Doing business in Russia:

Transcription

Doing business
in Russia:
Map of opportunities #4
Promising investment niches
in Russian regions
Economic report
Altai
Territory
Kamchatka
Territory
Lipetsk
region
Orel
region
Perm
Territory
15
0
2
Contents
Introduction 03
Thoughts of an economist: The era of explicitly conditional forecasts 04
Altai Territory’s investment opportunities 10
Kamchatka Territory’s investment opportunities 14
Lipetsk region’s investment opportunities 18
Orel region’s investment opportunities 22
Perm Territory’s investment opportunities 26
News of growing industries 30
macroecomonomic indicators
34
Disclaimer 35
Acknowledgements 36
|1
Map
of opportunities
INTRODUCTION
Dear colleagues, dear friends!
Please kindly be offered the fourth issue of the Agency for Strategic Initiatives’ analytical
report Business in Russia. Geography of opportunities in which we have presented attractive
investment niches in the Altai, Kamchatka and Perm territories, as well as in the Lipetsk and
Orel regions.
It is worth to note that the majority of investment opportunities described in this issue are
focused on the needs of domestic market experiencing a certain shortage due to economic
sanctions (such as pharmaceuticals, electrical and energy-saving equipment).
In addition, the devaluation of national currency continues to bring a negative pressure on
the purchasing power of the population. In this regard, investments in the development of
domestic tourism and food industry look promising.
However, on this background, manufacture and exportation of timber industry products may
be interesting in terms of yield.
As in previous reviews, we publish a commentary on Russian macroeconomic environment
prepared by VTB Capital analysts.
We sincerely hope that this material will be useful for the development of your business and
may help in making investment decisions.
Agency for Strategic Initiatives Team
|3
Thoughts of a n ec o no m i s t : t h e era o f exp l i c i t l y c o n d i t i o n al fo re c ast s
Thoughts of an economist:
The era of explicitly
conditional forecasts
Being an open economy, Russia constantly has to adapt to external shocks, be they volatility
in the terms of trade, the spillover of shifts in foreign central banks’ monetary policies or
swings in international investors’ risk appetite. The volatility these factors brought about,
though at times remarkable, stayed manageable (not least because key indicators, i.e. FX
were tightly managed) allowing a baseline scenario to be drawn up. Until recently.
The sum of shocks that the Russian economy faces now marks the end of the era of
meaningful point forecasts. Hence this report is our welcome to the new era of explicitly
conditional interval forecasts – we believe they are much better suited to an environment
which, for better or worse, lacks the visibility we used to enjoy in the past.
Net exports help external adjustments but are not a reliable growth engine. Net exports
are the only component of GDP to make a positive contribution this year (at 7.1pp) as
internal demand dwindles. That, however, is a result of the rapid contraction in imports
(both consumer but, more deeply, investment imports). In FX terms, exports contract
roughly proportionally to the declining trend in oil prices.
The decline in the price of energy commodities relative to other export items pushes for a
more diversified export structure, but in the medium term exports are going to continue to
be dominated by oil and gas.
On this front, a range of technological, political and economic factors supports the lower
oil price outlook:
• Technological advances on the supply side. In exploration and extraction, efficiency is set
to push the breakeven oil price lower still with the EIA projecting that the oil market will
continue to be dominated by excess supply.
• Iran’s entrance onto the international energy markets. The EIA estimates that Iran has
30 mmbbl of stocks and capacity of 2.8mmbbl/d, which is set to rise to 3.1-3.5mmbbl/d.
• EM slowdown weighs on the demand side. This could potentially be caused by the
spillover from lower Chinese demand for commodities.
Thus, the terms of trade will probably keep deteriorating and are unlikely to reverse any
time soon. Our scenarios assume USD 60/bbl as a new equilibrium which might be
reached either in the near term (upbeat), or approached gradually over a period of time
4|
(central) or not reached at all due to the equilibrium shifting still lower to USD 40/bbl. We
do not consider a return to levels above USD 100/bbl.
On the longer horizon, weaker REER creates the precondition for an increase in the export
of a diverse range of goods, from agriculture to manufacturing. However, this involves
entering new markets and, more importantly, creating and adapting local capacities so
that they can better meet external demand. That needs to be preceded by a recovery in
FAI. In the meantime, a recovery in local demand would push imports (both consumer and
investment) higher, which makes net exports a less likely growth engine in the medium
term.
Fiscal consolidation to weigh on local demand, not support it. The Guidelines for fiscal policy,
which contained preliminary estimates of the 2016 budget and was supported by the
government back in late June, assumed public expenditure would grow to RUB 15.9tn in 2016,
from RUB 15.2tn this year. That implies a contraction (in real terms) of at least 7.3% YoY.
However, by mid-August the assumption of Urals at USD 60/bbl had clearly become overly
aggressive and required a review, in line with the Ministry of Finance’s practice of offering
ex ante conservative budget drafts (spending is casually extended throughout the fiscal
year, if the revenue stream allows).
The first draft of the federal budget assumed a deficit of The first draft of the federal budget
assumed a deficit of decline in the price of Urals to an average of 50 USD/bbl for 2016
corresponds to a shortfall in revenues of roughly RUB 1.0-1.2tn. Keeping that expenditure
unchanged would increase the total deficit to RUB 2.9-3.1tn, on our estimates, in the central
scenario and even more in the downbeat scenario.
Keep an eye on the structure of the adjustment. With a RUB 2.9-3.1tn deficit to finance, the
government faces the task of spreading the burden between the Reserve Fund, net debt
issuance, fiscal consolidation and increased revenues (through more efficient collection
or increasing the tax burden). Government officials have even been quoted as saying that
some less standard revenue sources are being considered, such as extending the NPF
asset freeze past YE15 (which might shave up to RUB 0.35bn from the transfer to the PFR).
The proportion of deficit financing from debt issuance and the Reserve Fund/NWF is
also uncertain. Notably, MinFin defends keeping net issuance at RUB 0.5-0.6tn while
MinEconomy’s Alexey Ulyukaev argues that there is room to add another RUB 1.0tn
of new debt. The remaining RUB 1.5tn could be spread between the Reserve Fund and
outright expenditure cuts (which might include <5.5% pension indexation and a universal
percentage decrease to other spending).
Even in the upside scenario, fiscal policy faces the challenge of sustaining expenditures
in real terms, while the central and downside scenarios call for nominal cuts in spending
which means that any positive real contribution to growth from public demand (both
consumption and investment) is off the agenda.
Household consumption is under pressure on all fronts. The increase in household
consumption can be funded by a combination of i) increasing wages; ii) rising stock of
retail debt; and iii) declining stock of household wealth (i.e. selling accumulated FX cash).
While there are signs that households use accumulated FX to smooth a temporary decline
in real incomes, it can only be a temporary and relatively small fix.
|5
Meanwhile, retail lending is subdued and the retail portfolio is shrinking at 0.65-0.8% MoM
SA FX adj. We do not expect the recovery to kick in until at least 2Q16 when brighter signs
of recovery appear. Until then, interest and non-interest lending conditions are likely to
remain tight. Thus, retail lending is unlikely to support internal consumer demand in the
coming years, even after retail deleveraging runs its course.
Wage bill growth to remain anaemic, driven down by restructuring in public and nontradable sectors. Wages, the ultimate source of household demand growth (they account
for more than two-thirds of total household income), do not provide much ground to be
upbeat either.
• Fiscal consolidation is to continue weighing on public sector wages.
• In the private sector, wages are to track productivity trends in individual industries more
closely.
In the private sector, wage growth in the non-tradable sector (including finance, construction
and hospitality) is set to lag the tradable sector significantly, as employers share profits
from RUB weakness with the labour force. The anaemic wage growth in the public and
non-tradable sectors will provide more incentive for labour force outflow into the tradable
sector, helping to promote the restructuring of the economy.
Preconditions for private investments are starting to emerge. The contraction of private
investments can only in part be explained by elevated interest rates or tighter credit
conditions. Headline investment growth crossed the line back in 2H13 and has stayed in
the red since then. Back then, the CBR’s key interest rate1 fluctuated in a narrow 5.0-5.5%
corridor and other factors were weighing on the FAI; they included mounting economic
policy uncertainty, stronger REER-induced Dutch disease and (in part) the growing
disconnect between wage growth and productivity.
1
6|
Before the key rate was introduced, the effective equivalent was the CBR’s REPO o/n rate
Figure 1: GDP, % YoY
10
GDP, % YoY
upbeat, % YoY
central, % YoY
downbeat, % YoY
5
0
2010
2015
-5
-10
Source: Rosstat, VTB Capital Research
Figure 2: Key rate, %, eop
key rate
16
upbeat, %
central, %
downbeat, %
14
12
10
8
6
2014
2015
2016
2017
2018
2019
Source: CBR, VTB Capital Research
|7
Despite FX volatility and elevated interest rates which stifle investment activity, the
preconditions for reigniting private investments are starting to emerge:
• Corporates in the tradable sectors have accumulated substantial liquidity. This buffer,
due to weak FX-driven profits in 1H15, means investments are less dependent on the
availability of other sources of funding.
• The cost of funding is coming down. The 1-3Y corporate lending rate reached 15.4% in
July, down from its peak of 17.8% in February.
• Momentum in interest rate cuts fades. This created the incentive to delay borrowing
and push investment down the road, which made sense when the CBR was delivering
100-200bp cuts each meeting, but the pace of easing has slowed to 50bp and at its most
recent meeting the CBR opted for no change.
• Shift to weaker REER viewed as a permanent weakness. It is no longer seen as a
transitory weakness to be undone by a reversal of the tide on the commodity markets.
This is supported by regular verbal interventions from the authorities, and there
is virtually no sponsor of a strong RUB anywhere among the expert community or
publicly visible figures.
Businesses to exploit opportunities offered by cost competitiveness on both the local market
(weaker FX provides a natural barrier for imports) and on the external one (due to the attractive
cost of labour in FX terms, among others). Furthermore, in the coming years the government’s
efforts to promote a more investment-friendly environment are likely to bear fruit. The more
visible federal projects are i) a freeze on adding new taxes or increasing the existing ones and ii)
creating clusters with special treatment for incorporated enterprises (lower tax rates, less red
tape). Although a second-best decision in itself, it is important that the recent government talk
of extracting additional fiscal revenues from the oil sector is confined to just that sector since the
oil tax system gives the sector a special tax treatment which, with overshooting FX, makes the
sector’s P&L benefit from collapsing oil prices. An increase in economy-wide taxes remains a
taboo for now.
Investment growth is more likely to materialise in tradable sectors with larger liquidity
stocks. Private investment is harder to project than public capex, as the former is, by its
nature, more sensitive to swings in the outlook and level of ‘animal spirits’.
Nevertheless, we believe that the industries which are better positioned to take advantage
of the current conditions are those that:
• have low or materially improving NPL, allowing for access to bank lending and lower
borrowing costs;
• see the growth of the loan portfolio bottoming out or increasing, which is another sign
of access to borrowing;
• operate in the tradable sector, which means lower dependence on local demand (which
is to remain subdued) and better chances to diversify into external markets;
• are dominated by the private sector, as the public sector is set to shrink in real terms.
Thus, the more likely industries to deliver positive real investment growth are, among
others, agriculture, autos and electric parts and components producers, fertilizers and to
some extent infrastructure.
8|
Figure 3: Forecasts often follow oil price swings
Urals, b./
MinEc baseline as of May–15, USD/bbl
MinEc baseline as of Aug–15, USD/bbl
MinEc baseline as of Sep–15, USD/bbl
CBR baseline as of Sep–15, USD/bbl
120
100
80
60
40
2012201420162018
Source: Vedomosti, Kommersant, MinEconomy, CBR, Reuters, VTB Capital Research
Figure 4: Stylised scenarios frame the likely range
Urals, USD/bbl
Urals, USD/bbl, upbeat
Urals, USD/bbl, central
Urals, USD/bbl, downbeat
120
100
80
60
40
2012201420162018
Source: Reuters, VTB Capital Research
|9
The in v estment o p p o r t u ni t i es o f A l t a i Terri t o r y
Kemerovo
Moscow
3617 км
Novosibirsk
233км
414км
Barnaul
Gorno-Altaysk
258км
Astana
1201км
(289 km to border)
THE INVESTMENT
OPPORTUNITIES OF
A map of the region and arrows to the centers of
adjoining regions and to Moscow with indication of
distance on public roads1
Altai
Territory
01
Main characteristics
of the region
DETAIL:
For more detailed information on
key economic and social indicators,
please visit the following links:
http://investinregions.ru/regions/altaisky/
http://akstat.gks.ru/
Investment portal of the region:
http://invest.alregn.ru/
Investment strategy:
http://invest.alregn.ru/upload/
iblock/c9e/c9e0c6497e5851431b8250ae1a62a655.pdf
Investment agency:
http://altinvest22.ru/
1
2
10 |
Population
2 384 812 people
Adjacent regions’
population
6 438 308 people
Average lease rate for class A
office premises
8 400 rub/sq.m/year
production and storage premises
2 400 rub/sq.m/year
Average sale price
of industrial land lots
6 000 000 rub/hectare
Average monthly
salary
19 456 rub.
Between centers of the cities, on the road.
Including Pavlodar region of the Republic of Kazakhstan.
2
02
General Macroeconomic Situation
Gross regional
product (GRP ):
Place of the region
in terms of GRP:
6 | 34
410,8
bn RUB
in 2013
439,2
bn RUB
in 2014
+0%
Investment contact:
Nikolay Chinyakov,
Total equity
investments:
in Federal
District
Among all regions
of the Russian
Federation
* according to 2013 data
Unemployment
level:
chief of head department
of economy and investments
of Altai Territory
nickolay@alregn.ru
+7 (909) 504-00-13
92,9
bn RUB
in 2013
102,2
bn RUB
in 2014
+3,7%
The headline
inflation:
7% | 11,2%
in 2013 | in 2014
03
04
8,3% | 7,2%
in 2013 | in 2014
Manufacturing
Inflation:
-1,8% | 14,4%
in 2013 | in 2014
The key competitive advantages of the region
• The profitable economical geographical position thanks to proximity of Altai Republic,
Novosibirsk and Kemerovo region, the Republic of Kazakhstan.
• The first place in the Russian Federation by the area of fertile acreage.
• Natural and weather conditions, promoting development of improving and medical tourism.
BUSINESS INCENTIVES PROVIDED BY THE REGIONAL GOVERNMENT
• Subsidizing of a part of bank interest rate on the bank loans attracted by investors for
the investment purposes.
• Granting funds of the Altai Territory’s leasing fund.
• Subsidizing to the investor-lessee of part of leasing payments under finance lease
(leasing) agreements.
• Granting in accordance with the legislation of the Russian Federation and Altai Territory
of tax benefits on taxes and fees.
• Granting at the expense of funds of the territory budget of subsidies for compensation
of a part of costs for performance of works connected with connection to engineering
facilities networks.
• Special conditions of conducting business activities for residents of a SEZ TRT
«Biriuzovaya Katun».
• Subsidizing of a part of costs of the subjects of small and medium business connected
with acquisition of the equipment for creation, development or upgrade of production.
• Developed system of privileges in the agricultural industry.
| 11
01
Investment
niche
Production
of baby food
01
02
03
04
Main characteristics of a niche
Sales volume of baby food
in Altai Territory in 2014 1
3,25 billion rubles
Share of krai manufacturers
in total sales in 2014 2
4,6 %
Potential need for products,
in a year 3
8,91 billion rubles
Competitive environment
Currently, the baby foods manufacturers in the Altai Territory are focused on a segment of
dairy products. The major player in this segment is JSC Modest. Soon, CJSC Altayskaya
krupa will start supplying baby foods for children 3+ years old, produced of grain from own
fields. Thus, interesting opportunities for investments appear in the segment of breast milk
substitutes (especially taking into account historically high share of import), as well as in
the arrangement of complementary foods production.
Why Altai Territory
• Large volumes of environmentally friendly raw materials.
• Availability of the krai program of development of the industry of children’s goods
causes a possibility of receiving additional preferences for manufacturers.
• Potential of consumer market of all Siberian Federal District.
Manufacturing sites
Name of industrial
park / production site
Total area of the park/aite
(hectares)
Electric power
(cumulative power), MW
The investment
The investment
The investment site
site in Borovikha of
site in Borovikha of
in Slavgorod
Pervomaysky district Pervomaysky district (2nd Promyshlennaya St.)
(2nd Borovaya St.)
(2nd Borovaya St.)
46
5
61
Gas, one million cubic m/year
(one thousand CBM/hour)
6
2
2
- no, connection to - no, connection to 3 thousand m3/hour 3 thousand m3/hour
is possible
is possible
Water supply /
water disposal existence (yes/no)
- no, well drilling
- no, well drilling
- no, well drilling
Presence of railway (yes/no) |
presence of road (yes/no)
-|+
-|+
-|+
In the segment “from 0 to 3 years”.
According to calculations of ASI, including the neighboring regions of the Russian Federation, taking into account average rates of market gain.
1,2
3
12 |
02
Investment
niche
Hotel complex
in Belokurikha
01
02
03
04
Sales volume of hotel services
in Altai Territory in 2014 4
5,73 billion rubles
Tourist flow in Altai Territory
in 2014
1,6 million people
Potential free market capacity,
in a year 5
1,15 billion rubles
More than 10 health resorts, as well as circa 10 relatively large boarding houses and hotels
render their services in the territory of Belokurikha. At the same time, the city lacks hospitality objects of above-average level that, together with the increasing in-Russian tourism
flow, makes the resort attractive for international hotel networks.
Why Altai Territory
• Unique natural potential.
• Developed tourist infrastructure, the known brand.
• Availability of qualified personnel in the industry of hospitality
INVESTMENT SITE
4
5
Name of industrial
park / production site
Tourist subcluster “Belokurikha-2”
(hectares)
Electric power
Water supply /
water disposal existence (yes/no)
136 hectares
(Smolensk district, 10 km from the resort town of Belokurikha)
10 MW
-|+
According to Altaykraystat, including the sanatorium organizations and the organizations for rest.
According to calculations of ASI, across all Altai Territory.
| 13
The in v estment o p p o r t u ni t i es o f Ka m c h a t k a Terri t o r y
Magadan
870км
Moscow
11876 км
PetropavlovskKamchatsky
Yuzhno-Sakhalinsk
Khabarovsk
1724км
THE INVESTMENT
OPPORTUNITIES of
Vladivostok
2257км
1320км
The map of the region and arrows to the centers of
straight line distance 1
Kamchatka
Territory
01
of the region
DETAIL:
http://investinregions.ru/regions/
kamchatsky/
http://kamstat.gks.ru/
http://invest.kamchatka.gov.ru/
http://invest.kamchatka.gov.ru/investicionnyj_klimat/investicionnaya/
1
2
14 |
Population
317 269 people
Adjacent regions’
population
6 211 021 people
office premises
15 000 rub/sq.m/year
3 000 rub/sq.m/year
Average sale price
Average monthly
salary
53 151 rub.
Between the airports, by airplane.
Average rated accrued salary of employees of the organizations.
02
Gross regional
product (GRP ):
Place of the region
in terms of GRP:
6 | 66
131,6
bn RUB
in 2013
140,7
bn RUB
in 2014
-0,7%
Investment contact:
Dmitry Korostelev,
Total equity
investments:
in Federal
District
Among all regions
of the Russian
Federation
Unemployment
level:
Minister of Economic Development,
entrepreneurship and trade
of Kamchatka Territory
econ@kamgov.ru
prominvest@kamgov.ru
+7 (961) 965-94-62
32,7
bn RUB
in 2013
25,2
bn RUB
in 2014
-23%
The headline
inflation:
6,3% | 7,8%
in 2013 | in 2014
03
04
5,7% | 6,1%
in 2013 | in 2014
Manufacturing
Inflation:
-2,4% | 11,1%
in 2013 | in 2014
Key competitive advantages of the region
• A unique natural territory with the richest recreational resources; besides, there is a potential
for the development of cruise lines to Kamchatka and across the Arctic Ocean.
• Considerable stocks of water biological resources and mineral resources.
• Advantageous geographical position and considerable transit potential.
• Availability of port with year-round navigation.
• Availability of various servicing infrastructure, including ship-repair capacities.
• System of the state measures of support for the investors implementing especially
significant investment projects (subsidizing, tax benefits, coaching, etc.).
• Providing certain support measures for sector-specific business development and
modernization of production according to the Kamchatka Territory state programs.
• There has been created an advanced development territory «Kamchatka» that provides an
opportunity for receiving corresponding privileges and preferences by the residents.
• Support of investment projects by the principle of «one window».
• Lease of land lots to legal entities other than by competitive tendering for implementation of
large-scale investment projects.
• Providing investors with funds from regional investment fund for creating infrastructure on
PPP principles.
| 15
01
Investment
niche
Poultry
production
01
02
03
04
Poultry meat sales volume
in Kamchatka Territory in 2014 1
1,33 billion rubles
Share of territory manufacturers
in total sales in 2014
3 %
Potential
market capacity, in a year 2
1,680 billion rubles
At present there is only one poultry farm specializing in production of egg in Kamchatka
Territory, which produces 125 pieces per person a year or a half from the recommended
regulation of consumption of food egg and only 1/50 part from the recommended poultry
meat consumption rate of (0,6 kg per person a year) – JSC Pionerskoye.
Why Kamchatka Territory
• A niche, almost completely free from the internal regional competition.
• High interest of the Government of the region in project implementation for the purpose
of decrease in the general overestimated level of prices for products.
• Higher level of environmental friendliness of products can promote emergence of
demand from the neighboring regions.
Manufacturing sites
Name of industrial park /
production site
(hectares)
Electric power
Water supply / water disposal
existence (yes/no)
The project on cooled poultry meat
production of “Kamchatsky broiler”
20 hectares
1,3 MW
1,68 million m /year
3
- -|+
Including taking into account delivered to the region
According to calculations of ASI, only on poultry meat.
Proceeding from consumption estimates on average across the Russian Federation and the doctrine of food security of the Russian Federation.
1
2
3
16 |
02
Investment
niche
Hotel complex
in the Paratunskaya
resort area
01
02
03
04
Sales volume of hotel services
in Kamchatka Territory in 2014 4
890,5 million rubles
Tourist flow in Kamchatka Territory
in 2014
60,5 thousand people
Potential free market capacity, per year 5
Locations in the Paratunsky resort area are provided generally by mini-hotels, or
recreation facilities (Antarius, Blue Lagoon, Bel-Kam-Tur, etc.). Besides, in the nearby cities,
Petropavlovsk-Kamchatsky and Yelizovo, there are no objects of placement of the level
above average, and quality of hotel services within the available infrastructure (hotels Avacha
and Petropavlosk) does not correspond to price policy.
Why Kamchatka Territory
• Unique climatic potential.
• The status of the territory of advancing development with the corresponding privileges
and preferences.
• Development of entrance tourism is one of the main objectives facing the Government
of the region.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
4
5
Tourist and recreational cluster
of “Paratunka”
380,5 hectares
7,1 MW
-|+
Including sales of rooms, and also providing other tourist services.
According to calculations of ASI, taking into account the weighted average rates of tourist flow gain.
| 17
The in v estment o p p o r t u ni t i es o f L i p et s k r eg i o n
Moscow
463 км
Ryazan
266км
Tula
291км
Tambov
137км
Orel
294км
Kursk
347км
THE INVESTMENT
OPPORTUNITIES OF
Lipetsk
Voronezh
123км
A map of the region and arrows to the centers of
distance by public roads1:
LIPETSK
REGION
01
of the region
DETAIL:
http://investinregions.ru/regions/lipetsk/
http://lipstat.gks.ru/
http://invest-lipetsk.com/
http://invest-lipetsk.com/pages/36
18 |
1
Population
1 157 865 people
Adjacent regions’
population
7 925 185 people
office premises
7 200 rub/sq.m/year
3 000 rub/sq.m/year
Average sale price
Average monthly
salary
23 406 rub.
Between centers of the cities, by road.
02
Gross regional
product (GRP ):
Place of the region
in terms of GRP:
6 | 39
314,8
bn RUB
in 2013
347
bn RUB
in 2014
+1,9%
Investment contact:
Igor Malenko,
Total equity
investments:
in Federal
District
Among all regions
of the Russian
Federation
Unemployment
level:
Head of the Department
for Investments and International
Relations of the Lipetsk region
imalen@admlr.lipetsk.ru
+7 (903) 699-57-43
101,1
bn RUB
in 2013
110,1
bn RUB
in 2014
+5,0%
The headline
inflation:
6,3% | 11,9%
in 2013 | in 2014
03
04
3,7% | 3,7%
in 2013 | in 2014
Manufacturing
Inflation:
-10,5% | 3,3%
in 2013 | in 2014
• One of the most developed investment infrastructure objects system: federal special
industrial and production economic zone and 10 regional special economic zones.
• Developed industrial production, including that with participation of foreign capital,
ensures the availability of highly qualified personnel.
• Advantageous geographical position on intersection of key thoroughfares and, as a
result, advanced transport infrastructure.
• Profit tax rate reduction from 18% to 13,5% for a period of up to 5 tax periods.
• Tax exemption on property for a period of up to 8 tax periods.
• Special conditions of conducting business activities for residents of a SEZ PPT «Lipetsk»2,
special economic zones of the regional level.
• Joint financing of construction of state-owned facilities in the Lipetsk region created under
concessionary agreements at the expense of regional investment fund.
• A system of long-term state guarantees (up to 15 years)
• Provision with objects from the Lipetsk region mortgage fund.
2
http://www.russez.ru/oez/industrial/lipetsk_region/lipetsk/
| 19
01
Investment
niche
Production
of the electrotechnical
and energy saving
equipment
01
02
03
04
Sales volume within a niche
in the Lipetsk region in 2014
4,82 million rubles
Share of regional manufacturers
17,4 %
Import share across the Russian Federation
in 2014 1
45 %
At the moment, the main players in the markets of the electrotechnical and energy saving
equipment in the Lipetsk region are CJSC Yelets Electromechanical Plant, LLC Software
Enerkom, LLC ABB Elektrooborudovaniye.
Why Lipetsk region
• An opportunity to choose the most suitable site provided with all necessary infrastructure.
• Successful experience of the region accompanied by large investment projects.
• Proximity of large industrial enterprises – potential consumers of products.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
1
2
20 |
Special economic zone of industrial
and production type of the federal
Lipetsk level
1024 hectares
267 MW
1325 million m /year
3
+|+
+|+
According to calculations of ASI, in the segment of electrotechnical equipment.
According to calculations of ASI, taking into account average market gain rates, without assessment of potential effect of import
substitution.
02
Investment
niche
Production
of pharmaceutical
products
01
02
03
04
Sales volume within a niche
in the Lipetsk region in 2014 3
4,10 billion rubles
Share of regional manufacturers
6 %
Import share across the Russian Federation
in 2014 4
>70 %
Potential free market capacity,
per year 5
For the present day the industrial complex CJSC Rafarma, the full cycle enterprise,
specializing in production of antibiotics and antineoplastic preparations is provided in the
Lipetsk region.
Why Lipetsk region
• An opportunity to select the most suitable site provided with all necessary infrastructure.
• Proximity to large sales markets of all Central Federal District.
• Forming of a pharmaceutical cluster is one of priorities of investment policy of the
region.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
3
4
5
Special economic zone of industrial
and production type of regional level
“Terbuny”
992,2 hectares
90 MW
271 million m /year
3
+
+|+
According to calculations of ASI, on the basis of statistics of sales of medicines (commercial sector) for 2014.
According to calculations of ASI, on the basis of statistics of sales of medicines (commercial sector) for 2014.
According to calculations of ASI, on the basis of assessment of market gain rates by DSM Group.
| 21
The in v estment o p p o r t u ni t i es o f O r el r eg i o n
Moscow
Kaluga
209км
361 км
Tula
192км
Bryansk
129км
Orel
Lipetsk
296км
Kursk
162км
THE INVESTMENT
OPPORTUNITIES OF
The map of the region and arrows to the centers of
distance by public roads 1
OREL
REGION
01
of the region
DETAIL:
http://www.investinregions.ru/regions/orel/
http://orel.gks.ru/
http://invest-orel.ru/
http://invest-orel.ru/articles/razdel_1
22 |
1
Population
765 231 people
Adjacent regions’
population
6 032 239 people
office premises
5 300 rub/sq.m/year
4 800 rub/sq.m/year
Average sale price
Average monthly
salary
23 240 rub
02
Gross regional
product (GRP ):
Place of the region
in terms of GRP:
16 | 64
164,5
bn RUB
in 2013
176,6
bn RUB
in 2014
+3.1%
Investment contact:
Yury Esipov,
Total equity
investments:
in Federal
District
Among all regions
of the Russian
Federation
Unemployment
level:
member of the Orel region
Government – Head of the Orel Region
Department of Economic Development
and Investment Activities
tsh@adm.orel.ru
+7 (910) 748-42-05
43,7
bn RUB
in 2013
44,9
bn RUB
in 2014
+2,7%
The headline
inflation:
7,4% | 12,7%
in 2013 | in 2014
03
04
5,8% | 5,1%
in 2013 | in 2014
Manufacturing
Inflation:
2,6% | 8,9%
in 2013 | in 2014
• High power security of the region.
• Well-developed transport infrastructure.
• Availability of highly qualified personnel in the field of agriculture.
• Profit tax rate reduction for a period of 3 to 7 tax periods:
• from 18% to 13,5% for the organizations included in the register of investment
projects of the Orel region;
• from 18% to 15% for the organizations included in the register of programs of
production modernization of the Orel region.
• Property tax exemption for a period of 3 to 7 tax periods.
• Granting subsidies for the provision of manufacturing sites with industrial infrastructure,
including land management, registration of the created land lots with the State Cadastral
Register and state registration of rights thereto.
• Providing state guarantees amounting 50% of the investment project cost.
| 23
01
Investment
niche
Advanced grain
processing for
the food industry
01
02
03
04
2559 thousand tons
The volume of grain
processing in Orel region in 2013
773 thousand tons
70 %
Now the most part of grain crops, produced in the territory of the region is on sale in public
markets as raw materials. The large processing enterprises are not provided in the region.
All this causes need of creation of regional refinery capacities for receiving an end product
with high added value that finally should lead to raise in stability of a regional industry chain:
production - processing-implementation.
Why Orel region
• High productivity of grain crops.
• Transport availability of highly capacious sales markets.
• Priority of the industry at the region level.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
DETAIL:
http://www.park57.ru
1
24 |
Gross collecting grain in the Orel region
in 2013
“Industrial park “”Zelenaya Roshcha””
http://www.park57.ru”
140,5 hectares
50 MW
5 000 million m /year
3
+|+
-|+
Taking into account own consumption of the Orel region and sales on the markets of the neighboring regions.
02
Investment
niche
Milk
production
01
02
03
04
Milk production volume in the Orel region
in 2013
123,7 thousand tons
Share of local manufacturers in the market of
region in 2013
68 %
Potential free market capacity, in a year 2
1,2 billion rubles
There is a number of enterprises performing activities for milk production in the territory
of Orel region: LLC Jupiter (1046 cattle), LLC Maslovo (1500 cattle), Federal State Unitary
Enterprise Streletskoye (700 cattle), CJSC Slavyanskoye (650 cattle), CJSC APK Orlovskaya
Niva holding with a dairy complex for 1200 heads of milking herd, etc. However, now the
processing capacities of Orel region have deficiency in dairy products that, respectively,
causes need of increase in a livestock of milking herd.
Why Orel region
• Availability of land resources for creation of reliable food supply.
• Availability in the region of processing enterprises which are direct and potential
consumers and have an opportunity to process additionally up to 200 thousand tons of
dairy raw material a year.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
DETAIL:
http://www.park57.ru
“Industrial park “”Zelenaya Roshcha””
http://www.park57.ru”
140,5 hectares
50 MW
5 000 million m /year
3
+|+
-|+
According to calculations of Department of economic development and investing activities of the Orel region, taking into account
assessment of non-satisfied demand.
2
| 25
The in v estment o p p o r t u ni t i es o f Perm Terri t o r y
Syktyvkar
896км
Kirov
494км
Perm
Yekaterinburg
361км
Izhevsk
280км
Moscow
1442 км
Ufa
471км
THE INVESTMENT
OPPORTUNITIES OF
Distances from Perm to administrative centers of the
adjoining regions and Moscow 1
Perm Territory
01
of the region
DETAIL:
http://investinregions.ru/regions/perm/
http://permstat.gks.ru/
http://www.investinperm.ru/
http://www.investinperm.ru/
permregion/strategy/
26 |
1
Population
2 637 032 people
Adjacent regions’
population
12 085 694 people
office premises
6 000 rub/sq.m/year
3 000 rub/sq.m/year
Average sale price
Average monthly
salary
24 716 rub.
02
Gross regional
product (GRP ):
Place of the region
in terms of GRP:
5 | 13
893,4
bn RUB
in 2013
1 066,4
bn RUB
in 2014
+19,4%2
Investment contact:
Leonid Morozov,
Total equity
investments:
in Federal
District
Among all regions
of the Russian
Federation
Unemployment
level:
Minister of Economic Development
of Perm Territory
lyumorozov@economy.permkrai.ru
+7 (902) 801-61-75
219,5
bn RUB
in 2013
185,6
bn RUB
in 2014
-15,4%
The headline
inflation:
6,5% | 10,4%
in 2013 | in 2014
03
04
6,5% | 5,8%
in 2013 | in 2014
Manufacturing
Inflation:
1,3% | 1,2%
in 2013 | in 2014
• Rich stocks of mineral raw material resources.
• Transit status of the region (2 lines of Trans-Siberian Railway, Moscow-Yekaterinburg
federal highway).
• High gas provision of the region ensures competitive rates for this type of fuel.
•
•
•
•
Preferential profit tax rate, 13.5% for the widest range of taxpayers.
Differential property tax rate for different taxpayer categories.
One of the most developed mechanisms for investment projects support (‘one window’).
Well-developed personnel recruitment system (especially industrial staff) for the
investors’ needs.
• Targeted assistance in investors’ participation in state programs of the Russian
Federation.
3
http://docs.cntd.ru/document/911502218
| 27
01
Investment
niche
Wood-processing
and manufacture of
wooden products
01
02
03
04
The volume of wood procurement
in Perm Territory in 2014
> 8 million cubic meters
Timber production volume
in Perm Territory 2014 1
> 390 thousand cubic meters
Paper production volume
in Perm Territory in 2014
> 566 thousand tons
Market capacity, a year 2
> 2,63 billion rubles
At present the wide product range of timber processing complex is manufactured in
Perm Territory. The main players in this market are such companies as «Permsky DSK»,
«Sveza», «Solikamskbumprom», «Kama», «PTsBK». The implementation of several large
projects in the field of woodworking, directed on production with high added value is also
going in the region.
Why Perm Territory
• High share of high-quality raw materials (coniferous breeds make more than 61%).
• High concentration of wood resources, plans for growth of logging volumes.
• Proximity to key sales markets.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
1
2
28 |
Industrial land plot
Markovsky
281 hectares
22 MW
7500 million m /year
3
+|+
+|+
Statistically on large and medium-sized enterprises.
According to calculations of ASI, across Perm Territory, assessment by the cost of bar and paper for writing.
02
Investment
niche
Retail trade
(hypermarket
construction)
01
02
03
04
Retail turnover
in Perm Territory in 2014 3
Expected annual average rate
of consumer market gain 4
8,7 %
Share of modern trade
format in Perm 5
34 %
Perm Territory has the lowest provision of floor spaces per capita, at the same time the
modern trade format share (hypermarkets, supermarkets, etc.) is the lowest among the
neighboring regions. Perhaps, it partly provokes increase in consumer spendings by the
population of the region outside the region. Today there are several large networks in the
region, including: Magnit, X5 Retail Group, Auchan, Lenta, M.Video and Metro Cash and
Carry.
Why Perm Territory
• Rather higher level of consumer capability of the population caused by character of
economy of the region.
• Insufficient number of shopping centers of modern formats.
• Low level of penetration of federal retail networks.
Manufacturing sites
production site
(hectares)
Electric power
existence (yes/no)
3
4
5
133 Lyangasova St.
1 hectares
+
+|+
-|+
According to Permstat.
According to calculations of KPMG.
Modern format: hypermarkets, supermarkets, self-service minimarkets.
| 29
News of
growing
industries
News of pers p ec t i v e i ndu s t ri es
01
August 26
2015
PHARMACEUTICS
Opening of pharmaceutical plant CJSC Verteks took place in St. Petersburg.
Opening of the first stage of CJSC Verteks pharmaceutical plant took place at the
Novoorlovskaya site of the St. Petersburg Special economic zone.
In 2010, CJSC VERTEKS became the resident of SEZ St. Petersburg. In 2013, the construction
of new production was launched at the Novoorlovskaya site. In two years, the company has
built a pharmaceutical plant with the area of more than 20000 sq.m.
Investments into the project made more than 2 billion rubles. Production volume, which
the company intends to make at the initial stage, is about 70 million packages of finished
medicinal goods, or up to 1 billion units of medicines per year. The production comprises
350 workplaces.
The company’s product range includes prescription and nonprescription generics and
brand generics. Their share in the company’s portfolio comprises more than 130 positions,
including 80 vital items from the VED list.
02
August 24
2015
PRODUCTION
OF BABY FOODS
The Kemerovo dairy combine has opened a baby food workshop.
The Kemerovo dairy combine (belongs to Danone) has reopened the baby food workshop.
The workshop was reconstructed, its power has grown twice — up to 40 tons per day.
Investments into the equipment and opening made 700 million rubles.
The workshop will produce cottage cheeses, yogurts, milkshakes and drinking baby foods
of several types from premium high protein milk. The most part of milk for the workshop
will be supplied by local farms.
The entire Kemerovo dairy combine’s capacity in processing of raw milk is 240 tons per
day. 60% of raw milk is bought from local farms. In 2014, all production was completely
modernized and automated.
| 31
03
August 20
2015
WOODWORKING
The new sawing and woodworking complex was opened
in the Kaluga Region.
Production of timber and trim molding was opened in Balabanovo at one of the leading
domestic wood processing enterprises — CJSC Plitspichprom. The amount of investments
into the production is more than 1 billion rubles, payback period is about seven years.
The Balabanovskaya factory’s own production of timber and profile products from wood
is implemented within the comprehensive modernization program, which started in 2014.
The new production allows for several technology sections: raw materials storage, round
wood sorting section, sawing section, dry and raw timber sorting section. All production
sections are equipped with automatic transfer lines. The new production has 60 workplaces.
The main range consists of different timber, bar, board trim, block houses, floor board,
eurolining and some other products from wood.
Plitspichprom, with its more than a half-century history, is a large multi-profile enterprise,
the products of which are demanded in Russia and abroad. The company is included in
the list of backbone organizations of the region and is a strategic enterprise of the Kaluga
region.
04
april 10
2015
HOTEL SERVICE
Ufa launches Hilton Garden Inn.
Hilton Garden Inn Ufa Riverside — a hotel for 167 rooms was launched in Ufa. It is located
in the historical part of the city near the Congress hall, with a view of the Belaya river.
The hotel offers free Wi-Fi; a business center and a fitness studio are available round
the clock. There are conditions for arrangement of business negotiations, conferences
and wedding celebrations. For this purpose, the hotel complex includes four conference
halls and a banquet hall with a total area of 478 square meters. The Garden Grille and Bar
restaurant and round-the-clock Pavilion Pantry minimarket work in the territory of the
hotel.
The Ufa hotel became the seventh Hilton Garden Inn hotel in Russia. And it is the second
project implemented together with the KESCO company.
August 2
2015
a New hotel was opened in Belokurikha.
On August 2, a ceremonial opening of the Altai-Green park hotel took place in Belokurikha.
The new tourist object is opened within the implementation of the Belokurikha tourist
and recreational cluster project. The hotel offers a unique health-improving procedure:
antler baths based on natural raw materials. In the treatment block of the hotel, there are
3 bathtubs for antler procedures equipped with 6 boilers for preparation of antler solution.
There are 16 standard rooms, 2 luxury rooms and 1 room of the “deluxe” category in which
about 34 visitors can accommodate simultaneously.
32 |
05
July 20
2015
POULTRY PRODUCTION
Sakhalin Region launches a new building of the Ostrovnaya
poultry farm.
A new building of the Ostrovnaya poultry farm in which practically all processes are
automated, has been commissioned in Yuzhno-Sakhalinsk.
Initially, it was planned to spend 86 million rubles for the construction and equipping of the
object. As of the moment, 57 million rubles have been invested. After it reaches the design
capacity, the factory will produce 80 thousand eggs per day. One more similar workshop is
to be commissioned in the poultry farm this year.
Additionally, a broiler production designed to produce 10 thousand tons of goods annually
will be developed on the enterprise’s base. Citizens of Sakhalin and Kurils will be able to
buy poultry meat in a long-storage vacuum package. A grain elevator with a feed milling
plant will be located here.
The facility is designed to accommodate 80 thousand birds; today it will receive two
thousand ones. The birds will get vitamins to relieve stress. They will be included in food
allowance. The feeding system is completely automated.
The eggs collection process is also automated. A system of elevators and conveyer belts
brings products directly to the warehouse, which is located within the same facility.
| 33
Macroeconomic
indicators
Region
Gross regional
product
million rub
Gross regional
product per capita,
rub
Foreign direct
investments
(thousand US dollars)
2005
2010
2012
2005
2010
2012
2005
2010
2013
Altai
Territory
Kamchatka
Territory
Perm
Territory
Lipetsk
region
Orel
region
135 686,4
302 900,7
370 554,7
53 812,4
124 955,8
154 205,7
1 543
38 541
554
43 974,3
103 123,2
126 984,3
129 240,8
319 849,2
396 388,6
6
7 642
1 022
327 273,3
623 116,8
897 597,6
119 654,0
235 930,6
340 933,2
12 687
67 775
30 894
145 194,4
248 544,9
294 862,6
121 376,2
211 610,6
253 302,1
27 655
177 679
107 668
53 181,9
106 196,7
146 139,6
64 180,4
134 533,8
187 706,4
17 088
65 131
3 492
Region
Population
thousand people
Average annual
number of employed
thousand people
average per capita
income
(per month), rub
2005
2010
2013
2005
2010
2013
2005
2010
2013
Altai
Territory
Kamchatka
Territory
Perm
Territory
Lipetsk
region
Orel
region
2 503
2 417
2 391
1 105,1
1 079,4
1 075,0
4 640
11 029
15 979
337
322
320
180,9
189,1
185,9
11 167
27 010
35 371
2 719
2 634
2 636
1 318,9
1 304,8
1 280,1
8 273
19 834
26 054
1 194
1 172
1 160
548,7
544,9
543,4
5 591
15 936
22 222
822
786
770
410,9
391,9
392,1
4 857
13 115
18 262
Region
Capital investment
million rub
Altai
Territory
Kamchatka
Territory
Perm
Territory
Lipetsk
region
Orel
region
34 |
Fixed assets in economy
(by overall registration cost;
at the end of year), million rub
share of profitable large and
medium-sized enterprises and
organizations, %
2005
2010
2013
2005
2010
2013
2005
2010
2013
21 344
54 580
92 930
382 472
712 242
870 401
53,2
68,2
70,0
7 060
32 615
32 607
100 939
194 506
296 821
46,3
65,4
61,8
56 800
139 652
188 719
961 938
1 837 184
2 410 614
62,5
65,0
68,2
30 312
101 600
101 050
330 185
635 096
879 524
59,6
64,5
73,0
9 610
21 451
43 636
135 776
258 382
349 432
60,0
63,3
69,9
Disclaimer
The “Agency for Strategic Initiatives” is an independent non-profit organization
(hereinafter — the Agency). It is business organization and seeks to establish similar
relations with the administrative authorities of the Russian Federation, information about
which is available in this research report. Therefore, potential investors and entrepreneurs,
both Russian and foreign, should be aware of the possibility of a conflict of interest which
might affect the objectivity of this report. When deciding to make any investment decision,
potential investors and entrepreneurs, both Russian and foreign, must be guided by a range
of factors, not only this report.
This publication is solely for informational purposes and should not be construed
as a proposal to invest in a particular market segment or in a particular region. Neither
the information contained in this research report, nor any other information relating
to the topic of this report, which may be disseminated in the future, may be used as the basis
for any contract. Information contained within this report and the conclusions based thereon
have been obtained from public sources considered reliable by the Agency. Furthermore,
data provided by the Federal State Statistics Service, as well as other sources, including
data provided by employees of the executive bodies of the state authorities, has not always
met the requirements for completeness and consistency. Notwithstanding the due care
taken in preparation of this report, no warranties or representations, express or implied,
are given by any employee of the Agency and no responsibility as to the reliability, accuracy
or completeness of the information contained in this analytical report is assumed by them.
We expressly deny responsibility and liability in connection with any information contained
herein. Any information contained herein is subject to change at any time without notice.
No employee of the Agency assumes the obligation to update, modify or amend this
research report or notify readership in any form in the event that any of the facts mentioned
in the report, opinions, projections, forecast or estimates change or subsequently become
inaccurate, or if research on the subject company is withdrawn. In addition, it should be
borne in mind that past performance is not indicative of future results. Investments in the
economy of the regions of the Russian Federation are accompanied by a high level of risk.
Potential investors and entrepreneurs, both Russian and foreign, should conduct their
own due diligence before making any investment decisions. The views expressed in this
research report accurately reflect the personal views of the authors for their respective
niche markets and investment opportunities, but do not necessarily reflect the position
of any employee of the Agency. No part of the remuneration paid to the authors of this report
was not, is not and will not be directly or indirectly related to the specific recommendations
or views set out in this research report.
| 35
Acknowledgements
The Agency of Strategic Initiatives thanks all who took part in collecting, analysis and preparation of information on
potential investment opportunities and market niches in regions of the Russian Federation, and about a situation
in the Russian macroeconomic. Without your involvement, responsibility, professional comments and notes, and
continued expert support this overview would not be published.
Avdonkina Ksenia,
chief specialist of the department of
investment projects of the Ministry
of economic development of Perm
Territory
Anishchenko Marina,
the deputy head - the head
of tourism development,
tourist product promotion and
external relations department of
Kamchatka Territory of the Agency
on tourism and external relations
of Kamchatka Territory
Antontsev Sergey,
head of investment development
division of Department of economic
development and investing
activities of the Orel region
Buchkovsky Ilya,
managing director, VTB Capital
Golovina Olga,
chief specialist of department
of coordination of investment
activities of the division of
investment development of
Department of economic
activities of Orel region
Grishin Petr,
head of the macroeconomic
analysis department, VTB Capital
36 |
Ivanova Nina,
deputy head of department of
investments and international
relations of the Lipetsk region
Koval Nikolay,
deputy head of department of
investment activities development
of the Main department of
economy and investments of Altai
Territory
Kosacheva Elena,
leading consultant of investment
management and international
relations department of the Lipetsk
region
Kosikhina Elena,
head of investment activities
development department of Head
department of economy and
investments of Altai Territory
Lelikova Irina,
assistant of the investment
policy department of the Ministry
of economic development,
entrepreneurship and trade of
Kamchatka Territory
Malenko Igor,
head of investment and
international relations department
of the Lipetsk region
Nikolaev Roman,
senior teacher of department of
social and economic geography of
the Perm state national research
university
Surova Oksana,
chief specialist of the department of
coordination of investing activities
of investment development section
of the Department of economic
Chernysh Vyacheslav,
head of economy and financial
analysis department of the Ministry
of agriculture, food and processing
industry of Kamchatka Territory
Yakovenko Svetlana,
chief specialist of department
of coordination of investment
activities of the division of
investment development of
the Department of economic
development and investment
36/9 Novy Arbat Street,
Moscow, Russia, 121099
+7 (495) 690-91-29
int@asi.ru
asi.ru/en
2015

Doing business in Russia:

Transcription

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