The question of adaptation of manufacturing groups belonging to the industrial sector of Altai Krai to the market economy model during the first half of 1990s as exemplified by Barnaul instrument and mechanical plant (OAO BAMZ)

The article investigates reforms of industrial sector enterprises of Altai Krai during the first half of 1990s as exemplified by the largest gas welding equipment factory. The aim of this research is the analysis of the reforming process in manufacturing groups of Altai Krai as exemplified by Barnaul Instrument and Mechanical Plant. The author studies the financial condition of the Manufacturing Group BAMZ on the verge of the reforms, implementation of the privatization program of the instrument and mechanical plant, strives to uncover the main reasons behind the decrease in key indicators of OAO BAMZ financial activity in 1993-1994. This article is based on printed media reporting and statistical reports of the Altai Krai executive authorities. Data from fund R-757 of the State Archive of Altai Krai (years 1989-1992) and from current archive of the Property Fund of Altai Krai (years 1993-1994) are introduced into scientific usage. In the course of the investigation the author concluded that on the verge of market-type reforms manufacturing enterprises of Altai Krai took up leading positions in regional economic system. Starting with years 1990-1992 Barnaul Instrument and Mechanical Plant successfully fulfilled the state quota. Strategic goals of the enterprise during that period were the increase in production rate, enhanced production quality, modernization of the production process, working on improvement of working conditions and social and cultural benefits for the staff members. Reforms of the economy model in Altai Krai led to decrease in manufacturing rate of industrial products. Many factories were forced to interrupt their manufacturing activities and reduce the number of production personnel. Privatization of OAO BAMZ was carried out under conditions of economic crisis. Hyperinflation affected negatively the purchasing power of small investors. Securities of Barnaul Instrument and Mechanical Plant were allotted between the personnel and the Property Fund of Altai Krai. Shares were sold at nominal price, corporate employees were granted additional preferences. The amount of finance resulting from the sale of common shares was negligible and the plant’s debt in dividend payout increased. The company was in a difficult financial situation. Firm customers of the main products were short of funds for payment for the goods. During the crisis, the plant’s administration provided material support for its employees. Constant work was conducted to improve the production quality and the sales of products on the domestic and foreign markets. The enterprise was able to elude bankruptcy and partially stabilize the financial situation by the end of 1994, increasing the overall production in 1995. However, decrease in profitability of Barnaul Instrument and Mechanical Plant during 1995 alongside with increasing tax liabilities severely complicated further operation of the plant.

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