Central Russia: New Opportunities for Investors
4 September 2019
A package of investment projects in priority industries has been created for the Central Federal District
As of the beginning of September, the Investment Council has created a portfolio of 208 projects worth a total of USD 15 billion. This is the first project for proposals. An online resource has been specially developed (selectcr.site) — Igor Shchegolev, Presidential Plenipotentiary Envoy to the Central Federal District.
The project portfolio covers 12 sectors of the economy, and encompasses 208 projects which are already in a position to attract investment. <...> The average return on projects in this portfolio is 10–35%, depending on the sector — Sergei Kachaev, Co-Chairman, Council on Investment Authorized in the Central Federal District .
The Central Federal District has the infrastructure needed for investors
Central Russia has 15,000 hectares of industrial land with transport and utilities infrastructure in place. It also has 7 special economic zones, 16 regions with special tax and administrative regimes, 136 industrial parks, and 193 individual plots with fully developed infrastructure — Sergei Kachaev, Co-Chairman, Council on Investment Authorized in the Central Federal District .
Trade between Central Russia and countries of the Far East is growing at a rapid rate
Last year, trade with Japan increased by 21%, with South Korea by 34%, and with China by 35%. In addition, talks took place in June this year between the leaders of Russia and China. <...> A new form of interregional collaboration between the Central Federal District and Northern China was announced — Igor Shchegolev, Presidential Plenipotentiary Envoy to the Central Federal District.
All aspects related to transport have been solved, trains regularly travel to all ports in China, and we have seen the first trains travel to Japan, Vietnam, and India. <...> Today will see the signing of a deal <...> related to the new so-called ‘agro-train — Vladimir Potemkin, Deputy Governor of Kaluga Region.
The Central Russian economy possesses considerable investment potential
A fundamental driver of growth will be <...> the number of cars per 1,000 people. In Russia, the figure is half that of Europe. That is why the Russian automotive market must grow in the long term — Maxim Kondratyev, Chief Executive Officer, Alfa Automative Technologies.
Why is the chemicals industry in Central Russia attractive to investors? First of all, it accounts for sizeable part of the market at USD 72 billion. Chemicals are used substantially. <...> We export chemical products worth a total of USD 8 billion — Sergei Kachaev, Co-Chairman, Council on Investment Authorized in the Central Federal District .
Central Russia not only opens for me the whole of Russia, but also the CIS. <...> My aim is to maximize exports from here — Rajesh Sharma, Chief Executive Officer, Advanced Group.
Central Russia offers highly qualified personnel
We have a highly productive workforce concentrated in Central Russia. Forty per cent of our workers are university educated, and we have the biggest research centres, which can aid scientific developments in the chemicals industry — Sergei Kachaev, Co-Chairman, Council on Investment Authorized in the Central Federal District .
Why did we come to Belgorod? We signed an agreement, but other reasons were that in our field we require manpower, and Belgorod University is one of the universities in Russia which is giving out a lot of good professionals. What also interested us in Belgorod was the infrastructure. Already there existed a polyvitamin factory — Rajesh Sharma, Chief Executive Officer, Advanced Group.
Qualification requirements for local and regional managers are increasing
Success depends greatly on the work done by local and regional teams who support these projects. <...> Regional support measures and services in the regions of Central Russia are constantly adapting to new conditions. They are improving — Artur Niyazmetov, Deputy Presidential Plenipotentiary Envoy to the Central Federal District .
The need to improve the urban environment
The second priority is the quality of the urban environment. People don’t just work at our enterprises, they live in the city. <...> A pleasant environment is very often the deciding factor for an investor, — Denis Tikhonov, Minister of the Moscow Government, Head of the Department of Economic Policy and Development of the City of Moscow.
Simplifying bureaucratic procedures
With regards the Construction Support Centre, we brought together representatives from all agencies responsible for issuing permits at one site. And there are a great many such agencies. <...> We agreed that all these documents could be sent electronically. <...> We have agreements with representatives of federal government bodies whereby we can receive answers regarding the approval of projects within 15–30 days maximum, rather than the standard 60 days. <...> A personal manager helps coordinate our interactions with all department — Vadim Khromov, Deputy Chairman of the Moscow Region Government.
My experience is that there is a lot of help which you can get. If we can create one window for the investors, then this will help the investor understand the climate, to get all the information, and decide fast — Rajesh Sharma, Chief Executive Officer, Advanced Group.
Involving several regions in projects from the start
We view the investment plans of 18 regions as a comprehensive proposal to investors from the entire district. The investor has the option of increasing returns on a project through leveraging the advantages offered by each region. One place may have lower energy tariffs, while somewhere else may have the requisite infrastructure already in place. <...> By involving several regions from the start, we can significantly expand the range of profitable business sectors — Igor Shchegolev, Presidential Plenipotentiary Envoy to the Central Federal District.
Comprehensive government support for investments
When factories are constructed, we compensate part of the expenses which have gone on putting utilities infrastructure in place. Once the factory is commissioned, we refund up to 10% of the cost of the project — Vadim Khromov, Deputy Chairman of the Moscow Region Government.
Moscow Region has added an online calculator to the new investment portal <...> to help ascertain the value of government support. The investor specifies <...> a range of parameters for their project, and they are immediately shown a package of government services they can take advantage of — Artur Niyazmetov, Deputy Presidential Plenipotentiary Envoy to the Central Federal District .
The material was prepared by the Russian news agency TASS