Investment Audit of the Udmurt Republic Version 2.0 Udmurtia on the Map of Russia 1
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INVESTMENT AUDIT OF THE UDMURT REPUBLIC VERSION 2.0 UDMURTIA ON THE MAP OF RUSSIA 1 Moscow MADE IN UDMURTIA Kirov 41,200 SQ KM Perm Nizhny Novgorod Area Izhevsk (56th/85*) Kazan Ekaterinburg Ufa Samara 1.5 M Population (30th/85*) UDMURTIA’S LARGEST CITIES RUB 622.7 BILLION1 970 KM GRP IZHEVSK 650,000 Distance from Izhevsk to (33rd/85*) Moscow: SARAPUL 98,000 2 hours 98,000 VOTKINSK 18 hours (1200 km) GLAZOV 93,000 RUB 412,3001 GRP per capita (42nd/85*) KEY TRANSPORT INFRASTRUCTURE: Trans-Siberian Railway (Balezino Station, Glazov Station) ¹ Preliminary data for 2018, Ministry of P320 Elabuga-Izhevsk regional highway, connection to M7 Volga Economy of the Udmurt Republic Udmurt Republic * Ranking among Russian regions in 2017 Volga Federal District (VFD) Source: PwC analysis on the basis of Rosstat data and geodata 2 IGOR SHUVALOV MAKSIM ORESHKIN DENIS MANTUROV DMITRY PATRUSHEV 3 Chairman of VEB.RF Minister of Economic Development Minister of Industry and Trade of Minister of Agriculture of the THE REGIONAL ADMINISTRATION HAS INITIATED of the Russian Federation the Russian Federation Russian Federation AN INVESTMENT AUDIT TO SUPPORT UDMURTIA’S LONG-TERM ECONOMIC DEVELOPMENT MADE IN UDMURTIA 2014 2017 2019 2020 “VEB.RF, the Russian Export “Udmurtia’s focus on driving non- “Udmurtia is a region with “Udmurtia’s climate and Centre, DOM.RF and the SME resource-based exports, training enormous investment potential environment provide an excellent Investment strategy Map of investment Investment audit Udmurt Republic 2027 Social opportunities and Economic Strategy Corporation are providing the entrepreneurs and promoting and ambitious goals to develop foundation for the further Udmurtia’s 2025 An investment audit of the people of Udmurtia with essential entrepreneurship, enhancing the manufacturing sector. There development of the agribusiness, Investment Strategy is The Udmurt Republic Udmurt Republic has been The strategy will be based on tools to attract investors, open new productivity and adopting best is intense demand for investment food, raw materials and consumer aimed at enhancing the undertook a massive conducted, resulting in the growth areas identified during manufacturing sites, create new practices from other regions, with among companies in Udmurtia goods sectors. Fast growth republic’s investment stock-taking of its following outcomes: the investment audit. jobs, upgrade existing enterprises the proper implementation, is and strong collaboration between has helped to drive promising appeal and nurturing a investment resources the leading a roadmap of priority and promote goods made in definitely the right way to develop the regional administration and investments in Udmurtia’s favourable environment for and developed a map of ━ ━ factors promoting investment areas Udmurtia in foreign markets. VEB. the region’s economy.” the Industrial Development Fund agricultural sector, where there investment projects. investment opportunities: the investment has been developed, RF has forged a comprehensive established by the Russian Ministry are vast opportunities on both the madeinudmurtia.ru The strategy’s main attractiveness of the including a set of partnership with the regional of Industry and Trade. Regional Russian and international market.” objectives are to: Udmurt Republic measures for targeted administration. We are ready companies are participating in have been confirmed, work with investors, to participate in the region’s joint modernisation initiatives and improve the ━ including in the five as well as a set of priority investment projects on setting up new production lines competitiveness industries selected for measures to improve transport infrastructure and urban and import-substitution products. of regional an in-depth audit; the investment development, including a major As a result, Udmurtia today is one manufacturing; based on an analysis environment. upgrade of public transportation of the 10 leading Russian regions ensure a better quality ━ ━ of the market and networks. Another economic in terms of private equity raised of life for the people; priority is the diversification via the Industrial Development resources in the of Udmurtia’s defence sector. Fund. In 2018, companies filed ━ retain and develop Udmurt Republic, 10 The region’s highly educated RUB 1 billion worth of requests human capital; priority areas have population and human capital with the Fund and signed RUB ━ develop small and been identified (out of resources provide Udmurtia 500 million worth of contracts. medium enterprises; 100) to attract strategic ALEXANDER BRECHALOV investors to the Udmurt with the opportunity to enhance In 2019, Udmurtia plans to attract drive well-balanced Governor ━ Republic, and related existing manufacturing capacities around RUB 750 million via the regional development. of the Udmurt Republic and produce highly competitive Industrial Development Fund to areas have been civilian-use goods using low-cost develop manufacturing projects. determined for further financing tools.” The region’s cluster of oil and investment; gas equipment manufacturers ━ the advantages of is going to be a powerful driver the Udmurt Republic in developing the oil and gas have been identified sector. Furthermore, the region to attract strategic is successfully facilitating the investors for the 10 conversion of military enterprises priority areas, including to civilian-use manufacturing, and, a list of potential “We will use the results of PwC’s investment in the process, creating jobs and regional partners; demand for further investment.” audit to build a new strategy to develop the regional economy through 2027.” 5 THE FIRST RESULTS OF THE INVESTMENT AUDIT 4 OF THE UDMURT REPUBLIC ESTABLISHMENT OF OOO SOFTLINE OUTSOURCING Project Description: Establishment of OOO Softline Outsourcing, which provides a range of staffing and accounting outsourcing services. SOFTLINE IS OPENING AN OFFICE IN UDMURTIA TO OUTSOURCE ACCOUNTING SERVICES MADE IN UDMURTIA MADE IN UDMURTIA Investor: Softline Number of jobs: up to 400 UP TO 400 JOBS Taxes to the Consolidated Budget of Udmurtia: RUB 46 million a year Status: The office has been launched and the first employees hired. ESTABLISHMENT OF A RUSSIAN POST R&D CENTRE Project Description: Establishment of a Russian Post R&D Centre to develop end-to-end digital THE RUSSIAN POST IS OPENING AN R&D CENTRE TO DEVELOP END-TO-END TECHNOLOGIES technologies. Investor: Russian Post Number of jobs: up to 300 300 JOBS Taxes to the Consolidated Budget of Udmurtia: RUB 44 million a year Status: Office is being arranged and advance team hired. IZHEVSK AIRPORT RENOVATION Project Description: Izhevsk Airport renovation NEGOTIATIONS WITH A STRATEGIC INVESTOR ARE UNDERWAY TO ATTRACT PRIVATE INVESTMENT Implementation term: TO A PROJECT ON RENOVATING THE IZHEVSK AIRPORT 2019-2024 (2019-2020: design and price audit, 2021-2014: reconstruction and construction) Total investments: RUB 6.8 billion, including: Federal budget funds, RUB 3.4 billion RUB 3.4 BILLION IN PRIVATE INVESTMENT Private investments, RUB 3.4 billion Status: Negotiations with the strategic investor are underway. Source: Development Corporation of the Udmurt Republic 7 MIKHAIL BAZHENOV 6 PwC Partner THIS INVESTMENT AUDIT OF THE RESULTS OF THE INVESTMENT AUDIT HIGHLIGHT UDMURTIA’S THE UDMURT REPUBLIC IS AN FAVOURABLE INVESTMENT CLIMATE INDEPENDENT ASSESSMENT OF THE REGION’S POTENTIAL MADE IN UDMURTIA MADE IN UDMURTIA FROM THE INVESTOR’S POINT “We are pleased to present the final results of our investment audit of Udmurtia. The project was initiated by the regional administration to benchmark the republic’s investment potential and identify high- OF VIEW Key advantages of Udmurtia identified in the potential and promising investment and growth areas. investment audit: In the fall of 2017, Alexander Brechalov was appointed the governor 1. Our retrospective analysis has demonstrated that the 9. Udmurtia provides investors with the opportunity of Udmurtia. One of his first announcements was to focus on region’s favourable business climate can already be to get their businesses up and running quickly at budget optimisation, business development and the ambitious goal credited with fostering investment successes. launch-ready sites. of attracting additional direct investment. Much has already been done to improve the region’s investment appeal — administrative Key objectives of the investment audit: 2. The regional administration is highly accessible for 10. Udmurtia has a highly educated population to barriers have been reduced, a package of tax and financial benefits everyday work with investors. support investment projects, including 16 universities, 1. Identify the competitive advantages of has been developed and investment sites at our industrial parks and Udmurtia for direct investment The regional administration has taken special with 67% graduates working in the region. priority social and economic development areas (PSEDAs) have been 3. established. These initiatives are ongoing. 2. Identify direct investment growth points in measures to focus on important dimensions of social 11. Udmurtia offers a wide range of tax benefits to and economic development. investors, including tax incentives in the Glazov and Based on the results of the investment audit in the Udmurt Republic, Udmurtia Sarapul priority social and economic development we identified 10 key areas to attract strategic investors and prepared 4. Udmurtia provides investors with relevant 3. Prepare