Investment Proposal I. General Information About the Project 1
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Investment proposal I. General information about the project 1. Project title: «Realization of OJSC «Luninetsles» and attraction of investors to further development of production». 2. Industry affiliation of the project: concern «Bellesbumprom». 3. Place of project implementation: Republic of Belarus, Brest region, Luninets, Pervomajskaya-Str., 56. 4. Project description: realization of operating production with infrastructure. 5. Degree of readiness of the project: During 2012–2015 the enterprise carried out modernization of production. Technical re-equipment of sawing and woodworking industry was carried out in Mikashevichi timber enterprise and in Lyushcha timber station by putting in operation double trimming edging circular saws for cutting and length cutting of unedged timber, as well as a multiple saw for length cutting of two-edge cant and unedged plank. In 2013 equipment for the production of medium density fibreboard door blocks was purchased for Luninets production site. The new equipment allows producing high-quality competitive products that meet modern requirements. Currently, there operates production of edged and unedged timber from pine, softwood and hardwood species, fuel chips, planed stock (floor plank, apron, base molding), parquet of all types of wood, wooden window and door blocks in full factory readiness, window board, double-glazed windows. II. Information about the initiator of the project 1. Full name of the organization: open joint-stock company «Luninetsles». 2. Date of registration: 30 June 2000, №200251040. 3. Distribution of the statutoryfund in shares,%: Legalentities: Share - of state ownership no share - of private ownership 56,8 - Individuals 43,2 III. Characteristics of the markets for production planned A. Characteristics of the products to be produced: 1. Product name and description: At present OJSC"Luninetsles" offers: 2 - edged and unedged timber from pine, softwood and hardwood species(STB 1713-2007, STB 1714-2007); - planed stock, broad gauge sleepers (STATE STANDARD 2991-85, STB 1074-97, STATE STANDARD 78-2004); - windowand door blocks (STB 939-93, STB 1138-98); -wood chips (STATE STANDARD 15815-83). In 2006, the Certificate of product conformity was obtained (timber, wooden windows, balcony doors, wooden doors, profile parts made of wood, glazed units) STB ISO 9001: 2001. In 2009 the Certificate of product conformity STB ISO 9001-2009 was obtained. Products manufactured by OJSC "Luninetsles" are of good quality, practical and environmentally friendly. 2. Main consumers:The company's products are supplied not only to the domestic market, but also to the markets of Poland, Lithuania, Germany, and Azerbaijan. 3. Main competitors: logging enterprises of theconcern "Bellesbumprom". B. Characteristics of domestic market 1. Currentmarketvolumein 2016: 10% 2. Plannedmarketshare: 10% 3. Strategy of work in the domestic market: higher quality. 4. State control: no 5. Profitability of production sales (%): in 2017minus 18,00 % 6. Degree of concentration (approximate total market share of the five largest players), %: 10 % C. Characteristics of foreign markets 1. The expected distribution of sales by major regions, %: Eurasian incl.market in European Union other countries Economic Union Belarus countries countries 95% 50 % 1 % 4 % 2. Does the company have experience in exporting to these countries? –yes. 3. Are these goods exported by other producers to the main target markets? –yes. IV. Description of available infrastructure Railway androadaccess: 3 branch of the Belarusian Railway - distance to the site 0,3 km. all-republicanhighways-5 km. other roads with improved coverage -0,1 km. Availability of communications • Electric network • Water line • Phone/Internet Land plot and production areas Availability of land plot: Right (permanent/ tempopary) of use, rent, fully Location Area, ha owned Luninets 2,3417 right of permanent use Mikashevichi 14,9666 right of permanent use Lyushcha, Luninets district 10,3422 right of permanent use Availability of buildings: Name, location, purpose Area, m2 Office space Building of the office 799,3 Luninets, Pervomajskaya-Str., 56 Office of timber enterprise Luninets district, Mikashevichi, 458,7 Leninskaya-Str., 9 Office of the timber station Luninets district, Mikashevichi, 119,9 Leninskaya-Str., 89 Building of the office Luninets district, Lyushcha, 110,0 Zelyonaya-Str., 4 Production, trading and similar premises Store 59,5 Luninets, Pervomajskaya-Str., 56 Sections (10 pcs) 10 802,7 Luninets, Mikashevichi, Lyushcha Workshops (3 pcs) 1 951,6 Luninets, Mikashevichi Warehousing and other facilities Warehousing facilities (3 pcs) 999,9 0 Mikashevichi 1721 Garages, boiler houses, canteen 1783,3 Otherinfrastructure Possibility of further expansion of production and installation of additional capacities. 4 V. Key benefits of the project Description in brief • Specialized personnel: professional highly qualified industry experts aged from 20 to 50 years, who have necessary practical experience in the production of sawmilling and woodworking products, equipment operation. • Supply network of raw materials and components: own resource base, availability of partners. • Commodity distribution network: own store, distribution network, availability of partners. • Guaranteed orders: 70% • Active partners, licenses, permits: there are concluded contracts for 2018, all products are certified, the quality management system STB ISO 9001-2009 is implemented and operates. • Main partners: The entire building complex of the Republic of Belarus. VI. Project financing A. Total investment costs for the project: 2,7 million USD. B. The source of investment resources: investor’s funds: 2,7 million USD. C. Areas of use of investment resources: • research and development • creation of infrastructure • building • real estate acquisition • purchase of equipment, technologies, licenses • pre-production • working capital financing Form of investor participation in the project: For the investor in the authorized capital when Forms of investor participation in the project implementing the planned participation form,% Acquisition of a block of shares (stakes in the statutory fund) of an existing 49-100 enterprise. Acquisition of an enterprise as a 49-100 property complex VII. Contact information of the responsible executive at the enterprise 5 Responsible executive (name, position): anti-crisis manager Phone: +37544 7377337 E-mail: [email protected], [email protected] Date of proposal preparation: 30 January 2019 .