Overproduction hits key factories in Minsk

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Unsold tractors pile up around the Minsk Tractor Works; the workshops of the Minsk Motor Plant are filled with unsold stock, while Luch factory can hardly sell out watches. The beginning of the year was marked by a frenzy demand for household electric devices, furniture and even foodstuffs. Back then, industries cleared their warehouses. However, the crisis has led to a new reality when warehouse are filled with unsold stock again. What is the way out? To reduce costs? No, local manufacturers have found another method. They cut working hours or send workers to leaves.

The Brest-based factory that produces household chemicals has worked 4 days a week for one month. Now, all workers have taken their scheduled leaves. This is how the management tries to tackle overproduction.

The Minsk Tractor Works did not cut hours but urges workers to go on leave. Meanwhile, the territory around the factory is getting filled with unsold tractors, Vital, a worker, told the European Radio for Belarus.

“The plant is huge. When I go to work, I can see that tractors are parked around for a long time. There is definitely a drop in demand”.

In recent years, by March the demand for tractors would normally grow. Vital doubts that it is possible to reduce costs in order to sell it out, because the costs of steel and energy are not dropping.

Having called the Luch watch-maker, we learned that new watches were being sold. But the old stock remains in warehouses.

According to Siarhei Zhbanau, an economic observer with BelGazeta, it is not that simple to cut the costs like the neighboring Poland has done. In Poland, different from Belarus, the devaluation has reached 50 percent. Besides, Zhbanau reckons that prices should be regulated by market not our wishes.

“It is clear that we all are interested in low prices. However, it is also understandable that we all want to be healthy and rich. The thing is that if we promote certain economic principles, they should be implemented. The rules of the game should be changed depending on our mood. I think the government should do it this way. If we say that we stick to market economy rules, let the market regulate the whole thing”.