OREANDA-NEWS. February 27, 2010. With reference to board chairman Armen Garslyan, Prime-Tass reported Metafrax’s production plans for 2010. The company is set to direct roughly RUB 700 million for production development this year, notably, for the completion of projects to set up productions of urotropin and polyamide, products of further methanol processing. Productions are scheduled to begin before the end of 2010 and the load on production capacity is estimated to be at least 90%.

We believe that the investment projects will allow the company to boost a share of products with high value added and increase the extent of in-house methanol processing from 27% in 2009. A high capacity utilization should help the company retain its presence on external and domestic markets, which should benefit its financial indicators and profit margins, as prices recover on the global methanol market.

The plans voiced by the company differ insignificantly from the forecasts we have made upon estimate of a fair value for Metafrax shares. We had projected investments of RUB 716 million and a capacity utilization rate at 85%. Therefore, we have left our estimate of a fair value for the company unchanged. Our year-end 2010 target price for Metafrax shares is USD 1.24, with a BUY rating.