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Minsk Automobile Plant [MAZ] - Recent Developments

When one of MZKT tractors was photographed in 1997 by US satellite in China a scandal broke out, though it was reported that the Chinese hade actually reverse engineered the MZKT tractor. Subsequently it is claimed that the Chinese presented MZKT with a choice, either earn money and assist in construction of the plant in China, or the Chinese would manufacture MZKT clone anyway. Evidently MZKT decided to assist China in construction of the plant. This plant would manufacture the trucks similar to those of MZKT.

A working group with Russian Deputy Prime Minister Ilya Klebanov visited Minsk on 10 February 2000, and the negotiations resulted in the signing of an intergovernmental agreement setting up a Russian-Belarussian international financial industrial group called Defense Systems. The group, which would design, manufacture and sell joint air-defense technology, would include Belarussian companies like the Gomel radio factory and the Minsk truck factory. Using Belarussian-made chassis and electronic equipment, the group could manufacture mobile anti-missile systems such as the S-300 and S-400.

On 8 January 2002, Mikhail Leonov, the 48-year-old head of the Minsk Tractor Factory, was arrested on charges of abuse of office, large-scale embezzlement, and unlawful entrepreneurial activities. This was the third case to be brought against an industrial chieftain in recent weeks. If found guilty, Leonov faces up to eight years in prison and confiscation of property.

OJSC "Minsk Tractor Works" develops and manufactures wheeled and tracked tractors, motor blocks , trailed and mounted implements for agricultural, construction, forestry and communal services, spare parts, consumer goods, organizes on a licensed basis their production, renders services in setting up and carrying out service. In 2007 Minsk Tractor Plant produced more than 55,000 tractors and machines, which is 10% more than in 2006. The Minsk Tractor Works produced 42 158 tractors (excluding mini tractors) in 2005 - 22% more than in 2004.

In reality the state wanted to retain control over MAZ and therefore considers only those options that will allow it to be achieved. At the beginning of 2011 the government announced plans to establish an equal holding company with the participation of MAZ and Russian KAMAZ. In turn, the management of the corporation "Rostekhnologii", which owns the shares of KAMAZ, is confident that the Kama truck manufacturer is more expensive than the Minsk Automobile Plant. Accordingly, according to the logic of Rostekhnologii, the majority of votes in the supervisory board of the Belarusian-Russian holding should belong to the KAMAZ car factory. the proceeds of MAZ in the first half of 2011 amounted to 418 million dollars, which is much lower than KAMAZ's revenue of 1545 million dollars.

In November 2011 the audit company Ernst & Young, which evaluated the Minsk Automobile Plant (MAZ) as part of a joint venture with the largest Russian truck manufacturer KAMAZ, estimated the enterprise at $ 800 million, but the Belarusian government was dissatisfied with the results and required a reassessment. However, Ernst & Young reportedly refused to overestimate MAZ, after which the Belarusian car factory announced a tender for the selection of a new appraiser. the Minsk Automobile Plant was also evaluated by the state valuation company. The state structure estimated MAZ twice as much as Ernst & Young.

Along with KAMAZ, the GAZ Group, belonging to the "Russian Machines" (or, to put it quite exactly, the Russian businessman Oleg Deripaska) is offering cooperation to the Minsk Automobile Plant. Unlike KAMAZ, which proposes to create a non-cash holding company with MAZ, Deripaska's structure is ready to be bought by the Minsk Automobile Plant. At the price that an independent appraiser will determine. However, the actions of the Belarusian side showed that the authorities did not pay much attention to the proposals of the GAZ Group.

If in 2012 MAZ produced 26 thousand trucks, then for 8 months of this year only 2,255 were produced. During this time, the number of workers in the plant fell from 21,500 to 17,000. The long-term flagship of the Belarusian industry has now become the most unprofitable enterprise in the country. The increase in exports of goods was from $ 88 million in 2011 to $ 142.5 million in 2015, the expected result of 2016 is $ 146 million. The profit from sales for 5 years increased from the level of 8.4 million rubles to 37.7 million rubles, in 2016 the profit of 44.6 million rubles was expected.

At the end of February 2013, the Russian Minister of Industry and Trade Denis Manturov announced that Russia is no longer interested in creating a holding of the Kama Automobile Plant (KamAZ) with the Minsk Automobile Plant (MAZ). Prior to this, negotiations on the actual merger of the two giants of the automobile industry have been conducted since 2012, but without success. To a large extent, the Russian side is interested in enterprises that work for the military-industrial complex.

The school of production of such products, traditions, design bureaus and specialists is preserved in Belarus, which is not in Russia. Russia, having become entangled in a new arms race, does not have the appropriate means and time to create such production from scratch. "Therefore, for all its reluctance to depend on Belarus, the Russians are forced to turn to Belarus enterprises, especially after Ukraine refused to cooperate with Russia in the field of the military-industrial complex.




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