A. Project Opportunity Description

А1. Project Name

(а) Short name: Organization of viscose staple fiber production.

(b) Full name: Organization of viscose staple fiber production at R.U.E. “S.P.A.”Khimvolokno”

(c) Summary: The aim of the project is to increase efficiency of the viscose production, and to raise competitive capacity of products at the expense of organization of viscose staple fiber production

A2. Project Status

On realization of the project it is planned to utilize nonoperating technological equipment and production areas of  the existing viscose cord fabric production. For realization of the project it is necessary: to prepare expediency for the investment, to elaborate designing estimates, to purchase the equipment.

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, Director General

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.)

The focus of the project lies in reconstruction of the existing viscose production with the purpose of organization of production capacity 36 thousand tons per year. The realization of the project will allow to set in motion unused technological equipment and production areas of viscose yarn production.

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

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

Polyester Textile Yarns Plant;

Artificial Fiber Plant;

The main productions of R.U.E. “S.P.A. “Khimvolokno” are polyester textile yarns, viscose industrial yarns, viscose cord fabrics, polymer and carbon fiber materials, industrial yarns and fibers «Arselon», nonwoven thermally bonded materials.

А6. Environmental impact summary

While realizing the project it is supposed that actual emissions into the air and water basin will be brought in line with the accepted regulatory values. In order to increase effectiveness of air-gas treatment it is planned to obtain complete carbon disulfide recovery plant with the possibility to return carbon disulfide into the production in the volume of no less than 40% of the utilized in the process of viscose production.  

А7. Possible obstacles/ problems/ risk assessment

Risk assessment of the project is medium.  RUE “SPA “Khimvolokno” is a large enterprise with the stable production; it has stable connections both with the suppliers and with the consumers.

А8. Project implementation and recoupment period

Term of realization: 2009 -2011.  Term of recoupment:  8, 9 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 [including contract supervision and commissioning]

  34 879,47

  Building and assembly jobs

 5 226,34

 Customs fees

  52,32

  VAT on investment

6 287,72

  Total  (VAT incl.)

  46 445,86

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

11 566,40

D. Investments required. Insufficient means

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

34 879,47'000 EURO — Crediting, Direct investments, Loan

D2. Sources of financing

D3.Type of  financial instrument

D4. Amount,

'000 EURO

Borrowed funds and finances 

  Credit, Foreign direct investments

 34 879,47

Е. Demand (Consumers) and revenues

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

 The forecasting marketing outlets for the projected output. The domestic market of the Republic of Belarus is estimated at 2 000 tons. The principal consumers are enterprises-members of Concern “Bellegprom” (Belarusian State Light Industry Goods Production and Sales Concern:  ГРУПП «Гронитекс», г. Гродно; ОАО «Камволь», ОАО «Сукно», ОАО « КПТФ «Ручайка», г. Кобрин; ОАО «Слонимская КПФ»). The market of Russian Federation is estimated at 10 000 tons. The principal consumers are spinning and weaving mills .It is planned to  deliver up to 30 000 tons to the markets of Western and Eastern Europe and Turkey. Price movement for viscose staple fiber demonstrates variation in prices from 2.00 $/kg to 2,90 $/kg.

Е2. Revenues (Sales)

Е3. Amount, '000 EURO

  Total:

68 885,06

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

40 394,80

Energy resources

9 180,93

Personnel expenses

561,89

Amortization

2 690,59

Others

4 135,87

TOTAL production costs on realized production

56 964,08

G. Net Income Value

G1. Receipts E2 less operating expenses F2

G2. Amount, '000 EURO

11 920,98

H. Source of Information about the Project

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

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

H2. Organization (name and address):

Republican Unitarian Enterprise Svetlogorck production amalgamation “Khimvolokno”

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

H3. Теl/Fax/ Е-mail:

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

H4. Date: 25 September, 2009

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