In this series

  1. History of the first compact-disc in the USSR — Part 1
  2. History of the first compact-disc in the USSR — Part 2

Next part: Part 2

The Contract for Compact Disc Production

Back in ’87-’88, the All-Union Recording Company—or Vsesoyuznaya Firma Gramzapis, as it’s also known, and VFG “Melodiya” for short—bought a bunch of equipment for digital recording and digitizing its huge collection of analog masters. After that, Melodiya had two choices for entering the compact disc market: outsource production abroad or build its own facility.

Table of Content

Vadim Vasilyevich Smirnov, the company’s lead specialist and one of the most knowledgeable people in the USSR at the time when it came to digital audio media, really pushed for the second option. He gathered info on equipment manufacturers, met with foreign engineers, and started getting materials ready for a formal contract. At that point, he was up against a ton of technical, organizational, and financial challenges.

For the clean rooms, air-handling systems, water purification, and the replication line itself, Melodiya needed a company that could coordinate all of those specialized installations—and one with at least some experience working in the USSR. This was no small thing, especially when you think about all the paperwork and organization that was needed back then.

Money-wise, the situation was pretty complicated. Even though Melodiya exported a lot of vinyl records, audio cassettes, and other products through the foreign trade agency “Mezhdunarodnaya Kniga,” it wasn’t allowed to freely use the foreign currency it earned. The Ministry of Culture and a bunch of foreign trade organizations—like Mashpriborinorg, Tekhmashimport, and others—controlled every transaction: what could be purchased, from whom, and when. Melodiya basically had to beg and plead with the bureaucrats for the equipment it needed to operate and grow.

As the old saying goes, “one man with the hoe, and seven with the bowl.” That same dynamic is still around today. Bureaucrats always think they’re the center of the universe.

Eventually, Smirnov got Mashpriborinorg to take charge of the contract negotiations. In previous years, while working on compact cassette projects at the plants in Baku, Tallinn, Tbilisi, and Riga, I dealt more often with Tekhmashimport.

Even back then, the process was pretty similar to today’s tenders, just a bit more basic. Usually, three or four foreign companies would submit bids. And yes, there were “kickbacks,” but they were way more modest than the excesses that came after the collapse of the USSR. Sometimes it was almost comically provincial—like in Gogol’s line: “Yeah, I take bribes, but I only do it with puppies.” For us, the “puppies” were overseas trips: plant visits to see the technologies, training trips, and taking part in equipment acceptance.

The irony, of course, was that the people sent on these trips were often not the service engineers or technicians who would actually work with the machines, but instead plant directors, senior managers, or representatives of the trade organizations. They never forgot about themselves. So, when the equipment finally got here, we often had to bring in folks from the manufacturers to start up the lines and train our own technicians and operators on-site.

blank

Left: Viktor Kuzin in Sweden, 1989

Right: Viktor Kuzin and Vadim Smirnov, 2008

It’s hard for young people today to imagine what it meant, back in the 70s or 80s, to travel to a “capitalist country” like Germany, France, or Sweden. Even a trip to Bulgaria or Poland required approval from the trade union and the Party committee, and final sign-off from the district committee of the CPSU. There, aging officials with cotton in their ears, still proud of storming the Winter Palace, would ask the most absurd questions. And for an unauthorized five-dollar bill in your pocket, you could easily get five years.

But training and equipment acceptance for compact disc production were a whole other ballgame. After the company’s leaders and Ministry of Culture folks visited Sweden, Germany, and the Netherlands, more than 20 engineers and future operators were sent in the summer of 1989 for weeks of real training, capped with practical exams. The president of ANCLA, Mr. Volker Shirsh, and Vadim Smirnov were insistent on this arrangement, knowing that without proper training, launching such a complex production line would be nearly impossible. I’m still really thankful to both of them for that decision.

I was with the team at different points during the training in Germany and Sweden, where I learned to operate the equipment in the clean rooms—molding, metallization, lacquering—and worked on service and maintenance, which were key to keeping the line running smoothly. Our young engineers really impressed the Western specialists, and in the years that followed, they never let me down.

Four companies were involved in the tender, including ANCLA from Germany and NIMBUS from the UK. The Germans won easily. Volker Shirsh had years of experience working in Russia and had successfully completed several major projects equipping various organizations with electronics and acoustics—including the Supreme Soviet of the USSR. Shirsh wasn’t a tech whiz, but he was a natural when it came to getting things organized and working out deals, even when we were dealing with “puppies” — a term we used in jest for certain incentives.

Thanks to him, we were able to secure some of the best partners available at the time:

  1. KRANTZ (Germany) – construction of clean rooms and air systems
  2. TOOLEX (Sweden) – galvanics, molding presses, and training
  3. BALZERS (Luxembourg) – metallization systems
  4. GLOBAL MACHINERY (Japan) – lacquering equipment
  5. SICK (Germany) – automated quality control
  6. KAMMANN (Germany) – screen printing machines
  7. ILLSEMANN (Germany) – automated packaging and wrapping lines
  8. CD PLANT, Malmö (Sweden) – internships and operator training

…and that was far from a complete list.

On top of that, Volker had to make sure we had all the materials we needed for the first year of production—more than 30 different items. For example, the polycarbonate resin came from Japan—TEIJIN—and 65–70 tons were needed for an initial run of 3 million discs. Jewel boxes and black trays were also very popular. It wasn’t until the mid-1990s that Russia started making cases of its own, and even today, most of them are made in Southeast Asia.

Looking back at the materials list now, I’m amazed. We had to import everything, even the cotton and rubber gloves, activated carbon, polypropylene film—the whole nine yards.

It’s also worth mentioning that the mastering was done by ODME (Netherlands), using Philips’ technology. Four engineers trained there, and the acceptance of the mastering equipment was handled separately from the main contract, representing about 10% of the total project cost.

A Few More Facts

The British company NIMBUS wasn’t too happy about being “left out,” especially since everyone knew their discs were top-notch. Even today, there’s nothing better than a NIMBUS CD-R for cutting master discs—and there probably never will be. Apparently, someone told them that complaining to Melodiya, Mashpriborinorg, or even to Volker Shirsh wouldn’t do any good. They said the only place to be heard was the CPC (Committee of Party Control). And that’s exactly what they did.

Back then, the CPC was more powerful—and way more intimidating—than the prosecutor’s office or even the economic crimes police (OBKhSS). Vadim Smirnov had to put up with a bunch of days of “interviews” where he had to explain why the Germans were chosen. It sounds like a joke now, but General Director Sukhorado told Vadim, “If you don’t come back by the end of the day, we’ll organize a rescue mission.” Luckily, the NIMBUS proposal wasn’t cheaper and didn’t include materials supply, so the contract decision was kept.

By that time, monolines—which are fully integrated production lines combining molding, metallization, lacquering, and inspection within a single clean zone—had started appearing on the market. These systems took up way less space, made separate clean rooms unnecessary, and shaved a few million dollars off the overall project costs. By 1992–93, most plants had switched to the new systems, but many continued to upgrade their traditional systems for years. Looking back, we were among the last to build a full-scale clean-room production system, and we spent a ton of money to do it.

ANCLA, ODME, and the others really went after this contract—for them, time and money were everything. But it’s also important to understand our side. If the contract hadn’t been finalized in 1988, signed in 1989, and fully funded—down to the smallest items like screwdrivers and fasteners—there’s a very good chance that no money at all would have been allocated later, given the chaos that hit the country in the early 1990s. The installation and launch could’ve easily dragged on for a year or more, or it might’ve never happened at all, instead of being finished in just six months, as it ultimately was.

Payments were made in three stages:

According to some records, the total contract value was just over $11,000,000 USD. The amount may have been adjusted up or down over time, but the exact final figure is impossible to verify today.

The contract spelled out the responsibilities of each side:

ANCLA (and ODME) committed to:

VFG “Melodiya” and MOZ “Gramzapis” committed to:

And that, dear friends, is how it all began back in 1988. In the second part of this story, we’ll look at the additional commitments, how they were met, the training process, and the next steps that brought compact disc production to life in the USSR.

© 2015, Viktor Yevgenyevich Kuzin

Source

In this series

  1. History of the first compact-disc in the USSR — Part 1
  2. History of the first compact-disc in the USSR — Part 2

Next part: Part 2