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Photo of the Grodnoinvest Free Economic Zone

     

On the eve of the 10th international business forum “Euroregion Neman-2018”, held on September 14, 2018 in the city of Grodno, an event occurred that opened a new page in the history of the Smorgon Aggregate Plant. On September 12, 2018, the Smorgon Aggregate Plant Open Joint-Stock Company was registered as a resident of the free economic zone “Grodnoinvest” operating in the territory of the Grodno region. The basis for registering an enterprise as a resident of the FEZ was the development and protection of the investment project “Technical Re-equipment and Improvement of the Production Process with the Purpose of Increasing the Production of Small-Size, Municipal and Agricultural Machinery and Developing New Types of Products”.
      Free economic zones as an institution of a market economy occupy a special place in the legal system of the Republic of Belarus. Today, each regional center of Belarus can offer both foreign and domestic investors attractive conditions for investment in the territory of the FEZ. Free economic zones make a significant contribution to the socio-economic development of the regions and the country as a whole, forming 4% of GDP. It concentrated almost 13% of industrial production, about 16% of exports and about 7% of foreign direct investment.
      Smorgon Aggregate Plant OJSC is geographically located within the boundaries of the Grodnoinvest free economic zone. To date, 69 enterprises in the field of woodworking and furniture production, engineering and metalworking, food and light industry, agriculture with a production volume of over $ 1.4 billion are residents of the FEZ “Grodnoinvest”.

          

Infographics of the FEZ "Grodnoinvest"

For residents of the FEZ there is a special legal regime that provides a number of tax and customs benefits.
        As part of a special legal regime, as a resident of the FEZ, Smorgon Aggregate Plant OJSC received the following preferences: exemption from income tax derived from the sale of goods (works, services) of its own production; exemption from property tax on objects registered within the boundaries of the FEZ; exemption from land tax from land plots located within the boundaries of the FEZ; exemption from payment of customs duties and value added tax levied by customs authorities on goods placed in a free customs zone.

Infographics of the FEZ "Grodnoinvest"     

       

As Evgeny Stankevich, Acting Director of Smorgon Aggregate Plant OJSC, said: “The development and protection of the investment project, the entry of Smorgon Aggregate Plant Open Joint-Stock Company into the structure of residents of the FEZ Grodnoinvest, fully corresponds to solving the tasks of creating high-tech industries set President of the Republic of Belarus A.G. Lukashenko at a meeting held on August 7 this year on the situation in agriculture, regional development and improving the efficiency of free economic zones. Today our enterprise needs technical re-equipment. Due to the special legal regime in force in relation to the residents of the FEZ, the costs of the investment project will be reduced, and the released funds will be used to modernize production. This will positively affect the quality of such parameters as: production and sales, increasing export potential, product profitability, labor productivity, which in turn will increase salaries and attract highly qualified human resources. At the same time, due to the growth in production and sales of products, tax and non-tax revenues to the budget will increase. ”
          As part of the implementation of the investment project, more than 80% of the investments will be directed to the purchase of equipment. The purchase of new equipment will help to increase production volumes, reduce the labor intensity of manufacturing parts and reduce costs per unit of production, reduce energy costs, increase equipment utilization. In 2018–2022, the project provides for the purchase of a Pegas 240x280 A - CNC - F band sawing machine, a semi-automatic pipe bending machine according to the Ercolina MG 030 V2T type (Italy), four CNC turning machines of the DUMAN type, the PUMA GT2100 series (made in South Korea), two horizontal CNC machining centers of the type NHM 5000 "DOOSAN" (made in South Korea).
            As a result of the implementation of this project, JSC SAZ will not only increase its market share in developed markets, but will also ensure access to new promising sales markets. The development and production of new types of high-tech and innovative products, such as the Belarus-112N-01 mini tractor, the Belarus-152 small-sized tractor, the multifunctional-132MK lawn mower, Belarus-012N motoblock, the Belarus-821 tractor, mini-tractor Belarus-132H-01.
         To achieve this goal, Smorgon Aggregate Plant OJSC plans its further development in three areas.
          The first direction is associated with the creation of a model range of mini-technology with a capacity of 9 to 20 hp. and the modernization of the current technology. It provides for the improvement of design, improvement of ergonomics and consumer properties of mini-technology, as well as the development of a new, innovative model range of mini-technology. Its main representatives will be:
         - Belarus-08H walk-behind tractor, equipped with a GX390 HONDA engine with a high motor potential and an increased efficiency of 8.2 kW, with 6.00-12 wheels (MRL) with an increased tire diameter (633 mm). The motor-block is intended for performance of work with a big range of the hinged and hook-on equipment on personal plots and in municipal utilities with the greatest efficiency.
          The second representative of the new line will be the Belarus-132H-01 mini-tractor with the wheel formula 4x4, traction class 0.2, with the GX390 HONDA gasoline engine. The frameless construction (breaking frame) of the chassis will provide additional maneuverability of the mini-tractor, and the hydrostatic steering control will allow you to control the mini-tractor comfortably with less effort on the basis of the existing components and assemblies.
         The line will also be represented by a multifunctional 132MK lawn mower. In addition to its main function, this product, in an aggregate with mounted implements (brush, blade, bucket, mower) will be able to solve the problems of public utilities. The product has a compact size, all-wheel drive, hydrostatic steering, equipped with a rear axle lock and hydrostatic control mechanisms, as well as a two-speed power take-off shaft, which will expand the functionality of active attachments connected via PTO.
     

The second direction of development will be the development of the tractor line of the BELARUS-820/920 series. The tractor of the BELARUS-920 series is planned to be equipped with a girder bridge and a load-bearing crankcase to expand their functionality. The main feature of the girder bridge is its high rigidity and strength. It is resistant to high loads, reaching 1 or more tons, which will allow the use of the base chassis for the manufacture of a loader, utility machine, other types of special equipment. A tractor equipped with a girder bridge can be widely used in various industries, agriculture, utilities and transport.
         The BELARUS-820 series is a more budget-friendly counterpart of the 920 series tractors. Production of these tractors is planned to be carried out using cheaper components, including the engine. If the 920 series tractors are equipped with a 65 kW turbocharged engine, then the 820 series tractors will be completed with conventional engines, without a turbine. Their power will be 59.6 kW, which will significantly reduce the cost of the tractor. Interest in the tractors of this series is shown by the countries of the Middle East, Serbia, Moldova, Ukraine, Kazakhstan, where supplies are planned.
           The third direction is the expansion of the range of cooperative supplies to the head conveyor of OJSC MTZ through the development of parts for power-filled tractors, including parts of automatic production.
         The implementation of these areas will allow to increase production in the years 2023-2026 to the level of 2017 by 26.2% and change the structure of the products manufactured by the Company with the requirements of the time.
         In general, in the course of the implementation of the investment project as a resident of the FEZ, it is already expected in 2023 to ensure an increase in real wages by 87 rubles, or by 10.3% of the amount of wages without project implementation. Taking into account inflationary processes:

- the growth of nominal wages will be 276.5 rubles, or 32.8%;
- the increase in the volume of production and sales of products will amount to 51,389 thousand rubles, or 10.4%;
- return on sales to increase from 1.2% to 6.0%;
- the volume of investments will amount to 4,727 thousand rubles;
- the number of newly created and modernized jobs - 16 units;
- export growth will amount to $ 13,766 thousand, or 14.5%;
- the share of exports in the volume of marketable products (excluding products for cooperation) will be 55.2%;
- the increase in tax and non-tax revenues to the budget will amount to 2,123 thousand rubles.