By Meruyert Sarsenova :-
Igor Rybakov, a well-known Russian businessman, co-owner of the leading industrial corporation “Technonikol” being in Kazakhstan, gave an interview to the correspondent of the local business edition Kapital.kz. During the conversation, the entrepreneur told why he was interested in the Kazakhstani market, how many companies he runs today, what idea he is obsessed with and whom he considers as his teacher. The billionaire is also convinced that capital begins to multiply when it is reinvested in good for society.
– Igor, how long has your company been operating in the Kazakhstan market and what did you see as its attractiveness? I know that in March of this year you started building a large plant in the Almaty region.
– Technonikol has been supplying building materials to the Kazakhstan market since the late 90s. At the same time, we have long wanted to build a manufacturing enterprise here, we chose a place for a long time, and studied the vast territory of the country. And finally we found a beautiful area near Almaty in an industrial park. There, in March, we started the construction of a mineral insulation plant (stone wool). From that moment on, we registered here as an industrial company. The new plant will be about the same innovative level as we recently launched in Poland, but better. It is expected to be completed by 2023 and create 200 jobs.
However, we are not going to stop there this, since we initially chose the site so that a whole industrial cluster “Technonikol” appeared on it. Now the second huge plant for extrusion polystyrene is already being designed. I think we will launch it by 2023 as well. We have not told anyone about this yet.
In general, we have it so arranged that one strategic business unit (SBU) builds a plant and prepares a base for other SBUs, and then other SBUs quickly implement their projects. Therefore, it is possible that we will build at least 5 Technonicol plants on this territory by 2030. Thus, all building materials that are now being transported for 3000-4000 km will be produced here as a result.
In fact, Kazakhstan will become a kind of hub for our company in Central Asia. We understand that a lot of constructions are being carried out near Almaty, a large number of countries are concentrated around the Republic of Kazakhstan.
– How much investment will it require?
– We have invested 70 million euros in the first mineral insulation plant. Investments in the second extrusion polystyrene plant will be about 25 million euros.
– What is the payback period for projects?
– The business plan for factories is usually designed for 7-9 years. Of course, if everything goes badly, the payback period will shift by 9-12 years. If everything goes well, as it is now, then it will be 5-7 years.
– What profitability do you planning to achieve?
– The profitability of our factories is usually the same everywhere: from 15-20%.
– What share of the Kazakhstani market do you expect to conquer?
– Our policy: when the market is ripe, we come and take our 20% of the market, which we then increase to 40%. If we manage to do this, they usually turn into 60%. In this, Technonicol has an approach similar to that of Toyota. If we come – it is serious and for a long time.
Our share in the mineral insulation market will be over 50%, in the extrusion polystyrene market – 40%, in the roofing materials market – 80%.
– So you are going to become a kind of monopolist here?
– We never plan to become monopolists, but if others do nothing, then we are forced to become them. I hope this will not happen in Kazakhstan. This is not very good in every sense: neither for the stability of the country, nor for the industry, nor for our team. Our management also gets discouraged if there is no one to compete with in the market.
– How many people from the local population will work at the stone wool factory under construction?
– I think about 95%. There are many talented people in Kazakhstan, so we prefer to hire local people. Of course, at first, Russian specialists will be present at the plant to conduct training.
– Last year was not easy for everyone. Has the pandemic hit your business hard? Did you have to revise your business processes?
– The year was really difficult for everyone. Of course, I am a strong person, I am ready for a lot, but it was impossible to prepare for this event.
The first two or three months, when the lockdown was announced, all construction work was suspended, respectively, the demand for building materials fell by about 20-50%, business declined, especially in Europe, where we also have enterprises. But then, in three or four months, everything not only recovered, but also began to grow. This was influenced by fiscal stimulations and the accelerated completion of construction programs by large developers. This year, we see that demand has even increased by 20%.
This is what the construction business is about. I also have financial and technological businesses, educational, iTech, FinTech. There has been an unprecedented rise in this area, since the coronavirus has led the whole world to the large-scale use of financial advisory services and investment applications. In the United States, I have a cybersecurity school called Hacker U, which has received a large number of proposals from American universities to create similar cyber schools on their basis.
At the same time, three of my 150 companies had to be closed: one in Russia and two abroad, as their revenue dropped to 95%. But there is nothing extraordinary here, because as enterprises we have closed them, and as intellectual assets and teams we have joined other companies.
– In the end, what lessons did you learn from this situation?
– The main lesson: Technonikol knows how to meet “black swans” and barbecue from them: the company copes well with emerging challenges.
Also, the coronavirus has dramatically shaken up this year and given us more efficient ways of doing business. For example, now we do not need to bring so many foreign specialists to the installation of equipment, because we can do this remotely. In any unpleasant situation, there is always something that can be generated for the good.
But in fact, today we are more concerned about another issue – the high level of inflation-prices are rising and we need to have time to raise wages to our employees in time. Now people are becoming the main element, as the business is growing, and it is becoming more and more difficult to recruit and search for specialists every day. Therefore, in order to maintain the existing human resources potential, companies need to raise employees ‘ salaries in a timely manner, find new incentive packages and compensation programs. I do this myself and warn all other businessmen about it.
– Do you index the salary of your staff to the level of inflation?
– Higher for low-paid employees. By at least 10-15%, for some positions by 30-50%. The average index is somewhere around 15-20%. But this is only the first wave, next year there will be an increase in wages by another 15%.
You know that official inflation is a political tool, real inflation is much more.
– You said that you have 150 companies, how do you manage to control them all?
– All industrial enterprises are grouped into thematic groups. Technonikol has several divisions, we call them, as I said, strategic business units (SBUs). Each group has a co-owner managing partner, and he bears the burden of running the company more than I do.
Financial services and financial technologies are organized in the same way – 15 companies are united in a financial and technological group.
Accordingly, I am not involved in the daily operation of each group. If I was involved, I would not be here now (laughs).
My task and my mission is to build partnerships, complete mergers and acquisitions and be a mentor – mentor for managing partners if necessary.
– Which of your businesses do you consider to be your life’s work?
– This is philanthropy related to the quality education of children under 12 years old. I am obsessed with the idea of building more than 10,000 special kindergartens and primary schools of the new generation Rybakov PlaySchool around the world. The education received there will help to educate children as future adults in the two most important key competencies – the generation of defenses against abuse of power and control and the generation of the ability to plan something and achieve what is planned with the help of what is available. This knowledge will become the main help for the family in increasing the sense of security and quality of life. They will help educate people who build life according to their own rules, and do not study someone else’s.
We have been implementing this idea for the past five years together with my wife Ekaterina. Since we have four children, we went through a large number of different schools and kindergartens, among them there were and are very good ones, but even they do not give those skills that, I know, people should have. Such skills are not taught by any school, especially one of which the customer is the state. If the customer is the state, then it is obvious that obedient people will come out of such a school, observing discipline, convenient for someone. At best, they manage to survive, but they do not know how to flourish.
– Why do children under 12 study in your schools?
– The fact is that before the age of 12, 80-90% of what then determines his adult life is formed in a person, scientists have proved this, for which they were given the Nobel Prize.
But the whole world somehow ignores this fact. Mostly everyone is focusing on high school and higher education. Therefore, Katya and I are focused on this age.
– Was someone’s methodology taken as the basis of education? Was it recognized by the educational authorities?
– The knowledge of Lev Semenovich Vygotsky, a world famous scientist who lived in the era of the Russian Empire, was taken as a basis. According to his works, a large number of the best schools in the world are currently operating. However, in the market of preschool education in Russia, and in general on the territory of the CIS, few people know about this method so far.
My wife and I thought that everything had already been found, how to raise children so that they become autonomous, proactive, so we just took this program and certified it in all legislative instances. It meets the requirements of the Federal State Educational Standard, is included in the program navigator of the FIRO RANEPA. Today the technology is used by more than 400 institutions in Russia and abroad.
By the way, we are going to open PlaySchool in Kazakhstan as well. We are currently negotiating with one of the major housing developers to become the operator of kindergartens and schools in its residential complexes.
– Can Rybakov PlaySchool be called a charity project?
– It is more of a socially transformative investment project, the so-called low-profit company, its task is to be sustainable, to pay for itself through tuition fees, but it has no goal of distributing dividends.
We do not want to call the project charitable, because then we will block the entry of other entrepreneurs into this company who want to build Rybakov PlaySchool in different regions.
– So this is a franchise?
– In fact, yes, it is a franchise, but it works as an affiliate network. All members of the network help another beginner start a new school. But in fact, each institution will be autonomous with one global decentralized methodological center.
My vision: 10,000 primary schools and kindergartens Rybakov PlaySchool. I will help, I will build 30. The remaining 9970 will be launched by the partners of the network.
– How much will it cost you?
-As I have already said, I will build 30 PlaySchools, which is about 5,000 seats. One seat costs 1.2 million rubles. It is not difficult to calculate.
In 2020, at the Rybakov Prize, I publicly announced that half of our family’s fortune will be directed to the development of education, $ 100 million – over 10 years. Now I am in the first stage of fulfilling my promise.
– What is the cost of studying at Rybakov PlaySchool?
– In Moscow, where, let’s say, prices are higher than average, training per month on a 3-year contract costs 36,000 rubles per month. We prefer to build relationships with families for a long period of time, at least two to three years; by Moscow standards, this cost is even lower than the average. But if you want to come to Rybakov PlaySchool for only six months, then the cost of training for you will already be 60 thousand rubles, that is, we put practically prohibitive measures for those who want to interact with us briefly.
I think if parents want their child to have the skills I mentioned earlier, they will pay for the education. And those who cannot pay can apply to the Rybakov Foundation: it selects such families and gives them grants
– Is it true that you yourself decided not to leave your capital as an inheritance to your children?
– My wife and I decided to leave our children not an inheritance, but a legacy: to return the capital of the family to society – in the form of kindergartens and elementary schools.
– I read that you also support other entrepreneurs, including startups.
– Yes, there is one more area that I am engaged in – the entrepreneurial club “Equium”. Here I pass directly to my students the practices-techniques that lead to success. If Rybakov PlaySchool is for families with their children, then Equium is mainly for successful entrepreneurs who can become 10 times stronger under my accompaniment.
Today in Russia, Kazakhstan and other CIS countries there is a pronounced problematic: when success happens to you, then you start to guard it, hang in it like a trap, and stop, sometimes go abroad, instead of reinvesting funds and improving your country. There are many reasons why people do this. Meanwhile, this “hang-up” has an incredible impact on economic growth and people’s quality of life.
If you look at the culture that has developed in business in all post-Soviet countries, it is very tough and aggressive, in fact, just like everywhere else. Living in this aggressive culture, when you succeed, you immediately begin to build fences around yourself, as if you are fencing off from the whole world, and behind this fence you fall into isolation. You can see for yourself what large and high fences are in mansions near Almaty. It seems to people that they are not in isolation, but they are in isolation, because they launched the “self-guard” program and really forbade something new to penetrate into their lives.
When such a businessman enters our club, he communicates with other entrepreneurs, including foreign ones, and sees that they were also in a similar state, but now they have gone further, this motivates him, and he begins to grow without any effort. As a result, this affects the welfare of the entire country many times.
– Do you have a motto in life that you follow?
– I have many mottos … but my main one is “I want to make everyone rich”, because it is more pleasant for me to live among rich people than among the poor. Rich people are more likely to buy products from my factories. When everyone around is rich, the state collects a lot of taxes, builds many hospitals and roads. It has been noticed that rich people have a greater ability to feel the quality of life. Wealth is not only about money – it is a special way of life.
And when the rulers talk about social stability, the poor are saved. Therefore, everything I do, including education, is aimed at following this motto.
– You are now reasoning just like a psychologist …
– I don’t know about a psychologist (laughs). By and large, we all observe the results of alternative solutions over many generations, geographical manifestations and studying the statistics of consequences. And when you do this for a long time, you begin to seem to have scientific knowledge, that is, you have a certain field of cause-and-effect relationships, someone also calls it wisdom or experience. In fact, there are not so many laws of life and business in the world. But if you know these laws and put them at your service, then you succeed. If you do not know them, then you constantly have injuries and incompatibility with life. Life is the same physics.
Some say that they learn from life, and life is all beautiful and disgusting, white and black, it has many different manifestations. Therefore, when you learn from life, you automatically take in both, in other words, you get an average result. No, this is not bad, at least you will definitely survive and may even earn money for bread and butter. But if you apply for something more, then you will need to learn not from life, but from a teacher, from someone who has maps of minefields and knowledge of how to pass all these traps, to whom you can turn for help. Otherwise, you run the risk of being exposed to all winds and find yourself a victim of some kind of financial pyramid.
I always say, ask yourself the question: who is your teacher? Then you will understand who you can become in the future. And the point is not who we are now, weak, strong, white, red, the point is which of these qualities we are going to enhance, and this will depend on who we are learning from.
I also do not understand when people learn from teachers on the Internet, whom they do not know, that is, from some generated fake image – a talking head, I would be afraid to get knowledge from such a person.
– Who is your teacher?
– I had many different teachers. Now my teacher is Ruben Vardanyan, I learn business from him, and my family learns from his family, that is, for my wife and I, the family of Ruben Vardanyan and Veronica Zonabend is an example and role model.
I also consider my wife Katya to be my closest strong teacher, this is a rare case.
– Your fortune today is estimated at $ 2 billion, have you set new standards for yourself?
– When I earned my first billion dollars, I faced the problem of how to rationally return it to society in a transformed form – a whole combination arose about how many new generation schools I should build on them.
While reinvesting this billion, my fortune increased to $ 2 billion and I made a discovery: as soon as you expand the size of the benefit for others, your capital multiplies. This is one of the main laws of life.
Therefore, when my partners and I build 10,000 kindergartens and schools, I think I will have several tens of billions of dollars, each of my partners’ fortune will grow at least 10 times (X10). Let’s just say my KPI by 2030 is to make $ 10 billion. You can memorize these words, and then check them out after a few years.
– Do you remember the day you earned your first billion? How old were you at that time?
– I made my first billion when I was 45 years old. I remember this day very well – it was the day of meeting with my teacher. He took out Forbes magazine and said: “Igor, now you can teach others too.” On the same day, I founded Rybakov X10 Academy.
– And what did you feel then?
– I felt nothing. By this time, I already understood that the size of my fortune was close to a billion.
– Some people say that happiness is not in money, others that happiness is in their quantity. What does money mean to you?
– For me, money is the oars with which I move myself in the direction of my plans. And the bigger these oars are, the more I promote myself.
I know: money loves me, and I reciprocate them.
– Do you have an idol that you wanted to be like?
– My idol is who I want to become in the future, so I strive for myself.
The most powerful action that motivates me to do this is to change the world for the better through high-quality education of children. This is my obsession and I enjoy this clarity and will do everything to make it so.
(Meruyert Sarsenova, is a financial journalist of the business publication Kapital.kz. She has been writing about finance, economics and business in leading portals of Kazakhstan. She interviewed various famous personalities, including heads of banks, ministers and businessmen of Kazakhstan and the CIS countries.)