The authorities may give away the flagship of the Belarusian economy as part of payment for cheap Russian oil.
The merger of OAO Integral and Ruselectronics holding company may become a result of a natural process of the growth of Russian companies, observers think. Only a range of factors relating to politics can impede the process, Deutsche Welle reports.
The mechanism of integration of assets of Ruselectronics holding company (owned by Russian Technologies State Corporation) and Minsk-based Integral open joint stock company should be thoroughly elaborated. That was a task set after the negotiations of Belarusian first deputy PM Uladzimir Syamasha and Russian deputy PM Arkady Dvorkovich in Moscow on March 13.
Integral's general director Vitaly Saladukha said to journalists in March: “We are at the stage of negotiations so far. A non-disclosure agreement was signed, so we cannot say anything.” Saladukha noted Integral's technical re-equipment programme was developed for a period until 2020 suggesting large volumes of investments. Ruselectronics is considered to be the main investor.
It seems logical. Being the biggest enterprise in the electronics sector in Central and Eastern Europe, Integral produces over a billion of microcircuits and and a billion of semiconductor devices per year. Almost 80% of the plant's products were exported to Russia in 2012.
Experts point at risks, first of all the policy of the Belarusian authorities, that can hinder the merger.
According to Dmitry Baranov, a leading expert of Russian Finam Management company, the main risk is unpredictable behaviour of official Minsk, which can terminate cooperation at any moment. “Russian companies and the government know perfectly what Belarusian-style privatisation means. They already got their fingers burnt and would hardly like to repeat it,” Baranov thinks.
Belarusian economic expert Mikhail Radkevich marks the political factor. Both Belarusian and Russian companies are state-owned, he says. For this reason Integral's assets can be regarded as “partial compensation for supplies of cheap Russian oil to Belarus”.
It should be reminded that Uladzimir Syamashaka and Arkady Dvorkovich agreed in March on the volume of oil supplies to Belarus only for the second quarter of the year. Oil supplies for the third and fourth quarters are expected to have been approved by July. The procedure looks complicated because Belarus traditionally wants to buy oil at a reduced price and in larger amounts than Russia is ready to offer.
In such cases Moscow usually insists on a sort of compensation for the preferences. Analysts note that the merger of Ruselectronics and Integral may act as compensation. The partners are expected to set up a joint venture, but the terms and conditions are unknown.
Leanid Zaika, the head of Minsk-based analytical centre Strategy, is sure that the fate of Integral is predetermined. According to him, the plant's units that have faced hard times should have been modernised and converted long ago, but it was not done in time, after the collapse of the Soviet Union. The result is that Integral requires money for modernisation, but can scarcely have economic prospects.
Zaika warns that if the plant gets no investments, it may “slowly decay”. Belarus doesn't have spare funds. In this situation, a possible merger and even acquisition of Integral by Ruselectrnics is a natural process, Leanid Zaika says. “Many Russian corporations will grow in size at the cost of Belarusian companies. There's nothing strange,” the Strategy director concluded.