President of Belarus Alexander Lukashenko is visiting the metal sheet and tinplate production plant of "MZPP-Group" LLC, as reported by BELTA.
The Head of State will hear a report on the state of affairs at the enterprise and the measures taken to ensure its stable operation, as well as familiarize himself with an exhibition of manufactured products and the production lines of the rolling mill shop.
The metal sheet and tinplate production plant in Miory is the only producer of electrolytic tinplate and cold-rolled sheet in Belarus. It was commissioned at the end of 2020. The tinplate, which can be produced here in volumes of up to 150 thousand tons per year, is used for packaging in the food, perfumery, paint and varnish industries, and other sectors.
The key investor in the project, with a declared funding volume of over 380 million euros, was an Austrian company. The Belarusian state initially participated only in the creation of infrastructure for it. However, as a result of economic miscalculations made by the owner, as well as elements of business dishonesty, the enterprise encountered serious problems with loan servicing. The commissioning deadlines for the plant were repeatedly extended, and capital expenditures increased. The investor did not fully fulfill its financial obligations. This significantly affected the project's performance indicators, and the risks increased considerably. "We made profits of about Br90 million (based on the results of 2021. - BELTA's note), which is almost 10 times less than planned," explained Deputy Prime Minister Yuri Nazarov to journalists during a visit to the plant. "In essence, the plant stopped operating in August last year. Last year, almost $400 million in non-recoverable funds were formed for creditors. And the question arose of what to do with the plant, which has no analogues in the post-Soviet space. There are similar plants in Russia and Kazakhstan, but their technologies are different; this is the most modern plant."
Belarusbank, one of the main creditors, granted deferrals on the payment of part of the interest, refinanced the debtor's short-term liabilities incurred during operations, financed the purchase of auxiliary equipment, and the volume of credit support increased more than twofold compared to the planned amount. In May 2022, the bank was forced to commence compulsory debt recovery.
In a difficult situation for the plant, the state decided not to leave the enterprise without support, especially since about 670 people work there and there is no larger industrial facility in the district. The situation at MMPZ has repeatedly been a subject of serious discussion at the level of the President and the government. "The enterprise will live. We will ensure that this enterprise operates, preserves jobs and reaches the parameters that would allow it to meet its obligations to creditors," Prime Minister Roman Golovchenko told journalists following the President's meeting with the leadership of the Council of Ministers. "The government has developed a scheme, and the President has supported it. This is a clear set of actions."
Thus, the plant's territory was included in the Vitebsk FEZ to minimize taxes. Preferential tariffs for electricity and gas were established for it. A special account was opened where funds for salary payments were accumulated so that creditors could not seize it and halt the flow of funds. "It was also decided to load the plant with raw materials on a tolling basis. We appointed a management company, which was provided with credit resources under government guarantees and which ensured the purchase of raw materials and consumables to launch the production and technical process. In April, the plant produced 200 tons of tinplate, in May 1.4 thousand tons, and the July figures are approaching 5 thousand tons," informed Yuri Nazarov. "Of course, we would like to see faster dynamics. This is a continuous production cycle enterprise, and stopping and restarting it is very expensive, moreover, it puts a heavy load on the equipment. And in June, the plant switched to this technology. In July, the management company met with representatives of the Russian Severstal here and agreed on very favorable terms for the supply of raw materials to the Miory plant until the end of the year. We will purchase almost 50 thousand tons of metal from this company, and this will be enough to ensure a continuous production cycle here."
Regarding product sales, the initial plan was to supply to European Union countries. After the introduction of sanctions, this direction was closed. "Now we are looking at the domestic market, where we have two major consumers - Rogachev Condensed Milk and Food Plant and Glubokoye Condensed Milk and Food Plant, which use tin packaging, and the Russian market. And we are looking confidently. This plant produces tinplate of a thickness that no other plant produces. We will find our consumer. And recently, two owners of large packaging plants from Russian regions visited the Miory enterprise, and they are quite satisfied with this product. Fearing sanctions, they managed to acquire products from a European manufacturer, but when they came here, they signed a long-term contract," said Yuri Nazarov.
He added that by the decision of the Economic Court of the Vitebsk Region dated July 12, bankruptcy proceedings were initiated here, and from this date, a protection period for the legal entity has been introduced at the plant. "This decision was made so that the plant could get back on its feet and get going. And the enterprise's task is to reach a processing volume of at least 8-9 thousand tons per month and profitable operation by the end of the year."
Source: belta.by