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Belarus - Minsk tannery eyeing Chinese, Indian markets
04 November 2019

Belarus News reports that the Minsk Leather Production Association (MLPA) aims to start supplying products to China and India, Tatyana Lugina, Chairwoman of the Belarusian state light industry concern Bellegprom, told journalists on 30 October, after Belarus Prime Minister Sergei Rumas visited the enterprise, BelTA has learned.

Sergei Rumas was made familiar with results of the investment project implemented at the MLPA, the current state of affairs at the enterprise, and its development prospects. Sergei Rumas visited the workshops of the tannery and was made familiar with the equipment, the manufacturing process and the range of products. He also gave instructions to deal with problems facing the enterprise.

The MLPA stock in storage has increased and the enterprise aims to sell the accumulated products. “We focus on China and India, because other markets may be unable to consume such volumes. We are in talks over launching supplies to these countries,” Tatyana Lugina said. “Moreover, we should stimulate work of the company's commercial service. The tannery lacks specialists in this area and should employ more of them. The enterprise should motivate employees with bonuses. If sales managers fulfill or even exceed sales objectives, they should get a high salary,” she added.

The prime minister is checking on companies that have been retooled in the last few years. The MLPA is one of them. In December 2016, the MLPA finished undergoing upgrading in line with the president's instruction. The project cost Br26.558 million, including Br5.996 million in the MLPA funds and Br20.562 million in credit resources. Fitting the tannery with new equipment helped improve quality tp change and expand the range of products. The tannery started to make more products with high added value, minimize the output of semi-finished products from tanned leather, which, in turn, helped cut production and marketing costs, use less chemicals, improve labor productivity and energy savings, and reduce amounts of production waste (hide cuttings).

“The investment project has proven effective. Thanks to upgrading, the enterprise has started to make competitive products. However, there is one problem – a rather high interest rate (9%) on the loan grated for the implementation of the investment project. This problem will be addressed,” Tatyana Lugina stressed. The situation in the global leather goods market in 2018-2019 had a strong impact on Belarusian tanneries, including the MLPA. The demand for such goods (finished and semi-finished) has declined steadily recently, which caused a drop in prices and export volume. The main reason for this decline was falling production of footwear from natural leathers and replacement of natural leathers with synthetic materials.

“The furniture industry has also reported a decline in demand for natural leather, same as the aircraft and mechanical engineering industries. Perhaps, we have not been fast enough to adapt our purchasing prices for hides, reduce costs and optimize expenses,” Tatyana Lugina said.

A comprehensive plan has been drawn up to address the MLPA problems. The plan includes upgrading and remodeling the territory of the enterprise, improving the list of staff. “Work quotas, labor productivity, service areas, raw materials and waste management, deliveries of goods – we have a lot to deal with. We have drafted new technical regulations on deliveries of goods, because we want the quality of goods to correspond with the prices set by meat processing plants,” Tatyana Lugina added.

The Minsk Leather Production Association is one of the largest and most technically advanced tanneries in Belarus. Its employs some 500 people and offers an average salary of over Br1,000. The tannery was built in line with an Italian design and was commissioned in 1988. The enterprise is meant to make 500 million square decimeters of leather and 200 million square decimeters of split leather products per annum.

The company offers a wide range of natural leathers from bull, cow, horse, and pig hides made through chrome or chrome-free tanning methods, various colors and finishing techniques. Its goods are fit for footwear uppers and lining, for furniture, fancy goods, apparel, artificial limbs, accessories, and musical instruments.

 

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