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State interests top priority in Belarusian milk processing industry

MINSK, 24 February (BelTA) – Interests of the state and the nation must be observed when investors are invited into the Belarusian milk processing industry. President of Belarus Alexander Lukashenko made the statement at the government session held on 24 February to discuss the establishment of major milk processing enterprises (holding companies), BelTA has learned.

According to Alexander Lukashenko, a lot has been said about public private partnership recently. Unfortunately, many understand it in a too simple way, saying manufacturing enterprises should be privatized, in essence ousting the state out of the economy. The approach is not optimal because strategic and social interests are affected.

Alexander Lukashenko said the milk processing industry is important for the state. Virtually every agricultural enterprise in all parts of the country works for the industry. The industry turns out a lot of socially important products, playing a considerable role in ensuring the national food security. There are no guarantees the owner of a privatized enterprise will take care of manufacturing socially important products, said the Belarusian leader.

Belarusian dairy products also sell well abroad, earning foreign currency for manufacturers and the state. Belarus is one of the world’s top five suppliers of dairy products, hence, the great interest of private investors in the Belarusian milk processing and meat processing industries.

According to Alexander Lukashenko, Belarus has rather well-developed feedstock areas. The high quality of milk and the steady demand for Belarusian products attract domestic and foreign investors. “At today’s meeting we will discuss limits of private capital involvement, domestic and foreign alike, in the country’s milk processing industry in detail,” said Alexander Lukashenko.

The President reminded that the problem had been discussed repeatedly. “We even let individual investors into Brest and Mogilev oblasts. For instance, French Danone. We saw how they go about it. They want to get cheap milk, make an expensive product by spending a little, and sell it at a mark-up, doesn’t matter where, including in Russia. And the milk processing company retains the profit. Do we need it?” said Alexander Lukashenko.

“We saw their way of investing. They didn’t bring a load of money to us. They are ready to invest only using the profits they will earn from us. They may make investments at the expense of the loans they will get from us. The question is why we can’t do it like that on our own?” said the head of state.

He remarked Belarus has created major milk processing enterprises in the past and the work is in progress in various regions. “Why cannot they earn bigger profits like private companies do? Then we will not fear making errors. We can set up a company and if there are issues, we will just sell it. But it will be a powerful company and we will not sell it for $1.5 million or $5 million like they suggest, but we will sell it for $500 million,” remarked Alexander Lukashenko.

In his words, it is necessary to continue modernizing the milk processing industry. Enterprises may be merged. At present there are 43 of them. “The number may be ten. Time will tell. To artificially make big companies is a bad idea,” believes the Belarusian leader.

“If someone wants to buy a feedstock zone and a milk processing enterprise for a respectable sum, let’s discuss it. But I don’t see such offers now. Everyone wants to gain something from a smoothly operating industry. But it is primarily the Belarusian state and the nation that should earn benefits. It is the guideline,” stressed Alexander Lukashenko.

In his words, it is necessary to work out main approaches, including approaches for the regions, to work out a full and understandable mechanism for setting up such enterprises, primarily taking into account state interests. The relevant instructions had been given to the government and oblast administrations.

Alexander Lukashenko stressed the Agriculture and Food Minister will be personally responsible for the development of the milk processing industry, including investments. “The minister and the ministry are the key inspectors. They must safeguard interests of the state. Effective operation of the enterprise and profits are what matters. It would be good if a state-run enterprise worked like that. It should be profitable for the people,” concluded the President of Belarus.