Mozambique draws closer
Domestic machine builders master new sales markets using the principle ‘everything old is new again’
By Alexander Ivanov
The great volume of warehouse stock is worrying the government, inspiring the Economy Ministry to assess possible measures. Stocks of ready-made goods stand at 82.4 percent of the average volume of monthly industrial production at Belarusian enterprises. Nothing can be done, since our traditional markets are ordering less, due to depressive trends, obliging us to desperately seek new markets in Central and South Africa, Saudi Arabia, and some South East Asian states. Belarus’ presence on these markets is currently insignificant yet the attitude towards our technique is good. International financial leasing is being used to promote Belarusian machine building produce to these markets, alongside other traditional incentives.
Raising agriculture to its feet
The African continent is rich in natural resources yet socially poor, due to civil conflicts and apartheid which affect agriculture in most states of Central and South Africa. Small farmers, let alone large productions, have often abandoned their fields to escape fighting forces, resulting in an acute lack of food.
Our country has managed to help appease the technological ‘hunger’ of several African countries, selling agricultural machinery otherwise standing idle in warehouses. According to Pavel Krupnov, who heads Promagroleasing JSC, ‘agro-financial leasing’ will soon become a popular way for foreign buyers to purchase Belarusian goods. Actually, this refers to financial-industrial interventions which have been already tested by western financial institutes; however, these have their own Belarusian peculiarities.
The Belarusian variant includes training in how to use the latest technology, saving on consultation fees. It’s a great incentive for buyers in Africa, who are also benefitting from top quality, affordable agricultural machinery. Moreover, trust already exists as a legacy of Soviet days (when afro-communism was promoted in Angola, Mozambique, Guinea Bissau and Ethiopia). The Belarusian agricultural machinery arouses interest, because it’s not expensive compared to its foreign rivals. At present, Belarus can use such feelings to its benefit.
Mr. Krupnov explains, “Last year, representatives of Mozambique, where tractors from Soviet days are still operating, applied to Minsk Tractor Works to purchase a new fleet under leasing conditions; however, they received a more beneficial proposal.”
Finally, Belarus and Mozambique have agreed to activate agricultural and industrial co-operation. Having studied the issue in detail, Mozambique is now keen to purchase a large number of Belarusian agro-machines, while setting up joint assembly. Since no strict requirements exist for production localisation in Africa, such projects could be even more beneficial than in the Russian Federation and Kazakhstan (regardless of the distance involved). Last year, joint BelAfrica Ltd. was registered in Mozambique, jointly with Afri-Rent Ltd. — housing a trade fair of Belarusian agricultural and road-construction technology, manufactured by Minsk Automobile Works, Minsk Tractor Works and Amkodor JSC. The project is already yielding fruit; last December, the first MAZ vehicles — worth $1.7m — were delivered to Mozambique. The tractors are drawing attention for being simple to use yet effective, from such countries as Angola, Zambia and Namibia.
Sales of Belarusian machinery have been so buoyant just recently that promotion or the application of some additional schemes seemed unnecessary until the economic crisis hit. Promagroleasing is now expanding its export leasing programme for existing and previously lost markets, where our presence is currently insignificant. Attractive terms are being offered in Africa, as well as closer countries. Last year, Georgia placed its first order (worth $7.1m — provided on leasing conditions), while Moldova’s order was worth $2.8m. Previously, supplies of domestic machinery to these countries weren’t particularly active. Moreover, the Belarusian operator is now investigating opportunities for the supply of domestically-produced machinery in South East Asia and the Middle East: particularly, Bangladesh and Bahrain.