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GrandPrix, NY
Jan 24 2005
Midland - where does the money come from?
The Midland Group, the new owner of Jordan Grand Prix, seems to be
rolling in cash, at least that is how it looks when one examines the
impressive list of acquisitions it has made in the last three years.
The Midland empire is said to have revenues of $2bn a year but as it
is registered in Guernsey, where confidentiality laws are still
strict, there are no actual details of its financing.
Midland is run by chairman, 36-year-old Alexander Shnaider, a Russian
who grew up in Israel before emigrating to Canada, where he now has
citizenship. According to The Toronto Star, after graduating from
university in Canada Shnaider went to work for an international
trading company in the Ukraine. At the time when the old Soviet Union
was breaking up and when Ukraine emerged as an independent country
there were some extraordinary opportunities for entrepreneurs.
Shnaider told the Canadian newspaper that the steel mills in the
Ukraine were without customers at the time and so he and his partner
Eduard Shifrin did a deal with one of the steel companies to sell
steel and pay the companies back after the deals had been finalised.
This unusual arrangement was such a success that Shnaider and Shifrin
made sufficient money to buy control of Zaporozhstal, Ukraine's top
steel company, when it became a joint stock company in January 1997.
Gaining control of Zaporozhstal helped the two men to become hugely
wealthy in the years that followed and funded Midland's growth. The
company has also benefited in the last two years from surging steel
prices which have resulted from huge extra demand from China. Midland
diversified into steel-trading activities through Midland Resources
Holding Ltd and Midland Industries Ltd and then into the scrap metal
trade via a number of companies including Dan Recycling, the largest
scrap processing operation in Israel. The firm also went into steel
warehousing with businesses in Turkey, Britain, Serbia and Poland.
This was followed by the establishment of two shipping companies:
Midland River-Sea Shipping and Midland Shipping.
In addition Midland has added to its holdings ownership of the port
of Pancevo on the Danube and a copper and brass mill in Serbia. It
bought the national electricity distribution company of the Republic
of Armenia but is already to looking to sell that because of
opposition to the deal within Armenia.
Since the start of 2003 Midland has invested heavily buying the Red
October steel works at Volgograd in Russia, Montenegro's Niksic metal
company, the Kremenchug steel casting company in the Ukraine, there
has also been the Dneprodzerzhinsk Railcar Foundry and the
Donetskprodtorg trucking company. It has also bought Gumaplast, a
producer of rubber and plastic weatherseals for the automotive
industry in Serbia.
The company enjoys close links with the Moscow municipal government
in Russia and has developed the Arbat Business Center in Moscow and
is also involved in a big project to build overpasses throughout the
city, each combining business, entertainment and shopping areas. In
addition the firm has a deal until 2019 to operate containers for
selective collection of municipal waste and will use these to
advertise as well as collect rubbish. It has also recently signed a
deal with Moscow to turn an old metal processing center in the
Shabolovka district of the city into a housing development with
condominium-style apartment blocks.
In addition to all of this Midland has bought a meat-processing
company and a bakery chain in Serbia not to mention a number of
hotels and restaurants in Belgrade including the Hotel Kasina, the
oldest hotel in the city. There is also an involvement with US tycoon
Donald Trump in the development of a Trump International Hotel and
Tower in Toronto and another Trump-badged project in Hong Kong.
Keen to have a high profile international image, Midland has now
decided to enter F1 and it would be a surprise if some of the
companies listed above where not tapped for sponsorship. The team has
hired Boris Yeltsin Jr to work in its marketing department but will
be represented at races by a rather more western management,
involving Colin Kolles as managing-director. Kolles is the driving
force behind Kolles Racing and TME Racing, two contenders in the
Formula 3 Euro Series. The marketing director will be Christian
Geistdoerfer, a former World Rally Championship co-driver, who won
World Championships with Walter Rohrl in 1980 and 1982 before
starting up an event management agency. In addition the company will
feature Gary Anderson as technical director.
Jan 24 2005
Midland - where does the money come from?
The Midland Group, the new owner of Jordan Grand Prix, seems to be
rolling in cash, at least that is how it looks when one examines the
impressive list of acquisitions it has made in the last three years.
The Midland empire is said to have revenues of $2bn a year but as it
is registered in Guernsey, where confidentiality laws are still
strict, there are no actual details of its financing.
Midland is run by chairman, 36-year-old Alexander Shnaider, a Russian
who grew up in Israel before emigrating to Canada, where he now has
citizenship. According to The Toronto Star, after graduating from
university in Canada Shnaider went to work for an international
trading company in the Ukraine. At the time when the old Soviet Union
was breaking up and when Ukraine emerged as an independent country
there were some extraordinary opportunities for entrepreneurs.
Shnaider told the Canadian newspaper that the steel mills in the
Ukraine were without customers at the time and so he and his partner
Eduard Shifrin did a deal with one of the steel companies to sell
steel and pay the companies back after the deals had been finalised.
This unusual arrangement was such a success that Shnaider and Shifrin
made sufficient money to buy control of Zaporozhstal, Ukraine's top
steel company, when it became a joint stock company in January 1997.
Gaining control of Zaporozhstal helped the two men to become hugely
wealthy in the years that followed and funded Midland's growth. The
company has also benefited in the last two years from surging steel
prices which have resulted from huge extra demand from China. Midland
diversified into steel-trading activities through Midland Resources
Holding Ltd and Midland Industries Ltd and then into the scrap metal
trade via a number of companies including Dan Recycling, the largest
scrap processing operation in Israel. The firm also went into steel
warehousing with businesses in Turkey, Britain, Serbia and Poland.
This was followed by the establishment of two shipping companies:
Midland River-Sea Shipping and Midland Shipping.
In addition Midland has added to its holdings ownership of the port
of Pancevo on the Danube and a copper and brass mill in Serbia. It
bought the national electricity distribution company of the Republic
of Armenia but is already to looking to sell that because of
opposition to the deal within Armenia.
Since the start of 2003 Midland has invested heavily buying the Red
October steel works at Volgograd in Russia, Montenegro's Niksic metal
company, the Kremenchug steel casting company in the Ukraine, there
has also been the Dneprodzerzhinsk Railcar Foundry and the
Donetskprodtorg trucking company. It has also bought Gumaplast, a
producer of rubber and plastic weatherseals for the automotive
industry in Serbia.
The company enjoys close links with the Moscow municipal government
in Russia and has developed the Arbat Business Center in Moscow and
is also involved in a big project to build overpasses throughout the
city, each combining business, entertainment and shopping areas. In
addition the firm has a deal until 2019 to operate containers for
selective collection of municipal waste and will use these to
advertise as well as collect rubbish. It has also recently signed a
deal with Moscow to turn an old metal processing center in the
Shabolovka district of the city into a housing development with
condominium-style apartment blocks.
In addition to all of this Midland has bought a meat-processing
company and a bakery chain in Serbia not to mention a number of
hotels and restaurants in Belgrade including the Hotel Kasina, the
oldest hotel in the city. There is also an involvement with US tycoon
Donald Trump in the development of a Trump International Hotel and
Tower in Toronto and another Trump-badged project in Hong Kong.
Keen to have a high profile international image, Midland has now
decided to enter F1 and it would be a surprise if some of the
companies listed above where not tapped for sponsorship. The team has
hired Boris Yeltsin Jr to work in its marketing department but will
be represented at races by a rather more western management,
involving Colin Kolles as managing-director. Kolles is the driving
force behind Kolles Racing and TME Racing, two contenders in the
Formula 3 Euro Series. The marketing director will be Christian
Geistdoerfer, a former World Rally Championship co-driver, who won
World Championships with Walter Rohrl in 1980 and 1982 before
starting up an event management agency. In addition the company will
feature Gary Anderson as technical director.