Sviloza to invest 300 mln euro in new assets

Sviloza to invest 300 mln euro in new assets

Sviloza, the Svishtov-based cellulose and synthetic fibres plant, said it plans to invest some 300 mln euro in territorial and capacity expansion over the near term.

Some 230-250 mln euro will be spent to build a new factory for packaging paper on the site of the Sviloza plant in Svishtov.

The new factory will have an annual capacity of 500,000 tons. It should be operational by the end of 2009.

Another 30 mln to 60 mln euro will be allocated for the acquisition of production assets in Serbia, Romania, Moldova and Russia.

The investment projects should boost output and sales in response to rising demand for cellulose and paper products across South-eastern Europe.

The financing will be provided by banks but the management does not rule out the setting up of business partnerships and future capital hikes.

Talks are underway to borrow money from the EBRD which has funded previous Sviloza projects.

Earlier this year, Sviloza completed a project for the modernisation and installation of new production facilities worth 55 mln euro. Their launch will triple the company's annual output to 150,000 tons over the next three years.

The current estimates of the management are for a loss or a fractional profit in 2007 as a result of the shutdown that was needed for the launch of the new installations.