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Belshina Needs 857 Years To Overcome The Crisis

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Belshina Needs 857 Years To Overcome The Crisis

Indeed, the workers warned directors about it, so it happened.

Belshina JSC recently hit the headlines after Lukashenka put his own lackey in jail. The CEO of the enterprise Andrei Bunakou allegedly made a contract with Russian partners for the sale of large tires below cost. Although Western competitors left the Russian market and prices for these products began to rise. However, there is a possibility that in this way Mr Bunakou wanted to release full warehouses of the extremely unprofitable enterprise and start the work process somehow.

The company started having trouble back in 2015, and the net loss of Belshina increased almost 65 times to BYN 274.17 million in 2017. Further, it became almost impossible to change this situation. The workers met 2020 with a shorter working day and payment of 2/3 of the normal salary introduced back at the end of 2019. The reason was the lack of working funds and debts. The company's latest available annual report for 2020 showed a loss of 191.65 million rubles. According to analysts, it takes 857 years to overcome the crisis using all the earned profits.

Despite the fact that Lukashenka declares an open Russian market for a Belarusian tire manufacturer, it is difficult to sell profitable volumes at the same prices. Indeed, such eminent tire manufacturers as Continental, Michelin, Bridgestone, Yokohama, Pirelli have left Russia. But there are also Russian tire manufacturers whose products are cheaper than Belarusian ones, and it makes no sense to spend money on logistics.

Two large Russian manufacturers are working on the Russian market: the Yaroslavl Tire Plant and Nizhnekamskshina PJSC (from Tatneft PJSC). Also, there are small companies in other regions - Altai Tire Plant Nortek, Voltyre-Prom JSC.

Raw materials also affect the sale of Belarusian tires on the Russian market. In 2021, there were particular problems with some European materials. They had to look for it in other countries. Russia (carbon black and synthetic rubbers) and Southeast Asia (natural rubber) are supplying the main raw materials today. Only 30% of the components are Belarusian, so it’s easier to find these materials: metal cords are coming from the Belarusian Steel Works, and fibres are coming from Hrodna Azot.

Delivery of Russian raw materials to a Belarusian enterprise, tire manufacturing and return delivery to Russia is a more expensive operation than bringing it to a plant in Russia. The entire concern of Nizhnekamskneftekhim PJSC is engaged in both rubber and tire production. Conclusion: the old-school dumping comes into play for competitiveness. The CEO at Belshina was imprisoned for it.

Obviously, a plant with huge debts and extremely long maturities needed European and Ukrainian markets. It is extremely important for any enterprise also for getting the currency. However, the brutal repressions against the Belarusian people, as well as Lukashenka's complicity in the criminal war against Ukraine, left no chance for the development of almost all enterprises in Belarus. He is blaming everyone now. Even yabatka-CEOs appointed by himself. The debt hole of the regime is deepening in general, sales are declining, and professionals continue to leave the country. This is the result of the dictator's rule. In fact, after the 2020 repressions, labour activists told CEOs and warned that they would be the next. And so it happened.

Artsiom Chernikau, especially for the Basta Telegram channel

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