A.  Project Opportunity Description:

A1.  Project Name:

  à. Short name:

 Increasing of production of soft polypropylene (PP) package

  b. Full name:

 Increasing of production of soft polypropylene (PP) package at R.U.E. “S.P.A.”Khimvolokno”

  c. Summary description:

The aim of the project is the extension of up-to-date, high-tech and economically effective production of soft polypropylene (PP) package at R.U.E. “S.P.A.”Khimvolokno” manufacturing areas.

  À2. Progress Status:

The technical and economic ground according to the project has been worked out.

  À3. Organizations involved and their roles:

(à) Republican  Unitary Enterprise “Svetlogorsk Production Amalgamation «Khimvolokno», Zavodskaya str.5,

 Svetlogorsk, Gomel Region, Republic of Belarus - an initiator of the project

Vasiliy V. Kostyukevich, Director General

Tel. (02342) 25470

Fax (02342) 28800

E-mail: sohim@sohim.by

Internet: sohim.by

b) Bank and other organizations - investors

  À4. Project Description:

     It is stipulated by the project the acquisition of supplementary equipment for the increasing of the volume of production of flat polypropylene fabrics, soft polymeric Big Bag type containers  and  specialized polypropylene containers.

  A5.  Background / history / overall programme / related or similar projects:

 R.U.E. “S.P.A.“Khimvolokno” consists of:

·        Polyester Textile Yarns Plant;

·        Artificial Fiber Plant;

·        Production of consumer goods

 R.U.E. “S.P.A. “Khimvolokno” specializes in production of polyester textile yarns, viscose industrial yarns, viscose cord fabrics, polymer and carbon fiber materials, industrial yarns and fibers «Arselon», nonwoven thermally bonded materials, and consumer goods. The first stage of the organization of production of soft polypropylene package was implemented in the period from June, 2007 to December, 2008. At the expense of internal bank credits and home funds of our enterprise the complex line of production produced by German firm «Oerlikon Barmag, Zweigniederlassung der Oerlikon Textile GmbH & Co.KG, 09116 Chemnitz» was purchased, installed and started.

  A6.  Environmental impact summary:

       For the removal of gases from the working area the present equipment is fitted out with local suction units. These gases are thrown out into the atmosphere through the air ducting without gas cleaning. This process involves ejection such substances as polypropylene, formaldehyde, acetic acid, acetaldehyde, carbon oxide and others. Total volume of ejection of contaminants   with the allowance of realization of the project will be raised up to 18,409 tons per year.

There is no industrial sewage while manufacturing the polypropylene production..

The following types of solid waste will be formed while manufacturing soft polypropylene package:

     - Wastes of hardened polypropylene (they are transmitted to regranulation and then returned to the plant; they are processed at manufacturing departments of the enterprise).  

     - Wastes of polypropylene that are not subject to the reprocessing will be transferred to industrial waste site.

  A7.  Possible obstacles/ problems/ risk assessment:

Growth of prices on energy resources

 Lack of home source of raw materials in the Republic of Belarus

  A8.  Term of realization / term of recoupment (years):

  Term of realization: 2009 -2011.
  Term of recoupment:  5,8 years.

  A9.  Project’s branch:

 Petroleum refining and chemical branch

B.  Capital Cost Items (total investments necessary for realization of the project).

B1. Project physical components

B2. Capital cost (thousand EUR)

  Purchase of manufacturing equipment and materials.

  4 425,00

  Building and assembly jobs

 221,25

 Customs fees

  6,64

  VAT at realization of capital costs

797,69

  Total  (VAT incl.)

5 450,58

C.  Capital Resources Available from Sponsors/ Proposers:

 Ñ1. Resources

Ñ2. Amount, thousand EUR

Internal funds

1 025,58

D.  Required Financial Assistance:

D1.  Financing gaps, type of financial assistance required:

4 425, 00 thousand EURO   Credit, loan, direct investments

D2.  Sources of finance

D3. Type of investment

D4. Amount (thousand EUR)

Borrowed and drawn funds and finances 

  Credit, Foreign direct investments , Loan

4 425,00

Total

4 425,00

E.  Demand (users) and revenues:

E1.  Type of users/ markets, volumes, pricing, revenues, quantifiable benefits/ savings:

 The production is to be realized  in the Republic of Belarus and in Russia

E2.  Revenues (Sales)

E3. Amount (thousand EUR)

  Total:

3 893,46

F.  Operating and Maintenance Costs:

F1.  Cost components, strategies for cost recovery, operating organizations, subsidies, etc.:

 The necessary engineering utilities and power sources are available at RUE “SPA “Khimvolokno” for the production
placing. Additional land occupation is not required.

F2. Cost Item

F3. Amount (thousand EUR)

Raw materials, materials

1 382,07

Energy resources

56,25

Personnel expenses

637,96

Amortization

465,29

Others

291,58

TOTAL production costs on realized production

2 833,15

G.  Net Income Value:

G1.  Revenues E2 minus operating cost F2

G2. Amount,  (thousand EUR)

Sales income

1 060,31

G3. Net Income Value

G4. Amount (thousand EUR)

  Net profit:

588,02

H.  Project information source:

H1.  This form was completed by:

 Krapiva Sergey Olegovich, acting for the chief of Perspective Development Department

H2.  Organisation (address):

 Republican Unitarian Enterprise Svetlogorck production amalgamation “Khimvolokno”

247400, Republic of Belarus, Gomel region, Svetlogorsk, Zavodskaya str. 5

H3.  Òel/Fax/E-mail:

 Tel. (02342) 95823,  Fax (02342) 94877,  E-mail:opr@sohim.by   

H4.  Date:

  25 September, 2009