Steelmaker's Dream, or learning-by-doing entrepreneurship

SKOLKOVO Alumni success story: from corporate path to a pure entrepreneurship

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Entrepreneurial leader with an MBA degree
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Entrepreneurial leader with an MBA degree

Artemy Subbotin has been living at a hectic pace in the past few months, constantly shuttling between Moscow, Kyiv and Cherepovets. He has been promoting nondestructive testing of metal quality, and this autumn, if all goes smoothly, steelmaker Severstal, in Cherepovets, will install non-destructive testing of metal quality on its continuous casting lines.

Artemy is no stranger to communicating with people living in parallel worlds. His first education was in automated control systems (he graduated from the Russian State Technical University) and his career began as a technical support specialist at the Federal Financial Monitoring Service. He then went to work for MDM Bank and was involved in a project to create an internal audit function for business processes: “The task was to monitor whether the risk management was running smoothly and whether systems and people were working.” In four years, Artemy went from chief specialist to head of the IT-auditing department. Artemy, then 27, realized that he wanted to go into business himself and decided to study at SKOLKOVO : “I was hooked by the promise to be taught in practice,” he said. “And I was afraid that I would learn theories of finance and negotiation without any experience in a real business.”


Working on an enterprise project in China, he came to believe in himself: 90% of the activities of a marketing plan that he and his team of students developed for a large Chinese corporations were actually implemented on the Russian market. And he returned from America with a clear idea: to work on the commercialisation of scientific inventions from the laboratory testing stage to the finished product on the market (he learned much at MIT about this).

The issue of in what area to look for an invention resolved itself: Artemy had iron and steel magnate Alexei Mordashov as his mentor. Artemy decided to use these meetings to his benefit and focused on increasing production efficiency in the industry. Having searched the internet, he realised that quality control is a hot issue for steelmakers. There were people among his acquaintances who were ready to invest in such development.


Billet (slab) quality in most steel companies is controlled using technology that requires cooling the slab from 1,200 degrees Celsius to a minimum of 100 degrees, which usually takes two days. The proposed technology enables the cooling phase to be bypassed and fulfils every steelmaker’s dream: “hot-thrust” technology, whereby the hot billet immediately goes into rolling. Eliminating secondary heating in the production of one million tonnes of steel saves US$2 million. “There is nothing similar to our hot slab quality control technology anywhere in the world,” Artemy said.


When Artemy told Alexei Mordashov, the Forbes millionaire, one of SKOLKOVO founding partners, CEO of Severstal Group of Companies, about this technology at the first meeting, he became interested and called the production director, who suggested
conducting demonstration tests. Artemy and the developer of the technology flew to Cherepovets. Severstal eventually became the first client, having allowed testing of the technology in real industrial environments.


Work on expanding the product line is currently in progress. In addition to the flagship product, the automated installation for hot slab quality control, automated installations for quality control of pipes and sheet are being designed, as well as their mechanical “manual” versions. Artemy had a strategy to develop a start-up, and he determined potential markets and customers. Today, he is already exploring opportunities to sell and search for partners in China, which accounts for 43% of world steel output.


Further development of the project involves the use of technology in other markets where the technology is laser-EMAT (electro-magnetic acousticdiffraction flaw detection), which also has many advantages. For example, to control the quality of railway rails (for speeds up to 200 km/h, the equipment can be attached directly on the Sapsan train. Artemy has already visited the rail car factory and checked whether the technology can be used for to control the quality of elements of rail trucks.


“The ideal situation for promoting any technology is access to business owners or CEOs who are interested in improving their business,” said Artemy. He is already thinking about participating in other technological projects: people who can come to an understanding with scientists and investors are in demand.

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29 November 2011

Yes - very inspiring! Just imagine: Artemy graduated in December and in June he was already interviewed by Forbes! Hopefully he will join the Forbes list soon:)


 
25 November 2011
 

Wow you got to work with Severstal, that sounds very exciting. Are you still working with them?


24 November 2011
 

Very inspiring story - and someone how works in real heavy industry instead of the typical 'service' sector backgrounds of many MBAs. i've never been to russia, or china for that matter, but interesting information. thanks for sharing


Emad

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ekaterina inozemtseva
By ekaterina inozemtseva
24/11/2011

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Skolkovo
Entrepreneurship
MBA entrepreneur

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