In the second half of May Gomel hosted the VIII Economic Forum, the IX International Universal Exhibition-Fair «Spring in Gomel,» and the 1st Industrial Exhibition «GOMELPROMEKSPO». During these events director «Publishing House «Foreign Trade» met Chairman of Gomel Region Executive Committee Vladimir Dvornik and asked him some questions.

— Mr. Dvornik, how can you characterize the economic potential of Gomel region?
— Gomel region is a large highly developed industrial region of the country. There are about three hundred large and medium-sized enterprises, whose share in the volume of industrial production is almost 23 %. The leading industries - fuel, chemical, oil, pulp and paper, machinery, woodworking, food processing, ferrous metallurgy ... Here are being produced all the country›s ferrous metals, all phosphate fertilizers, animal feed harvesters, window glass, table salt, extracted all the oil and gas ... A significant portion of motor gasoline, diesel fuel, cardboard, plywood, chipboard and many other commodities produced in the country, is also ours. Since the beginning of the year we have released products of more than $ 11 billion.
Agro-industrial complex is also quite powerful and capable to provide not only the needs of the population in food, but also get processing plants to full capacity. Dairy farming, vegetable farming and potato growing is well-developed, flaxgrowing is also rapidly developing. We export a lot of dairy products, canned goods, butter, casein, canned fruits and vegetables…
I would like to stress that the economy is mainly export-oriented. Three-quarters of all products are shipped abroad. Our companies collaborate with foreign trade partners from 109 countries. We most actively develop trade with Russia (its share is over 60 % of total foreign trade!), Germany, Ukraine, Poland, Italy, France, the Baltic States ... We are actively working to develop new markets in the Middle East and Africa. In 2010 the volume of foreign trade turnover amounted to $ 6,5 billion, including export— $ 2,7 billion, import— $ 3,8 billion. The main exports - ferrous metals and articles thereof, wood products and chemical industries, mineral products, machinery and mechamisms.
— How do you assess the investment activity in the region?
— The region occupies the leading position in the country in terms of investment. For example, only investment 2010 in fixed capital increased by more than 4,8 % to $ 2,7 billion compared to 2009 with almost three thirds of the investments to production sphere. Talking about openness of Gomel region to foreign investment, it should be noted that the region has already attracted business finance and technology from 27 countries. We have actively working investors from Austria, Russia, the Netherlands, France, Britain, Germany, Switzerland … Only in 2010 we attracted over $1 billion of foreign investment. To attract foreign businesses and develop new high-tech industries, Gomel created a free economic zone «Gomel-Raton» in 1998. Today capital from thirteen foreign countries successfully works here. The amount of attracted funds to FEZ amounted to about $ 240 million, of which about 50 % - foreign.

— What new businesses will be built in the near future?
— A broad range of investment projects is being implemented. It is provided to develop existing and create new enterprises. Rechitsa Hardware Plant, for example, plans to commission a shop for hot galvanizing of pipes and metal structures. The main area of investment to purchase modern Italian equipment. Belarusian Steel Plant is implementing a project to create a bar iron production line. Svetlogorsk Pulp and Board Mill constructs a plant to produce ведется строительство завода bleached sulphate pulp. Rogachev Milk Canning Plant plans to create a shop to produce cheese. Agrocomplex «Yuzhny» carries out works to construct an animal feed mill. A modern dairy plant will appear in Turov.
I will list some other objects. With attraction of foreign capital is planned to establish production line on restoration of old tires by foreign company «Rilling Rife» in Gomel district. Joint venture «Pompe-Mix RB» launched a project to produce concrete and concrete products. Large investment project will be prepared to be implemented by Iranian company «Zamorod Kala» for extraction of rock in Lelchitsy district. As part of execution of concluded investment contracts it is planned to produce power hydraulic, radiators, construct a plant for solid wastes recycling.
The list may be long. For example, foreign investors can do the following:
— update of production lines of building blocks of cellular concrete in JSC «Gomelstroymaterialy»;
— update of the existing production line of polished glass in JSC «Gomelsteklo»;
— update of Mozyr house-building plant. The production capacity will be 100 000 m2 of living housing;
— industrial development of deposits of silicate sand «Boriskovichi» and construction of an enterprise LLC «LOTOS»— to produce gas silicate blocks and silicate stone;
— update and technical re-tooling of CPUE «Hoyniki Plant of Reinforced Concrete Products», CPUE «Zhlobin DSK-3»;
— implementation of Canadian technology to produce stored asphalt mixes for pavement repair on the basis of Vetka Road Repair and Construction Unit № 185;
— construction of a factory to produce of calcinated soda in Mozyr district.

— In recent years, special attention is paid to such a concept as «foreign direct investment on a net basis». How do approaches to the investors change in the region? What has been done or planned to do in this area?
— Yes, you are right. The most effective way to attract foreign capital is a direct participation of the investor in economic activities. The main thing is to attract «live» finance from abroad, along with that comes also modern production technologies and new market horizons marketing, innovation and corporate governance. In collaboration with investor the region already has a number of successful mutual interests Within the framework of Decree № 10 of the President 21 investment contracts has been signed totaling $ 411,6 million, including 7— with foreign companies for $ 263,2 million. Projects involving foreign direct investment are successfully implemented in Joint Venture «Ingman morozhenoe». International Corporation «Heineken» has completely bought the stock of shares of «Rechitsapivo».
Particular importance for attracting investment has various activities that allow establishing long-term business contacts with potential investors around the world. Traditionally, in May Gomel hosts guests in a major economic forum. It has given rise to a number of iconic and successful projects, such as development of deposits of chalk by Iranian company «Azarab», construction of hypermarket «Liniya», creation import-substituting production of copper rod by Joint Venture «Kateh-Polesie» and many others.

— Are there any plans to change the criteria for selecting investment projects in various industries, which claim to state support?
— The decision of the Gomel Region Council of Deputies approved the Instruction on the manner and conditions of reimbursement for legal entities of interest on bank loans. According to it, this form of state support is provided in case implementation of an investment project in terms of competitive selection. The issue of improving of the procedure is under constant control of the regional executive committee and in case of an objective need, we are ready both to initiate changes to the existing legal acts and create new ones. Investment projects should be recompensed and help strengthen our economy.

— Particularly interesting question for foreign entrepreneurs: the privatization of what public enterprises is planned in the near future?
— In 2010, eleven national and fifty-two community companies were privatized and transformed into joint stock companies. For example, «Gomel Machine Building Plant in the name of Kirov», «Gomel foundry «Centrolit», «Gomel Plant of Machine Units» and some others. Corporization Plan for 2011 - 2013 includes 81 community enterprise and 32 national companies. This year, in accordance with the Council of Ministers, «Gomel Plant of Measuring Equipment», in 2013— «Belarusian Steel Plant», «Gomselmash», «Gomel Plant of Casting and Normals», «Gidroprivod» will be converted into JSC. Among 17 community companies this year «Gomel fish complex», «Gomel Winery», operating enterprise «Kirmash» Gomel, «Zhlobin hunting household», «Mozyr Concrete Products Plant № 5», «Svetlogorskpromstroy», communal agricultural unitary companies «Iskra - Vetka» and «Ivanova Sloboda», Lelchitsy district.

— What enterprises can consider privatization as a way to attract investment?
— Last year we held six auctions to sell shares of 34 joint stock companies and five tenders to sell shares of 7 joint stock companies. The auctions sold share of 2 JSC: «Zhlobin Autotransport Enterprise» and «Trade House «Gomel». The tenders sold shares of JSC: «Mozyrpivo» and «Pridneprovye». In 2011 shares of 48 JSC were offered to the investors. Among them, there are almost all joint stock companies of consumer services, a number of enterprises of agricultural industry («Gomelagroenergoservis», «Gomellen», «Gomel Engine Repair Plant»), food industry (Belarusian-Moldovan JV JSC «Kodru», «Mozyrpivo») and many others. Naturally, this is where we expect the most active capital inflows and, consequently, significant improvement in competitiveness of these enterprises.

Dmitry Lupach, Director «Publishing House «Foreign Trade»
Photos by the author