Weighty and promising bid for bicycle brand
Investors promise to produce models able to compete with well-known foreign brands
By Dmitry Fiodorov
Being a major cycling fan, I was eager to read the report on the President’s visit to Minsk OJSC Motovelo. My own bicycles predate the arrival of the new investor, so the AIST logo is not present on my own bike, or on those of my son or daughter — who both learned how to ride before they turned four.
However, it is possible that I’ll reconsider my preferences in future. The new models appear rather interesting, including an extremely lightweight carboxylic track model. This may not mean much to non-cyclists but true connoisseurs will be delighted. Impressively, AIST was accredited for participation in the Olympic Games in Beijing and London.
Today, this Belarusian brand is rapidly developing; its M1NSK motorcycle sells across Russia, Kazakhstan, Kyrgyzstan and Tajikistan. It was used recently in a cross-country motorbike race to honour the 10th anniversary of the creation of the Collective Security Treaty Organisation. Visiting the factory, President Lukashenko chatted with those who took part in the race; they noted the reliability of the bikes over such a great distance. An enterprise making such beautiful and innovate motorbikes deserves success. However, it will take time to ‘balance the books’.
Some time ago, Minsk Motorcycle and Bicycle Plant seemed stuck in the mud. The arrival of Austrian holding ATEC saved the day. Alexander Muraviev, the Chairman of the Supervisory Council, decided to invest in glass plants in Yelizovo and Gomel and then began looking at Motovelo, promising to invest no less than $20 million. Sadly, only a small part of these funds have been spent on modernisation, with most being used to repay the plant’s debts. The management has come under some criticism for failing to invest more in innovation, as was certainly agreed in the contractual terms. Mr. Lukashenko has tasked the enterprise with meeting its targets in this field, with close supervision from government officials.
One goal is to produce and sell 500,000 bicycles by 2020, but annual goals are also needed, so that progress can be monitored. Other enterprises with ATEC capital need to follow suit. Banking partners bear some responsibility — in particular, Priorbank. All unresolved issues of co-operation between the investor and servicing banks should be settled promptly.
Serious conversations have been held with Motovelo, with the conclusions obvious: there’s not need to reinvent the wheel. Rather, hard work is essential.