Investors enhance their obligations

Austrian Kronospan Holdings East Limited to invest around $500m in Belarus over coming five years
By Semen Yevlampiev

Two years ago, the company (which boasts plants across 25 countries) signed an investment agreement to build a contemporary wood processing factory in the Grodno Region’s Smorgon, occupying the derelict Smorgon Aggregate Plant; its warehouses and facilities cover 64 hectares. It is the largest investment project to date, due to be complete by 2016. 

Belarus was chosen for its proximity to the Customs Union and Western Europe and the investor has been keen to kick off work quickly. Its wooden chipboard line opened within a year and its laminated flooring line will be ready in 2013. Kronospan Director Alexey Zvertovsky tells us, “We’re implementing an import substitution programme. Many furniture producers from various regions of Belarus have already re-oriented towards using our produce, manufactured in Smorgon. We focus on using wood waste rather than industrial timber. Mutually beneficial supply contracts have been signed with many sawmills, where we’re installing special containers to collect discarded wood chips. We’re also creating our own timber cutting line, using progressive European technologies. Kronospan has a comprehensive approach so we’re building our own railway line to our new site, as well as a transformer substation.”

He underlines that Smorgon is a good location from which to conduct exports, with market forces able to come into play. The huge investment in Smorgon will undoubtedly change the face of the town, bringing more infrastructure and employment. The company has vowed to raise local standards of living to match those of an average European over the coming five years. The major production facility will create over 300 jobs and, taking into account the ‘knock on effect’ around 3,000 people could find employment locally when the whole operation is up and running.
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