The European bank for reconstruction and development (EBRD) is supporting the development of one of the key sectors of the Belarusian economy, wood-processing, with a seven-year loan of up to €50 million to the particleboard and furniture producer VMG Industry FLLC, reports the bank in its press release.
Wood-processing is responsible for over 1.5% of Belarus’ GDP and for more than 6.3% of total exports. More than 40% of the Belarusian territory is covered with forests and the wood stock is around 1,5 billion m3. A number of state owned companies and several companies with foreign capital operate in the wood processing sector.
One of the foreign investors is VMG Group of Lithuania, which opened its first production facility in Belarus in 2013. The operations are based in Mogilev, Belarus third largest city where VMG has become one of major employers.
The EBRD loan will support the expansion of VMG through an increase of its production and warehousing area by 27,500 sq. m, in order to accommodate new furniture manufacturing equipment, such as cutting and edge-banding lines, narrow profile wrapping, assembly and packaging lines.
VMG will also install wet electrostatic precipitator for dust and formaldehyde emissions abatement to comply with the EU Industrial Emissions Directive for wood-based panels production.
Foreign Limited Liability Company VMG Industry is one of the VMG holding companies. VMG holding includes several enterprises located in Lithuania, Belarus and Ukraine and represents one of the largest manufacturers and exporters of furniture and chipboards in Baltic countries. The key customer of VMG Industry is the Swedish IKEA.