by David Zenian
A "serious" business meeting in post-communist Russia still involves a toast here and a shot of vodka there, but Western ideas are beginning to make inroads into an old culture where the term market-economy was nothing more than another capitalist concept.
"People are demanding the best in products and services. I can no longer say take it or leave it because we have competition now, and if the customer is not happy, he will go someplace else," said Artur Bagryan who operates the only Armenian-owned Volkswagen car dealership in Moscow.
Bagryan, 44, is one of a growing circle of Armenian businessmen who have flourished in Russia, mainly because of their deep understanding of the Russian business culture, knowledge of the language and the reputation of generations of Armenians before them.
For many of the new Armenian entrepreneurs in Moscow, communist-era connections have also played an important role. Others, true to the reputation the Armenians have developed over the past decades, were intuitive enough to jump into the Russian business world at the right time.
At a social gathering in Moscow, my Russian host was surprised when I said I was a journalist. "All Armenians are businessmen, how come you are not," he asked and proceeded with naming several top Armenians industrialists, builders, traders and oil exporters who have made a name for themselves in the short decade since the collapse of the Soviet Union.
Bagryan had no business experience when communism began to collapse. His background was military. Born in the eastern Uzbekistan town of Kogand and raised in Baku, Azerbaijan, by his father, a Nagorno Karabakh native, Bagryan served in the Soviet military which later sent him to Moscow to study Vietnamese.
"I could not have said all this ten years go. I held the rank of Major in a special military unit," he said with a smile. "Do you mean the KGB?" I asked. Bagryan smiled again and moved on to name some of the places he has served in during his military career from 1984 until the collapse of the Soviet Union.
His first posting was at a Soviet listening-post in Azerbaijan. "I stayed there until 1988, but when the conflict began in Nagorno Karabakh, the Azerbaijani authorities demanded that I be moved out because they considered me an enemy of their nation.
"I was transferred to Georgia, but that assignment did not last too long because the Soviet Union collapsed and I had to move back to Moscow. I left the military service at the end of the 1991. I did not have any money, and the only job I could find was with the police department," he said. But after a short stint with the police and a few months with a private security agency, Bagryan was out—this time in what he now calls "the uncertain and open market-place where everyone was on his own."
His first taste of free enterprise came with the opening of parking lots in the residential neighborhoods of Moscow, then a small coffee shop and later an Armenian restaurant. In a few years, Bagryan had already mastered the "art of free enterprise" and was moving from one business venture to another.
He sold his parking lot business and bought several acres of land on the city outskirts and took his first government-issued license to operate a "duty free zone" for trucks bringing in goods from across Europe to Russia. Today, that location handles more than 600 trucks a month. "I have nothing to do with Russian customs. I only charge a fee for parking and other services," he said.
In 1999 Bagryan negotiated and acquired one of the 13 VW dealerships from the German car manufacturer, which not only set up a modern showroom, but also a state of the art service department. His "Artico" company now is one of the fastest growing medium-size enterprises in greater Moscow.
Even though Bagryan has never lived in Armenia, his sense of national identity was never compromised.
Halfway through the interview, Bagryan stood up. "Come, let me show you something," he said. A few hundred yards away from the sprawling VW showroom stood a small Armenian chapel, built with the famous brown "toufa" stone imported from his ancestral homeland.
"Despite the fact that Moscow has an Armenian population of over 500,000, the only other chapel this community ever had, was at the Armenian cemetery. I felt I needed a place for people to worship, and as I had this land available on my premises, I built this chapel here. I often say a little prayer before I get to work," he said.
But despite his deep-rooted sense of identity, Bagryan remains skeptical when it comes to investing in Armenia. "I just cannot understand what's going on there. I don't know who to trust. Of course there is corruption here, but this is a large country and people like me have enough freedom to not only survive but also prosper. It is a lot easier to do business in Russia than Armenia," he said.
Another shining star in "neo-capitalist Russia" is 42-year-old Vitaly Grigoryan, a Baku-born Armenian who has made his fortune in oil, banking, fertilizers, and real estate. After graduating from law school in Moscow in 1981, Grigoryan held several junior positions with the judiciary but he was more inclined toward what he describes as the "business world." With a group of venture capitalists and the sum of 10,000 dollars, Grigoryan set up an offshore company in the Bahamas and entered the oil business in 1992, trading crude oil in the markets of the former Soviet Union.
Today, Grigoryan holds a 25-year drilling concession for oil in Russia and has already started exporting crude oil to Europe. The quantities may not be too large by international standards, but for someone who only started 10 years ago, the jump from near zero to the leadership of a company that employs nearly 10,000 people is not a minor achievement.
Apart from his crude oil export business, Grigoryan, in partnership, owns 300 gas stations (Alpha Nafta) in Ukraine, two refineries—including one in Estonia—and a long-term oil drilling concession also in Ukraine which is already producing 18 million barrels of oil per year. A soft spoken and elusive man, Grigoryan is also a major shareholder in an agricultural fertilizer plant in Uzbekistan, the "Seberbank" in Armenia, and "Arch USA", a construction company which has already started building residential homes in the San Jose, California area.
Over the years Grigoryan has quietly helped Armenia with much-needed oil imports, especially during the energy shortages of the early 1990's. "I am an optimist and I honestly see a bright future for Armenia. I don't say this because I am Armenian. I don't even speak the language. Despite the blockade Armenia is still doing a lot better than some of its neighbors. As much as Russia is vital for Armenia, we also need the close friendship of the United States," he said.
If Grigoryan is to continue to prosper, he needs the pipelines to get his oil from one place to another—something, which Senik Gevorgyan has done for more than 30 years.
Gevorgyan, who is now in his upper 60's, is an electrical engineer who jumped at the opportunity when the "Zakneftegazstroy-Prometey"—an offshoot of the USSR Construction Ministry for oil and gas enterprises—went on the auction block in the years immediately after the privatization process began in post-communist Russia.
The first step was to re-organize, and in 1990 it became a joint-stock company with Gevorgyan as Chairman of the Council and major shareholder.
In the past 12 years, the company has not only grown, but also embarked on new ventures, constantly adding to a power-base, which now employs more than 3,000 people—mostly Armenians. While registered in Armenia where its headquarters are located, the company has also established many so-called sister enterprises which include a construction division in Uzbekistan, a medical center, a bank and television station in Armenia, and branch offices across Russia.
One such sister company, Prometry XXI CJSC, which was founded in 1996, is the main contractor for the Belarus section of the Yamal-Europe gas pipeline. It has already laid down more than 140 kilometers of pipes. Another sister company is the Prometey Linear Construction Trust which has laid more than 300 kilometers of gas pipelines in the Republic of Uzbekistan.
As Gevorgyan's business empire grows, so does his commitment to helping Armenia, which is not only his birthplace, but the country where his grandparents took refuge after surviving the first Armenian massacres of 1895 in what is now eastern Turkey. "Realities cannot be ignored. Economic conditions in Armenia are bad, and thousands of people are leaving," he said an interview.
Gevorgyan, who employs thousands of Armenians on his various pipeline construction projects, places a few conditions for anyone who wants to work for him. "They cannot bring out their families. Their paychecks have to be sent directly to the bank accounts of their families in Armenia. This is one way of keeping a secure and constant cash flow into the Armenian economy," Gevorgyan said.
But just a cash flow is not enough.
In the past few years, Gevorgyan has expanded his holdings and purchased a number of factories in Armenia, including a chemical plant, a chemical fiber works enterprise, and an adjacent thermal power station, and is busy with modernization and improvements.
"Once we get these factories working, we will be able to provide much needed employment to hundreds of people in Armenia. I cannot argue with the fact that we need to create jobs in Armenia to save our country, but I cannot neglect the needs of the thousands of people who have no choice except to leave for Russia. They too are important, because they send hundreds of thousands of dollars home to their families," Gevorgyan said.
If job-creation is a top priority for Gevorgyan, philanthropy is also high on his agenda. Over the past decade, his charitable activities have included assistance to a large number of needy families, disabled people, pensioners, the Armenian Church, as well as investments in the science and health sectors along with culture and sports.
Only recently, Gevorgyan funded a three-hour Russian-language television documentary entitled "Armenia through the Ages—4000 years of Armenian History" which was aired on Russian television stations. He has also funded and published a pictorial historical guide dedicated to the 1,700 anniversary of Christianity in Armenia. The book is in Russian, English, and Armenian.
Hard work and perseverance have always been two of the main pillars of success, and Sergey Ambartsumyan is another example of Armenian entrepreneurs in Moscow. Born in the Azerbaijani town of Kirovabad, Ambartsumyan was five years old when his family moved to the town of Ghapan, Armenia, in 1957 where he received his early education, followed by a degree in engineering from Yerevan University and graduate studies in Moscow.
Upon his return to Armenia in 1985, he began teaching at his Alma Mater and climbed up to a top administrative position. "When I left Yerevan and the academic life in 1994 and moved to Moscow, I was making seven dollars a month. How can a person survive and keep a family. I had three children, and my wife, who is Ukrainian, did not want to leave. But I had no choice," he said in an interview at his Moscow office.
Thanks to friends, he soon established the Monolit, Architecture and Construction Company (CJSM MonArch), and took his first building contract for the Moscow city government. In less than eight years, his company has become one of the better- known engineering and construction firms in the greater Moscow area and has played a key role in the city's modernization.
Among his show-case projects are the Marriott Hotel, the Imperial Bank building, the Deutsche Bank building, the Aurora Hotel, the Avtobank building, and a number of modern residential buildings, schools and government administrative offices.
It was no surprise that given his reputation, Ambartsumyan was invited to join Glavmosstroy, the leading contractor of the Moscow government, and an open joint-stock company, which has more than 60 smaller firms under its jurisdiction. It has a work-force of more than 30,000 people. Ambartsumyan is Glavmosstroy's chief builder and first vice-president.
"You can say I have two parallel careers in Moscow today. I wish I had the same opportunity in Armenia," he said. "I did try to enter the construction market in Armenia four years ago. I did approach the government and offered to build earthquake resistant housing, but I faced so many hurdles. Land is government property in Armenia, and I needed the cooperation of the authorities which I could not get."
Describing his effort as a "bad experience", Ambartsumyan said he gave up and returned to his work in Moscow. "It is a sad situation. All the shoemakers in Armenia have moved to Syria, and the builders and engineers are in Russia along with many other professional people. Moving to where the opportunities are better is a human instinct. I am not less of an Armenian because I came and settled down in Moscow," he said.
Moscow is a booming town, and new wealth means fashion—yet another opportunity for a young Armenian who came to Moscow after living in Paris for ten years.
Gourgen Bdeyan was born in Yerevan in 1964 and had just started working as a sculptor and painter when the Soviet Union began crumbling in 1989. "I saw no future, and like many other artists, I left in search of a better life in Paris. I had great hopes and expectations, but I was naïve. I could not make it as an artist, and instead, had to do menial jobs just to survive," he said.
His first break came when his brother-in-law moved to Paris with "some operating capital" and joining forces began a small company to export French women's clothing to Russian markets. "Russian women came out of communism with a vengeance," Bdeyan explained. "They want to dress well, and in their minds, French fashion is the way to go."
Bdeyan soon set up offices and moved to Moscow to coordinate the Russian side of the business, which is primarily based on organizing "shopping trips" to Paris for Russian boutique owners and wholesale merchants. "I know the Paris fashion scene. I know the factories that produce the ready-to-wear clothing. The Russians need this, and I am here to provide a valuable service," Bdeyan said.
As his business began taking off, Bdeyan established a shipping and travel office to accommodate the needs of his Russian customers.
A self-made man, Bdeyan, who is fluent in Russian and French, has recently embarked on yet another project—this time the organization of Moscow's first Paris fashion week to introduce French manufacturers to Russian buyers. "We deal with thousands of small and large clothing companies in France. At least for now, business is booming, just like Moscow, he said.
