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Alexey Mordashov
CEO, Severstal JSC
Age:
Years as a CEO:
Tenure: 0
Industry: Energy & Natural Resources
CEO DOSSIER
A self-made billionaire who is quick to contest the title of a Russian business oligarch, Alexey is the main shareholder of Severstal, one of country’s largest steel and mining companies. He has avoided the trappings of wealth despite an estimated net worth of $12.8bn.
early years
Alexey Mordashov was born in 1965 in Cherepovets, Vologda Oblast, Russia. Born to steel-mill worker parents, Alexey has said that his family had coupons for food when he was younger and were only allowed 400g of sausages and 200g of butter each month. Alexey attended the Leningrad Institute of Engineering and Economics where he earned an undergraduate degree.
Following his education, Alexey joined Cherepovets Iron and Steel Complex in 1988 and held various positions for the company's economics bureau, labor organisation, and planning department. He was also senior shop economist before becoming finance director in 1992.
In 1993, the company was privatized by a decree from Russian President Boris Yeltsin, which made Cherepovets Iron and Steel Complex an open joint-stock business called Severstal. Alexey was the company's chief financial officer for three years before becoming CEO in 1996.
As ceo
Alexey started to build an industrial conglomerate by purchasing steel, mining and coal companies during his early years in charge. In 1999 he was the recipient of the Order of Service to the Motherland award.
Alexey became one of Russia's biggest investors after Severstal purchased US steel producer Rouge Industries for $286m in 2004. He said that at the time "steel plants in the U.S. were in worse shape than the Russian plants we renovated. A lot of the technology was 150 years old. They'd suffered from under-investment for many years. People were expecting Rouge to go bankrupt, so there was a lot of anxiety." Commenting on further acquisitions that year, Alexey said: "We don't have any particular aspirations about expanding anywhere specifically, but are keen to examine opportunities as the industry consolidates."
In 2006, Severstal announced plans to acquire a third of French steel conglomerate Arcelor. Alexey said: "I think the new company will aim as soon as realistically possible to reach through mergers and acquisitions an output of 100m tonnes a year." Arcelor's shareholders reacted badly to the proposal, claiming they were denied the right to voice an opinion. Alexey asserted: "If shareholders don't like it [the deal] . . . they can come and vote against it." However Severstal's competitor Mittal Steel eventually secured the deal with Arcelor paying Alexey €140 as compensation for the failed takeover discussions.
The following year it was revealed that Severstal would invest $1bn in the US in a bid to increase output and improve quality. The fund was also part of Alexey's plan to make the company more global following its failure to secure the Arcelor deal.
In 2008, Severstal announced plans to launch a $6bn investment programme in Russia, which included building new plants and doubling output at one factory. At the time Alexey also noted that Russia would become one of the world's most attractive business locations by 2020. “I think that is absolutely realistic, with our strong industrial base, natural resources, and the education of our people, despite the turmoils of last decade,” he said. The same year Severstal also purchased Sparrows Point, an integrated steel mill in Baltimore from ArcelorMittal for $810m.
Despite losses in the first six months of the previous year, Severstal reported an underlying £1.4bn profit in the first half of 2010. Alexey said rising prices had helped the company's financial situation, as had a recovery in the Russian economy.
In April 2012, Alexey said that as a steel company, Severstal was "vulnerable to trends in the world economy, which does not look easy today." The company would go on to post a Q4 loss of $150m, which Alexey attributed to the weak global economy and low demand in Russia's winter months.
Nevertheless, in January 2013, Alexey took part in an interactive Twitter debate in which he said a career in the steel industry was an opportunity "to be in a really international environment, to understand global processes, to participate in changes and to bring innovations."
Away from work
When asked about what he does away from work and how he relaxes, Alexey noted: "I work a lot and have very little spare time. But if I have some, my favourite way to spend it is to go for a walk with my family in the forest, close to nature."
He has an interest in poetry and is said to have recited his favourite work during meetings and interviews.
Alexey is also a keen follower of sports, with Severstal owning the super-league ice hockey team in Cherepovets, sponsors of the Dynamo Mosvow women's volleyball side and the Russian national male chess team. Through the company, Alexey also supports 20 sports facilities in Russia, which include stadiums, ice rings, heated football fields and athletic centres.
With an interest in art, Alexey also contributes to the Bolshoi Theatre, Mariinsky Theatre, Tretyakov Gallery, Russian Museum, Museum of Frescoes by Dionisius, Sergei Andriaka Watercolour School and the Moscow International Film Festival.
Alexey speaks fluent German and English.
In own words
"I will never buy a football team, I have got different hobbies!"
Leadership and philosophy
On what leadership means to him, Alexey has said:
"It means being able to facilitate discussions to set strategic goals, define priorities and help all members of a team to do their best in order to achieve them. Responsibility is key to leadership."
Alexey has earned the nickname "the tank" for his tough and uncompromising attitude. However he has also gained a reputation for being unassuming and modest.
This is echoed in his refusal to be regarded as an oligarch:
“Some people call me that but I would prefer to think of myself as a big entrepreneur and industrialist. If I have to be famous, I would prefer to be famous for that.
“Building companies involves creating great wealth. If that means I am an oligarch, OK, it’s fine. But if being an oligarch is about buying football clubs, it is not for me.”
On the subject of politics, Alexey regards Russian president Vladimir Putin as “a friend”, however he has said that any suggestion they have a close working relationship is a “big exaggeration.”
Furthermore, Alexey says:
“I believe I should be a good CEO - and being a good CEO of a big industrial company I have to develop a relationship with the government to help development of the company. It is in line with the normal rules of conduct. My personal relationship with the Kremlin is normal, it resembles those in France, or the US... Only through this interaction and steady dialogue can we achieve a better future for our country and our companies.”
On his personal success, he has noted:
"If you become too successful you can become too visible, and I don’t like to be No 1. To be No 1 doesn’t always trigger positive attitudes of others.”
As an economist, Alexey asserts:
“I have long been a supporter of competition and the free market economy and would rely on the free market to determine how the global financial and economic system develops.”
Commenting on his philosophy towards global expansion, Alexey has said:
"I believe in companies operating at their best potential when there is a fusion of cultures involved in the management and in how the company is run."
Our Three Questions
1. Do you believe Russia's steel industry will ever be re-nationalized?
2. In your opinion, is positioning Severstal’s future in the US safer than focusing on Russia?
3. Can manufacturing once again be a key industry for growth, like it was when you built Severstal?
Colleagues, Friends & Analysts' report
"A genius." John Connor, Portfolio Manager at Third Millennium Russia Fund.
Date Written
07-05-2013Sources
The Telegraph
CNN Money
BBC News
Boardroom Insiders
Financial Times
The Times
Forbes
Severstal
The Telegraph
CNN Money
BBC News
Boardroom Insiders
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The Times
Forbes
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Latest News
worldsteel elects new officers and welcomes new members
1. Chairman Mr Wolfgang Eder, Chairman and CEO, voestalpine AG 2. Vice Chairmen Mr Alexey Mordashov, CEO, Severstal JSC 3. Mr Andre Gerdau Johannpeter, President & CEO, Gerdau SA 4. TreasurerMr Eiji Hayashida, President and CEO, JFE Steel Corporation. read more...
2014-10-09 00:53:03
Severstal to Sell Its North American Units
MOSCOW—Russia's OAO Severstal CHMF.MZ +0.63% Severstal JSC Russia Moscow RUB 303.90 +1.90 +0.63% ... Dearborn unlocks substantial value to Severstal's shareholders," said Alexey Mordashov, Severstal's chief executive. Severstal had been trying to ... read more...
2014-07-21 17:08:24
Severstal to Sell Its North American Units
MOSCOW—Russia's OAO Severstal CHMF.MZ -1.54% Severstal JSC Russia Moscow RUB 337.80 -5.30-1.54% Aug ... unlocks substantial value to Severstal's shareholders," said Alexey Mordashov, Severstal's chief executive. Severstal had been seeking to sell ... read more...
2014-07-21 08:40:10
World Steel Association elects new officers
As is tradition, the retiring Chairman, Alexey Mordashov, Severstal JSC CEO will now serve as one of two vice-chairmen the other being Wolfgang Eder CEO & Chairman of voestalpine who is Chairman elect for 2014-15. Eiji Hayashida CEO and President of JFE ... read more...
2013-10-09 13:13:44
Brazil World Steel Association elects new Chairman [TendersInfo (India)]
Severstal JSC CEO Alexey Mordashov, voestalpine AG CEO and Chairman Wolfgang Eder Treasurer JFE Steel Corporation CEO and President Eiji Hayashida The new chairman takes office from Wednesday 9 October, 2013. The new officers are elected for one year ... read more...
2013-10-09 00:56:26
Pickering youth honoured at annual public speaking competition
which will be driven forward by the winners today," said Alexey Mordashov, chairman of the World Steel Association and chief executive officer of Severstal JSC. DURHAM -- St. Marguerite d'Youville Catholic School will get $25,000 thanks to a donation from ... read more...
2013-03-24 20:56:04
Gerdau Employees are Industry Champions of North America at Global Steel Competition
Alexey Mordashov (at center in photo), chairman of the World Steel Association and chief executive officer of Severstal JSC, presented the trophies and certificates to the winners. “I am delighted to meet ‘the next generation of Bessemers’ here today ... read more...
2013-02-26 23:57:14
World Steel to hold Twitter debate on future of Steel
Industry leaders including Dr Wolfgang Eder (CEO , voestalpine AG), Alexey Mordashov (General Director, Severstal JSC and Chairman of the World Steel Association), Prof Harry Bhadeshia (Cambridge University), Dr Richard Thackray (Tata Steel Lecturer in ... read more...
2013-01-17 07:41:02
World Steel Association elects new office bearers for 2012 13
Alexey Mordashov, General Director, Severstal JSC was elected as the Chairman, Vice Chairman is Xiaogang Zhang, President, Anshan Iron & Steel Group and John Surma, Chairman and CEO, United States Steel Corporation is the Treasurer. The new Chairman takes ... read more...
2012-10-10 06:20:45
Worldsteel Elects New Officers
The new officers for 2011/2012 are Chairman - Xiaogang Zhang, president, Anshan Iron & Steel Group Corp. Vice Chairman - Hajime Bada, president and CEO, JFE Holdings Inc. Vice Chairman- Alexey Mordashov, general director, Severstal JSC Treasurer - John ... read more...
2011-10-13 18:10:25
Worldsteel Elects New Officers
The new officers for 2011/2012 are Chairman - Xiaogang Zhang, president, Anshan Iron & Steel Group Corp. Vice Chairman - Hajime Bada, president and CEO, JFE Holdings Inc. Vice Chairman- Alexey Mordashov, general director, Severstal JSC Treasurer - John ... read more...
2011-10-13 00:59:38
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Financials
Business summary
Employees: N/A
PAO Severstal operates as an integrated steel and steel related mining company worldwide. It operates through Severstal Resources, Severstal Russian Steel, and Severstal International divisions. The Severstal Resources division mines iron ore and coking coal in the Russian Federation, and operates a coking coal complex in the United States. The Severstal Russian Steel division produces hot and cold-rolled flat and long steel products, and galvanized and color-coated steel products for construction, automotive, machinery, and electrical industries; and steel sections and automotive systems, as well as manufactures and repairs energy equipment. This division also offers diameter pipes from plate electric-welded pipes, and low-carbon and high-carbon wire rods, nails, cold-drawn steel, steel ropes, and netting and fastenings; as well as provides construction and equipment assembly services. The Severstal International division operates integrated iron and steel mills, as well as a mini-mill that produces steel products for the automotive, appliance, construction, container, pipe and tubing, distribution, converter and service centre industries. This division also offers steel solutions, such as ceiling grids, grain systems, HVAC equipment, machinery, metal buildings, and water heaters. The company was formerly known as Open Joint-Stock Company Severstal and changed its name to PAO Severstal in December 2014. PAO Severstal was founded in 1955 and is based in Cherepovets, the Russian Federation.
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