BMZ preserves export position
In the first ten months of 2015, the plant’s sales have risen in physical volume although they’ve fallen in value against 2014, with exports generating less than 80 percent of the previous income, reflecting the situation on the global market.
Prices have fallen significantly and, under present conditions, it’s a true challenge to expand export volumes. However, the plant is doing everything possible to compensate for the unfavourable market situation. Of course, it has state support in doing so.
Falling revenue is hampering the repayment of loans (taken out for the purpose of modernisation). The plant could access its floating assets but this would undermine its long-term plans. Additional mechanisms are needed to solve its financial problems.
With this in mind, the Government has proposed the issue of foreign currency bonds, by special Presidential decree. Mr. Lukashenko recently turned his focus onto the plant, noting changes since his last visit in September, and has promised to find a solution to the company’s difficulties, with bonds are one element of the answer. Their emission should ‘reduce the financial burden on the company and solve the existing financial situation’. A corresponding agreement with Belarusian banks has been achieved.
Overall, the idea is receiving support. The Belarusian Steel Works will issue $240.5m of securities, with a five year period of circulation (and profitability of 8.5 percent per annum). This should strengthen its market position, and enhance the volume of exports, with niches in the Middle East and Africa as a focus. The company is increasing its sales to Europe and is advancing towards to the USA. Sooner or later, any crisis ends. With this in mind, the plant will be ready when world economic recovery becomes evident.
By Vladimir Khromov
