VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Transcript of the beginning of the meeting:
Vladimir Putin: Mr Strzhalkovsky, not only is Norilsk one of our largest one-company towns. Your company Norilsk Nickel is not only one of our industrial giants, but a world leader in its sector.
Norilsk Nickel has had a difficult time, as has the global economy and the Russian economy likewise. But overall, according to available data, the company is gradually overcoming these problems. And so accordingly, I would like to talk about the current financial status of the company and about how social issues are being resolved. You even raised wages a little, didn't you? You did not cut pay, but conversely, you raised it.
What is the situation in terms of jobs? It does not seem bad. In any case, there have not been any redundancies. How are other social problems being resolved, such as housing, transport and so on? Let's consider all of those issues.
Yes and first of all, how did the customs tariff support measures we adopted last year work out?
Vladimir Strzhalkovsky: Mr Putin, first of all, of course, I would like to express my gratitude for the temporary cancellation of export duties on nickel. Here we felt not only financial but moral support from the government. It was extremely important to know early on in the crisis that we did not have to face these problems alone. And knowing that the government is aware of our concerns, and the hardships we face, and that is ready to come to the rescue, allowed us to focus more on our work. And our employees, of course, sense this, understanding that they will not be abandoned in their hour of need.
Vladimir Putin: I remember that at one point you were at a disadvantage compared with your competitors on the global market.
Vladimir Strzhalkovsky: Quite so, because our main competitors did not have to deal with customs tariffs. Therefore, when prices on our products fell sharply and went below cost price, we were in a precarious position. One of our fields in Norilsk was barely breaking even while the company Kolskaya was already operating at a loss.
Of course, support was vital at that precise moment. We followed your instructions, we acted just as you said back then, ensuring that the money be spent solely on maintaining salary levels in order to avoid job cuts.
Overall we were prepared for a worse year, a more difficult year. It ended, I would say, on an optimistic note. Total revenue for the group of companies was 285 billion roubles. We expect a net profit of around two billion roubles, although we won't have an exact figure until the report comes out.
This has enabled us to fully settle our debts, the $1.25 billion that we borrowed in previous years. We did not have to borrow any more money, instead settling these debts by optimising our industrial processes. We optimised our bulk purchases and operations with contractors and cut out the middle-men almost everywhere, and our margin increased instantly. As I said, we did not cut jobs and even paid bonuses. As of January 1, we raised everyone's salaries by 10%, which was a welcome move. We also improved the social benefits we offer.
Vladimir Putin: People are more understanding of difficulties if they see that the management and owners of a company are doing everything possible to straighten out the situation and foster development. Therefore, it seems to me that you made absolutely the right decision in raising salaries by 10% from January 1.
Vladimir Strzhalkovsky: In addition, we are improving recreation facilities for people who live in remote one-company towns. This is extremely important. As part of the benefits we offer, we now provide a free one-way flight to Sochi. Why one-way? Because our holiday allowance is generous and after a holiday in Sochi, people normally travel elsewhere, visiting their hometowns and relatives.
I think that overall this has proved a good solution. Your directive concerned not only Norilsk, but other regions as well. But Norilsk entails air transport. Indeed, this was a major concern for both the region's residents and the company's employees, and you set us the goal of standardising this process.
We were, however, unable to do this merely by negotiating with the airlines. Therefore, we did the following: we leased planes through our Taimyr helicopter company and used the leased Boeing 737-800 planes on the routes Norilsk-Moscow, Norilsk-Krasnoyarsk, Krasnoyarsk-Moscow, and we just recently started Norilsk-Sochi flights.
We almost halved prices, not artificially, not through subsidies, but by optimising transport and loading. This pushed other companies to slash their prices, and now an economy class Norilsk-Moscow ticket costs 9,600 roubles. Everyone can afford that, so the issue is resolved.
As for social benefits, this is extremely important for Norilsk residents and most of all those working for the Kolsky company, to have housing in central Russia, what they call "on the mainland", upon completing their contract. They endure harsh climatic conditions and of course, later, they all want to move to central Russia.
In the 2010 budget, which was approved in late December, we made provisions for a special program to deal with this. It is called "Our House." It co-finances apartments in central Russia: the company pays 50% and the employee pays the other 50%. This is not for all members of staff, but for those who work diligently, who have worked in the region for several years, as a way of reducing employee turnover. This is significant support.
More importantly, they immediately get an apartment to rent and in five, eight or ten years, depending on the contract, they will own it. Two regions were selected of course after research was carried out, they are the Moscow Region and the Krasnodar Territory. So we are launching this programme: we have allocated 4.2 billion from the budget. This also found understanding and support.
Vladimir Putin: Okay. What are the problems, Mr Strzhalkovsky? What are the goals and prospects for the near future?
Vladimir Strzhalkovsky: There are, of course, always problems. We still have a large debt burden. We will pay it off and money has been allocated for this. More than $2 billion of investment in our Russian companies is planned.
Vladimir Putin: What looks most promising, in your opinion?
Vladimir Strzhalkovsky: Developing our ore base. We have depleting mineral ores, and we need to mine ever more ore to support and maintain production. And the investment projects for renewal will focus on copper.
You signed a letter and I consulted you in late August in order to bring cupriferous ore resources into exploitation that were established during the Soviet era. This work is going slowly.
If we are unable to resolve all issues with the government at the end of this month, this will be delayed another year, and some of our capacities will lie dormant. In other words, I would like to ask for this to be expedited.
Vladimir Putin: Let's discuss this in detail right now.
