Our Culture

Optimism vs Volatility

Another year of Järnmalmer’s business presence in Russia is almost behind. We were busy with shipments of prime quality ferrous material for re-rolling and re-using, the volume of our export from Russia has grown up by 34% in comparison with year 2015. Volatility - а quantification of the degree of uncertainty about the future price of a commodity was the common word in the industry throughout the whole year 2016. When talking of melting grade ferrous scrap export from Russia in 2016 in general one needs to admit that selection of geographical destinations in international scrap trading has narrowed to literally two receiving countries that is Turkey with material loaded in North-West and South ports of the country and South Korea with shipments from loading ports in Asian part of Russia. The demand for melting grades of scrap domestically has increased significantly. Severe jumps and dives of international ferrous commodities prices, congestion on the freight market affecting bulk and container rates and in our case the rollovers of Russian currency throughout the year put a serious pressure on Russian scrap export on one hand while on another hand Russian domestic scrap prices nominated in rubles are ever rising steadily since March. Russian scrap exporters are seeking answers to these challenges individually however the common trend is clear- it is an attempt of enlargement of the exporting companies in both East and West sides of the country. At the same time Russian steel mills are expanding their procurement networks by attracting smaller suppliers. In these circumstances we at Järnmalmer are trying hard to be ever more comfortable and suitable business partner for those serious Russian suppliers of such ferrous raw material as for example replaced means of transport lines such as disposable rails or oil and gas pipelines. This material, disposed by strict terms is being procured from all over the country, getting delivered to St. Petersburg to our facility and being processed into semi-finished bars and plates suitable for re-rolling and piling. Being a biggest country on the planet and hence the owner of longest lines of railways and pipelines Russia may be a central place for supplying such semi-finished products. Thanks for our yard capacity we may continue to increase export tonnages in 2017. Of course in 2017 we shall further assess our options to export melting grades of scrap from Russia focusing into more deep processing of the raw scrap by means of fragmentizing or baling at the loading site. Dozens of our good clients, mini mills in India , Pakistan and Bangladesh are waiting the Russian melting scrap back to their stocks and we will do our utmost to meet their hopes. Perhaps we cannot control the global ferrous commodity/ currency/ freight volatility, but we are optimists and by all means prepared to what we can create as being a great Järnmalmer team!
Anton Kaznakov
CEO Järnmalmer International

Different cultures – our everyday experience

On one of my trips to Pakistan I visited Asia’s largest scrap market, located in Lahore. It’s called Misri Shah Steel and Scrap Market and is in the centre of this city of 10 million people. It was an unforgettable experience for me. There are several thousand merchants in an area with a circumference of about 2 km. For someone from the West like me, it appears to be a complete inferno here. The roads are narrow so two cars have difficulty when they meet. The small workshop owner comes here with a donkey and cart, while others arrive with wheelbarrows. The traffic flows reasonably until a large truck enters the site, which happens frequently. There is chaos for about 20 minutes but then everything goes back to normal. I get a bit nervous when the car I am in meets a small truck with ten tons of sheet metal on the back, two metres wide, secured with just a rope round the bottom.

Most of the businesses here sell used parts brought in by large importers of scrap steel. A lot of material has been smuggled in from Afghanistan. This purchased scrap is sorted and processed. It’s the most genuine form of recycling you’ll ever see, although it does look rather pathetic to see men beating small pieces of steel to make them marketable. A lot of people have been killed over the years disarming military scrap from war-torn Afghanistan.

Some steel mills have sales depots on the site. They bring in 12 metres of reinforcement iron, for example, and cut it up into small pieces to sell it. Everything is done by hand. There are no trucks or cranes. At one of the bigger companies I am given an honourable welcome by one of the uniformed guards outside the door, who comes to attention with his machine gun and salutes me.

Following an intensive day it’s nice to go back to the hotel in the city. The uniformed guard remembers me so this time I don’t need to pass through the metal detector.

Per Malmer, chairman of the board

Trading-Old School

Why do countries trade? In a market economy countries trade with each other when demand and supply differ from country to country. Concentration of the global resources is not allocated consistently between the countries around the globe when it comes to demand. And when it comes to supply-by developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need. Hence international trade in general and the trade of metallurgical raw material in particular are at the heart of the global economy and are responsible for much of the development and prosperity of the modern industrialized world.

International trade of metallurgic raw material is always a two-way street in theory, but what’s in practice? The traffic rules on this street are being set by the markets and official regulators of the countries , so what are the vehicles driving this street following the traffic rules and sometimes breaking them-just like it happens on the normal streets? These are the traders who serve the flows of the scrap commodities internationally. Being an export trading manager of the ferrous scrap for almost 14 years I had an opportunity to work together with many of them –in Europe, the US and in the South-East Asia. One of them was special and that was Järnmalmer.

I remember how we have met with Mr. Per Malmer in 2003 and in the fall of the same year he has arrived to St.Petersburg, Russia to see the yard and our material in stock as a main purpose of the visit. That was unusual –a CEO of the trading company arrives to see the stockpile himself rather than sending an agent or an employee. During these days in November 2003 we discussed the details like the freight options to India, methods of loadings and unloading, costs and qualities. Once, during the discussion our production Chief pointed with certainty that we alas cannot stuff 20’ containers with the used rails due to lack of special forklifts. “Let me show you that this is possible” –said Per “How do you show it to us?” –asked my surprised colleagues. “Let’s go to the yard now, you give me your hydraulic Liebherr machine, hang a magnet on a boom and I’ll stuff this box with 28 tones of rails in less than an hour!” –replied Mr. Malmer firmly. “Are you kidding, Sir?” ”No kidding, I just want you to understand-it’s not difficult at all!” We believed him-this gentleman was not kidding indeed, he was not just like another guy wearing a suit to come to us to take a plain trade-if given a chance he’d grab the joysticks in the cabin of excavator ! We agreed to make a trial load of 500 tones of scrap at that time then. This was the moment when the cooperation with Järnmalmer has began for me.

Now , many years after with many tens of thousands tones shipped together with Järnmalmer and landed successfully in India , Pakistan, countries of South-East Asia I keep recalling our numerous meetings with Per and Mattias during this years. We have met in St.Petersburg , in Stockholm , in Gothenburg and London and of course in a cozy town of Filipstad. In our cooperation we have seen a bullish and bearish phases of the scrap market, truly extreme sometimes, we argued at times, we helped to solve the problems of Järnmalmer’s clients at scrap destinations and my partners concerns at origin country. Soon after the start of cooperation we got rid from a paper contract practice in our business relationships –the level of mutual certainty and trust was topped and Jarnmalmer has never broke the traffic rules. We discussed the issues of a business culture of trade in different countries and Per were always surprising me by asking so many question which never was his plain curiosity –this was his sincere attempt to understand and feel any of his business partners. When you understand your partner genuinely you chances to create a win-win business are much stronger. When the international trading partners are loyal to each other they’d do business for many years and also they also may be personal friends outside the business hours…

Now that the speed of exchange of commercial information has increased to extremely rapid -thanks to information technologies ,international scrap traders often have no time to understand the true long-term needs of their trading partners. It is seldom they talk on the phone and even more seldom they meet-usually on the fields of the convents like the BIR.A typical Email exchange between the traders nowadays would be “Enquiry-offer-counter bid-yes(no)-thanks for biz(try at next point) –a mouse click-next! ” Vocabulary of a professional scrap trader became very limited and that is alas not encouraging the long term partnerships in international trade. Some banks are attempting to secure the international commodity transactions to a classified perimeter of faceless online trading platforms, though I believe that international scrap market is different by nature and will remain such for long period. In this business when the loads of physical material being physically moved from a loading point in country A to a landing point in country B in line with very complex traffic rules as it being said above the term “professional loyalty” is anything else, than just full of a hot air. A PC mouse click alone is not enough to move the standard 500 tones export scrap load from point A to point B. Many things yet to be done offline and therefore a good scrap trader must keep asking questions , keep answering questions , keep to hear and to be heard and that requires verbal professional interaction.

Järnmalmer and its owners have learned international trading business culture for many decades in a most efficient but hard way-by practicing a respectful tailor-made international trade. An OLD SCHOOL, as they say. It was June 2014 when I became an offer from Per and Mattias to join their team and be a junior trading partner. I was not uncertain with this offer – to me this team is a high regard for something that has been shown to have lasting value and quality.

Anton Kaznakov, CEO, Järnmalmer International

Key business decision – don’t get married!

Running a business takes up all day, all year. You’re always in demand. But experience teaches you to take pauses and re-assess. You realise that even though work is important there are other things in life you need to make time for.

The leaves on the road muffle the sound of our car. One of the most successful and well-respected scrap metal buyers in Europe is sitting on the back seat of my car. I glance at him in the rear mirror, a middle-aged man in well-pressed trousers and a brown tweed jacket. He is stressing the importance of structures and efficiency. “And don’t ever trust anybody, Mattias,” he says with conviction. “My job used to be about doing business. There was nervous tension in every deal, handshake, meeting. We have grown so much over the years. We’ve become a large group. Today the only thing I spend my waking hours doing is exerting control. Controlling branch managers. Checking figures and accounts,” he says. He goes quiet and looks out through the windscreen at the cold autumn day.

I think back to the message of that last lecture at university. Studies were about to end. The teacher said: “I would like to give you some advice. You have been given so much information here, we have filled you up with facts and knowledge. But whatever you do in life, however exciting things get in your daily work, whatever demands are made, never forget what I’m going to tell you now.” The lecture room suddenly went very quiet.

“Never get married to the job!” he said with emphasis. “Work is important and it will take up a lot of your time, but it will never replace your family, your friends or your dreams.” Those were the last notes I made while I was a student. I underlined those words twice.

I look out over the autumn landscape that stretches out between the motorway and the airport. I look at the man on the rear seat. Sometimes I imagine what it would be like not to own anything, he says. To stand here beside the road and hitch a lift, take each day as it comes. He smiles for a minute and looks thoughtful. Then his phone rings.

That day I left work and went home early. I almost run up the stairs from the garage. My young son is propped up on the carpet. He rolls over when he sees me, his muscles are still too weak to hold him upright. He lands on a cushion and fights with all his body strength. I put him in the child seat in the kitchen. His eyes are as large as saucers. He shakes his legs, not wanting to sit still. We both laugh. He’s laughing because there is a lump of apple sauce in his porridge. I’m laughing because I underlined those lines in my student notebook.

Mattias Malmer, CEO

The night shift

Järnmalmer has always had remarkable employees. The company feels like a family, where people stand up for each other in good and bad times. Here is just one example of one of our loyal members of staff.

It’s Saturday night and a shady figure suddenly goes past in the dark. The security cameras pick up the movement and silently come to life. Switching off the radio and slowly straightening up in my chair, I rewind back through the images. The pictures are grainy and I try to improve the focus. The clock shows it is 02.33. Something is not right. A few minutes later the shadow disappears into the winter night and the security camera goes dark again with lights on the motorway the only visible signs of life.

Roland Larsson is a wonderful colleague and he has retired after spending almost his entire working life at Järnmalmer. Thirty-one years of service to be exact. Not only was he very well liked, he was a highly respected contact with customers and suppliers as a reliable and service-minded driver in Gothenburg. When I was new in the company I once asked a customer what he thought of Järnmalmer. How could it be anything other than good when we had such a great driver, he replied, a bit surprised. No, of course, I mumbled.

I was worried for a while, this Saturday night. The alarm had not sounded and there were no marks on the doors. Early in the morning I told Roland what had happened. “Yes, it was me,” he said and laughed. I looked at him questioningly. “Well, you see, I woke up in the middle of the night and wondered if I’d turned off the tap in the kitchen.” He put his coffee cup down on the table and gesticulated. “I thought it was just as well that I went back to the office and checked.” he carried on laughing, shook his head and went back to his crossword again as though nothing unusual had happened.

Thank you Roland, for all the years together and the wonderful work you did for us!

Mattias Malmer, CEO

A beating heart

She made her way with tired steps through the hall and out onto the cold floor of the kitchen where she began to make some coffee for breakfast. The dream that had seemed so real to her was now gone. She picked the last coffee filter out of the packet. Today there would be no time for shopping. Her work and daily routines would now intrude. She drew her hand through her long dark hair and distractedly picked up the phone that was on the kitchen table. She stiffened sharply and dropped an empty cup on the floor.

Running a business requires a lot of heart. It takes up a big part of your life, it saps your energy. Work comes home with you, stays in your thoughts, and becomes your passion. I am sure this is true for many people, especially in family businesses. Everything is concentrated in the minds of a few individuals, who become critical for the company’s survival.

Running a business becomes a lifestyle and you must be capable of taking the stresses and strains that inevitably arise. So you need to be able to switch off at times and recuperate. Most of us are not very good at this. We like to keep going.
The situation had been described as “serious, but stable” for some time. Father had been unconscious for a month. In his room at Sahlgrenska hospital the atmosphere was calm. “Stroke his arms, like this,” the nurse showed me.

Yes, we keep going. My father did too. He had had pains in the chest for some time, but they would disappear. It will get better. He kept going, working for our family business, there was so much other stuff that was more important. But then came the night when my father had a heart attack.

When I came running down the hospital corridor the doors slammed gently behind me. A forest of green-clothed staff stood around the operating table, which was lit with a bright light. Time was now of the essence, but we did have time to talk. “This will be all right,” he said, trying to calm me down. The tubes of intravenous drip hung around his hospital bed and he looked very pale. Then he was taken inside the operating room and I was left alone in the corridor.

I called my sister, again and again. When she woke the next morning she would have over 30 calls from the same number. The coffee cup that she dropped on her kitchen floor broke into pieces and she sat on the floor with her head in her hands.
“We have found something,” reported the doctor after weeks of uncertainty. “Metal Bulletin.” It sounded like he was eating an apple while reading from a newspaper in the background.

“We found it behind his pillow when we were doing the morning check-up,” explained the doctor. “What does that mean?” I asked hopefully. “It means that your father is lying here and reading Metal Bulletin in order to keep up with the metals market, I suppose,” he said, unable to cover up how pleased he felt with himself. “These are the best calls I get to make as a doctor,” he added. Life had won.

Today, ten years later, I am so happy to hear him cutting the bushes down by the lake. Then he will weed the flowerbeds and spread some fresh gravel on the path. Today, so far away from the busy, stressful, constant decision-making of running a business. Life is so much bigger than the working day and managing a company. Thank you for going to the hospital that night. It wasn’t just your life that changed. Running a business is not just about responsibility. It’s an affair of the heart.

Mattias Malmer

Internal drive and a passion for steel, how Järnmalmer was formed

The Second World War had just ended and optimism was on the rise again. The well-tended shop was just a stone’s throw from the royal palace on one of the busy, narrow streets in Stockholm’s old town quarter. Passersby stopped on the cobblestones and stared inside. The shop window was filled with ceramics and decorations. Malmers Antik had a solid reputation and business was blossoming.

One day Grandfather was left in charge of the shop. Grandmother had hurried off outside into the cold on some urgent errand. Grandfather did not know much about antiques, but he had a warm personality and a rare business sense. An elegant lady wearing a fur coat came through the door. The lady walked round the shop and became more and more excited. She turned to Grandfather and asked straight out if the shop was possibly for sale. Grandfather paused for a brief moment. “Yes, yes, of course it is,” he said with a big smile. When Grandmother came back a contract proposal had already been typed up. First she was angry, but soon she was a housewife. The reconstruction of post-war Europe was under way and the demand for steel was huge. Grandfather had this idea that trading in scrap metal was what he should be doing. He started up Järnmalmer T. Malmer AB, the T standing for his name, Torbjörn. It’s a name that is still going strong 65 years later.

All businesses have their origins in something unique. This is ours. Maybe things were simpler in times gone by. Sometimes conviction and determination are all that are needed. Today Järnmalmer has annual sales of around SEK 400 million within recycling, dismantling and environmental consulting services.

Mattias Malmer CEO, Järnmalmer

Magic. At the table next to the window

It takes a long time to build a brand. But it can be damaged very quickly. Trust is a key part of our business.
“I work with trust,” I say after a brief silence and I look meaningfully at her. I remember this occasion, the feeling and the atmosphere like it was yesterday. It is an early summer evening and autumn would soon bring rain and wind to the city. We are sitting opposite each other at a table next to the window. The candlelight is inviting, but there is a cold draught from the door. Guests are coming and going.

She had asked me what my job was all about. “Trust, I see,” she repeats thoughtfully. “I thought you worked with scrap metal,” she says playfully, leaning back in her chair. The food arrives almost unnoticed. “It’s two sides of the same coin, almost the same side,” I say, taking a mouthful. She nods at me and I continue.

“Imagine going shopping in a large supermarket. You fill your trolley with the finest cuts of beef, French cheese, lots of delicacies. When you get to the check-out you put on your most charming smile and say that you will take the goods with you and then call back later to say how much you will pay for it all.”

She looks up and stares at me more intently, wondering where this is going. “That is unimaginable for most people,” I say. “But it is what we do most of the time. We go into companies with our trucks to collect scrap metal, or waste products, as it is now called. We take it back to our site and weigh it. Then we pay depending on the value. The sums are often quite high. It’s relatively simple and it’s all about trust.”

I put my glass down on the table. “There is also another dimension to what we do, more important than you might think,” I continue enthusiastically. “We live at a time when higher living standards and fast population growth is a threat to our planet. Recycling reduces hazardous emissions and saves huge resources in terms of energy. We recyclers have a large responsibility to manage resources, not just for our customers and suppliers, but for future generations.”

“That’s about it,” I say and laugh. “That’s what I work with.” Our eyes meet. Right at this moment I don’t know that this will be my wife, my life’s companion sitting opposite me. This is the person with whom I will share success and failure, hope and joy. Magic. At the table next to the window.

Mattias Malmer, CEO

Close no doors – thoughts on a change of generation

Changing generations isn’t always easy for a family business, but if it’s done well it can leverage in a new era of success as innovation rubs shoulders with experience. Today’s Järnmalmer has representatives of three generations.

The world is a great adventure. I am allowed to come to the office today. I’m four years old, and I’m standing in front of a door on the second floor. It’s a black wooden door with a silver handle high up. I look at Papa, then back at the door. It’s so high I can hardly see where it ends, like a giant castle door in a fairy story. Papa is looking for something. “Don’t close the door,” I hear him say. He’s making noises looking for something in another room right now.

“You can’t unlock it from this side if you shut it,” he shouts as he opens some boxes. I wonder what ‘unlock’ means. The door shuts with a bang. This is my first memory of Järnmalmer, our family business.

The first generation creates, the second generation manages. And the third generation? Well, that’s usually when things go wrong. A successful change in generation is never easy. But with the right determination you can go a long way. Inspiration and enthusiasm can create wonders. I have been fortunate to work alongside my father for many years. He has been a good mentor. He has given me freedom and responsibility, but he listens and, when necessary, gives advice. I think this has been the right recipe for moving the company successfully into its future.

Per Malmer, my father and the chairman of the company, retired from the post of CEO in 2010. I represent the third generation and I have been trusted to be the new CEO of Järnmalmer.

Papa has stopped looking for something now. He comes back, looks at the door, then at me, puts his hand on his forehead. “What does unlock mean?” I ask, although I am starting to understand. We are locked in. Fortunately there are plenty of big white towels in the changing room. Papa ties them together to make a rope. I watch him climb out of the window, like Robin Hood. He saves the day, of course, he’s the strongest man in the world.

Don’t close any doors. Thanks, Papa!

Mattias Malmer, CEO, Järnmalmer