Commentary to Decree No. 449 of 1 October 2012

    President of the Republic of Belarus Aleksandr Lukashenko has signed Decree No. 449 on setting up the production of coated and uncoated cardboard.

    To start cardboard production, an investment project will be carried out to refit the Dobrush-based paper factory Geroy Truda of Belorusskie Oboi Holding Management Company.

    In particular, the project provides for building, equipping and commissioning a factory able to make 200,000 tonnes of three-ply cardboard per annum in 2015, with the designed output capacity to be reached in 2017.

    The facility will be built by the Chinese company Xuan Yuan Industrial Development using credit resources of the People’s Republic of China. The total cost of the project will be $509.9 million.

    The China Development Bank (CDB) will provide a $348.6 million loan for 13 years. The project is expected to return the money within about 9.5 years.

    The accomplishment of the project will create a modern enterprise in Belarus able to substitute the import of coated board. It will be able to satisfy the domestic demand and export the product. In addition, within six years (2012-2017) the company’s proceeds from sales will skyrocket by more than 900% while tax liabilities will soar by 820%. Net profit is expected to rise from $0.2 million (2011) to $56.3 million (2017).