A Friendly Investor

That world steel industry has moved into a new reality of ongoing consolidation and globalization is no longer in doubt as major international steelmakers are looking ever more closely at acquisitions in many countries that might have been seen as relatively modest some time ago.
This is one of explanations why so many eyes have been set on Pakistan Steel Mills Corporation, a state-owned firm with a million-tonne annual turnover, ever since the Pakistani government aired its plans to privatize the mill.
As a dozen companies from many countries sent their Expressions of Interest for the controlling stake in PSMC which is to be sold in late 2005 to early 2006 under government plans to attract a high-profile foreign investor to upgrade the firm and boost output, and bidders from Pakistan, Saudi Arabia, Kuwait, China, Ukraine, and Russia have qualified for the short list - the UAE and Swiss bids still pending the approval of Pakistani regulators, - let us take a closer look at the Russian contender - Magnitogorsk Iron & Steel Works (MMK).
MMK is a steel giant headquartered where Europe and Asia come together. It is Russia's No 1 steelmaker, a member of the exclusive global Top 20 list of the steel industry.
The company that most Russians grew so accustomed to that it has been known in the country as Magnitka through 75 years of its history, has lived through an investment jump-start in the last decade, spending $400 million to $500 million a year on re-equipment.
This investment activity, unmatched in Russian history, paid off as MMK became one of Russia's most efficient and modern steel firms that also has extensive experience of international cooperation. Furthermore, MMK engineers helped construct the steel mill at Bin Qasim, which makes Russians especially easy to deal with where Pakistani technologies and equipment are concerned.
MMK and PSMC share the same history of a state-to-private transition as the last government stake in the Russian mill was auctioned off just a year ago. Now more than 90% in the resulting public company are controlled by managers.
MMK chairman Viktor Rashnikov is not only the man in charge of the mill but also apparently one of those national business leaders who care about efficiency, sustainable development, and corporate citizenship, a combination that earned MMK a reputation of a nation-friendly business whose full privatization left no questions unanswered.
"There were fears in recent years that the control over the mill might go to some faraway not completely clean hands - fears that proved unwarranted, as I was given to understand. Everyone is content," Russian President Vladimir Putin said upon the sale of the last government stake.
There is also a cultural touch. Magnitogorsk, the MMK host city, bridges the border between Europe and Asia and is close to Bashkortostan, one of Russia's largest Muslim-populated regions. Many Magnitogorsk residents are Muslim, and Bashkortostan is host to the mill's extensive health care and recreation base.
For a long time, MMK has catalyzed active networking, cooperation, and neighborliness between people of different ethnic, cultural, and religious dispositions in the region.
The firm donates equally to the construction of one of the city's biggest Orthodox churches ever built and of the Magnitogorsk Grand Mosque for 1,500 people.
This just goes to show that Russians and Pakistanis have much more in common than appearances might suggest. Of course climate is different, and Russians, for example, play hockey mostly on ice while Pakistanis prefer grass, but both countries were equally successful in this sport: Magnitogorsk's Metallurg has repeatedly won European as well as Russian hockey championships.
As an aspiring investor for Pakistan, MMK presents a successful combination of objective financial and technological advantages with a firm prospect of operational coherence not marred by cultural or sectarian divide.
Back in 1930, Allama Mohammad Iqbal, the poet and philosopher who played such a vital role in the birth of Pakistan, said: "There are no social barriers between Muslims and 'the people of the Book'." History will prove Dr. Iqbal right. To which Magnitka's corporate philosophy and corporate culture is ample evidence.