Government counts on foreign funding to retool Belarusian tractor factory MTZ

Roman Golovchenko said: “The enterprise should grow on. The most important thing now is to determine the maximum configuration, how much investment is needed, and what the payback will be.”

In his words, a lot of work has already been done to prepare the concept for retooling the enterprise. “The main task is to compare notes, check how the instructions given by the head of state during the latest visit to MTZ are being fulfilled. As a matter of principle, there is one instruction: make quality products. But to make it happen, it is necessary to implement a set of measures. In general terms, we are talking about retooling,” the prime minister explained.

The head of government specified: “We have to actually make a brand new factory. It will be difficult to accomplish because we don't want to do it from scratch, which would be easier. We have to preserve this platform, integrate new divisions into the existing structure of the enterprise.”

MTZ is in negotiations with the world's leading vendors of equipment and technologies in order to secure profitable terms for the country. “Buying [equipment and technologies] is easy but we have to make it as economical as possible. We have to bring finance from those vendors here. All the world's leading producers want to participate in tenders. One of the conditions specified by MTZ is that they have to bring their money here. We don't want the project to be a drain on the state budget in any way,” Roman Golovchenko added.

On the whole, the head of government is satisfied with MTZ performance. “The management know what should be done, the action plan is understandable. The development strategy has been approved. It is necessary to implement it. It is a complicated task but doable,” he believes.

Speaking about MTZ's operation in current conditions, the prime minister pointed out that markets have shrunk and sales have dropped all over the world due to the pandemic, this is why the state supports enterprises. “But it will be too much of a burden on the state budget in the long run. This is why the enterprise chose a different tactic. As a matter of principle, Western suppliers are ready to provide resources on more advantageous terms in comparison to Belarusian banks or government investments. This is why, as I've already mentioned, trade financing will be a very advantageous option without putting a drain on the state budget,” Roman Golovchenko explained.

Asked about MTZ's marketing strategy, the head of government noted it is important to keep traditional markets and raise sales.

Possible options to keep the company operational during the second wave of the coronavirus were also discussed on 26 June. “We have to think about backup options in case the second wave of the pandemic occurs. We are going to make preparations for various scenarios,” Roman Golovchenko concluded.

The head of government intends to pay attention to the top enterprises of the Belarusian manufacturing sector. MAZ was the first company the prime minister had visited. MTZ came second. “I know MTZ very well. I am a guy from this neighborhood, as they say, I used to live and go to school 200 meters from here,” he said. “But the most important thing is that these enterprises will produce substantial growth, they are a mainstay of the mechanical engineering industry.”

The public joint-stock company (OAO) MTZ is one of the world's top ten tractor manufacturers. It exports about 90% of the tractors it makes. OAO MTZ employs over 15,000 people. Another 7,500 people are employed by the holding company MTZ.