There should be no loss-making and subsidized projects in the country, Belarus President Alexander Lukashenko said at the session held on 10 May to discuss the development prospects of OAO Grodno Azot.
“My requirements are well known: there should be no loss-making and subsidized projects in the country. It is inadmissible to spent budget money on various readjustments,” Alexander Lukashenko stressed.
The President remarked that Grodno Azot is an important enterprise for the chemical industry, the region and the country in general. It is the manufacturer of nitrogen fertilizers, ammonia, methanol, caprolactam and other chemical products.
According to the head of state, the global demand for nitrogen fertilizers will be on the rise: the world population is increasing, it means that existing farms will have to grow more products. “Therefore, this production will always be in demand and will always be growing,” he is convinced.
Alexander Lukashenko remarked that more than a half of Grodno Azot fertilizers are delivered to Belarusian agricultural enterprises. Therefore, its stable operation directly depends on the efficiency of these enterprises. “The factory has been working at full capacity for more than 30 years. Using those technologies, the enterprise cannot actively compete with foreign manufacturers of similar products,” the President said.
Therefore, the enterprise needs serious modernization. The government has considered two options: deep modernization of existing facilities or construction of a new nitrogen complex with gradual decommissioning of certain operational facilities. “Unfortunately, they have not considered an option to build a new complex and modernize an old one. But this is the issue of the market. Perhaps, they have calculated the cost of the modernization and construction projects. But they have not started with the main things: where we will sell the products and what prices will be established for necessary raw materials in the future. Sales markets and raw materials are the main things. Then we will make conclusions,” the head of state said.
According to specialists, both projects to modernize the production facility or build a new one carry certain risks, and they can have a significant impact on the efficiency of the project.
Alexander Lukashenko emphasized that it is essential to thoroughly analyze all aspects and make a balanced decision with long-term goals. The President asked if the proposals of the government are in tune with his requirements. He also asked about the most optimal variant for Grodno Azot, what resources will be needed for the fulfillment of the plans and what are the sources of financing.
The head of state asked about the volume of Belarus’ import of nitrogen fertilizers. “It is also important for the consideration of this project,” he said.
The President also suggested discussing other issues at the session. Alexander Lukashenko wanted to know about the progress in the implementation of major investment projects.