ISTIL GROUP/KYIV POST JOINS U.S.-UKRAINE BUSINESS COUNCIL (USUBC) AS 150TH MEMBER
Large private equity investment company/Ukraine's leading English-language newspaper
U.S.-Ukraine Business Council (USUBC)
Washington, D.C., Thursday, December 9, 2010
WASHINGTON, D.C. - The ISTIL Group/Kyiv Post have been approved as the 150th member of the U.S.-Ukraine Business Council (USUBC), the USUBC Executive Committee announced today on behalf of the entire USUBC membership of companies and organizations who have business operations, investments or other development programs in Ukraine.
The official announcement of the 150th member, a new record for USUBC, who only had eight members in January of 2005, will be made today in Washington, D.C., at the annual business meeting of USUBC. Microsoft was announced as the 100th member of USUBC in December of 2008.
ISTIL GROUP, LARGE PRIVATE EQUITY INVESTMENT COMPANY
The ISTIL Group is a private equity investment company, focused on the most contemporary and distinctive projects. ISTIL is actively investing in such areas as media and entertainment, real estate, production of television content, production and distribution of films, energy and environment, banking, hotel business, trading and production of consumer goods and other assets.
The total volume of ISTIL investment in Ukraine will exceed $150 million by the end of 2010. In addition to the Kyiv Post among the most interesting acquisitions by the ISTIL Group are the Leipzig Hotel building in Kyiv, business centers network in Kyiv, Odessa and Donetsk, and the production house ISTIL Studios.
KYIV POST, UKRAINE'S LEADING ENGLISH-LANGUAGE NEWSPAPER
The Kyiv Post, Ukraine's leading English-language newspaper, was founded on Oct. 15, 1995. During its 15-year existence, the newspaper strives to live up to its motto of "Independence. Community. Trust" with outstanding reporting, independent opinion and world-class journalism. The Kyiv Post plays a vital role as a primary source of independent news for the foreign community in Ukraine and is one of the few independent media outlets in the country.
Over the years, the weekly newspaper has led the charge for a free press in Ukraine, as well as taken consistent editorial stands in support of Ukrainian statehood, free markets and democracy. After the Kyiv Post was purchased by the ISTIL Group in July 2009, the Kyiv Post launched a website (www.kyivpost.ua) to offer news in Ukrainian and Russian. The new site is in addition to the newspaper's print edition and its English-language website.
ISTIL STUDIOS, UKRAINE’S MOST ADVANCED PRODUCTION HOUSE
Production company ISTIL Studios has been founded in spring 2008 and is a part of media assets of ISTIL Group. It specializes in production of film and TV content of any level of complexity. It is located on the territory of the largest film studio A.Dovzhenko.
ISTIL Studios (www.istilstudios.tv) owns a complex of equipment and a set of programs necessary for the production of programs in an HD or SD format. It provides its clients (leading TV channels, film production groups, clip making companies) a full video production technological cycle. The company has the Sony OB Van – the most advanced complex in Eastern Europe and CIS countries.
The Van is equipped with 15 HD cameras (with the possibility of expansion to 30), Slow Motion camera and 1 HDCAM recorder. It is perfect for production of sports programs, live broadcasts and filming of various shows. OB Van complies with all UEFA requirements for live broadcasts of soccer matches.
DR. MOHAMMAD ZAHOOR, FOUNDER AND MAIN OWNER
Dr. Mohammad Zahoor is the founder and main owner of the ISTIL Group, the 150th member of the U.S.-Ukraine Business Council (USUBC). Born in Pakistan, Dr. Zahoor would go on to create one of the most modern and efficient steel plants in the CIS, which he would sell at the peak of its development in 2008. He first arrived in Ukraine in 1974, eventually to study metallurgy at Donetsk Technical University. He completed his doctorate from Donetsk Technical University in 2007.
Dr. Zahoor formed MetalsRussia, his first business venture, in 1991. It was later renamed to ISTIL. For five years the company entered the top twenty world's largest traders in metal, reaching an annual export volume of 2 million tons of steel.
In 1997, MetalsRussia, with Dr. Zahoor as its Chairman and CEO, listed on the London Stock Exchange. The company acquires a controlling stake in the Donetsk Metallurgical Plant. The Ukrainian unit of what was later renamed to ISTIL Group becomes known as ISTIL Ukraine. From 1997-2008, Dr. Zahoor invested nearly $150 million into ISTIL Ukraine to create the most technically advanced facility in the CIS, producing world class steel
By 2008, finished steel and billets produced by ISTIL Group in the U.S., Britain and Ukraine, are traded through 21 branches and offices located in key cities around the world. In April 2008, when steel prices were at historical highs, Dr. Zahoor chose to sell his steel business completely.
JIM PHILLIPOFF, MEDIA & TELECOM DIRECTOR
Jim Phillipoff, Media & Telecom Director, ISTIL Management, heads the media and telecoms projects at ISTIL Group, as such he is the CEO of Public Media, the company which publishes the KyivPost newspaper, and the CEO of ISTIL Studios.
Mr. Phillipoff is an American native with a B.A. in international relations from Clark University. His work experience includes media, sales, telecoms, management, public relations, marketing and contract negotiations.
As a former entrepreneur, he founded, owned and managed wireless cable television systems (MMDS) operator, an English language newspaper and Motorola distributorship in the CIS region. At the height of his company's growth, he managed and maintained a staff of more than 100 employees as CEO of the group.
BRIAN BONNER, CHIEF EDITOR, KYIV POST
Brian Bonner is chief editor for the Kyiv Post. For nearly 24 years, Brian Bonner was a reporter, editor for the Pioneer Press in St. Paul, Minnesota, covering cops, courts and City Hall as well as working general assignment, enterprise and investigative beats. He has also lived or worked abroad in India, Russia, Kazakhstan, Belarus, Poland, Sri Lanka, Thailand and Laos.
While in Ukraine the first time in 1996, Brian taught journalism workshops in Kyiv, Kharkiv and Odessa. He has returned every year since then. He served as Kyiv Post chief editor in 1999 and worked from 1999-2004 as an election expert with the Organization for Security and Cooperation in Europe during five election missions. He also worked as an anti-tobacco advocate with the Washington, D.C.-based Campaign for Tobacco-Free Kids in 2007-2008 before returning as chief editor of the Kyiv Post in 2008.
ISTIL GROUP/KYIV POST IS USUBC'S 150TH MEMBER
"I met recently in Ukraine with Jim Phillipoff, Media and Telecom Director, ISTIL Management and Brian Bonner, chief editor for the Kyiv Post. I have been very impressed with what Jim and Brian have accomplished since the ISTIL Group took over the Kyiv Post in late July, 2009," said Morgan Williams, Director, Government Affairs, Washington Office, for the SigmaBleyzer Private Equity Investment Management Group, who serves as President of the U.S.-Ukraine Business Council (USUBC).
"We discussed a variety of ways the Kyiv Post and the U.S.-Ukraine Business Council (USUBC) could work together to promote Ukraine as a place to do business with the international business community, to tell the story of business opportunities in Ukraine and to provide information on what needs to be done to improve the business environment. USUBC is very pleased to have the Kyiv Post/ISTIL Group as the 150th member and look forward to working with them." Williams said.
USUBC FOUNDED IN 1995 IN WASHINGTON, D.C.
The U.S.-Ukraine Business Council (USUBC) was founded in 1995 in Washington, D.C. and had around 15-20 members in the early years. USUBC has had a significant growth in membership since January of 2005 when the membership had dropped to only 8 members. The members of USUBC developed new leadership and a program of rapid growth. Microsoft was announced as USUBC's 100th member in December of 2008 and now ISTIL Group/Kyiv Post as the 150th member in December of 2010.
USUBC now has the largest membership and program of activities in the world for Ukraine that is headquartered outside of Ukraine and has become a 'strong international voice for business in Ukraine." The complete list of USUBC members can be found at: http://www.usubc.org/members.php. For a list of the USUBC board of directors go to the following link: http://www.usubc.org/site/u-s-ukraine-business-council-board-of-directors.
SIGMABLEYZER, MICHAEL BLEYZER, PRESIDENT/CEO
Morgan Williams said a major factor in the success of the U.S.-Ukraine Business Council (USUBC) to significantly increase its membership over the past few years has been the strong support received from Michael Bleyzer, President & CEO of the SigmaBleyzer Private Equity Investment Group, www.SigmaBleyzer.com. SigmaBleyzer became a member of USUBC in 2001.
THE BLEYZER FOUNDATION (TBF)
Michael Bleyzer has always thought the interests of international businesses and investors working in Ukraine needed a much stronger and more effective international voice in Washington and in Kyiv. Michael, through The Bleyzer Foundation (TBF), www.BleyzerFoundation, and his support of USUBC, has always promoted macroeconomic research, development programs, legislation and other measures that would significantly improve the business environment in Ukraine, increase the flow of investment funds to Ukraine and bring about real economic growth.
INFORMATION: For more information about the ISTIL Group go http://www.istilgroup.com/index; Kyiv Post go to http://www.kyivpost.com/ and the ISTIL Studios go to www.istilstudios.tv.
THREE RECENT NEWS ARTICLES: ISTIL GROUP/KYIV POST
1. THE KYIV POST RIDES AGAIN
By Michael Willard, Willard Marketing Monthly, Kyiv, Ukraine, June 2010
KYIV - To be honest, and that is what we try to be at Willard Marketing Monthly, about a year ago I felt the Kyiv Post’s best years were in the rearview mirror. It had become the veritable empty suit.
From it’s heyday during much of the Kuchma Administration, it seemed to have run out of gas following the Orange Revolution. I rarely read the printed edition and only casually glanced at the on-line version.
What’s more, it was hardly readable. The grayish type faded into the page. The page layout made the paper seem like an aging movie star without makeup.
There seemed to be no enthusiasm. An outside observer felt it was a death watch.
Then, this year, the empty suit morphed once again into a class act. Almost overnight, the publication once again tackled controversial subjects, took political stands and became an advocate, a voice not a puny whisper.
It became readable, obviously the result of better paper and printing processes. The type now jumps from the pages, and the revamped and energetic layout shouts “read me, we have something important to say.”
What happened? The newspaper changed hands. Publisher Jed Sunden, who started as a neophyte in the newspaper business and became quite good at it, sold the Kyiv Post to another newspaper neophyte, Mohammad Zahoor.
Zahoor quickly turned what started as a frisky pony and eventually became an old, gray nag back into a fairly good thoroughbred of a publication. It still has its minuses, such as a recent stacked-deck Best of Kyiv display.
However, it’s a good publication, a damn good publication, and, in my view, is up there with the Moscow Times which is printed five times a week.
I admire Jed Sunden, who still maintains a publishing empire. Without any prior newspaper experience, he came to the city in the 1990s, saw a need, and did a commendable job filling that need – for expats and for English-savvy Ukrainians.
A few years ago I woke up one morning and decided my company could no longer subsidize The Ukrainian Observer, though I loved that eclectic publication and held on to it for seven years.
Perhaps Sunden felt the same about the Kyiv Post, given a recession. He reportedly pocketed more than a million dollars in the deal.
But my hat is off to Zahoor, an acquaintance and one-time client who survived and thrived with his steel company in the rough and tumble Donetsk business world, and a man who has a Midas touch.
He sold his steel company just prior to the bottom falling out of the market for a reported billion dollars. In this respect, Zahoor and Sunden are a lot alike, though on different scales.
The talk was the Pakistani-born Zahoor would turn the Kyiv Post into his personal playground, merely advocating his own interests. This hasn’t happened. Zahoor has shown remarkable restraint as the rich publisher.
Instead, he has brought in or kept capable people such as Brian Bonner, a low-key, old-school, no nonsense chief editor. On the reporting side, my view is that John Marone is the best news writer this city has to offer, and Roman Olearchyk, is both a solid editor and writer.
It might be a little odd for one publisher – albeit for a niche marketing magazine such as this – to sing the praises of another. But this city needs a good English-language newspaper, and now, the Kyiv Post rides high again.
2. MOHAMMAD ZAHOOR: WAITING FOR THE GOOD TIMES
Perhaps Zahoor's smallest investment, the English-language Kyiv Post
newspaper is his most visible, particularly to the expat community
Interview with Mohammad Zahoor, investor in Ukraine
By Michael Willard, Willard Marketing Monthly, Kyiv, Ukraine, Oct 2010
KYIV - By accident more than design, Mohammad Zahoor is a steel man. He knows steel, and has never trusted outside advisors. He did his own homework, and that made him a near-billionaire.
During the two years after selling his steel holdings in Donetsk, however, he trusted consultants as he pumped some of his wealth into new ventures in areas where he had little experience. The advisors were well-intentioned, but their advice cost Zahoor millions of dollars.
The Pakistani-born British citizen is on a new learning curve now, in his post-steel days. The betting is that he will succeed in his media and real estate forays, but he admits to some disappointment: A good return on his new investments will require time - and a favorable economy.
I met with the 55-year-old Zahoor on a Saturday morning in his well-appointed Istil Group office above a Maserati dealership on Shevchenko Boulevard. He was casually dressed and recovering from jet lag, having just returned from one of his many trips abroad.
I have followed Zahoor's career for years, and consider him Ukraine's most successful expat - primarily because he is an entrepreneur, rather than a hired hand. In the past, my company, Willard, has done work for him, though not recently.
When Zahoor sold his Donetsk steel company, he invested primarily in media and real estate. "I sold (steel) at the right time and invested at the wrong time," said Zahoor, who primarily invested in satellite television, hoping to form another Sky or Canal Plus network.
$35 MILLION FOR THE LANDMARK LEIPZIG HOTEL SITE
He also invested in real estate, including $35 million in the landmark Leipzig Hotel site. The Leipzig opened its doors in 1900, but has been shuttered for years. However, it is one of Kyiv's most visible and majestic buildings.
Zahoor lined up EBRD co-financing for the new hotel, but still feels it is optimistic to think the facility will make a 2012 target opening date. He is looking at various international hotel chains to manage it.
With his investment in direct-to-home television (Poverkhnost Group), Zahoor said he had the right strategy but the wrong Ukrainian management. His losses were substantial. His real estate ventures were market-priced - but the market took a tumble in 2009.
"We did analysis. We did due diligence," said Zahoor of the satellite venture. "But unfortunately, I was wrong. It was mainly human error, and quite stubborn and bad management on the Ukrainian side. We ended up giving the company back to them."
However, as is characteristic of an entrepreneur, Zahoor is optimistic about the future. "We will make up our losses over a longer period and with a smaller investment in direct-to-home television," he said.
Zahoor has had some success in television programming with his Istil Studios, and believes this is an area that will grow and pay off over time. The studio currently produces several popular television programs.
ENGLISH-LANGUAGE KYIV POST NEWSPAPER
Perhaps Zahoor's smallest investment - the English-language Kyiv Post newspaper - is his most visible, particularly to the expat community. He seemed to light up when talking about the newspaper and efforts to make it more interesting and readable. It has been published that he paid $1.1 million for the publication.
When Zahoor bought the Post it was in decline. It seemed that its best years were behind it. It was physically difficult to read due to poor paper quality, and the news reporting seemed but a shadow of its former self. Zahoor added quality paper, and gave additional reportorial resources to chief editor Brian Bonner.
Still, he said, "I am a hands-off publisher." Zahoor said he has only once written an article for the newspaper and that was to urge a Jewish group opposing his purchase of the Kinopanorama cinema to meet with him and discuss the issue.
"Every person owes something to the community. I believe I owe something to the expat community that has been supportive of me," Zahoor said, explaining why he bought the newspaper. "Whenever we had problems, the expat community has been there for us."
Zahoor said the newspaper was "not something that is there to make money. It is there to bring news that is not biased so that the public can understand better the atmosphere in which they live and work. It's there to help people make educated decisions."
The newspaper has been fearless at times in attacking the current government, yet Zahoor says there has been no backlash. "If someone suppresses the Kyiv Post, everyone would immediately know. [Those in power] understand that - the people reading the Kyiv Post include foreign diplomats."
Zahoor suggested that the newspaper actually is helpful to the government because authorities can point to its straight talk and deny that there is censorship in Ukraine. "So, we have never been approached by anyone to stop writing on a topic," he said.
THE PATH ZHOOR TOOK TO UKRAINE
The path Zahoor took to Ukraine began when he was just 19 and won a scholarship sponsored by the Pakistani government to study the steel industry and its inner-workings. More than 60,000 young people applied, but Zahoor was one of only 43 chosen.
Though he had not been interested in steel, he saw there was opportunity. Pakistan was building its steel capacity at the time. When he concluded his education in Donetsk, he had a five-year commitment to work at Pakistan Steel, where he became a rising star.
Then the Soviet Union invaded Afghanistan, and that led to a series of problems, since Pakistan supported the United States in condemning the invasion. Having married a Russian, Zahoor said he was told he would go no further up the career ladder at Pakistan Steel. He was only 29 years old at the time.
After securing a job with a Pakistani company that primarily worked trading in textiles, Zahoor packed his bags and left for Moscow. He got the company interested in trading in steel and other commodities.
He was back in the steel business. For the next few years, he traded in steel, working with a partner from Thailand. When the Donetsk mill came up for privatization - and it owed Zahoor $19 million at the time - he competed and won the tender. "Most people thought I was throwing good money after bad," said Zahoor.
Instead, he targeted areas of the mill that could be profitable, and separated those which he felt would not succeed. In the process, he paid off the steel plant's $50 million debt.
In 2008, he looked at the steel market - particularly in China - and felt it was time to sell. "China had built steel mills and used a lot of steel in preparation for the 2008 Olympics. When the games were over, I felt they would have overcapacity and would begin exporting, driving the price down."
Almost immediately after he sold the business, the steel market took a nosedive. Zahoor walked away with a fortune estimated at between $500 million and $1 billion. That gave him the opportunity to begin his new career in real estate, media and entertainment.
Zahoor is married to Natalya Shmarenkova, better known as the singer and actress Kamaliya, who in 2008 won the Mrs. World title.
So, I asked him: "Being a billionaire, having a beautiful wife and being able to travel and go to exotic locales anytime you wish, do you ever ask yourself, is this all there is?"
"It gives me comfort that I have somewhere to go and sit when I go to pension," he laughed. "When I was young, I worked 20 hours a day. I still work 20 hours a day." That, one might conclude, is how to become a billionaire.
3. KYIV POST NOW ONLINE WITH NEWS IN RUSSIAN, UKRAINIAN
Alexey Bondarev, Kyiv Post, Kyiv, Ukraine, July 15, 2010
KYIV - From now on, the Kyiv Post will be much more than just Ukraine’s best and oldest English-language newspaper. On July 16, the 15-year-old independent news source is launching a version of its website in both Ukrainian and Russian languages. With the change, the Kyiv Post is aiming to attract a much broader audience and to become one of the nation’s top news outlets.
The Kyiv Post runs an increasingly popular English-language website at www.kyivpost.com, with exclusive and investigative staff-written stories, as well as content from international news agencies such as Reuters and the Associated Press. The local-language website will be hosted on the same domain, so its URL will be www.kyivpost.ua.
The decision to expand the Kyiv Post’s reach came soon after Mohammad Zahoor took over as owner and publisher a year ago. Zahoor thinks the newspaper’s special brand of journalism will find an audience among Russian and Ukrainian readers.
“The Kyiv Post offers more than a different style of journalism,” Zahoor, a British citizen who lives in Ukraine and who owns the ISTIL Group, said. “We follow Western standards of journalism. That makes our news product unique in the Ukrainian market.”
The journalism standards are encapsulated in the newspaper’s motto, “Independence. Community. Trust.” In practice, it means that the newspaper clearly separates news from advertising and does not accept money to slant coverage in “advertorials” – advertising or PR that is disguised as news stories, a practice still not eliminated in Ukraine.
The Kyiv Post also highly restricts the acceptance of “freebies” – gifts, trips and other favors that politicians, entrepreneurs and others in Ukraine frequently try to bestow on journalists to curry favor with them. The newspaper has a long tradition of striving for critical, but fair coverage of political leaders.
In editorials – the unsigned opinions meant to represent the newspaper’s position on issues – journalists have promoted democracy, Ukraine’s development as an independent nation, and free economic markets. While the newspaper endorses political candidates during elections, the Kyiv Post has never aligned itself with any politician or political party.
Moreover, in keeping with Kyiv Post tradition, Zahoor has made it clear that while he determines the budget and overall direction of the newspaper, the journalists make the news and editorial decisions.
Zahoor said the local-language website is part of the Kyiv Post’s ongoing commitment to the nation and development of free and unfettered news media. “We firmly believe that a press free of government pressure or influence is essential to Ukraine’s development,” Zahoor said.
Jim Phillipoff, the Kyiv Post’s managing director, expects the enhanced website, “with its high-quality content in the Ukrainian and Russian languages, to be rapidly embraced by news consumers and online advertisers. The site will provide the best reporting available, regardless of language.”
Rather than purely translate much of the content from one language to another, Kyiv Post chief editor Brian Bonner said the newspaper has recruited multilingual writers capable of retelling their own stories in different languages.
“Translations will still take place. But the newspaper and its two websites will be put out by the same team of news and business personnel.” Having a unified team is designed to give readers – no matter what language they prefer – the feel that the newspaper is produced by the same people who follow the same journalistic standards, Bonner said.
“The Kyiv Post is a Ukrainian newspaper that has been produced in English by an international staff of writers and editors for 15 years,” Bonner said. “We feel the time is right to widen our audience, and we are looking forward to the community’s reaction.”
Phillipoff said the Kyiv Post has, over the years, provided a training ground for journalists who went on to become some of the nation’s best in the profession. “We are pleased that many former Kyiv Post journalists are now leaders in the profession,” Phillipoff said.
“The Kyiv Post is a special blend of people – mostly Ukrainians, with deep knowledge of their nation, but also foreigners who bring a different perspective to the news. We learn a lot from each other. This synergy has created a top-quality English-language newspaper, and I am sure that it will make the new website successful as well.”
The Kyiv Post was started in 1995 by American Jed Sunden, who sold the newspaper to Zahoor in 2009. Expanding the website requires substantial investment, and the launch is coming during a time when the advertising climate remains weak.
The Kyiv Post has nearly doubled the size of its editorial team, from 16 people at the time Zahoor bought the newspaper on July 28, 2009, to one that currently numbers 29 people. Additionally, another 15 people work in administration, advertising sales, web development, marketing and distribution.
More hiring is planned, including a half-dozen journalists and web specialists in design, advertising and marketing.
In June, the Kyiv Post moved to 22B Prorizna St. The new headquarters is in a renovated four-story flat in the heart of Kyiv near Zoloti Vorota that can fit up to 57 people. All but eight employees are Ukrainian.