Andrey Melnichenko (industrialist)

While at university, Melnichenko began his entrepreneurial ventures opening a currency exchange booth on the campus.[1] Having made their first US$50,000 through a chain of the currency exchange booths, Melnichenko and his partners, two like-minded fellow students, received a banking licence from the Bank of Russia. In 1993, at the age of 21, Melnichenko co-founded the MDM Bank which grew to become one of Russia's largest private banks within ten years. The bank moved onto buying currency at the interbank foreign exchange, developing a derivatives market and debt instruments[5]. From 1993 to 1997, Melnichenko chaired the Board of Directors of MDM Bank[14]. From the late 1990s to the early 2000s, MDM Bank expanded through acquisition, integrating seven regional banks. MDM Bank did not participate in any post-Soviet privatization programs or the loans-for-shares auctions of the 1990s.[2][4][15] In 1997, Melnichenko bought out MDM Bank shares from his partners and became the sole shareholder of the Bank and the Chairman of the Management Board. It gradually became one of Russia's largest private banks, based on total assets, and the first in book running of Russian corporate Eurobonds[15]. Bloomberg reported that "unlike many bigger rivals, MDM came through the 1998 crisis nearly unscathed, thanks to a conservative credit policy, the lack of illiquid assets and no exposure to government bonds. As competitors went under, the lender snagged some of the biggest Russian companies as clients."[6] From 2001 to 2005, he chaired MDM Bank's Board of Directors[14]. MDM Bank was named the "Bank of the Year" by The Banker in 2002 and 2003. In 2003, Euromoney and, in 2004, Global Finance, named it the "Best Russian Bank"[15].

In 2000, Melnichenko, together with Sergei Popov, a former metals trader from Ural, co-founded the MDM Group for industrial investments into three areas: pipeline manufacturing, coal production and processing, production and processing of fertilizers[1]. It was done through the acquisition of more than 50 independently run and owned businesses: joint-stock companies, plants and mines, which enabled to form three separate companies: SUEK, EuroChem and TMK (which he exited in 2006 through an IPO at the London Stock Exchange)[16]. These industries were derelict and risky and not subject to the political influence that dominated other sectors[6][15]. With the process of post-Soviet era privatizations having finished five years earlier, no more than 5% of the assets purchased were acquired from the state[4][2]. From 2001 to 2004, Melnichenko was the President of the MDM Group[14].

From 2004 to 2007, Melnichenko sold shares of MDM Bank to his MDM Group partner Sergei Popov, and focused on the development of the industrial assets in fertilizers and coal.[1][17] In 2006, Global Finance named it the "Best Russian Bank" in four categories: corporate management, FOREX, the best organizer of Eurobond loans in the Russian market, and the best consultant in the Russian M&A market. Following Melnichenko's decision to step down from MDM Bank in 2007, the International Financial Corporation (IFC) purchased 5% of MDM Bank shares for US$185 million, valuing the bank at US$3.7 billion[15]. Having served its consolidating purpose, MDM Group ceased to exist.

Melnichenko became the chairman of the mineral and chemical company OJSC EuroChem in April 2004[14]. In 2007, he became EuroChem's majority shareholder[3].

When EuroChem was founded, the purchased assets included several nitrogen plants and a phosphate mine with Soviet-era equipment. Melnichenko built EuroChem to become one of the world's largest high-tech fertilizer manufacturers[18].

One of EuroChem's key enterprises, Novomoskovsky Azot, became the largest urea plant in Europe, where production of granulated urea began for the first time in Russia. New modern manufacturing facilities were built in Nevinnomyssk (including the first melamine production plant in Russia) and Kovdor (including an apatite and shtaffelite ores processing complex). Modern terminal was launched in Sillamae (Estonia), and Murmansk port was rebuilt. It acquired laboratories in Germany in 2011, which led to creation of similar facilities in Russia and other countries, which are working on the development of second-generation fertilizers, including advanced slow-release products that help reduce the environmental footprint of the agricultural sector[19].

EuroChem bought licenses for potash deposits in Volgograd (2005) and Perm (2008), launching plans to develop two large potash industrial plants[4].

In 2015, EuroChem moved its headquarters to Switzerland for access to the capital markets and international operations. It has manufacturing, logistic and distributing facilities in Russia, Belgium, Lithuania, Estonia, China, Germany, Kazakhstan, and the USA[4]. EuroChem products are sold in more than 100 countries. EuroChem Group has raised funds on the international capital markets. In 2016, EuroChem invested in biological crop nutrition company Agrinos to invest in research and development for a new generation of products. Elsewhere, EuroChem expanded its distribution network, buying operations in the US, Argentina, Brazil and Hungary. It is developing second-generation fertilizers, including advanced slow-release products that help reduce the environmental footprint of the agricultural sector. One EuroChem fertilizer, Entec 26, became the only such product to be recognized by a carbon exchange foundation in Switzerland, marking the first time that the contribution of advanced fertilizers to reducing agricultural emissions was acknowledged.[19][20][21]

EuroChem is Russia's largest manufacturer of nitrogen and phosphate fertilizers and one of largest fertilizers exporters globally[4]. It produces higher-value specialty fertilizers including inhibitor products that allow slow release of nutrients into crops, and is launching two Russian potash mines planning to produce 8 million metric tons of the fertilizer a year, a 10th of current world output, as well as eyeing an ammonia and urea plant in Louisiana. According to Melnichenko, EuroChem aims to transform itself "into a company that creates and promotes high-tech products"[4][19][22][23].

Melnichenko is the Chairman of the Nomination and Remuneration Committee, Member of the Strategy Committee, and Non-Executive Director of EuroChem Group AG[24]. As of 2020, Melnichenko is the beneficiary of 100 percent of EuroChem.[3]

In May 2018, EuroChem sold the Ukrainian subsidiary EuroChem-Ukraine after an embargo imposed by Ukraine on the import of Russian fertilizers. The EuroChem website noted that the sale was made to a company that was closely connected to the former management team.[25]

Melnichenko became a director of SUEK JSC (Siberian Coal Energy Company) in February 2005, and the chairman in June 2011[14]. The same year, he created the Siberian Generating Company (SGC) on the basis of electricity assets of SUEK and became the chairman. In 2013, he became the primary shareholder of SUEK and SGC after he has bought his ex-partner's shares[3].

The assets that formed SUEK were distressed – production capacity was less than 30 million tons per year, the enterprises employed 70,000 miners yet productivity was low, and virtually none of its output was exported. The average equipment depreciation was 90%. During the early years of the business, SUEK's assets were modernized, debts were repaid, wages and taxes were paid, and a modernization program was launched with new machinery. The old mines and worn-out equipment were transformed into modern enterprises. Several enrichment factories and modules were put into operation with the latest processing technologies that allowed SUEK to produce highly enriched coal with low impurity levels. SUEK built modern coal bulk terminals and upgraded seaports, and built Russia's first coal mine methane processing station to generate power within the framework of the Kyoto Protocol. Russia's first smart mining management control center was built to run all SUEK's operations, monitoring the location and well-being of miners working underground[26][2].

After the consolidation of electric power assets, Melnichenko created the Siberian Generating Company (SGC) as a part of SUEK, and then spun it out as a separate company. SGC provides between 35% and 78% of electrical power in the Russian regions of its operation. It is the fourth largest heat producer in the world[26][3]. In 2018, SUEK took over SGC strengthening SUEK as one of the world's largest coal energy companies[8].

Melnichenko led SUEK to become Russia's largest coal producer with operations in seven Russian regions, as well as the world's third largest coal exporter by reserves and sales with distribution in 38 countries worldwide, including the Asia Pacific where coal plays a key role in energy access. SUEK assets produce more than 100 million tons of coal annually, with assured coal reserves of 5.4 billion tons. SUEK is Russia's largest coal producer and a global leader in exporting higher-quality thermal coal. As reported in Financial Times in 2017, according to the International Energy Agency's Clean Coal Centre, "SUEK, Russia's main exporter of higher-quality thermal coal, has invested in modern high-capacity washing plants and has ash control technologies at all its coal ports".[7] According to Bloomberg, SUEK is Russia's largest producer of higher quality thermal coal which, according to Melnichenko, focusses on "high-quality and less-emitting coal"[4][27].

Melnichenko is the main beneficiary of SUEK (which now directly owns SGC). As of 2019, he owns 92.2 percent stake in SUEK[3][28].

He is the Chairman of the Strategy Committee (Non-Executive Director) in SUEK OJSC since April 2015[14].