Банкеръ Weekly



Sviloza will launch production of paper and will thus close its production cycle, Krassimir Dachev, Director of the company's BoD announced. Currently, the Svishtov-based enterprise produces only pulp and sulphate rayon. It was exporting almost 100% of its output so far. At the same time, Bulgaria imports all the newsprint and coated paper it needs. After the introduction of the necessary equipment Sviloza will become the first domestic producer of that product.The company will invest EUR6MN by the year-end in one more new production line, to be commissioned in October. It will be a part of the overall reconstruction of the pulp and paper mill, pre-estimated at EUR40MN, of which EUR17MN will be provided by the company itself and the balance will come from the European Bank for Reconstruction and Development (EBRD), United Bulgarian Bank (UBB), and Piraeus Bank. As a result of the enterprise's modernization its production capacity will go up from 50,000 tons to 110,000 tons. The company ended the first three months of 2004 almost BGN1.9MN in the red and proceeds from its operation amounted to BGN18.3MN. The worsening of the enterprise's financial performance began last year when its profit was only BGN99,000, down from BGN7MN in 2002. According to Mr. Dachev, that is due to the upset balance as a result of a collapse in the technology last August. In addition, forex fluctuations also has a negative effect on the company's financial performance.Sviloza is owned by the American offshore company А. R. U. S. LTD, which holds 87% of its capital. The deal on the chemical works was signed by the Privatisation Agency (PA) and А. R. U. S. LTD on February 12, 1999. The purchase price was USD7MN and outstanding arrears of USD11MN were undertaken and repaid by the buyer.The company's subsidiaries are: Ecosvil EOOD of Svishtov, Hotel Complex - Sviloza EOOD, and Canteen Complex - Sviloza EOOD.

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