Rumas: Wood Processing Industry Requires Extra Modernization

It turned out unexpectedly that EUR 2 billion, which had been invested in the Belarusian wood processing industry since 2007, was an insufficient amount.

“Some enterprises of the wood processing industry need extra modernization. There was not enough finance, and some joints or equipment had never been bought. We are trying to solve these issues now,” – Chairman of the Bank of Development Siarhei Rumas has stated on August 15.

Rumas has also made it clear that the profit of these enterprises remains just a plan so far.

“As for most wood processing enterprises, we have already approved business-plans for 2 years, and the enterprises are working in accordance with thereof. Every business-plan is unique, but all of them prescribe achievement of profit-making work already in 2017,” – he has said.

It is worth mentioning that PM Andrei Kabiakou admitted a year ago that the modernization of the wood processing industry hadn’t brought the planned results.

“The concern “Bellesbumprom” is handling far-reaching work on modernization of the wood processing industry. Most projects have been fulfilled. However, due to various reasons, there has been no planned economic effect,” – Kabiakou then said.

Another “extra modernization” will not bring the desired economic effect either.

Ph.D. in Economics Leanid Zlotnikau has expressed such opinion to the Belarusian Partisan.

“Why should there be any economic effect this time? Has anything changed? It’s just they need to justify it somehow, as there have been no results yet – they played the wrong card with the business-plans, the market shrunk, there was not enough money or raw materials. There are also objective factors, but these EUR 2 billion could have been used much more effectively anyway,” – the economist thinks.

“It would be reasonable to free workers from all the loss-making or marginally profitable enterprises and re-train them so that they obtain the specialties which are really high-demanded, at the same time paying them unemployment benefits of EUR 100-150 per month for a year, if necessary, but Lukashenka believed in 2007 that the wood processing industry was more important, and now, having invested so much, the government simply cannot give it up,” – Zlotnikau has said.

The program for modernization of the wood processing industry remains one of the most broad-scale ones in the country.

The volume of investments in such projects as for the concern “Bellesbumprom” has made EUR 1 billion, while, given the projects realized by foreign investors, the sum grows to over EUR 2 billion.

Lukashenka ordered to develop and modernize the wood processing industry back in 2007, when he inked the decree “On some measures for development of the wood processing industry”. 9 organizations, namely, “Borisovdrev”, “Vitebskdrev”, “Homeldrev”, “Ivatsevichdrev”, “Mozyrdrev”, “Mostovdrev”, “Rechytsadrev”, “FanDOK” and “Mogilevdrev” got the preference regarding payment taxes and customs fees, from the state. The debt of the wood processing enterprises before the republican and the local budgets was restructured. The banks were recommended to give loans to fulfill the modernization projects.

Within 5 years, the wood processing plants were granted loans under the government’s guarantee.

Aliaksandr Lukashenka repeatedly expressed his discontent about the process of the industry’s modernization.

The Investigatory Committee’s branches started criminal cases to charge General Director of “Borisovdrev” JSC, Director of “Mogilevdrev” JSC, General Director of “FanDOK” JSC, Head of the transportation department of “Rechytsadrev” JSC. There was also investigation against the authorized officials of “Vitebskdrev” JSC.