A. Project Opportunities

A 1. Project Name

а) а) Short name: «Technical Re-equipment of manufacture of all-steel truck tires» б) Full name: «Car and truck tire plant. Main building. Technical Re-equipment of manufacture of all-steel truck tires» в) The Project is aimed at increasing the volume of output and expanding the assortment of all-steel radial tires  for trucks and buses subject to the demands of RUE "MAZ".

A 2. Project Status

Pre-investment stage. A business plan has been worked out, design and estimate documents as well as equipment purchase documentation are being elaborated.

A 3. Organizations Involved and Their Role

Belshina JSC - borrower, Republic of Belarus, Mogilev region, Bobruisk Mr. Dmitriy Katerinich , Director General Tel. +375 (225) 43 43 90 Fax +375 (225) 43 31 11, 44 63 88

A 4. Project Description

The project .envisages purchase of modern processing equipment and accessories for the manufacture of all-steel radial truck tires. The project is expected to be implemented in the period 2010 – 2013. Achievement of this investment project permits to increase the output of truck tires by 150,8 thousand pieces/year., to raise labour productivity, to save and improve competitive position of the company in the home and foreign markets, to increase export potential. No new construction is required for the project implementation.

A 5. Prerequisites/History/ Overall Program/ Related or Similar Projects

Belshina Joint Stock Company (JSC) was established in 1972 as an enterprise of petrochemical industry. The enterprise was state-owned before 26.09.2002.  At present the share of government in the authorized capital of the company is 100 %. Due to high level of technical and technological tooling, high-skilled personnel, high production and labor organization standards the company is capable of producing high-quality tires of various standard sizes de-pending on the market conditions. The territory is 172.6 hectares, of which 104.2 hectares are built-up. Key activities of Belshina JSC: production of tires for heavy-duty dump trucks and super heavy-duty dump trucks,  for construction, road-building and materials-handling vehicles,  tractors and agricultural vehicles, motor cars and light trucks,  trucks and buses and re-treaded tires. Belshina JSC includes: Giant Tire Plant is a manufacturer of tires for dump trucks of high load-carrying capacity, construction and road vehicles, trailers, and agricultural machinery.  OTR tire plant is a manufacturer of tires for heavy-duty dump trucks that are operated in open cast mines of metal mining industry.  Belshina JSC is the sole producer of OTR tires among the tire plants in CIS coun-tries. Car and truck tire plant produces tires for truck families such as MAZ, GAZ, ZIL, buses, and agricultural machinery. It also produces tires for motor cars such as VAZ, Moskvich, Volga, and practically all types of imported cars. Mechanical plant produces polymer and optional equipment and spares, performs major repairs of equip-ment at the tire plants The company output is marketed in the Republic of Belarus and exported to more than 50 countries world-wide.  Exports account for more than 60% of total sales. Russia is a major foreign trade partner, exports to Russia account for 41% of total exports. The share of certified products is 90%. The plant has been certified for compliance with the international quality system standard ISO 9001 - 2000.

A 6. Summary of Environmental Impact

Significant emissions are within the permissible limits. Modern equipment and technologies will permit to reduce total emissions, reduction of fuel and power consumption including.

A 7. Potential Obstacles/Problems/Risk Level

The most important risk to which Project implementation is exposed is the growth of prices for raw materials and supplies.

A 8. Project Implementation and Payback Period

Project implementation period: 4 years Payback period: 6.8 years.

A 9. Industry Classification of Project

Petrochemical

B. Capital Cost Items (Total investment requirement for project implementation)

В 1. Physical components of Project (equipment, works, services, etc for Project implementation)	В 2. Capital '000 EURO
Purchase of equipment, including spare parts and installation supervision	14043
Other costs	1282
Total	15325

C. Available Capital by Source

С 1. Source type	C2. Amount,'000 EURO
Internal funds of Belshina JSC	1282
Total	1282

D. Investment Requirement, Shortage

D 1. Underinvestment, Kind of Financial Assistance

Crediting  -   16270

D 2. Sources of finance	D 3. Type of instrument	D 4. Amount, '000 EURO
Credit facilities	Credit, loan, direct investment	14043

E. Demand (Customers) and Income

E 1. Customers/markets, volumes, prices, revenues, estimated profit/saving

Prospective markets: CIS markets (primary – kitting and secondary), domestic (secondary) market, and other markets worldwide. Implementation of this investment project will make it possible to improve labor efficiency in production of motor car tires, reduce consumption of fuel and energy, maintain and improve competitive position in the domestic and foreign markets, and increase the export capacity.

E2. Revenues (sales)	Е 3. Amount, '000 EURO
Revenue from sales of tires	25804

F. Operating and maintenance expenses

F1. Cost components, cost coverage strategy, and management of production

To implement the project, the enterprise has unused production space, utilities and liner networks, power sources, and part of equipment required therefore. No need of new buildings and structures.

F 2. Cost items	F3. Amount, '000 EURO
TOTAL costs of marketing	22358

G. Net income

G 1. Receipts E2 less operating expenses F2	G2. Amount, '000 EURO
	3446

H. Source of Information on Project

H1. Form filled by (Name, post):

Dubasov Dmitri Yurjevich , Head of Advanced Development and Investment Department

H2. Organization (name and address):

Belshina JSC Republic of Belarus, Mogilev region, Bobruisk, Minsk Highway

H3. Tel./Fax/E-mail:

8 (0225) 43 43 90; 43 31 11, 44 63 88; belshina@belshina.biz

H4. Date:

15.02.2010г.

H5. Superior organization:

Belneftekhim Concern