KALUGA, July 27. /TASS /. Moscow-based Krasin pencil factory, one of the oldest Russian producers of writing materials, plans to build a plant in the Kaluga region.

The relevant agreement between the factory and the regional government was signed on Monday.

Investments in the project will amount to about 300 mln rubles ($5.063 mln).

"When the new plant reaches its full production capacity, which is to take about 7 years, the plant’s turnover will amount to 1.5 bln rubles ($25.3 mln)," - the factory’s general director Pyotr Golubev said at the signing ceremony.

He added that the new plant will use only Russian raw materials (woods, paints and lacquer) in production.

The new enterprise will be located on the territory of the Lyudinovo special economic zone.

It will take 3 years to build the new plant, he said.

The products will be sold on domestic market.

According to the factory’s marketing director Alexander Medovikov, when the new plant starts operating at full capacity its products may substitutes 50% of imports on the Russian market of writing materials.

"This means $70 mln, which is a quite realistic task for the enterprise," - Medovikov said.

At present Chinese writing materials account for 79% of the Russian pencil market, Medovikov said adding that these products are not certified.

European and Turkish products account for 15% of the Russian market of writing materials while the hare of the Krasin factory is only 6%, he said.

"Our strategic task in economic development is to develop production diversification. The Kaluga region produces cars, TV-sets, construction materials, food products and soon it will also make pencils," - the Kaluga region’s acting governor Anatoly Artamonov said at the signing ceremony.

The new factory will also create about 600 working places including 300 for people with disabilities.