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Weekly Overview Monday 26th September & Sunday 25th August 2011

Investment website presents to your attention a weekly overview of investment events in Belarus (26.09.2011 - 02.10.2011)

Monday 26 September

The business plan of Chinese Chery Company envisages $102 million worth of investments to start up the production of 50,000 cars in Belarus, media learned from Deputy Chairman of the Belarusian Scientific and Industrial Association (BSIA), Chairman of the Board of Directors of Chinese Cars Company Sergei Varivoda. Chinese investors have frozen the project, but they have not refused to implement it. The government of Belarus is currently in talks with two Chinese manufacturers, namely Geely and Chery. They are eager to set up an assembly of cars in Belarus. “It is very good that the government is in talks with several Chinese companies,” Sergei Varivoda said. According to him, China is the most reliable partner for Belarus in the car industry. “The problem is as follows: we may assemble cars with Chinese partners, or no cars at all,” Sergei Varivoda explained.


German businessmen are interested in investing in Belarus, President of the German-Belarusian Economic Club Klaus Baier told a press conference on 26 September. He also noted that “the economic component is beyond any political context.” Klaus Baier explained that 97.5% of all companies in Germany are small and medium-sized business. When making investment decisions these companies are guided by their own economic reasons. Here, everything is simple: the clearer the economic framework and the government economic policy are, the easier it is for a company to decide to invest,” said Klaus Baier. He also stressed that the upcoming Fifth Day of German Economy in Belarus will help strengthen the Belarusian-German economic cooperation.


In January-August 2011 Vitebsk raised about Br1.3 trillion in investment, journalists learned from Deputy Chairman of Vitebsk City Hall Zinaida Koroleva. The volume of investments went up almost 18% over the same period last year. Construction, revamping and reconstruction of production facilities were the most investment-friendly industries. According to Zinaida Koroleva, to date the volume of fixed capital investments is on the increase. Thus, investments to buy equipment and machinery gained 46.5% to reach Br588.8 billion in January-August 2011. In 2011 the city of Vitebsk is planning to implement 18 investment projects to the tune of Br75 billion as part of the State Investment Program for 2011. In January-July 2011 the city implemented Вr46.2 billion worth of investment projects, or 61.6% of the annual target. The state program helped set up a unique medical library at the Vitebsk State Medical University.

Tuesday 27 September

Australian business is ready to invest in the Belarusian dairy industry, Warren Reynolds, Executive Chairman of the Board of Directors and the largest shareholder of the Austrian company Muzz Buzz Franchising Ltd, a public representative of the Belarusian Chamber of Commerce and Industry in Australia, told media on 27 September. Warren Reynolds believes that the Belarusian dairy industry has a huge potential for growth. However, at present the potential is not fully used. The product lineup could be expanded among other things. Australian investments could help launch new products and export them. Australian investors also show an interest in Belarusian poultry factories. Warren Reynolds said that Belarus and Australia could promote cooperation in many areas. It is important for the sides to show an initiative, a desire and will to build up partnership.


Australia’s Muzz Buzz Franchising Ltd. will open a coffee shop chain in Minsk, Executive Chairman of the Board of Directors of Australia’s Muzz Buzz Franchising Ltd. Warren Reynolds told reporters on 27 September. The Australian company has plans to open 20 coffee shops in Belarus. “They will open in the next two years in Minsk and the district. The investments into the project are estimated at $5.5 million,” Warren Reynolds said. Over 200 new jobs will be created. Warren Reynolds emphasized that the company will not only set up retail outlets, it will also create the associated business infrastructure supporting these retail outlets. In the near future, the company is going to set up an enterprise dealing with coffee supplies.

Wednesday 28 September

The most comfortable conditions for investors will be enabled in Belarus, Vice Premier of Belarus Sergei Rumas told the international scientific and practical conference “20 years of the Commonwealth of Independent States” on 28 September. Enabling a favorable business operation environment will be a national priority, said Sergei Rumas. The directive for the development of entrepreneurship initiative and encouragement of business activity in Belarus aims for it, too. Creating the foundation for a complex reform of the Belarusian economy through securing the equality of all forms of ownership, forming a mechanism for public private partnership, removal of the barriers that business entities face in startup and operation phases will be the key task. Belarus will follow the strategy for the economic development of the Commonwealth of Independent States till 2020 to advance towards an intensive modernization of “our economies and final restoration and unity of production chains”. In 2011 Belarus plans to attract $6.5 billion in foreign direct investment. All sectors of the Belarusian economy are open to foreign investors, said the Vice Premier.


 Belarus will create additional stimuli to build up innovation efforts, Igor Voitov, Chairman of the State Committee for Science and Technology of Belarus, told the international scientific and practical conference “20 years of the Commonwealth of Independent States” on 28 September. Measures to improve the legal base for R&D and innovation efforts will be taken this year, he said. In particular, the Committee has prepared a draft law on the state innovation policy and innovation activities in Belarus. The bill is supposed to lay down the framework for a state innovation policy and innovation activities in the country. It will also determine the main conditions for regulating relations in the area of innovation efforts. The Council of Ministers is now revising the document. More legal acts will be adopted to build up on the bill. According to Igor Voitov, 2011 will see bills on copyright and allied rights, commercial secrets, decrees on encouraging innovation efforts, on measures to enable more effective protection and use of intellectual property, on venture companies, on setting up the scientific and technological park Biograd.

Thursday 29 September

Belarus is eager to invite investors from China and India to take part in privatization, Piotr Lukyanov, First Deputy Director of the State Property Fund of the State Property Committee, told a video briefing in Minsk on 29 September. Piotr Lukyanov noted that Belarus is keen on cooperation with big Chinese and Indian companies. The cooperation with promising investors from other countries is possible as well. “We are considering and will consider investment proposals from India, China and other countries,” Piotr Lukyanov said. He stressed that final decision on the privatization of big companies will be made by the President. Piotr Lukyanov lauded prospects of privatization as it helps attract additional financing the country’s economy. “The inflow of foreign investments to the economy, of course, has a positive impact on enterprises and on the economy in general,” he added. Piotr Lukyanov stressed that Belarus creates equal privatization conditions for Belarusian and foreign investors.


Belarus is not going to reduce the price for the government’s stake in the Mobile TeleSystems Company (MTS trademark), First Deputy Director of the State Property Fund of the State Property Committee Piotr Lukyanov said in his statement in a video briefing in Minsk on 29 September. In his words, the value of the 51% state share in the company has been voiced by the head of state - $1 billion. “The President has set the price, and this is the minimum,” he added. Piotr Lukyanov stressed that the appraisal of the state share in the mobile communications company MTS had been held according to the law. The tender will take place on 1 December. Potential investors have been informed and invited to take part in the sales.

Friday 30 September

Enertrag AG intends to implement the project for the construction of a 160 MW windmill in Belarus in full volume. The investment will approximately total €360 million, media learnt from Jurgen Schenk, the company’s consultant in Belarus. Despite the concerns of the Defense Ministry of Belarus regarding the initial windmill site in Dzerzhinsk District, the company intends to implement the project in full. He added that cases when energy companies have to adjust the geography of wind projects due to the proximity to radars are not uncommon abroad too. Germany is not an exception. The impact of wind farms on military equipment is to be reckoned with. When it comes to national security, even economy fades into the background. Talking about the deadline for implementing the project, Enertrag AG consultant said that it will be shifted. The deadline will be finalized after the company gets a land plot and evaluates the amount of preparatory work that has to be done.


Yours Sincerely,

P.T. & Co