Presentation on Kirov Oblast American Chamber of Commerce in Russia Delivered by: Nikita Belykh, Governor of Kirov Oblast February 11, 2010
Area– 120,400 sq. km Population – approx.1.5 million people (1% of the population of the Russian Federation) Borders 9 federal subjects of Russia Transected by federal highways and major railroad lines, which form a transit corridor to the northern seaports, Siberia and the Far East. The region has huge potential in terms of industry, science and human resources, and already has a developed communications network.
200 years of cooperation In 1806, Vyatskiy Region merchantXenophon Anfilatov first sent his ships, laden with Russian goods, to the shores of the United States of America. In Boston, New York and Washington, Anfilatov studied the economics of the young, “bourgeois” republic, particularly the banking sector. In 1810, Anfilatov opened Russia’s first municipal public bank in Vyatka. Thus was laid the foundation for banking in our region.
Resource potential The largest phosphorite deposits in Europe - 45% of all phosphate mined in Russia. Large reserves of peat - 50% of Russia’s peat is harvested in Kirov Oblast Limestone, glass sand, raw material for expanded clay aggregate and ceramic brick, and other construction and building materials. Rich in mineral water and healing muds. The greatest source of wealth in the Vyatskiy Region isits forests. Forest covers two thirds of the Oblast. Timber reserves total over one billion cubic meters, with a cutting area of 16 million cubic meters.
Competitive advantage – a highly skilled work force • Educational system: - high-quality, systematically reinforced material basis, - constant improvement of the quality of educational services, - widespread innovative processes, - stable pool of qualified teachers. Results: - for the past five years, the Oblast has been one of the top ten regions in the Russian Federation, according to the results of the Unified State Examination, - eighth place according to the number of prizes won at All-Russian Olympiads. The scientific and educational campuses in Kirov Oblast, as represented by universities and research institutes, are growing steadily.
Stimulating investor activity Cooperation with foreign investors The sales relationship between the Italian company CANDY and VESTA, a PLC from Kirov Oblast - an investment project which has expanded production of a new generation of consumer electronics. Full support has been given to the investors in getting this project up and running in the Vyatka Region.
Stimulating investor activity Construction of a plant to produce ceramic building materials, with an output of 42 million bricks per annum. Cooperation withGerman company KELLER HZV GMBH • - equipment installed on-site is unparalleled by anything seen in the Russian Federation to date: - latest ‘flashing’ technique is used in firing bricks, - production process uses the most up-to-date world-class standardrobotics. State support: direct investment, subsidized loans, tax exemptions Plans for building the factory were completed in an unprecedentedly short period of time – a mere year-and-a-half passed from the moment the first brick was laid to the production of the first batch of bricks.
Investment ratings of Kirov Oblast • Fitch Ratings: • - foreign and domestic currency international rating of В, - domestic rating of BBB+(rus). • Moody's Investors Service: - domestic currency issuer international rating of Ва3. • Moody's Interfax: • - domestic rating of Aа3.ru. • Stable outlook according to all ratings. In a rating of the investment attractiveness of Russia’s regions for 2008 – 2009, conducted by EXPERT rating agency. The Kirov Oblast places 53 in terms of investment risk (a decrease in risk by 18 places versus 2007 – 2008);
Cooperation with International development institutes Project to support local initiatives The World Bank offers consultingsupport on • Repairing cultural centers; • Repairing local village roads; • Building playgrounds for children; • Constructing pedestrian walkways; • Improving communities; • Sports venues; • Water supply. Anticipated subsidies – about 20million rubles 25-35municipal districts took part in tender bidders
Cooperation with international development institutes Regional and municipal development program The World Bank and International Finance Corporation (IFC) area: - Housing and public utilities - Power generation - Transport - Roads - Environment - Social infrastructure facilities - Various types of public-private partnerships Negotiations are currently underway on completing a project to construct a milled-peat burning boiler.
Economic cooperation between Kirov Oblast and the USA Export Chemical and petrochemical production Zavod Mineralnyk UdobreniyJSC Zavod PolimerovLLC DomostroitelPLC Krasniy Yakor JSC Novovyatskii Lyzhniy KombinatPLC Plywood and furniture Import Machine-building production, ferrous metal products andlighting equipment
Strategy for Social-Economic Development in Kirov Oblast by 2020 Our strategic goal is to increase the quality of life for our citizens by developing priority sectors of the economy and modernizing the social sphere. • Implementing this strategy by 2020 will: - increase work productivity levels three-fold, - increase gross regional product (GRP) by 2.6 times, - Increase fixed-capital investment by 2.4 times.
Strategy for Social-Economic Development in Kirov Oblast by 2020 • В Priority areas in the region’s socio-economic development include: - forestry, - agricultural, - production of building materials, - developing the chemical sector based on phosphate mining, - complex harvesting of peat . We have developed a series of planned activities which will allow us to overcome a number of major infrastructural and human resources constraintsin order to complete the investment projects.
Forest covers around 70% of the region Forestry Cutting area of 16 million cubic meters The region is in fifth place in Russia in terms of lumber production, in eighth placein terms of timber transportation, and 19th placein terms of timber reserves High supply of logging and timber processing specialists • We are interested in project implementation: Create a high-powered enterprise for complex harvesting and processing of wood, including: • - a factory with the capacity to process pulp from 700 tons of raw coniferous and deciduous material, • - a sawmill with a lumber capacity of 600 thousand cubic meters, - an enterprise which will make use of the waste from the sawmill and generate electric power, - a paper-production factory. Build an OSB (chipboard) factory. Manufacture laminated wood products.
The region’s agricultural enterprises specialize in milk and meat production and also processing them. Agriculture Dairy products from the region are shipped to the Republic of Komi, the Archangelsk and Nizhny Novgorod regions, Perm Territory and other regions. The region’s agricultural enterprises produce ecologically pure goods that adhere to international standards. It is necessary to form a new agricultural sector structure to provide high competitiveness of the sector. We are interested in implementing projects aimed at the technical and technological modernization of agricultural enterprises, at increasing the overall volume of processed agricultural produce, and developing alternative products in the agrarian sector.
Construction The region has a strong construction industry. The main products in this sector are building bricks, wall blocks and panels, precast concrete structures and components The region’s raw materials allow for the creation and production of lining brick, cement, technological and building lime, as well as building sand and sand-gravel mixtures Investment proposals: - Buildan inter-regional cement complex, comprising a cement plant with a capacity of 2.5 million tons per annum, and a dry mortar plant with a yearly capacity of 30 thousand tons; - Produce ceramic tiles.
Pharmaceutical cluster to produce blood preparations Plasma center Estimated processing capacityof up to 600,000 tons of plasma per year Fulfill 100% of the country’s immunoglobin needs– 58% of the requirement for albumin, with two factors for blood clotting at 40% and 100% A network of donor centers: 8 in Kirov Oblast,40 in the neighboring regions Kirov scientific research institute for haematology and blood transfusions. Scientific research and development conducted in the treatment of blooddisorders. The Roszdrav Kirov State Medical Academy Training highly qualified scientific researchers in medicine and pharmaceuticals
Biochemical cluster Kirov Region has unique potential for the development of biochemical technology. • Significant reserves of reproducible biological material (waste from the forest and timber industry, processing of agricultural and food raw material, peat deposits, medicinal plants in ecologically pure areas of the region, and so on); • organizations for scientific development; • educational institutions; • industrial plants for biotechnological and pharmaceutical products; • factories for the manufacture of necessary biotechnological equipment; • infrastructure dedicated to scientific results.
Biochemical cluster Key segments of the biotechnological sector of Kirov Oblast Biotechnological products for agricultural and timber processing Biotechnological pharmaceutical products The region’s biotechnological sector Enzymes and enzyme products Live microorganism cultures
Development of the peat industry Area of cooperation – attract investment in order to develop the peat industry Complex system developed for liquidating waste petroleum products and salvaging oil sludge and recycling it as fuel briquettes. The region’s government is currently exploring alternative uses for peat, for example in the machine-manufacturing, furniture and cosmetic industries, as well as manufacturing household chemical goods.
Environmental safety We areinterested in developing and implementing projects which will improve the ecological conditions in the region. Plan on implementing a project entailing the construction of a waste-recycling complex, which include: - waste-sorting system, - universal high-performance system for the thermal disposal of dangerous solid and liquid chemicals, medical and biological waste, - facilities to recycle waste from the manufacture of market products. The overall cost of the project is $32.3 million. It is imperative that we find co-investors in order for this project to be completed.
Logistics potential In the Kotelnichskiy Region of Kirov Oblast, there are plans to implement an investment project for the Creation of an Industrial Park with a Transport and Logistics center. Theregional government, district administrators and private investors have reached an agreement on cooperation and collaboration in this project. The overall cost of the project will be about $70 million. Within the framework of this project are plans to construct: - a multi-modal transport and logistics center with class A storage, container platforms and customs posts; - an industrial center to house a factory to produce building materials and a plant to create electric and heat energy from processed timber waste.
Kirov Oblast has unique recreational potential. Tourist and recreation potential Mineral and healing mud reserves. 20 health spas operate in Kirov Oblast. There are more than 200 nature sanctuaries in the region, including a wildlife preserve, 2 nature reserves, and 9 game hunting reserves. There are 189 federal historical monuments, including the unique Uspenskiy Trifonov Monastery ensemble, the Velikoretskiy architecture and temple complex, and the Mikhail Archangel wooden chapel. There are more than 40 museums.
Social and cultural exchanges The government of Kirov Oblast is interested not only in economic cooperation, but also in social and cultural exchanges. Within the framework of the Cooperation Agreement between the Vyatskiy Humanitarian University and Troy University, Alabama, the Russian-American University project is currently in place, allowing Russian students to receive a dual Russian-American education. Since 1993, the Vyatskiy Humanitarian High School has been participating in the FLEX (Future Leaders Exchange) program, which allows older pupils to take part in exchanges organized by the American Council for International Education, with the support of the Federal Education Agency. Researchers at the Kirov State Medical Academy can avail of internships with their American colleagues at Southeastern Medical Center, Alabama, Southeastern Neurosurgical Center, Alabama, and the American Center for Nonproliferation Studies.
Ladies and gentlemen, I would like to invite you to join us in mutually beneficial collaboration and, as the Governor, I guarantee that your business dealings and implemented projects, as well as cooperation in all other areas, will be trouble-free and successful. In order to accomplish this, the Government ofKirov Oblast is ready to offer full financial, economic and organizational support.
Contact Address: 69 Karl Libknekht St.,Kirov, Russia, 610019 Telephone: (8332) 64-9564. Fax: (8332) 64-8958, 38-1313. E-mail: email@example.com. Thank you for your attention.