A dump truck delivered to Cape Town? No problem
By Alexander Bestemyanov
Worldwide, export leasing is an efficient means of promoting sales of machinery abroad, allowing states to expand their influence over a new customer base. Buyers are able to buy goods under deferred payment terms, via a long-term financial lease. Belarus was the first within the post-Soviet space to launch export leasing and, judging by the results, the experiment is a success.
“Domestic export leasing is at the start of a long and difficult path, but our first results indicate that it is an efficient means of promoting domestic machine building,” notes Irina Nassonova, who heads Financial Market Development at the Finance Ministry. She believes that granting leases to foreign companies has greatly contributed to the promotion of domestic machine building.
Last year, giants such as MTZ (Minsk Tractor Works), Gomselmash, MAZ (Minsk Automobile Works), BelAZ (Belarusian Automobile Works), Belkommunmash, Bobruisk Plant of Tractor Parts and Units and Bobruiskagromash delivered goods to foreign countries under leasing terms. “Last year, we transferred 5,316 units of machinery and equipment — worth over $290m — under lease agreements,” reports Pavel Krupnov, who heads Promagroleasing. “Compared to 2009, volumes quadrupled.”
Since February 2010, Promagroleasing — a leasing operator — has been supplying Belarus-made machinery to the CIS, EU and Africa, under international lease agreements. In total, 25 international lease agreements for Belarusian machinery — worth over $30m — were concluded in 2010. Most goods were delivered to our closest neighbours: Russia and Ukraine. However, alternative markets are being sought, with five BelAZ heavy duty dump trucks soon to begin operations in South-African Republic quarries.
The Czech Republic is another promising new market for domestic trade expansion. In September 2009, Promagroleasing JSC set up a joint Belarusian-Czech firm, named the Bel-Czech Trade Company. A permanent exhibition of domestic machinery is on show in Czech Trebic, while a central European warehouse of spare parts is opening, to be used by all Belarusian goods dealers in the EU.
According to Mr. Krupnov, the markets of Austria, France, Slovakia, Bulgaria and the Netherlands are under focus by the joint Belarusian-Czech venture. “We have the opportunity to reach Romania and Moldova via Ukraine, where we already supply goods, and a joint enterprise in Georgia is also being considered. This would allow us to sell Belarusian machinery under lease conditions to Armenia, Azerbaijan, Iran and Turkey,” he explains.
The expansion of Belarusian export leasing schemes is being discussed at state level, with around 30 percent of Industry Ministry manufactures to be exported under financial lease conditions by 2015.