The EBRD is lending €5 million to finance the building of a furniture plant in a fast-growing cluster on Belarus’s border with Russia. The plant will use raw material supplied by the cluster’s first project, a Lithuanian-owned wood processing plant, to which the Bank provided an initial loan seven months ago.
The output of the two plants, which are situated in a free enterprise zone outside the border city of Mogilev on Belarus’s eastern border, is earmarked for the biggest retailers in the region and particularly targets a rapidly developing consumer market in Russia. Both plants are owned by Lithuanian investors.
This seven-year loan not only adds to the attractiveness of a strategically placed furniture cluster but will also contribute to the development of Belarus’s forestry industry, one of the country’s main exporters, said Francis Delaey, the Head of EBRD Minsk Resident Office.
The borrower is IOOO Mebelain, which is controlled by Lithuania’s SBA Furniture Group, one of the biggest manufacturers in this sector in the Baltic states. The project’s total cost is estimated at around €14 million.
When completed, Mebelain’s greenfield plant aims to produce about 750,000 items of veneer-faced furniture a year.