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09 April 2024, 13:51

Lukashenko weighs in on problems in Belarusian manufacturing sector

MINSK, 9 April (BelTA) – Belarusian President Aleksandr Lukashenko highlighted the problems in the manufacturing sector as he spoke at a large meeting to discuss the country’s manufacturing outlook at the Palace of Independence on 9 April, BelTA has learned.

"We are giving the domestic market away to competitors. This is an extremely negative trend. The government will answer for this. Despite the availability of a wide range of domestic engineering goods, we still purchase imported analogues. These are not isolated cases," Aleksandr Lukashenko said.

Last year, the country purchased more than a thousand tractors. Almost $40 million was spent on this.

"We are modernizing the bearing plant. The quality of its products is comparable to the world leaders. However, high production costs do not allow the plant to win tenders even of Belarusian machine-building enterprises. Is it just about a tender? We forget a simple truth: a miser pays twice. You can save pennies on the cost of a bearing and lose thousands from equipment downtime due to its replacement," the president said.

The head of state asked what measures are being taken to protect the domestic market. What exactly has been done and is being done.

"Problems with sales are the result of all the afore-mentioned negative trends. Warehouses are overstocked with finished products. Inventories for 2023 increased by almost a quarter (by Br350 million, or 23%). The deputy prime minister ‘lulls me’ by saying that this is normal. It has always been like this -  yesterday and the day before yesterday. Everything  will sell. But we are evaluating the inventories from period to period. How much equipment do dealers have? For many manufacturers the dealerships have become an additional warehouse abroad? No one will be able to hide behind them going forward," Aleksandr Lukashenko warned.

The president cited MTZ as an example, with almost 6,500 units of machinery being stocked in the warehouses of its trading houses. This is more than the company’s two months' output. “This is what your ‘output’ and your ‘export’ mean,” he said.

According to the State Control Committee, a significant number of entities of commodity distribution networks do not participate in the sales of products at all, and the costs increase significantly when the goods are sold through them. “Why did you set them up then? Whom are we feeding there?” the head of state asked.

For example, when selling to Russia under the “manufacturer-general-importer-distributor-dealer-end consumer” scheme, the cost of AMKODOR front loaders increases in price by more than 50%, MAZ cargo and passenger vehicles - by 20%.

“How can we compete here?” Aleksandr Lukashenko asked.

The president's requirements to reduce external overdue accounts receivable have not been fulfilled either. In 2023, it grew by more than 10%, while it could be working capital and investments.

“A simple question arises: why are we allocating loans? In this case, to assist that customer. The emergence of debts is often a consequence of a mindless race to meet the target for unloading warehouses and exports,” the head of state said.

“What is the overall outcome? First of all, the decline in the qualitative indicators of enterprise development. Profitability does not reach the level of 2022. The number of loss-making organizations and the amount of losses are growing. We have complicated logistics and the rising cost of imported raw materials. Destruction of cooperation ties with Western suppliers has led to the need to find alternative partners or to establish our own production of components, including accelerated development and implementation of new technical solutions. It is generally clear what to do. Why are we protracting? Why don't we act?” the Belarusian leader asked.
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