Russian Steel Tycoon to Build One-Stop Shop for Food and Travel
Russian Steel Tycoon to Build One-Stop Shop for Food and Travel
(Bloomberg) -- Russian billionaire Alexey Mordashov made his money in steel, but is betting on groceries and tourism to help expand his empire away from commodities.
Almost half of his $20 billion fortune already comes from outside the steel industry. The country’s fifth-richest man said he wants to keep investing in consumer-focused sectors and eventually create an online marketplace for them.
“We have several investments related to human needs: education, medicine, traveling and retail. We are thinking of creating an ecosystem based on these assets -- a kind of Amazon,” Mordashov said in an interview near Moscow. “Each of these areas is on the verge of great change.”
The wealth of Russia’s richest individuals are largely tied up in commodities, with much of it geared toward energy and metals. But as Russia looks to break its dependency on raw material exports, Mordashov -- whose main asset is steelmaker Severstal PJSC -- is looking to gain a stable foothold elsewhere.
To be sure, Mordashov is still bullish on the outlook for his steel assets. Russian steel consumption grew about 4% last year and Severstal is among the most profitable producers in the global industry, paying one of the highest dividends. Here’s a summary of his other interests:
Shopping
Last year, Mordashov’s SeverGroup acquired an almost 80% stake in Russian supermarket chain Lenta Ltd. after buying out minority investors and private equity firm TPG Capital in deals that value the company at $1.8 billion. He said he wants to reshape Lenta’s business by focusing on online sales and quick deliveries, while keeping a hypermarket model.
The tycoon will use technology at his online retailer, Utkonos, to help do that and could merge the two companies in the future, he said.
Tourism
His family owns a quarter of travel giant TUI AG -- a stake worth $1.7 billion -- and while in the past indicating that he’d like to boost the holding to 30%, he said there are no plans for now to do so. Instead, he’s interested in expanding TUI’s Russian business and said it could start building hotels.
“Human desire to travel is as constant as the need for food or communication,” said Mordashov, who sometimes uses TUI services himself. Last year’s collapse of Thomas Cook Group Plc was good for TUI because it made the industry healthier, he said.
Education
Mordashov moved into education and recruitment in recent years. He sees the current education system as outdated and is considering starting an online university.
Medicine
SeverGroup in 2017 bought AVA-Peter, which owns a network of clinics mostly operating in St. Petersburg. Mordashov wants to expand the business into other parts of Russia and develop online services covering diagnosis to treatment.
--With assistance from Alex Sazonov.
To contact the reporter on this story: Yuliya Fedorinova in Moscow at yfedorinova@bloomberg.net
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Nicholas Larkin
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