Business Non-Stop

Economy of Belarus - - BUSINESS ENVIRONMENT -

The Be­laru­sian light in­dus­try has been go­ing through pretty hard times after the coun­try joined the free trade zone of the Sin­gle Eco­nomic Space. Many do­mes­tic com­pa­nies have been strug­gling due to many rea­sons, start­ing from the value for money ra­tio and end­ing with the poor mar­ket­ing pol­icy. Thus, the track record of the com­pa­nies which could rise to the chal­lenges and build suc­cess­ful busi­nesses is of great in­ter­est. The pri­vate company Conte Spa was es­tab­lished in Grodno about 20 years ago. Since then it has grown to be­come one of the most prof­itable light in­dus­try com­pa­nies in Be­larus and one of the big­gest leg­wear pro­duc­ers in the postSoviet space. Valentin BAIKO, the company owner, chair­man of the gen­eral meet­ing of share­hold­ers, mem­ber of the En­trepreneur­ship Coun­cil un­der the aus­pices of Be­larus’ Pres­i­dent, tells the Econ­omy of Be­larus Mag­a­zine about the business en­vi­ron­ment in Be­larus, the company growth and com­pe­ti­tion with big-name global brands.

Mr Baiko, Conte Spa has to com­pete mainly with for­eign com­pa­nies both on the do­mes­tic and for­eign mar­kets and the company is said to mo­nop­o­lize the do­mes­tic leg­wear mar­ket. Is it an ad­van­tage or a dis­ad­van­tage?

Those who say that we are a mo­nop­o­list are a bit out of touch with re­al­ity. In the con­di­tions of the Sin­gle Eco­nomic Space when goods from all over the world freely flow to Be­larus via Rus­sia, the state­ments al­leg­ing that we are a mo­nop­o­list do not make any sense. Be­sides, now

that do­mes­tic com­pa­nies op­er­ate in the free mar­ket there is no need to sanc­tion those who were be­lieved to be mo­nop­o­lists.

As far as com­pe­ti­tion is con­cerned, the time runs very fast, the sit­u­a­tion changes all the time. A num­ber of ag­gres­sive pro­duc­ers and dis­trib­u­tors have emerged on the Be­laru­sian mar­ket. They have made sig­nif­i­cant strides and we al­ready feel them breath­ing down our neck. On the other hand, we have to com­pete with fa­mous for­eign brands in the en­tire postSoviet space.

As the com­pe­ti­tion gets tougher, what mar­kets are you go­ing to pri­or­i­tize and fight for?

Our ma­jor sales mar­kets are Be­larus, Rus­sia and Ukraine. We are grow­ing our business, first of all, on the ter­ri­tory of the for­mer USSR republics. Here we see the big­gest growth op­por­tu­ni­ties. Of course, we sell in Western Europe, the United States and Is­rael. We would like to ex­pand our pres­ence in th­ese coun­tries, too. How­ever th­ese are not our tar­get mar­kets. Let’s speak frankly: it is eas­ier and more lu­cra­tive to sell things on tra­di­tional mar­kets.

Mar­ket re­la­tions in Euro­pean coun­tries have been de­vel­op­ing for decades and even cen­turies. The Euro­pean mar­ket is very ma­ture, with all the mar­ket niches taken. I am con­vinced that this is true about other eco­nomic sec­tors, too. Op­er­at­ing on the Rus­sian mar­ket is also quite a chal­lenge, but it is eas­ier (though not easy!) to se­cure a pres­ence there com­pared to the Euro­pean mar­ket.

What fac­tors, in your opin­ion, have the big­gest im­pact on the suc­cess of a business in Be­larus?

If you are ask­ing me whether there are con­di­tions for do­ing business in Be­larus, I will say that clearly there are. We, for ex­am­ple, have grown our business on our own. Within a span of 20 years, we have built a suc­cess­ful and rec­og­niz­able brand. There­fore, our ex­am­ple and my own per­sonal ex­pe­ri­ence are ev­i­dence that you can do business and achieve good re­sults in Be­larus...

I think that the ba­sic con­di­tion for be­ing suc­cess­ful in business in any coun­try is to talk less and do more. I am con­vinced that if there’s a will there’s a way. The main thing is to set re­al­is­tic tar­gets so that you would not look for ex­cuses for fail­ure af­ter­wards...

What are the is­sues that need to be ad­dressed to im­prove the con­di­tions for small and medi­um­sized busi­nesses in our coun­try?

I think there are no spe­cific three or five prob­lems that, when solved, will make the sit­u­a­tion per­fect. After solv­ing some prob­lems, oth­ers will arise...

We should stop the “talk­fest”. We have no prob­lems. If you want to work, then do it! Who is stop­ping you? This is what I sin­cerely be­lieve in.

The limited ac­cess to loans is of­ten cited as the prob­lem. Here is an ex­am­ple from my life. When ap­ply­ing for my first loan I of­fered my apart­ment as col­lat­eral to a bank. How­ever, as it turned out, there was no leg­is­la­tion at that time that would al­low do­ing so. But I had this re­solve and faith in what I wanted to do. I knew I would re­pay the loan and was ready to of­fer my prop­erty as col­lat­eral. Now we of­ten see that peo­ple (es­pe­cially young peo­ple) com­plain that they are de­nied loans but at the same time they are not will­ing to of­fer guar­an­tees to a bank.

In my opin­ion, no­body owes any­thing to any­one. The con­di­tions are there, get down to work! If you are not yet ready to work, this niche will be taken by oth­ers while you are sort­ing out your pref­er­ences.

The main key to suc­cess is the will and will­ing­ness to work. Plus, of course, time. There is one fa­mous for­mula: if you want to be­come a pro, you need to invest three hours daily into what you do and you will be there in ten years. If you want this faster, you need to invest 15 hours daily. I share this opin­ion.

Fi­nan­cial and credit support is cru­cial for any business. What are Conte Spa’s sources of in­vest­ment?

To­day we mainly rein­vest prof­its. We di­rect almost all our prof­its to­wards growth. This year we will not even pay div­i­dends as there is a need for in­vest­ment. More funds will be in­vested in Brest Hosiery Mill. The sec­ond tra­di­tional source of in­vest­ment for us is loans of Be­laru­sian banks.

What are the plans of the main share­holder re­gard­ing Brest Hosiery Mill?

We want to put this company back on growth track. In Oc­to­ber, Conte Spa and af­fil­i­ated com­pa­nies ac­quired a 19.39% stake in this en­ter­prise from the state and thus in­creased our share to almost 90%. Pur­chas­ing th­ese shares we signed up to dif­fi­cult and costly terms. And we are sure we will achieve our tar­gets.

Conte Spa pur­chased Brest Hosiery Mill at a time when that company was not sim­ply bro­ken but was sink­ing fast. The man­u­fac­turer lost its mar­ket in Rus­sia, be­gan los­ing the Be­laru­sian one where it was squeezed out by the pre­vi­ously un­known com­peti­tors.

First off, we re­placed the man­age­ment. We changed the prod­uct port­fo­lio, came up with a new prod­uct lineup, im­proved the prod­uct qual­ity, and up­graded tech­nolo­gies and equip­ment. To­day the company op­er­ates more than 100 new state-of-the-art ma­chines. The new equip­ment had been in­stalled be­fore the fi­nal buyin­gout of the state share. Now we are busy restor­ing our po­si­tions in Be­larus and ad­vanc­ing to Rus­sia un­der the Brest Socks trade­mark. We have been work­ing in Rus­sia at a loss in or­der to bring Brest Hosiery Mill back to that mar­ket. We are de­ter­mined to do this most ag­gres­sively. In Au­gust the Brest-based company posted prof­its for the first time in many years.

We po­si­tion Conte Spa in a dif­fer­ent price niche, closer to the pre­mium seg­ment. Brest Socks prod­ucts will be bet­ter in qual­ity yet bud­get-friendly. We plan fur­ther mod­ern­iza­tion of the company. We are plan­ning to invest more than $5 mil­lion in the de­vel­op­ment of the company.

Newspapers in English

Newspapers from Belarus

© PressReader. All rights reserved.