Belarus will hold negotiations with Chinese companies on attracting investments for the development of the Orsha Flax Mill

August 9, Minsk / Olga Belyavskaya - BELTA /. Belarus will soon hold negotiations with Chinese companies on attracting investments for the development of the Orsha Flax Mill. This was stated today to journalists by Gennady Vyrko, Chairman of the Bellegprom concern, as reported by a BELTA correspondent.

The issue of financing the enterprise reconstruction project was discussed today at a meeting of the Presidium of the Council of Ministers.

"A Chinese delegation is expected to arrive from the 11th to the 20th, and during this visit, issues of investing in the development of the Orsha Flax Mill and the Belarusian flax industry as a whole will be considered," said the head of Bellegprom. At the same time, he emphasized that the Belarusian side is primarily interested in foreign direct investment.

Gennady Vyrko recalled that a serious program for modernizing the capacities of the Orsha Flax Mill is planned in Belarus. The enterprise is expected to master the production of competitive products. It was planned that Br545 billion would be allocated for the deep reconstruction of the mill, including Br145 billion for construction and installation work, as well as 82 million euros in the form of an external loan. However, due to certain difficulties in attracting external borrowing, the project financing plans have been adjusted. "We analyzed the financial condition of the enterprise, and it was decided to carry out the technical re-equipment using the enterprise's own foreign currency earnings," said Gennady Vyrko. "Thus, the project cost at the current exchange rate has decreased by Br320 billion. This is the money that the state was supposed to pay. The repayment period will be reduced by 7 years."

In case of successful implementation of the flax industry development program, as well as the creation of favorable conditions, it is planned to begin the second stage of technical re-equipment of the Orsha Flax Mill by 2013, with an increase in the volume of flax fiber processing. 

The modernization of the enterprise's facilities, which has been underway since 2009, has already yielded significant results. Thus, according to the results of the first half of the current year, the plant achieved a sales profitability of 13.4%, whereas just two years ago it was unprofitable. The export growth rate for the specified period reached 167%, and foreign currency earnings – 188%.

Gennady Vyrko added that not only the flax industry but also the light industry as a whole needs foreign investment today. "Thus, the concern's need for investment is estimated at $0.5 billion," reported the head of "Bellegprom". "This is the amount of funds that we are capable of mastering, investing in production, and receiving a return on." -0-