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Eugene Gerden

Expert Opinion

31st March 2017, Moscow

Belarus plans to increase technical textiles and nonwovens production

Belarus may become a new European technical textiles production centre, thanks to the announced plans to build a new industrial cluster on the basis of Mogilevkhimvolokno, the largest producer of polyester fibres and yarns in Europe.

The new cluster will operate on full cycle basis, from the processing of raw materials to the manufacture of finished products. To date, the company has completed the process of technical modernisation, which took place through the installation of new German production equipment.

View of Mogilevkhimvolokno production complex.

According to Yevgeny Averkin, head of department of management of Mogilevkhimvolokno, during the first stage of the project the new cluster will focus on the production and processing of technical yarns. At the same time, the second stage involves the production of a wide range of products mostly intended for export, including tent cloth, rubber technical goods, and others.

It is planned that the establishment of the new production will allow to significantly improve financial performance of Mogilevkhimvolokno and will contribute to the rise of profitability of the entire Belarussian technical textiles industry.

In recent years, the profitability level at Mogilevkhimvolokno has significantly declined and is currently estimated at 3%, which became mainly due to the devaluation of the local currency – ruble – and the overall financial uncertainty in the country.

Currently, investors and the country’s government are hoping to see an increase in exports of finished products to the EU, and in particular to Germany, where the demand for nonwovens and technical textiles has significantly increased in recent years. In addition to the EU, part of the production of the new cluster will be exported to the North American region.

Implementation of the project is controlled by the president of Belarus Alexandr Lukashenko, who has recently approved plans for the modernisation and development of the company until 2019 and the establishment of the new cluster on the basis of it.

According to the Belarus government, the volume of investments in the project is estimated at EUR 208 million at the initial stage, with the possibility of increase in the coming years. The majority of these funds will be provided by the government, with the rest coming from German banks in the form of loans.

The government is hopeful that the successful implementation of these plans will create conditions for the growth of the entire Belarussian technical textiles industry by 30%, and for the increase of the company’s profits by 80% to US$ 20 million per year. However, achieving these figures may be offset by volatile global prices for raw materials.

Alexander Lukashenko, President of Belarus and the main initiator of the establishment of the new cluster.

Among the products that will be produced at the new cluster are fire hoses, preforms, special clothes, and chemical coatings, with the range planned to be significantly expanded in the coming years. The new cluster will also house new R&D facilities that will focus on the design of new products.

Foreign investors

As part of its strategy, the government also aims to attract foreign investors. According to an official spokesman of Andrew Kobyakov, prime-minister of Belarus, to date, the government has already started negotiations with some Western technical textiles producers, as well as Chinese investors, for the establishment of technical textiles and nonwovens production within Belarus.

The government plans to provide benefits and concessions to foreign investors, which will mostly include both customs and tax benefits.

According to the government, significant growth in technical textiles production, which is planned for the next several years, will provide an opportunity to the country to start exporting, which should help to attract additional exchange earnings, which is an acute need for the country’s struggling economy. According to the government’s plans, Belarus should become the largest producer of technical textiles in the post-Soviet space and one of the largest in Eastern Europe by 2018-2019, overtaking Russia.

In addition to the new cluster at Mogilevkhimvolokno, the plan also includes creating conditions for the increase of production at SvetlogorskHimvolokno, another Belarussian leading technical textiles and nonwovens producer, which is based in Svetlogorsk, one of the centres of the country’s petrochemical industry.

Several months ago, the company had successfully launched a new line for the production of technical textiles and nonwoven materials and there is a possibility that its production capacities will continue to grow in due course.

At the initial stage, the capacity of the new line will amount to 30,000 tonnes of technical textiles and nonwovens per year, with a possibility of a significant increase of production during the next several years. This will allow processing of the already produced nonwoven polypropylene materials, and in particular, SpunBel and AquaSpun.

Overall, the company plans to implement at least six investment projects in the field of nonwovens during the next five years, which will take place at different production facilities throughout Belarus. A particular attention will be paid to a significant increase in production of nonwovens for construction applications.

In the case of nonwovens, according to the government’s plan, successful implementation of these projects will allow to increase the annual volume of nonwovens production in the country up to 1.5 billion m2 by 2019 and up to 2.2-2.3 billion by 2021.

Over the past 10 years, the volume of nonwovens production in Belarus has increased by 4,1 times.

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