OREANDA-NEWS. August 02, 2011. At least ten Belarusian flax mills will be revamped using European technologies, Prime Minister of Belarus Mikhail Myasnikovich said when taking a tour of the Korelichi-Len flax mill.

Mikhail Myasnikovich noted that big upgrade projects will be implemented at 12 to 15 flax mills. “At least ten flax mills will be equipped with European technologies,” Mikhail Myasnikovich stressed. Three flax mills in Grodno, Brest and Vitebsk Oblasts have already been modernized. “Once other enterprises are refurbished we may expect the output of 60,000 tonnes of qualitative flax fiber,” the Prime Minister added.

The project to revamp and modernize Orsha Linen Mill is in the spotlight as the company is the main manufacturer of flax fiber in Belarus. “The project envisages not only the replacement of equipment. Our objective is to start producing finished goods as main source of extra profits,” Mikhail Myasnikovich explained.

Mikhail Myasnikovich said that the Government keeps an eye on the flax industry operation. “The Government is concerned about the lack of profitability in the industry, even with substantial government subsidies and support,” said the Prime Minister. According to him, the industry should start seriously working on the quality of products, and calculate the economy of its projects. “So far the flax industry operates in the red. Even the increase in export prices has not helped. This is a big problem,” said the Prime Minister.

Work is underway to address these problems in Belarus. "The idea is to get the industry on course toward profits,” said Mikhail Myasnikovich. Prices on world markets for flax fibers are growing. The demand is there, even for short flax fiber. Belarusian producers should take advantage of it.

The head of Government noted that Korelichi District is one of the best areas for flax cultivation. But even here the flax mills are operating in the red. According to Mikhail Myasnikovich, flax is not a simple crop to grow. “The main task for farmers is not only to grow flax, but harvest and process it using modern technology.

When asked about the prospects to set up flax holding companies in Belarus, Mikhail Myasnikovich said that these are promising projects; however, there should be no mechanical unions. “If we fail to properly develop some parts of the chain, we may have a weak structure. Thus our goal today is to revamp flax mills,” he stressed. After we start producing premium flax fibers we may start planning some integration in this industry, Mikhail Myasnikovich is convinced. “Vitebsk manufacturers proposed to set up a regional flax holding company. This is a good idea but we need to look into the economy of the whole enterprise not to ruin the idea,” the Prime Minister said.

When asked about the possibilities of attracting foreign investment into the industry, Mikhail Myasnikovich noted that there are no barriers or restrictions. However, there are fewer and fewer producers of flax fiber in the world. There is competition between processors to produce high-quality products out of subsidized and relatively cheap crop, he said. “Until Belarus starts producing high-quality products, we will not be able to talk about cost-effectiveness,” said Mikhail Myasnikovich. He also noted that setting up a linen holding company will make economic sense only when the industry starts manufacturing high-quality textile products. “Then we will be able to redistribute sale profits within the holding company,” said the head of Government. He also stressed that the flax industry should focus on production of high-value added products, which are high-quality, fine and wrinkle-proof fabrics. "We will invest in the processing industry to help it start manufacturing the products which will be in demand in the domestic and foreign markets,” said the Prime Minister.