Oleg Matskevich: "The economy depends on every resident of the region"

In the conditions of an open economy, in which our producers currently have to operate, much depends on external factors, which has been proven more than once. This imposes special requirements on enterprises, the main one being the ability to quickly respond to market changes. In a sense, it is no longer technology (although, of course, it is indispensable) that comes to the forefront, but management, i.e., competent production management. And, of course, the team. The well-being of the enterprise as a whole and of an individual in particular depends on the labor of everyone: from the machine operator to the manager. It is important to understand this.

What enterprises in the Vitebsk region approach work in this way, and how is the economic sector of the region doing in general? This is discussed in an interview with Oleg Matskevich, Deputy Chairman of the Vitebsk Regional Executive Committee.

– Oleg Sergeevich, the first quarter of the year is over. How did the economy of the Vitebsk region perform during this time? And what forecasts for the future can be made in this regard, where should the work be improved?

– There are no final figures for three months yet, but according to preliminary data, we see that the result is no worse than the trend of the first two. For January-February of this year, compared to the same period last year, there is growth. For example, exports of goods – 190%, exports of services – 140%. Let's not be disingenuous, the base of 2016 was not high, and nevertheless, this is a result. The dynamics indicate that the approaches are correct: both in terms of activities, markets, and product groups. Plus, industry is helped by agriculture, where the growth in meat and milk production was 106%. For two months, inventories have not increased, overdue accounts receivable have not increased, there is revenue and net profit. So, in general, if we continue at this pace, the results for the half-year and the year will be good.

– Some enterprises are currently going through difficult times. But at the same time, there are others that are increasing their pace and feel confident in the market. Why is there such a difference?

– We live and work in an open economy and depend on external factors, we do not have large

raw materials. But we must offer products that are competitive in price and quality. You rightly said that there are other enterprises, and the market, the conditions are the same for everyone. But some save costs, including at state enterprises, look for new sales markets, think about what new products to offer, how to certify them, where to sell them. And some are used to not moving forward, but waiting for help from the state. An example is the same "KIM" or the silk fabric combine, which eventually went bankrupt. At the same time, the "Krasny Borets" plant in Orsha is a state enterprise that has found its niche, produced innovative products, expanded its supply geography, and is doing well today. Which OAO "Vizas" from the same machine-building sector cannot do at all. So the situation forces us to think about what to produce and how to sell. Everyone must understand this: from the machine operator to the manager.

– The private sector is more flexible in terms of restructuring production and mentality. Are local authorities supporting it? 

– Yes, we are trying to support small and medium-sized businesses. We have a project competition, in the financing of which the budget can help, a program for the development of small and medium-sized businesses, and an innovation fund of the regional executive committee, from which we give half of the money to private entrepreneurs. This is non-repayable and interest-free money, which has been used, for example, by SOOO "Novopolotsk Plant of Technological Metal Structures", ChPTUP "Vitstroytekhmash", NPP "Belama Plus" in Orsha. A serious economic reserve is the involvement in circulation of unused objects, and this is also mainly done by businesses. The only thing is that we are discussing at all levels that the legislation is over-regulated in this matter, and it takes a lot of time. Therefore, like the business community, we are counting on simplifying the conditions for doing business, the public discussion of which has already been announced. Indeed, some sanitary, fire, and other regulations can become a serious obstacle to the development of an enterprise.

– Today, the Russian market still plays a leading role for producers in the Vitebsk region. Are we moving towards export diversification? And why?

– Nevertheless, our products are periodically not wanted in Russia?

– Currently, the share of the Russian market in the total export volume of Vitebsk region enterprises is 70%. For now, this direction is beneficial for us. Firstly, the acceptable price, and secondly, they know our quality there. In a new market, we have to prove this – to be competitive in price, to undergo certification, which entails considerable costs. Nevertheless, we understand that we cannot put all our eggs in one basket. We see that our products are periodically banned, we note that our neighbors provide preferences to their producers. That is why we are looking for ways to enter other markets.

Currently, the geography of exports of producers from the Vitebsk region includes 52 countries. At the moment, Saudi Arabia, Oman, Croatia, and Slovenia are in our sphere of interest. They are interested in our packaging, dry milk, and dry demineralized whey. By the way, dry dairy products produced in Verkhnedvinsk and Glubokoye are especially in demand in Asian and African countries, so there are prospects here. But it is worth considering the fact that the Russian market is large and the potential of our interaction is far from exhausted.

– The recent visit of the Vitebsk delegation to Volgograd and Astrakhan – what will the agreements at the regional heads level bring us? What are your impressions of visiting local enterprises? And what could we adopt from these regions, and what experience could we share?

– We have a similar construction industry with Volgograd. We visited the Volma enterprise, which produces building materials; it has plants in various regions of Russia, as well as recently in the Minsk region. We discussed that the products of our OJSC Dolomit could be used as filler for the boards produced there. Now we are waiting for representatives of the plant to visit us. In addition, the military-industrial complex is developed in Volgograd; they need machine tools and equipment, the components of which are produced by Monolit and Krasny Borets. They are interested in Belarusian agricultural machinery for field cultivation and spare parts for repairs. However, we have something to learn from them in terms of organizing the activities of greenhouse complexes, and for this purpose, we plan to cooperate with OJSC Rudakovo.

In Astrakhan, negotiations were held on the supply of dry milk, as there are no natural conditions for animal husbandry there. We were impressed, of course, by fish production and the technologies used there, as well as sheep breeding – we plan to develop these two areas in the Vitebsk region, so we will study everything in detail. As you can see, there are points of convergence.

– Which sectors are most promising for the production of export products?

– As we can see, meat and dairy products, which we have already discussed, are in demand on the foreign market, as well as packaging, cables, telescopic lifts, parquet flooring, veterinary drugs, water treatment equipment, electrical equipment and appliances. In a word, innovative products that are capable of competing.

– Competition in the market is indeed high now. How can the competitiveness of goods produced in the Vitebsk region be increased?

– Two indicators are important – price and quality. The price depends on the work of the enterprise itself, including energy savings, labor productivity, and the use of materials that allow for price reduction. As for quality, it involves the implementation of modern technologies and all kinds of certification, including the assessment of management quality. This certificate indicates that the product quality is at the highest level not only due to high-tech equipment but also due to the competent work of the enterprise management. We currently have three such enterprises, but the process continues.

– Modern enterprises are appearing in the region, partly due to attracting investments, which is one of the five priority areas of the region's development in the coming years. How can our districts and cities make this work more successful?

– Firstly, create conditions for the investor. Although there have been cases when, even with such an approach, the investor turned out to be unreliable, now, at the legislative level, penalties are provided for such cases for missing deadlines for commissioning facilities. But, of course, much depends on the position of the district executive committee. For example, in Liozno, business is thriving because the local authorities themselves are actively involved in these projects, creating conditions to allocate

some premises and land to speed up the registration process. As a result, several worthy enterprises with foreign capital have appeared there, and work is currently underway to create an agro-logistics center and a garment factory. It is evident that the district administration is searching for, proposing, and finding optimal solutions. This approach is also being taken in Vitebsk, Glubokoye, and Verkhnedvinsk districts. As for investment agreements directly with the regional executive committee, these include attracted funds for the creation of the "Modern-Expo" plant for the production of trade equipment, the "Nativita" enterprise in Beshankovichy, a tinplate production plant in Miory, dairy complexes of IE "Detskoselsky-Gorodok", a bacon pork production complex in Tolochin by the "Beldan" company, and others. This is a significant addition to the economic complex of the region.

– Ultimately, the main goal of the economy is the functioning of the social sphere and the well-being of people. The salary target has been announced by the President. How can it be achieved?

– New jobs, new markets, competitive products... But ultimately, one all-encompassing indicator influences this – labor productivity. Salaries must be earned today, everyone must understand this. Decree No. 3, although not fully implemented as intended, made many realize: one must value their work and salary, one must work. The authorities, in turn, must create conditions for the activities of economic entities, and enterprises must create decent jobs. If all this is achieved comprehensively, then there will be results.

Olga MASLOVSKAYA. Photos by Anton STEPANISHCHEV. "Vitebskiye Vesti".