In 2010 the Belkelme company celebrated its 15th birthday. This anniversary marks the official birthday of the company. Meanwhile, few know that in fact the history of its creation should be prolonged for approximately eight years. That’s how much time it took to finally bring to life several ideas that appeared yet in the Soviet era. Speaking about the past, we should look a bit further, touch the origins. It is particularly interesting, because Belkelme’s biography indirectly reflects the processes that drastically changed the political and economic map of the whole Eastern Europe.
In 1958 builders came to the outskirts of the Nivki village of Biaroza districtof Brest region to lay the foundation of a new village. It was intended for the families of power engineers — personnel of the Biaroza hydroelectric power station (HPS) being constructed nearby. And in 1988 the XXIV Summer Olympics took place in Seoul (capital of South Korea). What is there in common between events separated by such time and distance? Strange as it may seem, there is a connection.
A village in Nivki grew along with a powerful power station. On June 25, 1960, its name was changes to Beloozersk — after Lake Beloye situated nearby. On September 16, 1970 Beloozersk, that was already inhabited by more than 10 000 people, was granted the status of a town under regional jurisdiction. Of course, principal places of employment for its inhabitants were the HPS and facilities maintaining the station. However, most power engineers were men, while representatives of the fair sex had difficulties with finding a job in Beloozersk and its suburbs. This particular circumstance, referred to as “overabundance of manpower by the statistics, played its part in the second half of the 1980s, when, by the initiative of the State Committee for Sports, the government of USSR decided to construct an experimental sports footwear factory in Belarus. At that time in Soviet shops even ordinary high-quality footwear was in large “deficit. And production of mass footwear for outdoor activities and sports was limited to primitive gumshoes (in the all-Union State Standard were described as “sports footwear made of rubber and rubber-textile). Appearance of more contemporary products would have been doomed to succeed, demand for such goods many times exceeded their offer.
Unemployed manpower in Beloozersk, convenient access roads, Brest-Moscow highway situated nearby determined the choice of location for the future factory. Design and estimate documentation were ordered. Over some period of time on a lowland, marshy town end, where the industrial zone was situated according to the general layout, site preparation for the main production building was started.
This is how the panorama of JV Belkelme, CJSC, complex looked like when the company was opened
At the same time foreign partners, who could render corresponding technologies, were searched for. Retaining nuclear parity with the USA, domesticating space, the Soviet Union constantly and considerably fell behind western nations in the sphere of producing high-quality goods of national consumption: from ballpoint pens to automobiles. Thus, using foreign experience to organize the production of sports footwear was a justified decision.
Thus, we have approached the second event — Olympics in Seoul (1988). When they were held, an image of lion’s paw — logotype of the specialized footwear Kelme — was depicted on training shoes of Soviet athletes. By then this Spanish company, that started working in the sports footwear segment in 1977, achieved considerable commercial results, which allowed it to gain a steady reputation in the professional environment. At the same time, Kelme Internacional was not a widely recognized leader in the world, which facilitated the process of establishing contacts with its management. While representatives of Soviet sports and foreign trade institutions were developing such contacts, issues of preparing regular labor force for the future shoe factory were dealt with “at the local level. GPTU-82 (State Vocational Technical School), situated in Beloozersk itself, was chosen as the basic educational institution. Three groups were formed here, into which first students were accepted — mostly girls and young women. Besides, the administration of relevant ministry of BSSR took care of training expert personnel. Correspondent department was opened in Vitebsk State Institution of Consumer Industry.
The year 1990 saw the first graduation of shoe manufacturers in GPTU-82. But the factory in Beloozersk, designed for 2000 workers, wasn’t yet constructed by then. Therefore, before it was opened, graduates were temporary placed to other related enterprises of the republic: Grodno shoe factory Neman, Bobruisk shoe factory. Meanwhile new groups of students were admitted to GPTU-82. It seemed that everything was developing quite positively. But already at that period the processes that soon resulted in unprecedented social and political upheavals were taking place in the economy of USSR. Burden of arms expenditure, long-term resource support of “countries of socialist orientation, “constructions of the century — all these were bound to tell on the development of the Soviet state, whose industry remained extremely material- and energy consumptive, while the scheduled model of administration of national economy more and more chained the initiative of enterprises and distorted the real indexes of their effectiveness. Especially acute situation could be observed on the consumer market. Administrative rise in wages without advances in release of consumer goods and increase of paid services caused a disbalance that with time became a factor of social instability. A critical amount of social, national, economic and political contradictionsaccumulates inside the empire that seemed to be impregnable. Should control over the situation be lost, it threatened with “hot conflicts, including with catastrophic consequences. Growing paralysis of central administration made the governments of soviet republics search for other forms of preserving stability.
In December, 1991 Soviet Union became history. Republic of Belarus gained independence and sovereignty. From the early days of its independent existence Belarus had to oppose economic crisis. In early 1990s it continued to escalate, spreading over the whole territory of the former Soviet Union. A number of economic projects in the country were either shut down or frozen due to objective reasons. The same fate was in store for the experimental sports footwear factory in Beloozersk, Belarus. Due to termination of financing, inflation development, severance of economic ties with other republics of former USSR and, subsequently, segregation of markets, the project was shut down. Its perspectives, that used to be absolutely bright just a few years ago, now seemed quite clouded. State Committee for Sports of USSR, key customer and owner of project documentation, became a thing of the past. Although the foreign partner, Kelme Intenacional, restructurized its “Russian project, orientating it for Bashkortostan, Moldova and Belarus. But at that time Belarus incurred a heavy deficit of hard currency. At times there wasn’t enough money to buy even critical raw materials and spare parts for imported equipment on functioning government enterprises. By mid-1990s inflation in the republic acquired a “hyper prefix. It seemed that under such circumstances some construction site in the outskirts of Beloozersk was doomed to be forgotten. Nevertheless, this didn’t happen. Contacts with the Kelme Intenacional company were restored, afterwards one of the first capital investment projects in the republic was developed — of course, subject to entirely different conditions than it was supposed to before. In 1993 Belarusian-Spanish JV Belkelme, CJSC, was created. Its incorporators were the National Olympic Committee of Belarus, Kelme International, JSC, Bobruysk Leather Plant, OJSC. Thereafter one of Spanish banks (Banco Bilbao Vizcaya) provided a loan for further construction and launching the factory, Belarusian government became its sponsor. Unfortunately, the start of this project wasn’t very successful either. It was affected by both errors of the then management of JV and difficult overall situation in Belarus and outside its borders. But over time these difficulties were overcome. On July 3, 1995 first workers were accepted to the sports footwear factory in Beloozersk. In the end of the month the first set of training shoes, decorated with a logotype, was released. At present this event can with good reason be considered the company’s birthday.
Near the entrance control post – a group of young workers and specialists. 1995
Thus, a unique company, making products that could be easily compared to foreign analogues, appeared in the Republic of Belarus. These are more than just words. By then a cofounder of JV, Kelme Intenacional with its headquarters in the city of Elche (Valencia), achieved impressive breakthroughs in the sphere of manufacturing technology and design of sports footwear. It will be enough to say that in 1992 it won the right to be the official supplier of equipment for the Spanish national team at Summer Olympics in Barcelona. Starting from 1994 the company was the technical sponsor of one of the most decorated and rich football clubs of the planet — Real Madrid. Besides, it has to its credit cooperation with other football clubs and track team. Spanish Kelme equipped the factory in Beloozersk with contemporary technological equipment. It also provided designs of training shoes, curves, took up supply of component parts. Highly professional technologists arrived to the city of power engineers from faraway Valencia to supervise production process here, on the site, and, the main thing, organize additional training of personnel. Long-service employees of the factory still remember with gratitude Luis Maestre — one of the best specialists of the parent company, who knew perfectly well all the stages of producing sports footwear and fully understood technologic nuances.
Headquarters of Kelme lnternacional in the city of Elche (Valencia)
Results of such cooperation became apparent quite soon. Stylishness and high quality of footwear from Beloozersk was appreciated both in Belarus and outside its borders. It quickly gained popularity among consumers. The factory worked on a two-shift basis, products found a quick sale. Sports footwear Belkelme was in great demand in Russia despite the fact that in eastern countries a true boom of import from Asia regions and Western Europe could be observed. But this is not all of it. Considerable batches of shoes made in Beloozersk, were shipped to the address of Kelme Internacional and sold afterwards through the company’s distribution network on markets of western countries. For example, football boots afterwards sent to the countries of Europe and USA were made in Belarus, etc.
Instead of 2000 workers who were to fill the shop floors and according to the old Soviet plans, the factory was manned by only 500 people. Nevertheless, they managed to produce 30 thousands pairs of shoes every month already in 1996. Certainly, not everything looked so bright. The company had a currency credit to pay; payments for it were extremely strictly reglamented by the Ministry of Finance of Belarus. Thus, normal functioning of Belkelme (Director General of JV was M.V. Shiyanov, later succeeded by M.P. Kushlina) was critically dependent on the customer-owned raw materials supplied by the Spanish cofounder. Until a certain moment such circumstance wasn’t considered a weak spot, but, as is well-known, everything in the world is subjected to risks and changes. At the start of the new century the expansion of Chinese goods that finally took over all outlet chains continued at the Russian market, which for natural causes was the one with highest priority for JV Belkelme. A factory in Beloozersk was still producing high-quality sports footwear, but since recently it didn’t have enough funds to invest into advertising and promotion of goods and, thereby, resist dumping consumer goods at the markets of CIS. As for the Spaniards, the company had just started to realize a large order of the parent company, Kelme Internacional (on condition that the latter supplied raw material). In these circumstances the company had to considerably cut the output of products intended for domestic market. It led to cutting the rates of return. And all the funds that they after all managed to earn were immediately used for government credit repayment. But after the President of the Republic of Belarus looked into the existing situation, a decree of the Council of Ministers was issued, thanks to which the company (its Director at that time was T.A. Babich) obtained a delay in repaying 1.8 millions of Deutsche Marks to the budget (until the end of 2001). Itwasanimportantstep. Nevertheless, the company didn’t manage to turn events around and significantly increase production release — and only this, together with the activation of merchandising could have saved Belkelme. Moreover, in the first years of XXI century volumes of production started to significantly decrease. In 2002 executive order No. 271 (dd February 28) on granting JV Belkelme, CJSC, another delay in reimbursement of credit until December 31, 2003, was issued. A new schedule of payments was also developed.
In 2004 yet another change of the administration took place at the factory (the company was headed by A.V. Novikov). By that time products of Belkelme occupied 9% of the national market of sports footwear, its main assortment was represented by urban style training shoes. The company had 7 shops selling its products and 33 sections of company’s goods. A representative of Kelme Internacional Luis Maestre occupied the post of engineering director, technology of shoe production practically didn’t differ from the one that was used by Spanish companies. Quality management system of STB ISO 9001-2001 was introduced at Belkelme in 2003. And still a lack of own circulating assets masked all the efforts for coping with the recession. Business of Beloozersk shoe manufacturers was nearing its “freezing point. However, soon all these seemed to be just regular troubles. Starting approximately from 2004 the main cofounder — Spanish Kelme — started having serious troubles. In 2005 JV Belkelme, CJSC, completely dependent on the designs, technologies and components arriving from abroad, suffered real shock. Technical and intellectual support almost disappeared. Development of perspective designs and materials supply was actually denied to the company in Beloozersk.
In this respect Belkelme company experienced severe crisis in 2006. Production was wasteful, along with this increased its debts for rent of premises, electricity etc. Several cofounders of JV decided to withdraw from the list of founding members. Their places were occupied by others: Brest administration of local industry, Aresa company (Moscow), State Committee on Property of the Republic of Belarus, a number of physical persons. Kelme Internacional also remembered a member of the company.
During these challenging times, when an unspoken issue of closing the company was on the agenda, a new management team was created. V.V. Derenchuk — an experienced manager, who earlier worked in Frost and Co, LLC, from the moment of its creation — became Director General of JV Belkelme, CJSC. Having received “carte blanche for the most decisive actions, he and his colleagues made their move. Goosenecks of manufacture and sales of products were determined. Among them, in their turn, crucial positions requiring immediate interference were singled out. The first issue in the list was abandoning “customer-furnished footwear designs, due to which the whole manufacturing cycle was programmed. The process of creating its own design and engineering department was initiated in Beloozersk. The company had to come through hard times, placing its bets for young specialists. Famous foreign designers were also engaged in an official capacity with the factory on certain stages. In these circumstances there existed one important rule: all developments already were the intellectual property of JV Belkelme, CJSC. Development of its own footwear designs allowed freedom of actions both for technologists and suppliers. Now the specialists of the factory acquired freedom of manoeuvre while working with suppliers of materials and components. In other words, they could act with a greater degree of flexibility, increase the list of contractors, optimally regulate the quality-price ratio, use more materials of home manufacture.
Marketing policy was seriously revised, new approaches to working with the distributors were developed, efforts for providing more successful advertising support of the company’s products were made.
A line of sports footwear of the most democratic price range sold under the Spotter trademark was introduced to the market by way of experiment. Besides, the range of output products was considerably, manifold, broadened. If sometimes it was mostly represented by men’s training shoes, after refocusing on “its own designs the factory offered its clients a wide choice of women’s and children’s footwear, that would be perfect both for outdoor activities and daily use, as well as sports, casual and special-purpose footwear.
For a decade and a half of its history JV Belkelme, CJSC, preserved its status of a company unique for Belarus, producing the most contemporary sports footwear in large volumes. Having received foreign technological and technical support from the start, employees of the factory managed to creatively master this experience, and then train its own highly professional personnel, constitute the backbone of the collective. At present it is one of the main resources of the company, attracting the attention of foreign partners and potential investors.
Having come a long way over the past 15 years, the company has reached a new stage in its development. Undoubtedly, ambitious plans and tasks, put by the management of JV Belkelme, CJSC, stand a good chance to spring to life.
