A. Project Opportunity Description

А1. Project Name

(а) Short name: Technical Re-equipment of Giant Tire Plant

(b) Full name: Giant Tire Plant. Main Building. Technical Re-equipment of the Plant.

(c) Summary: The Project is aimed at increasing the volume of output and expanding the assortment of large-size and giant cross-ply and radial tires that are compliant with the current engineering excellence of the leading foreign manufacturers and meet the demands of both the industry of the Republic of Belarus and customers in CIS countries and other countries worldwide.

A2. Project Status

Pre-investment stage. A business plan has been worked out, design and estimate documentation has been examined. Process is being adjusted; tender documentation to purchase equipment is being elaborated.

A3. Organizations involved and their roles

(а) Belshina JSC — borrower, Republic of Belarus, Mogilev region, Bobruisk

Mr. Dmitriy Katerinich , Director General

Tel. +375 (225) 43 43 90, Fax +375 (225) 43 31 11, 44 63 88

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

The program of technical re-equipment of the Giant tire plant includes upgrading and modification of the existing equipment, replacement of morally and physically obsolete equipment to increase the volume of output, expand the assortment produced, raise productivity of labor, upgrade the quality of production, and improve labor conditions.
Achievement of this investment project allows to raise labour productivity, to lower fuel-energy resource consuming, save and improve competitive position in the home and foreign markets, to increase export potential.

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

Key activities of Belshina JSC: production of tires for heavy-duty dump trucks and super heavy-duty dump trucks,  for construction, road-building and materials-handling vehicles,  tractors and agricultural vehicles, motor cars and light trucks,  trucks and buses and re-treaded tires.

Belshina JSC includes:

Giant Tire Plant is a manufacturer of tires for dump trucks of high load-carrying capacity, construction and road vehicles, trailers, and agricultural machinery.

OTR tire plant is a manufacturer of tires for heavy-duty dump trucks that are operated in open cast mines of metal mining industry.  Belshina JSC is the sole producer of OTR tires among the tire plants in CIS coun-tries.

Car and truck tire plant produces tires for truck families such as MAZ, GAZ, ZIL, buses, and agricultural machinery. It also produces tires for motor cars such as VAZ, Moskvich, Volga, and practically all types of imported cars.

Mechanical plant produces polymer and optional equipment and spares, performs major repairs of equip-ment at the tire plants

The company output is marketed in the Republic of Belarus and exported to more than 50 countries world-wide.  Exports account for more than 60% of total sales. The share of certified products is 90%. The plant has been certified for compliance with the international quality system standard ISO 9001 — 2000.

А6. Environmental impact summary

Significant emissions are within the permissible limits. Modern equipment and technologies will permit to reduce total emissions, reduction of fuel and power consumption including.

А7. Possible obstacles/ problems/ risk assessment

The most important risk to which Project implementation is exposed is the growth of prices for raw materials and supplies.

А8. Project implementation and recoupment period

Project implementation period: 5 year, payback period: 6.17 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 equipment, including spare parts and installation supervision

32520

Other costs

6769

Total

39285

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 of Belshina JSC

6769

D. Investments required. Insufficient means

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

Lack of required funds is  32520 '000 EURO . Type of financial assistance— crediting, direct investments

D2. Sources of financing

D3.Type of  financial instrument

D4. Amount,                     '000 EURO

Investor's funds

Credit, loan, direct investment

32520

Е. Demand (Consumers) and revenues

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

Consumers of products to be produced: domestic market (BelAZ), CIS markets (open-mine vehicles) world markets (India, Indonesia, Western Europe). Expected assortment of products: 33.00-51, 27.00-49, 24.00-35, 21.00-35, 37.5-39, 35/65-33, 29,5R25, 26,5R25, 23,5R25 with volume of production 26.3 thousand units/year.

Е2. Revenues (Sales)

Е3. Amount, '000 EURO

Revenue from sales of tires

49081

F. Operating and Maintenance Expenses

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

To implement the project, the enterprise has unused production space, utilities and liner networks, power sources, and part of equipment required therefore. No need of new buildings and structures.

F2. Cost items

F3. Amount, '000 EURO

TOTAL costs of marketing

42713

G. Income

G1. Receipts E2 less operating expenses F2

G2. Amount, '000 EURO

6368

H. Source of Information about the Project

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

Dubasov Dmitri Yurjevich , Head of Advanced Development and Investment Department

H2. Organization (name and address):

Belshina JSC, Republic of Belarus, Mogilev region, Bobruisk, Minsk Highway

H3. Теl/Fax/ Е-mail:

 8 (0225) 43 43 90; 43 31 11, 44 63 88; belshina@belshina.biz

H4. Date: 04.09.2008

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