Alutech's secret deals
Authors
The Italian island of Sardinia is a popular holiday destination for the rich. Warm sea, clean air and picturesque landscape. In the fashionable resort of Porto Cervo, a luxury villa hides in the shade of cypress trees – a 400-metre mansion with 12 rooms and a swimming pool. Russian billionaires close to Vladimir Putin have their villas next door. Belarusian businessman Aliaksei Zhukau also found his place in their company under the hot Italian sun. His 11.5 million euro home is located just one kilometre from the Emerald Coast of the Mediterranean Sea.
Porto Cervo. Source: ft.com
Zhukau is a highly successful Belarusian businessman. He was awarded with an order by Aleksandr Lukashenko for his contribution to the country's economy. Under the brand name Alutech, he established the largest holding in Eastern Europe for producing roller shutters, gates, and aluminium sections. Following the outbreak of war in Ukraine and the implementation of strict measures against Belarus, Zhukau underhandedly sold his entire business to the German group of companies Hörmann. However, he got burned for supplying sanctioned goods to Europe.
GIMMICKS
A week after Russia invaded Ukraine full-scale, the European Union prohibited the import of several goods from Belarus that are crucial to our economy. The sanctions were a response to the complicity of Aleksandr Lukashenko's regime in the war. Alutech holding lost the opportunity to supply steel panels, gates and doors to EU countries. The EU has subsequently implemented a ban on the import of steel products from Russia. However, the new restrictions did not apply to steel panels, gates, and doors. That is, some Alutech products could not be exported from Belarus to the EU, but the ban did not affect Russia. And Alutech took advantage of this loophole.
Our colleagues at the Russian online media Verstka have provided us with customs data that reveals schemes to circumvent sanctions. The Russia-based Alutech-Sibir company supplied Alutech Systems S.R.O. with steel panels, doors, and gates from June to December 2022. The steel was produced by Alutech Vorotnye Sistemy, a company based in Belarus. Such goods of Belarusian origin should not be allowed into the EU, but a loophole in the sanctions legislation made it possible. The total statistical value of the goods delivered exceeds $5 million.
Aliaksei Zhukau and the German Hörmann Group controlled Alutech-Sibir, Alutech Vorotnye Sistemy and Alutech Systems S.R.O. at a time when sanctions could have been circumvented.
Aliaksei Zhukau declined to comment. The Hörmann Group responded:
"The detailed list of questions in your request gives the impression that you intend to make or disseminate a number of false and reputation-damaging statements. [...] We reserve the right to pursue any and all legal claims..."
In 2022, the Alutech group's turnover in Russia increased by 65% to 370 million euros. Net profit increased 2.8 times to 5.2 million euros. The indicators of the Belarusian enterprises of the holding were also impressive. Revenues rose 17% to 636 million euros and net profit increased 44% to 132 million euros.
Germany's WirtschaftsWoche also reported on possible sanctions evasion last year. According to the journalists, the garage doors produced in Belarus in June 2023 entered Europe through a Lithuanian subsidiary of Alutech, as stated in the documents. By that time, the EU had banned the import of steel sections, gates and doors not only from Belarus, but also from Russia. At the same time, earlier this year, Alutech products were sold at an exhibition in South Germany unimpeded.
Today, Zhukau has nothing to do with Alutech, but to understand the intricacies of his business career, let's take a trip back in time.
BRÜDERSCHAFTTRINKEN
Zhukau started his business in Belarus in the mid-90s, when opportunities for entrepreneurs were plentiful. Initially, he used to bring ready-made roller shutters from Riga and resell them in Minsk. Over time, his small installation company has evolved into a full-fledged production facility of aluminium sections, rollers, gates and other products. The first plant was built in the Minsk Free Economic Zone, where residents enjoy extensive tax benefits. Subsequently, two more businesses opened there.
The company expanded significantly: the brand name Alutech encompassed three factories and a trading house in Belarus, representative offices in Russia and Ukraine, as well as a logistics centre in the Czech Republic. The concern actively traded its products not only in CIS countries, but also in Europe. The company's portfolio includes not only roller shutters and aluminium sections, but also gates, windows and doors, sandwich panels and automatic systems.
AluminTechno production. Source: Alutech-group.com
As the business gained momentum, Zhukau set up a network of companies in Cyprus in the early 2000s, through which he controlled Alutech holding. A quiet tax haven on the other side of the Mediterranean attracts businessmen with favourable rates and clear business conditions.
Zhukau's main asset in Cyprus is FJA Future Limited. Through it, the Belarusian businessman owns other Cypriot companies, including, until recently, Elutek Investments Limited. It has three factories and a trading house in Belarus, representative offices in Ukraine and a logistics centre in the Czech Republic, as well as its own branches in Russia.
In 2013, Aleksandr Lukashenko awarded Zhukau the Third-Class Order of Fatherland for producing high-quality products that are in demand both in Belarus and abroad. This information has now been removed from the Alutech website.
Aleksandr Lukashenko awards an order to Aliaksei Zhukau. Source: president.gov.by
In 2018, Alutech joined forces with Hörmann Group, its closest competitor from Germany. One of the largest door and window manufacturers in Europe bought a 75% stake in Elutek Investments Limited, with Zhukau retaining 25%.
"For us and the country, it's an additional export growth, for Hörmann it's a reduction in production costs. This is a good synergy effect," commented Aliaksei Zhukau on the deal.
At that time, Alutech brought together approximately 20 companies from Belarus, Russia, Ukraine, and the Czech Republic. The purchase of the majority stake cost Hörmann 109 million euros.
"Alutech holds a strong position in the Eastern European market, which is of great interest to us. At the same time, growth in the Western European market is also a goal for Alutech, so we can support each other perfectly,” said Martin Hörmann, managing partner of the Hörmann Group, commenting on the deal.
Martin Hörmann and Aliaksei Zhukau strike a deal. Source: alutech-group.com
SECRET SALE
The Belarusian and German businessmen opened a company showroom in Ekaterinburg and a large warehouse near Minsk after the deal was finalised. But all plans were disrupted by Russia's full-scale invasion of Ukraine. Two weeks later, Cyprus-based FJA Future Limited formally changed ownership. Instead of the Belarusian citizen Aliaksei Zhukau, the Cypriot citizen Aliaksei Zhukau became the owner. The Belarusian businessman has a Cypriot passport, which is valid until the beginning of July 2029. With the war in full swing and the West imposing sanctions on Russia and Belarus, the owner's change of citizenship came in handy.
While Alutech was shipping sanctioned products to the EU, the holding was putting down roots in occupied Crimea.
Krymskaya Okonnaya Kompaniya received a new certificate at the end of June 2023. Alutech trained the staff of the Sevastopol company. Soon, Krymskaya Okonnaya Kompaniya reported on commencing installation in the new workshop of the Zolotaya Balka champagne factory. Alutech's stained glass windows and doors were installed in the factory's production area. By the way, in 2021 and 2022, Alutech-Rostov supplied Belarus products to the unrecognized Donetsk People's Republic. The total statistical value of goods exceeded $55,000.
СAlutech Certificate. Source: instagram.com
In August 2023, Aliaksei Zhukau bid farewell to his life's work. He sold the remaining 25% of the Cypriot company Elutek Investments Limited to Hörmann Holding. Now German entrepreneurs fully control Belarus plants and Ukrainian branches of Alutech through Elutek Beteiligungs GmbH.
The Alutech Group's Russian assets, including the new plant in Novosibirsk, have been taken over by another Cypriot company with a very similar name, Elutek Investments II Limited. Its owners are Martin Hörmann and the same German company Elutek Beteiligungs GmbH.
In the face of Belarusian counter-sanctions, Zhukau sold his stake in Alutech holding. The government approved a list of foreign investors in July 2022 who were prohibited from selling stakes in their Belarusian companies. This list includes five Minsk enterprises from the Alutech group. They are now all owned by the Hörmann family. The founder of the business, Zhukau, is no longer an owner.
According to the accounts of his main Cypriot company, FJA Future Limited, the businessman received over €30 million in dividends as a beneficiary from 2017 to 2022. This includes €12 million in 2022. This decent sum of money should provide a comfortable living and vacation in Sardinia.