Modernization, export, new jobs: how enterprises in the Orsha district solve their problems and develop production
Strategy and Tactics for Success
A year ago, the President made a working visit to Orsha to personally inspect the state of affairs in the city, which became the country's first platform for an unusual economic experiment. Such increased attention is quite understandable: the full upgrade of a specific region was initiated back in the spring of 2017 – then the Head of State demanded to establish "iron order" here, and a little later signed the corresponding protocol of instructions. However, the implementation of the pilot project encountered problems even at the initial stages. In August last year, after visiting four enterprises in the city and analyzing the situation as a whole, the President sternly stated that the instructions were not being followed. This conclusion was followed by large-scale personnel decisions. A special group undertook the development of new regional development options. As a result, Decree No. 506 was issued, approving a detailed program for the development of the Orsha district until 2023. It includes 18 blocks and significant preferences for businesses in terms of taxation, reduction of insurance contributions, investment deductions, simplification of the import of new equipment, construction and acquisition of unused state-owned facilities, and a moratorium on inspections.
In other words, all the levers for achieving the maximum economic effect are in place. How did these extraordinary measures affect the region's economy?
Among the most problematic enterprises is the Orsha Instrument Plant. It can be said that its condition back in 2017 became a certain impetus for the development of an unprecedented program for the region as a whole. Annually, metal-cutting tools worth $30-50 million are imported into Belarus. This niche can be fully filled by the Orsha plant. A year ago, the President criticized the state of affairs at this enterprise – from the landscaping of the territory, the maintenance of premises to wages, very slow modernization rates, and intentions to purchase machines from external suppliers, while the neighboring Orsha enterprise "Krasny Borets" is capable of manufacturing and supplying most of the necessary equipment to the instrument plant. Alexander Lukashenko emphasized: the instrument plant must be restored at the highest level so that all other enterprises can buy the necessary tools here, not abroad.
Today, the territory of the Orsha Instrument Plant surprises with its cleanliness and order. The workshops have also been significantly transformed. As part of an investment project to organize the production of modern metal-cutting and auxiliary tools with the implementation of innovative technological processes, equipment is already being supplied to the plant, contracts have been concluded, and advances have been made for the purchase of 15 new and modernization of 4 old machines. Documentation for the creation of a galvanizing section has been developed and submitted for expert review. By 2023, it is planned to invest about 90 million rubles in production. The plant's revival project is divided into two stages, the second of which is planned to be implemented jointly with a foreign partner company. Work is already underway on a mutually beneficial cooperation agreement.
Interestingly, taking into account the existing plans for modernization and expansion of production, three more business projects have been developed jointly with the management company. They will be financed by the holding. The first is the opening of a multifunctional sales center with warranty, post-warranty, technical, and service maintenance of tractors in the Vitebsk region and a spare parts warehouse. It, by the way, is already operating, under the care of Orshaan instrument-making plant — about two dozen machines. The second project is the creation of serial production of hydraulic lifts for the hydraulic hitch system of "Belarus" tractors. The third project is related to the production of hob cutters and gear cutters — this is a new product for the plant.
The employees of the joint-stock company (and there are about 400 of them) are happy with the changes: the innovations have already affected their earnings. Life is improving, and instead of talk about inevitable bankruptcy, there is confidence in stability. Additional incentive payments have been introduced, and now a good specialist can earn up to 1.5 thousand rubles. So there is something to strive for.
Currently, the Orsha Instrument-Making Plant shows growth in production volumes compared to the previous year. There is also positive dynamics in exports. Despite the debts of previous years, by the end of the year, the plant workers plan to achieve break-even operation.
…The city-forming enterprise in Barani resembles a construction site. They joke here: they started renovating in August last year and can't stop. And the "room of upheaval," where it all began, has been cleaned and is kept open — for incentive and admonition at the same time. So as not to forget about criticism and to move forward. After all, it was here that Alexander Lukashenko, deviating from his route and discovering the disorder, very eloquently characterized the general state of affairs at the enterprise.
Specialists say that several trucks of scrap metal were removed from the unused premises of the enterprise alone. They were put in order and locked — repairs will be carried out here in stages as production expands.
The director of the enterprise, Alexey Fomin, who took over the OJSC after the historic visit of the President to "Tekhnika svyazi," says:
— In one year, there have been more changes than in the last decade. I am not focusing on repair and construction work and landscaping (they cover 25 hectares and over 113 thousand square meters of our area) — the fate of unnecessary buildings is being decided, workshops are being reconstructed, restrooms are being renovated, a wonderful cafe has been equipped, roofs and windows have been replaced… This work is proceeding strictly according to schedule. The main thing is that we have managed to start modernizing equipment. For example, the productivity of the new surface-mount line, purchased from leading global manufacturers, is three times higher. Previously, several different machines were used to manufacture radio-electronic modules (they are needed for 70-80 percent of our products). This was time-consuming and resulted in a large percentage of waste. Now, we insert a blank board, it goes through a drop-jet printer, a placer, and a reflow oven. The output is a finished product. To assist with this, we have purchased new Japanese equipment — an automatic optical inspection system. Previously, quality was checked, one might say, manually, now it is done with the help of 8 cameras. The cost of the line is about a million dollars. Since we mainly work for the defense industry, where extreme precision is required, the costs are worth it. As a result, the enterprise's competitiveness has reached a completely new level.
The financial result of the modernization is also evident. If last year OAO earned 625 thousand dollars from exports, now it is over 700 thousand. For the year, it will be at least 925 thousand dollars. Production volumes, sales revenue, and consequently, wages have significantly increased.
New projects will help to further develop production. For example, last year "Signal Equipment" mastered the production of several new products developed by enterprises of the "Geoinformation Control Systems" holding. It fulfills a Ministry of Defense order for the supply of fiber-optic armored cable used for field communication equipment. A large volume of work involves the production of radio-electronic modules for emergency call devices in vehicles. Alexey Fomin emphasizes:
— We have developed a development program until 2020 and a business plan until 2023. All tasks are detailed— what direction to go, what to buy and implement, and how high the return will be in the end. The past year has shown that in our system, where the set conditions are met with military precision and on time, there should be no failures. The key goal is to increase production efficiency by mastering and producing new types of products and implementing advanced technologies. The main directions are the creation of new facilities, the involvement of unused and inefficiently used property in circulation, and the stabilization of the financial and economic situation. Several new facilities have already been created: we have mastered and are producing mobile communication complexes, protective helmets, "Klen" radio stations, new types of telephones, switchboards, modems, chest straps, antenna devices, headsets with active noise cancellation, "Tucha" smoke screen systems, control panels for military equipment, and much more.
The net profit of OJSC "Technika svyazi" since the beginning of this year has increased more than 10 times compared to the previous year. Exports of goods have increased by one and a half times. Over the past two years, tens of times more funds have been invested in production than in the entire preceding five-year period.
The President also expressed many claims to the management of the Orsha Meat Canning Plant a year ago. He was dissatisfied with the condition of the premises and the use of the material and technical base. He demanded that funds be found, a new slaughterhouse be built, and a modern enterprise be created. "It should be like the best meat processing plants," Alexander Lukashenko emphasized at the time.
A year has passed. Unfortunately, little has visually changed at the enterprise. Although the order, cleanliness, and cosmetically updated workshops, as far as possible, cannot be overlooked. But the absence of global changes is not surprising – too much time was taken from the combine, giving nothing in return. Over six and a half years, as the employees count, 17 (!) directors have changed here. The current head is both former and future. Nikolai Shabunya, who returned to his previous position after a year's break, is currently acting. But he knows the situation and the entire backstory like no one else.
>
He confidently states: the enterprise has prospects. And it is very good that a decision has been made on its development, rather than reorganization into a branch.
— There are грандиозные changes in the Orsha region. Everything indicates that production volumes in both industry and agriculture will only increase, — Nikolai Vikentyevich outlines his position. — It would be a mistake to reduce the scope of work for local processors. Soon we will be loaded with raw materials to full capacity. In July, we produced products worth 6 million rubles, now we supply them to the markets of the CIS countries and China. Canned goods are especially in demand — they account for almost half of all volumes. The high quality is evidenced by numerous counterfeits. From time to time, information comes that fakes are found in Russian markets. Therefore, we are taking protective measures. For example, we have now ordered lids with lithography. If fraudsters learn to duplicate them, we will switch to embossing. What has changed in a year? We have moved from fourth place in the country in terms of canned goods production to second place.
The main problem, notes the head, is physically worn-out and morally obsolete equipment. Almost all workshops were built in the post-war period. The combine has only one modern facility — for baby food production. All other departments require large-scale renovation.
The development program is divided into three stages. Thanks to the Presidential decree on preferences, construction deadlines will be reduced — design work can be carried out in parallel with construction and installation work. First, a slaughterhouse will be built here — a factory within a factory. With refrigeration equipment, and sections for deboning and packaging meat. It is interesting that the slaughterhouse will be designed according to the requirements of the PRC — there is a great focus on the Chinese market. And foreign specialists must certify the project. This will be the first such facility in the country where pork and beef flows will be completely separated, excluding even the slightest contact between them, plus — at the request of Arab partners, ritual animal slaughter can be organized here.
Following the slaughterhouse, an expeditionary section and a sausage shop will be built, followed by a cannery. The fully turnkey renovated enterprise planwill be completed in about five years. But the processors will not have to stop their work even for a day. The workshops will simply change their location mobilely, and thus the opportunity to earn money will be preserved. The pre-project documentation has now been approved, public hearings are underway, and then ecologists and architects will give their consent. In October, builders will begin laying the foundation, and the first housewarming party will be in November 2020. The contracting organization is already ready to start.
The new slaughterhouse of the meat canning plant is a factory within a factory. The project will be certified by Chinese and Arab partners, and it will be possible to observe all the national customs of foreign consumers here.
At OJSC "Orshaagroprommash", they formulate the main conclusion made after the President's visit to the enterprise for me: if we work and earn, we will be able to develop. Everything is interconnected. The young director Alexander Laptinsky considers this an axiom and lists what has already been managed to change, guided by it:
— Last year, we had a net loss of 500 thousand rubles for this period. Now we are working at zero. This is the first step. By the end of the year, we hope to make a profit. How? We have increased our volumes. We have mastered the production of new types of equipment. If earlier we produced trailers with a carrying capacity of a maximum of 4.5—6.5 tons, now we produce 12—17-ton ones. They turned out to be in demand — we have already shipped 4 million rubles worth.
A new and very promising project is the organization of gearbox production. The business plan is ready. Several enterprises in the country produce mowers, but they purchase gearboxes (cutting bars) abroad — from Germany, Austria, and France. This in-demand import-substituting product will allow the enterprise to make a breakthrough in all directions. The project is currently undergoing an expert review, after which financing will be opened within the framework of the program for the socio-economic development of the Orsha district. Thanks to the new production (which will reach its design capacity in 2023), about 20 additional jobs will be created.
Another important aspect: thanks to what has already been done over the past year, as well as the clear prospects for the future, OJSC "Orshaagroprommash" has gained the opportunity to become part of a free economic zone. And this provides a number of preferences. All this together will allow us to save a considerable amount of money on the purchase and import of necessary equipment for the new workshop — machine tools, measuring stands, laboratory and other technical equipment.
It is noteworthy that customer demand has already been studied, agreements have been reached with partner enterprises, and a portfolio of orders for three-meter cutting bars of domestic production has been formed. All that remains is to bring the idea to life. There is hope that the overall stabilization of the situation at the enterprise will allow us to retain young staff — there is a shortage of qualified specialists here. Last year, 10 newcomers were hired after graduating from educational institutions, now only one of them remains. Some go into the army, while others simply look for easier paths. "We will earn, and then we will receive," is the motto that the young director now gives to his subordinates.
Since the beginning of the year, OJSC "Orshaagroprommash" has increased by more than 40 percenthas increased production output. This was achieved by mastering the production of new trailer equipment.
Igor Isachenko, Chairman of the Orsha District Executive Committee:
A year ago, the President made a working visit to Orsha to personally inspect the state of affairs in the city, which became the country's first platform for an unusual economic experiment. Such increased attention is quite understandable: the full upgrade of a specific region was initiated back in the spring of 2017 – then the Head of State demanded to establish "iron order" here, and a little later signed the corresponding protocol of instructions. However, the implementation of the pilot project encountered problems even at the initial stages. In August last year, after visiting four enterprises in the city and analyzing the situation as a whole, the President sternly stated that the instructions were not being followed. This conclusion was followed by large-scale personnel decisions. A special group undertook the development of new regional development options. As a result, Decree No. 506 was issued, approving a detailed program for the development of the Orsha district until 2023. It includes 18 blocks and significant preferences for businesses in terms of taxation, reduction of insurance contributions, investment deductions, simplification of the import of new equipment, construction and acquisition of unused state-owned facilities, and a moratorium on inspections.
In other words, all the levers for achieving the maximum economic effect are in place. How did these extraordinary measures affect the region's economy?
Instrument Plant: Before and After
Among the most problematic enterprises is the Orsha Instrument Plant. It can be said that its condition back in 2017 became a certain impetus for the development of an unprecedented program for the region as a whole. Annually, metal-cutting tools worth $30-50 million are imported into Belarus. This niche can be fully filled by the Orsha plant. A year ago, the President criticized the state of affairs at this enterprise – from the landscaping of the territory, the maintenance of premises to wages, very slow modernization rates, and intentions to purchase machines from external suppliers, while the neighboring Orsha enterprise "Krasny Borets" is capable of manufacturing and supplying most of the necessary equipment to the instrument plant. Alexander Lukashenko emphasized: the instrument plant must be restored at the highest level so that all other enterprises can buy the necessary tools here, not abroad.
Today, the territory of the Orsha Instrument Plant surprises with its cleanliness and order. The workshops have also been significantly transformed. As part of an investment project to organize the production of modern metal-cutting and auxiliary tools with the implementation of innovative technological processes, equipment is already being supplied to the plant, contracts have been concluded, and advances have been made for the purchase of 15 new and modernization of 4 old machines. Documentation for the creation of a galvanizing section has been developed and submitted for expert review. By 2023, it is planned to invest about 90 million rubles in production. The plant's revival project is divided into two stages, the second of which is planned to be implemented jointly with a foreign partner company. Work is already underway on a mutually beneficial cooperation agreement.
Interestingly, taking into account the existing plans for modernization and expansion of production, three more business projects have been developed jointly with the management company. They will be financed by the holding. The first is the opening of a multifunctional sales center with warranty, post-warranty, technical, and service maintenance of tractors in the Vitebsk region and a spare parts warehouse. It, by the way, is already operating, under the care of Orshaan instrument-making plant — about two dozen machines. The second project is the creation of serial production of hydraulic lifts for the hydraulic hitch system of "Belarus" tractors. The third project is related to the production of hob cutters and gear cutters — this is a new product for the plant.
The employees of the joint-stock company (and there are about 400 of them) are happy with the changes: the innovations have already affected their earnings. Life is improving, and instead of talk about inevitable bankruptcy, there is confidence in stability. Additional incentive payments have been introduced, and now a good specialist can earn up to 1.5 thousand rubles. So there is something to strive for.
Currently, the Orsha Instrument-Making Plant shows growth in production volumes compared to the previous year. There is also positive dynamics in exports. Despite the debts of previous years, by the end of the year, the plant workers plan to achieve break-even operation.
"Tekhnika svyazi" — Always in Touch
…The city-forming enterprise in Barani resembles a construction site. They joke here: they started renovating in August last year and can't stop. And the "room of upheaval," where it all began, has been cleaned and is kept open — for incentive and admonition at the same time. So as not to forget about criticism and to move forward. After all, it was here that Alexander Lukashenko, deviating from his route and discovering the disorder, very eloquently characterized the general state of affairs at the enterprise.
Specialists say that several trucks of scrap metal were removed from the unused premises of the enterprise alone. They were put in order and locked — repairs will be carried out here in stages as production expands.
The director of the enterprise, Alexey Fomin, who took over the OJSC after the historic visit of the President to "Tekhnika svyazi," says:
— In one year, there have been more changes than in the last decade. I am not focusing on repair and construction work and landscaping (they cover 25 hectares and over 113 thousand square meters of our area) — the fate of unnecessary buildings is being decided, workshops are being reconstructed, restrooms are being renovated, a wonderful cafe has been equipped, roofs and windows have been replaced… This work is proceeding strictly according to schedule. The main thing is that we have managed to start modernizing equipment. For example, the productivity of the new surface-mount line, purchased from leading global manufacturers, is three times higher. Previously, several different machines were used to manufacture radio-electronic modules (they are needed for 70-80 percent of our products). This was time-consuming and resulted in a large percentage of waste. Now, we insert a blank board, it goes through a drop-jet printer, a placer, and a reflow oven. The output is a finished product. To assist with this, we have purchased new Japanese equipment — an automatic optical inspection system. Previously, quality was checked, one might say, manually, now it is done with the help of 8 cameras. The cost of the line is about a million dollars. Since we mainly work for the defense industry, where extreme precision is required, the costs are worth it. As a result, the enterprise's competitiveness has reached a completely new level.
The financial result of the modernization is also evident. If last year OAO earned 625 thousand dollars from exports, now it is over 700 thousand. For the year, it will be at least 925 thousand dollars. Production volumes, sales revenue, and consequently, wages have significantly increased.
New projects will help to further develop production. For example, last year "Signal Equipment" mastered the production of several new products developed by enterprises of the "Geoinformation Control Systems" holding. It fulfills a Ministry of Defense order for the supply of fiber-optic armored cable used for field communication equipment. A large volume of work involves the production of radio-electronic modules for emergency call devices in vehicles. Alexey Fomin emphasizes:
— We have developed a development program until 2020 and a business plan until 2023. All tasks are detailed— what direction to go, what to buy and implement, and how high the return will be in the end. The past year has shown that in our system, where the set conditions are met with military precision and on time, there should be no failures. The key goal is to increase production efficiency by mastering and producing new types of products and implementing advanced technologies. The main directions are the creation of new facilities, the involvement of unused and inefficiently used property in circulation, and the stabilization of the financial and economic situation. Several new facilities have already been created: we have mastered and are producing mobile communication complexes, protective helmets, "Klen" radio stations, new types of telephones, switchboards, modems, chest straps, antenna devices, headsets with active noise cancellation, "Tucha" smoke screen systems, control panels for military equipment, and much more.
The net profit of OJSC "Technika svyazi" since the beginning of this year has increased more than 10 times compared to the previous year. Exports of goods have increased by one and a half times. Over the past two years, tens of times more funds have been invested in production than in the entire preceding five-year period.
The combine will exist. And develop
The President also expressed many claims to the management of the Orsha Meat Canning Plant a year ago. He was dissatisfied with the condition of the premises and the use of the material and technical base. He demanded that funds be found, a new slaughterhouse be built, and a modern enterprise be created. "It should be like the best meat processing plants," Alexander Lukashenko emphasized at the time.
A year has passed. Unfortunately, little has visually changed at the enterprise. Although the order, cleanliness, and cosmetically updated workshops, as far as possible, cannot be overlooked. But the absence of global changes is not surprising – too much time was taken from the combine, giving nothing in return. Over six and a half years, as the employees count, 17 (!) directors have changed here. The current head is both former and future. Nikolai Shabunya, who returned to his previous position after a year's break, is currently acting. But he knows the situation and the entire backstory like no one else.
>
He confidently states: the enterprise has prospects. And it is very good that a decision has been made on its development, rather than reorganization into a branch.
— There are грандиозные changes in the Orsha region. Everything indicates that production volumes in both industry and agriculture will only increase, — Nikolai Vikentyevich outlines his position. — It would be a mistake to reduce the scope of work for local processors. Soon we will be loaded with raw materials to full capacity. In July, we produced products worth 6 million rubles, now we supply them to the markets of the CIS countries and China. Canned goods are especially in demand — they account for almost half of all volumes. The high quality is evidenced by numerous counterfeits. From time to time, information comes that fakes are found in Russian markets. Therefore, we are taking protective measures. For example, we have now ordered lids with lithography. If fraudsters learn to duplicate them, we will switch to embossing. What has changed in a year? We have moved from fourth place in the country in terms of canned goods production to second place.
The main problem, notes the head, is physically worn-out and morally obsolete equipment. Almost all workshops were built in the post-war period. The combine has only one modern facility — for baby food production. All other departments require large-scale renovation.
The development program is divided into three stages. Thanks to the Presidential decree on preferences, construction deadlines will be reduced — design work can be carried out in parallel with construction and installation work. First, a slaughterhouse will be built here — a factory within a factory. With refrigeration equipment, and sections for deboning and packaging meat. It is interesting that the slaughterhouse will be designed according to the requirements of the PRC — there is a great focus on the Chinese market. And foreign specialists must certify the project. This will be the first such facility in the country where pork and beef flows will be completely separated, excluding even the slightest contact between them, plus — at the request of Arab partners, ritual animal slaughter can be organized here.
Following the slaughterhouse, an expeditionary section and a sausage shop will be built, followed by a cannery. The fully turnkey renovated enterprise planwill be completed in about five years. But the processors will not have to stop their work even for a day. The workshops will simply change their location mobilely, and thus the opportunity to earn money will be preserved. The pre-project documentation has now been approved, public hearings are underway, and then ecologists and architects will give their consent. In October, builders will begin laying the foundation, and the first housewarming party will be in November 2020. The contracting organization is already ready to start.
The new slaughterhouse of the meat canning plant is a factory within a factory. The project will be certified by Chinese and Arab partners, and it will be possible to observe all the national customs of foreign consumers here.
Work and Earn
At OJSC "Orshaagroprommash", they formulate the main conclusion made after the President's visit to the enterprise for me: if we work and earn, we will be able to develop. Everything is interconnected. The young director Alexander Laptinsky considers this an axiom and lists what has already been managed to change, guided by it:
— Last year, we had a net loss of 500 thousand rubles for this period. Now we are working at zero. This is the first step. By the end of the year, we hope to make a profit. How? We have increased our volumes. We have mastered the production of new types of equipment. If earlier we produced trailers with a carrying capacity of a maximum of 4.5—6.5 tons, now we produce 12—17-ton ones. They turned out to be in demand — we have already shipped 4 million rubles worth.
A new and very promising project is the organization of gearbox production. The business plan is ready. Several enterprises in the country produce mowers, but they purchase gearboxes (cutting bars) abroad — from Germany, Austria, and France. This in-demand import-substituting product will allow the enterprise to make a breakthrough in all directions. The project is currently undergoing an expert review, after which financing will be opened within the framework of the program for the socio-economic development of the Orsha district. Thanks to the new production (which will reach its design capacity in 2023), about 20 additional jobs will be created.
Another important aspect: thanks to what has already been done over the past year, as well as the clear prospects for the future, OJSC "Orshaagroprommash" has gained the opportunity to become part of a free economic zone. And this provides a number of preferences. All this together will allow us to save a considerable amount of money on the purchase and import of necessary equipment for the new workshop — machine tools, measuring stands, laboratory and other technical equipment.
It is noteworthy that customer demand has already been studied, agreements have been reached with partner enterprises, and a portfolio of orders for three-meter cutting bars of domestic production has been formed. All that remains is to bring the idea to life. There is hope that the overall stabilization of the situation at the enterprise will allow us to retain young staff — there is a shortage of qualified specialists here. Last year, 10 newcomers were hired after graduating from educational institutions, now only one of them remains. Some go into the army, while others simply look for easier paths. "We will earn, and then we will receive," is the motto that the young director now gives to his subordinates.
Since the beginning of the year, OJSC "Orshaagroprommash" has increased by more than 40 percenthas increased production output. This was achieved by mastering the production of new trailer equipment.
COMPETENTLY
Igor Isachenko, Chairman of the Orsha District Executive Committee:
— Much remains to be done for the effective implementation of the strategically important program for the socio-economic development of the Orsha region. We can say that we are at the beginning of a long journey. But thanks to unprecedented state support, the first results are already visible. The main thing is people's morale. Investors are drawn to us, the number of enterprises is growing, and proactive young managers have come. There is a surge in entrepreneurial activity. The conditions for starting your own new business, as well as expanding existing production facilities, have become more attractive. Since the beginning of the year, about 300 individual entrepreneurs and more than 50 legal entities have been registered. More than 700 new jobs will be created within a year. New construction organizations, telecommunications enterprises, representatives of IT technologies, and pharmaceutical enterprises are entering the region's economic market. Budget revenues are growing. There is a trend of growth in the economically active population. There are about 1.2 thousand vacancies in the labor market compared to 322 officially unemployed people. Significant growth in production is observed in the agro-industrial complex. After the completion of the construction of large livestock complexes (there are five of them), this growth will become even more significant, and the raw material base for our processing enterprises will be seriously expanded.