The Belarusian government has signed an investment agreement with MSP-oil, an oil company owned by Russian tycoon Vladimir Bryntsalov, for a pharmaceutical plant to be built in Minsk.
The plant, which is expected to manufacture substitutes for imported medicines, will be built by Belarusian-Russian pharmaceutical giant Ferein. Seventy-five percent in Ferein belongs to Mr. Bryntsalov and 25 percent to the Belarusian government.
In November 2009, Alyaksandr Lukashenka, by his presidential edict, released control of the Dialek pharmaceutical company to Ferein but set certain conditions.
In particular, Ferein was required to appraise Dialek before January 30, 2010, and ensure that its authorized capital stock was equal to at least four times its market value and four times the amount of Dialek's debts, which were to be written off under the edict.
The edict also required Mr. Bryntsalov to transfer a 25-percent stake plus one share in Ferein to the Belarusian government before March 15, 2010.
Mr. Lukashenka, by the edict, ordered the cancellation of 3.3 billion rubels ($1.23 million) of Dialek’s state loan debts.
MSP-oil was required to build the new plant on the premises of Dialek before 2015.
The edict recommended the Minsk City Executive Committee and the Minsk Regional Executive Committee to exempt Ferein from "target" taxes on the profits from Dialek.
Reports that Mr. Bryntsalov planned to build a pharmaceutical plant in Belarus first appeared after his meeting with Alyaksandr Lukashenka in Minsk in April 2008. The Belarusian leader said during the meeting that the government was interested in Ferein expanding its operations to Belarus. "I would like you to manufacture your goods here," Mr. Lukashenka said.
Reports had it that between $100 million and $120 million was expected to be spent on the construction of the plant, with half of the amount coming from the Russian tycoon.
However, the project was put on hold in October 2008, officially because of the global financial crisis. Some analysts suggested that Mr. Bryntsalov had called off the project because Minsk would not guarantee him preferential treatment in the Belarusian market.
Ferein was granted tax relief for carrying out the project by the November 2009 presidential edict.