Finnish investor about work in Belarus: “It’s total bedlam”

A Finnish investor of Lida brewery told about the hardships of work in Belarusian market.

We remind that in 2008 Lidskoe Pivo JSC (Lidskaye Piva) became a subsidiary of an international concern Olvi Oyj, which bought a controlling interest in the company (91.6%). Alongside with Lidskoe pivo JSC, 4 breweries belong to the concern: one in Finland and one in each of the Baltic countries, Ezhednevnik writes.

Today in the framework of the first stage of investments by the Finnish concern to Lidskoe Pivo JSC the investments make more than Euro 40 million.

- After reconstruction of the brewery, a complex modernization of the production department, launching a transport and logistics centre, we have increased production capacities of the brewery by 30%. The sales growth after assimilation of investments was up to 150 thousand litres a year. In order to make the second investment injection, we should be sure that it would pay, that the economy of the country would be stable in the next 10 years, said Lidskoe Pivo CEO Audirius Mikshis.

- In general, we plan expansion of the production volume of the brewery twofold. It demands investments not less than modernization of production, - said a manager for the Baltic States and Belarus Peep Akkel.

As said by him, modernization of production took a year and a half, but it was “a total bedlam.”

“There was a shortage of construction materials, there were problems with foreign currency, so in general we found ourselves in the thick of the crisis. We would build two times quicker in other European countries probably, but it is a rather good term for Belarus, a year and a half,” Peep Akkel said.

To the question how it feels to work at the Belarusian market for Olvi Oyj, Audrius Mikshis refused to answer, explaining it as he could be deported for that.

“It would be nice if European design standards and fire safety rules were used in Belarus as well. It has been declared at the highest level of power, but it is not always supported by facts,” he added.

“The problems we faced are directly connected with the specific nature of our state. The state control over the industrial process is considerable in Belarus, unlike Europe, where questions of private business are solved more easily, and there is no such control and supervision,” said Brewing Director of Lidskoe Pivo Svyatlana Zubko.

“We had difficulties when we received a project design from the Finnish company and wanted to get approvals to start construction. The question of adaptation of the project of the foreign company to the specific features of the Belarusian market arose at once. We were allowed to start construction in principle, but when it was time for the construction to be put on service, problems came up, as there was adaptation to Belarusian requirements. If it were not for these discrepancies between Belarusian and European requirements, the new production shop could have been put into operation a year earlier,” she added.

“We produce medium carbonated water. Some people like it, and some people say that it should be more carbonated. In order to increase the content of СО2, it is necessary to turn the valve for just 5 minutes. In order to legalize this procedure in Belarus, from 3 to 6 months are needed. And I thought: if I need so much time for authorization of this insignificant process, what should such large plants as, for instance, MAZ do?” said Lidskoe Pivo CEO Audrius Mikshis.

Besides, Audrius Mikshis stressed that one of the important things in beer consumption is its price. The lower the price, the more people drink bear, and vice versa. The price is mostly determined by taxes, and it is mostly excise duty. When Olvi concern came into the market of Belarus, the excise duty was 4.5 Eurocents, and now it is 18 Eurocents, while since October it is to reach 24 Eurocents.

“It cannot but make one disquieted,” he said.