Woodprocessing as an example of the country"s unused opportunities

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April 22, 2016 18:22

On November 30th, woodworking industry’s modernization was declared a failure.

Belarus has significant forest resources, but the share of woodworking industry in the country’s economy is minor. The industry has the potential to gain influence inside the country, but organizational factors weaken the industry’s competitiveness.

Forests cover 38.8% of Belarus. However, the use of forest resources in the Belarusian economy is negligible. Manufacture of wood and wood production make up 1.2% in the Belarusian industry. Woodwork industry exports make 0.7% of the total Belarusian exports. Return on sales was 6.8% in January-September 2012 and 17.5% of the industry are unprofitable.

Woodworking industry modernization programme was designed to improve the situation. Organizational factors disrupted meeting of all the programmes’ deadlines at Bellesbudprom concern.

Top-management staff rotation principle in the industry is unclear. Director of a successful company (Ivatsevichidrev) was dismissed despite the obvious improvement in financial indicators at the enterprise, and director of a company experiencing obvious financial problems (Borisovdrev) nonetheless runs the enterprise.

Instead of solving organizational problems, the government shifts responsibility on the employees. Woodworking industry employees have the lowest wages in the country. To solve these problems, Alexander Lukashenko proposed to introduce a ban on staff dismissal from the enterprises to undergo modernization and simultaneously to increase their wages. Source of wages’ growth was not named.

Thus, woodworking industry has a potential, which hypothetically could be implemented. But it is hardly possible without solving the organizational issues which relate to interaction between the wood processing and construction industries in terms of construction period reduction and enterprises’ modernization.

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