China Development Bank to finance US$348M upgrade for Belorusskie Oboi's Dobrush Paper mill in Belarus to launch paperboard production; investment includes 200,000 tonnes/year paperboard machine installation, bleached pulp production

MINSK, Belarus , September 23, 2011 (press release) – The state-run China Development Bank is going to finance a project to upgrade Dobrush Paper Mill, BelTA learnt from the public relations department of the Economy Ministry of Belarus.

During the visit of Chairman of the Standing Committee of the National People’s Congress of China Wu Bangguo to Belarus on 15 September this year, the Council of Ministers passed Resolution No. 1225 to approve a framework agreement between the Government of Belarus and China Development Bank. The agreement formalized the intention of the Chinese bank to finance the investment project to upgrade Dobrush Paper Mill affiliated with the Belorusskie Oboi holding company and launch the production of uncoated and coated cardboard.

The investment project envisages installation of a cardboard-making machine with the capacity of 200,000 tonnes per year. There are plans to produce two types of cardboard: SBB (for Tetra Pak packages) and FBB (for the printing, pharmaceutical and cosmetic industries). The Belarusian company is set to start producing bleached chemi-thermomechanical pulp to be used in cardboard production. The investments will also be spent on the renovation of water treatment and disposal facilities.

The project is estimated at $348 million, including $286 million of capital outlay. In line with the framework agreement, the project will be implemented using a loan of China Development Bank (15% will be provided in advance).

The project is export oriented; up to 70% of finished goods will be sold abroad. The foreign exchange payback period will make six years, the dynamic payback period will be 13 years, and the return on sales is estimated at about 19%. One employee is to generate nearly $170,000 of revenues, five times up from the 2010 level.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.