№01–02 / 2016

Go to page key projects: New Silk Road

Contents

VESTNIK # 01-02 The Region’s Economy. 2016 Results. 2016 Forecasts

Interview Economy High Potential Projects

6. Alexey Laptev 10. Investments 50. Panasonic and KRAFTWAY

First Deputy Governor of Region: 12. Industry and Agriculture

‘Transform risks into opportunities’ 51. TANDETRON Charged Particles 13. Industrial Production Breakdown Accelerator 14. Ratings 35. Salavat Kutushev

Director General of Kaluga International Airport: 56. New Cluster in Kaluga Region Events ‘We are happy offering world-class service’ 16. Events 2015

24. Agreements 2015 37. Ruslan Smolensky

Deputy Governor of Kaluga Region: Key Projects ‘Construction of the Southern Bypass Road and reconstruction of M3 are two key road construction 34. Kaluga International Airport: projects’ Development Stages and Trends

36. Reconstruction of M3 Ukraine Highway 41. Vladimir Nesterenko 37. Southern Bypass Road Director General of Niarmedik Group: ‘Niarmedik, 100% Russian-made’ 38. New Silk Road

40. Key Goal: Get Effective Russian-Made Medicines to the Market 43. Georgy Rotov 42. Automotive Digest Director General of Continental Kaluga LLC:

‘New opportunities under the new conditions’ 46. Business Support Afield

PUBLISHED BY KALUGA NEWS AGENCY SINCE 2010 Director – Larisa CHUVIKOVA +7 (910) 860-35-43, [email protected] Editor – Tatiana ANTIPOVA +7 (910) 609-74-21, [email protected] Advertising – Elena BOCHENKOVA +7 (910) 915-00-58, [email protected] PUBLICATION OF THE MINISTRY All rights to information and photo materials and the logo of Kaluga Region FOR ECONOMIC DEVELOPMENT belong to the Agency for Regional Development of Kaluga Region: 41 bldg.2 Dzerzhinskogo St., Kaluga, 248001 OF KALUGA REGION Tel.: +7 (4842) 27-87-85, 27-87-86, arrko.ru

3

Editor’s Word

Numerous troubles the Russian economy faced in 2015 came as an efficient ‘stress test’ for businessmen and government management teams. Complicated as it was with the plummeting Russian ruble and economic sanctions, new growth opportunities opened up. Today the key focus is placed on the development and support of competitive Russian manufacturers. Only products that are in highest demand, high-quality services and promising developments will remain in the market.

The annual results of Kaluga region have demonstrated that the selected development strategy enables the region both to keep up its development pace and to implement new high- potential projects.

In this Vestnik the leaders of the region’s largest companies and the regional administration will share their views on the results of the past year and their expectations of this year.

5 Interview

Transform Risks into Opportunities

? Alexey Laptev, First Deputy Governor of Kaluga region

manufacturers entered new sales and supply markets. As for foreign companies, Mr. Laptev Mr. Laptev, according to experts over 100 large foreign manufacturers talked to us the year 2015 was rather a challenge operate in various branches of the about new to the Russian economy. On region’s economy. Some of them have the one hand, several foreign seen their domestic sales plunge, e.g. developments markets were shut off as a result the companies of the region’s automotive and new of international developments cluster. Obviously, a demand drop has had forcing the Russian economy to a large impact on the region’s car plants. openings that However, due to their high localization lean on its own resources. On are expected level the car manufacturers managed not the other hand, dropping fuel in the regional to cross the line where shutting the plant prices and foreign shares in would be more reasonable than carrying economy this Russian regional manufactures on working. With resilience they have year. pose a threat to further economic built up, the cluster’s 27 automotive development. In your opinion, did component manufacturers have the time the region’s economy face more needed to adapt to the new circumstances. risks or opportunities in 2015? The plants are now researching export opportunities for their products. I would say that last year we managed Volkswagen and Peugeot-Citroen- to transform risks into opportunities and Mitsubishi are negotiating a special intend to carry on doing so. Shutting off investment contract with the region’s of the markets is a good example. Instead Ministry for Economic Development. of losing their markets, Kaluga region’s With the contract, the companies will

6 Interview

launch SKD assembly of new car models and export them without losing their Uniquely, the pharmaceutical cluster in import benefits for components. The automotive component manufacturers Kaluga region develops both its produc- have already started to export their products to foreign markets, e.g. Fuyao tion facilities and research centers. As and Continental are exporting car glass and car tires, respectively. It has become you may know, Kaluga State University evident by now that the Kaluga region’s automotive cluster has managed and the National Nuclear Research Uni- to survive and open new promising opportunities. versity of Moscow Institute of Engineer- However some growing markets do not have to get scared of any border ing and Physics have significantly ex- closures. In our region that holds true of the pharmaceutical branch. panded their pharmaceutical training. The pharmaceutical cluster in Kaluga region is growing intensively now. A technology park is being constructed Obviously, it has much lower sales than the automotive cluster, but in terms of in . The investments we are now growth the pharmaceutical cluster is ahead of all other branches. This year making in this field will over 2 to 3 years three large production facilities have already been launched: Novo-Nordisk, yield us a competitive advantage com- Niarmedic Plus and AstraZeneca. Total investments into those projects pared with other competing regions. under the investment agreements are estimated at RUR 25.9 billion.

efficiently and, secondly, the current standards of high-quality development. As regards investments, have economic instability has little effect on Uniquely, the pharmaceutical cluster investment activities in the investments, which are made under in Kaluga region develops both its region become less intensive over the existing agreements. production facilities and research the past year? Where are projects centers. As you may know, Kaluga standing, which have not reached State University and the National their production phase yet? Are Kaluga region is one of the few Nuclear Research University of Moscow there any projects, which will not regions with a rather diversified Institute of Engineering and Physics be implemented? economy. What branches are, have significantly expanded their in your opinion, drivers of the pharmaceutical training. A technology Obviously, the region is getting less region’s economy? park is being constructed in Obninsk. investment projects. Investors are The investments we are now making going through a transition period when Industry remains at the core of in this field will over 2 to 3 years yield they are working on new strategies our economy. Any linking of our us a competitive advantage compared of how to distribute their money. development to oil price fluctuations with other competing regions. For Investors choose to invest less in some is not fair. The little oil we have is example, with our support OFK-Kardio fields while in other fields a demand for brought to Kaluga region from other has gone the whole way from a small- investment projects is higher than their regions. Our industry is doing much scale laboratory to a developer of offer such as agriculture, lightweight better. The region has 2,747 industrial unique substances and pharmaceutical construction materials, logistics, etc. plants, which account for 33.8% of GRP. tests. We expect to launch 2 to 3 new In 2015 18 new investment agreements The industry paid RUR 34 billion to the pharmaceuticals in the market every were made for a total amount of RUR regional consolidated budget in taxes year. 17 billion. Over RUR 23.5 billion was and other non-tax revenues. The region’s agricultural invested in the region’s economy What branches are the drivers of the manufacturers have demonstrated under the existing agreements. These region’s economy depends on how you a significant output growth of 9%. investments provided for 1,800 new look at it. In terms of industrial output That is a good result compared with industrial jobs and 9 new plants. the leading place will be occupied by other branches. In the past year the With these figures included, since manufacture of vehicles with a share of agricultural companies manufactured 2006 a total amount of RUR 452.6 around 35% to be followed by the food products for RUR 35 billion. billion has been invested in the industry (15%), electric machinery and region’s economy under the existing metal works. agreements. 73% of the declared I would rather define the term ‘driver’ Have the import phaseout amounts is already driving the as an industry setting the development programs brought any results in economic growth in Kaluga region. That pace such as the pharmaceutical the agriculture yet? means, that, firstly, our investment industry and agriculture. The agreements are implemented quite pharmaceutical industry is setting the Recently I have seen products of

7 Interview

Agro-Invest’s greenhouses on sale. That means that our people will be buying We intend to revise our system cucumbers, tomatoes and greenery grown in our region. I see no pending of financial and non-financial support, food shortages. That holds true of dairy and meat products, too. too. A high demand has been registered Kaluga region has been ranked first in Russia in terms of dairy output growth for support to receive loans. (+14% by agricultural companies). That growth was achieved after several new Our objective is to help each small dairy farms were launched. Beef production has a high growth business find the right credit rate, too. At the end of the year the livestock is expected to grow by 7,000 organization. livestock units (+27%). In 2016 an even higher growth rate is expected mainly due to investments by Miratorg. I am convinced that with those growth rates we will make it to the leading regions to business development and a too high delegations. Instead, investors and of Central Federal District. tax burden. The region’s administration bankers can be invited to a large forum has a crystal clear message for them: on small business in Kaluga region. get yourself an official status and you Our businessmen have come up with will become eligible to tax benefits. such an initiative. In 2015 Kaluga region was awarded Today microbusinesses do not have to the first place by the National have an accountant as they are eligible Investment Climate Rating in to simplified or patent taxation. Patent Many Russian regions have cut the category ‘Support of Small taxation is a godsend for craftsmen who their costs in the budget for 2016. make fashion and interior accessories. and Medium-Sized Business’. Where does Kaluga region stand They only need to buy a patent once. on this and can any reductions Support of small and medium- Also, a 2-year tax holiday has been sized business is a top priority in in the financing of regional introduced for newly set up businesses, programs be expected? the current development format who have selected simplified or of the Russian economy. Will patent taxation. A regulation is being Such reductions were already made Kaluga region be implementing developed now, which will expand the in late January when the budget was any supplementary support list of activities eligible to tax benefits. adopted. We have primarily optimized measures for small and medium- We intend to revise our system cost items, which have no social value sized business? of financial and non-financialwhile being very expensive, such as support, too. Today we are receiving construction of new administrative I would say that the year 2016 will increasingly less requests for subsidies buildings, purchases of new high- be the year of small and medium-sized to finance equipment purchases or tech equipment instead of repairing business. Firstly, small and medium- leases of premises. A high demand has the available equipment. It is not the sized businesses provided for the been registered for support to receive right moment for entertainment and majority of jobs. We will be working loans. On average loans extended to large-scale celebrations. However we hard to prevent unemployment growth. small businesses have dropped by 36% decided to carry on with the Pure Water Secondly, large companies account for nationwide and by 30% in our region. Program, which modernizes water only 27% of all companies in Kaluga Some banks refuse to extend loans to supply systems in our municipalities. region. Most of our manufacturers are small businesses altogether. That is The infrastructure in Kaluga Special medium-sized companies, which have unacceptable. Our objective is to help Economic Zone is still being set up. The fully occupied the field of services, food each small business find the right construction of the Southern Bypass and science-intensive products. credit organization. Road is in full swing. We are prepared to Now we are facing the difficult task Also, the system of finding investors fulfill all our obligations to our investors of raising the share of entrepreneurs for small and medium-sized businesses as regards construction of the required and encouraging them to grow. First will be revised. Several organizations infrastructure and connections to the of all we need to have microbusinesses operate in the region, which offer the utility systems. Our key goal today is step out of the shadow. Microbusiness required support to small and medium- to implement projects in order to reach is currently dominated by confusion as sized businesses through cooperation the expected results rather than for the many people actually have a business with foundations, business missions. sake of the project itself. Each invested but have not had themselves registered Those efforts are now brought together ruble needs to bring RUR 12 to RUR as individual entrepreneurs, pay no under the ministry of economic 15 in investments and each invested taxes and do not have their employees development, which will be shutting million will bring a dozen new jobs. on official payroll. Such businessmen down inefficient programs andMost importantly, the governor and look down at their colleagues who have carrying on with programs, which his team are, as always, confident that chosen to abide by law. Surprisingly, have yielded the expected results. they will achieve success. entrepreneurs of the former group are Today, for example, there is no need the ones who complain about hurdles to pay business trip costs for large

8 Интервью

9 Facts and Figures Investments 2015

rur 452.8 rur 443.8 rur 92.5 163 billion investment agreements billion billion and projects have been investments in into the in actual investments in investments in put on the register of industrial sector in the period in the region’s fixed assets in 2015 the region’s ministry of from 2006 to 2015 (under economy (in the period economic development agreements) from 2006 to 2015), since 2006, including including

rur 40.7 80.5% 18 billion compared agreements with 2014 in 2015 in 2015

86 25,000 rur 17.2 production facilities new jobs billion were opened in the have been created in taxes paid by investors period from 2006 to 2015, since 2006, including in the 9 months of 2015, including including

9 1,800 rur 12.75 rur 4.44 production facilities jobs billion billion openings in 2015 in 2015 paid to the federal paid to the region’s budget consolidated budget

10 Facts and Figures Clusters 2015

Pharmaceutical Cluster 62 companies 155 investment 2015 — 3 production facilities opened projects are implemented in > 80% share of FPPs in total output Kaluga region

automotive cluster Agricultural Cluster 30 110 companies robotic dairy farms 2015 — VW engine plant opened 2015 — Rosva Biotechnological Complex opened Training centers 9 branches

Tourism Cluster Transport and Logistics Cluster

4,000 Rosva Freight Village historical and cultural Vorsino Freight Village monuments hospitality companies 2015 — Kaluga International Airport 100 opened 2,6 growth of tourist flow since 2008 25,5 growth of freight turnover since 2007

Information and Communication Aviation and Space Technologies Technologies 107 22 companies companies

30 research organizations RUR 6,9 billion in output value 27 institutions of higher ORPE Technologiya — education is the cluster’s head organization

11 Facts and Figures

Industry 2015

2,747 2.4 growth 40% rur 42 industrial of the industrial output share of the industrial sector in billion since 2006 (in nominal in tax and non-tax plants the region’s GRP values) revenues of the operate in the region, consolidated regional including budget in 9 months 285 — large of 2015 and medium-sized companies

rur 456.6 rur 496.3 90.9% million billion IPI in support of small and value of shipped medium-sized business in products in 2015 2015

Agricultural sector 2015

rur 39.8 rur 36.7 51 209 billion billion dairy farming agricultural in investments into the value of agricultural complexes companies agricultural sector since produce* 2006, including

rur 1.62 rur 2.7 10% 14.2% billion billion growth compared growth of milk production at in government support with 2014 farming complexes in 2015 in 2015 in 2015

rd 3 место in Central Federal District in terms of milk production *in actual prices of 2015

12 Facts and Figures

Industrial Production Breakdown 2015

Economic Activity share (%)

Total shipments by the industrial sector 100 129.9% growth of resins and plastics production Mineral production 0.6

Manufacture, including 95.8

food production, including beverages and 15.3 tobacco 121.2% growth of non-metallic mineral products timber processing and wood products, except 1.0 furniture

pulp and paper production, publishing and 2.7 printing 107.6% chemical production 2.4 growth of pharmaceutical production

resins and plastics production 2.1

other non-metallic mineral products, including 4.7 construction materials 109% growth of food production, including beverages and tobacco metallurgy and finished metallic products 12.5

machines and equipment 3.7

electrical machines and equipment 13.2 114.3% growth of metallurgical production vehicles and transport equipment 35.2

13 Facts and Figures Ratings 2015

st

in the category ‘Support of Small and Medium-Sized 1 Business’

nd in the National Investment Climate Rating of the Russian Regions 2(by the National Rating Committee) 1st 1st 1st in Central Federal in Central Federal District in Central Federal District and 2nd in and 12th in Russia in District and Russia in Russia in terms of terms of the industrial terms of the birth rate. manufacture per sector production per In 2014, with 12,953 capita capita newborns, the highest birth rate was registered in Kaluga region over the 1st 1st past 26 years. Nikola–Lenivets Kaluzhsky Krai: 1st Landscape Park: 1st award in the category award in the category ‘Best Regional Tourist ‘Best Site for Event Information Center’ Tourism Development: (Russian Event Awards) Natural and Recreational Zones’

nd th nd 4 2 Governor Anatoly Artamonov of Kaluga region has been rated 2nd in Central Federal District in Central Federal District and 9th in Russia in and 16th in Russia in terms in the 2015 Governor Efficiency terms of construction of of performed construction Rating (Civil Society Development residential property per works per capita Foundation) 1,000 people 2

14 Openings and Agreements

2015 Events Openings 2015

First Resident in Obninsk Innovation Zone 21 January ObninskEnergoTekh CJSC, the first company in Obninsk Innovation Zone, opened its complex there, which includes a production and R&D facility. The complex was built in cooperation with the administration of Kaluga region. The investments into the complex reached RUR 180 million. ObninskEnergoTekh is a Russian developer and manufacturer of high- tech energy- and resource-efficient products and an award winner of the 2013 TechUp National Rating of Fast-Growing High-Tech Companies. ObninskEnergoTekh is one of the ten leading innovative companies of Russia.

Omega Lease-Kaluga‘s Production and Logistics Center 15 March Novo-Nordisk Insulin Plant The second stage of the production and logistics center of Omega Lease- Kaluga LLC with a total area of 27,839 m2 was put into operation. That is an A class facility located in Vorsino Industrial Park. The second stage of 10 April the complex was built based on the build-to-suit concept. The complex is Novo-Nordisk opened a high-tech plant in Grabtsevo Industrial Park. The plant is designed in compliance with the lean production principles, which will help the only insulin production facility in Russia built from scratch. Investments into the potential lessors minimize their energy costs and warmth losses. With the project totaled USD 100 million. The plant has a staff of 150 people, which is expected costs of the services of natural monopolies constantly growing, a special to grow. At the plant insulin solution will be made, and Penfill® cartridges and focus was placed on energy efficiency at the design stage. FlexPen® pen needles will be filled and packed. The plant’s output is expected to fully satisfy the domestic demand.

Cellino S.R.L. Launched Automotive Parts Production in Kaluga 16 April The first production facility of SMK LLC, a subsidiary of Cellino S.r.l., was opened on the premises of Kaluga Engine OJSC. Investments into the project reached EUR 10 million. The project will be implemented in two stages. At Stage 1 a production line of aluminum fuel tanks for trucks will be launched. At Stage 2 production volumes are expected to grow and the product range will be expanded to include steel fuel and oil tanks, frame components and cross pieces, truck and car body components. With the launch, a new robot welding line, a know-how of Cellino S.r.l., was put into operation, too.

16 Events

Kaluga Airport: Construction Completed 25 May Kaluga International Airport was opened. This Class B airport will be accommodating Airbus’ A-319, Boeing’s Boeing-737 and other aircraft. The terminal has a capacity of 100 passengers per hour. The passenger flow is expected to reach 500,000 people per year by 2030. Starting from 2016 the airport will be offering maintenance services to business aviation and aircraft hangar storage services. In terms of its construction time frame, financing, technologies and period of implementation, the project of Kaluga International Airport is a unique project as the construction of the airport began less than one year ago.

Lafarge’s Alternative Fuels 1 june An alternative fuel shop was put into operation at Lafarge’s plant in Russia. That marked a launch of an energy efficient and environmentally friendly technology. Investments into the project exceeded RUR 240 million. The shop has a capacity sufficient to process 450,000 t feeds per year. Utility and industrial waste and used tires will be used as alternative fuels. The available concrete ovens will process the waste in full and in compliance with the environmental standards. By the end of 2015 natural gas had been replaced with alternative fuels for 15% and by 2020 that figure is expected to reach 45%.

Niarmedic Pharma’s Unique Plant in Russia 5 june Niarmedic opened a pharmaceutical plant in Obninsk Industrial Park. The total area of the plant is 22,000 m2. Investments into the project reached RUR 4 billion. The plant will have a capacity of up to 100 million packages of medicines per year. The staff of the plant includes 185 people. The plant will be operating in compliance with the requirements of GMP, ISO and FDA. Uniquely, the plant accommodates the whole production cycle, from synthesis of feeds to finished products. The plant’s product range includes its own proprietary products. The plant in Kaluga region will produce about 20 products. That will help reduce the dependence of the country on imported pharmaceuticals.

17 Events

Rosva Biotechnological Complex: New Development Level of Biotechnologies 23 june A lift conveyor was put into operation at the advanced wheat processing complex of Rosva Biotechnological Complex in Rosva Industrial Park. The processing complex with an annual capacity of up to 250,000 t wheat will launch its operations in full in 2016. The company will create about 300 jobs and the project’s total investments exceed RUR 10 billion. The complex will satisfy the key requirements of the Russian economy such as implementation of innovations, imports phase-out as regards food and supplements, new jobs, food security, a switch of the Russian economy from a commodity-based model to the processing high-tech economy.

Timber Complex of Plitspichprom CJSC 20 August Plitspichprom CJSC, one of the leading New Production Facility for companies of the Russian timber industry, Construction and Road-Building opened a timber complex. The annual design capacity of the complex is 51,623 Branches in Kaluga Region m3 (120,000 m3 of round wood). The key products in the plant’s product range will be lumber, planed bars, edged boards, bloc houses, imitation bars, floor boards, euro-batten and other timber products. 26 june The project’s investments exceeded RUR Set up in 2007, Transsnabstroi opened new industrial sites. The 1 billion. The plant accommodates a full company’s key activities include construction, road reconstruction production cycle, from logging to finished and repairs, industrial and civil engineering. Transsnabstroi products, and is a brilliant example of has four production facilities and a fleet of road machines and imports phase-out. vehicles exceeding 370 units. The company participated in the construction and reconstruction of roads and sites for such investment projects as the construction of Volvo-Vostok, Volkswagen Group Rus, Peugeot-Citroen-Mitsubishi, Lafarge Cement, Magna, General Electric, Samsung.

18 Events

Regional Engineering Center 25 August The Regional Engineering Center was opened in Obninsk on the premises of the Active Molecules Park Biopharmaceutical Alliance of Competences. The center will serve as one infrastructural site that will be offering services of technology engineering to small and medium-sized biopharmaceutical companies in Kaluga region. The center is equipped with analytical, laboratory and technological capacities, which can be used both to reach individual goals and to perform the whole range of works related to the implementation of a biopharmaceutical project. According to preliminary estimates, the Regional Engineering Center can help start up 5 to 10 new innovative pharmaceutical companies per year.

Volkswagen Engine Plant

4 September An opening ceremony was held of a new engine plant of Volkswagen Group Rus in Grabtsevo Industrial Park. An 1.6 MPI (EA 211) engine was the first engine that rolled off the assembly line. The new 32,000 m2 plant is located in the immediate proximity of Volkswagen’s car plant. The project’s investments totaled EUR 250 million. The plant created about 400 new jobs. It has an annual capacity of 150,000 engines (about 600 engines a day). The engines will be installed in Skoda Rapids and Volkswagen Polos, which are made at the car plant of Volkwagen in Kaluga, and Volkswagen cars, which are manufactured in Nizhny Novgorod, such as Jetta, Skoda Octavia and Skoda Yeti.

19 Events

OFK-Kardio’s High-Tech Capacities 30 September High-tech production facilities of the joint project of the Modernization. Innovations. Development Foundation and the Active Molecule Park Alliance of Competences were opened at OFK-Kardio. For example, a capacity of conjugated monoclonal antibodies were launched. With those capacities, OFK-Kardio has become one of the few companies in Russia with a full development and production cycle of individual testing systems based on their own feeds (antibodies). OFK-Kardio develops and manufactures KARD-INFO, testing systems for diagnosis of acute myocardial infarction at points-of- care. In May of 2015 the project ‘Early Diagnosis of Acute Myocardial Infarction’ was approved by the Supervisory Council of the Agency of Strategic Initiatives chaired by President Putin. Early this year Governor Anatoly Artamonov of Kaluga region allocated RUR 1 million to purchase KARD-INFO testing systems for the region’s emergency medical services and local health care services.

Distribution Center 5 September The first stage of Pyaterochka retailer’s distribution center was launched in Vorsino Freight Village. X5 Retail Group has become a resident of the modern logistics center in Vorsino. The total area of the warehousing facility is about 39,000 m2. Food will be supplied from the distribution center to retailers in Kaluga, Moscow and Smolensk regions. The managers of X5 Retail Group believe that the opening of the distribution center will help them fulfill their social obligations in relation to the local population through additional discounts and direct food supplies to the region’s social institutions without any additional markups.

New Treatment Facilities in AstraZeneca Opens First Full Cycle Plant in Russia Vorsino Industrial Park 9 September 10 October AstraZeneca, an international biopharmaceutical company, opened its plant in Vorsino Industrial Park in Biological treatment facilities with a capacity of 4,000 m3 Russia. The company invested USD 224 million in its project in Kaluga region. In additional to production per day were opened in Vorsino Industrial Park. The area of activities, the new plant acts as a R&D center and offers continuous medical training and patient support the facilities is 17,825 m2. The project’s investments totaled programs. By 2019 the full cycle production (from dosage forms to packages) output will reach about RUR 230 million. The applied treatment technology will 500 million pills. The design capacity is 1.5 billion pills per year. The design capacity of the production help efficiently reduce chemical and biochemical oxygen facility is over 40 million packages or about 850 million pills per year. The plant will be making about demand and other contaminating substances in waste 30 innovative medicines of AstraZeneca for treatment of cancer, heart, gastroenterological, psychic water. This infrastructural site was designed in a manner to and long conditions. Those medicines account for 30% of the company’s product range in Russia. take into account the needs of all the plants in the park. So The production facility has a staff of about 300 far 15 residents have been connected to the facilities, which employees, who have been trained in compliance is less than 10% of their capacity. The resulting surplus with international standards. capacity is expected to be used as the north-eastern territory of the park and the site of Kaluga Special Economic Zone continue to develop.

20 Events

Food Warehousing Facility Antonius Medvision Health Care Center 31 October 15 December Russky Produkt put into operation a warehousing facility in Detchino. Built based on Antonius Medvision, a joint project of Russia and Germany, opened innovative technologies, the warehousing facility has a storage process in place, which a health care center in Grabtsevo Industrial Park. The center will be complies with today’s advanced requirements. Russky Produkt needed a new warehousing offering medical checkups, medical and consulting services. Kaluga facility as it expanded its production facilities and moved some of its workshops to Detchino region has been a partner of Antonius Medvision for 8 years. The from Moscow. Currently, the plant in Detschino has a product range of about 160 items, company offers medical services to the companies located in Rosva, including instant coffee, soup mixes, spices, kissels, baking mixes, etc. The warehousing Vorsino, Grabtsevo and Ferzikovo Industrial Parks and, as a participant facility has an area of 10,000 m2. The staff at the facility includes 30 people. of the government guarantees program, free medical services to the population of Kaluga region under an obligatory medical insurance policy. Antonius Medvision has a staff of 100 people who have at their disposal advanced equipment, effective medicines and 10 ambulances, several of them are equipped to serve as ICUs.

Triada-Impeks’ Production Facility 1 December Triada-Impeks (Triada-Holding) opened a production facility in Vorsino Industrial Park. The key activity of the plant in Kaluga is manufacture of specialty cement- and polymer-based mixes for repair, reconstruction, waterproofing and plugging-back works. The plant is equipped with advanced LAHTI Precision OY equipment capable of producing materials, which will satisfy the strictest requirements of the construction branch.

Goncharov Hotel, First Government- Private Partnership Project 25 December Goncharov Hotel, a guest house in the Polotnyanyi Zavod mansion complex, was opened as part of government-private partnership. Uniquely, the partnership is governed by the first concession agreement, which ever was made in Russia in relation to a heritage property. Alpinex from Austria started the restauration works in 2012. In addition to the hotel, the mansion includes a literary café and a home church of the Goncharov family, which is currently under reconstruction. A private museum of paper is expected to be opened soon. The mansion can boast unique interior, household an furniture items of the early 19th century. Its 18th century architecture is turning the museum complex into a national tourist attraction.

21 Events

Hygiene-Service from Kaluga Region Opened New High-Tech Production Lines

An official opening ceremony of production line of MEED adult diapers has been held at Hygiene- Service LLC in Kondrovo of Kaluga region. The ceremony was attended by Gulnaz Kadyrova, Deputy Minister of Industry and Trade of the Russian Federation, Aleksei Komissarov, Director of the Industry Development Foundation under the Russian Ministry of Industry and Trade, Aleksandr Avdeeev, Deputy Governor of Kaluga Region, Chief Federal Inspector Aleksandr Savin of Kaluga region, and Aleksandr Bushin, Director General at Hygiene-Service.

The new production lines will be the 19th and 20th involved in the public life. production lines opened since the establishment of Hygiene- With the investment project of production of MEED adult Service in the Russian market. The maximum annual capacity diapers implemented jointly with the Industry Development of the lines will be 180 million items. The diapers will be made Foundation, Hygiene-Service will end up among the leading of environmentally friendly absorbing materials, which are Russian companies as regards imports phase-out. The project very efficient at catching moisture and eliminating odors. is of paramount importance as currently only 10% of diapers The product will have consumer and technical properties is produced in Russia. The annual domestic demand in adult compliant with the requirements of the government diapers has already exceeded 700 million diapers. According to standards (GOST). The products can be used both in health estimates, the products of Hygiene-Service Med will phase out care institutions and at home, including any emergencies. 50% to 55% of foreign-made products. As a result, the prices of Aleksandr Bushin, Director General of Hygiene-Service, personal care are expected to drop significantly. said the following: Noteworthy, the production of hygiene products to phase This is the largest project of its kind in Russia and it will out foreign-made personal care products is one of three create new jobs, pay more taxes and phase out imports. Most projects in Kaluga region, which have enjoyed support of the importantly. This is a social project. It has been our conscious Industry Development Foundation. choice. We are fully aware of our responsibilities and are Hygiene-Service has invested RUR 1.3 billion in the committed to produce high-quality products, which will production lines, including RUR 500 million, which it has help millions of people live a life worth living and be actively received as a low-cost loan from the foundation. Gulnaz

22 Events

Development Milestones

• Established in 1994, Hygiene-Service LLC offers over 100 feminine hygiene products.

• The company produced over 2,000,000,000 packages of medical hygiene products.

• In July of 2015 the Expert Council of the Industry Development Foundation under the Russian Ministry of Industry and Trade approved a rur 500 million loan to the company for implementation of a project of production of adult diapers as part of import phase-out efforts.

• The total project costs reach Ours is the largest project of its kind rur 1.3 billion. in Russia and it will create new jobs, pay more taxes and phase out imports. • Hygiene-Service LLC intends to produce and sell Most importantly, our project is a 160 million social project. diapers in 2016.

• An annual capacity growth of items is Kadyrova, Deputy Minister of Industry It should be noted here that the company 80-90 million and Trade, spoke about the short is committed to carry on. The managers are expected. implementation time frame of the project: in the process of negotiations with several The production project of MEED adult banks on potential financing of a project to diapers is the first project, which has been produce equipment for hygiene products for • The production line has a capacity of financed by the Industry Development adults and children. Mr. Bushin is confident Foundation. The financing has been made that the quality of both the equipment and 200 diapers per minute. possible by Law ‘On Industrial Policies’, the products will be compliant with the which was adopted in December of 2014. global standards. The company received the financing from • By 2019 the company intends to the foundation in the second half of 2015 A social focus, planned production launch Russian-made production lines and is launching the production now in growth and development, a higher turnover of diapers for adults and children. February of 2016. I would like to thank the of Russian-made high-quality products — whole project team, who starting from the all those are the elements of the strategy, negotiations kept working in a consistent which has proved its efficiency over the past and responsible manner, everyone who has 20 years. • By 2020 the company intends to fully made this project possible. switch over to Russian-made feeds, materials and components.

23 Events

Agreements 2015

04/02

Kaluga Region and Berlin-Pharma: at New Stage of Development

Governor Anatoly Artamonov of Kaluga region and Hans- Jorg Kilian, a Board member of Berlin-Chemie AG from Germany, signed an agreement on implementation of a construction project of a warehousing facility of Berlin- Pharma CJSC. The warehousing facility will help enhance the capacity of the company’s pharmaceutical plant in Kaluga region. The project’s investments total EUR 10 million. The plant of Berlin-Chemie Menarini in Kaluga region was opened in May of 2014. The capacity of the plant is 47 million packages of medicines per year. The investments in the construction of the plant exceeded EUR 40 million.

03/02

Pharmaceutical Cluster in Kaluga Region and Skolkovo

The Skolkovo Foundation and the Active 18/02 Molecules Park Biopharmaceutical Alliance of Competences signed an agreement on cooperation in the field of technologies. Under the agreement a shared knowledge RPM Group and Pyaterochka center for Skolkovo’s projects will be set up on the premises of the Active Molecules Park in X5 Retail Group announced a launch of cooperation Obninsk. In their turn, the members of the between the retailing network of Pyaterochka and RPM’s alliance will receive a Skolkovo resident status Pemputmash in Kaluga Region. On the same day the and will become eligible to tax benefits and first training center was opened at Remputmash for its the foundation’s support in the form of grants staff members, who will be getting a job at Pyaterochka. and infrastructure. The resulting concentrated Similar training centers will be opened at 10 of RPM’s competences and innovations flow will open companies. The offered training program will be free up new opportunities for the development of for its participants and will last 21 days. Annually, the Russian pharmaceutical industry. the training centers will train up to 3,000 people in the following fields: stock management, operational engineer, etc. The trainings will be offered to the staff members of Remputmash and the staff members of other companies, who have become redundant.

24 Events

12/05

AstraZeneca and the Active Molecules Park

AstraZeneca announced a launch of the first project, which will be implemented as part of the Open Innovations initiative aimed to develop new medicines. The project will be implemented jointly with the Active Molecules Park Biopharmaceutical Competences Alliance and its Scientific and Research Center, which form the innovative core of the pharmaceutical cluster in Kaluga region. The participating scientists will be conducting pre-clinical trials of a molecule of AstraZeneca, which has a large potential as regards the treatment of various types of malignant tumors. The resulting experience and scientific and research potential will serve as a basis for new anti-cancer medicines.

16/04

Special Economic Zone Expanded

Dmitry Medvedev signed a regulation on a new 432 ha lot to the Special Economic Zone. The new lot is located in Borovsk District along the border of Moscow. The new lot was added as the Special Economic Zone is developing at a fast pace and the first lot in Ludinovo is almost fully occupied by four companies, which implement their projects there. Almost half of the lot is occupied 26/05 by Agro-Invest, the largest greenhouse complex in Central Federal District. The new lot is a unique offer as investors can receive a production site within a short period of time and almost free of charge. AKOTEKH – Altai Polymer Composite Cluster 27/04 The Association of the Cluster of Aviation and Space Technologies of Polymer Composite Materials and Trilateral Agreement Designs (AKOTEKH), the Association of the Altai Polymer Composite Cluster and the Innovative The governments of Kaluga and Bryansk regions and the Development Agency of Kaluga region signed a administration of Smolensk region signed a trilateral agreement trilateral agreement on cooperation. The parties on the development of unified approaches and standards, which to the agreement intend to join their efforts as will be applicable in various fields of activities. The parties have regards the development and manufacture of high- agreed to cooperate in the following fields: industry, investment tech innovative products and their distribution. policies, agriculture, public health, utilities, energy, science and The cooperation will include joint research and high technologies, education, small and medium-sized business, development efforts, infrastructural projects and communications and IT, construction, sports, tourism, transport, other activities. social security, etc.

25 Events

ц

08/06

Audit Analytic, New Resident of Kaluga Special Economic Zone

The government of Kaluga region and Audit Analytic LLC signed an 19/06 agreement on construction of a timber plant in the lot of Kaluga Special Economic Zone. The project’s Kaluga Region and St.-Petersburg investments will be RUR 3 billion. The project will provide for sustainable Expand Cooperation forest management and will result in a no-waste production facility of energy- efficient pre-fabricated cement fiber At the St.-Petersburg International Economic Forum Kaluga region mat-based housing. The annual output signed an agreement on cooperation with St.-Petersburg. The is estimated at 3,000 finished houses agreement provides for more partnership in the following fields: trade per year (with an average area of 140 m2) and economy, science and technologies, culture, social, innovations and or over 400,000 m2 of private homes. investments. Organizations in Kaluga region and St.-Petersburg will be The project will be a pioneer in the exchanging economic information and establish business relations with Russian construction industry as regards each other. More contacts are provided for in science, education, public assembly-line construction of low-rise health, environment protection, culture, tourism and sport. housing.

Kaluga Region and the Russian ц Technological Development Foundation

Kaluga region signed an agreement on cooperation with the Industry Development Foundation (established under the Russian Technological Development Foundation). The cooperation will be aimed to support industrial companies that implement high-tech projects. The Foundation is prepared to offer financing to such projects for a period of 5 years at 5% per year. By August 15 local companies had supplied 19 project requests to the Foundation. On 31 August its Expert Council selected the following 3 projects to finance: projects of Hygiene-Service, Niarmedic Plus and Elektronika (Kraftway). The latter project is aimed to develop computers based on the company’s platform. 24/06

26 Events

27/07 18/08

The Krasin Pencil Factory LLC, First Resident in Innovative Medical Borovsk site of Special Economic Zone Center in Obninsk

The government of Kaluga region and the Krasin Pencil Factory LLC signed The National Medical Radiological an agreement on the construction of a plant, which will be manufacturing Center of the Russian Ministry of office and school supplies. To set up its plant the company had selected the Public Health, the government of Borovsk site of the Special Economic Zone. Investments in the plant equal Kaluga region and Gamma Ventures RUR 300 million. The plant will have a staff of 600 people, including 300 Group Inc. signed an agreement on disabled people. The plant’s products will be sold in Russia and CIS countries. the establishment of an innovative The plant will be running on Russian feeds. The plant’s capacity is expected scientific center Gamma Knife. to reach its maximum in 2020. A gamma knife is a device able to penetrate a tumor without damaging healthy tissues. The center in Obninsk will be running one of the five devices available in Russia. The new center 26/08 will be established under the Obninsk Medical Radiological Scientific Center, a branch of the National Medical D.A. Rus to Build a Plant Scientific Center. The center will have a clinical unit and a team of developers The Governor Anatoly Artamonov of Kaluga region and Li Dong Zhu, of precision XRTs. Director General at D.A. Rus, signed an agreement on the construction of a plant, which will be manufacturing rubber and plastic products. The project’s investments equal RUR 500 million. The plant will be built in Vorsino Industrial Park in 2016. D.A. Rus is a manufacturer of components for household devices, which are assembled at Samsung Electronics Rus Kaluga (in Kaluga region) and LG Electronics Rus (Moscow region).

09/09

Kaluga Region and Russian Railways Sign Memorandum on Cooperation

During his visit to Kaluga region Oleg Belozerov, President of Russian Railways OJSC, signed a memorandum on cooperation with the government of Kaluga region, which provides for more projects in transportation, implementation of joint programs of innovative railway machinery development in Kaluga region and cooperation in efficiency of local passenger carriage.

27 Events

14/10

Chinese Building and Railway Specialists Choose Kaluga Region

Two official documents were signed in Beijing. A memorandum on cooperation between Kaluga region and the Chinese Federation of Construction Materials 18/11 confirmed the intentions of both the parties to develop cooperation, primarily through Chinese investments in Kaluga Tourist Hub in Kaluga Region region and facilitation of negotiations with potential partners. The other Two agreements were signed at the 5th Tourist Forum in Kaluga: document, an agreement on cooperation an agreement on cooperation between the region’s ministry of between the Chinese Federation of culture and tourism and the Russian Association of Travel Agents, Machine Building and Kaluga region, which is aimed to develop domestic and international tourism, opens up new opportunities to attract and an agreement between the Dialogue of Cultures Foundation Chinese capital, to launch new machine and the Russian Association of Travel Agents on a tourist hub, building facilities in cooperation with which is expected to be set up on the premises of the Etnomir Kaluga companies. Center of Culture and Education. The tourist hub will serve as a basis for the promotion of the regional and national tourist product to the international and domestic market.

Kaluga Region to Cooperate with the 23/10 Association of Russian Diplomats

At the Etnomir Center of Culture and Education an agreement on cooperation was signed by the government of Kaluga region and the Association of Russian Diplomats, a Russian public organization. The agreement is designed to develop the foreign economic relations of Kaluga region with other countries and to promote the region in the global community. The agreement provides for a bilateral exchange of economic information and establishment of a business relationship between the organizations.

28 Events

Kaluga Region and the Republic of Ingushetia

The minister of culture and tourism of Kaluga region and the chairman of the Committee for Tourism of the Republic of Ingushetia signed an agreement on cooperation. The agreement lays the framework for the promotion of the tourism potential of the Russian regions in the run up to the 2018 FIFA Football World Cup. The key obligations of the parties under the agreement include development of equal and mutually beneficial cooperation between national and regional tourism organizations, rendering support to their initiatives and generation of a single tourism environment. 23/11

17/12 Pharmaceutical Cluster in Kaluga Region and BIOTURKU Cluster from Finland

The Agency of Innovative Development – Center of Cluster Development of Kaluga Region JSC, Kaluga Pharmaceutical Cluster Non-Profit Partnership and BIOTURKU, a cluster from Turku, Finland, signed an agreement on cooperation. The goal of the agreement is to establish partnership in the following fields: development of infrastructure, implementation of joint training programs and cooperation in science and research. The agreement also enables small and medium- sized companies from Kaluga region to participate in the TEKES contest in Finland and to receive support as regards commercialization of their projects and developments.

Vesta Park Chooses Kaluga 21/12 Special Economic Zone

The government of Kaluga region and Vesta Park JSC signed an agreement on the construction of a plant, which will be manufacturing metal structures and sandwich panels. A preliminary agreement has been reached to build a 14.2 ha plant in the Borovsk site of Kaluga Special Economic Zone. The project’s investments are estimated at RUR 2.3 billion and the staff of the plant will include over 600 people. The products will comply with ISO quality standards and any other standards effective in the territory of the Russian Federation. The expected annual capacity of the plant is 24,000 t metal structures and over 1 million m2 sandwich panels.

29 Anniversary Reliability Runs in Our Tradition 25th Anniversary of Elite Bank ООО БАНК «ЭЛИТА»

Today the key goal of Elite Bank is to act as a reliable financial partner to its clients and to continue operating at a high professional level. Over the past 25 years the bank has contributed significantly to the economy of Kaluga region through offering support to small and medium- sized businesses operating in the following branches: industry, construction, trade, agriculture, state-owned companies and municipalities.

lite Bank has always seen cooperation with small and medium-sized businesses as one E of its priorities. We believe that small and medium-sized businesses provide for the stability and sustainability of the economy. In our opinion, banks with a focus on cooperation with small and medium- sized businesses can compete with large federal players in regional banking markets. In the current economic situation most companies are facing the same issue, i.e. a lack of an adequate security. The issue arises as the company is willing both to finance a new project (production facility) and to expand the existing production capacities as most companies lease their production facilities and the available equipment is of an inadequate quality and relatively depreciated. Elite Bank has solved that issue together with the State Small and Medium-Sized Business Support Foundation. Now a guarantee of the Business Support Foundation of Kaluga region can serve as the required security. In 2015, loans extended to small and medium-sized businesses under guarantees of the foundation totaled RUR 45.7 million.

Vadim Vantsov, Board Chairman

‘I would like to congratulate the management of Elite Bank on its 25th anniversary. The bank has been one of the most reliable partners of Kaluga region for many years. The managers of the bank focus on support of small and medium-sized businesses, implementation of agricultural projects and assistance in the development of innovative production facilities. As an experienced banker, I understand that following those priorities in financial policies is complicated and that it will only pay off in the long term. For that reason I would like to wish the bank success and prosperity, more clients, profitable assets and, obviously, successful development and further improvement.’ Alexey Laptev, Deputy Governor of Kaluga region

30 Anniversary Reliability Runs in Our Tradition Projects of Elite Bank Vorsino Industrial Park th With a total area of 2,190 ha, Vorsino Industrial Park is the 25 Anniversary of Elite Bank largest industrial park in Kaluga region. Investors who choose to set up their production facilities in the park, will receive prepared land lots with an access to customs and logistics terminals, high tax benefits and comprehensive support at all project stages.

Kaluga International Airport A Class B airport, Kaluga International Airport accommodates Airbus’ Airbus A319, Boeing’s Boeing 737-500 and other similar or smaller aircraft. In 2015 the airport had an annual passenger turnover of over 10,000 people and accommodated 518 flights. The airport won at the 2nd National Air Gateway of Russia Award in the category: ‘2015 Best Regional Airport with an annual passenger turnover of up to 500,000 people’ and was elected by journalists 2015 Airport of the Year.

Robotic Farms Waste Sorting Facility CARD-INFO Testing Kit (by OFK- Kardio) for Early Diagnosis Elite Bank contributes to the Located in , the waste sorting of Myocardial Infarction at development of the region’s facility serves the following districts Points of Care agriculture. The bank offers loans to in Kaluga region: Sukhinichi, Duminichi, farms to set up robotic operations and Lyudinovo, Kirov, Zhizdra, Meschovsk, The testing kit requires 1 drop of to develop farmland for the cattle at Babynino, , Peremyshl and Ulyanovo. blood to identify any injury to cardiac the farms within the framework of The facility is designed to operate for the myocytes (cardiac muscle cells) within the program ‘Setting up 100 Robotic following 40 years. The estimated solid 1 to 1.5 hour of the first symptoms of Dairy Farms’. municipal waste to be processed by the the condition. With that, health care facility reaches 166,869,000 m3. The annual specialists can start the required capacity of the facility is 120,000 m3. treatment and avoid a therapeutic failure.

Elite Bank has been operating In 2015 AK&M and RIA Rating Key Services in the banking market since 1991 confirmed the national scale Deposits / Loans (license No. 1399 of the Russian credit rating of Elite Bank at B++. Money Transfers / Foreign Currency Central Bank). Kaluga region Banking Cards represented by its ministry of 10, Moskovskaya St., 20, Kaluzhskaya St. Obninsk economic development and Kaluga Tel.: (48439) 5-65-35 Development Corporation of Tel.: (4842) 72-14-65 Kaluga Region JSC participate in Email: [email protected] 3, Churilina St. Kirov Tel.: (48456) 5-16-56 the bank and that enhances trust 106, Grabtsevskoye Shosse the bank’s clients and the whole Kaluga 106, Lenina St. Sukhinichi population of Kaluga Region have Tel.: (4842) 22-78-92 Tel.: (48451) 5-10-75 in it. www.bankelita.ru

31

Key Industrial and Infrastructural Projects in Kaluga Region

2015-2016 Key Projects Kaluga International Airport Development Stages and Trends

25 May 2015 18 August 2015 20 October 2015 Kaluga International Airport The airport received an Participation in the launched its operations. In official status. Deputy 8th Wings of Russia terms of its short period Chairman of the Russian International Aviation of construction, financing Government Arkady Forum. and technologies, Kaluga Dvorkovich handed a International Airport is a regulation of the Russian unique project. Its runway Government on launching 22 October 2015 was reconstructed within international flights and Flights to new international only 5 months. In the same on establishing a multiway and regional destinations period the taxiways, ramp passenger border inspection were launched. and apron were built, too. post in Kaluga Airport The launch took place within to Governor Anatoly 2 November 2015 less than a year after the Artamonov of Kaluga region. construction began. A corporate charter program was launched 4 September 2015 10 June 2015 where European airlines The first international 2 to 3 times a week make An agreement with flight is made. A Dassault charter flights to Russia Komiaviatrans OJSC was Falcon 7x landed in Kaluga for Volkswagen on Airbus’ signed on comprehensive bringing Board members Airbus A319. Formerly, aircraft maintenance. of Volkswagen from specialists of Volkswagen Under this agreement Braunschweig (Germany) on flew to Vnukovo Airport. services are rendered an official visit to Kaluga. in relation to aircraft, passengers, luggage and 21 December 2015 cargoes. The airline makes 16 September 2015 Seasonal charter flights scheduled flights from The results of the previous were launched to Nis Kaluga to St.-Petersburg and three months were evaluated. (Serbia). Sochi on Embraer ERJ-145 An unrivalled growth was aircraft. registered since the launch of scheduled flights on 16 23 December 2015 16 June 2015 June as the airport had a Kaluga International The first scheduled flight passenger turnover of 5,059 Airport received an active IG-739 from Kaluga to St.- people, accommodated 211 member certificate of the Petersburg is made. flights and handled 33.6 t of Airport Commercial Aviation luggage. Association. 23 July 2015 Scheduled flights to 1 October 2015 the Crimea (Simferopol Certification of the International Airport) are management system launched by Center South in compliance with the Airlines on Russia’s newest requirements of ISO 9001 SSJ-100 aircraft. was started.

9 February 2016 Kaluga International Airport won in the category ‘2015 Best Regional Airport with an Annual Passenger Turnover Under 0.5 Million Passengers’ and became 2015 Airport of the Year at the 2nd National Air Gateway of Russia Award.

34 Interview

‘We are happy offering world-class service’

Salavat Kutushev, Director General of Kaluga International Airport ?

The year 2015 was probably the Ministry of Transport and air tickets to with reliable and professional partners. most important year in the history those destinations are expected to be Early this year Gazpromneft-Aero, of Kaluga International Airport. But sold at an acceptable price. one of the market leaders in Russia, for the technical flight, which was We understand that with a passenger assumed the obligations to fuel aircraft made in December of 2014, other flow of 250,000 people per year the and helicopters. We are happy that significant events all took place in 2015, maximum capacity of the existing the company believes in the potential including the opening, receipt of an terminal will be reached and the of Kaluga International Airport and official status, launch of regional and need will arise to expand the existing decided to cooperate with us. We, in international flights. The passenger facilities. Obviously, we will be our turn, are happy offering airlines turnover in 2015 (starting from June preparing for that as making designs world-class service, which has been 16 to be more precise) exceeded 10,000 takes much time and costs a lot. proved by various European audits. passengers. The airport accommodated We keep engaging in cooperation over 500 flights and handled about 60 t of cargoes. For example, the passenger turnover of Grabtsevo Airport at the time of the Soviet Union did not exceed 2,000 people. According to our estimates, in We have ambitious plans for the 2016 the passenger turnover of Kaluga International Airport can reach 60,000 summer of 2016, too, launching to 80,000 passengers. The year 2016 has more in store flights to the Black Sea Coast, e.g. for Kaluga International Airport. In February we will start expanding our destinations network, e.g. flights to to Simferopol, Anapa, Gelendzhik, Yerevan, the capital city of Armenia, which has intensive business and Sochi. These flights are on the subsidy social relations with Kaluga, will be launched to be followed by flights to program of the Russian Ministry of Kazan, Kaliningrad and Minsk. We have ambitious plans for the summer of Transport and air tickets to those 2016, too, launching flights to the Black Sea Coast, e.g. to Simferopol, Anapa, destinations are expected to be sold at Gelendzhik, Sochi. These flights are on the subsidy program of the Russian an acceptable price

35 Key Projects Reconstruction of M3 Ukraine Highway

The reconstruction works are conducted under a long-term investment agreement between Russian Highways OJSC and Avtoban and will include widening of the carriageway of up to 7.5 m and of the hard shoulders on both sides of up to 3.75 m, construction of speed change RUR 17,1 lanes and entry lanes, 10 multi-tier junctions, 6 pedestrian bridges and billion cost of reconstruction a wildlife crossing. The existing of 124 km — 194 km bridge over the Ugra river will be reconstructed and another bridge over the river will be built.

On 26 June 2015 a capsule- laying ceremony was held to mark the beginning of the construction of a traffic junction as part of the reconstruction project of the M3 173 km to 194 km stretch. The reconstruction project includes widening works and bringing According to the ministry of public roads of Kaluga region by February of 2016 the highway in compliance with the reconstruction works had been performed as scheduled. The following the requirements of 1B technical works had been completed: reconstruction of a 40 km carriageway of M3 category, i.e. four lanes and no Ukraine Highway, construction of flyovers at junctions, electric lighting had intersections. The carriageway will been completed for 60%. Pillars are set for the new bridge over the Ugra river. have a width of up to 7.5 m and Side hill filling works had been commenced at the stretch from 173 km to 194 each hard shoulder of up to 3.75 m km of the highway. Preparatory works are performed by a contractor at a with the same tarmac. The stretch junction, which will be built at km 173 of the highway. No works restricting will also get speed change lanes and the traffic will be conducted in winter time. entrance lanes.

36 Key Projects Southern Bypass Road

Ruslan Smolensky, Deputy Governor of Kaluga Region The project’s total value is over

‘The two key road construction projects are of vital RUR importance. Why are we building Southern Bypass Road? 10 Now in order to get into Kaluga, you have got to go through numerous intersections of regional and municipal roads billion and the city streets. As a result the traffic is moving slowly giving way to traffic jams. In the restrained conditions of the city no broader streets, new junctions, entry lanes and reconstruction of the existing junctions are possible. The Southern Bypass Road in the proximity of Sekiotovo and Annenki and with a bridge over the Oka river will help solve those issues. With the new road, transit traffic will be routed around the city streets. In future the traffic in downtown Kaluga is expected to drop by 30%. Importantly, the project is not only about the bridge of the Oka river. It also includes the construction of a 22 km road stretch, three new junctions and 8 flyovers and the reconstruction of the existing junction. The project costs are estimated at RUR 4 21.21 km 649 m 12 billion. The construction will be completed in 2017. This Lanes Road stretch under Bridge length project is very important for the development of areas on the construction right bank of the river. It needs to be implemented now and not 10 or 15 years from now. The road and the bridge will be promoting the development of the areas. The reconstruction 120 km/h project of the M3 Ukraine Highway will enhance the traffic Design traffic speed safety and the transit capacity of the highway, which is of pivotal importance for Kaluga region. The highway will get 4 lanes, a median strip, electric lighting at the whole stretch length and barriers separating the median strip and the hard shoulders. Also, an automatic traffic management system is On 18 August 2015 the and Construction Company. expected to be put into operation. New junctions will help get construction of the Southern Bypass The project’s works include the rid of all intersections and same-level left turns. The project road, including a third road bridge following: construction of a 22 km will separate the turning traffic from the transit traffic by a over the Oka river, began in Kaluga. road stretch of the category IB, median strip for more security, will include the construction The new road will redistribute about construction of three new junctions 80% of the traffic flows and keep out of and reconstruction of one existing of bus stops with pedestrian traffic at other levels. The old the city over 7 million cargoes. Given junction, construction of a bridge bridge over the Ugra river will be reconstructed and a new the region’s fast development, the over the Oka river, six flyovers at one will be built. Pedestrian bridges will be available all road is to gain strategic importance. the junctions and two flyovers at along the highway. So far the contractors have fulfilled their The bypass road will be routed intersections with local 4th category obligations and the works are performed according to the roads. around all the local settlements and approved and agreed schedules. will be built in the period from 2015 The construction of the road is to 2017. The Southern Bypass road monitored by the administration of will be free. The general contractor Kaluga Region. of the project: Moscow Engineering

37 Key Projects New Silk Road

On 27 January 2016 a farewell ceremony was held for the first container train departing from Dalian in China (formerly Dalny Port) to Vorsino in Kaluga region. The ceremony also marked the launch of the New Silk Way infrastructural project, which from now on will connect North- Eastern Asia with consumers and partners in Europe through the territory of Russia. Vorsino Freight Village in Kaluga region has now become a part of the New Silk Road. Advantages of the New Silk road: Cargoes from north-eastern China and South Korea will be shipped through the port of Dalian by the Chinese • More Russian exports to Asia • A large distribution center Eastern Railway and the Trans-Siberian • Access to the Russian and • Expansion of the existing Railway. Cargoes can include both European markets for Asian facilities and construction of finished products for consumers and components and materials for plants in countries new ones Russia and Europe.

Currently e.g. components With the New Silk Road cargoes are for Samsung’s plant in delivered three times faster Kaluga region are delivered by sea, which takes over 50 days.

38 3 times Key Projects

On 27 January 2016 Kaluga region and the port of Dalian 5 February 2016 Group signed a memorandum on the establishment of a logistics corridor between Kaluga and Dalian. An The first contained train agreement has been reached to generate conditions from Dalian arrived required for each party to offer logistics services for in Vorsino Industrial Dalian further cooperation and trade development. With Park. The trained its convenient location in the Russian Federation covered 7,721 km over An important financial, trade, industrial and tourist and the developing transportation and warehousing less than 10 days. That center located in eastern China, Dalian is the largest infrastructure, Kaluga region can be viewed as an means that the New international transportation hub and logistics important development link of the New Silk Road in Silk Road provides for a center. Russia. three-fold reduction of delivery times of cargoes and goods from/to China and other Asian A multimodal logistic center, Vorsino Freight Village countries. Also, the new is located on a 600 ha lot in Vorsino Industrial Park international logistics alongside the M3 Federal Highway, 67 km off the corridor is cheaper than Moscow Ring Road and 20 km off Greater Moscow. most alternative logistic Vorsino Freight Village combines three means of solutions. The first transport: by vehicle, by air (Ermolino Airport) and container train delivered by railway. The infrastructure of the village include components for class B+ offices, a customs post of the Kaluga region Samsung Electronics. customs, a temporary storage warehouse, an open Today Vorsino Freight cargo inspection site, a container terminal and a Village can receive terminal for heavy trucks. 150,000 containers and has a potential capacity growth of up to 350,000 On 11 November 2015 an agreement was signed by TEUs per year. Trans-Siberian Railway representative of Samsung Group and the government of Dalian District on declaring the port of Dalian to be the By sea The New Silk Road starting point of the New Silk Road.

‘This project is a brilliant example of cooperation between governments and business. Either party benefits from the implementation of the project: governments through more investments and new jobs and business through guaranteed delivery times, a good pricing and transportation growth.’

Vladimir Moldaver, Director of Moscow Railways, a branch of Russian Railways

ВЕСТНИК 39 Pharmaceutical Cluster Key Goal: Get Effective Russian-Made Medicines to the Market Cluster Structure

Manufacture Research and Development Training of Finished Dosage of Original Pharmaceutical of Specialists Forms Substances and Active Molecules

• the companies of • Medical Radiological Scientific • 30 new projects in the portfolio the pharmaceutical Center of the Russian Ministry of of innovative projects of pharma- cluster manufacture 109 Health Care and Social Develop- ceutical companies in Kaluga pharmaceutical product ment, State Scientific Center of items Russian Institute for Physics and • over 10 pharmaceuticals are Power Engineering, a branch of at the stage of pre- and clinical • finished medicines account the Scientific Center of Institute trials for 80% of the cluster’s for Physics and Chemistry, Kaluga products • according to experts over the State University and a branch following 3 years companies and • the products manufactured of National Nuclear Research organizations of the pharma- by the cluster have a value of University of Moscow Institute ceutical cluster will be bringing RUR 18 billion of Engineering and Physics in annually 2 to 3 new medicines to Obninsk the Russian market

The pharmaceutical cluster has 62 companies Large pharmaceutical production facilities opened in 2015:

Cluster Excellence Bronze Label

According to a survey conducted by the The pharmaceutical cluster said that the activities of the European Secretariat for Cluster Analysis in in Kaluga received the pharmaceutical cluster in highest rating in the group Kaluga had been rated best 2015 only 5 Russian clusters received a bronze ‘Health and medical science’. in terms of the following: label out of 750 participating clusters. The cluster’s activitiesbringing financing for had been compared with R&D projects, the number the activities of 19 leading of products and services European pharmaceutical developed by the cluster’s clusters. participants, small business development, staff training, Director of the European development of international Secretariat for Cluster cooperation and cooperation Analysis, Helmut Kergel, within the cluster.

40 Interview

Niarmedic: 100% Russian-Made

Vladimir Nesterenko, Director General of Niarmedik Group ?

The opening of Niarmedic Pharma in and has been put on the list of plants, which Obninsk Industrial Park has obviously will be phasing out imported products. Today been one of highlights in the year 2015 for foreign-made products account for 99% of Niarmedic Group. The 22,000 m2 facility the products offered in this field. Niarmedic Niarmedic Group houses advanced fully standardized is capable of changing that. According to equipment. The plant design complies experts, the new facility will help to phase Established 26 years ago by with all international quality standards out foreign-made products in this field by scientists of the Gamaleya of manufacture and laboratory practices. reducing their share down to 20% in 2020. Scientific and Research Institute Niarmedic Pharma will be manufacturing The construction is scheduled to be launched of Epidemiology and Microbiology, Kagotsel, a popular antiviral medicine. in 2016. the company introduces advanced In 2013-2014 Niarmedic conducted jointly diagnostic test systems in broad with the International Society of Internal medical practices for laboratory Medicine, the Clinical Trials Support diagnosis of the most significant League and the Eurasian Society of Infection Niarmedic is intending infectious diseases threats such as Specialists a unique analysis of 14,000 STDs, HIV, viral hepatices, TORCH patients who received treatment of a common to launch yet another infections, etc. DNA tests make cold and flu in outpatient departments of 202 another important field of the unique project in medical centers in various countries. The company’s activities. The project analysis has once again demonstrated the has been supported by the Russian the near future: efficacy and safety of Kagotsel irrespective Ministry of Industry and Trade of when its administration begins. As a and will be partly financed by the construction of a result, the company is prepared to offer the Industry Development Foundation. medicine to customers abroad, too, now that The Russian economy needs a full cycle production foreign health care specialists are aware of production facility of DNA tests the efficacy of this unique Russian-made facility, which will be as 98% of the products offered in medicine. that fields are foreign-made. As it Niarmedic is intending to launch yet the first in Russia to reaches it full capacity in 2017, the another unique project in the near future: plant of DNA tests will completely construction of a full cycle production manufacture acting phase out similar foreign made facility, which will be the first in Russia products. to manufacture acting agents for genetic agents for genetic identification of people and establishment identification of people of family ties. The project has been approved by the Expert Council of the Industry and establishment of Development Foundation operating under the Russian Ministry of Industry and Trade family ties.

41 automotive cluster Automotive Digest

In September 2015 a VW engine plant was opened. A gasoline 1.6 MPI (EA211) engine was the first engine to roll off the assembly line. According to Chairman of the Russian Government, Dmitry Medvedev, who attended the opening ceremony, ‘these are large investments and it is the first time that a foreign company localizes its engine production in Russia. Our relationship with Volkswagen can stand any adverse developments and we value the cooperation a lot’.

In October of 2015 truck production was resumed at the plant of Volvo in Kaluga. Late in September production of Volvo and Renault truck cabins had been launched. Peter Andersson, Director General of Volvo Group in Russia, said the following ‘we keep receiving new orders for our plant in Kaluga, the business is developing well at the car plant, cabin plant and at Volvo Construction Equipment. Customers are showing a strong interest in trucks made in Kaluga’

In November 2015 VW Polo sedans got a 1.6 l engine made in Kaluga. The new engines have a higher capacity compared with former generation engines reaching 90 and 110 hp. Their winter adaptation package has been expanded especially for the Russian market. Cold start has been made possible at -36ºC. One of the best selling cars in the Russian car market, VW Polo has received several updates, including multimedia systems and lighting equipment. Since May of 2015 VW Polo second In January 2016 the VW plant in Kaluga launched generation cars have assembly of a new Polo Allstar model. The new model been on sale. will be available for ordering at all VW dealers starting from January of 2016. The new model will help VW expand its market share and keep strengthening its positions in the Russian market. The car will be equipped with a VW 1.6 l (90 hp)engine with a 5-speed manual transmission or a 1.6 l (110 hp) engine with a 5-speed manual or 6-speed automatic transmission as the customer may prefer. A new color of Copper Orange will be available for the new car.

42 automotive cluster

Georgy Rotov, Director General of Continental Kaluga

‘Swiftly changing, business conditions make new opportunities more prominent. In 2015 we made a significant progress towards more efficiency in our internal processes. Despite the dropping demand in the Russian market, we doubled our In December 2015 the automotive cluster in Kaluga region received government output compared with 2014 manufacturing 2 million tires in support in the amount of RUR 92.66 million. 2015. That was made possible among other things by a growing The Russian Ministry of Industry and Trade demand in other markets. In April of 2015 we started to export completed the process of granting subsidies our products. In the past year tires manufactured at our plant to the management companies of Russian in Kaluga were shipped to 15 European countries, former Soviet industrial and technology parks from the republics and Asian countries. The exports accounted for federal budget in 2015. According to the requirements of Regulation No. 831 of the over 20% of the plant’s output. In 2016 we intend to raise our Russian Government and the agreements exports. Currently we are looking at potential supplies to China. made by the ministry a decision was taken to In the current situation, prompt and flexible response to market allocate funds to the management companies developments is of pivotal importance. We also work to expand of industrial and technology parks in the the plant’s product range. In 2015 our product range doubled, amount of RUR 252 million. The government too, to include 200 13 to 18 inch tires distributed over three support was granted to 11 parks in 10 Russian brands (Continental, Gislaved and Matador). In 2016, the launch regions. of large-scale production of 20 inch tires is on the schedule. In addition, in 2015 we managed to start the production of winter studded tire IceContact 2, the latest development of Continental, which are manufactured at two plants of the company only: in Kaluga and Korbach (Germany). The year 2015 was also marked by a launch to direct supplies of our tires to the assembly lines of car plants. We now cooperate with 5 plants and intend to keep exploring this field of activities. Automotive Cluster In 2016, we are expecting a growth of demand for the products in Kaluga of Kaluga plants in foreign markets. We will be expanding includes further our product range. Our team is key to our success. Our staff members keep improving every day as they value the opportunity to work in our company and are striving to develop together with the plant. Several important organizational 3 27 changes took place in 2015: employees who were at the plant OEMs manufacturers of since the opening have been promoted within the organization. automotive components Importantly, the plant has staff members who can not only work at the required level but improve as well. This year the company will keep offering the same social None of the cluster’s plants suspended its operations in 2015. guarantees as previously, including sports activities, subsidized Moreover, the car manufacturers have declared their intentions to raise their car manufacture localization in the region significantly living accommodations, meals and traveling to/from work. In and the manufacturers of automotive components are reviewing addition, Continental raised the salaries of its employees by opportunities to expand their presence in the Russian and global more than 10%. I am confident that together we will be able to markets. achieve the expected results as we have always done!

43 Agricultural Cluster Agricultural Cluster: Key Figures 219 750 45 1st 1st agricultural farms food and food in Central Federal in Russia in terms companies processing District in terms of gross production companies of milk production growth (in relative growth, % terms)

RUR 41,2 RUR 2,7 RUR 36,7 50 billion billion billion launched their operations in 2015 in investments in the in investment growth value of gross agricultural in various fields agriculture in Kaluga region in 2015 product in all kinds of farms of activities since 2004 in 2015

Dairy Beef Fish Farming Farming Farming

110 27% 780 robots growth tons implemented of beef cattle of fish bred 11 49 at 27 farms units in 2015 family cattle winners of the Farmer Crop Farming farms received Starters Program a grant of up received a grant of up to to RUR 10 million RUR 1.5 million

A grant is a free subsidy provided in money or in kind with 30% 20 ha 500 ha a requirement to report on the spending. The government program of support to farmer starters has been in potato of greenhouses of restored effect since 2012. The program is aimed to promote the gardens development of branches important to the region: milk, production growth put into operation for beef, poultry, rabbit, bee and crop farming. in 2015 crop growth

44 Agricultural Cluster 156 farms operating in various branches received grants since 2012 in the total amount of RUR 424 million 13 44 robotic dairy farms small businesses operating in 5 agriculture received loans from the beef farms Entrepreneurship Support Foundation in the amount of RUR 91 million

launched their operations 38,8% in Kaluga region production growth at farms in Kaluga region

Proud! Events in 2015

In February Agro-Produkt in Kaluga region under this received federal and regional In November the second 905,000 under the program LLC was registered in Kaluga investment project. In total, government support in the stage of Eko Niva – APK’s of support to farmer starters region. The company will 8 farms will be put into amount of RUR 108 million robotic complex was put into and used the money to set up set up a 25 ha greenhouse operation and 6 districts and loans in the amount of operation. One of the largest sheep breeding operations. complex for crop breeding, of the region. The project’s RUR 376 million. in Russia, the complex has 32 mainly tomatoes and costs are RUR 6 billion. robots installed in its three In December a stone In October a new incubator cucumbers. Expected cow barns, a maternity barn laying ceremony was held In September a large pig was put into operation at investments will exceed RUR and young stock area. The of a rabbit farm of Ms breeding complex was Kaluzhskaya Poultry Plant. 6 billion.; farms are house to 2,000 Vysotskaya (an individual opened in The investments into the cows. The investments in the entrepreneur). A farm is In August Bryansk Meat District. The complex will reconstruction amounted to project are estimated at RUR expected to be set up with Production Company, a be equipped with advanced RUR 168 million. With the new 992 million. a capacity of 1,083 doe company of Miratorg equipment and new equipment from Belgium, the rabbits and an automatic Agricultural Holding, technologies. Over 30 new incubator will produce up to In November a new feeding function. Capital have brought Aberdeen- jobs have been created. 27 million chickens per year. sheep farm was opened in investments will exceed RUR Angus breeding stock to Investment in the project The company’s own eggs Maloyaroslavets District. 40 million. Alekseevka, which will be exceeded EUR 9 million. account for 80% of the feeds The owner received a the first cattle breeder built In addition, the company of the incubator. grant in the amount of RUR

‘Looking back on the year 2015 I am happy to say that the region’s agriculture had done a great job. That can be accounted for by the following three factors: highly efficient work by our agricultural workers, significant federal and regional government support and, finally, investments. I would like to thank all stakeholders for their contribution to the development of the agriculture of Kaluga region’.

Leonid Gromov, Minister of Agriculture of Kaluga Region

45 Agricultural Cluster Business Support Afield

Agriculture Key Development Activities Agency of Kaluga Region 1 2 3 Finding contactors Development Consulting on the Has been operating under for investment and financing of available project the ministry of agriculture projects projects government support since July of 2014 Stefan Perevalov, Director General of the Agriculture Development 4 5 Agency of Kaluga Region

developed Technological Information support business plans support of the agricultural 150 business

received ‘In Kaluga region a special focus is grants 38 placed on the development of the agricultural industry. In addition to document packages financial help from the government collected for subsidy in the form of grants and subsidies, a 28 requests specialized agency has been set up to Ilya Vepritsky, offer help to agricultural businesses: approved Winner of the Farmer the Agriculture Development Agency of loans Starter Contest Kaluga Region. 21 Our goal is to offer support to a potential investor or farmer on various selected kinds of issues, ranging from finding a 14 sites The team of the Agricul- develop a business plan. suitable location to offering coverage ture Development Agency They have done a great job of a successfully implemented project helped collect all the docu- and I only needed to visit in the mass media, on the basis of the farms receiving technological ments required for the par- Kaluga few times. All is- one stop shop principle. Lately, small 13 support ticipation in the contest: sues that needed to be set- and medium-sized business have been certificates, documentstled were settled by phone demonstrating a growing demand for from the tax inspectorate or email. our services. and the Pension Fund and

46 Innovative Agricultural Machinery to be Produced in Kaluga Special Economic Zone

On 14 January 2016 мan agreement was made between the government of Kaluga region and KalugaSelMash LLC on the construction of a production facility of mobile grain drying facilities. Unique in Russia, the plant will be the first innovative plant of mobile grain drying facilities, which will help achieve the following goals: reduce grain costs, reduce equipment purchase costs, reduce grain losses by 20% to 30% and manufacture products able to phase out foreign-made products and having an export potential.

The investments will reach about RUR 300 million. The project is expected to be implemented in 2016-2017. The plant will be manufacturing mobile grain drying facilities operating on various fuels, such as gasoline, diesel, heavy oil, etc., with a capacity of up to 570 t grain per day. The products will be sold in Russia and the countries of the Customs Union.

The parties have reached a preliminary agreement to set up the plant in Kaluga Special Economic Zone. The manufacturer selected a 2 ha lot in Ludinovo Lot. Localization will be reaching 80%.

This year an assembly line will be set up at Lyudinovo Machine-Building Plant with a localization of at least 40%. In 2017 a plant will be constructed manufacturing a wide range of products such as mobile and stationary grain drying facilities, grain storage systems, etc.

Kaluga Special Economic Zone

Located over two lots in Lyudinovo and Borovsk sites and the nearest industrial site of that kind to Moscow 1,042 ha Area

The Special Economic Zone offers the same regional advantages as are in effect in the region’s other industrial parks, such as access to the engineering, transportation and business infrastructure. The advantages of the special economic zone also include federal and regional tax benefits and customs preferences.

47 Anniversary Galanthus & K: Wide Interests

First tulips planted on the Right Bank 15 years ago, Galanthus & K is celebrating its anniversary We talked to Director General of Galanthus & K, Oleg Mitrofanov, on how to make a floral business a success.

European Quality In 2011 we made an agreement with IKEA is a European company with rigid IKEA. Galanthus & K is one of flower supplier requirements. We go through suppliers of IKEA stores in the run up annual audit checks and operate to 8 March. At all of its stores, either in in compliance with environmental Moscow, Nizhny Novgorod, Kazan or standards, e.g. we pack our flowers Novosibirsk, bunches of flowers are sold only in environmentally friendly foil. at a fixed acceptable price. That attracts All the staff members of Galanthus & lots of customers to IKEA stores. K have an understanding that they work in a Russian company with strict Economically, we get few benefits European standards. We are striving to here. Large as it is, IKEA is a discounter, keep improving, which is crucial for the and the benefits of our cooperation with development. lie elsewhere.

Efficiency In order to minimize costs we have decided to invest into modernization of our capacities. We bought the key line in Holland while the rest of the equipment supplying flowers from the flowerbeds, though similar to Dutch equipment, was developed by ourselves. All the improvements are our knowhow!

We have modernized our greenhouses. We use only drip watering and hydroponic solutions. We have purchased packaging lines and managed to cut our manual labor by 60%. Previously it took 10 to 15 5 million 500,000 5 people to take care of a 1 ha lot, now 5 people suffice. Flowers per ha flowers and young trees and flower shops remained unchanged at 5 million per year. In terms of efficiency, plants per year bushes per year in Kaluga Galanthus & K is reaching the level of advanced greenhouse complexes.

48 Anniversary

Development Mission Galanthus & K has a rather small This year Galanthus & K will jointly with the area, including a 1 ha protected regional Philarmonic Society implement a large lot and a 1 ha open lot, which project to decorate the public garden near the undergoes intensive development. Concert Hall. The idea behind this project is to Mother plants have been planted set up a botanical mini-garden for family fun. for apple, pear, plum, cherry and ephedra trees. We graft, inoculate, The garden will include our regional plants put our plants in containers and such as shrubs, fir- and broadleaved trees. In sell them. Today we have our own autumn we will be planting tulips. That will planting materials of about 10,000 be the first project of the kind both for us and rooted plants. Over 2 to 3 years Kaluga region. Hopefully it will be a success. we will be able to fully phase out Children who love plants will keep loving them imported products. for the rest of their life.

Obviously, a modern trading site We have accumulated some experience has become a necessity. In 2015 in performing the awareness function. we laid the foundation of a new Development and education of our staff garden center, which is expected members is one of the goals of our company. to be opened this year. The 1,000 People in Kaluga like gardening and enjoy m2 garden center will be selling Lilies have been me the visiting Botanik Club at Galanthus & K, which virtually everything, from indoor have been open for the past four years. Every plants and various kinds of soil specialist I am now. I do Saturday we hold free tours of locals, master and fertilizers to festive decorative not read them as an open classes, workshops and other events, such as items. In summer time the garden book though, there are the day of lilies, irises, cucumbers, etc. We center will be selling young plants. enjoy telling people about various breeds, Daily we grow up to 1,000,000 still a couple of pages left breeds that are worth buying, share care tips, young plants. to be read. etc. Those activities are very important as they help promote our business.

Partners Recently I have visited the IPM Essen-2016 horticultural trade fair. I was amazed at its scale. Obviously, the larger the exhibition, the more contracting opportunities are available. We have acquired new partners, primarily suppliers of planting materials. Direct supplies without intermediaries are always more efficient. We are currently thinking percentages. As banks offer loans at 19%, we need to find out how we can reduce our costs for the same amount. So far we have five suppliers from Holland, Germany and Denmark. Those are the most advanced horticultural countries.

Flower shops: Flower Market, Garden Center and Plant In Kaluga: 94, Lenina St., 37a, Lenina St.; 13, Nursery: at 2a, Energetikov St. General Popov St., 6a, Vishnevskogo St.; 10, Tsentralnaya St. Vorotynsk 49 High Potential Projects

Tekhnologiya to Develop PD-10 Aircraft Engine

The relevant proposal was first as regards the development of a family to develop new-generation PCMs voiced at a meeting of the managers of high potential jet engines. Currently for aircraft engines and the offer to of Tekhnologiya and the United Tekhnologyia manufactures SaM-146 participate in the development of the Aircraft Corporation, also attended liners, nacell thrust reverser buckets, PD-10 engine, which will be put on by representatives of NPO Saturn core engine panels and liners of PD-14 SSJ-100 jets, is definitely of interest to and Aviadvigatel Plant from Perm. engines. the company. Projects, which can be After the parties have had a tour of implemented together with the United Tekhnologiya’s production facility According to the Tekhnologiya’s Aircraft Corporation, will contribute in Obninsk, they looked at the General Designer, Oleg Komissar, the significantly to more competitiveness opportunities of potential cooperation company has made consistent efforts of Russian aircraft engines.

Joint Solution by Panasonic and Kraftway

In May of 2015 Kraftway from Russia needs to be met by users of protected and Panasonic from Japan presented a devices with large government and joint solution in the market: modified commercial structures, which are semi-rugged Toughbook CF-54 with subject to the law on information. integrated Kraftway’s hardware and integrated software options providing for cyber security of the whole system.

Kraftway became the first Russian company that integrated its hard- and software in Toughbook CF-54. The cooperation, which started only a year ago, turned into efficient efforts In terms of its dimensions to implement a project for one of the and weight (1.9 kg), strategic customers in the government sector. Engineers and programmers Toughbook can be compared completed the integration within a with a usual office laptop, very short period of time. The solution however, it is more rugged provides reliable protection of data and as it has received a IP-51 anti- business processes, a requirement that dust and anti-spill level

50 перспективные проекты

Tandetron, Russian- made charged particles accelerator, put into operation in Obninsk’

In December the specialists of the Leypunovksy Institute of Physics and Power Engineering launched a charged particles accelerator Tandetron, unique in Russia and best globally in its class. The unit generates all kinds of accelerated ions, from hydrogen to gold. The new accelerator will be applied in various branches of science and industry. In the field of nuclear energy the accelerator will be used to conduct fundamental and applied research and to test new technologies. In industry the unit will promote the development of materials for micro- and nanoelectronics. It will also help improve distanced neural therapies of radioresistant malignant tumors.

ВЕСТНИК 51 Opinion Cast-Iron Arguments from Obninsk Steel Project The key field of activities of Obninsk Steel Project is designing complete steel buildings an structures. The company’s specialists not only make estimates and develop a design, but act as a technical customer, too, monitoring the quality of works at all project stages. With this comprehensive approach, the company managed to implement over 300 projects over the past 4 years. The projects of Obninsk Steel Project are located not only in Russia, but also in Kazakhstan, Belarus and France. German partners implementing investment projects in the region value the accuracy of the company’s estimates.

Selecting a contractor You would like to construct a building. You have made all the choices as regards its purpose and sizes. Now you have got to decide who is going to implement the project, i.e. to develop a design and to construct the building. Many customers follow the path of least resistance by choosing a general contractor and wait self-contentedly when the building is built without interfering in the implementation. That is a bad decision. Experience has shown that many general contractors do not attempt to minimize the costs, quite on the contrary.

Mistake 1

Not interfere in the implementation. Keep monitoring the implementation closely, verify and analyze the information you receive. Nikolay Botin, Director General of Obninsk Steel Project LLC What’s the Price? We can help you save up to millions in construction costs. Answer the following question: ‘How has the general We would like to see more useful steel buildings, which contractor estimated the project costs?’ The costs of outer have been efficiently built moneywise. structures can be estimated. And what about the frames? Exactly, no estimates can be made without any design What is so difficult? You collect all offers, pick the cheapest documentation. Detailed estimates can only be made one and start saving money. It is not that straightforward. after the design has been developed. Picking the offer with the lowest price is the easiest but not the most efficient way to save on costs. Such approach That is where the most common mistake is made. can, instead of reaching the desired results, lead to even The contractor needs to be chosen very thoroughly. more costs. An analysis of the information we receive has How do you make the choice? Based on costs estimates? demonstrated that such a superficial approach to project You might select the cheapest designer saving e.g. RUR implementations is common for both government and 500,000 on the project costs. You believe you have made private implementations. Some people avoid delving into a good choice. However, any job obviously has a price. the implementation due to a lack of willingness, others due You cannot buy a loaf of bread at RUR 5 where its costs are to a lack of knowledge and yet others believe that they are RUR 10. A price declared at a level lower than the market dealing with professionals. value indicates either that the estimates have been made inaccurately or that the quality of the product is about to We would like to show you a good manner of saving on drop. It gets increasingly interesting here. For example, project implementation costs. Your feedback is welcome at you have received a design from the designer, which at www.ObninskSteel.Pro. the first sight seems to be OK. But is everything as good as it seems?

52 Opinion

Timelines At every other construction site timelines are not observed and the estimated costs go up. What is the reason? Constant negotiations on the costs of production and works. A production cost reduced to the minimum can turn our badly for you. A plant supplying high quality and having a tested technology, an attested laboratory and quality control cannot come up with a price of a semi- professional company. Such plant will have overhead costs higher than that. Forcing a plant to work at the level of the production cost, you must understand that even a minor mistake can lead to high expenses, idle times and fines.

Mistake 3 Example An example will make it clearer here. Recently we have Chasing the lowest price. received a design of a maintenance depot for the well-known Select the best cost-benefit ratio. trains from St.-Petersburg. The building had dimensions Consult professionals. of 42x300 m. The design weight of the frames was 1,130 t. Rubbing his hands, the general contractor will say that the metal frames cost RUR 79,100,000, assembly costs RUR We have accumulated an extensive knowledge on most problems, 22,600,000, etc. What would many customers do in this which can arise in the course of a project implementation. Our company situation? Exactly, try to get down on the price by declaring cooperates with many manufacturers of metal structures. We know what tenders and exercising pressure on the plants. their capacities are and our technical specialists offer their consulting It was a stroke of luck for the customer that we received the services to them every now and then by conducting a technical audit or design on time. An analysis has shown that the frames were performing the function of a technical customer. All that helps make the designed not quite efficiently, to put it mildly. We convinced right choice of a supplier of metal constructions and prevent any potential the customer to get another design of the frames. financial and time losses.

For the results, see below Tips Building of Previous New Savings Requesting a design of metal structures, select the plant right away, 42x300 m design design your design will then be developed based on the plant’s capacities and no approvals and replacements will be needed. If you decide to request Weight (t) 1,130 574 556 the related documentation from the same designer, you will be able to receive the requested materials earlier and to save about RUR 700 on 1 t of metal structures. With modern software, the designers will be able Frames production to come up with a draft of the documentation sooner as they will have 79,100,000 40,180,000 38,920,000 costs a finished model of the frames available. If you request the documents at the plant based on the develop design, the plant’s designers will have first to make the model of the frames again and that costs time and money. Frames assembly 22,600,000 11,480,000 11,120,000 costs

Total savings 50,040,000 1. Make sure you are aware of products. Visit the plant yourself or everything and monitor everything. ask one of your specialists to do that. What would you think of savings in the amount of RUR 2. Focus on the selection of the 4. Order the design package from one 50,000,000? And those are only savings on the production designer, request preliminary estimates designer. That will help you save on costs of the frames and the assembly costs? Savings on the of the weight of the frames, select time and the costs of the design. the structural elements and modern costs of the ground work can potentially be added up here. 5. If you do not have the time or the Some would be skeptical saying we made incorrect estimates. materials. A good design will save you costs. knowledge to monitor the project But that is not true as the project has already been approved implementation, ask a professional by the Russian Glavgosexpertiza. 3. Select the plant based on the company to do that for you. quality and not the price of its

Mistake 2

A lack of interest and knowledge of the process. +7 (48458) 38-102 Select the designers very thoroughly, ask questions, +7 (48439) 96-206 most importantly, on the weight of the frames. If +7 (910) 915-73-19 the designer fails to come up with a figure within 2 days, start searching for another one. Obninsk Steel Project [email protected] www.ObninskSteel.Pro

53 Construction Khoroshy Residential Compound Place of Attraction in the Right Bank

In 2015 residential properties with a Financing the construction of What are, in your opinion, the key 2 compounds in 56 Russian regions advantages of Khoroshy Residential total area of 800,000 m were put into is an ambitious project of Moscow Compound? operation in Kaluga region. In Kaluga only Industrial Bank. How did you select regions for construction? The holding Right Bank residential properties with a total are Construction Company makes part of of 350,000 m2 were built, which is 52% We had a whole range of criteria comprises several plants, including where the pace of the region’s social manufacturers of metal structures more than in 2014. Most comfortable and economic development was and CBPBs. We manufacture the key evidently the key criterion. The faster construction materials ourselves and new-generation residential compounds a region is developing, the higher do not have to buy them reducing the are built on the Right Bank. One of the requirements to their standards of construction costs significantly. Ready living people have and the higher the construction arrive in Kaluga where key projects of Greater Kaluga, Khoroshy demand is for high-quality housing. they get assembled and concreted at the Residential Compound is implemented A quite unique region, Kaluga region construction site. Concrete is supplied opens new plants and people from by plants in Kaluga region only. The by Right Bank Construction Company, various regions would like to live and assemble works are conducted by a company of the Moscow Industrial work here. people from Kaluga region, too. We Judge for yourself, today 16 developers trained over 300 people, who currently Bank Holding, which is actively involved are active on the right bank. Housing are employed by CU-40, which has been in the financing of real estate projects, is built at an unprecedented rate, but set up specially for this project. the demand keeps growing. Obviously, The walling technology is yet another including the construction of compounds with so many offers, buyers are fought advantage. Unique, the technology in 56 Russian regions. We talked to Bulat for. In this fight the company with has been applied in Kaluga for the first the best offer wins. I am confident time. A stay-in-place form is filled up Kerimov, Director General of Right Bank that competition will list the Russian with high-quality concrete. As a result, construction industry to a whole new the flats have straight inner walls and Construction Company, about the project level. buyers do not have to straighten them implementation stages in Kaluga. any more as it is usually the case and

54 Construction

save on the costs of decoration. With this Speaking of the infrastructural technology, the flats in the compound development of the right bank, the have a height of 2.90 m. It is comment compound has one school, which knowledge that the higher the ceiling offers lessons in three shifts. Since is, the better the microclimate is in the the social responsibility of your flat. Our offer provides for individual company is a common knowledge, planning solutions, too. Each bloc of the city administration approached Khoroshy Residential Compound is built around flats in the compound has a different you with a request to build another the 650th Anniversary of Kaluga Square in the planning, but all th planning options school. Has the decision on the middle of the right bank area. The project includes are made based on modern trends. construction already been taken? construction of 10 9- to 16- storied blocs of flats with Even the smallest studio with a total Absolutely, we will be both a modern infrastructure, which will include 7-tier area of 37 m2 has a spacious recessed constructing the school and parking facilities. The ground stories of the blocs of balcony and panoramic windows. The financing the construction. The city flats will be occupied by social establishments and heating technology is unique, too, administration is currently working shops. due to its individual character. The in this field. Hopefully we will be able single boiling room supplies warmth to construct the school soon as the In February 2016 two blocs of flats were to the bloc of flats. However each flat compound is in a real need of another commissioned and yet another bloc of flat is in Khoroshy has an individual warmth school. scheduled for completion in March of 2016. In total 3 meter and a heating regulator. That is blocs of flats will be built this year. both convenient and cost effective. As regards comfortable living, Last year your company jointly All the blocs of flats are built as metal frames with I would like to say here that the with the city department of monolith walls and floor structures. The structure compound is constructed in compliance education launched an initiative is rigid and stable due to carrying walls, pillars and with the new norms requiring 30% called the Chase Race of Kindness. slabs with interflooring disks. The ventilated ceramic larger areas around the flats. Resting What is this initiative about, how façade is well insulated and covered with ceramic places, playgrounds, sports grounds, will it be implemented and will it tiles. The flats have reinforced plastic windows bicycle tracks and table for all-the-year- receive a follow-up? with triple-pane glass. The heating system and round ping pong will be made here. electrotechnical works have been fully completed. Basketball and volleyball courts will be I am confident that projects of this The engineering systems comply fully with modern ready in spring. In addition, multi-tier kind are of crucial importance now requirements: water and warmth meters are place parking facilities will be constructed in and for that reason we will set it forth outside the flats, power meters are placed in the compound this year. The initiative boils down to separate boxes. Internal walls are made of plaster The location of the compound is a simple thing of doing something wall boards, which provide for good noise isolation another key advantage. Pure nature, good. It does not matter what as good and are suitable for re-planning activities. woodlands, the Oka river and beautiful things cannot be small. Giving up your vistas – all that is combined with an seat in a trolleybus, bringing someone The project is implemented jointly with Moscow ease of travel, shops, daycare centers across the street and helping parents or Industrial Bank. For the customers of Right Bank for children, sports, cultural and neighbors… Tell about it in one of the Construction Company, the mortgage rate has been educational centers, a developed social networks. Users will evaluate established at a low level. trade and service infrastructure. The it and the winners will receive a free compound is developing fastly and, I trip to Eksperimentanium in Moscow. In 2015, Khoroshy Residential Compound won at the am confident, is to become a place of The principle of the initiative is very Market Leaders Award in the category ‘Opening of attraction on the right bank. simple, for all information go to our the Year’. We are making every effort possible website. Currently children from to make living here pleasant. I take three schools in Kaluga participate in the initiative myself sometimes and it. I would be happy if the initiative propose solutions for some issues. A transforms into a city movement and good example here is the construction everyone, irrespective of his or her age of a road from the Generala Popova or social position can help make life St. to the village of Shopino. The better. need of the road was evident. I held a general meeting of the developers and the department of construction. At the meeting we decided to break up the road in stretches and each of the developers paid for the construction of their stretch. Now we are maintaining the road jointly.

«ЗАО СК Tel. 8 800 222 87 90 «Правый Берег» www.калугаправыйберег.рф

55 New Aviation Transport and Logistics Cluster in Kaluga Region

22 January 2016 governor Anatoly will make part of it. As regards the Artamonov of Kaluga region announced potential of further development of the the region’s plans to set up a system of transport and logistics infrastructure, commercial and cargo carriage by air, the governor stressed that despite the which will be operating based on an current difficulties the project has all it aviation transport and logistics cluster. takes to become a success. ‘This project The cluster will be set up based on Kaluga has a high potential for the region. International Airport and Ermolino We constructed Kaluga Airport at hard Airport. The region’s administration times and expect more synergy and is currently looking at possibilities to development opportunities after it has breathe new life into the flight school in been brought together with Ermolino Kaluga, which will be offering training Airport’. for the specialists of the cluster and

Chinese Investors To Participate in the Reconstruction of Ermolino Airport

16 October 2015 the government of Kaluga region and the Chinese Railway Construction Company signed a memorandum on intentions in Harbin regarding implementation of an investment project on the construction of Ermolino International Airport. The cooperation will be based on the available experience of cooperation between Russia and China and the strategic value of this project for both the region and Russia. The details of the investment project are worked on now. To that end, a joint working group has been set up. 57 Largest Sports Events Live

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