Belarusian Promsvyaz suggests manufacturing cooperation to Huawei

The Belarusian company OAO Promsvyaz has invited the Chinese company Huawei to enable manufacturing cooperation, BelTA learned from Promsvyaz Director Alexander Gelyasin as Prime Minister of Belarus Mikhail Myasnikovich visited the enterprise on 17 April.

“For the sake of stepping up localization we are in negotiations with Huawei on creating a joint development center or a lab that will allow us to gradually phase out simple assembly operations and get down to manufacturing our own products. Huawei Company has also been suggested to consider buying the 99.8% state share in the charter fund of our company,” said Alexander Gelyasin. However, in his words, China’s development strategy frowns upon the acquisition of technological enterprises, therefore, the Chinese side suggests developing the joint venture. “Therefore, it is necessary to find solutions to advance this cooperation within the framework of our laws,” said Alexander Gelyasin.

The Promsvyaz Director noted that the company is the only industrial enterprise in the system of the Information Technologies and Communications Ministry that makes wired products for the communication industry. “Thanks to cooperation with the Chinese companies Huawei and ZTE we have managed to establish an enterprise to assemble products based on their assembly kits. At present virtually 90% of the terminal equipment such as modems, terminals, digital television set-top boxes is made by our enterprise. We are taking steps to start making remote equipment,” he said. Alexander Gelyasin stressed that by doing so the Belarusian company had managed to achieve great performance. In 2013 earnings per employee reached $160,000, up from $20,000.

At present the company focuses on keeping the current pace and volumes taking into account the oversaturation of the market with these products. “In the future we would like to work not only for the communications industry but other industries, too, which consume similar products and we have a niche in this regard. Last year the import of products similar to our merchandise was close to $1 billion. We should analyze it and gradually start the manufacturing of such products while reducing the imported component,” said Alexander Gelyasin. Belarus should also put more efforts into its own technologies in this area, he believes.

Speaking about cooperation between OAO Promsvyaz and Chinese partners, Belarusian Information Technologies and Communications Minister Sergei Popkov said he believes this manufacturing cooperation will allow increasing the Belarusian component in the end products. At present the localization level is 20-25%. “Work is in progress to consider the establishment of a design center, a special design bureau where Belarusian research products could be present and could be exported,” he said.

Prime Minister of Belarus Mikhail Myasnikovich underlined he had nothing against manufacturing cooperation with the Chinese companies. It is important for OAO Promsvyaz to make promising, competitive products that sell well. “At present the company boasts a very low localization level. You can go ahead and enable manufacturing cooperation, I am not against it, it is important to sell your merchandise at a profit later on. For instance, some countries specialize in making unique products, which are in demand all over the world. By doing so they form the added value and the GDP,” noted the head of government.

Mikhail Myasnikovich believes that the Belarusian company should focus on making products that can be sold effectively. In turn, Information Technologies and Communications Minister Sergei Popkov underlined that the company should consider making technologies for the housing and utilities industry. Those are remote control systems, door phone systems, intrusion alarms and so on. “Taking into account housing construction volumes and the modernization of communication systems it is a very promising avenue. Besides, it will allow satisfying the domestic demand for the merchandise,” explained the Minister.

OAO Promsvyaz is a leading Belarusian developer and manufacturer of electric communication equipment. The enterprise is part of the system of the Belarusian Information Technologies and Communications Ministry. For 80 years the company has been making wired communication equipment for the country’s economy in addition to a wide choice of consumer goods. For over ten years the company has been using an ISO 9001 quality management system. The company introduced an environmental protection system compliant with ISO 14001 over five years ago.