To the manner born in Russia

More than 50 million people live in the Ukraine, and nine out of 10 of the journeys they make are by rail. From Central Station in the capital, Kiev, 140,000 ticket-holders depart every day, and elsewhere in the republic the platforms of at least 100 other main-line stations echo to the step of comparable multitudes. Distances can be long, trains slow, journeys monotonous.

The state railway company, still adjusting to national autonomy after the Soviet collapse, is anxious to create an image of its own, one more modern and European; and as its passengers have greater freedom of choice, it feels it needs to make more effort to keep them happy. But with little money and few of the requisite "consumerist" skills, the question is: how?

Enter Stephen Hayklan, an Anglo-Scottish entrepreneur with a Finnish surname, a decidedly unconventional approach to trading behind the old Iron Curtain, and arms almost wind-milling with enthusiasm as he reels off facts and figures. Not, however, because he scents a coup. "In our culture," he says, "international traders like me are supposed to indulge in raw capitalism. In theirs, we should remember that 10 years ago raw capitalism meant the black market and the death penalty, and so behave more sensitively."

The fly-by-nights and bond pedlars who swooped from the West to re- indulge their Eighties greed may have ultimately helped pave his way, but early on, the resentment and xenophobia they fostered did him no good. So, he speaks with some feeling.

But his attitude may also have more than a little to do with the fact that his family were landowners in what was then the Tsarist province of Finland, and that his grandfather, an army officer sent to the front in the Russo-Japanese war, had to leave in a hurry after the first Russian Revolution of 1905.

Hayklan himself was born of a Scottish mother in Hertfordshire 29 years later; and whatever his reason for adopting it, later, the "sensitive" approach seems to have worked.

In carving out what he believes is "probably a unique foreign niche", he has been honoured by foreigners of eminence - Gorbachev when still Soviet president,and Chirac when mayor of Paris, for instance.

Yet so reticent has Hayklan been in the UK that, outside the CBI, of which he has been an active member for 15 years, and Wiggins, the construction firm of which he was chairman for a decade until 1992, almost no one knows his name; and his mini-conglomerate, Hayklan Industries, has remained one of the best-kept secrets of British trade behind the former Iron Curtain.

What has prompted him to break his silence now is what is about to happen in the Ukraine, as a consequence of the equal joint venture he has negotiated with the state railway company.

Hayklan saw a first obvious step: the sort of "in-journey" magazine you can get on InterCity or Eurostar and airliners. So, with a modest test-run and anodyne title, Discovery is to be launched on 1 November, at first as a quarterly but with plans for up to 10 issues a year and print-runs of a million copies.

The magazine will carry a mixture of international editorial, translated into Ukrainian and Russian, ads, maps, and timetables for trains - London Victoria to Kiev, for example, or Kiev to Vladivostok and Peking - and connecting flights en route. Edited and laid out in London, colour-separated and typeset in Kiev, printed in Barcelona on Spanish-made paper, with a cover price of $2 and Hayklan as its publisher, it will be a truly international effort.

Even better, Discovery will "dovetail nicely" with his other activities, as he puts it. Dovetailing - US execspeak wouldprobably use "synergy" - is clearly central to Hayklan's method and philosophy of growth. Discovery will dovetail with his weekly newspapers called News Digest for Japanese expats in the UK, France and Germany, and the monthly Irish-European "business-to-business" journal he launched in Dublin this year.

With a combined weekly circulation of more than 25,000, the Japanese News Digests in turn dovetail with another enterprise that Hayklan launched this year in one of the most desolate towns on earth, Khabarovsk, during the thaw of the Siberian spring.

On the back of a joint venture between a Japanese travel agency and the Russian national airline, Aeroflot, this enterprise last summer employed 40 people in what Hayklan calls "the region's first world-class western shop" - to sell cashmere sweaters and silk bras to Japanese tourists recovering for the flight home after rugged $3,000 "explorer" holidays in the Arctic Circle. It, in its turn, dovetails into his core business behind the old Iron Curtain - a lengthening chain of his own small department stores.

These stores - aimed at indigenous families rather than tourists but selling up-market lines such as Wedgwood, Dior, Pringle and Gossard - trade as Bradleys of London, which Hayklan has promoted as a miniature Harrods or Harvey Nichols. Somewhat surprisingly, given standard western notions of post-Soviet poverty, the idea seems to have caught on. There are now five Bradleys shops: four run under the auspices of his subsidiary, Bradleys Evrokim - one in Odessa, the main port of the Ukraine, on the Black Sea, and three in the Crimea; and the fifth, run under franchise, in Moscow. Employing more than 200 people, mostly women, the shops are open seven days a week. The biggest has a staff of 100; Kerch, in the Crimea, which opened in July with a staff of 20, has more than doubled its projected takings.

In total, Hayklan's enterprises at present employ 350 full-timers of 15 different nationalities, working in eight different countries, at an average wage of $100 a month. In purely western terms, though, their financial performance would leave much to be desired and, more graphically than anything he may say, perhaps illustrates why, in the "Eastern bloc", he has been so well accepted: his group turnover is just $5m (pounds 3.2m).

Although this might also help to explain why he looks more like a rumpled senior medico or university administrator fighting government cuts than a thrusting, cosmopolitan empire-builder, appearance - or adherence to stereotype - does not seem to matter to him. What does is knowing how far he's travelled, seeing how much farther he can go, standing on his own feet and, in his early 60s, completing symbolic life circles.

Grand as the Hayklans may once have been, he has not forgotten his parents' hard times, or his own as an evacuee from London to the West Country during the Blitz. In the early 1950s, after his father died, he started work to support his mother and siblings.

"My first job," he recalls, "was in an old City firm of wholesalers which sold the same sort of fashion goods as we're selling now."

Qualifying as a valuer and auctioneer and moving into construction, he set up Hayklan Industries when he was 24.

He has never believed in marble halls or management pyramids, borrowed as little and as seldom as possible from the banks, and bought a long lease on the building north of Oxford Street in which he has his stark basement office. He runs Hayklan Industries, he says, "in effect as a venture capitalist to its own federation of companies".

Each has its own small board, with him at the head, and an emphasis on staff. "We have a lot of very young, bright people, and we believe in a lot of training," he says. "For their sakes, and because there's financial risk in what we do, I don't think it should ever be more than we can actually afford to lose. It's therefore a good safe discipline to use only our own resources.

"I've seen too many companies fail because of huge asset bases and borrowings, and managements which were too remote from the action. Wherever possible I think they should be run like family institutions, with no more than one or two people between the strategy and the product or service they provide."

Who's on the board of Hayklan Industries? "You're looking at it!" he says. The decision to set up Bradleys, which he did with $500,000 of his own money, matched dollar for dollar by a "brave" private investor - was made less than five years ago, in the pit of the recession, and was therefore his and his alone.

Unsafe as his previous core activities, construction and property, had become, the change of tack required courage, and an underlying conviction that supposedly ingrained Soviet attitudes would be susceptible to change.

"To show key people from the former Soviet Union how things are done in real western commercial life," he says, "we opened a small shop in north London. But by learning so fast, and showing they're as good as anyone else, given the chance, they proved it unnecessary."

There have been numerous other obstacles to surmount: his own lack of a suitable language - "I've taught myself pidgin Russian"; poor transport - "road haulage was so hit-and-miss in the early stages that we had to hire a military aircraft to fly British underwear from Kiev to Yalta"; the supposed ubiquity of organised crime - a problem which, he says, "has been overplayed by the western media".

He adds: "Of course, we've had to set up our own security. But the question is simple: do you have to deal with the Mafia? I say 'No', and that's it. We don't do anything to upset them, because we're not making vast fortunes or exploiting anybody. They know that if they tried to exploit us, we would not be there."

Further Hayklan decisions can no doubt be expected soon: other ventures with Ukrainian State Railways, maybe, and perhaps a "company store", reminiscent of the old American West with which he believes the old USSR has so many parallels; or maybe a mail-order catalogue, Sears Roebuck- style, which could buy double-page ads in Discovery - and dovetail nicely indeed!