What industries can become points of growth of the Belarusian economy and which industries are worth investing in? Here is an interview with Roman Osipov, director of Investment Company “UNITER”.
— How do you assess the current level of foreign investments in the Belarusian economy?
— Speaking about foreign investments in our economy, not about reinvestment of profits, not about any loans between the companies, which are also can be regarded as investment, the amount of FDI is small — 300-400 million dollars a year. It could be much bigger. Investments are channeled in production of construction materials, woodworking, health care, various information technologies — in business, mainly oriented for export.
— What is the most promising and favorable sector of the economy to be invested in and could be offered to a solid investor? What are the niches still available?
— Investors are interested in a quick payback of investment. So we need to calculate and propose projects with a quick payback. We have numerous advantages, such as a favorable geographical position, a well-developed infrastructure, highly skilled personnel. In my opinion, investors should be attracted to increase the efficiency of going business. By competent organization the result can be tangible within one or two years. A positive example is a joint venture with the Swiss Company “Stadler Minsk”. Foreign experts should be involved in large government projects, promising them a share of profits. We are not used to paying an outside manager or an individual, for example, $ 5 million, while in the West people pay if it is worth it.
There is an instructive experience of the Chinese economy. Once in China private enterprises were allowed to manage state assets, also such attractive conditions were created for foreign investors, and they transferred its production to China, introduced modern technologies. As a result, the Chinese economy has flourished…
We need to update and upgrade our large and medium-sized enterprises, to seek funding for it. Now there is such a competition in the world that once you can lose a hard-won market. Under no circumstances should we refuse, for example, mechanical engineering. On the contrary, we should strengthen productive capacity, improve management, constantly update range of goods and displace competitors from markets. In order to be strong, it is necessary to cooperate with the Russians and the other EAEU partners, and it should be done quickly.
Fertile ground for doing business is an expansion of service market. Often a selection of an appropriate niche directly depends on an analysis of human behavior. Habits of society are gradually changing. For example, earlier a majority of housewives do seaming for winter. Now, this tradition has been gradually disappearing over the last 10-15 years . In Germany, people have not been engaged in seaming already for half a century. In other words, an additional opportunity to earn extra money has appeared, as people have not stopped eating pickles and jam. Another example is a provision of private traders simple consumer services: screwing in a light bulb, wiring work, plumbing, etc. Dry cleaning is again in demand. Domestic demand should not be underestimated.
— How justified is an export rate? Is it possible to find new growth points abroad?
— The development of any business is mainly determined by the share it holds in different markets, and competitiveness of products. If we can find a large, growing market like the Indian or Chinese, and invest in those areas that are growing faster than the overall economy, profits can surpass all expectations.
For example, in developed countries aging of population has become a long-term global trend, and many people want to make money out of it. In particular, companies focus on production of various medicines and dietary supplements, medical devices, in other words, companies target things that can be useful for middle-aged people.
An interesting subject for the EU market is production of wood goods. In Europe, there are few high-quality forests, as a result a stumpage fee is high. Belarus could start production of exciting and marketable products from the wood, which is value-added up to 300-400%.
Under the materials of www.belmarket.by