dr. dmitry klevzhits ceo of the national agency of investment and privatization belarus: welcome to...

Dr. Dmitry Klevzhits

CEO of the National Agency of Investment and Privatization

Belarus:Welcome to Discover

Macroeconomics1China-Belarus cooperation

Competitive Advantages of Belarus

Table of Contents

23

Investment Climate4Priority Sectors for FDI5Offers to Investors 6

Macroeconomics1

GDP growth (%)Sustainable growth

Belarus is a keen reformer with the main focus on rapid change of investment climate

$2.5bn = Privatization

$1.2bn = Greenfield

Macroeconomics (1)

Average = 7,7 %

China-Belarus cooperation2

China- Belarus (1)

Belarus proposes good opportunities for China investment

There are 16 joined ventures and 69 enterprises with China capital

FDI flow from China($ mn.)

2007 2008 2009 2010 2011

Complex administrative and territorial unit with all the necessary infrastructure for doing and maintaining business and a special legal regime of management

Belarus and China Industrial Park

Park Layout

China- Belarus (2)

Perfect location: Total area of 80 sq kmOnly 35 km from MinskOn the highway Berlin-Moscow (M1)Next to National Airport (the second runway suitable for A380 airplanes is under construction)Close to railway (5 km) Excellent resources:experienced personnel of the Belarus capital (about 30 institutes of higher education in Minsk whose annual number of students is 230 thousand)water system (water storage basin Petrovichskoe, 4.8 sq km) Best conditionsduring 10 years residents of the park are exempt from all taxesthe next 10 years - just a half of the applicable taxesresidents of the Park can get the land in private ownershipall public services are provided by the Park Administrationto become a resident of the Park it’s enough to invest 5 mn. USD

Competitive Advantages of Belarus3

Intellectual Property Rights Protection

• As of January 2012 there were 10 728 patents for inventions and 100 436 trademark certificates and service marks registered

• Belarus’ legislation provides reliable defense of intellectual activities’ results and investment

Competitive Advantages (1)

Intellectual property rights protection and high level of professional education of employees are of the highest priority

Belarus was 65th in the world and st in the CIS by

Human Development Index in 2011

Average salary in Jan 2012 = low rate of red tape no inter-ethnic or religious conflicts

Belarus has…

BY

RU

KZ

Developed transport infrastructure At the crossroads of Eurasia

th position in Europe by

the number of roads per sq. km.

Pan-European corridors (West-East and North-South)

logistics centers are under construction in Belarus

Market increase

Duty-free access to Russia and Kazakhstan

Free movement of goods, services, capital and labor force

Liberalization of trade in services and investment conditions considering entry into WTO

Common Economic Space 2012

Belarus has a clear strategic vision to be a transit hub between the Common Economic Space and the EU


One-stop shop for investors

Keeping a single database on investment projects

Interaction between government agencies in matters concerning privatization and investments.

Arrange events to shape Belarus’ investment outlook

Overseeing 8 of the privatization tenders

The shortest way for investors into Belarus


National Agency of Investment and Privatization

Privatization programme

The aim is to attract strategic investors for privatization


List of enterprises, which are to be privatized by theNational Agency of Investment and Privatization, in accordance with the

international standards with the assistance of financial advisors.

EnterpriseNumber of employees

The state’s share, %

Sales revenue, 2010, $ mn

Construction

1. Baranovichi plant of reinforced concrete structures

616 88.0 24.69

2. Belsantehmontazh-2 1902 77.0 73.153. Avtomagistral 929 98.2 20.024. Construction and mounting trust № 8 625 99.8 22.985. Belgazstroi 807 50.6 22.77

Food industry6. Konfa 384 25 8.317. Minsk margarine plant 459 93.8 28.29

Plastiс products production8. Medplast 271 91.3 7.98

Investment Climate4

Investment climate (1)

Ease of Doing Business Rank 2012

Korea 8

Lithuania 27

Poland 62

Belarus69

(up by 22)

Italy 87

Vietnam 98

There is a stated goal to enter top-30 countries favorable for

business and investment

Belarus is a keen reformer with the focus on rapid improvement of investment climate

Country

Belarus 18%

Russia 20%

Ukraine 21%

CorporateTax Rates

Belarus is on the placeaccording to Legatum ProsperityIndex 2011


Preferences for investors

Companies with foreign investments are working effectively in Belarus


Priority Sectors for FDI5

Belarusian IT-companies are put on the list of

*The Global Report on Outsourcing

Belarus has all possibilities to become a new center of IT producing

One of Belarus’s most successful

private companies, Epam Epam SystemsSystems, floated on the

Priority Sectors for FDI (1)

in early 2012

Hub for software

Belarus is on the place (up by 36 points since 2008) in

telecommunication infrastructure rank according to UN E-Government Survey 2012: E-Government for the

People (among 193 countries)

• Universities provide training in biotechnology and pharmaceutics with more than 3.2 thousand students in 2012-2015

• There are near 30 pharmaceutical/microbiological/biotech enterprises• The possibility to get taxes exemption (VAT, profit tax, real estate and etc.) through

investment agreement• Scientific and innovation capacity:

specialized institutions of the National Academy of Science:

Institute of Genetics and Cytology

Institute of Microbiology

Institute of Pharmacology and Biochemistry

Institute of Radiobiology

Institute of Bioorganic Chemistry

faculties of leading Universities

Healthy ambitions

Exclusive preferences for investors in pharmaceutics


If you are interested in investing into other sectors you are welcome to get full support


Favorable conditions :•guaranteed connection to the state-owned energy grid;•guaranteed purchase by the state of all proposed energy produced from RES,

as well as its payment at the very competitive tariffs – EUR 0.314 per 1 kWh for electricity generated from solar power, EUR 0.136 per 1 kWh for electricity generated from biogas, wood, hydro, wind, geothermal power.

•protection against unfair competition, including from legal entities dominating in Belarusian energy production market;

•production, the expansion (reconstruction, modernization) of RES plants if design documents are provided as prescribed by law;

•independent identification of energy facilities location;•government support.

Renewables and new materials – perspective area

Offers to Investors6

Offers to Investors (1)

Construction of transport and logistics center at FEZ «Gomel-Raton»

•Investment required

$314mn

•Project`s description

Transport logistics is one of the key elements of realization of the country’s transit potential. There are two Pan-European corridors (West-East and North-South) that cross Belarus. FEZ “Gomel-Raton” possesses a beneficial location in immediate proximity to economically promising regions of Russia, Ukraine and the EU countries.

The logistics center will provide a full range of services for receiving, processing, storage and shipment of large and small consignments by road, rail and air transport.

The land area of 200 hectares has been allocated for the construction.


Construction of a high-speed tramline between Minsk and Logoysk


$190mn (there is an investment feasibility study of the project)


The town of Logoysk (located 36 km away from Minsk) has been defined as a tourist and recreational center of the national importance, in the borders of which ski resorts “Silitchi” and “Logoysk” are located and the construction of a water park and Disneyland is planned. The key factor of the high-speed tramline construction is the availability of stable passenger flow in the direction of Logoysk.


Granit Deposit Development


$380mn


Production of nonmetallic structural materials in amount of 8.1 mn m3, including 6.0 mn m3 as crushed stone.

Commercial reserves – 255 mn m3. Preliminary estimated reserves – 277.2 mn m3.

The minerals to mine are granites and diorites that are found at depth of 9 to 64 m.

Consumers: civil, industrial engineering, road building, etc. in Belarus, CIS and EU


Construction of a factory on assembly of color Liquid Crystal Display Panels at JSC “Integral”


$3.2bn


The aim of implementation of the project is construction on the territory of the Republic of Belarus of factory on assembly of

color LCD panels. The main products are TV color liquid crystal panels with different diagonal sizes of 32 inch, 37 inch, 42 inch, 46 inch, 55 inch. Related products are LCD-panels for personal computers, industry and home using, medical equipment, etc.

JSC “Integral” can be considered for privatization (sale of government-owned shares to Investor)


Construction of nitric production complex at joint-stock company "Grodno Azot"


$836.2mn (total costs $1019.5 mn).


The nitric fertilizers production complex consists of:

- ammonia/methanol plant – from 700 000 to 450 000 t/a of ammonia and from 0 to 238 000 t/a of methanol;

- urea plant – 500 000 t/a.

Volume of commodity output – $340 mn per year.

The share of output for export – about 74% of total production.

Deadline for putting into operation– 2018.


Development of cabin production for new generation “MAZ” vehicles


$292.8mn (a business plan of the project is available)


Joint Venture.

The main products of the “Minsk Automobile Plant” is automotive engineering, designed to carry out all types of motor trucking. JSC “MAZ” manufactures over 300 models and modifications of vehicles of ecological level EURO-3, EURO-4 for various purposes. The project envisages the modernization of cabs production for pressing, welding and painting, which will result in automobile equipment output in the amount of 35 thousand pieces per year.


Establishment of a JV for production of railroad and large-size casting




Location in “Mogilev” FEZ.

Establishment of railroad and large-size casting production will allow production for the world’s largest manufacturers - JSC “Belaz” and CJSC “Mogilev Carriage Works” (annual demand from Belarusian companies – 40 tons of castings) and other companies of the Common Economic Space (Belarus, Russia and Kazakhstan).


The organization of industrial processing of flat polished glass at JSC «Gomelglass»


$71.6mn


It will be possible not only to substitute the imported products (such as bent furniture and automobile glass, mirror glass, Low-E glass, laminated glass (triplex)) in Belarus, but also to market it successfully in Russia, Ukraine, etc.

Project time-frame – 2012-2013.


The modernization of the existing float glass production line at JSC «Gomelglass»




The manufacturing capacity of the line after modernization – 46 mn sq. meters annually. The growth of flat polished glass output and reduction of material costs including the costs of energy resources are accompanied by an opportunity to meet the needs of building, furniture and automobile industries in the Republic of Belarus, CIS countries and European countries.


Reconstruction of heating plant №2 in Mogilev with steam-gas technology implementation


$198mn


Installation of gas turbine with capacity of 110 MW with a heat-recovery boiler. This will provide industrial enterprises and the housing-communal sector with electricity and heat.


Construction of a multifunctional entertainment centre in Logoysk district


$740mn


As of today Logoysk is a major Belarusian recreation center with the government priority given to it. The amusement park on its territory (by the analogy with Disneyland) will present infrastructure which includes rides, scenes involving characters from Belarusian folk tails. The area will make up 175 hectares or more.


Reconstruction of the hotel "Belarus"


$12mn


Participation in the construction of the multifunctional sports and entertainment complex with trade and exhibition gallery of Belarusian manufactured goods and works of art.

There is a possibility of participation of the investor in the financing of the construction of the mentioned objects under agreement with the Client – Open Joint-Stock Company “Minotel” with the following transfer of the property rights to the investor.

Project implementation period – April 2014.

Total area of the object – 5000 m².


Reconstruction of historical and cultural monuments of the 19th century with adjustment to a hotel complex


$5.2mn


The project envisages the placement of buildings (in 25, 27a Zamkovaya st.) and a transformer substation, the arrangement of parking areas for 10 and 14 parking spaces, driveways to buildings and sidewalks.

Land area – 0,426 ha.

Project implementation period – 2012.


OJSC “Paritetbank”

•Form of investment

Privatization (sale of government-owned shares to Investor)

•Bank`s description

Full-service bank oriented at servicing individuals and legal entities of various forms of ownership and activities, carries out all types of banking operations and services. Major customers of the bank are companies and organizations working in the field of trade, transportation and service industries, and individuals.

Assets: $111.4mn.

Credit portfolio: $53.3mn.

Liabilities: $94.2mn.

Deposits: $65.2mn. * $1=8170 ruble (as of March 7, 2012)


The reconstruction of the industrial complex of "Polygraph im.Ya.Kolasa"

Project cost – 49 $ mn.

Building area –29 thousand sq.m.


Creating a multi-functional center (Kuibysheva Street - pr.Masherova - Krasnaya -Kiseleva)

Project cost – 240 mn. euro



Multifunctional fitness center

Project cost – 250 $ mn.



Dwelling houses on the avenue. Dzerzhinsky

Project cost – 21,2 $ mn.

268 flats


THE EXPERIMENTAL COMPLEX OF THE MULTI-STORIED DWELLING HOUSES WITH OVERGROUND MULTILEVEL PARKING IN MICRO DISTRICT «SOKOL»

Project cost – 12 $ mn.Land plot – 12 hectare

Welcome to Belarus!

Address: 14/B Bersona st., 220050 Minsk, Republic of Belarus+375 17 200 81 [email protected]

Thank you for your attention

dr. dmitry klevzhits ceo of the national agency of investment and privatization belarus: welcome to...

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