Case study - Reviving a Struggling Synthetic Fiber Plant and Turning It Around

The Mogilev Synthetic Fiber Plant was facing significant financial challenges. Over the course of three years, the plant underwent a complete transformation, evolving into a competitive and modern producer of artificial fibers and films

Client
Mogilev Synthetic Fiber Plant
Years
-
Service
Executive Management, Sales Management, Crisis manager

Case study - Reviving a Struggling Synthetic Fiber Plant and Turning It Around

The Mogilev Synthetic Fiber Plant was facing significant financial challenges. Over the course of three years, the plant underwent a complete transformation, evolving into a competitive and modern producer of artificial fibers and films

Client
Mogilev Synthetic Fiber Plant
Years
-
Service
Executive Management, Sales Management, Crisis manager

Overview

The plant was originally established in 1930 as part of the industrialization efforts of the Belarusian SSR and became the first major chemical enterprise in the region. Over the decades, it developed extensive expertise in the production of artificial fibers and packaging films.

By 2011, when Jerzy assumed the role of CEO, the plant was focused on manufacturing viscose textile yarn, as well as polypropylene and polyethylene films. At that time, the company was facing significant financial challenges and operated primarily thanks to annual government subsidies totaling approximately €25 million.

Plain Construction View

Market Landscape at the Time of Transition

At the time Jerzy took over as CEO, the plant operated primarily as a supplier to foreign markets through intermediary trading companies. Its core product — viscose textile yarn — was exported mainly to Pakistan and Turkey. These countries maintained a steady demand for viscose yarn, driven by their large and well-established textile industries, where viscose remained a cost-effective and versatile material for fabric production. However, due to the indirect sales model, the plant had limited control over pricing and market positioning, which negatively affected profitability.

In parallel, the plant produced polypropylene and polyethylene films, which were in demand across the packaging, construction, and industrial sectors. These materials were sold through trading partners primarily in Russia and Kazakhstan. While these markets provided consistent order volumes, the reliance on intermediaries once again limited the company’s ability to build direct relationships with end users or develop a strong brand presence.

Despite the consistent demand in these regions, the overall market approach remained outdated and inefficient, leaving significant room for strategic improvement and modernization.

Construction View

Reforms and Strategic Improvements

Upon assuming leadership, Jerzy initiated a wide range of strategic reforms aimed at improving profitability, product quality, and market positioning. These measures affected both key product lines — viscose yarn and polymer films — and had a transformative impact on the enterprise.

Viscose Yarn

  • A significant shift was made in the product mix. The plant transitioned to the production of finer, more technically advanced viscose yarns. This move not only aligned with evolving market demands but also enabled the company to increase the average selling price per kilogram by 4–5 times.
  • Another breakthrough was market diversification. The company successfully entered the Indian and Chinese markets — two of the largest textile markets in the world — while scaling back sales to the low-margin Pakistani market.
  • The company eliminated its dependency on Belarusian intermediaries, establishing direct export channels.
  • These steps, combined with an optimization of workforce size and structure, significantly improved operational efficiency and revenue per employee.

Polypropylene and Polyethylene Films

  • Reforms began with a rationalization of the product assortment, focusing on higher-value film types.
  • The company shifted from indirect sales to working directly with end consumers, leading to an increase in average sales prices by up to 20%.
  • Direct contracts were established with raw material producers, reducing input costs by 20–25% and stabilizing supply.
  • A major investment was the launch of a new production line for polyolefin films using double bubble (double orientation) technology from GAP, Italy.
    • With an investment of €3.5 million, the plant introduced a high-performance 7-layer film with a thickness of just 12.5 microns — which became its most profitable and in-demand product.
  • The company also turned waste management into a profit center:
    • Instead of selling recycled granulate, €0.3 million was invested in a full-cycle production line for polypropylene wagon liners.
    • This new business line achieved 100% profitability at full capacity, delivering both financial and environmental benefits.
Equipment

Growth Phase and Production Focus

The turning point in the plant’s development occurred in 2012, following the successful commissioning of the new polyolefin film production line. The 7-layer film, with a thickness of just 12.5 microns, gained quick popularity among industrial and food packaging clients due to its superior strength, clarity, and barrier properties.

The production process used high-quality European-grade polyethylene and polypropylene resins, sourced directly under long-term contracts. This ensured consistency, reduced costs, and improved overall product quality.

This strategic shift — combined with optimized procurement, upgraded production capabilities, and improved market access — led to a significant increase in output and sales volumes. By the end of 2013, the plant's annual turnover had grown to approximately €42 million, marking a substantial rise compared to the pre-reform period.

First Pipes

Market Expansion and Strengthened Position

Between 2011 and 2013, the company not only stabilized its operations but also made a decisive move toward strengthening its market presence both regionally and internationally.

  • Direct entry into the Indian and Chinese viscose yarn markets opened access to high-volume, higher-margin buyers.
  • In the film segment, direct relationships with end users in Russia and Kazakhstan allowed the company to position itself as a reliable and flexible supplier.
  • Domestically and within the CIS region, the plant enhanced its reputation by offering consistent quality, technical support, and shorter lead times.
  • By 2013, it was recognized as one of the most modern and competitive producers of multilayer polyolefin films in Belarus and the surrounding region.
Main Production Line

Results and Impact

During Jerzy’s tenure as CEO (2011–2013), the plant underwent a period of intensive transformation and measurable progress:

  • Annual turnover increased by 50% — from €40 million to €60 million — driven by product innovation, market expansion, and operational improvements.
  • Government subsidy dependence dropped — annual support requirements were reduced from €25 million to €8 million.
  • Two major investment projects totaling €3.8 million were successfully implemented.
  • These initiatives not only modernized production but also opened new revenue streams and improved long-term competitiveness.

What we did

  • Strategic Leadership
  • Market Expansion
  • Product Development
  • Operational Efficiency

Jerzy did an incredible job during his time here. His leadership brought real positive change to the plant — not only in our processes and results but in the spirit of the entire team. He was approachable, always ready to listen, and inspired confidence in every one of us. We will remember him with great warmth and respect. Truly, he was one of the best leaders in the history of this factory

Boris Pekhterev
Chief Techincal Officer
Turnover growth
€20M
Losses decreased
68%
New investments
€3.8M
Workers daily
2000

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