pp. 14–19 p. 12 p. 18 p. 22 Cover Story: Success Story: Paratunka is waiting for Presentation Fishery Industry Synthesis new residents of the Investment of Two Technologies of «Kamchatka» ASEZ Project EAST RUSSIA #17 | MAY 2018 ECONOMIC AGENDA

Also inside: Government of Russia Expands Komsomolsk ASEZ p. 8

The Ministry for Development of the Russian Far East is continuing to improve legislative control of the region’s advanced development с. 9 Everything is Just Beginning in Country’s East President of TechnoNIСOL corporation Sergei Kolesnikov on business development in the Russian Far East pp. 10–11

Official Bulletin of the Ministry for Development of the Russian Far East. The document was prepared by ANO Far East Investment and Export Agency. Distributed by subscription. Reference to the source is required when using materials. ECONOMY OF THE FAR EAST Investors to Receive Help In Entering Foreign Markets SPIEF 2018 Opens with Discussion on Far Eastern Breakthrough & Requests to Authorities from Business

The St. Petersburg International Economic Forum (SPIEF) was held on May 24-26. The reason to open the business program of the forum with a discussion entitled "Far Eastern Breakthrough: How to Become a Leader in the Growth of Private Investment?" was the statistics of 2017.

For the first time in several years, the The moderator of the session was Al- Faculty of World Economy and World Pol- Far Eastern Federal District has become the exander Ivlev, Managing Partner of EY in itics of the Higher School of Economics leader in the private investment growth rate Russia. The following people took part in Sergei Karaganov. with 17.1% against 4.4% of the national av- the discussions: the Deputy Prime Minister All these people represent the largest erage. 1200 investment projects are being – the presidential envoy to the Far East- investments in the Russian Far East that ei- realized in the Far Eastern Federal District ern Federal District Yury Trutnev, Head of ther have already been implemented or are with total financing of RUB 3.7 tn. 107 new the Far East Development Corporation De- just planned (Sibur is planning to make the enterprises were created by residents of the nis Tikhonov, Head of the Far East Invest- most significant contribution of RUB 500 priority development areas (ASEZs) and the ment and Export Agency Leonid Petuk- bn to the Amur Gas Chemical Complex). The Free Port of Vladivostok (FPV) with a total hov, as well as major businessmen: CEO of absence of representatives of Gazprom and investment amount of RUB 90 bn. Accord- PJSC Polyus Pavel Grachev, CEO of Sibur Rosneft at the discussion about the "Far ing to the Federal State Statistics Service, Mikhail Karisalov, CEO of PJSC Sollers Eastern breakthrough" was somewhat dis- the growth rates in the Far Eastern Federal Vadim Shvetsov, presidents of two corpo- sonant, although it turned out that the Far District exceeded the Russian average: the rations – TechnoNICOL Sergei Kolesnikov Eastern agenda of the SPIEF also included industry rate exceeded it by 2.2%, agricul- and Kinross Gold Paul Rollinson, Heads of them: Igor Sechin and the project of East- ture rate by 8.2%, construction rate by 9.2%. Boards of Rusagro Group LLC Vadim Mos- ern Petroleum Company was mentioned by And the organizers of the discussion won- hkovich, Kolmar Group LLC Anna Tsivileva Yury Trutnev during a media scrum, and at dered what is considered "advanced" at all, and ESN Group Grigory Berezkin. Among the discussion about gas several hours later, if not such economic development, calling the experts were also vice speaker of the Alexey Miller said that by 2035 Gazprom ex- the development of the Russian Far East a State Duma Irina Yarovaya, Khabarovsk pects to supply as much as 80-110 bn cubic "breakthrough". governor Vyacheslav Shport, dean of the meters of gas to China from 180-190 bn cu-

2 MAY 2018 EVENTS

bic meters which China will import through year, as it is now (the draft law is in the ical clusters along the border, where dif- pipelines. Another major investor in the State Duma). ferent redistribution chains would work in Russian Far Eastern economy, Viktor Veksel- Paul Rollinson called stages, in a related manner." "We have not berg, was speaking at the digitalization ses- again attention to the reached this stage, but we will soon. This sion at those moments. fact that the current way we will bond consumers to us more", Yury Trutnev, began the session by an- threshold for assigning he stressed (ESN plans to supply grain al- swering the question of "what are we going deposits to the federal cohol, produced from gas of "Sila Sibiri," to to do next?". "First of all, we will continue to level is set at a rate of the countries of the Asia-Pacific Region). support the conditions for better business. 50 tons of recoverable "And the second is the cost of financing: The world is changing every day, and hav- gold reserves, but the Ministry of Natural it's much cheaper all over the world. This ing once created a matrix favorable for the Resources "intends to suggest raising the is the next frontier because while we have investor does not mean that one can count threshold to 200 tons in the autumn, and solved administrative problems and tax on winning", stressed the Deputy Prime we continue to make such proposals." Vad- planning, this problem still remains com- Minister and promised to start transform- im Moshkovich noted that "optimal con- pletely," added Mr. Berezkin. ing the sectoral legislation in the inter- ditions for investments aimed at meet- Products of the Khabarovsk TechnoN- ests of entrepreneurs this year, since "gen- ing domestic demand have been creat- ICOL plant entered the Chinese market eral preferences are not enough," as well as ed" in agriculture, but it is difficult to start through automotive thermal insulation "continue reducing administrative pressure exporting Russian products. "We haven't supplies, but 80% is still sold in the Rus- on business." solved the problems of biosafety in the sian Far East market. "We don't have a sin- "Most industries have significant obsta- country. The government is aware of the gle automobile corridor from the Russian cles to investments, with your help, we will problem. It's clear what to do: we've been Far East deep into China. We have to trans- try to understand to the letter what needs talking about this at all levels for sever- ship our stone wool to Chinese cars. This is to be eliminated," said Yury Trutnev. "It's also al years. However, there is still no central- a waste of time because the builder always very important to have a sufficient number ized solution," said Mr. Moshkovich. "The wants the products "yesterday", and we of trained specialists. Currently, while there Russian Far Eastern region alone can eas- lose a week. In addition, there's also dam- is demand for certain professions, people ily feed all of Southeast Asia even with- age, as with any transshipment. The third are trained for others. Within two months out involving the central part of Russia; thing is the number of cargo-and-passen- we should complete the "balance" through- there is the task to double our exports, we ger crossings on the border of Russia and out the Russian Far East, and then start the can easily send 10 mn tons of pork abroad. China; there are only 4 of them, which is a education reform," he added. Thus, changes That's USD 20 bn, a doubling if you will," catastrophically small number for such a are promised not only for legislation on tim- he stressed. long border. And when timber trucks start ber processing or aquaculture, for example, Anna Tsivileva also going, traffic jams begin, and we lose time but also for the system of the Ministry of drew attention to the at the crossings as well," said Sergey Kole- Education, which is new to the Russian gov- problems of entering snikov. ernment. foreign markets and "The main problem in the Russian Far Many speakers thanked Yury Trutnev the need to refine the East is demand, markets. We can't supply for the system of preferences for invest- mechanisms of inves- Mazda parts to the north of China, where ments in the Far Eastern Federal District tor benefits. In a number there is no production; that's only in the created with his participation, and in- of Chinese ports, there are re- south. But a 25% export duty, of course, deed asked for amend- strictions on the import of coal from Rus- hinders supplies. If we applied the same ments to certain areas sia, but according to her, that's not the only mechanism as Kazakhstan did creating a of legislation. For ex- problem. "It's up to the level of the inter- duty-free trading zone along the border, ample, Pavel Grachev governmental commission and business, to this would help develop the engineering proposed extending make us a competitive partner in the Chi- cluster in the Russian Far East," said Vad- last year's alignment nese market. The import duty on coking im Shvetsov. "What is needed today to at- of electricity tariffs in the coal is 3%, and on energy coal is 6%. And tract investment? We have the tools, and Russian Far East to the federal level be- Australia and New Zealand import goods the technology works. Preferences are yond the originally defined period of three under agreements without duties. We are a good, but at the initial stage, it's neces- years. "It's not a long period for any in- bit uncompetitive here: we either have to sary to help businesses find markets. In the vestor: with three years, one just has time lower the price, dump, or increase purchas- Khabarovsk Territory, the population den- to create the project and, maybe, to start ing prices. In addition, there is the prob- sity is 1.7 people per square kilometer, in the construction, but not to commission it. lem of reducing the customs clearance China it's 144, in Japan it's 340, in South The initiative to extend this measure for time in China, we are faced with the fact Korea it's 510 people per square meter. 10 years, which is now discussed, would that sometimes our shipment stands up to From 2 to 4 bn consumers live near our re- be very useful as an incentive for attract- three months without customs clearance," gion. We need to help investors get there. ing new players," said Pavel Grachev. He said Anna Tsivileva. Sales markets plus human capital plus also proposed to allow concluding con- For Russian products to enter for- preferences equal to investments," said the tracts on tariffs in isolated power systems eign markets more successfully, Grigory governor of Khabarovsk Vyacheslav Shport for a period of five years instead of one Berezkin suggested "creating technolog- in support of entrepreneurs.

3 ECONOMY OF THE FAR EAST

NEWS ABOUT ASEZ AND THE FREE PORT OF VLADIVOSTOK RESIDENTS

ASEZ RESIDENT increasing the coal transshipment vol- CONCLUDES LARGE ume by another 8 mn tons. CONTRACT FOR EXPORT The created specialized coal termi- OF SAWN TIMBER nal will be located on the lands of indus- The company Bellesprom, a resident try and transport of the Romanovsky rural of the Amur Belogorsk ASEZ, has signed settlement of the Shkotovsky Municipal Contract Between a contract for EUR 9 m for the supply of District of the Primorsky Territory, in the sawn timber. According to the general di- northern part of the Sukhodol bay. It will "Bellesprom" rector of Bellesprom Viktor Eremenko, solve the existing problems in the ports and Idea Serviss (Latvia) the contract with Idea Serviss (Latvia) is of the region in terms of storage volumes, Amounts to considering an advance payment of EUR car processing speed and limited ship 550 thousand, which makes it possible to calls; it will create conditions for the de- start production ahead of schedule. velopment of the coal industry and trans- The plan provided for the beginning port in general. of production at the end of this year, but "The permission for the construction EUR m in the case of prepayment, the production of all port infrastructure facilities and 9 line will start earlier, as under the con- external infrastructure facilities was ob- tract Bellesprom is supposed to send the tained. Preparatory work is already under- first shipment within three months of re- way. Active construction will begin in the ceiving funds. second half of 2018," said Olga Kornien- Currently, 5 investment projects with ko, the financial director of Sukhodol Sea a total volume of RUB 4.5 bn are being Port LLC. implemented in the Belogorsk ASEZ.

FACTORY OF ASEZ RESIDENT NEW FPV RESIDENT TO BUILD TO BUILD UP TO 100 THOUSAND SPECIAL PORT IN PRIMORYE, METERS OF HOUSING PER YEAR COSTING RUB 30 BN In July, "Domostroitelniy Kombi- nat Primorye" (Primorye House-Build- ing Factory), a resident of the Nadezh- dinskaya ASEZ, will launch the produc- tion of prefabricated housing made of re- inforced concrete products. The compa- ny will be able to build up to 100 thou- sand meters of housing a year. The vol- ume of investments in the creation of the plant of concrete products amounted to RUB 772 mn. By the time it reaches the full capacity (Q2 of 2018), there will be 134 workplaces. DNS-Development will build the first Sukhodol Sea Port LLC, a FPV resi- houses using reinforced concrete prod- dent, will build a specialized port to pro- ucts manufactured by the house building vide access to port infrastructure to small factory. The draft design of the "Format" and medium-sized coal mining enterpris- residential complex has already been es. The project investment will amount to completed. Its construction will begin in more than RUB 30 bn rubles, and it will September this year. The first houses will create about 660 new jobs. appear by next spring. The work will be The first and second stages of the completed by the end of 2019. coal port will provide the transshipment According to the director of "Do- of 12 m tons of cargo per year. The con- mostroitelniy Kombinat Primorye" LLC struction will be completed in 2021. The and DNS-Development Alexander Golut- third stage, which will be built in 2022, vin, the problem of providing afforda-

4 MAY 2018 EVENTS

ble housing is acute in the Primorye Ter- FPV RESIDENT SIGNS AGREEMENT ritory. To develop large-scale construc- ON SUPPLY OF HEAVY DUMP TRUCKS tion in Primorye and the Russian Far East, WITH CHINESE CCMF high-quality reinforced concrete products should be available; with their help it's possible to build affordable and comfort- able housing in a short time. The prod- ucts of the ASEZ resident will also be sup- plied abroad.

TECHNONICOL TO BUILD TWO NEW ENTERPRISES IN THE KHABAROVSK TERRITORY TECHNONICOL, the resident of the Khabarovsk ASEZ, will build two new plants for recycling polymers and produc- Yubo-Sumotori, a FPV resident, has ing modern plastic drainage systems in signed an agreement on supply of heavy the Khabarovsk Territory. The total invest- dump trucks with the Chinese CCMF cor- ment will be about RUB 600 mn. The com- poration. The large contract was signed missioning of the new production facili- on the fields of the 2nd International ties is planned for 2018-2019. "Vladivostok" Auto Show, which was held on the "Primorsky Ring" from May 11 to Investment in Construction May 13. of Two TECHNONICOL At the VIAS site, the company exhibited Factories Totaled heavy dump trucks with a carrying capac- ity of up to 30 tons, which are assembled at the "Sumotori" production site in Artem. RUB "At the exhibition, we signed contracts for the delivery of 50 units of dump trucks, 20 of them were purchased by the Chinese CCMF corporation", said the head of "Yu- M bo-Sumotori" LLC Konstantin Gurkovich. 600 According to the commercial director of the CCMF corporation Weibing Su, the The agreement on construction was special equipment will be used at the con- signed between KRDV and TECHNONICOL struction of the "Zvezda" shipyard in the at SPIEF 2018. TECHNONICOL company city of Bolshoy Kamen in Primorye. The became one of the first ASEZ residents in company plans to purchase another batch the Far Eastern region of Russia and it al- of dump trucks in the future. The head of ready produces products that are in de- Yubo-Sumotori added that the first batch mand, actively developing exports. released by the company is already suc- "It's been almost two years since cessfully working at construction and in- we launched the enterprise for the pro- dustrial enterprises of Primorye. duction of basalt heat insulation in the Khabarovsk ASEZ. The plant reached its designed capacity. It was thanks to the KHABAROVSK ASEZ RESIDENT TO support of the regional authorities and OPEN PIG FARM IN AUTUMN the provided tax benefits that it was pos- At the Rakitnoye site, SkifAgro-DV, a sible to build the project quickly and re- resident of the Khabarovsk ASEZ, is im- duce the payback periods from 10 to plementing a project for the construction 7 years," said the co-owner and president of a modern pig-breeding complex. This of TECHNONICOL Sergei Kolesnikov. autumn, the company plans to launch the

5 ECONOMY OF THE FAR EAST

NEWS ABOUT ASEZ AND THE FREE PORT OF VLADIVOSTOK RESIDENTS

first stage: five buildings of sow farm, finished wooden panel and frame house where they will place 1240 pigs delivered units, using German technology. The cost from Canada. of the project is RUB 139.6 mn; the new The project of the Skif Group is one production will create 31 jobs. of the largest in the agricultural sector The main advantage of panel and of the Khabarovsk Territory. Its total cost frame housing is the high speed of con- is RUB 2.2 bn. The number of pigs raised struction and energy efficiency. Such fa- will be 70,000 units a year. After commis- cilities are suitable for living in the Far sioning, the livestock complex will annu- North and can be built in nomad camps ally produce 5.2 thousand tons of meat. and remote areas of Yakutia. The project of the construction of the According to Nikolay Andreev, Gen- pig-breeding complex should be com- eral Director of "Wooden Park" LLC, the pletely implemented by 2019. It provides house fragments are connected like in The new machine is controlled by for the construction of a sow farm, an ele- a construction set in strict accordance only one specialist (previously this vator, a feed mill, three gas boiler houses with the technology. This provides re- work was done by 5-6 people) and other related infrastructure. The new cord-breaking construction time, about complex will provide 165 new jobs. 1-1.5 months, depending on the build- ing area. It's planned to produce 10,000 square meters of housing, which is about ONION ON SAKHALIN WILL 100 houses, a year. BE CHEAPER «Sovkhoz Teplichny», ASEZ «Yu- zhnaya» resident, introduces Japanese RESIDENT OF FREE PORT OF technology in growing onions. The main VLADIVOSTOK LAUNCHES FILM RUB advantage of this technology is to in- PRODUCTION crease the accuracy and speed of sowing. Without increasing the greenhouse areas, agricultural producers were able to dra- matically increase the volume of produc- tion. If last year on one hectare of agrar- 139,6 ians harvested about 150 thousand tons of onions, then this year the volumes mn should be twice higher. Benefit from in- invested in the project novation will feel the buyers of onions, the «Wooden Park» LLC because by saving on greenhouses, fuel and lubricants, the cost of the product will also drop. «A year ago, we were planting a on- ion with a cabbage plant-machine. The The company Sea Wolf. Cinematic Sto- work required a lot of time and human ries Creation, a FPV resident, successfully resources. But this is a modern, high-per- realizes the production and promotion of formance, economical, mobile and com- film projects. In total, the project invest- pact equipment from Japan», – said the ments amounted to 4.1 mn rubles. general director of the «Sovkhoz Teplich- During the implementation of the ny» Viktor Butkov. project, a start-up set of equipment for the studio was acquired, as well as a car to transport employees, an advertis- RESIDENT OF "IP KANGALASSY" ing campaign and information support ASEZ TO PRODUCE 100 WOODEN for the project were organized. Current- HOUSES PER YEAR ly, the film studio has already produced Until the end of 2018, WoodenPark, a full-length documentary films "Norman- resident of the IP Kangalassy ASEZ, will dy – Niemen. Monologue" and "Coubertin launch a workshop for the production of Rule" to participate in film festivals.

6 MAY 2018 EVENTS

"We founded an independent film production company that acts as an in- novative platform for supporting and promoting the brand of the Russian Far East. Bringing together the efforts of the state authorities, the film industry, busi- ness and specialized non-profit associ- ations, this project goes far beyond the usual territory branding," said Alexandra Maksimets, the General Director of "Sea Wolf. Cinematic Stories Creation."

FIRST RUSSIAN REHAB CENTER The FPV resident is aimed at creat- OPENS IN FPV ing a modern, cozy and affordable hous- ing with quality finishes, completely equipped, including communications and a bathroom with sanitary equipment on a turn-key basis. Modular houses are suita- ble for permanent residence and are also considered for placement in recreation centers. "Modular frame house construction 911 is a good alternative for those who want square meters to build an attractive modern house, but has an area of the modern don't have the opportunity to get spa- cious housing immediately because mod- trade and warehouse JGC "Hokuto Medservice" Medical ular buildings can be expanded over complex Center, a FPV resident, started conducting time," says Julia Tsytsarets, CEO of IdeaD- effective rehabilitation treatment of trau- om Plus. matological and neurological patients. Investments in the project amounted to more than RUB 19.5 mn. NEW TRADE AND WAREHOUSE With the support and supervision of COMPLEX COMMISSIONED WITHIN Japanese specialists, the rehabilitation FPV IN VLADIVOSTOK center provides high-level medical care, "DOTI", a FPV resident, built and namely rehabilitation after sports inju- launched a trade and warehouse complex ries, fractures, endoprosthetics, strokes in Vladivostok. Investment in the project and spine disorders. amounted to RUB 3.7 mn. Russian doctors, who have successful- A modern roadside trade and ware- ly completed an internship in Japan, work house complex with a total area of 911 with patients under the guidance of ex- square meters provides warehouse space perienced rehabilitation specialists. for wholesale and retail. Wholesale, small wholesale and retail companies, engaged in sales of non-food products, can use the FPV RESIDENT STARTS PRODUCING services of the complex equipped with MODULAR ALL-SEASON HOMES lots for entry points, unloading and load- IN VLADIVOSTOK ing. "DoobleDom" ("IdeaDom Plus"), a FPV "The privileges and preferences grant- resident, started producing, installing, ed to residents of the Free Port of Vlad- and selling modular all-season homes. ivostok help us provide services at com- Investments in the launch of housing petitive prices," says Denis Oratovsky, the production amounted to RUB 2.2 mn. head of "DOTI" LLC.

7 ECONOMY OF THE FAR EAST

INVESTOR SUPPORT Government of Russia Expands Komsomolsk ASEZ

To launch new investment projects, The first project of the company is con- the territory of the Komsomolsk ASEZ nected with the construction of a mining en- (Khabarovsk Territory) has been increased. terprise with the necessary infrastructure on The corresponding decree was signed by the basis of the Pravourmiyskoye tin ore de- the Chairman of the Government of Russia posit. Thanks to this, the company will in- Dmitry Medvedev. crease the production of tin concentrate to "Rusolovo" PJSC plans to launch two in- 4,000 tons. When the designed capacity is vestment projects for the extraction and reached, the production volume will cover the processing of tin ore. Launch these two internal demand for tin concentrate. The to- projects will create at least 956 jobs and tal estimated volume of investment is RUB attract more than RUB 9.5 bn of private 8.7 bn. It's expected to create 806 workplaces. investments. Total revenues to the con- The second project is connected with the solidated budget from taxes and fees (in- modernization of the Solnechnaya concen- cluding tax subsidies) for the period from ry. As a result of the past year, more than a trator. The project is aimed at creating new 2018 to 2027 will amount to more than thousand tons of tin were mined in the re- production capacities of the enterprise op- RUB 7.4 bn. gion, which is almost a quarter of the an- erating at the Festivalnoye deposit in the Rusolovo PJSC (part of the Seligdar nual demand of the Customs Union (60% Khabarovsk Territory, as well as increasing tin Polymetallic Holding) is implementing of 2016). At the beginning of the year, the production in the Russian Far East. The total projects in the Verkhnebureinsky and Sol- company announced an increase in annual estimated volume of investment is RUB 802 nechny Districts of the Khabarovsk Territo- metal production by 10%. mn. It's expected to create 150 workplaces.

IEA TO CREATE ELECTRONIC INVESTMENT PROJECTS IN FAR FEDC TO BUILD TWO BUILDINGS DATABASE OF AGRICULTURAL EASTERN FEDERAL DISTRICT TO BE FOR RESIDENTS OF KOMSOMOLSK ASEZ LAND IN FAR EASTERN FEDERAL INCLUDED INTO STATE PROGRAM IN Far East Development Corporation JSC be- DISTRICT DECLARATIVE MANNER gan the construction of industrial and admin- The Far East Investment and Ex- The Government of the Russian Federation istrative buildings at the Parus site (Komso- port Agency will create an electronic has determined the procedure for introducing molsk ASEZ) as part of the process of creat- database of agricultural land in the changes in the methodology for selecting in- ing infrastructure for residents. Two identical Far Eastern Federal District. The da- vestment projects planned in the Far Eastern buildings with a total area of 2,748 square me- tabase will have information on land Federal District and Baikal Region. This intro- ters will be used to accommodate productions plots, including their size, boundar- duces the declarative procedure for including of various profiles. The construction will be ies, ownership, type of law, as well as private investment projects in the state pro- completed in Q4 of 2018. qualitative characteristics. The agen- gram entitled "Social and Economic Develop- ASEZ residents will be able to lease new cy will act as a database operator. ment of the Far East and the Baikal Region." production facilities on preferential terms. "Businessmen need this informa- Now the initiator of the investment proj- Each building will have electricity, water and tion when making investment de- ect can submit documents to include the proj- gas supply networks, equipped with drainage cisions," said Valery Dubrovsky, the ect in the state program. The document pack- systems and storm sewage. Heat supply of in- Agency's investment director. "Now age includes a business plan, a financial mod- dustrial and administrative areas will be pro- they will receive all the information el with a conclusion, confirming its validity and vided by gas boiler houses. Within the bound- they need about land plots in a 'one- a cover letter. The Ministry will review the ap- aries of the Parus site, 2.2 km of the road with stop shop', that is, from one base." plication within 30 days, the decision on in- asphalt concrete pavement will be built. Today, about 35% (about 1 mn ha) clusion will be taken by the subcommittee un- The new production buildings at the of agricultural land in the territory of der the chairmanship of Acting Deputy Prime Komsomolsk ASEZ will allow representa- the Far Eastern Federal District has Minister – presidential envoy to the Far East- tives of small and medium-sized businesses not been put into circulation. In par- ern Federal District Yury Trutnev. to work in qualitatively new conditions and ticular, in Amur Region, 560 thousand At the moment, 22 investment projects, to- create production associations. At present, a ha can be provided to businessmen taled in RUB 147 bn, have been approved for similar industrial and administrative building for implementing agriculture invest- inclusion in the state program of development for entrepreneurs is being built at the Rakit- ment projects, 430 thousand ha in of the Far Eastern Federal District and Baikal noye site of the Khabarovsk ASEZ, another the Primorsky Territory, and 15 thou- Region. Two more projects were sent for revi- building will be built in the Nadezhdinska- sand ha in the Jewish Autonomous sion; they are planned to be considered at the ya ASEZ in Primorye Territory, its design is be- Region. next meeting of the subcommittee. ing led by FEDC.

8 MAY 2018 EVENTS Russian Far East Getting Closer and More Attractive The Ministry for Development of the Russian Far East is continuing to improve legislative control of the region's advanced development. Here, we cover the most important initiatives.

DRAFT LAWS BY THE MINISTRY FOR DEVELOPMENT OF THE RUSSIAN FAR EAST SUPPORTED BY SENATORS

ISSUANCE OF FAR EASTERN HECTARES TO PARTICIPANTS IN CITIZEN RESETTLEMENT PROGRAM The Council of Federation Committee on Agrarian and Food Policy and Environmen- tal Management supported the draft law on granting land plots to citizens resettling in the Far Eastern Federal District within the Far Eastern Hectare Program. According to the State Secretary, Deputy Minister for the Development of the Russian ject of the Russian Federation, which they only carriers flying to the Crimea and abroad Far East Pavel Volkov, the proposed initiative entered. are freed from the tax. Exemption from VAT is aimed at solving two problems. The first is Earlier, the State Duma Committee for would increase the profitability of flights to make the Russian Far East more attrac- the Development of Civil Society, Issues of to the Russian Far East, reduce the cost of tive for participants of the State Program Public and Religious Associations recom- air tickets, and increase passenger traffic by when choosing a permanent place of resi- mended this bill for consideration in the 2-3% per year. dence. The second is solving demographic first reading. problems and attracting a population fit for STATE DUMA APPROVES work to the territory of the Russian Far East. RF GOVERNMENT COMMISSION GRANDFATHER CLAUSE AND According to the estimates of the Minis- APPROVES ZERO VAT RATE FOR AIR EXTENSION OF APPLICATION TERM try for Development of the Russian Far East, CARRIERS OF RUSSIAN FAR EAST FOR LOWERED INSURANCE PREMIUMS the implementation of this bill will make it The Commission on Legislative Activ- FOR INVESTORS IN FAR EASTERN possible to attract up to 3,000 people addi- ity approved the draft law on the exempt- FEDERAL DISTRICT IN FIRST READING tionally to the territory of the Russian Far ing services for domestic air transport to the In the first reading, the State Duma Com- East on an annual basis. In 2017, less than regions of the Russian Far East from VAT. It is mittee on Budget and Taxes approved bills 5% of the total number of all participants covered in the draft federal law "On Amend- on the "grandfather clause" and on improv- in the State Citizen Resettlement Program ing Article 164 of the Tax Code of the Rus- ing the procedure for calculating and pay- moved to the regions of the Russian Far sian Federation". ing insurance premiums by ASEZ and FPV East, which is about 5,500 people. The bill was drafted by the Ministry of residents. Finance to implement solutions following It has been proposed to amend Article SPREAD OF ELECTRONIC VISAS TO FAR the meeting of the Government Commission 5 of Part 1 of the Tax Code of the Russian EASTERN AIR HARBORS on the social and economic development of Federation that guarantees ASEZ and FPV The Council of Federation Committee on the Russian Far East and Baikal Region. The residents the invariability of the conditions Constitutional Legislation and State Build- initiative to abolish VAT for flights to the of doing business within 10 years from the ing sent a positive opinion to the State Russian Far East originated with the Min- moment of obtaining the resident status. It Duma on a draft law on the extension of the istry of Regional Development of the Rus- is also planned to amend Article 427 of the simplified procedure for the entry of foreign sian Far East. It is proposed to establish a Tax Code of the Russian Federation aimed citizens with electronic visas to technically zero rate for VAT for organizations provid- at extending the term of application of ben- equipped airports in the Russian Far East. ing services for domestic air transportation efits on insurance premiums. Under the ini- Foreign citizens who have arrived to the of passengers and baggage, provided that tiative, preferential insurance premium rates Russian Federation through the points of the point of departure and/or destination will be set for 10 years for ASEZ and FPV entry of international airports on the basis of passengers and baggage is located in the residents, who will come to the Russian Far of electronic visas will have the right to Far Eastern Federal District. Now, the airline East until 2025, solely with respect to indi- freely move within the territory of the sub- services are subject to VAT at a rate of 10%, viduals employed in new jobs.

9 ECONOMY OF THE FAR EAST Everything is Just Beginning in Country’s East President of TechnoNIСOL corporation Sergei Kolesnikov on business development in the Russian Far East

– Enterprises of TechnoNICOL Group have launch the new production facilities. An- – What is currently happening on the become one of the first residents of the- ad drey Belousov once said that the notori- Asian construction markets, and what are vanced special economic zones in the Russian ous Russian «dashing 90’s» with their law- your Group’s plans for business development Far East. Can you already say how successful lessness ended only recently in the Rus- in the Russian Far East in this regard? this mechanism is for attracting investors? sian Far East. I agree in that for me per- – Now, about a third of TechnoNICOL – I think that it’s one of the strongest sonally they ended in 2014, when the new revenues come from foreign markets. The and most successful tools. I think that it team for the development of the Russian markets that interest us are growing: a new gives one of the only reasons for coming to Far East emerged in the Russian govern- cyclical upswing in the European Union, I the East. For us, this has turned into reduc- ment. So in fact, everything is just begin- hope, will last for another 7 years, and the tion of the payback period for the construc- ning in the country’s east, and the ASEZ building material market is in a strong tion project of rock wool production, provi- mechanism in this sense is a powerful pen- phase there, as well as in China. There- sionally, from 10 to 7 years. I am sure that dulum. In my opinion, if it weren’t for these fore, we are trying our luck in the European in other business projects this significant- regimes, there wouldn’t be such interest in Union because it’s closer, and we are tak- ly reduces the payback period and makes the Russian Far East that Russian, Japanese ing our first steps in China. Our goal in Asia the commercial project attractive too. And and other investors are now showing in the is to export 20% of the products manufac- this, I think, is a powerful incentive to come first place, there would be nothing to talk tured by the company in Khabarovsk. For to ASEZs. Of course, there are problems about, there wouldn’t be any incentive. now, we sell up to 95% of the produced there as well: with infrastructure, with the goods in the Russian Far East. Deliveries to regime, there are plenty of yet unresolved China are not easy to develop. problems. And Deputy Prime Minister Yury – What are the main difficulties? Trutnev honestly says that there are many Our goal in Asia is to – There are few automobile crossings problems, and he tries to solve them, al- export 20% of the on the Russian-Chinese border, and the though the process is slow. throughput capacity is low. That’s why we – Would you have started building new pro- products manufactured are very supportive of the idea of creating duction facilities in the Russian Far East if the by the company a cargo checkpoint on Bolshoi Ussuriysky Is- government hadn’t created the ASEZ regimes? land, which would allow us not to ride ex- – I’m sure we would still be moderniz- in Khabarovsk tra kilometers from Khabarovsk to check- ing the rock wool plant and wouldn’t even points in Primorye. The second problem is

10 MAY 2018 FACTS AND OPINIONS

the need to reload the products onto Chi- is shorter, while such costs remain, it’s eas- nese vehicles when crossing the border. We ier for us to supply products to India from still don’t have an intergovernmental agree- the western part of the country. ment that trucks from Russia can carry cargo – The costs for everything are higher in across China, as is the case with the Europe- the Russian Far East, from maintaining per- an Union for example. And in China we pay sonnel to electricity. It’s somewhat unfair, a higher import duty than in Europe, which isn’t it? How business can deal with this? adds another 12-15% to the price. – It used to be harder with personnel, but – Nevertheless, TechnoNICOL is building now it’s easier. We have solved this prob- two more production facilities in the Rus- lem for ourselves, but for a new company it sian Far East. Will they focus on the domes- would be a problem. In general, we, entre- tic market? preneurs, should survive and act positive- – We are now building two polystyrene ly regardless of the conditions. In the Rus- waste processing plants. We will make sec- sian Far East, electricity and labor are more ondary polystyrene and PVC drainage sys- expensive, and this can be explained from tems: pipes, gutters, transitional elements. an economic point of view. Markets are ex- There are no plans to export PVC products. tremely broadly distributed over a vast ter- duction is superfluous. Obviously, the price It’s very light; in fact it’s only air boxes, and ritory, the population density is low, and the per unit is higher. It’s the same with ener- it’s designed for transportation over a short industry is based on scale economies: the gy and specialists. But our task, as business- distance, from Chita or Yakutsk to Vladi- higher the output, the lower the nominal men, is very practical: to reach the goal in vostok. Secondary polystyrene, most likely, cost. In the Russian Far East, transporta- a short time, with a tight budget. Like run- will be used for our own consumption. tion costs for distributing products over a ning a marathon. We, entrepreneurs, work – But do you expect to increase the export large area are enormous, and therefore no with practical tasks. of the main products of rock wool? one can use this scale effect. It’s just impos- – In other words, do you perceive the fact – Compared to these productions, rock sible to supply a large technological com- that it’s more difficult to build a business in wool is more technological. And we’re hop- plex. We have a factory in Ryazan producing the Russian Far East as normal? ing to find consumers in South Korea, Japan, 4 mn cubic meters, and that’s not enough, – The Russian Far East, i.e. Pacific Russia, and Vietnam. Currently, 30% of rock wool while in Khabarovsk, there are only 700 is another Russia: it has other local and for- capacity in Khabarovsk is free. On average, thousand cubic meters, and 30% of pro- eign markets, different regulations, differ- we export 20% of the goods, produced by ent neighbors. This is for starters. Moscow all the group’s enterprises in Russia. And we and Vladivostok are two different agglom- expect to reach such indicators in the Rus- Our task, erations. So, I see no reason to make the sian Far East too. as businessmen, is very same laws in Moscow and the Russian Far – Do you regard India as a potential East. The key is to raise the average stan- market? practical: to reach the dard of living, use particular features, be- – The transportation tariff from the Rus- goal in a short time, with cause the Russian Far East has its own ad- sian Far East to Mumbai is 2-3 times more vantages, as well as Moscow. Why do we expensive than the tariff from Vyborg to a tight budget have to do everything the same way inside Mumbai. Therefore, although the distance the country? I hear many conversations like this. But I can’t make the cost price in Khabarovsk the same as in Ryazan either, for a variety of reasons. – In your opinion, what needs to be done so that people would come to the Far East first to work, and then stay forever? Author- ities say the salaries should be twice as high. – If we pay twice as much, then some of the projects will be simply unprofitable. This is a problem, which lacks a clear answer. This is a balance of interests. I think we have many federal decisions, which in fact nei- ther Moscow nor the Russian Far East needs. Therefore, it’s necessary to give more pow- ers and more budgets on the ground. As they say, help us with money, and we’ll manage it ourselves. And what is going on in the Rus- sian Far East with its highest growth rates of investment per capita shows that something still can be done about it.

11 ECONOMY OF THE FAR EAST Synthesis of Two Technologies First Foreign Medical Company Becomes FPV Resident

based, among other things, on self-treat- ment. To help such patients, we have to per- suade and coax them. There are such peo- ple in Japan too, but there are fewer of them," said Oshima Masao, General Director of JGC "Hokuto Medservice." The rehabilitation center of JGC Hoku- to Medservice accepts patients after strokes, neurological disorders, endoprosthetics, or- thopedic injuries, surgical intervention, etc. Soon, the center's professionals will get an exoskeleton, which helps restore lost func- tions. "Japanese rehabilitation is based on spe- cial assessment systems, international scales of the patient's physical condition (e.g. the walking speed, the muscle tone, the time the patient can stand on one leg, and so on). The opening ceremony of JGC "Hokuto Medservice" in Vladivostok was held All this is digitized and assessed. After a few on May 16, but they started receiving patients a little earlier. In early 2018, days, the evaluation is carried out again, in Russian doctors, including rehabilitation specialists, manual therapists order to measure the rehabilitation effect and an exercise therapy doctor, underwent training at the 200-bed Hokuto to revise the program. For the patient, even tiny progress is an incentive for recovery. The hospital in Japan, which has 20 years of invaluable experience in recover- Russian rehabilitation school itself is strong, ing patients after orthopedic and neurological disorders. but there are not enough specialists. It's of- ten the case that in some post-stroke cen- "We've just opened in Vladivostok, we Corporation in July 2017, and in September of ter, like one in Vladivostok, there's one reha- have four rehabilitation specialists and three last year, an agreement on investment activi- bilitation specialist for 20 beds and one ex- doctor consultants in the staff. We will invite ties between the FEDC and the Medical Cen- ercise therapy physician," says Alexander Se- more specialists and expand because there ter JGC Hokuto Medservice was signed at the livanov, coordinator of the international re- are many appeals from Russian patients, and Eastern Economic Forum. The investments lations department at the Hokuto hospital in not only from the Primorye Territory. Every- amounted to RUB 150 mn. The decision to Japan. "And the intensity and timeliness are one wants to be helped by Japanese doc- implement the project was made against important for rehabilitation. After the stroke, tors. They are present at the receptions with the backdrop of cooperation agreements be- for example, the therapeutic window is open an interpreter. The Japanese have a delicate tween the countries that were reached by for the first six months, then the treatment approach; they try to endear patients. I con- President Vladimir Putin and Prime Minister effectiveness decreases. It often happens stantly see how patients come to us with Shinzo Abe in May 2016. The mission of the that the patient returns home after the sur- stern faces, but after talking with Japanese new center is to provide residents of the Pri- gery and doesn't lead an active life, lies and specialists they leave with a smile, in high morye Territory and beyond with high-qual- withers, not rehabilitating properly after the spirits. In regard to rehabilitation, I will say ity medical services in the organic synthesis surgery. While young people all heal quickly, something as a doctor who has worked in of Japanese and Russian technologies. an elderly person breaking a leg spends half Russian practical public health services for "The methodology in the Japanese tra- a year with a plaster bandage, not moving 20 years. When an urgent operation is need- dition is completely different than in Rus- the leg, and the muscles atrophy as a result. ed, people in our country find money, borrow sia. We use a range of rehabilitation medi- The person begins to walk less, the quality of it, take loans; but rehabilitation, our main cine, which includes mainly manual thera- life worsens—they rarely go outside, get sick profile, is considered somewhat second- py, manual work, an individual approach, and more often. It's a vicious circle." ary. And this is fundamentally wrong," says hardware medicine has an auxiliary func- According to the experts, they not only Sergei Kolchanov, the head physician, trau- tion. Disorders are the same everywhere, but treat but also try to inform the population. matologist and orthopedist of JGC "Hokuto there is a difference in the characters of Jap- Doctors conduct lectures and workshops on Medservice". anese and Russian patients. Russian patients health rehabilitation. Over time, JGC Hokuto The project of the Japanese medical cen- can initially show disbelief in the medical Medservice plans to accept up to a hundred ter was established by the shareholders of staff: many come with their own strategy, people a day, with Russian doctors and truly JGC Corporation and Hokuto Social Medical they trust the Internet and their experience Japanese hospitality.

12 MAY 2018 FACTS AND OPINIONS

leaf, leaf, granulated, packaged black and green teas, as well as teas with additives. Our brands: Zolotaya Victoria, Indus, Gold Bond, Korol Djun- glei, Old England, Ussuriyskiy Tigr, Siniy Almaz. Raw materials are 100% Indian, the bulk of our tea is grown in the northeast, in the highland plantations of the State of Assam. The tea from there is famous for a particularly strong infu- sion and a pronounced flavor. It's shipped by steamships from the tea capital of India, Kolka- ta. For several types of granulated Indus™ tea, we use raw materials from southern India, the Nilgiri area. The tea from there is very astrin- gent and gives a rich, dark red infusion. We pro- duce tea for the mass consumer and we would like all Russians to be able to buy quality prod- ucts at an affordable price. After all, Indian tea is especially loved by many of you since the time of the Soviet Union!" said Tanmai Chakrabarty. Mr. Chakrabarty knows what he is talking "We produce tea about, as he has been living in Vladivostok for almost 30 years. According to him, the Russian tea market is very consolidated and saturated for the mass consumer" with strong competitors like Orimi, Mai, Unile- ver and others. The advantage of Jay Tea is its own laboratory for monitoring the quality of A tea-packing factory in the Russian Far raw and other materials and finished products. The resident launched three workshops for East reached 3/4 of its capacity different types of products and bought auto- matic machines of Chinese and Italian origin. The city of Artem in Primorye, Aviapolis Russian Far East is providing us with full in- "Unprocessed tea is an agricultural prod- Yankovskiy more precisely (production and formation support," says Tanmay Chakrabarty, uct, so it doesn't have constant quality char- logistics zone with an area of 688,053 m2), Director General of Jay Tea. acteristics. When accepting a new batch, our where Jay Tea was located, became the tea Today, there are 50 employees at the fac- laboratory staff always makes a strict selec- capital of the Far Eastern Federal District in tory of the FPV resident, Jay Tea, and about 50 tion; they compare it with the standard before just one year. The total volume of capital in- more jobs were created through a contractor further admission to the filling shop. Qualities vestments in the region's first packaged and company. The company has achieved 75% of of the tea's taste and physical parameters are weighted tea factory amounted to RUB 176 the planned capacity and covered the main checked such as the size of leaves and gran- mn. Registered in Artem in 2016, Jay Tea is price segments with its "tea portfolio" – from ules, fragility, presence of extraneous inclu- a continuation of the "Jay Rus" LLC project, ultra-economy to premium. sions of non-tea production. During the pack- opened in Vladivostok in 2003 as the Rus- aging process, high-tech equipment ensures sian branch of the Indian holding company compliance with eco-standards: the tea bag Madhu Jayanti International Ltd, which sup- The advantage is sealed only with a thread, without clips or plied ready-made products from Kolkata to glue; it provides the ideal taste of natural tea. Russia. Now, only the raw materials come of Jay Tea is its own There is another control stage immediately from India. The founder of Jay Tea, Jay Rus, laboratory for monitoring after release: we exclude any, even insignifi- as well as Jay Foods is the limited liability cant, defect in the finished product, and the company Multitrade Overseas PTE. LTD, reg- the quality of raw and consumer receives not only a high-quality, but istered in Singapore. other materials and also an aesthetic product," said the General Di- "We needed 5,000 m2 under one roof, and rector of Jay Tea. Yankovskiy provided us with such premises. finished products Today, the main range of Jay Tea can be In addition, it's located in an ideal location found in the trading networks of the Russian in terms of our logistical needs. We're able to Far East and Siberia. The businessmen plan supply our western and northern customers, "We focus exclusively on the Russian tea to seize the western market and establish ex- ship products to all settlements of Primorye, market, as tea is the No. 1 drink for Russians ports to Belarus, Kazakhstan and China. Ac- including Nakhodka. The only downside was (Russia ranks 4th in the world for tea consump- cording to the manufacturers of the strategic problems with finding employees because the tion after China, India and Turkey, average con- product, Mongolia has already fallen in love company is situated outside of any settlement. sumption is 1.2 kg/person per year. – Note). Our with the genuine Indian tea packaged in the But the Ministry for the Development of the company produces various kinds of tea – large Primorye Territory.

13 ECONOMY OF THE FAR EAST

Fishery Industry: Analytical Review The main priorities of the fishery industry in the Russian Far East are the development of local large fish processing productions within special economic regimes (ASEZ, FPV), as well as attracting investments in the industry through the introduction of "quotas under keel." Introduction of investment quotas will stimulate the construction of fishing fleet vessels at domestic shipyards, as well as the establishment of enterprises for the production of fish products. Today, this measure is supported by the majority of fish producers, the first contracts were concluded in Kamchatka and Sakhalin. Unresolved remains the situation with "crab quotas", and market participants are developing a comprehensive solution based on them. The issues of development of Russian Far Eastern aquaculture, as well as the consequences of various restrictions on catching fish resources, are topical.

IMPLEMENTATION In general, the introduction of investment quo- nage fishing vessels for the Far Eastern basin. OF INVESTMENT QUOTAS tas will provide an opportunity to stimulate the The construction of a series of trawler-seiners The most important task of this year is the construction of fishing fleet vessels at domestic is already underway at the Yantar Shipyard in renewal of agreements on assigning quota shipyards and the establishment of enterpris- Kaliningrad (United Shipbuilding Corporation). shares to users for a new historical period. Par- es for the production of fish and other products. The supply of the entire series to the custom- ticular attention is paid to the introduction of The first agreements on fixing quotas for -in er is scheduled for 2019. The total volume of in- investment quotas. Initially, this innovation did vestment purposes, which affected the regions vestments exceeds RUB 4 bn. not cause appreciable support from the fishing of the Russian Far East, were signed. For exam- In turn, the Granis company has pledged to industry, but today the majority perceive "quo- ple, the contracts were concluded between Rus- build an investment bank for a coastal plant in tas under keel" positively. For the most part, dis- sian Federal Agency for Fishery and the Lenin Sakhalin Region, the construction of which is putes are caused by the course of the campaign Fisheries Collective Farm (Kamchatka). The in- expected to be completed in September 2019. and the technical issues of quota distribution. vestments will go towards three medium-ton- The investment volume is RUB 350 mn; the ob-

14 MAY 2018 COVER STORY

ject of D-3 investment is a low-power process- vestment quotas for Alaska pollack and herring ern basin (or about 350 thousand tons of Alas- ing plant for the aquatic bioresources of the amounted to about 125,000 tons and 20,000 ka pollock and 55 thousand tons of Pacific her- Northern Kuriles. tons, respectively. However, these limits will not ring). As a result, market participants are inter- According to the legislation, the users will be distributed in the 2018 campaign, accord- ested in commencing the construction of ships receive the volumes for development within the ing to the provision on fixing quota shares, their as soon as possible, and the delay in distribu- investment quotas after commissioning the in- distribution was postponed to 2019. tion of shares of investment quotas slows down vestment object—either the ship or the plant. It the process. In addition, since 2021, the require- is worth noting that in February 2018 alone, a ments for constructing ships for investment special interdepartmental commission selected quotas have become tougher. 10 investment projects for consolidating quota Investment Quotas for the crab catch are still attract- shares. Another 46 projects are allowed to par- in Construction ing particular attention, a decision on which ticipate in the reverse auction. has not yet been adopted: whether auctions for In the middle of March, the situation with of Series of Trailer- crabs are necessary or they can be replaced by the transfer of the distribution of the remain- investment quotas (both mechanisms definite- ing "ship" investment quotas for Alaska pollock Seiners for ly won't be launched at the same time). For now, and herring to 2019 received a wide response Russian Far Eastern the Russian Federal Agency for Fishery supports among the fishing industry. During the first -ap the auctions: Despite the fact that the profitabil- plication campaign, held until December 7, 2017 Basin Amounted ity of fish-producing enterprises may decrease, and concluded on February 15, 2018, applica- it is expected that enterprises will withstand tions for "ship" investment quotas for Alaska to RUB 4 Billion such a load. The agency presented this position pollock and herring were submitted by six com- to the government, although the issue of chang- panies registered in the Primorsye Territory, af- ing the current mechanism for allocating quo- filiated with the owners of the Russian Fishery This situation has caused dissatisfaction on tas is broader than the functionality of the Fed- (RRPK, the main owner is Gleb Frank), claiming the part of the fishing industry, including the eral Agency for Fishery, it concerns, among oth- in aggregate for an annual catch of 137 thou- members of the VARPE association (All-Rus- er things, the Ministry of Economic Development sand tons of Alaska pollock and 22 thousand sian Association of Fisheries Enterprises, Entre- and the Ministry of Finance; therefore the posi- tons of herring. The order of the Russian Federal preneurs and Exporters). Investment quotas for tion should be consolidated. Minister of Agricul- Agency for Fishery assigned corresponding quo- Alaska pollock and herring make up approxi- ture Alexander Tkachev instructed that the proj- ta shares to the six companies of the holding, mately 20% of the annual total allowable catch ect on securing investment quotas for the con- and the undistributed balance of the "ship" in- of these marketable fish in the Russian Far East- struction of ships for the production of crab be

Herman Zverev, products and niches. and new marketing communi- ent the results in the form President of the VAPRE: There are unexpect- cations comes to us, and the of a ready-made promotion "First, over the last ed examples of new coming years, it will be very strategy. 6-7 years, the yields markets: crabs and acutely felt in the market. And thirdly. The last de- of old markets have seaweed. The crab The second phenomenon cade, there has seen a ma- been falling and the began to grow af- is the enlarging gap between jor change in fish regulatory yields of new ones have ter the Chinese market the market leaders and the in all countries of the world. been growing around the opened for the supply of live rest of its participants. The Three years ago, the Europe- world, and this is not only a product. As for seaweed, it al- first include those who- suc an Union completely changed product category, but also a ready accounts for a quarter cessfully use the regulatory the directive regulating the geographical one. What is of the world's aquaculture – system. Unfortunately, Rus- fish market. Iceland is taking happening on the Alaska pol- 24 mn tons – and the growth sian fishermen are trying to serious initiatives to devel- lock market is an example of began in the last five years. catch up with modernization. op coastal fishing. Japan is re- wilting. There is a significant In Russia, this was not so It was the case with envi- writing its fishing law, which price reduction of Alaska pol- acute: anti-sanctions and the ronmental certification, with is 70 years old. So the initia- lock roe, by 30-40%, and by devaluation of the ruble have Alaska pollock roe. The Alas- tives of Russian Federal Agen- 50-60% for fillets; commod- had their effect without seek- ka pollack roe market, I recall, cy for Fishery, put forward two ity substitutes are appearing ing new ways. Our compa- was created artificially thanks years ago, fit into the world that seriously affect the pric- nies have not changed any- to the actions of players from trend. Another thing is that es. The result is obvious: two thing in production strategy Japan 40 years ago. Russia all this should be discussed transnational corporations, and marketing. However, the was getting profit from it, but with the business, and the which were in the world top overall decline in sales and could not manage it. So now, department is ready for this. 10, found themselves in a the growth of retail prices Russian Alaska pollack fish- But we are more concerned very difficult financial situa- have led to the fact that the ermen are working to create about the position of the oth- tion. One went bankrupt, and volume of the fish market has such a market in China. This er part of the regulatory bloc: the other is going through declined, and many are be- is an interesting project and Those regulators that set the a financial recovery. At the ginning to face a sales crisis. a great research work, which requirements for the market same time, many companies So the global trend of grow- started a few months ago. I structure, ignoring, for exam- are trying to find new types of ing demand for new products think that soon we will pres- ple, the need for traders."

15 ECONOMY OF THE FAR EAST

finalized and submitted to the government be- na's Yantai Tongxiang Foods) has started the in a good year it's possible to extract 1-1.5 thou- fore June 1. According to the estimates of the construction of a scallop and trepang farm (Ol- sand tons of sockeye salmon worth USD 5-6 mn. Ministry of Agriculture, about 40 medium-ton- ginsky District, the Moryak-Rybolov bay). In ad- Thus, for 20 years, which is the term of the right nage vessels will be built for these quotas. dition, there is a fish processing shop of- Mo to lease, revenue can reach USD 100-120 mn. At ryak-Rybolov LLC in the bay, a partner of the the same time, according to market experts, the DEVELOPMENT OF FISHERY Chinese investor. structures of Boris Nevzorov already control the PROJECTS AND COMPLEXES In the Far Eastern Federal District in gener- areas where about 15% of all sockeye salmon The fishery industry in the Russian Far East al, many investment projects in fish processing harvested in Russia is caught. The Federal An- is actively developing with the help of the are being implemented. For example, a large ti-Monopoly Service may recognize the auction ASEZ and FPV tools. It's still planned to create fish processing plant will be established in Ka- as invalid in case of revealing the facts of the "sea-based" ASEZs in the macroregion, or more mchatka in the Olyutorsky District. KZB-Don- provision of incorrect information by Ustkam- precisely, to include the water areas in ASEZs, ka LLC plans to invest RUB 505 mn in the cre- chatryba LLC. which Yury Trutnev, the Deputy Prime Minister, ation of this complex. A modern fishery complex Successful expansion in the Russian Far East presidential envoy to the Far Eastern Federal will be built in Primorsky Territory in coopera- was demonstrated by RRPK, which lost one of District, mentioned last year. As a result, in was tion with a South Korean company, Korea Trad- its shareholders at the beginning of the year. decided to finalize the law on ASEZs in this area. ing & Industries. The Russian partner of the Ko- Maxim Vorobyov agreed to sell his share to an- In general, it is planned to create sever- rean company will be the fishing company Mag- other co-owner, Gleb Frank (who will increase al fish processing complexes in the Russian Far Si International LLC. Investors are considering the share in the company to more than 90%). East within the framework of ASEZs, primari- the Cape of Nazimova as one of the sites for Industry experts associate the sale of Voroby- ly in Sakhalin and Kamchatka. The largest com- placing the production. ov's share with the divergence of the views of plex will be built by Rybokombinat Ostrovnoy As the attention of the federal center to the the partners on the further business develop- LLC (the founder is Sevrybflot LLC with 98% of development of the fishery industry in the mac- ment. In particular, Maxim Vorobyov proba- the capital), which is the anchor investor of the roregion grows, one can notice the competition bly didn't support the investment program of Kurily ASEZ. The total investment in the project between major fishery companies. In particular, RRPK, which provides for expensive modern- is RUB 7.4 bn. Three large fish processing plants large fish producers compete for fishery plots ization and renewal of the fleet, construction of are planned in the Kamchatka ASEZ: a high-tech in Kamchatka. In February, the fish-producing ships (investments amount to about USD 900 processing complex by Ukinsky Liman LLC; a company Delta Fish Ltd (part of the Okeanryb- mn), processing plants (investments amount to modern complex for processing seafood by AK- flot holding company, associated with the sen- more than USD 30 mn). In addition, it is Voroby- VAFI LLC; as well as a shop for high-tech process- ator of Kamchatka Territory Valery Ponomarev) ov who is credited with the proposal to change ing of fish products by Rusak. appealed the results of the bidding for the right the rules for issuing quotas for the crab catch, Representatives of the fishery business are to use a fishery plot in the Kamchatka Gulf. The which caused active criticism of those fearing starting to take advantage of the benefits of winner of the competition was the company Ust- the redistribution of the industry sector of the FPV. Local company Margaritovsky LRZ LLC in- kamchatryba LLC, which is close to Boris Nevzor- market. Nevertheless, Vorobyev announced his tends to build a fish-breeding plant to grow ov, the second Kamchatka senator. As a result, we intention to focus on the development of an- salmon fry (chum salmon) within the Free Port are talking about a collision of interests of the other asset, "Russkaya Akvakultura" (the produc- of Vladivostok. Another FPV resident, Morskaya two largest companies in Kamchatka. According er of Atlantic salmon and trout, working in the Akvakultura He Xiang LLC (a subsidiary of Chi- to preliminary estimates, on the disputable site North-West of Russia). At the same time, RRPK

Sergey Darkin, years, and our quota allowed to catch. And after rent situation on the mar- President of PJSC management system, receiving the quota for 2018, ket: The state can easily Pacific Investment I think, is one of the it turned out that we can deal with several unscrupu- Group: best in the world. In catch only 58 tons because lous participants who vio- "The tendencies 2003, a law on fish- scientific forecasts have de- late the law, but in no case that have developed ing was adopted, and creased. And how do we buy should we avoid the "histor- in the world market re- a decision was made modern vessels worth EUR ical" principle. If there's not quire us to do more and more on the "historical" principle 55 mn with such uncertain- enough money in the bud- to meet the challenges fac- of quota allocation. It was a ty? Here's another example, get, it's possible to raise fees ing the country, including the complete victory. last year we bought 55 tons for aquatic bioresources. For task of joining the "big five" in But there are also neg- of squid in the Southern Kuril example, USD 5 for each ki- the production of GRP, which ative aspects. For example, Islands, at an auction as well. logram of crab is about RUB was set by President Vladi- crab auctions are now be- And this year, it's planned 24 bn of additional feder- mir Putin. Sustainable fish- ing discussed: whether to to be excluded from objects al budget revenue per year. eries are, first and foremost, introduce them or not. Last for which the total allow- With these funds, it'd be pos- the result of sustainable leg- year, our group of companies able catches are determined. sible to modernize our pro- islation. Today, the industry bought at an auction a quo- What should we do? Make a duction fleet and bypass auc- is developing very efficiently ta of 33% for the blue crab in claim? And there are a lot of tions that we don't need. Al- and dynamically, and all this the area of the Primorye Ter- questions like this. though, of course, these are is thanks to the legislative ritory; this equated to nearly I think that there is an el- more political decisions than framework formed in recent 120 tonnes, which we were ementary way out of the cur- economic ones."

16 MAY 2018 COVER STORY

continues to successfully expand its activities in one reservoir, and now it's proposed to con- the Far Eastern Federal District. sider the "one river – one fishing site" mecha- In addition, new players are beginning to Kamchatka Becomes nism. It should be noted that this mechanism take interest in the fishery business. For- in Leader of Pacific is most familiar to Sakhalin, where tradition- stance, at the end of last year, representatives of ally only one user company operates on each Roman Abramovich's team, the former Chukot- Salmon Catch in river, as there are no large rivers in the region ka senator Efim Malkin and Natalya Panchen- that could be "divided" between several com- ko registered Dalneye LLC, which might acquire 2017. The production panies (therefore, the governor Oleg Kozhe- several small fishing companies in the Russian volumes were more myako is called the initiator of these chang- Far East that own quotas and combine them. es). On the contrary, the situation when sever- Earlier, the above-mentioned RRPK did the than 241 thousand al companies work on the same river, is more same: it acquired a number of enterprises in the typical for Kamchatka Territory. Russian Far East in 2013 (Intraros, Turnif, Sovga- tons (or 75.5%) The very initiative to reduce the number of vanryba, Vostokrybprom) and received the right users on commercial reservoirs is formally moti- to catch more than 200 thousand tons of fish. In vated by the need for careful development of the the past year, Okeanrybflot of Valery Ponomarev were caught on Sakhalin. Recently, the Ministry of territories. Representatives of the industry, fish- agreed on the purchase of the "Dalintorg" and Agriculture has posted a draft amendment to the ing communities in their turn regard the idea "'Ogni Vostoka" fishing companies. Neverthe- fishing regulations for the Russian Far Eastern with caution: The mechanism for choosing one less, although Dalneye confirms that the com- Basin. It's proposed to introduce fishing restric- company for one site is unknown. Fishermen of pany was created for a possible industry project, tions for Pacific salmon. These changes are envis- Khabarovsk Territory immediately demonstrat- it has not yet shown any activity. aged for industrialists, amateur fishermen, repre- ed categorical rejection of the initiative. The pro- sentatives of indigenous peoples. In particular, it posed principle is acceptable for small rivers that RESTRICTIONS ON RULES was proposed to ban fishing Pacific salmon with directly flow into the sea, but in general, according FOR CATCHING FISH set nets in fishing areas of the Kamchatka Terri- to fishermen, a differentiated approach is needed. At this point, preparations for the salmon path tory and Sakhalin Region, as well as change the This principle is not applicable to the Amur either of 2018 have already begun. Last year, the difficult fishing regulation for Pacific salmon on the Amur technically or economically, since there is a huge path attracted a lot of attention. Last year's fore- River and in the Amur Estuary. water area where there are dozens of users and cast for the country as a whole assumed the de- At the beginning of the year, there was hundreds of fishing areas. In turn, fishermen from velopment of about 319 thousand tons of Pacif- an initiative to amend the rules for catch- Magadan Region noted that, from a legal point of ic salmon, but more than 350 thousand tons were ing river fish. At that time, the market partici- view, changing the current rules for granting land caught, which is a fairly good result. The lead- pants were split in their opinions; there were plots is unfounded, since in Magadan Region, as er of the catch is Kamchatka, where production fears about another attempt at monopolizing well as in Kamchatka, the bulk of them was dis- volumes amounted to more than 241 thousand the industry. The annual turnover of the riv- tributed in 2008 for 20 years. In the event of re- tons (or 75.5%). However, in other regions of the er fish market is estimated at up to USD 1.5 moval of sites from bona fide users, negative so- Far Eastern Federal District, the indicators were bn and is mainly provided by salmon fishing cial and economic consequences are inevitable, worse, which is largely due to a decrease in salm- in Sakhalin and Kamchatka. At the moment, like job cuts, bankruptcy of enterprises, a decrease on stocks. In particular, about 50 thousand tons several enterprises can lead the extraction in in tax revenues.

17 ECONOMY OF THE FAR EAST Territory for Tourism

More than 300 ha of the Paratunka tourist and recreational cluster are free for new residents of the Kamchatka ASEZ We present you the Paratunka tourist and recreational cluster within the Kamchatka ASEZ. At the moment, several residents with investment projects amounting to RUB 2.7 bn successfully operate in the cluster. But most of the territory is still free.

Promoting the territory of the Paratunka site, lo- ly, the zone will be able to accommodate more tion of a bridge over the Paratunka River is com- cated within the borders of the Paratunsky ru- than 4 thousand people. ing to an end. The bridge will enable the con- ral settlement, is a social and economic task car- To develop the Paratunka site, it's necessary struction of treatment facilities with a capacity ried out by the institutions for development of to build engineering infrastructure, as well as of 3,000 cubic meters per day. the Russian Far East. In many respects, this is be- an automobile road at the site. The entire infra- The design of a 20 km transportation system cause Paratunka is the most preferable territory structure will be built at the expense of the gov- for thermal waters (heat supply system) from the for the development of tourist facilities among ernment. territory of Verkhne-Paratunskoye thermal water the existing zones in the Kamchatka ASEZ. First As of the end of May 2018, more than 10 km deposit to the borders of the Paratunka tourist of all, it's due to transport accessibility, proximity of pipeline networks have been laid, preparation and recreational cluster and the Paratunsky ru- to thermal springs and the possibility of placing of the treatment facility site on the right bank of ral settlement has been completed. Start of con- a large number of facilities in one area. the Paratunka river is under way. The construc- struction of the facility is planned for Q3 of 2018. The area of the territory for the develop- The creation of the facility will give a tremen- ment of the Paratunka tourist and recreational dous impetus to the development of the territo- cluster is about 362.5 ha. The construction of Paratunka can ry of the Paratunka site and tourism activities, as commercial facilities is provided for with RUB well as increase the reliability of the heat supply 5213 mn; the construction of infrastructure fa- simultaneously system of the existing residential and social fa- cilities is provided for with RUB 4,203.37 mn. cilities of the Paratunsky rural settlement. The main tourist facilities: a health-improving accommodate more The construction of the main 3.8 km long complex, a rehabilitation center for athletes, than 4 thousand road of the Paratunka tourist and recreation- a camping site, a hotel complex, a ski center al cluster is also planned in Q3 of 2018. It is on the slope of the Topolov mountain range, a people planned to complete the construction of pow- sports and entertainment park. Simultaneous- er supply networks for the Paratunka tourist and

18 MAY 2018 INVESTMENT SHOWCASE

recreational cluster with a total capacity of 7.1 MW, which will make it possible to provide res- idents with electricity already this year, includ- ing for the period of construction of facilities by residents. At the moment, the creation of electricity and heat supply networks for the Aquapark facility in the territory of the Paratunka site has been completed: a 1.2 km deep thermal water well was constructed and put into operation, provid- ing swimming pools and a heat supply system for the Chudo-Ostrov water park; electric grids are available at the border of the resident's site to connect a facility with a capacity of 1 MW.

AQUAPARK AND CHILDREN'S HEALTH CENTERS Nine residents with investment projects to- Installation of temporary supports for the bridge necessary for the construction of the site and taling RUB 2.709 bn currently operate on the installation of treatment facilities on the other side of the Paratunka river during spawning of valuable Paratunka site of the Kamchatka ASEZ, with 703 species of red fish. At the end of Q3 of 2018, after the end of spawning processes, the installation of workplaces to be created. the main pile supports of the main bridge.

THE MOST INTERESTING RESIDENTS OF THE PARATUNKA TOURIST AND RECREATIONAL CLUSTER

ZHEMCHUZHINA KAMCHATKI CHILDREN RESTING CAMP METALLIST Stage: construction completed FAR EASTERN CENTER Project: Modernization of the year-round Project implementation period: 2015-2017 Project: 1) Reconstruct the building and in- children's health camp. Investments: RUB 525 mn frastructure facilities of Zhemchuzhina Kam- Project implementation period: 2016-2018 Jobs: 60 people chatki Far Eastern center in order to improve Investments: RUB 200 mn the treatment and diagnostic process; 2) Re- Jobs: 20 people TULUACH LLC construct the Voskhod children resting camp Project: Recreation center, hotel for 300 for the year-round use for the children of the IP VETCHINOVA V.A. people. Kamchatka Territory. Project: Сonstruction and operation of the Project implementation period: 2017-2022 Project implementation period: 2016-2020 Aquapark water attraction complex on the ter- Investments: RUB 1350 mn Investments: RUB 200 mn ritory of the Lesnaya sports center, village of Jobs: 150 people Jobs: 278 people Paratunka.

INFRASTRUCTURE OF THE PARATUNKA SITE Oksana Gerasimova, Head of the Investment and Entrepre- neurship Agency of the Kam- chatka Territory: «The Paratunka tourist and recreational cluster is a unique investment site within the Kam- chatka ASEZ regime. The territory is located in close proximity to the Verkhneye-Para- tunskoye thermal water deposit, known for its me- dicinal properties throughout the world. Today, the Paratunka tourist and recreational cluster has free land plots with an area of more than 65 ha for the implementation of projects of potential residents. These land areas are provided to residents of the Kamchatka ASEZ without bidding. In addition, the management company of the Kamchatka ASEZ, Far East Development Corpora- tion JSC, is carrying out a complex of works on the construction of communal and transport infrastruc- ture of the site, including the thermal water pipeline, transformer substations, and backbone power grids. Completion of the construction of basic infrastruc- ture is scheduled for 2018-2019.»

19 ECONOMY OF THE FAR EAST Development of Fish Processing in Kamchatka Investment Showcase

Kamchatka is traditionally one of the main Russian exporters of aquatic biological resources. At the moment, there are more than 500 enterprises in the Kamchatka Territory that are engaged in fishery activities with a year-round or seasonal production cycle. More than 200 of them catch aquatic biological resources. There are also more than 190 fish processing plants in the region with a total capacity of more than 12 thousand tons of frozen products and 1200 tubes of canned food.

The strategy of social and economic de- ing of positions in the world market by 2030. We present you the examples velopment of Kamchatka Territory provides Kamchatka's enterprises are actively working of investment projects in the fish- for the modernization of fish-producing and to expand and modernize existing produc- ery industry in the Kamchatka fish-processing production and strengthen- tion facilities, as well as to create new ones. Territory.

20 MAY 2018 INVESTMENT SHOWCASE

Fish processing plant in the district of former Krasnoye village of the Karaginsky District Aim: To establish a fish processing enterprise Description: Construction of a fish processing plant with a pro- duction capacity of 360 tons of finished products per day. The main activity is the production of salmon fish products. It’s planned to organize the extraction and processing of aquatic bi- ological resources (ABR) using the quota of Tymlatskiy Rybokom- binat LLC and its own fleet for the production of the ABR. Project cost: RUB 1204 bn Payback period: 7 years Project implementation period: 2016-2020

Fish processing plant in the Olyutorsky District Aim: To construct a fish processing plant for flounder of three types with a capacity of up to 100 tons per day Description: The investment project of KZB-Donka assumes the creation of a fish processing complex in the Olyutorsky District of the Kamchatka Territory. The peculiarity of this enterprise is non-waste technology. In addition to the plant, the investor provided for the construction of the necessary infrastructure in the project (roads, berthing facilities, dormitory for employees), which is an important stimulus for the development of the re- mote northern region. Project cost: RUB 506 mn Payback period: 6 years Project implementation period: 2018-2022

Fish processing complex in Ustyevoe village of the Sobolevsky District Aim: Highly effective development of quotas for the extraction of aquatic biological resources by VITYAZ-AUTO LLC through con- structing and operating a fish processing plant Description: The investment project provides for creating a fish processing complex in the village of Ustyevoe of the Sobolevsky District of the Kamchatka Territory. The produc- tion capacity of the enterprise will be 140 tons of finished products per day. Project cost: RUB 200 mn Payback period: 2 years Project implementation period: 2017-2018

21 ECONOMY OF THE FAR EAST Fish processing complex in Karaginsky District

The project provides for the construction of a fish pro- Aim: To establish a fish process- ing enterprise cessing enterprise, consisting of a complex of industri- Description: OOO Ukinsky Li- al, residential, utility, warehouse and auxiliary build- man invests in the construction ings and facilities in a total area of 14.6379 ha. With- of a fish processing complex in in the project, it’s planned to create a production fa- Karaginsky District with a pro- duction capacity of 132 tons of cility for freshly frozen salmon fish products, fresh-fro- products per day, as well as a zen and salted salmon roe, as well as processing ser- warehouse for frozen products vices for fish and seafood. It is also planned to pur- with a capacity of 1.1 thousand chase fillet machines and machines for the production tons of simultaneous storage. of minced salmon to expand the product range and Project cost: RUB 1.6 bn assortment of finished products.

The project is being implemented using ulated and has more developed econom- sea-sea vessels with intermediate trans- new technological automated lines, which ics, year-round transport accessibility of shipping. allow stabilizing the quality of production the whole river and its main tributaries The Uka river is one of the most sta- and minimizing the impact of negative ex- for the population of this territory and the ble and productive spawning rivers on ternal and internal production factors. Petropavlovsk-Elizovskaya agglomeration. the Russian East Coast. This is confirmed The site for the construction of the fish By sea, the distance to the regional cap- by the activities of the initiator company, processing plant capacity is located at the ital, the city of Petropavlovsk-Kamchatsky, the fishing grounds of which are located mouth of the Uka river of Karaginsky Dis- is about 900 km. Thanks to the favorable in the said territory since 1930. trict, 90 km to the south of the village of location of the site, the approach to the The combined river basin is one of the Ivashka. The area is relatively more pop- plant is possible both by river-sea and largest river basins in Eastern Kamchatka.

22 MAY 2018 INVESTMENT SHOWCASE

It covers a significant part of the territo- ry of the Karaginsky District. Its total area Sales Markets is about 8 thousand square kilometers. All six species of Pacific salmon, which have In 11 months in 2015, Russian fishermen caught 4.6% more fish year on year. Such a significant intraspecific diversity, as well data was provided by the Russian Federal Agency for Fishery. In total, almost 4 m as several species of loaches are repro- tons of fish were caught from January to November 2015. The largest basin, Dalne- duced in the basin. Fishing productivity vostochniy, brought 2.5946 m tons of fish, which is 70.3 thousand tons more than for all types of salmon in the basin ranges in 2014. from 10 thousand tons in even years to 30 Nevertheless, only a smaller part of this volume makes it onto the Russian table. thousand tons in the «fish» years. The lion’s share of the seafood is exported. After the fish is caught on the high seas, It should also be noted that the initi- fishermen take it to ports of neighboring countries, where the checking and unload- ator company has been fishing for a long ing procedures take less than one day, and the payment is in local currency, which is time in the Karaginskaya subzone, which particularly advantageous in the current conditions. allows to speak about the exceptional ex- In Russian ports, in addition to numerous inspections, there may be other prob- perience of fish and seafood production, as lems; first of all, there is the condition of the port infrastructure and coastal fish pro- well as the knowledge of the features and cessing plants, which is not always satisfactory. Many types of equipment are still specifics of the territory. of Soviet origin. According to the Russian Federal Agency for Fishery, the export vol- The climate in the area is marine ume of seafood caught and sold outside the customs control zone in January-Sep- with moderately severe winters (Novem- tember of 2015 amounted to 572 thousand tons, and this includes only official sta- ber-March) characterized by heavy snow- tistics. In reality, this number may be much higher due to illegal catch or incomplete falls and frequent thaws. Spring is short registration. and cold. The summer period (June-Au- gust) is cool and cloudy, autumn (Septem- ber, October) is relatively warm. maintaining high cooling rates even if one As of December 31, 2017, the follow- of the compressors fails, which is especial- The main production characteristics ing buildings were built: production ly important due to the geographical re- of the complex: workshop, refrigerator, engine room, die- moteness of the complex. In the basis of • refrigeration production systems with a sel power plant, female dorm, male dorm, the second circuit, in turn, are three MY- total capacity of 132 tons/day (80 tons/ canteen. The following general construc- COM F62WBHE reciprocating compressor day of air IQF, 32 tons/day of tiled IQF, 20 tion works were carried out for these facil- units. These units are more suitable for tons/day of fillet); ities: the installation of foundations, met- maintaining stable subzero temperatures, • a processing line for fish raw materi- al frames, external sandwich panel walls, have a long service life before mainte- al with a capacity of 5,000 tons/year for roof. In the diesel power plant building, nance, and, in general, are easier to main- raw materials and 3,933 tons/year for fin- diesel generators and an overhead crane tain. The system of the second circuit is ished products, with a load capacity of 5 tons were in- also designed with a 20% power reserve • Refrigerating storage capacity is 1,100 stalled and commissioned; engineering per compressor, which has a positive ef- tons. networks, ensuring an uninterrupted oper- fect on the reliability of the system. ation of the production cycle, have been finished. In the engine room and refrigera- tor buildings, 100% of refrigeration equip- ment is installed and commissioned. In the production workshop building, 90% of technological and refrigeration equip- ment is installed. The refrigeration system of the complex is based on the compo- nents of well-established global brands, MYCOM (Japan), THERMOFIN (Germany), Danfoss (Denmark), and it has two cir- cuits: the first provides freezing capacities of tunnel freezing systems and the second provides the storage refrigerator with a capacity of 1,100 tons. In the heart of the first circuit are three MYCOM 2016 LLC- LBL screw compressors. The advantages of these compressors include high resistance to reactive loads, high MTBF and cold gen- eration in a wide range of temperatures. The system is designed with 20% pow- er reserve per compressor, which allows

23 ECONOMY OF THE FAR EAST

Vladivostok, Russia September 11–13, 2018

Владивосток, Россия 6–7 сентября 2017

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FAR EAST INVESTMENT AGENCY FOR THE AND EXPORT AGENCY DEVELOPMENT OF HUMAN АГЕНТСТВО ДАЛЬНЕГО CAPITAL IN THE FAR EAST ВОСТОКА ПО ПРИВЛЕЧЕНИЮ АГЕНТСТВО ПО РАЗВИТИЮ ИНВЕСТИЦИЙ И ПОДДЕРЖКЕ ЧЕЛОВЕЧЕСКОГО КАПИТАЛА ЭКСПОРТА НА ДАЛЬНЕМ ВОСТОКЕ +7 (495) 540 41-33 +7 (495) 123 47-27 [email protected] [email protected] www.hcfe.ru www.investvostok.ru

Official Bulletin of the Ministry for Development of the Russian Far East. The document was prepared by ANO Far East Investment and Export Agency. All published information is current as of May 30, 2018. Distributed by electronic subscription. Using materials reference to the source is required. The bulletin uses photographs by: TASS, ROSKONGRESS, administration of the Far Eastern Federal District, Kremlin.ru, Shutterstock.

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