Aleksandr Lukashenko makes a working trip to Mogilev Oblast

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Belarus’ President Aleksandr Lukashenko approved the establishment of the Belarusian Cement Corporation. This matter was discussed during a visit by the President to Krichevtsement, a subsidiary of Krichevcementnoshifer, on 16 August.

Aleksandr Lukashenko visited Krichevtsement, a subsidiary of Krichevcementnoshifer, to get familiar with the situation in the cement industry.

The President was reported on the progress in the implementation of his instructions to construct a new technological cement production line.

The target is to increase the output to 10 million tonnes by 2015. According to Architecture and Constrcution Minister Anatoly Nichkasov, the task of increasing the capacities will have been fulfilled. Two lines to produce cement were launched at Krasnoselskstroimaterialy and Belarusian Cement Plant in 2012. Another line will come on stream at Krichecementnoshifer in 2013. In 2008-2013 the aggregate investments in the cement industry have amounted to $1.227 billion. In 2013 the output is expected to reach 6.1 million tonnes.

An estimated 4.9 million tonnes of cement was produced in 2012. Today cement production fully meets the domestic needs of the country. There are also opportunities for its exports. Last year the country exported 1 million tonnes of cement. It is a two-time increase on 2011. In the first half of 2013 a total of 750,000 tonnes of cement were supplied abroad. It is expected that cement supplies will reach 1.5 million tonnes by the end of the year. Cement supplies mainly go to Russia, Poland and the Baltic states. According to the minister, in 2012 Belarusian cement accounted for 19% of Russia’s total cement imports.

Anatoly Nichkasov added that today’s major task before the industry is to produce value-added products: decorative, artificial stones and other goods.

New factories to make reinforced concrete structures and artificial stones should be up and running by November 2014. according to President of Belarus Aleksandr Lukashenko, given the high demand for such products these projects should be implemented as quickly as possible to.

Both projects are supposed to be implemented by Belarusian Cement Plant.

Belarusian Architecture and Construction Minister Anatoly Nichkasov said that the project to build the factory to make artificial stone costs $38 million. There are plans to use a Chinese loan as large as 15% of the total to accomplish it. According to the Minister, plans have been made to commission two lines able to make 1 million m2 and 2 million m2 of the merchandise per annum. Anatoly Nichkasov noted the capacity of the Belarusian market is 3 million m2 but the factory will export 50-60% of the output.

The cost of the project to build the factory to make reinforced concrete structures is estimated at $50 million. According to the Minister, the factory will make energy-saving structures compliant with European standards.

Aleksandr Lukashenko underlined that 7 November 2014 is the deadline for implementing these projects. The head of state instructed Chairman of the State Control Committee Alexander Yakobson to get these matters under control. “All these plans should not be fake promises,” said the President. “We don’t want them protracted the way things are done in the civil engineering industry when a construction project takes 5-7 years to accomplish. If the demand for this merchandise is that great, then we should jump on the bandwagon fast”.

Aleksandr Lukashenko also gave instructions to start manufacturing reinforced concrete structures and artificial stones in the Krichevcement branch of the construction materials company OAO Krichevcementnoshifer.

Regarding the new holding company, it is expected to comprise three cement plants: Belarusian Cement Plant, Krasnoselskstroimaterialy and Krichevtsementnoshifer, and a transport and logistics company. Work on establishing the holding company is expected to be complete in 2014. In 2015 the country expects to attract a strategic investor.

This move is expected to help reduce the cost of construction materials manufactured from cement and lime, increase gross value added, return on sales, revenue per employee, develop new kinds of competitive products from cement with high added value, expand markets, increase sales and foreign exchange earnings.

“If you have decided to go ahead with this project, and the move will bring profits, then do it,” the head of state said.

“But if this move is designed to hide the existing problems, it will not work. Economy and efficiency should be always in the first place. I am not going to ask you at what price you buy raw material and sell ready-made products. I will be interested, first of all, in the result. This is why, when working on this project, think about the economy first,” the head of state said.

In his words, the holding company should demonstrate effective operation.

The President also noted that there should be reasons for setting up such corporation. This should not be a tribute to fashion.

The head of state got acquainted with the production and economic performance of the plant, and modern technological process of cement production.

Aleksandr Lukashenko pressed the symbolic button launching a new technological cement production line.

The capacity of the new plant will be 1.8 million tonnes of cement per year. This large-scale investment project was implemented with the help of Chinese loans and loan resources of the Belarusian banks.

Architecture and Construction Minister Anatoly Nichkasov considers that the country needs to expand the areas of cement application. In particular, cement can be used in the road industry as well as in monolithic construction. Currently about 15% of new houses in Belarus is built with the use of monolithic construction technology, while in the world this practice is very widespread. Anatoly Nichkasov considers that the wider implementation of such technologies in Belarus will require a form setup system. The Belarusian builders use this technology while implementing development projects in Venezuela. This technology allows building any types of structures quickly.

The President also touched upon the issue of unjustified mediation, demanding it should be eradicated.

Aleksandr Lukashenko remarked he had received reports about existing unfair mediation companies. “Why do you have to get even Belarusian raw materials via mediators?” the head of state asked those present. Anatoly Nichkasov noted that such mediation had been practiced by the industry before but relevant measures had been taken after audits.

The President pointed out that he had repeatedly warned that the situation when an enterprise buys any raw materials from the private companies it controls is inadmissible.

“The head of the enterprise must go to jail, the private company must be shut down. Such private businessmen will not be involved in doing their business any more. Such things add to prime costs. If you buy raw materials at avoidably higher prices and raw materials are the key component of the prime cost (70%), then naturally you cannot compete on the market,” said the head of state.

“It is time to shut down such mediation! Those, who let it happen, should compensate for the damage in addition to being fired,” stressed the President. He instructed auditing bodies to start working on it. “I don’t need simple facts and proofs. I need a compensation for the damage incurred by the enterprise,” he added.

“Forgiveness is out of the question whatever status you may have,” warned Aleksandr Lukashenko. The President instructed Chairman of the State Control Committee Alexander Yakobson and Aide to the President for Mogilev Oblast Gennady Lavrenkov to take a closer look into the situation regarding unjustified mediation involving enterprises of the entire oblast. The Belarus President told heads of enterprises that they “should fight for every cent that saves resources and keeps down prime costs”.

The working trip also focused in the harvest campaign which is completing in Mogilev Oblast as well as the social and economic development of the region.

According to Mogilev Oblast Governor Piotr Rudnik, they have harvested crops on 98% of the area, with only leguminous crops left to gather in.

Thus, Mogilev Oblast is the first one to finish the harvesting campaign in 2013.

The President remarked that this year the oblast had demonstrated both a high harvest speed and a high harvest yield. As of the morning on 10 August Mogilev Oblast produced 1.1 million tonnes of grain. According to Piotr Rudnik, the cereals harvest is expected to be 1.13 million tonnes of grain and 250,000 tonnes of corn. In his words, in 2011 the harvest totaled 1.122 million tonnes of grain while in 2012, the highest yield year, the harvest amounted to 1.285 million tonnes of grain without corn.

Aleksandr Lukashenko commended Piotr Rudnik for the proper organization of the harvesting campaign. “Frankly speaking, I doubted the real state of affairs in the oblast. But even before the harvesting started, I said that proper organization can secure a good yield. So it has turned out that way. Because the harvest was very good in the field. Well done. If certainly you manage to turn round the production sector the way it is intended, then we can say that Rudnik is a true manager. Because it is not a simple year, it is an indicator of performance of any governor,” the head of state told Piotr Rudnik.

As for the overall harvesting campaign, the yield is expected to be close to 9.7 million tonnes of grain including corn and over 10 million tonnes taking into account personal subsidiary plots of citizens.

Aleksandr Lukashenko also raised the topic of brewing barley import. He warned that not a single tonne of brewing barley can be imported. “We have invested heavily in the program on procuring brewing barley. Besides, the yield is good this year,” said the President.