BALC Projects / Projects: Nanotech Leasing /

RUSNANO and Uralplastic

Lease of industrial equipment for production of flexible barrier polymer packaging modified with nanocomposites.

Total contract value: RUB 1.3 billion.
Financing: Bank ZENIT (Russia).

The project is aimed to establish Russia's first full-cycle production of flexible barrier polymer packaging modified with nanocomposites. The brand new manufacturing facility will be opened in 2011 in Sverdlovsk Oblast. In 2013 Uralplastic Company (the lessee) plans to bring the commercial output of flexible barrier packaging to 20.000 tons per year and then in 2016 to enter the world market.

In order to implement the project an SPE — ZAO "Uralplastic-N" — was established. The co-investors provide this entity with movable and immovable assets including equipment, land and funds. The total project value is about RUB 2.3 bn including RUB 0.85 bn of BALC's investments in the form of industrial equipment leasing. The remaining part of the investments is shared between RUSNANO and Uralplastic Company itself (movable property and non-material assets – know-how). On the whole the total sum of the 6-year lease contracts signed within the project exceeds RUB 1.3 bn. The first delivery of the leased equipment is planned for October 2010. In order to finance the deal BALC obtained a 6-year credit from Bank ZENIT.

The new packaging material, which will be manufactured by Uralplastic, is a multi-layer polymer film supplied with nanocomposites. These modifiers are made of polymers and ceramics and combine qualities of both heterogeneous elements: the flexibility, resilience, and processing properties of polymers with the hardness, temperature stability, and resistance to wear and tear the characteristic of ceramics. This unique technology was developed by Uraplastic's specialists along with the Institute of Solid State Chemistry and Mechanochemistry, Siberian Branch of the Russian Academy of Sciences.

About parties of the deal:

The Russian Corporation of Nanotechnologies (RUSNANO) was established under the Federal Law № 139-FZ in September 2007. The mission of RUSNANO is to advance Russia into the pool of the world leaders in the field of nanotechnologies. The priority of RUSNANO is the commercialization of nanotechnology projects with high business potential and/or social benefit. The Corporation has 130 billion rubles (about $5 billion) fully provided by the Russian Government and under the management of CEO Anatoly Chubais, former CEO of RAO UES Russia.

Bank ZENIT was established in December 1994 by the Academy of National Economy under the Government of the Russian Federation, the oil company Tatneft and a number of other legal entities. Bank ZENIT is a leading private financial/lending institution in the country that provides full-scale corporate services as one of its major lines of operation. Active in the development and promotion of retail services, Bank ZENIT offers its retail customers a full spectrum of banking programs including deposits, mortgage loans, consumer and auto loans, plastic cards and safe deposit boxes. The Bank is a strong player on the private banking market. Bank ZENIT is one of the most dynamic Russian banks that is currently rated Bа3/Stable by Moody's and B+/Stable by Fitch.

Uralplastic Company was established in 1941 as a facility producing plastics. Today the company is one the leaders in the polymer packaging market in Russia. The company produces packaging for a wide variety of consumer goods and it is also the only Russian manufacturer of foamed polypropylene. Among the key clients of Uralplastic in Russia are: Procter&Gamble, Nestle, SUN InBev, Wimm-Bill-Dann and etc.