Will BelGee And BelAZ Plants Stop?
- 7.09.2022, 8:54
Possible problems with the supply of components for Belarus.
In early August, Petr Parkhomchyk, who was the Minister of Industry, said that the BelGee plant would not be able to meet last year's car production volumes.
The official explained this by the fact that China did not want to supply vehicle kits to the plant. They had to involve Lukashenka in resolving the issue, but time was lost.
The day before, Deputy Prime Minister Petr Parkhomchyk said that the Geely car plant plans to reach last year's volumes in monetary terms.
"Filin" asked the experts of the Kosht Urada project about the impact of the Western sanctions, as well as Russia and China, on the sphere of domestic engineering.
"The sphere of mechanical engineering is an important component of the industrial potential of Belarus. Enterprises in this sphere produce a wide range of products from small-scale mechanization for agriculture to BelAZ heavy-duty dump trucks for mining.
Taking into account the fact that the basis of the local production base was laid back in Soviet times and was focused on the Soviet bloc in the broadest sense, the capacities of these enterprises exceed the country's domestic needs, therefore, to a large extent, Belarusian engineering works for export.
This, in turn, explains the fact that the sanctions against Belarus are extremely painful for this sector of the economy.
However, taking into account the fact that a large share of Belarusian engineering products goes to these markets. Access to the markets, primarily to the Russian one, is still open for Belarusian products, a collapse in exports is not expected here.
The action of restrictive measures against the Belarusian and Russian economies creates both obvious difficulties and opens up opportunities for local producers. The withdrawal of foreign companies in the field of mechanical engineering from the Russian market simultaneously opens a corridor for Belarusian products. But not everything is as clear.
Firstly, problems with the supply of components that stopped Russian factories may well affect Belarus, if they have not already.
Secondly, many Belarusian enterprises depend on Chinese partners and, therefore, on their desire or ability to continue supplying components or financially support Belarusian joint ventures.
If Chinese companies consider it profitable, expedient or elementary possible, taking into account the new logistical tasks, to continue production, then this will open up wider prospects for them, primarily in the Russian market.
Of course, now motor manufacturers have especially great prospects in the Russian market. The withdrawal of Western companies reduced their production in Russia by 85%. The price rises and demand persists when the production falls. This puts other manufacturers in an advantageous position and promises significant profits.
However, even the opening of new branches in the Russian market does not guarantee that Belarusian machine builders will be able to take them. Belarusian companies will depend on Russian investment in capacity development lacking sufficient domestic resources for development or access to foreign capital markets.
The profitability of investments in Belarusian engineering companies on the Russian side will be a difficult issue. It also concerns property rights that the Belarusian state, especially in such an important area as engineering, prefers to keep.