Program for long term development of JSC BELSHINA
for 2005 - 2010

In compliance with expansion strategy the company has elaborated the Program for long term development for the period till 2010.

The aim of the present Program: increase of the amount of high quality products, not yielding to foreign similar goods together with technical re-equipment and introduction of effective manufacturing equipment and to get lasting profit for subsequent development of the company.

Total volume of investment for 2005 – 2010 (taking into account the commencing date of the achievement of the Program) is 160.4 mln EURO, for the period of the achievement of the Program within 2007-2010 – 143.6 mln EURO. 16.7 mln EURO has been paid for the equipment.

Realization of the Program will allow to increase:
- volume of tyre output –   by 153 300 pcs/year to the amount 242.7 mln EURO,
- sales income – by 45.1 mln EURO,
- clear profit – by 44.6 mln EURO.

The Program of long-term development comprises the following investment projects:

• 1. «Creation of production of all steel radial tyres for mining machinery at the Earthmover Tyre Plant"
  Term of realization: 2005 – 2008 (start-up – December 2008)
  Project cost – 58.8 mln EURO (capital costs – 41.3 mln EURO)
• 2. «Creation of production of agricultural tyres at the OTR Tyre Plant»
  Term of realization: 2005 – 2008
  Project cost – 5.6 mln EURO (capital costs – 3.9 mln EURO)
• 3. «Technical re-equipment of  the OTR tyre plant»
  Term of realization: 2007 – 2010
  Project cost – 70.4 mln EURO (capital costs – 53.0 mln EURO)
• 4. «Installation of building machine to manufacture 16.00R20 tyres»
  Term of realization: 2007 – 2010
  Project cost – 7.6 mln EURO (capital costs – 5.8 mln EURO)
• 5. «Main building of the Car and Truck Tyre Plant. Curing department #1. Installation of curing presses 64»
  Term of realization: 2006 – 2007
  Project cost – 6.0 mln EURO (capital costs – 5.1 mln EURO)
• 6. «Main building of the Car and Truck Tyre Plant. Modernization of curing department #2 to manufacture new generation of car tyres»
  Term of realization: 2007 – 2008
  Project cost – 12.0 mln EURO (capital costs – 10.4 mln EURO)

Dmitry Dubasov
Head of Perspective Development and Investment Dept.

INVESTMENT PROJECT

Name of the project: «Technical re-equipment of the OTR tyre plant»
Aim of the project: Capacity expansion and diversification of bias and radial OTR tyres with steel cord in carcass area, not yielding to tyres from leading outside manufactures in technical aspects and corresponding to the demands of both Belarus industry and users from CIS and foreign countries.
Assumed form of the investor's participation in the project: (in share capital or collective investment fund, profit share, manufactured output, crediting, etc): foreign credit.
Project costs: EURO 70.4 mln.

Draw-down pattern: (acquisition of share in authorized fund, real estate, right to the objects of intellectual property, securities, equipment, and other funds. Regarding equipment, specify the designation and the country if origin):
- cost of equipment, spare parts and commissioning works – EURO 44.7 mln;
- modernization of the existing equipment, purchase and manufacture of production tools – EURO 2.0 mln;
- custom duties  - EURO 2.1 mln;
- construction-and-assembling works – EURO 3.3 mln;
- banking services – EURO 0.9 mln;
- VAT - EURO 8 mln;
- circulating carrying value capital growth – EURO 9.4 mln.

Project payback period: - 5 years
Achievement period:  2007 - 2010 

Contact:
Nikolai Zagorovsky - Deputy Chief Engineer,
Tel  +375 225 44 92 07,
Tel./ Fax   +375 225 44 91 66 

INVESTMENT PROJECT

Name of the project: «Installation of building machine to manufacture 16.00R20 tyres»
Aim of the project: Serial mastering of modern tubeless all-steel 16.00R20 tyre with adjustable inflation and cross-country capacity. The tyre is intended for dump trucks with load capacity 21 tons (MZKT-6525 and its family).
Assumed form of the investor's participation in the project: (in share capital or collective investment fund, profit share, manufactured output, crediting, etc): foreign credit.
Project costs: EURO 7.6 mln.

Draw-down pattern: (acquisition of share in authorized fund, real estate, right to the objects of intellectual property, securities, equipment, and other funds. Regarding equipment, specify the designation and the country if origin):
- cost of equipment, spare parts and commissioning works – EURO 4.0 mln;
- purchase and manufacture of production tools – EURO 0.4 mln;
- custom duties  - EURO 0.2 mln;
- construction-and-assembling works – EURO 0.1 mln;
- banking services – EURO 0.6 mln;
- VAT – EURO 0.7 mln;
- circulating carrying value capital growth – EURO 1.1 mln.
- other expenditures – EURO 0.5 mln

Project payback period: 2.1 years
Achievement period: 2007 - 2009 

Contact:
Nikolai Zagorovsky - Deputy Chief Engineer,
Tel  +375 225 44 92 07,
Tel./ Fax   +375 225 44 91 66