Ovnan Lalayan has a passion for traveling. But unlike most other tourists enjoying the comfort of their suites, he can't help but scrutinize how hotel businesses are run and, from a professional perspective, observe every little detail that could matter.
Born, raised and based in Moscow, Lalayan now runs a successful construction company that has left its noticeable trace on the face of the Russian capital and nearby areas. The 32-year-old graduate of International University of Geneva, in business administration, became director general of Construction Department 7 (SU-7) Fundamentstroy (literally translated "foundation company") Closed Corporation two years ago after the sudden death of his father, Meruzhan, a native of Artashat, Armenia, who was in construction in Moscow since 1972 and founded the company in 1994.
Ovnan did not have a background in construction when he had to assume leadership of a company running a $70-80-million-a-year business with a staff of some 1,000. So he relied on what he had picked up from his father – a veteran builder and businessman who had been in construction for nearly four decades.
Lalayan Jr., though, still gets a chance to explore his interest in the hotel business as his company runs three hotels, including one in Armenia. In fact, he says that while the construction business has suffered contraction, the hotel business remains lucrative.
The businessman says the financial and economic crisis that started at the end of 2008 put a heavy strain on his companies in general.
While the peak of the construction boom in Moscow and elsewhere in Russia passed with the onslaught of the economic crisis, Lalayan says the construction market particularly has shrunk considerably. Specialists estimate that commercial construction has decreased by some 70 percent, while other construction shrunk by half. (Before the slump, construction was a nearly $15 billion a-year-sector in Moscow, with volumes of construction also growing in other major cities and locations of Russia.)
"You can count on your fingers how many construction sites (in Moscow) were started last year and in the first few months of this year. The tendency is that suspended construction sites are being revived, because 18 months have passed since the start of the crisis, and there is some stabilization in the market."
And with the slow resurrection of construction comes renewed competitiveness.
While in Western economies productivity is achieved through innovation and efficiency to reduce the cost of production, in Russia, builders still mostly rely on a lower cost of labor to achieve affordability.
The Russian construction industry, Lalayan says, "still lags behind in terms of Western standards. Introduction of new technologies, IT technologies, all this will have an impact on competitiveness."
Lalayan, however, thinks that the cause of the problem might also become its cure.
"The financial crisis began in the United States because of the mortgage collapse, and so construction on the one hand was the cause of the crisis. But on the other hand it could also prove to be a certain flagship for dragging the economy out of this crisis – more construction, more jobs, more revenue for the whole economy. Yet the situation is unlikely to drastically improve tomorrow.
"I think what we had here in Russia in 2008 is unlikely to be repeated for a long time and probably there will not be such a thing again. However, the situation will be more stable in terms of demand, because the demand that existed before the crisis was considerably inflated. People would build property as a financial instrument of investing their money because property prices were on the rise, because bank interest rates did not bring a profit as property did. That boom was abnormal and today I think this demand is healthier and based on the definite need for housing construction."
In the two years since becoming CEO, the young businessman has earned a reputation as a hands-on manager while at the same time remaining good-hearted, modest and easygoing with his staff.
"A great guy. His father's son," one construction worker, who also worked under Lalayan's father, told AGBU, giving the thumbs up to Lalayan Jr.
His father's son
Lalayan followed his father's steps not only in business, but also in community life.
SU-7 Fundamentstroy has built numerous housing and municipal construction sites in the Moscow region of Podmoskovye, and in 2005 became the general contractor for the construction of an Armenian church and complex in Moscow—a site hoped to become a magnet for the (estimated) 500,000-strong Armenian community of Moscow and possibly a two-million-strong Armenian Diaspora throughout Russia.
"There was a great desire to get the Armenian church built. The Armenian Diaspora in Russia is the largest of Armenian diasporas and it has the strongest influence on Armenia—if not financially, then at least socially and culturally. But until today we have had no central church of Armenians in Russia," says Lalayan, who recalls an atmosphere of certain skepticism at first among local Armenians about the grandiose plans for the church.
"But like a real patriot, a real Armenian, my father, who knew how to build things, agreed then to become a contractor, even though there was more burden of responsibility than prospect of gain in that project," says Lalayan. "The goal was so important and the project so vital that my father immediately agreed, even without knowing what the funding would be."
Lalayan Jr. says it was his duty to continue what his father did for the Church after his death. As with his father's agreement, now too, he recovers only the cost of labor and material.
"I could have opted out of this as it was a difficult period for me and the company. But that clearly wasn't an option for me. And today, even despite the crisis, even when donations [for the church construction project] have considerably dwindled, we don't give up, we still continue to build," says Lalayan.
The budding businessman, who yet has to start a family of his own, says the church will be a lasting legacy for the generations of local Armenians to come, which eclipses by its scale any possible difficulties the project might face today. "My father's principle was—if not I, then who?" he explains.
Lalayan says his staying "Armenian" is a direct influence of his family. He has never lived in Armenia, nor attended an Armenian school. He spent summers in Armenia, to which he attributes his ability to speak the language fairly fluently.
"I was raised in a classical Armenian, traditional family, visiting Armenia every year. Being Armenian is natural for me. And while I may be a Russian-Armenian, my blood is Armenian and I think like an Armenian."
Not incidentally, Lalayan has combined his passion for the hotel business and the strong cultural bonds he enjoys with his historical motherland in a hotel in Aghveran, some 55 kilometers northeast of the Armenian capital Yerevan, a favorite resort for many Armenians.
Lalayan says the 124-room Arthur's Aghveran Resort, a modern hotel built in the style of an Alpine chalet, wasn't a miscalculated move, even though it was driven more by emotion than by business. The recently built hotel employs 80, and is becoming popular not only with locals, but also with foreign tourists.
"Armenians are known for their hospitality and to a certain degree the hotel business is in the Armenian blood," says Lalayan, who says the success of his hotel in Armenia is largely due to its natural surroundings. (The company also has one hotel in Russia and one in Ukraine).
"For a country like Armenia, tourism perhaps holds out more opportunities than even an oil well—should one be discovered there. But this multifaceted industry needs a whole infrastructure built and developed around it—from normal accommodations to good roads and toilets. This task, however, needs a joint effort, a joint approach from the state and business. Money is not always the problem. Sometimes there is no good ground to invest that money in order to get some return, rather than see it become a waste," concludes Lalayan.
While ties with Armenia are becoming thinner in the Armenian community of Moscow and Russia overall, especially with the slowing down of economies during the turbulent times of the global crisis, another successful Armenian family has been trying to use its business strength to help faith hold people together culturally.
Ruben Grigorian, a native of Hoktemberian, Armenia, is now president of Rutsog-Invest Company, a major investment and building firm based in Moscow.
The 56-year-old, whose business has done well since he commenced as entrepreneur in the late Soviet period, graduated from the department of radio electronics at the Yerevan Polytechnic Institute before he moved to the Russian capital in 1977.
Grigorian, who was a school administrator during the Soviet years, managed a college and also worked in Germany for four years, says he chose Moscow for his career through a coincidence of circumstances (though it is well known that any ambitious Armenian saw a post in Moscow as the crown of achievement in Soviet times).
Doing business in Moscow, he says, required (and still does) certain experience and "courage" as well as a particular mindset if the city were to embrace a newcomer.
"And Armenia is the land that gives you this type of nature," says the successful businessman, whose holding today has a capitalization of about half a billion dollars.
Grigorian says that Armenians are particularly successful in business in Moscow and throughout Russia first of all because they have the genes for the work. He sees a lot of rivalry in business among different diasporas, but says Armenians have certain features and qualities that help them stand this competition. And he also puts it down to the history of the nation when Armenians learned by necessity to become survivors.
Asked why he chose to base his business in Moscow, Grigorian says: "Of course, it is impossible to do business locally, in one place only, in today's increasingly global world." Grigorian's firm now is also working on a project in Prague, Czech Republic, and plans to expand overseas with a project in New York.
However, Grigorian says he feels reasonably comfortable with a Moscow-based company, adding: "I wouldn't say that it is easy to do business in Moscow and Russia as a whole. It has its own specificity. While your business might be successful, you always have to overcome some difficulties as with any country."
Doing business in Russia
Grigorian turned his "courage" into business with the onset of Perestroika in the Soviet Union. At that time, the late 1980s, reformist Secretary-General of the Communist Party Mikhail Gorbachev attempted a major shakeup of the stagnant economic system, a process that, uncovering the woes of the political and economic system of the USSR, led to the demise of the Soviet state in 1991.
He says the breakdown of the "single country" and "division of the motherland" (i.e. Armenia's separation from the rest of the Soviet Union) did not leave him much choice.
"Even in Soviet times Armenia was quite isolated from other republics," says Grigorian, speaking about differences of life in Armenia and Russia at that time. The emergence of new market relations promised good opportunities for business then and so Grigorian engaged.
"I think my business career was quite successful from the very start. Some say that everything is in your hands. But I believe that everything is in your genes. Some ethnic groups are more enterprising than others and Armenians can favorably compare to other Diasporas in this sense," says Grigorian.
Since establishing his business in construction and development in the 1990s, Grigorian and his groups have implemented a number of large projects giving a modern facelift to the Russian capital (and beyond), including the multipurpose complex "Sheremetievsky," Trade-Office center "Olympic Plaza," residential and apartment houses, hotel complexes and other sites. In particular, the company has built complexes for Kempinski, the largest network of five-star hotels in recent years.
Currently, Rutsog-Invest is completing a large hotel complex in Moscow and is also working in Yekaterinburg, a major city in central Russia.
Faith and business
Grigorian is also a major donor of the Armenian Church and his company plays a central role in the construction of the new complex that will become the largest in the Diaspora.
"We do the hardest job as the technical advisor," says Grigorian. "This involves making sure everything meets all regulations, which are numerous."
"The spiritual aspect of it is rewarding, though," says Grigorian. "After we get this complex done and when it starts functioning, this will mean a lot for the local Armenians as it will accentuate the status of the community."
The businessman, who works in a competitive environment of all ethnic groups (of which there are at least 100 in Russia), appreciates the church complex as a symbol of the Armenians' consolidation and strength.
"Seeing all this power, they [other locals and Diasporas] will think twice before taking a step against an Armenian," says Grigorian. "If your surname is an Armenian one, you will get respect."
For native land
Grigorian has also contributed to spiritual life in Armenia, where, while consolidation is still needed, there is hardly rivalry with other ethnic groups.
Three years ago the businessman restored the 19th-century St. George Church (Surb Gevorg) in Aigeshat village, Armavir region. This was the church where his late father was baptized more than 70 years ago.
"Four years ago I was in Armenia and saw that the church was nearly destroyed. I also saw that the locals were in a very hard social situation, most of them lacking faith in a promising future. This renovation could also serve as a sign of hope for them as this beautiful structure will serve as a message: 'Don't lose heart, have faith.'"
Global trends and Armenians
Grigorian is surrounded by different photographs, pictures and books representing "The Armenian" in his working office in a modern building on Moscow's Prospect Mira. In front of his armchair and working desk, on the other side of the room, there is a picture of Mount Aragats—the highest point in modern Armenia.
Grigorian says the choice of Armenian items surrounding him is explained simply. They are not merely patriotic, but are "esthetically beautiful."
Proud of his roots and still speaking Armenian fluently, Grigorian says that he believes global integration will sooner or later overtake the modern world and he expects the "assimilation process" to be more of a concern to his son and grandchildren rather than himself.
Grigorian's son Bogdan, 24, is a native of Moscow and a graduate of the Moscow State Institute of International Relations, or MGIMO, a prestigious Russian school of learning that trains diplomats for top postings. Bogdan has not yet earnestly pursued his career in diplomacy, but says that the skills provided by the top Russian university help him to assist his father's business as head of one of the company's departments.
Coming from a half-Armenian, half-Russian family, Bogdan says he's never had questions about his identity, as he's always considered himself to be an Armenian.
"I've always been drawn to learning Armenian culture, traditions, history. I've been in Armenia many times since childhood. I always feel at home when I go there," says Bogdan, who doesn't speak Armenian, but says he feels more Armenian than even those who consider themselves "pure blood" Armenians just because they can speak Armenian.
"The construction of this church complex will also have a major role for Armenians in Russia to communicate with the Armenian culture and also learn the language," says Bogdan, speaking with enthusiasm about the project in which the company has made a contribution.
Getting the machinery for it
Like Lalayan and Grigorian, "non-Moscovite" businessman Gevorg Mehrabian also plays a central role in the construction of the spiritual center. A native of Armenian-populated Tsalka in Georgia, he is contributing with machinery produced at his plant in Alexandrovsk, Perm region.
It was in 1977 that Mehrabian left Georgia and moved to Russia where he now heads a large machinery-building plant.
It is also these machines that have been used to cut stones for what will become the largest Armenian church compound outside Armenia.
But Mehrabian, 55, is not even based in Moscow. He is chairman of the Board of Directors of the open joint-stock company Alexandrovsk, some 1,100 kilometers east of Moscow.
The businessman was, however, one of those who appreciated the need for having a larger Armenian "spiritual home" in Moscow when Bishop Yezras Nersissian, Primate of the Armenian Diocese of Russia and New Nakhijevan, launched his ambitious construction project in 2005.
"The church is very important to us Armenians, who live not only in Moscow but throughout Russia," says Mehrabian, an energetic entrepreneur who often comes down to the Russian capital on business trips. "If we neglect our heritage and fail to develop culturally and spiritually, our trace (here in Russia) will soon be gone."
Based in a Russian province, the head of the machinery works (AMZ) whose products sell well beyond the Russian borders (and are used in the mining industry, metro construction, etc.), never forgets his homeland.
Until Yerevan feels the need to expand its metro system (in which Mehrabian's machinery would be quite handy), the businessman helps homeland Armenia mainly through donations. In particular, he has donated two ambulance cars to Stepanakert in Karabakh and another one to a medical center in Yerevan.