In business, any economic relationships between companies are often referred to as partnerships. One provides goods or services, the other purchases them. This makes these entities partners. Strategic partnership represents a different, much higher level of cooperation. This kind of relationship has been established between two well-known players on the construction market – the Belarusian Cement Company (BCC) and the Dana Holdings developer.
The good news is that the two companies have agreed that Dana Holdings will increase the purchase of cement and other building materials from BCC by 15-20% in 2021.
Today, the Belarusian Cement Company brings together 26 enterprises located in all regions of the country. The backbone of the holding company is Belarus' three largest cement plants: Belarusian Cement Plant, Krichevtsementnoshifer and Krasnoselskstroimaterialy. The holding company has created its own supply chain, which includes trading houses in Smolensk and Kaliningrad (Russian Federation), Siedlce (Poland) and Kiev (Ukraine), which enable it to confidently maintain leading positions in the construction materials markets of Belarus and neighboring countries.
According to Viktor Sidorenko, Deputy Director General for Finance and Economy of the BCC Holding Company, Dana Holdings buys a wide range of products from the company.
“We have been cooperating with the Dana Holdings developer since 2015, and our supplies to the company are growing incrementally. Today, cement accounts for 77% of our trade. In addition, the developer buys our gas silicate blocks and reinforced concrete structures. This amounts to about Br24 million a year, or 4% of our company's turnover. Therefore, Dana Holdings is a strategic partner for the Belarusian Cement Company,” Viktor Sidorenko said.
In general, about 70% of BCC's products are sold domestically, and the remaining 30% are exported. The company is determined to diversify its sales markets and to increase the share of export up to 40% of its output. According to the BCC senior executive, the company has already signed sales contracts with domestic and foreign customers for the products it will produce throughout the year. In this situation, it is particularly important that Belarus' biggest developer decided to purchase more from the company.
“An increase of 15–20% is significant. By the end of the year, our sales can reach Br30 million, and this will be quite a boost for the holding company,” Viktor Sidorenko believes.
A strategic partnership is more than just a steady supply and purchase. This concept is defined by the willingness of business partners to come to the rescue when it is most needed.
“In winter, when it is quite difficult for us to work because of the seasonal decline in demand for products, Dana Holdings gives us a shoulder - we get an advance payment, produce goods and sell them, and we use the money to pay for energy, raw materials, salaries and taxes,” Viktor Sidorenko said.
Maksim Kolyago, head of the domestic sales department of Belarusian Cement Company, also spoke about the role of big customers for Belarusian producers.
“Dana Holdings is one of the biggest consumers of our cement on the Belarusian domestic market. Thanks to this developer we can pay for our energy resources in winter, receive profit in the period of low demand and provide people with work and decent wages. According to the results of the previous year, salaries at our enterprise increased by 11.4%,” Maksim Kolyago said.
The real estate developer is also satisfied with its reliable supplier of high-quality products. The interest in cooperation is mutual, Chairman of the Board of Directors of Dana Holdings Vibor Mulic stressed.
“We have cooperated with Belarusian Cement Company for many years. This is the largest manufacturer of various construction materials in Eastern Europe. The company produces high-quality products that enjoy a stable demand and supplies them in time, which is important for our construction sites. This is why in recent years we bought more than $27 million worth of cement and various mixtures from Belarusian Cement Company. Today, we have decided to increase supplies by around 20%,” Vibor Mulic noted.
According to him, the company is actively working with many Belarusian manufacturers of construction materials for a reason. Almost all materials and equipment used at the construction sites of the holding are made in Belarus. Thanks to high quality and a wide range of domestic products for the construction industry, the real estate developer is able to substitute import at all stages of the construction.
Vibor Mulic said: “We intend to finish most of the work in the Minsk World complex by the end of 2023. Much faster than the timeline specified by the investment project. Speed is going up. Construction is in progress in all the quarters of the complex simultaneously. We are interested in steady deliveries of construction materials, equipment, and machines. This is why we met with many partners of ours in spring in order to discuss a substantial increase in deliveries. I think it is a good example of mutually beneficial cooperation of our companies and successful growth of the entire economy of the country.”
Let's recall another important thing in conclusion. Tight cooperation of the companies directly affects interests of Belarusian Cement Company workers. A special partner program allows personnel of the cement holding company to buy apartments in new houses of Dana Holdings at substantial discounts. Many have already managed to use the profitable offer. As they move into new apartments of the Minsk World complex soon, many will be pleased to stress: “My house was built using our cement and blocks!”