Barlinek invests US$44M in new flooring plants in Ukraine and Russia

KIELCE, Poland , July 14, 2006 (press release) – Two new production plants for Barlinek floorboard are to be launched in Winnica in Ukraine and in Russia. The start-up dates are planned for the autumn of 2007. The investments by Barlinek in Ukraine are estimated at approx. 140 million PLN.

The decision to establish two new Barlinek plants in Eastern Europe sprang from the growing demand for layered floorboards in countries across our eastern border. Due to the cost of transport, the locations were chosen in countries that feature the greatest sales potential – Ukraine and Russia. The planned production lines will have comprehensive support facilities and will act as independent production units. Both plants will be located in regions offering an abundance of high-quality raw timber.

The first construction stage for the plant in Ukraine was completed in March this year. A deciduous timber sawmill was built, including a wood-friezing unit with a total capability of 60 thousand cubic meters per year. At this moment, the entire sawmill produce provides for the needs of our plants in Poland. The second stage of the project features a production line for floorboards, a coniferous timber sawmill, drying facilities, a boiler unit and a production plant for pellets.

The production plant for Barlinek floorboards, currently under construction, will be the biggest plant of its kind in Ukraine. Its production capabilities will equal 2 million square meters of flooring materials per year. The target is to employ 400 people, while the estimated costs of the second investment stage amounts to approx. 140 million PLN. The funds derive from a share issue and long-term credits. The next step by Barlinek is the construction of a production plant in Russia.

The launch of new production plants by the Barlinek Group will account for an increase in its total production capabilities of up to 10 million square meters of floorboarding per year. This will allow this Polish concern to stand among the elite of international layered-floorboard manufacturers.

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