MINSK, 9 August (BelTA) – Belarus will soon hold talks with Chinese companies on raising investments into Orsha Linen Mill, Chairman of Bellegprom Concern Gennady Vyrko told reporters on 9 August, BelTA has learnt.
The financing of the company’s upgrade was discussed at a session of the Presidium of the Council of Ministers of Belarus on 9 August.
“A Chinese delegation is to arrive in Belarus from 11 to 20 August to discuss the investments into the development of Orsha Linen Mill and the entire linen industry of Belarus,” the Bellegprom Concern chief said. He emphasized that Belarus is interested, first of all, in foreign direct investments.
Gennady Vyrko reminded that Orsha Linen Mill is gearing up for a dramatic upgrade of production facilities aimed to manufacture competitive products. The initial funds for the company’s upgrade were estimated at Br545 billion, including Br145 billion for the construction and installation works and ?82 million of external borrowing. However, as the external borrowing situation got rather complicated, the modernization plans were revised. “We have analyzed the financial performance of the company and came to the conclusion that the technical upgrade should be carried out using the company’s own foreign currency revenues. Thus, the cost of the project shrank by Br320 billion. This is the money that should have been allocated by the government. The payback period will reduce by seven years,” Gennady Vyrko said.
Provided the linen industry development program is a success and the economy environment is favorable, by the year 2013 Orsha Linen Mill plans to launch the second phase of the technical upgrade meant to build up the company’s capacities.
The work on modernizing Orsha Linen Mill that started in 2009 is bearing fruit already. In H1 2011 the company posted a 13.4% profitability of sales, while two years ago the company was loss-making. Over this period the export grew by 67%, foreign currency revenues by 88%.
Gennady Vyrko added that not only the linen industry, but also the entire light industry needs foreign investments. “The concern’s demand for investments is estimated at $0.5 billion. It is the money we are able to utilize, invest in production and get the returns,” he said.
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