Business news

5 Feb 2019

Subsidies for cement producers discussed in Belarus

MINSK, 5 February (BelTA) – A possibility to provide financial aid for domestic cement producers is under consideration in Belarus. A separate legal act regarding this matter will be submitted to Belarus President Alexander Lukashenko, Belarus First Deputy Prime Minister Alexander Turchin told the media following the government meeting chaired by the Belarusian president, BelTA has learned.

In focus of the meeting was economic performance of a number of companies, including cement manufacturers. “The investment projects were launched at a time when cement prices dropped dramatically. Today, the companies are able to support their current operations, at the very least. I would like to emphasize that a possibility of providing state support to the cement industry will be analyzed in a separate legal act to be submitted to the president,” Alexander Turchin said.

At the meeting, the head of state reiterated tough requirements to the companies that had already received financial support in any form. There is an instruction of the State Control Committee and the Belarus President Administration to keep track of how these companies fulfill their tasks and whether they meet deadlines. At the same time, company chiefs will be held responsible for failing to meet these tasks. As BelTA reported earlier, at the beginning of the meeting Alexander Lukashenko said: “I want to remind you that no excuses will be tolerated. And please stop submitting proposals regarding the companies that failed to fulfill the previous instructions. Heads of such companies (I remind you once again) should be punished, and only then we will consider proposals for the second and third time. Right now these company chiefs feel perfectly well. They failed to deliver on their promises, did not return money to the budget or investors, and now you suggest we help them handle their debts using budget funds? These practices should have been stopped long ago,” the Belarusian leader said.

At the same time, Alexander Turchin cited some success stories, when companies receiving government support got back on track. Gomelsteklo is a case in point. The company was discussed at the government meeting. “Its profitability rate is encouraging. It makes the government confident that the company will be able to fully meet its obligations to the state, budget and the banking system. The company is paying back its debts ahead of time,” he said.

A reminder, the state and prospects of the cement industry were discussed at the nationwide conference on the efficiency of the Belarusian construction industry in November. Back then the president slammed the cement factories that failed to reach the design capacity and restore profitability despite the upgrade effort. “The aggregate losses of three cement factories more than doubled over the past year to reach Br220 million. Their loan debts exceed $1 billion,” the head of state noted in November.

With the domestic cement companies not operating under their full capacity, Belarus had to import substantial amounts of cement Alexander Lukashenko said.