Production of All-Metal-Cord Radial Tyres with Rim Diameter of 49" And
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production of all-metal-cord radial tyres with rim diameter o f 49" an d 51" by flat installation method at OJSC "BELSHINA" OJSC BELSHINA is one of the world's The aim of the project is to increase the production largest tyremakers. The company develops, range and output volume of oversized markets and sells more than 300 sizes of tyres all-metal-cord radial tyres for the assembly for cars, trucks, heavy vehicles, road of super-heavy dump trucks. Implementation construction and hoisting vehicles, electric of the project will allow to vehicles, buses, tractors and agricultural increase production efficiency, export of vehicles. the enterprise and volume of revenues. EURASIAN ECONOMIC UNION European EAEU union agreements on avoidance of double 70 taxation The Republic of Belarus is a member of 1. the Multilateral Investment Guarantee Agency 2. 3. agreements on assistance discrimination of investors in the mutual protection of 66 investments In 2018, Belarus extended the visa-free stay for foreigners to 30 days. Visa-free visits are provided on condition of the entrance through the National Airport Minsk for citizens of 74 countries, including European countries, as well as Brazil, Indonesia, the United States, Japan and other countries. T HE ENTERPRISE OJSC "Belshina" Ownership "Belshina" is an open joint stock company, the majority of shares of which belongs to the state. OJSC "Belshina" is a part of the Belarusian State Concern for Oil and Chemistry (Belneftekhim Concern). Location 4 Minskoye shosse, Bobruisk town, Mogilev region. Infrastructure There are a large-size tyres plant, a mass tyres plant, a super-large-size tyres plant, a mechanical plant and other divisions necessary for the production and sales, as well as social facilities. Staff 9,256,employees (526 managers, 1,677 specialists, 7,053 workers). Products certification The quality management system of the enterprise is certified on compliance with the requirements of ISO 9001:2015, DIN EN ISO 9001:2015, СТБ ISO 9001-2015 and IATF 16949:2016. Customers The biggest Belarusian and Russian machine building enterprises, such as "BELAZ", "Minsk Automobile Plant", “Minsk Tractor Works", "Minsk Wheel Tracktor Plant", "Rostselmash", "Gomselmash", "Amkodor", "AVTOVAZ", "KAMAZ", "GAZ Group". Business relations have been established with more than 70 countries. 2 HE PROJECT T ABOUT THE PROJECT production of OVERSIZED all-metal-cord radial tyres for the assembly of super-heavy mining dump trucks "BelAZ", as well as for the foreign quarry machinery ("Komatsu", "Caterpillar" ETC.). PROJECT PURPOSE productivity Increase of the production range 5,100 tyres per year. and output volume of oversized 27.00R49 BEL-302 - 2,074 tyres per year. all-metal-cord radial tyres with rim 33.00R51 BEL-362 - 3,026 tyres per year. diameter of 49" and 51" by flat installation method for product name the mining dump trucks with All-metal-cord radial tyres of 27.00R49, the payload capacity of 90-140 tons. 33.00R51 types. range of use investment volume Machinery building, mining industry. from 52,0 mln USD, from 46,7 mln EUR. 3 PROJECT ECONOMics Planned indicators of project financial performance (taking into account implementation of the 1st stage of the project). 1. Annual revenues (without VAT, after reaching full capacity) - 15,7 mln USD. 2. Term of reaching full capacity - 4 years. 3. Simple payback period (from the start of production) - 8,8 years. 4. Dynamic payback period (from the start of production) - 10,2 years. 5. NPV - 18,344 mln USD. 6. IRR - 10.58%. 7. Discount rate - 6,65%. project benefits Well-developed brand. Highly qualified staff. Well-established supply logistics of raw materials, stuff and components. Own distribution network. 4 selling markets research republic of belarus In the Republic of Belarus the primary equipment The most sought after in the market are market of oversized tyres is represented by the tyres of radial construction with the mining dump trucks of OJSC "BELAZ" – the steel cord in the frame and the world's largest manufacturer of heavy and breaker, allowing to exploit the super- super-heavy mining dump trucks, as well as by heavy mining dump trucks economically. other heavy transport equipment used in Given the development prospects of the mining and construction industries. the mining industry, production volume of In 2018, 1,098 mining dump trucks and 3,412 the mining dump trucks, growth of dump trucks for off-road use were produced. the raw materials market For January-October, 2019 - 777 and 1999 and plans of the world tyres respectively. The top place in total production manufacturers, the main and shipments belongs to the mining dump trucks activities of OJSC "Belshina" within with the payload capacity of 110-130 tons, the investment project will be directed on: the second place – 220-240 tons, and then - 45 -transition from the production of diagonal tyres tons. Currently, OJSC "BELAZ" implements a large- to the all-metal-cord radial tyres; scale investment project on creation of -service support of the oversized tyres during the facilities and increase of production and sales the warranty period; volume of mining dump trucks with the payload -conclusion of the long-term contracts with capacity of 90-450 tons. During implementation the mining companies for a period of more of the project around 150 million USD of than 2 years; the investments in fixed assets have been spent. -application of the formula-based prices in The market of oversized tyres depends directly on contracting with the mining companies. development of the machinery building and mining industries. In 2019, the volume of the Belarusian market of oversized tyres is estimated at 3,899 units. The planned share of the domestic market of oversized tyres manufactured by OJSC "Belshina" is 100%. Estimated sales volume in the main regions, %: • EAEU countries - 81.7, incl. Belarusian market - 37.9. • EU countries, other countries - 18.3. 7 the Belarusian market of oversized tyres is estimated at 3,899 units. The planned share of the domestic market of oversized tyres manufactured by OJSC "Belshina" is 100%. Estimated Sales Volume in the main regions,%: • EAEU countries - 81.7, incl. Belarusian market -37.9. • EU countries, other countries - 18.3. world market At present, the market of oversized tyres stands The sales policy of the leading at about 5.5 billion USD, and it is expected world manufacturers of oversized tyres is to grow (at the current exchange rates) to built on a batch system supplies and 6.2 billion USD by 2022. Thus, long-term contracts for the period of 3 to the Compound Annnual Growth Rate 5 years. The pricing policy of (CAGR) is about 4.6% between 2017 the leading world manufacturers is built on and 2022. The main manufacturers of the formula that can be reviewed once oversized tyres are located in the North every 6 months and includes major indices America, Brazil, Europe, Japan, China. on raw materials used in tyre manufacturing. The most of the supply of oversized The following general trend in the development tyres falls on such countries as and world distribution of the mining dump Indonesia, Australia, the USA and Russia. trucks has been observed: an increase The largest growth in the oversized tyres in the total world payload capacity of market is expected in South America the mining dump truck park (220 tons and (CAGR is 11.6%), which will also above) and growth of the average payload be facilitated by the fact that this region capacity, while reducing the total is a major mining center. park of the operated machines. The main global manufacturers This trend has been also traced of oversized tyres are in the Russian Federation which is the main "Michelin" (France), "Goodyear" (USA), market of the oversized tyres sales "Bridgestone" and "Yokohama" (Japan). for OJSC "Belshina". The share China's tyre factories are also expanding of the vehicles delivered from Belarus their presence in the oversized takes up to 80% of the Russian tyres market. market, while maximum (around 40%) is presented by the BELAZ dump trucks with The assessment of the shares of global the payload capacity of 120-240 tons. manufacturers in the oversized tyres market: •Bridgestone and Michelin - 60%. •Goodyear, Yokohama, Titan (USA) - 20%. •Others - 20%. 8 NATIONAL AGENCY OF INVESTMeNT AND PRIVATIZATION The Agency is ready to help foreign investors interested in doing business in Belarus: • Presentation of information on invest- and support for the investor during ment opportunities, preferential the negotiations. regimes and benefits, industries, • Organization of visits to the Republic legislation. of Belarus (development of a program • Provision of current information on of stay, assistance in obtaining a visa). investment projects. • Representing the interests of the • Selection and provision of information investor in negotiations with on options for land and premises. government officials on the • Search for potential partners for the implementation of investment implementation of the investment projects, as well as on improving project; organization of meetings, business practices in the Republic of negotiations with potential partners to Belarus. establish cooperation. • Post investment support. • Providing a platform for negotiations Phone +375 17 200 81 75 +375 17 226 41 66 Fax +375 17 226 47 98 [email protected].