A. Project Opportunity Description

А1. Project Name

(а) 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: 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.

A2. Project Status

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

A3. Organizations involved and their roles

(а) Republican  Unitary Enterprise “Svetlogorsk Production Amalgamation «Khimvolokno», Zavodskaya str.5,  Svetlogorsk, Gomel Region, Republic of Belarus — an initiator of the project

Vasiliy V. Kostyukevich, General Director

Tel. (02342) 25470, Fax (02342) 28800, E-mail: sohim@sohim.by, Internet: www.sohim.by

А4. Project Description (approaches, objectives, components, results, stages, time, financing, advantages, influence on transient processes in economics, etc.)

     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.

А5. Background / history / overall program / related or similar projects

R.U.E. “SPA “Khimvolokno” at the  moment comprises:

Polyester Textile Yarns Plant (PTYP);

Artificial Fiber Plant (AFP);

Consumer Goods Plant.

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.

А6. 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.

А7. Possible obstacles/ problems/ risk assessment

Increase in utilities prices. Lack of own raw materials sources in the Republic of Belarus.

А8. Project implementation and recoupment period

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

А9. The branch of industry the Project belongs to

Petrochemical branch

B. Capital Cost Items (total investment required for the Project realization)

В1. Project physical components (equipment, works, services, etc. required for the Project implementation)

В2. Capital cost,                  '000 EURO

  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

С. Capital (as per its source of origin) to be available from the project initiator, owners,  copartners, sponsors)

С1. Type of sources

C2. Amount, '000 EURO

Internal funds

1 025,58

D. Investments required. Insufficient means

D1. Lack of required funds, type of financial assistance (credit, share interest and e.t.c)

4 425, 00 '000 EURO. Credit, loan, direct investments

D2. Sources of financing

D3.Type of  financial instrument

D4. Amount,

'000 EURO

Borrowed funds and debt capital

direct investments, loan, credit

4425,0

Е. Demand (Consumers) and revenues

Е1. Type of consumers/markets, volumes, prices, revenues, profits/savings:

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

Е2. Revenues (Sales)

Е3. Amount, '000 EURO

  Total:

3 893,46

F. Operating and Maintenance Expenses

F1. Expenses components, expenses cover strategy, organization of production

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 items

F3. Amount, '000 EURO

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. Receipts E2 less operating expenses F2

G2. Amount, '000 EURO

1 060,31

H. Source of Information about the Project

Н1. This form is filled in by (Name, position):

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

H2. Organization (name and address):

Republican Unitary Enterprise Svetlogorsk Production Amalgamation «Khimvolokno»

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

H3. Теl/Fax/ Е-mail:

tel. (02342) 94950, fax (02342) 94877,  opr@sohim.by

H4. Date 23.02.2010

H5. Departmental identity of the Project: concern "Belneftekhim"