Lukashenko in Dobrush to discuss major investment project

DOBRUSH (BelTA) – Belarus President Aleksandr Lukashenko is on a working trip to Dobrush on 4 February, BelTA has learned. The head of state will take stock of the progress made in implementing the investment project to upgrade Dobrush Paper Factory. In 2012 the factory started building a facility to produce uncoated and coated cardboard with the designed capacity of 200,000 tonnes of cardboard per year. However, the project has not been finished. The construction was put on hold. In 2019 the Council of Ministers approved a construction plan that provided for launching individual startup facilities with the help of specialized organizations as subcontractors. The facility is to be commissioned in 2020 and is to reach its designed capacity in 2022.

The onset

The investment project on technical retooling of the factory was supposed to be completed in 2015. However, this did not happen, because the general contractor of the project, Chinese Xuan Yuan Corporation, repeatedly missed deadlines because of financial issues. In 2018 the contract with the company was terminated. The project was worth nearly $350 million. Since the start of the project, the general contractor received over $265 million. The rest of the loan (about $83 million) was not utilized and was accepted by China Development Bank in discharge of the principal debt at the request of the Belarusian Finance Ministry.

How much money is needed to finish the project

The facility is 95% complete. Some $83 million is needed to finish the project. Half of the amount should be paid to Austrian company Andritz that will launch the primary technology. The remaining funds are to be spent on commissioning the energy complex, water and wastewater treatment facilities, general construction and development works, purchase of additional equipment. In December 2019, the Belarusian head of state ordered to consider a possibility to provide finances to several struggling investment projects, including the one in Dobrush. The president underlined that resources should not be wasted. There should be guarantees that the recipients will not apply for government support again.

Why this project matters

The Belarusian timber, woodworking, pulp and paper industry concern Bellesbumprom explained that the new facility will help ramp up production of import-substituting cardboard products that can be used to manufacture a broad variety of packaging. “Taking into consideration that neither Belarus nor Russia manufactures such high-quality cardboard yet, we expect a considerable increase in cardboard processing for the food industry, light industry, healthcare sector, perfumery and printing industry. Therefore, the cardboard production in Belarus opens up great opportunities to promote new industry niches specializing in eco-friendly packaging. Secondly, this will be a great contribution to expanding the export of Belarus-made paper and cardboard products,” the concern noted.