Draft:Iakov Goldovskiy

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Iakov GOLDOVSKIY
Born (1962-02-26) February 26, 1962 (age 62)
Kryvyi Rih, Ukrainian SSR, USSR
Citizenship
Education
OccupationEntrepreneur

Iakov GOLDOVSKIY (born on February 26, 1962 in Kryvyi Rih, Ukraine).[1] — entrepreneur, owner of Petrochemical Holding[2], Austria. He is well known for his input (since 1996) on the revival of the Russian gas and petrochemical industry and reestablishing vertical integration between key industrial players and core enterprises with further centralization of management of their business activities through Sibur, which he owned from 1998 until March 2001 and headed as President from 1999 and until January 2002.

Biography

Born on February 26, 1962 in Kryvyi Rih, Ukraine

After army service he got into the faculty of mechanics at the Tashkent Institute of Irrigation and Agricultural Mechanization Engineers (TIIAME), but he did not graduate since he moved to Moscow.

Before army service, he shortly worked as a fitter in Kryvyi Rih and in Volgograd. He started his entrepreneurial activities in Tashkent and continued them in Moscow, combining business functions with his work in the Lyuberetskiy District Consumer Union and in the Moscow Automobile Road Institute in 1987/89. With the beginning of the co-operative movement in the USSR in 1989/90 he established cooperative “Avtotechnik”, which produced plastics articles.

In 1992 Austria became permanent place of residence for him and for his family. He established several commercial firms in Vienna, and continued business activities, mainly in the republics of the former USSR.

In 1990-1993 he became co-founder and general director of one of the first joint ventures in the USSR - the Soviet-Russian-Panamanian JV “Columbus”. This entity was in the business of procurement and processing of wood and hides, imports and wholesale trade with cigarettes and other consumer goods. The plant “TESTA” built by him in 1992 in Grodno (Belarus) and certified according to European standards was the largest European producer of wooden pallets. As from 1994 he started repositioning of his business to oil refining in cooperation with well-known Russian entities, such as Roscontract, Rosneft, LUKoil and others. In 1994/97 his Austrian company “Rosetto”, in the capacity of the agent of the Republic of Kazakhstan under the intergovernmental agreement with the Russian Federation, annually processed 5-6 million tons of oil at the refineries of Kazakhstan, supplied oil products to the agricultural producers of the republic and handled counter deliveries and cross-border sales of grain for Europe and Asia.

In 1997 he graduated from Odesa National Academy of Food Technologies with a specialization in “Accounting and Audit”, in 2001 – from Russian State Social University with a degree in “Economics and Law”, in 2004 – from IMADEC University, Vienna (executive MBA).

Time before Sibur

I. Goldovskiy started in 1996 the implementation of the most significant project in his business career. This project, that gave a dramatic turn to his life, was aimed at regeneration and reunification of the once centralized and powerful gas and petrochemical industrial system of the USSR, which declined and almost ceased to exist in the post-Soviet years as a result of the collapse of technological ties, decentralization of management and lack of adaptation to market realities. In the same year, i.e. in 1996, he established Petrochemical Holding (PCH)[3] in Austria. Activities of this entity in Russia were carried out through its subsidiary ZAO Gazoneftekhimicheskaya Kompaniya (GNK) and affiliated entities. The resources of all his former businesses were contributed to the project. At this stage, GNK acquired large blocks of shares in 9 gas processing plants in Western Siberia and the Tobolsk Petrochemical Plant, which produced primary raw materials for their subsequent processing into petrochemicals. This step, along with cooperation with Gazprom through joint company OAO Gazsibcontract, opened the floodgates to creating a solid raw material base (annually about 6 million tons of derivates from associated petroleum gas and gas condensate processing) for further conversion at specialized enterprises (up to six processing stages) by 1998. This integration made it possible to link-up and assimilate more than 30 plants with GNK within few years either through purchase of controlling blocks or all their shares or by way of acquisition of assets through bankruptcy procedures. These enterprises produced from 30 to 70% of mono- and polymers, liquefied gases, chemical fibers, resins, alcohols, plastics, rubbers, tires and nitrogen fertilizers in Russia.

Time of Sibur

In 1995, the Siberian-Ural Oil and Gas Chemical Company (Sibur) was established by the Presidential Decree. This entity became home for OAO Sibneftegazpererabotka, the Perm Gas Processing Plant and the Krasnodar Research and Development Institute for Gas Processing. With a view to obtaining state support for his strategic plan, I. Goldovskiy, bought in 1998-1999 through GNK and its affiliates 100% of Sibur's shares from the state and minority shareholders, and in 1999 he transferred to Sibur the entire operating gas and petrochemical business of GNK. As a result, by the early 2000s, Sibur became the largest gas and petrochemical entity in the country. I. Goldovskiy spent about $500 million (not to mention bank loans) on the acquisition of the enterprises of this production and technological complex (PTC Sibur), which were finally taken over by the holding, although the assets themselves (shares and/or property complexes of the plants) remained owned by other PCH/GNK affiliated companies until the implementation of the shares’ placement programs planned for 2001.

At the same time, I. Goldovskiy initiated participation of Gazprom as a strategic investor in this project: Sibur’s Board of Directors and Management Board gave their consent to Gazprom’s interest in equity (up to 38% of shares). In March 2001, Gazprom became a shareholder of Sibur with a 50.6% stake. This participatory interest was to be reduced to 38% after the additional placement of ordinary and preferred shares worth RUR 70 billion, which was planned for the same year. These steps were agreed by all the shareholders, including Gazprom, the Anti-Monopoly Policy Ministry and by the Federal Commission for the Securities Market (FCSM). Under the terms of the private offering of Sibur ordinary shares, Gazprom was to receive its interest in additional shares, apart from cash settlements and transfer of a number of core assets, by way of swap to equity of loans it previously granted to Sibur, while PCH and GNK were to receive their shares in exchange for shares in PTC Sibur's enterprises, which were already operating as vertically integrated business.

However, when a new team of top managers joined Gazprom in May 2001, the strategy of this entity with regard to Sibur changed dramatically, investments in the company were reclassified to the category of borrowed funds, which precipitated holding’s financial crisis and disruption of its programs of shares’ placement in the fall of 2001. As a result of criminal proceedings initiated by Gazprom, I. Goldovskiy was forced out of the company. On January 7, 2002, he was arrested in the reception room of Alexei Miller, Head of the Management Board of Gazprom, and then he spent 7 months in a detention center. In this time, he was forced to resign as head of Sibur and to transfer control of the company to Gazprom. After his release and the court verdict he had no choice but to leave Russia. According to the court verdict as of September 25, 2002, I. Goldovskiy was acquitted on charges of fraud, money legalization/laundering of proceeds of crime and falsification of documents. He was sentenced merely for coordinating and carrying out, in full compliance with the terms of the private offering, the buyout by GNK of a very small percentage of its part of Sibur's additional issue of shares prior to Gazprom, which was qualified by the court as "abuse of entrusted power". He was sentenced to 7 months' imprisonment, which he had already served in a detention center. Gazprom dropped its claims against I. Goldovskiy at trial. In 2003-2004, he was paid $95 million for shares in the Sibur’s PTC plants.

Time after Sibur

I. Goldovskiy returned to Vienna after trial and his release and continued his business activities with petrochemicals. He worked, inter alia, in Russia until 2022. In 2003-2005, business entities under his control acquired a number of PET preforms production plants in 11 European countries. In 2005 he built one of the largest PET plants[4] in Europe with a capacity of more than 450 thousand tons in Lithuania, Klaipeda (this business was successfully sold in 2007). Korund chemical plant in Dzerzhinsk was acquired in 2004. Two phases of Europe's largest sodium cyanide plant project with a total design capacity of about 70,000 tons were implemented in 2015 and 2018 at Korund industrial location. New production facilities for PVC pipes, polyesters, paints and enamels were also built there. He had involvement in other projects as well, including a plant for the production of aseptic beverages (Aqua Vision), a plant for construction foam and household chemicals, both in the vicinity of Moscow, Romanian refinery RAFO Oneşti, and the Ukrainian real estate development company FUD (project DeVision)

In line with the EU restrictive measures against Russia over Ukraine I. Goldovskiy exited his Russian business in 2022[5]

References

Category:Petrochemical industry Category:Entrepreneurship Category:1962

  1. ^ "LIVEJOURNAL". 23 June 2011.
  2. ^ "Bloomberg". Bloomberg News.
  3. ^ "Petrochemical Holding Webpage".
  4. ^ "Lithuanian PET producer extends range".
  5. ^ "Interfax".
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