BelAZ Carrying Capacity
By 2014 the largest manufacturer of heavy-duty quarry vehicles will increase the output of dump trucks with the carrying capacity of 90-360 tonnes by 120%
By 2014 the largest manufacturer of heavy-duty quarry vehicles will increase the output of dump trucks with the carrying
capacity of 90-360 tonnes by 120%
At the end of 2011 the company started a major investment project to set up new facilities to make heavy-duty dump trucks. Could you, please, tell us where the facilities will be built and what money will be required? How many dump trucks will BELAZ make annually by 2014?
The company has to increase its manufacturing capacity due to the constantly growing demand for extra heavy-duty dump trucks. We believe we will be able to offer these vehicles to customers. After Prime Minister of Belarus Mikhail Myasnikovich visited BELAZ on 11 August 2011 the company has developed a complex program to set up the facilities and increase output and sales of dump trucks with the carrying capacity of 90-360 tonnes in 2011-2014.
The program is aimed at creating the capacity to make 838 extra heavy-duty rock haulers per annum by 2014. Of the total we will make 65 90-tonne rock haulers, 476 130-tonne rock haulers, 49 170-tonne rock haulers, 218 rock haulers with the carrying capacity of 220-240 tonnes, and 30 rock haulers with the carrying capacity of 320-360 tonnes. The project will require $260 million in investments.
To fulfill the program, there are plans to build 23,500 square meters of production space in manufacturing block No. 3. We will place the facilities to make 320-450 tonne rock haulers, welding, processing of most components, their assem-
BELAZ has been a Belarusian brand for a long time. Year after year the Belarusian automaker has been upholding the brand, rapidly growing and creating new vehicles. BELAZ is a major player on the international market of rock haulers, with the company’s share at 30%. The company’s operation today, plans for the future are revealed by Piotr PARKHOMCHIK, Director General of OAO Belarusian Autoworks, in an interview with the Economy of Belarus Magazine.
bly and dying will be localized there.
Another wing as large as 3,800 square meters will be built to finish rock haulers able to transport 90-450 tonnes. It will improve the quality of finishing of extra heavyduty rock haulers after the break-in period, improving their readiness for shipping.
Manufacturing practices to be employed in the new wings provide for using flexible technological solutions based on wide use of high-performance programmable equipment through all technological conversions. The approach will increase the output of rock haulers with the carrying capacity of 90-360 tonnes by 120% by 2014 at the cost of a comparatively small increase in manufacturing space. It will also more fully use the manufacturing capacity while keeping manufacturing processes stable.
The product range of Belarusian Autoworks already has extra heavy-duty dump trucks – 320-360 tonnes. Now specialists are designing a dump truck to transport over 400 tonnes. Tell me, please, about it in more detail.
Last year BELAZ rolled out nine dump trucks able to transport 320360 tonnes. This year the company will turn out 15 trucks to meet the growing demand.
I would like to note the company focuses on modernizing and creating brand new quarry vehicles. The rock hauler BELAZ-75710 with the carrying capacity of 450 tonnes and electromechanical transmission is a new promising product. Its design focuses on reliability, compactness, a substantial increase in performance coupled with compliance with international and European safety standards.
The new-generation vehicle BELAZ-75710 will boast the latest design decisions in several systems and components. The 4x4 wheel formula, a conventional front and rear air-oil suspension with a low friction coefficient, an original design of the steering system coupled with an alternating-current electromechanical transmission will enable smooth driving, maneuverability, and good traction parameters. The dump truck will be able to reach 60 km/h. The vehicle will implement a 4,600hp power plant.
Belarusian specialists have designed and produced an unmanned remotely controlled vehicle. Where is the truck BELAZ-75137 now? Will we see any more trucks like that?
We have designed a driverless truck to improve labor automation.
Safety is what matters due to the rapid development of the mining industry and its skyrocketing output. Open quarry mining is pursued in virtually all climatic zones of the planet. Heavy and severe climatic conditions are combined with tailpipe pollution, dust pollution and so on. If a driver works 24 hours a day, the factors negatively affect his or her overall status. Tiredness and lack of concentration are some of the reasons of traffic accidents. Operational safety measures are vital but not always feasible in practice. Removing the driver from the hazardous space, which is the truck, is the first thought that comes to one’s mind as a way to improve the situation.
As the first step BELAZ came up with a development prototype of an RC rock hauler last year. The vehicle went through manufacturer’s trials successfully. The vehicle can feed audio and video information to the driver’s workstation. Telemetry and command information flow has been established.
The development prototype has been passed onto the experimental workshop. Now BELAZ is working to design a robotized rock hauler. The onboard equipment will feature a collision prevention system. Capabilities of the transmission system will be improved to allow transmitting more information. Functions of the system are being improved as well as software. The placement and the number of video cameras are being optimized. Full-scale trials are carried out. The company is always on the lookout for new technological solutions.
Automated driving will improve safety, reduce expenses of mining companies, will improve the overall effectiveness of mining operations and will greatly reduce the impact of hazardous factors on human health. Therefore, the production of an RC vehicle is a most important step made by Belarusian Autoworks in a bid to preserve and strengthen its leading position on the global market of mining vehicles. The creation of a fully automated system “dump truck – excavator” with an operator controlling the entire system is the final goal the company aims for.
BELAZ is an exporter with over 95% of the output shipped abroad. Tell me, please, about the geography of exports in detail. What new sales markets did you get in 2011? Where are BELAZ joint ventures abroad?
In 2011 BELAZ successfully implemented the strategy of enhancing and diversifying sales on foreign markets. Belarusian quarry vehicles and spare parts were exported to over 30 countries. Among them are traditional markets of Russia, Ukraine, Kazakhstan, Uzbekistan, other CIS states as well as Asia (China, Mongolia, Vietnam), Africa (South Africa, Guinea, Egypt), Latin America (Chile, Venezuela), Europe (Bulgaria, Serbia, Bosnia, Poland, Estonia, and others).
Last year BELAZ exported over $1 billion worth of merchandise, with the export growth rate at 150.8% as against 2010 and 174.9% as against 2008. The company’s last year’s foreign trade balance exceeded $460 million.
Russia accounted for 67.9% of the sales, non-cis states 15.8%, CIS states 11.6%, Belarus’ domestic market 4.7%. The growth rate of the sales in Russia stood at 154.9% as against 2010. BELAZ vehicles are used by coal-mining companies in Kuznetsk Basin, Yakutia, Krasnoyarsk Territory, by ore-mining companies in the North-western District, the Kursk magnetic anomaly, by metallurgical companies of Ural, Siberia, Far East and other regions.
In 2011 the largest and most interested partners were Kuzbassrazrezugol, Mechel Mining, the holding company Siberian Business Union. BELAZ’ relations with these companies are longterm. Mutually beneficial agreements on strategic cooperation have been signed. For instance, last year BELAZ and Mechel Mining signed a strategic agreement for the delivery of about 900 dump trucks with the carrying capacity of 136-320 tonnes (80-90 trucks per annum) by 2022. The company has already started implementing the agreement.
BELAZ’ export growth rate for CIS and non-cis states amounted to 162.7% and 129.2% respectively. 2011 saw BELAZ delivering 220 tonne dump trucks to Kazakhstan and Mongolia for the first time. South Africa bought 130 tonne trucks. Chile bought 55 tonne trucks. Bulgaria
bought a wheeled bulldozer and a water distribution vehicle.
In 2012 there are plans to increase the export of quarry vehicles, including via penetrating markets of Indonesia, India, Peru, Brazil, and Mexico.
So far BELAZ has set up joint ventures in Kazakhstan, Russia, and China.
Work is underway to set up a service center in Venezuela. We have developed and agreed a system action program with Ambassador Extraordinary and Plenipotentiary of Belarus to Venezuela Valentin Gurinovich. The program is aimed at further development of the service chain in Venezuela. It includes step-by-step actions to set up a service center with a training classroom.
A spare parts warehouse has been established in the city of Victoria for the sake of uninterrupted operation of quarry vehicles. We have translated technical documents for the rock hauler BELAZ-75570 and have handed them over to the Venezuelan side. BELAZ representatives are constantly in Venezuela to provide technical aid and train personnel.
Buying mining vehicles is a long-term investment for mining companies. We are eager to help them using various forms of sales, including leasing. Our partners can buy BELAZ vehicles on preferential terms using two schemes involving government aid. Quarry vehicles are sold in line with the agreement on Sberbank of Russia loans, which are available for Russian buyers of Belarus-made vehicles.
What does BELAZ do to improve quality and competitive ability of its products? Do you manage to keep competitive prices for Belarusian dump trucks?
Quality is the most important indicator of a competitive product and improvement in the economic state of the company. This is why BELAZ’ mission is to make reliable quarry vehicles with balanced quality and price to satisfy and inspire confidence in customers and the society.
We understand we can reach the goal by manufacturing competitive, reliable and safe products that meet customer’s expectations. To do it, the latest technologies are used, technological and metrological equipment to ensure high quality of products. Belaz’s manufacturing is based on processes and relies on a quality management system compliant with ISO 9001. Performance of the quality management system is analyzed, decisions are made to improve the company operation and take into account changes in customer preferences.
Quality improvement efforts are analyzed at all stages. They are discussed in detail at technical conferences, sessions of the corporation’s quality commission. We stay in touch with suppliers, keeping an eye on the fulfillment of the quality program, in particular, the design and technological measures meant to improve the technical level and the competitive ability of products.
We are eager to satisfy customer desires. We improve and renew products in co-authorship with leading producers of components, constantly improving its consumer qualities. BELAZ mining vehicles can be optionally fitted with components from the world’s leading producers. To make customer expectations come true, BELAZ employs an effective quality service team of 430 highly qualified specialists, managers and testers.
BELAZ offers quality products only thanks to the quality management system certified for compliance with STB ISO 9001-2009. The quality management system of BELAZ’ Mogilev-based branch has its own certificate of compliance with the national system and the German system TGA. BELAZ employs a total of 107 standards as part of the system. As many as 13 processes determine the company’s operation from design to aftersales service as part of the quality management system.
Introduced in 2000, the quality management system means the company is serious about maintaining cutting-edge standards. BELAZ uses the latest scientific and technological advances, putting efforts into making its dump trucks reliable, safe, and comfortable. These factors give BELAZ an edge over competition.
After the examination performed by the certification body BELGISS in May 2011 the company’s certificate of compliance was extended onto the production and aftersales service of consumer goods. The quality management system is being constantly improved taking into account results of internal audits and examinations by the certification body.
To maintain proper quality and competitive ability of its products, the company has introduced international standards harmonized with European requirements for such products. Mining and excavating vehicles are compliant with requirements of European directive No. 2006/42/EU. If exported to Europe, vehicles are labeled with a CE sign.
Compliance of products is confirmed by trials and consequent certification of products. The company boasts a set of equipment able to carry out any strength tests of major components. Besides, a testing range has been commissioned to accelerate tests of new products in conditions resembling actual operating conditions as much as possible.
To confirm quality and improve sales, voluntary certification of all the main products, including dump trucks and other mining vehicles, has been carried out.
Aftersales service is a large component in competitive ability of mining vehicles. What do you do to supply service centers with spare parts?
BELAZ’ service chain includes service centers and dealerships. As of 2011 it includes only certified service centers that comply with BELAZ requirements. As many as 42 companies were examined for compliance with BELAZ requirements. The service centers that failed the tests were recommended to step up their operation and try getting tested once again.
In the CIS states there are 17 regional service companies, in which BELAZ owns 75-100% of the property. In the CIS states there are also 13 service centers of the dealership chain, six service enterprises and one support base. In Russia there are 24 of them, 4 in Kazakhstan, 4 in Ukraine, one in Armenia, three in other CIS states. There are six service centers of the dealerships in non-cis states. The service centers employ over 1,200 people.
BELAZ specialists provide aid in resolving problems that emerge in the operation of rock haulers on site in warranty period and in postwarranty period on a for-fee basis. In 2011 specialists of the technical service department and service centers, who performed installation and carried out pre-commissioning, commissioned 1,112 new vehicles at mining enterprises in CIS and non-cis states. Specialists of BELAZ’ aftersales service department went on business trips over 140 times.
Today I am confident that the company can satisfy any customer requirements regarding the choice and options of the vehicles they buy. BELAZ is always open to cooperation with interested sides. Since its foundation the company has developed over 600 modifications of mining vehicles.
BELAZ has set up a working group to prepare an IPO. Earlier you said that the company was busy transferring its accounting practices onto international standards. What has been done so far? Are there potential investors?
The initial public offering is a complicated and labor-intensive process. BELAZ shares are another product and therefore requirements for the product are tough.
OAO Belarusian Autoworks is internationally recognized as a manufacturer of reliable and quality vehicles. Now the company will have to earn its reputation as a reliable borrower and a partner. Turning out competitive world level products is not enough to achieve the goal. Investors have to be confident that BELAZ has come to stay. To get the idea through, it is necessary to talk to investors using the same language, including financial figures.
Reports prepared in compliance with international financial reporting standards are mandatory
for floating shares on foreign stock exchanges. Besides, it ties in with the Belarusian government’s policy of step-by-step introduction of these standards in everyday practices. Therefore, BELAZ is taking measures to transform its reporting practices. It should be noted that reported figures have to be confirmed by an audit.
The company plans to finish the measures by the end of Q1 2012. BELAZ has set up a department to provide investors with the information required to promote shares on foreign markets.
Prospects of the initial public offering segment are not yet determined. They are influenced by external factors, including the financial and economic status of international money markets, slower growth of the global economy, interest of foreign nations in Belarus and other factors. By the way, a large number of companies have postponed the IPOS they planned for late 2011.
Meanwhile, mining industry prospects look promising. It means that producers of mining vehicles will have new orders and new customers. Belarus should penetrate promising markets and the move requires huge investments. The company plans to float its shares to get them. We will be able to get access to inexpensive long-term financial resources and a market evaluation. We will make the brand highly recognized and will ensure high interest of investors in the company.
Although BELAZ has quite many potential investors, it is premature to mention any specific names before the company has entered the international stock market.
What was BELAZ performance in 2011? How much money was invested in manufacturing development?
Last year the growth rate of the output amounted to 150.6% as against 2010 in comparable prices. The company turned out 1,461 BELAZ vehicles. Its branch Mogilev Automobile Plant made 138 vehicles. As many as 1,545 railway cars were made. The share of new products in the industrial output of Belarus amounted to 78.7%. In 2010 the company invested Br80 billion in production development while in 2011 BELAZ invested about Br180 billion. In 2012 there are plans to invest Br450 billion.
What do you do to encourage your employees: designers, engineers, working elite? If it is not a secret, how much do Belarusian Autoworks employees earn?
Salariesof Belazworkersdepend on their personal contribution and the company’s overall performance. In December 2011 salaries averaged Br4,275,800, with salaries of piecework system workers at Br5,106,300, salaries of executives, specialists, and clerks at Br4,879,800.
The company uses various methods to encourage performance, including productivity wages.
To encourage employees of the marketing and sales departments in line with presidential decree No. 49 of 23 January 2009 personal salaries are paid to those, who earn foreign currency for the company, increase export and reduce the finished goods inventory. The system has proved to be effective. Therefore, we are interested in our employees being initiative and eager to improve their professional and intellectual skills.
The company has developed and uses a system of regulations to enable financial and moral labor encouragement, allowing individual workers to earn benefits thanks to their initiatives and intellect. Financial encouragement is available for people, who substitute temporarily absent workers, for fulfillment of technical organization measures and the introduction of research products. We encourage for fulfilling particularly important manufacturing tasks, for reducing the standard technologic labor intensity of the products they make. Regulations have been worked out to encourage multiple employments, regulations on temporary scientific (creative) groups of interest at OAO BELAZ, regulations on rationalization activity and other encouragement regulations. We treasure our people and want them to have decent salaries because it is their intellect and hands that create internationally recognized BELAZ vehicles.
OAO BELAZ should pay close attention to improving the quality and the competitive ability of its products, said Prime Minister of Belarus Mikhail Myasnikovich as he visited the company in August 2012
The unmanned dump truck BELAZ
75131, which developmental prototype is being
tested by the company, can be controlled from any
part of the globe
Rock hauler BELAZ-75600 able to transport 320 tonnes at the Bachatsky openpit mine of OAO Kuzbassrazrezugol
Since its foundation the Zhodino-based
enterprise has designed over 500 modifications of rock
haulers with the carrying capacity of