- •International Business Strategy
- •Midterm essay
- •Norilsk Nickel
- •Ownership
- •Internationalization
- •Ummc – Ural Mining and Metallurgical Company
- •Ownership
- •Internationalization
- •Russian copper company - Русская медная компания
- •Ownership
- •Internationalization
- •Armz Uranium Holding Co.
- •Ownership
- •Internationalization
- •Kamensk-Uralsky Metallurgical Works j.S.Co. (kumz)
- •Ownership
- •Internationalization
- •United Co. Rusal.
- •Ownership
- •Internationalization
- •Vsmpo-avisma Corporation.
- •Ownership
- •Internationalization
- •Conclusion
- •Norilsk Nickel
- •Russian copper company - Русская медная компания
- •Armz Uranium Holding Co.
- •Kamensk-Uralsky Metallurgical Works j.S.Co. (kumz)
- •United Co. Rusal.
- •Vsmpo-avisma Corporation.
Conclusion
After careful examination of most prominent companies in non-ferrous metallurgy sector in Russia, we could say that government influence in this industry is very visible. In some cases control of the companies is direct and manifested, while in other cases influence is more indirect and latent. However, government was able to influence companies in many issues or to help their internationalization, as well as ease their working conditions in the country and in that way prevent possible foreign entrants in this industry.
To support our conclusion we will refer to the book “Russian MNE’s”: ”Russian government protects domestic producers with quotas and tariffs as well as by creating favorable conditions for exporting. It also aids companies in buying foreign assets and make great effort to persuade other countries to reduce trade restrictions against Russian steel products.”42
Also, in 2009, Russian Ministry enacted program “Development Strategy of the Steel and Iron industry in the Russian Federation”. The program is consisted of practical measures, which set goals for government and companies that should be met until 2020. This program helped industry to prosper a lot during 2000’s. 43
To sum up, based on evidence we presented, our conclusion is that government affects companies in the non-ferrous metallurgy industry, which proves our introductory premise.
APPENDIX – Internationalization Tables
Norilsk Nickel
Country |
Finland |
Year of entry |
March 2007 |
Industry/ business area |
Metallurgy – non-ferrous metals. Nickel refining plant in Finland. |
Entry mode |
Norilsk Nickel acquired Harjavalta refining plant – brownfield investment. |
Motives |
Norilsk Nickel Harjavalta is the only nickel refining plant in Finland. Norilsk Nickel Harjavalta refinery has the capacity to produce 60 thousand tons per year of nickel products. It employs a technique of sulfuric acid leaching of nickel products. It allows to consistently obtain nickel extraction rates above 98%, being an advanced practice for the metals and mining industry. |
Firm specific advantages used on the foreign market |
Monopoly position, great work experience in this industry, professional management, government support to internationalize. |
First mover or follower |
First mover. |
Type of state involvement in the process of internationalization |
There is no clear link between Norilsk Nickel acquisitions and visible governmental involvement it the process. However, as we said earlier influence of government on owners of the company could have something with Norilsk Nickel action. Also there are other programs of Russian government intended to help metallurgy companies to grow, we will discuss it more in conclusion. |
Evaluation of the success of the internationalization |
Internationalization was successful. Norilsk gained access to new technologies and new production facilities as well as bigger capacities. Also, it gained monopoly on the Finish nickel market, because Harjavalta was only producer of nickel in Finland. Furthermore, it gained access to raw materials, experienced and quality managers and employees, and better access at the EU market.
|
Country |
Australia - Botswana |
Year of entry |
2007 |
Industry/ business area |
Metallurgy – non-ferrous metals |
Entry mode |
Norilsk Nickel (Norilsk) separately acquired certain assets of OM Group Inc (OMG) and all of LionOre Mining International Limited's (LionOre) assets through the brownfield investment. In Botswana government of Botswana has 15% ownership over company, while Norilsk has 85%. |
Motives |
Norilsk acquired a diverse mix of projects and growth opportunities which have a rich history in Western Australia's mining industry. In Botswana Norilsk obtain reach source of cheap raw materials. Furthermore, it become present and more involved in the new markets. |
Firm specific advantages used on the foreign market |
a diverse mix of projects and growth opportunities, great work experience in this industry, professional management, government support to internationalize, |
First mover or follower |
Compare to other Russian companies operating in the same country and the same business area. |
Type of state involvement in the process of internationalization |
There is no clear link between Norilsk Nickel acquisitions and visible governmental involvement it the process. However, as we said earlier influence of government on owners of the company could have something with Norilsk Nickel action. Also there are other programs of Russian government intended to help metallurgy companies to grow, we will discuss it more in conclusion. |
Evaluation of the success of the internationalization |
Internationalization was successful. Norilsk has assembled a strong management team experienced in mining and processing supporting the company's operations in the southern hemisphere, and with strong capabilities in building new operations in remote areas.44 Also, it obtained complementary technology for a "reserve rich" sulphide based nickel producer and an asset base of mining and processing operations that fit with Norilsk's refining capabilities. |