L. S.  Arinich,

the general director of Closed Joint-Stock Company “Holding company “Pinskdrev”

Closed Joint-Stock Company “Holding company “Pinskdrev” — within the last decade confidently keeps a leader rank in furniture manufacture and woodworking industry of Belarus, on the equal competes with many foreign companies. The oldest enterprise of woodworking of the country celebrated 128 anniversary this year. Combining traditions and an innovations in the products, practicalness and style, durability and the attractiveness, the leading manufacturer has created a brand which is enjoying confidence and loyalty in many countries.

Confident victories and numerous international awards at republican furniture competitions-exhibitions testify to it. Many socially-significant objects of Belarus are equipped by furniture of “Pinskdrev”. Among them the Republic Palace, National library, residence of Belarus president, the Ice palace in Brest, many health resorts, educational institutions etc.

Now Closed Joint-Stock Company “Pinskdrev” is a compound economic complex which structure includes 33 independent branches, including five joint ventures producing upholstered furniture, particle board, plywood, matches; six factories of the cabinet furniture, two logging enterprises, timber mill, unitary enterprise “Avtopark”, “Tekhenergoservice”, “Remstroymontazh”, “Social Complex” and others.

Quality of production meets all world standards. Today “Pinskdrev” produces all kinds of household furniture and the wide range of furniture for public premises: plywood, bent-glued details, matches, particle board, including laminated, building and furniture moulded strips, decorative veneer, saw timber and fuel granules. The assortment of upholstered and cabinet furniture exceeds 1,5 thousand types. Today “Pinskdrev” have about 34,7% of all furniture, 30,3% glued plywood, 27% particle board, 45,8% of matches, 23,6% of decorative veneer in common quantum of output of woodworking industry of Belarus.

Production of “Pinskdrev” is known more than in 40 countries of the world. About 60% of all products is exported. The basic commodity markets is Belarus, Russia, Germany. Enterprise production is known in Sri-Lanka, Australia, Argentina, Japan, the USA and other countries.

Quarter of the century furniture association is headed by general director L. S.  Arinich.

- Loran Stepanovich, it is difficult to compete on the foreign markets in modern conditions. And your production is know and bought not only in Belarus…

— It is said the quality does not have competitors. As concerns the near abroad we thoroughly activated work this year. From the beginning of the year we exported production more than half as much again as the same level of last year. It speaks for itself. Of course, the main hope in Russia-mother. And in general everything is not bad. We kind of informed a new life into founded earlier representative office in Smolensk and today it has started to come out on those problems which were set by us. The work has gone successfully across Moscow and Moscow region. Besides, we actively start to work now with the largest trading networks of Russia and in other regions. For example, with the Kuzbass furniture company. We opened relations with Kazakhstan. We also established representative offices in Ukraine, Azerbaijan, Moldova… It is enough to tell, that now more than 150 firms in the different countries of the world constantly cooperates with our company.

- From the point of view of the work organization, do you have your “firm secrets”?

— Our strategy is that now we are seriously engaged in service network as well as we create join ventures, representative offices, storage megapolices… Now we are looking for serious storage constructions in different cities of the CIS. We consider that it is the most reasonable approach. Warehouses will solve very serious problems. We will get rid of dictatorship of very large dealers which so far dictated selling prizes and working conditions with us.

- I don’t understand. Is it bad to work with wholesalers?

— I would say it is not bad… But your own trading network, your own prices in shops is absolutely other work! Look at extra charge they give? To 100 percent! We, manufacturers, have only 12 — 15 percent of profitability, and they have hundred percent! Nobody wouldn’t work if the “gain” is less than forty percent! Wholesalers? They are just like a wind, — where it has blown, there they trend. For example they have heard that someone is played out and cheaply sells out the goods, they immediately run there. Someone from the beginners in the furniture market sales all production under distress prices in order to consolidate a position, — here they are the first again!

It is very difficult always to live under pressure and dictation of wholesalers. Judge for yourself: besides a payment delay they also demand the discount. Sometimes the price was reduced for twenty percent. And it was considered as a norm. It means that we, manufacturers had lower profitability — two, three or four percent after granting such discounts.

We can’t suggest re-equipment of manufacture. We even couldn’t to pay salary to people with odd money!

Therefore I consider that to the end of the year we will break this tendency. Now we develop new position about dealership. We believe it is wrong when all wholesalers consider themselves as dealers — demanding the special relation. But if to examine, what is the dealer if our production in total amount of his trade amounts only from one to five percent in whole output! The dealer is the firm which has in its trade at least fifty percent of production of the manufacturer. Then we will give you privileges — both on the prices and payment conditions, and so on…

- I heard that your sale and supply centralized through the Trading house “Pinskdrev”?

— Yes, today the production shipment from any warehouse, wherever it is located, is making only after permission of our Trading house. And, as a rule, only after an advance payment. One owner — one price. In general we have reconsidered the whole work system of logistics and sale. Now we don’t have such situations when some cars of our suppliers can meet together at the same enterprise and get a box of screws. We broke this system and centralized it. We have created a holding. And the finance we also centralized. Now questions of technical development can be solved much easier. We think over every detail. It is more “ transparently”. Everything we buy centrally and only by tender. At the enterprise we carry out the permanent work on cost minimization.

- And how is a trade on the western direction?

— We still wish to work with Europe on a plywood product it is bent-glued details, solder pads, glued plywood and a little chipboard… We start to refuse upholstered furniture orders gradually. The reason is that orders as a rule, individual, single, individual. Work on them both uphill and very painstaking. And the demands are laid down very severe! Besides customers do not recognize any force-majeur. For example, remember, as a result of strike of the Polish customs officers there were queues at the borders? Our cars stood there on 40 kilometers queues many days.They imposed penalty sanctions on us for a delivery delay. They say «it’s your problems»… The wild penalties are specially written in contracts for each small deficiencies. And try to find them in the delivered furniture by any way… Probably, conditions on the western direction would change, but now the relations with misters-customers of furniture from Europe can’t be named affiliate…

- But you produce not only furniture?

— Now we actively start to come on the European market with matches. In the near future we will receive from Ukraine the new equipment which will allow us to make colorful boxes from a cardboard. Besides side won’t be habitual continuous friction. It would be in a kind of stylish, elegant net. By the way the packing have already changed: boxes we put not in cardboard boxes and under a film. Beautifully, visually! Manufacture of matches is in demand today. About twenty percent of total amount of matches we send on the western market. Well, and in perspective we are planning, that the centre of our sale of matches will be in Europe. On what grounds? Across all the Europe there is only one match factory in Czechia, all the others — were closed. And our manufacture is increasing. If in 1983 we made 200 million boxes, this year we are planning 900 million. We also want to buy some Swedish lines then we are planning to manufacture one billion three hundred million of boxes in a year! After the Russian factory in Balobanovo we would become the second match manufacture on volumes of production on the post-Soviet territory.

- Well, and plywood products of “Pinskdrev” were always famous for quality!

— The second stage of reconstruction on manufacture of glued plywood is in progress now. For the last one and a half year we have invested in this business big money. We received new equipment and now we installing it. After technical modernization we are planning to increase manufacture volume half as much. If last year we have let out sixty thousand cubic meters, in 2010 we are going to produce about hundred thousand cubes. For comparison: today six enterprises of this branch in Belarus let out approximately 160 thousand cubic meters of plywood in a year.

Our glued plywood has always been in great demand. As it seems to me the marketing specialists of “Pinskdrev” has founded an interesting creative move for its advertising. Imagine for yourself two cars of foreign make — “Mercedes” and “Zaporozhets”.Our plywood is, conditionally speaking, “Mercedes”. All other is “Zaporozhets”. In extreme case “Zhiguli”! Do you fill the difference? Because we use the progressive European technology. We constantly and tightly control all production phases. That is why both outside and inside our plywood remarkable. When we will finish re-equipment the quality of our product will be much above.

For the information:

Among the awards confirming high quality of production of “Pinskdrev” — diplomas of the international festival-competition “Choice of the year” (Minsk). At national competition “Brand of the year 2006” “Pinskdrev” has been awarded the Gold medal in a professional nomination and became the winner in a consumer nomination. At the International summit in Moscow (on April, 27th, 2007) became a prize-winner of the Award A Sign of Honour Commonwealth Star in a nomination “the Best company of the CIS”. The enterprise was awarded the competition diploma “100 best goods of Russia: the best goods of Belarus on the market of the Russian Federation” (Moscow-Minsk). Five years running (and for all history — already in 8th time) it has been awarded the main prize — “the Silver Fir” and the diploma “For the achievement of high results in development of furniture manufacture” in National Exhibition Centre “BelEkspo” (Minsk). This year “Pinskdrev” has confirmed the title of the prize — winner of theByelorussian government award for achievements in the field of quality. “Pinskdrev” was honored with anniversary medal in professional nomination “Furniture”, including the honourable Diploma of the winner “Socially Ethical Brand” and the winner in a consumer nomination “ Brand №1” at National competition “Brand of the year 2007”, that became 5th jubilee of victories for the company in professional competition. The Belarusian Chamber and Commerce Industry gave one of the main prizes of competition “The Best Exporter” of 2006 — the Crystal cup and the Diploma of the winner in a nomination “Forestry, Woodworking and Furniture industry”.

- And what can be compare with the furniture of “Pinskdrev”?

— Upholstered furniture, without false modesty with “Mercedes”! There is no equal upholstered furniture on all post-Soviet territory! There is no larger and modern manufacturer, with the developed infrastructure, with various directions in technologies. For today it is used already five kinds of technologies: both our Belarus-Russian, German, Italian, and France-Belgian… Well, and the range of assortment which we produce is very wide — starting from a nursery “toptushka” and finishing the smartest suits of furniture in the English manner. By the way, if in England such suits cost thousand pounds sterling, in Italy it costs not less than twenty thousand US dollars, we sale it for one and a half-two thousand dollars.

- And how about cabinet furniture?

— I hope that in time, we will compare it to “Mercedes” also! We carry out a big re-equipment work on transition from the cheap laminated plate on furniture from a massive of various fine woods. That has been always in demand — oak, ash, beech. Alder and birch are well exposed to toning — under a nut, under the American cherry and so on. We have six furniture factories of it. Now we reconstruct the furniture factory in Zaslavl near Minsk. After completing the volume production will increase five times by our calculations. Big money are invested in Gorodishchensky furniture factory,in the factory of decorative veneer and furniture, in timber mill.

I due time we were well deceived by Germans. We ordered the equipment for manufacture of 3000 м³ board. And they have sold us low-power, twice less productive equipment. Now an error is correcting. We also conduct other works. Therefore, I think that we should increase the volumes of cabinet furniture in three times in a year one and a half. And upholstered furniture production — half as much. Also we will seek to regulate specific weight of either. On the principle that at furniture of apartment upholstered furniture occupies approximately 30 percent and the rest is cabinet furniture, in such proportion we should produce the furniture.

For the information:

In 2007 “Pinskdrev” used investments into a fixed capital at a rate of 20 billion rubles or 9.3 million US dollars. For 2008 “Pinskdrev” has planned to realize 5 investment projects in the total cost more than 30 billion. Development strategy of “Pinskdrev” provides in the near future re-equipment of power installations on the use of secondary raw materials (wood chips and production wastes) as well as to finish modernization of furniture manufactures. Speaking about ways of financing of these projects the most acceptable way for the enterprise is leasing. Today manufacture is equipped with technique of such world leaders, as Finnish Raute, Swiss Steinemann, Italian Angelo Cremona and Bathild, German Babcock BSH, Shpul, Altendorf, IMA, Brandt, Homag, etc. We successfully negotiate with foreign company on opening of particle board factory with productivity of 400 thousand cubic meters a year and timber mill with productivity of 100 thousand cubic meters a year which will be constructed in Luninets. Work on attraction of the Russian capital is conducted.

- Are you going to increase export?

— In absolute volume — yes, certainly. And in percentage from production manufactured — hardly. Today we export 60 present of whole production. Earlier it was 70%. But then, when I have seen how quickly private manufactures are developing and locking in the market I has thought about. And then I have solved, no, we shouldn’t leave Belarus. We can be displaced from other markets but nobody wouldn’t displace us from Belarus. That is why today we are creating a powerful trading network in Belarus. We have already about 30 shops of firm trade, about 200 firm sections. We conduct the big work in different cities and we achieve to receive ground areas for building of new shops.

The government have suggested to join the association “Minskmebel”. The enterprise hardly kept “afloat”. First of all we have refused, but then — have agreed. We drew the business plan and counted everything. And it is issued that after manufacture modernization it is possible to produce volume products of 5 — 6 billion a month. It is much more then now! So we have a lot of plans! We are in development, we are in movement!

An interview was conducted by Dmitry Lupach.

Photo of the author.