What Is Happening With BelAZ Under Sanctions?
- 3.09.2021, 14:19
Key partners refuse to cooperate with the plant.
On June 21, the EU introduced sectoral sanctions against Belarus. The manufacturer of mining dump trucks, the BelAZ plant, also fell under them.
Radio Svaboda analyzes what is happening with the plant.
More than 1.2 billion rubles of debt
In the first quarter of this year, BelAZ earned 36 million rubles, a year earlier there was a net loss of 60 million. Such data follows from the report on the Single portal of the financial market.
The plant has 371.4 million debts for long-term loans and 880.7 million for short-term loans, a total of more than 1.2 billion rubles.
The net profit of BelAZ for the last year was 30 million rubles, a year earlier it was 265 million rubles. That is, the net profit decreased by 8 times over the year. The number of personnel decreased by 571 people per year.
What about dump truck sales
Belstat removed operational statistics on mining dump truck sales. Last year Belarus sold $ 3.3 million worth of mining dump trucks to the EU. This is only 10 units. In total, during the year Belarus sold 435 units of this equipment to different countries. From the EU countries, dump trucks were bought by Poland and Bulgaria.
Most of the dump trucks were bought by Russia (for $ 106 million), India (for $ 83 million), Uzbekistan (for $ 55 million).
Which companies have refused to cooperate with BelAZ
The American company Cummins, one of the suppliers of engines to BelAZ, has stopped sending products to BelAZ and its dealers.
Rolls-Royce announced the complete termination of cooperation with BelAZ this summer. Previously, supplies went through their German subsidiary MTU Friedrichshafen GmbH. These two companies are the main suppliers of engines and power units for the plant.
Earlier this year, global companies Becker Group, Liebherr and Danfoss refused to cooperate with BelAZ.
The German Becker Group, in particular, said that "after the introduction of EU sanctions against BelAZ, it stopped all operations with BelAZ from July 9, 2021." The company supplied paint for BelAZ through the Finnish distributor Geramatic OY.
Another German concern, Liebherr, which previously supplied machines and other equipment to BelAZ, also confirmed that its "policy (is) to comply with the rules and regulations."
In early July, the international mining and metallurgical group of companies Metinvest announced that it had sent a request to the European Commission asking for an explanation about the possibility of purchasing from BelAZ, which was subject to sanctions.
Later, the Kryvyi Rih mining and metallurgical plant ArcelorMittal announced that it was suspending purchases from BelAZ and was sending this issue for analysis to its legal department.
All cases of suspension of cooperation are related to sanctions or human rights violations in Belarus.
What will be the consequences of the refusals to supply parts and fittings?
There are not many suppliers of components for mining trucks. According to Vadzim Iasub, financial analyst at Alpari Eurasia, Rolls-Royce was one of the main suppliers of engines.
- Such engines are made in industrialized countries - the USA, Japan, Western Europe. In theory, under sanctions it is possible to arrange supplies through a series of intermediaries, but this, most likely, makes the process more expensive and prolongs the delivery time. It is unlikely that it will be possible to hide the supply of engines for BelAZ, so production problems will be serious, - says Vadzim Iasub.
According to Leu Lvouski, senior researcher at Beroc, problems may arise even with Chinese suppliers.
- Nobody wants to mess with sanctions. It is clear that American companies have refused. The Chinese are in no hurry to supply their engines, because China, if you look at the economy, is one of the largest economies in the world, and the United States is an important partner for them. You shouldn't wait for the Chinese engines either. Russia remains. Large companies also do not want to be associated with sanctions. BelAZ's profitability was not at a high level, because how they will survive now is a serious question. Most likely, the state will seek to finance them, says Leu Lvouski.
Let's see what engines are on BelAZ vehicles, which the plant sells now through its website.
For example, the 45-ton 7545 is a Cummins engine. But the model 75440, with a lifting capacity of 32 tons, has a YaMZ engine - from the Yaroslavl Motor Plant.
Model 75320 with a lifting capacity of 290 tons has a Cummins engine, a model with a lifting capacity of 450 tons - an engine of the German manufacturer MTU (Rolls-Royce), which also stopped deliveries to BelAZ. The 360 ton model also has an MTU engine. Model 75310 with a lifting capacity of 240 tons is powered by a Cummins engine.
As you can see, most of the models have engines from companies that have now refused to cooperate with BelAZ.