Skiing Putin doesn't forget steel mammoth

Russia's President Vladimir Putin is on a short athletic vacation in Abzakovo, mountain-skiing centre near Magnitogorsk in the South Urals. He found time for a routine conference with Victor Rashnikov, Director General of the Magnitogorsk Iron-and-Steel Combine, who had invited him to the highland retreat.

The President thanked Mr. Rashnikov for the kind offer, and pointed out Abzakovo's fine ski courses and lifts. "I'm sure holiday-makers enjoy being here," he remarked-after which the conferees came over to corporate problems.

Social welfare has to be prominent among the company's challenges, what with a total staff of the combine and related enterprises exceeding 200,000, said President Putin.

As he asked for last year's production statistics, Mr. Rashnikov said that the company had allocated US$100 million to upgrade the combine. A major part of the money went to update production. Steel output accordingly increased, and so did company profits. The last six years have sent output 65% up. Principal investment now goes to introduce pioneer knowhow and purchase high-tech equipment. The company is Russia's first to offer zinc-coated plate to automotive industry-Russia's mammoth AvtoVAZ, and overseas companies.

The President wondered about personnel earnings and whether the company had gained with government promotion of its exports.

The USA and the European Union recognised the market status of the Russian economy, last year. When asked what it had brought the combine, its boss said the company was feeling much better in contacts with principal clients and investors-but it has not overcome formidable customs barriers to this day. They are at 30% in the USA, so exports remain a headache. Mr. Rashnikov hopes the company will leap over the obstacle this year as prices go up in other sales markets.

China stays a reliable client. The combine supplied a million tonnes of its produce to that country last year. An European 1.2 million tonne import quota is holding out for the entire industry, and all Russian-based iron-and-steel manufacturers have a fifty-fifty arrangement for exports and deliveries within Russia, said the captain of industry.

President Putin asked what had changed in the combine routine as Russia introduced a new Tax Code, and how bank loans were going without government guarantees.

The last seven years have brought a spectacular change to crediting, replied Mr. Rashnikov. It took the company several months to obtain a fairly recent US$20 million loan from the EBRD-European Bank for Reconstruction and Development. Now, investments in the company amount to $300 million, loans taken from Russian and overseas creditors alike. $230 million was invested in the company last year alone.

President Putin has scheduled another several routine conferences for his Abzakovo sojourn.

He, naturally, is spending much time skiing. A great many vacationers have gathered in Abzakovo for New Year family outings. Winter's peak came to the Urals with cracking frost-40 degrees Centigrade, and ski courses and lifts were sealed for a time. The cold subsided a few days before the celebrations, and athletic pursuits resumed.

The course chosen by the President is not closed while he is skiing, and anyone is welcome to join him. Easy of access, Mr. Putin never refuses when asked for an autograph, or to have a snapshot taken together with the people-in-the-street.