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Starting as a maintenance plant all the way to the largest manufacturer of electric passenger transport in the CIS – this is the way of BKM HOLDING (former Belkommunmash) for its almost half a century long history. State-of-the-art trolleybuses, trams and electric buses produced by BKM HOLDING are innovative and environmentally friendly, adding to the modern look of Belarusian and foreign cities.
The real success story of the national electrical engineering flagship began in 1994, when Belkommunmash Production Association produced its first passenger vehicles. Since then, years have passed, a lot of projects have been implemented, high performance results have been achieved. Undoubtedly, the main contribution to these achievements has been made by the employees, who have put their mind, talent and spirit into the production activities. However, the solid share of this success also belongs to the top-management of the holding, which in 2000s was headed and confidently led to success by Vladimir Korol, who was holding the post of Director General until this year.
All these years BKM HOLDING has been successfully maintaining cooperation with the Belarusian Chamber of Commerce and Industry. Together, the two organizations have implemented projects to promote Belarusian electric transport abroad. In his interview, Vladimir Korol, a competent, experienced manager and a great friend of the BelCCI, told us about the formation and development, current company activities, key pillars of international cooperation and export policy, and modern electric transport development trends in Belarus and abroad.
Vladimir Mikhailovich, you have been heading the enterprise for almost 20 years. Could you tell us how the plant has changed over these years? What would you consider to be the most significant events? What are the key features of BKM HOLDING vehicles in general?
For almost half a century of our history we have gained the reputation of the leading manufacturer of public electric transport in Belarus. Modern, reliable and efficient BKM HOLDING equipment has become a hallmark of Belarusian cities. Passengers know and like our vehicles, welcoming new trolleybuses and electric buses with enthusiasm.
The company has changed tremendously from a small maintenance plant to the leader in the production of urban electric passenger vehicles. Relying on our half-century experience in the development, production and after-sales service of electric transport, we still stay up to date and keep up with cutting-edge engineering and transport development trends, which allows us to move forward and leave our competitors behind.
Over almost 50 years, the company and its employees have come to a common understanding of the company goals. The company mission is to contribute to the improvement of the modern city image, introducing effective transport solutions with care for people and the environment.
It is worth noting that the success of BKM HOLDING partly stems from the fact that we do not produce to stock, trying to follow the rule "produce what you sell". Therefore, our e-transport is as tailored as possible to fit individual customer requirements and regional operating conditions. This is how our products become exclusive, and we are sure that no trolleybus (for example) will be as suitable as ours in terms of technical and commercial performance for the future region of operation. Today, this is a very significant advantage over competitors that are "stamping out" identical batches of their products to stock.
In addition, BKM HOLDING is one of the leading manufacturers of full-cycle wheel and rail electric vehicles: from prototype and engineering specification design to the installation of power electronics, assembly units of own production and putting into operation. This is another competitive advantage – we are fully responsible for each stage of the production cycle.
BKM HOLDING has been exporting its products since 1996. Could you please tell us briefly about the development of the company export activities? What markets have been and still are your priority destinations? Were there any challenges in entering foreign markets, and how did you manage to cope with them? What were the mechanisms you used to expand export geography?
When entering new markets, first of all, one has to face the peculiarities that are specific to a particular region, i.e. mandatory region-specific product certification, import duties (from 15 to 30 percent). Besides, the existing support measures at the state level designed to support local producers are worth mentioning (subsidies, state programs, etc.). And in order to be competitive in different markets, it is necessary to constantly work on offsetting the existing restrictions.
Additionally, our activities, including export activities, are largely influenced by the state programs for passenger transport fleet replacement, because the end users of BKM HOLDING in most cases are municipal operators.
Of course, in those markets where we have been operating for a long time, our equipment is already considered reliable. In new markets, however, visibility has to be gained; it takes some time for the advantages of our products to become known to consumers. Therefore, apart from technological development and product improvement, we are actively promoting our dealer network and organizing joint ventures abroad.
At the moment we are carrying out orders not for the domestic market only. It is worth mentioning that BKM HOLDING for many years has been maintaining cooperation with Russia, Ukraine and Moldova. We continue to develop the markets of Georgia and Tajikistan.
The European certificate for electric buses obtained in 2020 helped us winning the tenders for the European cities of Vratsa and Sarajevo. Thus, we will supply 34 trolleybuses with extended self-sufficiency (9 single-section and 25 articulated ones.
Both 2020 and the current year have undoubtedly been challenging for the international business activities all over the world. At the same time, last year BKM HOLDING was for the first time among the winners of the "Best Exporter of the Year" contest under your thoughtful leadership. How the pandemic affected the company operation? How did you maintain cooperation with your foreign partners during the restriction period? What did make it possible not only to preserve, but also to expand the markets for your products?
Since the last year, the industrial sector not only in Belarus, but all over the world has been in a rather difficult situation caused by the pandemic and quarantine measures.
At the same time, challenges give rise to development. And for us, the pandemic has become a stimulus to search for new ways and solutions to overcome obstacles, to introduce new operation modes and methods of interaction to improve our market position.
The company has been operating as normal. Modern technologies make it possible to communicate freely with our partners from any part of the globe on issues related to both the existing and prospective projects. In addition, thanks to the possibility of submitting bidding documents electronically, the company is taking part in many calls for the purchase of passenger transport, carried out primarily in the CIS countries.
Nevertheless, the quarantine and border closures affected the implementation of projects that require direct participation. This included the cancellation of exhibition events, postponement of trial operation of our products in the UK, extension of certification procedures for electric buses, postponement of tenders, which required personal submission of documents (mainly for the far abroad countries), etc. Maintaining joint activities with European partners has become more difficult, but has not stopped yet.
To summarize the activities of 2020, it is safe to say that a tremendous amount of work was done, which allowed us to achieve good results. During the year, we produced and shipped more than 250 vehicles in volume terms with an export rate of 96 percent, given our maximum production capacity is 300 units per year. We received the EU type-approval for the OLGERD electric bus, as well as the UK individual vehicle approval and an ultra-low-emission bus certificate for the right-hand electric bus VITOVT.
All this allowed us to lay a solid foundation for our export activities in 2021, including thanks to the expansion of our export geography with two more target markets (Georgia and Bulgaria).
The company has been a member of the BelCCI since 2003. During five of them you were a member of the Presidium and made important decisions about the Chamber activities. Could you tell us about the cooperation between our organizations? What projects have been implemented? How do you generally assess the tools offered by the BelCCI for the development of export activities of Belarusian companies?
I would like to point out that membership in the Belarusian Chamber of Commerce and Industry helps to expand business opportunities.
With the support and direct participation of the BelCCI we have held a number of large-scale international events both in the Republic of Belarus and abroad, which undoubtedly had a positive impact on the activities of our enterprise and the development of the industry as a whole.
Joint activities with the BelCCI are allowing to promote Belarusian products on foreign markets at a high level, as well as to promptly introduce new products to the market. Moreover, in 2020 the Chamber included BKM HOLDING into the Register of Reliable Partners, which is undoubtedly an effective mechanism to build reputation in new markets, increase competitiveness, as well as promote products for export.
One of the cooperation pillars is the joint work within the Belarus-Switzerland Business Council, which today is a successful platform for discussing issues arising in the two countries' business activities, finding solutions and defining strategies for mutually beneficial partnerships. It was established in 2013, and you were directly involved in the creation of this institution. Could you inform us about this project, the role of Belkommunmash and your personal involvement?
The establishment of the Belarus-Switzerland Business Council was carried out with the active participation and guidance of the President of Stadler Rail AG Mr. Peter Spuhler. It was a follow-up to the cooperation of this Swiss company with the Belarusian Railway in terms of supply of rolling stock and with Managing Company of Belkommunmash Holding JSC in terms of creation of a joint venture and construction of a plant in Fanipal to produce advanced electric trains and other electric transport vehicles. The creation of such a high-tech joint Belarusian-Swiss enterprise had become a starting point and a good basis for the development of relations between the two counties. That is why both Mr. Spuhler and myself gladly responded to the proposal to create such a body and become its co-chairs. During the Council operation, we have held several major events and business visits to Belarus and Switzerland. The first event, held in Switzerland, exceeded all expectations and thanks to active patronage of Peter Spuhler the number of participants of the Business Council meeting exceeded the planned figures by 1.5 times. I think it is a good indicator of the work done and the high status of the Belarus-Switzerland Business Council.
In the course of the Belarus-UK season held at the BelCCI last year the project of organizing the assembly production of your electric buses in the UK was presented. Нow is this project currently being implemented?
Our joint venture in the UK, Wave Industries Limited in Coventry, is putting a lot of effort to ensure its participation in the procurement programs of environmentally friendly vehicles. Thus, together with the UK colleagues, BKM HOLDING specialists are working on several projects at once. In accordance with the policy of the UK government, aimed at active transition to the "green" transport, growth of the market of zero-emissions vehicles and development of technologies in this area in a number of UK cities, procurement of electric buses and charging infrastructure is already planned for this year.
In Belarus, as well as all over the world, there is a trend towards environmentally friendly means of transport. It is planned that by 2025 the share of electric vehicles on the country's roads will total 30 percent. And electric buses produced by BKM HOLDING play a significant role in implementing these plans. You were at the origin of this type of transport in our country. How is it planned to develop this sphere? How do you see electric transport of the future?
In our production activities we've learnt everything on our own, gaining the experience from our foreign colleagues. Initially, it was the first Belarusian trolleybus, then the first Belarusian tram. And the further perfection of our expertise allowed us to implement such a project as the first Belarusian electric bus. Notably, we were the pioneers in this field not only in our country. We had to do everything from scratch, through trial and error. But thanks to this, we have gained tremendous practical experience, we have our own technologies that are constantly being upgraded, because we are permanently following the current mechanical engineering, transport, and informatization development trends. And, of course, all the advanced solutions are being first and foremost introduced in our country. Thus, in May 2017 Minsk became the first city in the CIS with regular electric bus routes.
It is important to stress that, in addition to public transport, large Belarusian companies have also set a course towards environmentally friendly transportation in the domestic market: Minsk Tractor Works OJSC purchased an electric bus to transfer its staff to a test site located away from the main production site; BELAZ OJSC purchased three electric buses with a range of about 200 km. We are planning to further develop this segment, i.e. the use of electric buses as corporate transport. And to ensure greater accessibility, we are already working on cutting the final price by reducing the cost of storage units and synchronization with the existing charging infrastructure for electric cars.
BKM HOLDING will undoubtedly continue to follow the electric transport promotion trend and, in particular, to improve the engineering development.
For example, the main disadvantage of an electric bus right now is its price. Our task is to produce an electric bus that could be economically competitive with a classic bus. This can be achieved only by reducing the cost of electric power storage units via taking over part of the manufacturing process, and, consequently, mastering this technology in full. And the foundation has already been laid during the project in Minsk, where we designed and introduced our own lithium energy storage units for electric buses. We do still buy the cells, but we make the electronic components and design ourselves. This solution made it possible to retain the quick-charge principle, and to double the driving range (50 km) at the same time.
In addition to the expected passenger transport model range expansion, the company is setting an ambitious plan to introduce an electric truck by the end of 2021. At the stage of design documentation development, the possibility of further implementation of unmanned technology is already being considered. For our potential customers we are planning to cover almost all the commercial application areas with the possibility to install any kind of equipment on the base chassis – from cargo cover to a tanker. Speaking about the travel range, one should consider urban and suburban cargo transportation. The cruising range of the vehicle is supposed to be around 200 km, depending on the body type. The design of the electric truck is planned to be fully compatible with the existing charging infrastructure for electric cars.
At the same time, a battery electric vehicle is only an intermediate stage in the development of electric transport. In the future, in addition to batteries, hydrogen fuel cells will be used. The rapid development of hydrogen power source technologies is expected, because this type of transport will be more cost-effective (currently hydrogen-powered transport can compete in price with battery-powered transport, with a single charge range using the hydrogen technology being not less than 300 km). Our company is working in this direction, but just like for battery-powered electric vehicles, a significant factor that is hampering the development of hydrogen technology is the lack of charging stations. However, we expect that this issue will be addressed shortly.
Having been at the helm of a Belarusian flagship company for so many years, you can't stay away from its further development. How will your personal interaction with the company be carried out? What plans and projects, both in our country and abroad, have you left as "hometask" for the new Belkommunmash generation?
Indeed, I will not be able to stay away from the activities of BKM HOLDING. I have put my energy and commitment to this enterprise. I will continue my work as a member of the Supervisory Board, which will allow me to take an active part in the activities of the plant. As for the "hometask", I think I have managed to build a team, to create or, if I may say so, to bring up a team of professionals – the people aimed at success and constant development and advancement, the people able to find a way out of any situation and solve the most difficult problems.
This team has gained experience and competence both in the field of development, manufacturing and maintenance of electric vehicles, and in the field of promotion of our equipment in different countries. This team of professionals has already formed its own strategy and sales policy, which will allow the company to stay afloat for a long time. I think this is the most important thing.