Aleksandr Lukashenko visits Kommunarka Company

Food companies, as well as refineries and light industry plants, are strategic enterprises, i.e. they are people’s companies and should work for the benefit of the Belarusian people. At the same time, the country’s economy is open for honest investors, President of Belarus Aleksandr Lukashenko said at the meting to discuss the development of the Belarusian confectionery industry.

The head of state decided to hold the meeting at one of the Belarusian confectionery companies – Kommunarka.

The familiarized himself with the production capacities of the company and the assortment of products. Aleksandr Lukashenko was also informed about the development prospects of Spartak. The President wanted to know about the state of things at the company, first of all, how many funds and what kind of funds were invested in the upgrade and production expansion in recent years.

Aleksandr Lukashenko emphasized the need for efficient operation of the companies on all the stages: “You should get raw materials at a minimal price, reduce the prime cost of products and generate bigger revenues. The world has not come up with other ways. These will be the criteria of assessing your work”.

The head of state outlined two blocks of issues to be discussed. They are the overall development of the confectionery industry and implementation of the corresponding program set to run until 2015 and the operation of the two biggest enterprises of the industry – Kommunarka and Spartak.

According to the President, he had given instructions to closely analyze what has been going on at these enterprises since the Soviet times. He was interested to learn how they were privatized, who the owners are, how the enterprises were assessed for the court to pass a ruling. “The court has passed its ruling. Who has failed to fulfill the ruling? The supervisory boards have. As of tomorrow the supervisory boards have to be eliminated,” Aleksandr Lukashenko said. “Court rulings must be fulfilled unconditionally but after it is done, you have the right to appeal them”.

“My decision is unambiguous regardless of any investors and the investment climate. As of tomorrow the enterprises should operate like they used to. I am not talking about shares, percentages, and investors for now. I am just talking about the management of the enterprises. As of tomorrow the heads of the enterprises should make decisions at their own discretion like state-run enterprises do. They should forget that they once had a supervisory board. Condemning me or approving is a matter of taste,” the President said.

Aleksandr Lukashenko also explained some of the reasons why the government session had been called. “First of all, the shareholders and government agencies have raised the matter of the future of Kommunarka and Spartak and the entire confectionery industry once too often. A lot of instructions have been given to straighten out the industry,” the Belarusian leader said.

“A while ago I received a letter stating that acting out of their personal interests some officials want to sell the enterprises instead of helping them. I would like to get explanations today as to who those officials are,” Aleksandr Lukashenko said.

The head of state remarked that the letter he had received says the situation can affect the investment climate in Belarus. “This kind of blackmail is not new for me. Certainly, I am concerned about the investment climate but not at the expense of the state and the Belarusian nation. It must always be remembered by those, who appeal to me, too,” the President stressed.

“Keep in mind that such enterprises will never be privatized without the approval of the president. You must always remember it. Therefore, writing letters that some officials want something for their own ends… Wanting something is not bad. Wanting is not forbidden. We don’t have other enterprises like those. They are our flagships in this sphere,” the head of state said.

Speaking about the enterprises Kommunarka and Spartak, Aleksandr Lukashenko said: “We’ve always expected them to export a lot while reducing import. I’ve been informed that for now import exceeds export. It totally won’t do”.

“Kommunarka, Spartak and similar enterprises are people’s enterprises and enterprises for the children. That’s all there is to know,” the President stressed. “Whatever price our confectionery products may cost, the father and the mother will always buy them for their child. It means that they are strategic enterprises, they will always exist (maybe not as Belarus-owned enterprises but foreign-owned ones) just like enterprises that make milk, meat, footwear, and clothes”.

“The question is why it was necessary to privatize and divide them once,” Aleksandr Lukashenko said. “I agree that 15-20 years ago a different policy was in place, a policy of giving away everything. Pensioners, natural persons, workers of the enterprises were given their share, at minimum prices. After that our wheeler dealers, figuratively speaking, bought these shares for a song and became owners of the enterprises”.

“This is the result of this kind of privatization and this is why I always practice a very accurate and careful attitude to it,” the President remarked.

The head of state expressed dissatisfaction with the performance of the confectionery industry. He underlined that a number of issues have accumulated in the industry. “First of all, the output growth in the confectionery industry seriously lags behind the overall economic growth of the country. Kommunarka and Spartak, the two companies that meet almost one third of the country’s needs in confectionery products, unfortunately do not lead the way, which is revealed by their statistics,” Aleksandr Lukashenko said.

According to the President, this has resulted in appreciable reduction in the share of Belarusian products on the domestic market where foreign producers are making significant inroads: “In 2005 the retail sales of Belarusian confectionery products accounted for over 90% of total sales on the domestic market, while in 2012 the figure shrank to a little more than 70%”.

“Second, over the last five years, the foreign trade deficit in the confectionery industry has doubled (from $33.8 million in 2005 to $67 million in 2011),” the head of state said.

Third, the industry has virtually no distribution network of its own on major foreign markets, while the use of middlemen considerably reduces the efficiency of work.

The head of state emphasized that if adequate measures are not taken, Belarusian confectionery makers will lose their foothold on the market against the backdrop of tough competition in the SES and later in the WTO. “We cannot let it happen,” the President said.

Aleksandr Lukashenko demanded that the government officials should make a report on what is being done to address the issues.