Creating a flax holding in two years

Draft business plan for linen branch development studied by Council of Ministers’ Presidium

By Inna Levkova

A flax holding is to be set up in Belarus by 2013, with Orsha Linen Mill heading the organisation, uniting another 29 enterprises. Among them will be 22 linen mills, the Flax Institute and flax-seeding stations. “We are to establish a holding by 2013,” explains the Agriculture and Food Minister, Mikhail Rusy. By then, the system of long flax-fibre supplies to Orsha Linen Mill will have been established; this raw material will further be used to manufacture fabrics of enhanced quality.

Companies which are to join the holding will be modernised, while others will undergo restructuring and re-specialisation. “Some small plants are economically inefficient, employing just 22-24 staff,” explains the Minister. “We are now re-equipping them with lines to process flax-fibre (they currently produce ribbon and rope).” Additionally, four new lines producing linen oil are to be launched, with the necessary equipment already purchased.

The linen branch needs technical modernisation. “This is the most problematic avenue,” Mr. Rusy stresses, adding, “We’ve prepared a business plan and eighteen new foreign lines are to be launched.” The latter are to work in three shifts, making it possible to increase production volumes and improve quality.

According to Mr. Rusy, foreign investors are interested in the Belarusian flax industry. He cites Belarus’ plans to co-operate with a Belgian company as an example. Belgian investors are eager to finance short flax-fibre processing in Belarus, with further plans to manufacture deluxe products. “We’re negotiating with Japan and France as well,” Mr. Rusy adds.
Interest from foreign investors in Belarusian flax companies is growing due to falling flax supplies worldwide. Belarus can only benefit from this situation, while promoting local products.

The Agriculture and Food Minister emphasises that flax companies receive government subsidies in many counties: in Belgium, each tonne of flax receives funding worth $800. Moreover, Belgian manufacturers export their products at world prices. Orsha Linen Mill is also backed by the state but sells its manufactures at a lower price. “It’s essential to co-ordinate the two aspects of the flax industry: that responsible for profit making and that overseeing the distribution of state support,” Mr. Rusy is convinced.

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