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Lelchitsy Regional Executive Committee
22 May 2020

Foreign demand for Belarusian timber products expected to gradually recover

Bellesbumprom expects demand for Belarusian timber products to gradually recover as quarantine measures are relaxed abroad, BelTA learned from Chairman of the Belarusian timber, woodworking, pulp and paper industry concern Bellesbumprom Mikhail Kasko.

According to the source, the situation was comparatively stable in Q1 2020. Bellesbumprom enterprises operated steadily and increased export. Unfortunately, the enterprises started feeling negative trends on foreign markets by the end of March due to the pandemic. Quarantine measures were introduced, borders and trade hubs were closed, and the operation of enterprises was suspended. The business activity of the timber industry was virtually paralyzed due to these factors, Mikhail Kasko said.

In his words, an overwhelming majority of Bellesbumprom enterprises are geared towards export. More than 70% of the output is exported. “It is obvious that events happening in the world cannot but have an effect on their foreign trade operations. Furniture shops, construction materials shops where our goods were sold were closed in our main target markets – in countries of the European Union, in Russia. Our partners decided to suspend their purchases. Market problems due to the shutdown of multiple enterprises abroad affected not only manufacturers of furniture and wallpaper but also wood-based panels, plywood, pasteboard and paper packaging, and other products. The decrease in export will definitely have a significant effect on performance of Bellesbumprom enterprises, at least in April and May,” Bellesbumprom noted.

A number of European countries and other ones are gradually lifting the restrictions and relaxing quarantine measures. Enterprises are resuming work, shopping centers are being reopened. “We hope the situation will change for the better. Although we understand that sales will not recover fast. The products we make, for instance, furniture are not essential goods,” Mikhail Kasko pointed out. “After losing financial stability people initially tend to limit their spending. Buying a sofa or new kitchen furniture is likely to be postponed. The same is true for many other products we make – wallpaper, windows, doors, structural units. This market sector will not recover as fast as we want it to.”

Nevertheless, Bellesbumprom enterprises have no intention of passively waiting for customer orders. “It is necessary to find alternative ways, diversify manufacturing and export. It is what heads of Bellesbumprom enterprises have been instructed to pursue: they have to closely work with all partners abroad and take measures to penetrate new markets,” the Bellesbumprom head said.

Taking into account the current situation Bellesbumprom enterprises have revised their planned repair schedules, schedules for maintenance of manufacturing equipment, and schedules for installing new equipment. Measures initially scheduled for Q3-Q4 2020 are being implemented now. “Nobody has been laid off yet,” Mikhail Kasko stressed.

Bellesbumprom enterprises demonstrated steady positive dynamics in Q1 2020. Their industrial output totaled 110% as against January-March 2019. Labor productivity growth in terms of added value exceeded 103%. The growth rate of proceeds from sales per employee exceeded 111%. Export rose by 5% to $147 million. Shipments to non-CIS states amounted to 50.5%, 4.9% up from Q1 2019. Shipments to CIS states exceeded $72 million, 105.1% as against January-March 2019. Bellesbumprom’s sales profitability totaled 4.8%.