Ability to choose clear focus brings good profits

Since early 2011, Orsha’s Legmash has quadrupled its production of innovative goods

By Boris Yevgeniev

Not long ago, employees at Legmash Plant JSC were anxious about the fate of their company… and their own. The production sphere was gradually decaying, leading to falling profits and salaries. Now, the Orsha plant has managed to regain its lost position — even advancing. Last year, its exports rose 6-fold, while its five-year investment business plan and focus on import substitution helping create a sustainable ‘safety cushion’. The joint stock company is a member of the Belarusian Steel Works Production Association and is actively realising new projects while developing promising avenues.

“Over a period of five months, a third of our produce has become innovative,” notes the Deputy Director for the Economy, Finances and Sales, Gennady Tsurankov. “Last year, it accounted for less than 10 percent. We are now actively developing the Russian market and our future partners include famous Bekaert, which is also interested in our products. Co-operation with foreign metallurgists will bring around $1m of profit annually to Legmash — a quarter of our present revenue.”

To ensure that goods remain in demand both domestically and abroad, the plant’s design bureau is using Italian and German experience to develop new products — such as a lime-burning kiln. It’s a major project, involving a great deal of funding.

A list of import substitution products is lengthy, with investments helping the plant quickly introduce innovations into production. State funding, alongside loans from banks and the Belarusian Steel Works, is supporting this development. A few months ago, Legmash opened four modernised workshops. Its major revamp runs until 2015, with import substitution goods high on the agenda. It aims to raise export deliveries and establish new facilities and joint ventures. Legmash intends to start producing strained fittings and steel ropes (in demand by the construction branch), in addition to currently imported high-pressure hoses. After the foundry facility is modernised, it will be possible to produce high-accuracy blocks and cases for machine building enterprises. There are also plans to revamp the metal constructions and welding workshop.

Economists have calculated that, in the coming five years, about $10m should be injected into Legmash’s development. This will soon pay for itself; by late 2015, the plant should have doubled its production volumes, raising sales considerably. Moreover, Legmash has serious plans regarding the attraction of foreign investments. At present, it is studying the launch of a new production line, jointly with Italian businessmen, to manufacture high-pressure hoses for the machine building industry.

A currently neglected block is to be allocated for this purpose, with the project worth around $5m. Analysis of the market situation indicates that produce will enjoy demand both at home and abroad.

One of the largest enterprises in Orsha (known as the city of railway workers) boasts enough production sites to further open several new facilities — in need in the city and countrywide. Its staff are truly enterprising and have their ear to the pulse of the economy, with a clear focus.

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