The stealth-like hull of Andrey Melnichenko’s superyacht is designed to cut through waves leaving barely any wake. Costing an estimated $300 million, the ship uses a unique submarine shape to remain stable in rough seas. Interiors combine Baccarat-crystal bling with fingerprint-reading gadgetry to unlock cabins.
The swanky boat reflects the same eye for innovation and high-tech detail that Melnichenko, 44, is now focusing on the fertilizer business that’s helped make him one of Russia’s youngest billionaires. With revenue dropping because of a global surplus and weaker farm income, the tycoon is remaking EuroChem Group AG into one of the few companies in the world using micro-organisms and polymers to tailor-make products so farmers can grow stronger crops.
“We aim to transform ourselves from a manufacturer of cheap commodities into a company that creates and promotes high-tech products,” Melnichenko said during an interview in Moscow.
He owns 90 percent of EuroChem, a producer of nitrogen and phosphate fertilizers with assets in Russia, Lithuania, Kazakhstan, Belgium, China and Brazil, and plans to start potash operations next year.
The company has already shifted about a fifth of its sales to the higher-value specialty fertilizers, its premium product, and seeks to increase that share further. Among them are inhibitor products that allow slow release of nutrients into crops.
If Melnichenko’s ambitions for change are uncommon in a Russian resource company, so was his route to commodity riches. Too young to gain from the 1990s privatizations that made many oligarch’s fortunes, he began trading currency with two friends while a physics student at Moscow State University.
After the Soviet Union fell, the trio registered themselves as a bank, before Melnichenko began buying assets including in thermal coal and fertilizers. He sold his banking interests in 2007, just before the global financial crisis, allowing him to focus on those industrial investments.
In 2012, the acquisition of a BASF SE plant in Antwerp by EuroChem for 830 million euros ($930 million) brought in new technologies.
Another part of his strategy is to make the Russian company a one-stop shop for farmers by selling seeds produced by international producers, testing soil and plants and offering advice on improving conditions and what crops to grow. The group is expanding its distribution network and this week announced that it will open new distribution center in Hungary.
"The company is diversified and starting to provide high-tech specialty fertilizers," said Elena Sakhnova, an analyst at VTB Capital. "It has gained a large distribution network, while having low costs."