment, computers, furniture, vehicles. Through barter agreements, Kazan VTNPO supplied AvtoVAZ with tires.
The businessmen understood that industrial enterprises stood idle because of discontinued supply of raw materials. Besides, the quality of the products left much to be desired. ''We started working in business at a very difficult time — in the early nineties. The contacts with officials at the government level began later, when our company, the Foreign Trade Scientific Production Association Kazan, having stood on its own two feet due to sale of petrochemical products, began to understand that it needed more decisive ways and support at the state level to improve the regional economy, to pull the enterprises of petrochemical industry out of a deep crisis. It urgently required to raise the product quality, to increase output volume,'' Albert Shigabutdinov recalls.
In 1995, it was decided to reorganize Kazan VTNPO into TAIF PSC. First President of Tatarstan Mintimer Shaimiev green-lighted the decision. The regional leadership and the shareholders of the company assigned TAIF as an investment company to perform difficult tasks: to work on effectiveness of the regional companies. The activities of TAIF PSC subsidiaries now fall into five main areas: oil extraction, oil refining and petrochemistry, construction, telecommunications, services. The history of development of each of these areas is worthy of a separate book.
TAIF-INVEST reveals potential of securities market
As a visionary entrepreneur, Albert Shigabutdinov foresaw a huge potential and value of the stock market to create the new economy of Russia. TAIF leadership decides to create a professional participant of the securities market to represent the interests of the company in the new economic realities and to promote the integration of the group of companies in Russian and international economic space. Thus, in January 1997, TAIF founded the brokerage company TAIF-INVEST, which is involved in many joint projects with participation of the issuers of the Republic of Tatarstan to this day.
One of the first customers of TAIF-INVEST was the Chemical plant named after Karpov, which shares were introduced in the Russian trading system (RTS) and maintained by the company as a market maker — a trading participant responsible for the maintenance of prices, demand, supply and (or) volume of trading in securities. The company's specialists took part in the program of allocation of the regional companies' shares on domestic and international stock markets. In particular, in the program of issuance of American Depositary Receipts (ADR) for shares of the enterprises such as Kazanorgsintez, Nizhnekamskneftekhim, Nizhnekamskshina.
The company TAIF-INVEST took an active part in placing of bonds of the first in the republic cellular operator, TAIF-TELCOM JSC, of the trade mark Santel, which attracted additional funding for the project of construction and development of cellular network of the Republic of Tatarstan. Secondary market of these securities was organized in the RTS, which created a precedent for corporate bonds trading on this platform. Before that, only shares were traded on this biggest Russian stock market. Allocation of TAIF-TELCOM bonds on the organized market site was undertaken one of the first in Russia, along with the securities of the largest companies such as Gazprom, Tyumen Oil Company, and Lukoil. It was the project at the federal level.
TAIF-TELCOM: pioneer in cellular industry
The profit on operations on the stock market and trading operations was invested in major projects on the territory of the republic, in particular – in creation of the local cellular operator TAIF-TELCOM, working under the trade mark Santel. ''Realizing that we as market subjects couldn't do without quick and effective communication, we started thinking about creation of modern telecommunication services. We acted using the principle: if not we take this on, who will? Someone from outside? But why do they have to care about our problems, and how soon this hypothetical investor decides to do much good for us? In the end, we did all by ourselves. First, we launched the projects of mobile and fixed communication, later created terrestrial and satellite television and multimedia network, including cable television,'' Albert Shigabutdinov says in the book The First Stories About TAIF.
Of course, the process of creating from scratch the popular brand of cellular communication of Tatarstan was fraught with difficulties. It turned out that up to 95% of the stationary communication stations in Tatarstan was created 40-50 years ago. The outdated equipment made it virtually impossible to tie in the modern mobile communication systems with fixed networks. Moreover, for urban communication it was responsible the Kazan city telephone network, and for long-distance and international — Tattelecom. This separation complicated the situation even more. The whole industry needed to be reorganized. By the order of President Mintimer Shaimiev and Prime Minister Rustam Minnikhanov, the pioneer in the market of cellular communication of the Republic of Tatarstan, TAIF, was attracted to this process.
TAIF-TELCOM gradually became the first and chief in the Republic of Tatarstan cellular operator of GSM standard — the largest local company. The wide network of base stations covered almost the whole region. At the beginning of the 2000s, Santel to a certain extent was the hallmark of Tatarstan. Having developed the mobile direction, in 2003 TAIF gained $150 million from the sale of telecommunication business to the federal operator MTS, focusing on other activities.
A new impetus of Tatarstan petrochemical industry
In an interview, Albert Shigabutdinov admitted that the most difficult period for TAIF was the years 1997-1999. At this time, the company started reconstruction of the Nizhnekamsk chemical plant. In the late 90s, Nizhnekamskneftekhim was working on tolling scheme. TAIF leadership understood that improving the product quality of the enterprise was impossible without a serious upgrade of production technologies, and this in turn required large investments.
TAIF offered Nizhnekamskneftekhim JSC and Tatneft JSC to modernize the refinery in short terms. However, that time the oil and petrochemical leaders did not support the company in this project. TAIF took on reconstruction of oil refineries itself and came up trumps.
Today Nizhnekamskneftekhim is one of the largest petrochemical companies in Europe. The company is in the top 10 world producers of synthetic rubber. In 2016, it produced 670,000 tonnes of rubber, the main consumers of which are world giants such as Michelin, Pirelli, Bridgestone, Continental and Goodyear. The second major area of the company's work is the production of plastics such as ABS plastic, polystyrene, polypropylene and polyethylene. Over the past year it produced 730,000 tonnes of plastic, which allowed to almost fully cover the needs of Russian market in polypropylene and polyethylene.
In 2017, Nizhnekamskneftekhim marked the 50th anniversary with ambitious plans on building the largest investment project of the olefin complex with a capacity of 1,2 million tonnes of ethylene a year. The services on design, equipment and materials supply, provision of technical advisory will be provided by the German company Linde.
The enterprise development strategy until 2025 includes goals to increase all kinds of products. By 2021, it is planned to increase production capacity of synthetic rubbers up to 1 million tonnes a year. With the aim of import substitution and expansion of sales in Russia and CIS, it is also planned to increase plastics production to 1,5 million tonnes a year by 2021 and to 2,5 million tonnes by 2025.
The technology of new generation at TAIF-NK
For half a century, the Republic of Tatarstan, possessing large reserves of hydrocarbons and leading in terms of oil production, did not have its own processing base, carrying out only the functions of a supplier of raw resources to other regions of the country and abroad. Albert Shigabutdinov understood the need for development of refining industry in Tatarstan. In 1997, the management of TAIF established on the territory of Nizhnekamsk industrial area its branch — TAIF-NK, which focused on the issues of design and construction of the refinery complex.
At the end of 2015, the company switched to production of Euro 5 fuel. The government imposes such requirements to all producers from the beginning of 2016. High environmental relevance of this product has been highlighted by President of the Republic Rustam Minnikhanov, who took part in the solemn ceremony of Euro 5 gasoline launching in production.
Tatarstan TAIF-NK has some fundamental differences from other Russian refineries. The majority of oil refineries in the country are focused exclusively on the production of motor fuels. TAIF-NK works in two directions simultaneously: it provides the raw material for the petrochemical industry and produces fuel. At the same time, the company is one of several in Tatarstan and Russia processors of the most heavy and high-sulfur oil. For this reason, in the autumn 2012 with participation of President of Tatarstan, Rustam Minnikhanov, it was held a solemn ceremony dedicated to the official beginning of construction of the heavy residue conversion complex based on the unique technology Veba Combi Cracking.
The Heavy Residue Conversion Complex is being at the stage of commissioning. After commissioning, the depth of processing is to increase from 74,5% to 98%, and from dark residue (tar and oil) with a volume of almost 4 million tonnes a year, at the output there will be light petroleum products (diesel fuel, naphtha, straight-run petrol, butane and propane fraction, nafta), meeting the European quality and environmental standards.
Kazanorgsintez: realities of today
In the early 2000s, TAIF Group became the key shareholder of the petrochemical giant Kazanorgsintez. ''The republican government offered us to deal with Kazanorgsintez, which could not start modernization,'' recalls Albert Shigabutdinov. ''We held negotiations with all shareholders owning not less than 0,1% of the shares. It took about a year. The government, which initially offered us to buy a large stake in, stated that if it sold its blocking stake, it would be only through an auction. We decided that the auction would only raise interest in the securities of the company and, accordingly, their price on the market. We had to continue negotiations with the shareholders. They were conducted strictly confidentially, and all contracts with the holders of the securities were signed almost simultaneously and at above-market and privatization prices.''
The program of Kazanorgsintez development with the participation and under the control of TAIF and the government of the Republic of Tatarstan was developed for nearly three years. It was invested more than $2 billion. The scale of positive changes at the enterprise is huge — Kazanorgsintez was turning into a model chemical plant with the latest technology and equipment.
Fundamental changes at the company, which remains one of the largest producers of polyethylene in Russia and CIS countries, began with the signing of the contract in the spring of 2004 between Kazanorgsintez and the American company Univation Technologies on granting the Tatarstan enterprise a license for the right of designing, construction, production and sales in all countries of the world of polyethylenes of the newest brands of linear and bimodal structure with a total capacity of up to 440,000 tonnes a year.
In addition to the introduction of new production lines, the company improves the product characteristics. In 2014, at the plant for production and processing of high-density polyethylene it was put into service the line of bag palletizing and packaging in the case from stretch film. This allowed to improve the packing quality of polyethylene, to lower polyethylene scattering during transportation, to improve the performance of loading operations.
It is planned to introduce new technologies at Kazanorgsintez that will allow the company to reduce the risks for the supply from Gazprom of ethane — the most important raw material for ethylene production and the end product — polyethylene. By 2020, Kazanorgsintez intends to produce a million tonnes of polyethylene a year — one and a half times more than today. Kazanorgsintez will be neither more nor less than the largest producer of polyethylene in Europe, and by 2025 it is planned to start production of engineering plastics used in automotive, aerospace and space industries.
Growth energy
In 2010, having amalgamated Nizhnekamsk CHPP-1 and Kazan CHPP-3, TAIF created TGC-16 JSC. Albert Shigabutdinov understood that without the own energy source, the diversified holding company, concentrating the energy intensive industries, couldn't move forward confidentally strengthening market position. The idea to form its own energy generating capacity came to the Tatarstan petrochemical leaders in the 90s. The management of Nizhnekamskneftekhim was trying to prove to the government of the region the advisability of incorporating into the structure of the enterprises of Nizhnekamsk CHPP-1, more than 80% of the generated energy consumed by NKNK. The mechanism of this transfer could become privatization of the station. That time all the efforts of the petrochemical leaders were in vain.
The creation of the private energy company of TAIF Group was determined by a rapid and unjustified growth of tariffs for energy resources supplied at the time by the republican monopoly Tatenergo through an intermediary, Tatenergosbyt JSC, to industrial enterprises. In addition, the companies of TAIF consumed a total of 50% of the generated by Tatenergo heat and provided up to 80% of the revenue part from the heat with exhaust steam from the power plants of Generating Company JSC included in the structure of Tatenergo JSC. ''It cannot be continued this way,'' said Albert Shigabutdinov at an annual meeting of the shareholders. ''We will create our own energy from scratch.''
Becoming the asset owner, TAIF began to develop a strategic program to improve the reliability and efficiency of the energy complex at the expense of its fundamental modernization. The modernization program was divided into two stages. First it was implemented activities aimed at ensuring reliability in the production of thermal and electric energy. Then it started the stage of complex reconstruction and modernization of the power plants.
In June 2017, TGC-16 completed the complex modernization of the largest Kazan plant CHPP-3. The energy unit, the power capacity of which is now 405,6 MW, was officially launched by Rustam Minnikhanov. It should be noted that it is the largest gas turbine plant in Russia.
The total cost of the project amounted to 14 billion rubles. ''We spent on the production of a kilowatt-hour of electrical energy about 300 grams of conditional fuel, but now we will consume less — 200 grams. I think that by those parameters that are characteristic of the turbine, we can repay the project in acceptable for us terms. For Kazanorgsintez it is a very reliable power supply,'' Albert Shigabutdinov said.
A sense of responsibility for employees
Life itself suggested Albert Shigabutdinov what direction of Tatarstan's economy needed the most the attention and support of TAIF. Immediately after the creation in Tatarstan of the President's Fund for elimination of dilapidated housing in 1996, it was opened a subsidiary company Meta-TAIF. The company took part in the program on liquidation of dilapidated housing and in record time erected two 12-storey brick houses in the residential district Azino-1. Kazan citizens had the opportunity to move from old, uncomfortable houses in the city centre to new comfortable apartments. In 1998, another two residential houses were commissioned.
For further development of the construction industry, TAIF established another company — TAIF-ST. It is the company that erected Kazan's first full-fledged cultural-entertainment complex Piramida, new offices of the company, the complex of buildings for the customs terminal Karsar, which includes a petrol station, service stations, hotels and warehouses. Thanks to the efforts of TAIF, the construction industry of Tatarstan began to develop as an industry. The concrete plant started its operation, as well as the sand lime brick plant. Piles, produced by the plant of concrete, were used in the construction of half of the city buildings.
Albert Shigabutdinov has always advocated that the standard of living of the employees of his company were not worse than of people in developed countries. Therefore, after the end of the program of liquidation of dilapidated housing, TAIF continued the work with the state housing fund under the program of social mortgage. The company annually makes voluntary contributions for the implementation of this program. Together with Avers Bank, for the years 2014-2016, the employees of TAIF Group received 4,513 apartments.
So, from 2005 to 2014, 586 families of the employees of Kazanorgsintez PJSC improved their living conditions under the program. Besides, it was signed an agreement with the State Housing Fund on allocation of another 1,600 apartments for the workers of the plant in the residential area Salavat Kupere for 50,000 residents, where the provision of engineering infrastructure at a total amount of 760 million rubles was fully undertaken by TAIF.
Investments in history
Albert Shigabutdinov has repeatedly underlined how it is important that businesses need to be responsible for the social life of the republic. Together with the fund Revival, headed by Tatarstan State Counselor Mintimer Shaimiev, TAIF conducts joint projects on revival of cultural and historical heritage on the island-town Sviyazhsk and Bolgar.
According to Mintimer Shaimiev, participation in such projects for conservation of cultural heritage is a decent way into the history. The representatives of the companies-investors, interacting with historians, archaeologists, conservators, learn about the history of their native land. Their good act itself becomes a history because each of the restored object immortalizes the names of the companies-investors and the names of their leaders.
Before the advent of Revival Fund, there virtually was no infrastructure and communication on the territory of Bolgar and Sviyazhsk. Roads, gasification, treatment plants, sustainable heat and energy supply had to be restored again. The results of the active restoration of historical objects, cultural monuments, Orthodox churches and construction of new facilities were not late in coming — the number of tourists in Bolgar and Sviyazhsk has increased significantly.
Minister of Culture of Russia Vladimir Medinsky highlighted the transformation of Sviyazhsk during his visit to the town-island in 2017. ''The town is becoming like a little oasis of perfect cleanliness and order, it is the result of attention and care to the culture. The number of visitors who come here has increased nearly 100 times. Ten years ago it was 7,000 people, this year it is more than 500,000 people. I'm sure that in one or two years we will celebrate the figure of one million tourists in Sviyazhsk,'' the minister said.
The holding continues to finance the restoration and construction works in the ancient city of Bolgar. Besides, in 2016, TAIF supported the initiative of the residents of Tatarstan for the construction of the Islamic Academy in Bolgar and reconstruction of the Cathedral of the Kazan Icon of the Mother of God in Kazan. In 2016, for these purposes it was allocated 1 billion rubles, and since 2012 — more than 1,5 billion rubles.
TAIF team consists of modest and professional staff
Certainly, it is impossible to achieve high results in refining, petrochemical and other fields of economy without a cohesive team of like-minded people. Only with the right partners who eventually become close friends it is possible to go through all difficulties in the way of an entrepreneur. Albert Shigabutdinov is called to be a talented manager, who definitely knows how to gather a team. Rustem Sulteev and Guzeliya Safina were the first partners and later became top managers of TAIF. They continue to work together and they cannot imagine their way without TAIF.
''We haven't invented something new, of course. It was just regular people — not lazy, not mummy's boys, but workaholics, who taught themselves to work day and night and not to whine, not to complain about difficulties and fatigue. And it is not an exaggeration. Life went on at an accelerated pace. We managed to do so many things in a day that other people would do in a week,'' Albert Kashafovich says in an interview.
The company's director general always says that the style of TAIF is the creation of a new generation of professionals. Not only the management of the holding works hard and at full efficiency. Albert Shigabutdinov believes that any experienced employee of the enterprise could be employed in the most prosperous companies. ''We work next to very modest, but highly professional people. It is the way we achieve the overall result,'' said the head of the company.
Albert Shigabutdinov admitted that in TAIF any senior member could quickly earn a lot of money if had such goal. However, the company deliberately limits itself by investing all funds in the production, that is, further development of the enterprise. ''I want my children and grandchildren lived here and thought about the prosperity of their native land. Our lives and rest can be arranged as beautiful as in Switzerland, for example, where tourists go from all over the world — we have everything for this. Our soul is happy by what have been done and that good deeds of TAIF are in the sight of everyone,'' Albert Shigabutdinov added.
''Such a person is rightly called a ''priceless human capital''
Major political figures, long-standing supporters, partners from Russian and international companies congratulate Director General of TAIF PSC Albert Shigabutdinov with the 65th anniversary and share with the history of their joint work.