1
INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
1 2 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Chukotka Petrochemical industry AAutonomous Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Sakha Fishery and aquaculture (Yakutia)
Magadan Region Wood harvesting and processing Khabarovsk Territory
Machine building Sakhalin Region
Real estate and tourism
Transport and logistics
Amur Region Jewish Autonomous Region Primorsky Territory Healthcare 2 3 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Petrochemical Chukotka Petrochemical industry AAutonomous industry Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Sakha Fishery and aquaculture (Yakutia) Magadan Projects underway Region Wood harvesting and NGL field Khabarovsk processing Territory Processing facility Machine building LNG plant
Investment Opportunities Real estate and tourism
Oil and gas field Sakhalin Region Transport and logistics
Amur Processing facility Region Jewish Autonomous Region Primorsky LNG plant Territory Healthcare 3 4 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment ▪ Significant reserves (27% of gas and 17% of oil of the APR), estimated reserves – over USD 1.0 trillion. ▪ The Russian Far East offers unparalleled preferences to businesses – special legal treatment in the Advanced Special Economic Zones ▪ Industry majors are engaged in the sector (Gazprom, SIBUR, Power industry (ASEZ) and Free Port of Vladivostok (FPV): Rosneft, Surgutneftegaz, etc.) ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture ▪ Eastern Siberia – Pacific Ocean oil pipeline with the capacity ✓ Zero property tax for the first 5 years of the project, and reduced of up to 80 mln tonnes per year by 4 times for the next 5 years ▪ Power of Siberia Gas Pipeline with export capacity of ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years 38 bln m3 per year of the project Fishery and aquaculture ✓ Duty-free zone regime ✓ Simplified land registration procedures ▪ Accessible maritime transportation hubs, available seaport ✓ Electronic visa for foreigners Wood harvesting and infrastructure for cargo transshipment processing (15 terminals) ▪ Investors can resolve all and any issues based on one-stop shop ▪ Available railways and hydrocarbons transshipment principle infrastructure. Machine building Infrastructure ▪ Construction of the necessary infrastructure for the investor is subsidised by the state on a non-repayable basis ▪ Geographic proximity to the major consumers of the growing Real estate and tourism APR market (fast delivery by sea: 6 days at the most from Financing the Far Eastern Federal District sea ports compared to 23 ▪ Preferential project financing is available for 5% p.a. in rubles for 10 days from the Middle East and 12 days from South-East years (operator – Far East and Baikal Region Development Fund) Asia) Transport and logistics ▪ Annual imports of chemicals to China, Japan and Korea exceed USD 200 bln. Dedicated industry-specific support measures ▪ Preferential oil export duty Healthcare 4 5 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
3 ▪ Amur Gas Processing Plant, capacity 42 bln m per year (Gazprom PJSC). Mining Application to Svobodny ASEZ under development ▪ Total investment – over RUB 600 bln, construction and installation works are launched Power industry
▪ Amur Natural Gas Chemical Complex, capacity – 1.5 mln tonnes of polyethylene per year (SIBUR Holding PJSC), application to Svobodny Agriculture ASEZ under development ▪ Total investment – over RUB 500 bln Fishery and aquaculture
▪ Mini-LNG plant in Yuzhno-Sakhalinsk, Sakhalin Region, capacity – 12.5 thou. tonnes per year (Sakhalin PCC LLC) Wood harvesting and ▪ Total investment – RUB 0.9 bln, to be commissioned in 4Q 2017 processing
▪ Amursky Refinery, capacity 6 mln tonnes per year (AEC LLC), Machine building Priamurskaya ASEZ resident ▪ Total investment – over RUB 120 bln, construction and installation works launched Real estate and tourism
Transport and logistics
Healthcare 5 6 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ Methanol synthesis plant in the Amur Region with the capacity of 1.0 mln tonnes per year (TechnoLeasing JSC). Application to Svobodny Mining ASEZ under development ▪ Total investment – RUB 38 bln, co-financing in the amount of RUB 29.0 bln required, IRR ~25% Power industry ▪ Nakhodka fertilizer plant in Primorye Territory, capacity 5.2 mln tonnes per year ▪ Total investment – over RUB 400 bln, EPC-partner with financing-raising Agriculture potential required, IRR ~20%
▪ Methanol synthesis plant in Yakutia with the capacity of 1.8 mln tonnes Fishery and aquaculture per year (YATEC JSC) ▪ Total investment – RUB 80 bln, co-financing in the amount of RUB 65 bln Wood harvesting and required, IRR ~15% processing
▪ Construction of a mini-LPG plant network in Khabarovsk Territory with Machine building the capacity of 400 thou. tonnes per year (Dalgazresurs LLC) ▪ Total investment – RUB 14.6 bln, technology partner with financing- raising potential required, IRR ~25% Real estate and tourism
▪ Creation of natural gas chemical cluster in Svobodny ASEZ Transport and logistics ▪ Selection of polymer processors is underway, average investment per one project – about RUB 300 mln (e.g. production of polyethylene tubes, films) Healthcare 6 7 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Mining Chukotka Petrochemical industry Autonomous Area
Sn Coal - Pyrkakaiskoye - Amaamskoye Mining Au Cu Kekura - Au - Baimskoye Klyon - Power industry
Au Kamchatka Territory Sn Drazhnoe -
- Ruchei Au Agriculture Au Tirekhtyakh - Au Ozernovskoye - Kyuchus Au Pavlik - Au Ni - Igumenovskoye Natalkinskoye - Fishery and aquaculture Republic of Au Coal- Shanuch Sakha - Nezhdaninskoye - (Yakutia) Magadan Krutogorovskoye Region Coal Zn Wood harvesting and
Coal - Kirovskoye - Sardana Khabarovsk processing - Khapchagaiskoye Coal Territory - Kangalasskoye
Au Machine building Chulmakanskoye Au - Bolshoi Kuranakh river Sakhalin Coal Zn Au - Polyanka Region Fe - Albazinskoye Coal Coal - Verkhne-Menkeche Cu Tayozhnoye- - Solntsevskoye Cu Coal - Malmyzhskoye - Elginskoye Coal Sn Projects underway Real estate and tourism Kun-Manye - Ni - Urgalskoye Au - Pravourmiyskoye Noni - Au Sn Investment Opportunities Sn - Durminskoye Transport and logistics Coal - Tigrinoye Amur Au Support of FEIA ANO - Bikinskoye Region Jewish Autonomous Region Primorsky Coal Territory Acronyms: Au – gold; Ni – nickel; Healthcare - Suchansky mine Fe – iron ore; Zn – zinc; Sn – tin; 7 Cu – copper; Coal – coal 8 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining First-rate source of raw materials: ▪ gold: 5.7 thou. tonnes (USD 220 bln) – 44% of Russian Unique business environment reserves ▪ The Russian Far East offers unparalleled preferences to businesses ▪ silver: 45 thou. tonnes (USD 24 bln) – 37% of Russian – special legal treatment in the Advanced Special Economic Zones Power industry reserves (ASEZ) and Free Port of Vladivostok (FPV): ▪ copper: 10 thou. tonnes (USD 57 bln) – 11% of mln reserves ✓ Zero income tax for the first 5 years of the project, and half ▪ coal: 30 bln tonnes (USD 1,300 bln) – 10% of Russian income tax for the next 5 years reserves ✓ Employee insurance contributions reduced 4 times ▪ tin: 2 mln tonnes (USD 30 bln) – 93% of Russian reserves Agriculture ✓ Zero property tax for the first 5 years of the project, and reduced by 4 times for the next 5 years Opportunities for follow-up exploration of the available fields. ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years The unallocated fund contains: of the project Fishery and aquaculture ▪ 14% of precious metals ✓ Duty-free zone regime ▪ 70+% of coal ✓ Simplified land registration procedures ▪ 50% of tin ✓ Electronic visa for foreigners Wood harvesting and ▪ 70% of tungsten processing ▪ 16% of iron ▪ Investors can resolve all and any issues based on one-stop shop principle Machine building Infrastructure ▪ Accessible maritime transportation hubs, available seaport ▪ Construction of the necessary infrastructure for the investor is infrastructure for transshipment of solid minerals (10+ subsidised by the state on a non-repayable basis terminals) ▪ Available railways and infrastructure. Real estate and tourism Financing ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund) ▪ Proximity to the major APR markets raises competitiveness Transport and logistics of the commodities: delivery by sea from the Far Eastern Federal District sea ports to Shanghai does not exceed 6 Dedicated industry-specific support measures days, compared to Australian (23 days) and Canada’s (19 ▪ Zero extraction tax for solid minerals days) sea ports Healthcare 8 9 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway (1/2) Petrochemical industry
Mining ▪ KOLMAR MC LLC: development of Chulmakanskoye and Denisovskoye coal fields in Yakutia. Output in 2016 – 3.6 mln tonnes. Target output in 2021 – 20 mln tonnes ▪ Total investment – RUB 54 bln Power industry
Agriculture ▪ Beringpromugol LLC (Tigers Realm Coal): development of Amaamskoye coal field in Chukotka Autonomous Area Output for 6M 2017 – 121.5 thou. tonnes. Target output in 2021 – 2 mln tonnes Fishery and aquaculture ▪ Total investment – over RUB 6.5 bln
Wood harvesting and processing ▪ Geotekhnologiya RPC LLC: development of Shanuch copper-nickel field in Kamchatka Territory. Ore output for 6M 2017 – 83 thou. tonnes, processed and Machine building packaged – 69 thou. tonnes of ore concentrate. ▪ Total investment – RUB 9 bln
Real estate and tourism
Transport and logistics
Healthcare 9 10 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway (2/2) Petrochemical industry
▪ Vysochaishiy OJSC: development of Drazhnoye gold ore field in the Republic of Sakha Mining (Yakutia) with total reserves (JORC) of 25 tonnes of gold. The design capacity of stage 1 is 700 thou. tonnes of ore per year (about 2.7 tonnes of gold) ▪ Total investment – RUB 9.8 bln, construction and installation works in progress Power industry
Agriculture ▪ Polyus PJSC: development of Natalkinskoye gold field (one of the largest in Russia) with total reserves exceeding 500 tonnes. Stage 1 is scheduled to be commissioned in 3Q 2017. Design capacity – 10 mln tonnes of ore per year ▪ Total investment – RUB 88.6 bln, about 1 tonne of gold is expected to be produced by Fishery and aquaculture the end of 2017 Wood harvesting and processing ▪ Pavlik JSC: development of Pavlik gold ore field with total reserves of 154 tonnes of ore. By the end of 2016, 3.8 tonnes of gold were produced at the field Machine building ▪ Total investment – RUB 33.4 bln
Real estate and tourism
Transport and logistics
Healthcare 10 11 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities (1/3) Petrochemical industry
▪ Development of Baimskoye porphyry-copper field: aggregate reserves – 9.5 mln tonnes of copper and 512 tonnes of gold Mining ▪ Total investment – RUB 276 bln, co-financing in the amount of RUB 120 bln required, IRR – 27% Power industry
▪ Development of Malmyzhskoye porphyry-copper field: reserves – 5.6 mln tonnes of copper and 300 tonnes of gold Agriculture ▪ Total investment – RUB 78 bln, co-financing in the amount of RUB 60 bln required, IRR – 23% Fishery and aquaculture ▪ Development of Kun-Manye copper-nickel field in the Amur Region: aggregate reserves – 1 mln tonnes of nickel equivalent Wood harvesting and ▪ Total investment – RUB 72 bln, co-financing in the amount of RUB 60 bln required, processing IRR – 31%
Machine building ▪ Development of Sardana zinc field in the Republic of Sakha (Yakutia) and construction of a processing plant ▪ Total investment – RUB 6.2 bln, co-financing in the amount of RUB 5.2 bln required, Real estate and tourism IRR – 25%
▪ Development of Igumenovskoye gold field in the Magadan Region: Transport and logistics reserves – 7 tonnes and resource potential of 370 tonnes ▪ Total investment – RUB 5.9 bln, co-financing in the amount of RUB 4.1 bln required, Healthcare IRR – 23% 11 12 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities (2/3) Petrochemical industry
▪ Development of Verkhne-Menkeche silver and zinc field and construction of a Mining processing plant with production capacity of 330 thou. tonnes of ore per year ▪ Total investment – RUB 4.5 bln, co-financing in the amount of RUB 3 bln required, IRR – 27% Power industry
▪ Development of Durminskoye gold field in Khabarovsk Territory, total reserves – 9 tonnes with total reserves of 9 tonnes Agriculture ▪ Total investment – RUB 1,9 bln, co-financing in the amount of RUB 1,4 bln required, IRR – 24% Fishery and aquaculture ▪ Development of Polyanka gold field in Khabarovsk Territory, aggregate reserves – about 12 tonnes Wood harvesting and ▪ Total investment – RUB 3,2 bln, co-financing in the amount of RUB 2,1 bln required, IRR – 30% processing
Machine building ▪ Development of Ozernovskoye gold field in the Kamchatka Territory with total reserves of 107 tonnes of gold and resource potential of 250 tonnes ▪ Total investment – RUB 5.9 bln, co-financing in the amount of RUB 5.2 bln required, IRR – 31% Real estate and tourism
▪ Development of Noni gold ore field in the Khabarovsk Territory with total reserves of 9 Transport and logistics tonnes ▪ Total investment – RUB 2.0 bln, co-financing in the amount of RUB 1.5 bln required, IRR – 28% Healthcare 12 13 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities (3/3) Petrochemical industry
▪ Suchan-Ugol LLC: development of the coal cluster in the Partizansky District of Primorye Mining Territory Commercial coal reserves – 27 mln tonnes (15 mln tonnes – fat coal, 12 mln tonnes – lean coal). Production capacity – 500 thou. tonnes per year ▪ Total investment – RUB 7.5 bln, co-financing in the amount of RUB 3.6 bln required, IRR – 30% Power industry
Agriculture ▪ Development of Krutogorovskoye coal field in the Sobolevsky District of Kamchatka Territory. Commercial coal reserves – 258.6 mln tonnes. Estimated output – 10 mln tonnes per year ▪ Total investment – RUB 36 bln, co-financing in the amount of RUB 25 bln required, IRR – 15% Fishery and aquaculture
Wood harvesting and ▪ Seligdar PJSC: construction of an ore mining and processing facility in Pravourmiyskoye in processing field in Khabarovsk Territory. Reserves and resources – up to 150 thou. tonnes of tin. Production capacity – 5.3 thou. tonnes of tin per year The facility is expected to reach design capacity in 2018 Machine building ▪ Total investment – RUB 15 bln, co-financing in the amount of RUB 1.5 bln required, IRR – 24%
Real estate and tourism ▪ Yanolovo LLC: Development of Ruchei Tirekhtyakh stream tin field in Ust-Yansky District, Republic of Sakha (Yakutia). Reserves – 70 thou. tonnes. The facility is expected to reach design capacity (3 thou. tonnes per year) in 2023 Transport and logistics ▪ Total investment – RUB 4.1 bln, co-financing in the amount of RUB 3 bln required, IRR – 34%
Healthcare 13 14 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Power industry Chukotka Autonomous Petrochemical industry Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Sakha Fishery and aquaculture (Yakutia) Magadan Region Wood harvesting and
Khabarovsk processing Territory
Sakhalin Machine building Region
Real estate and tourism Projects underway
Investment Opportunities Transport and logistics (power generation) Amur Region Jewish Autonomous Region Primorsky Territory Investment Opportunities (line laying) Healthcare 14 15 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Renewable energy: ▪ The Russian Far East offers unparalleled preferences to businesses hydropower potential – over 10 GW, with the volume of – special legal treatment in the Advanced Special Economic Zones Power industry investment up to RUB 1.5 trillion. (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture Large reserves of fossil fuels – power generation potential ✓ Zero property tax for the first 5 years of the project, and reduced over 5 GW in one location with the volume of investment up by 4 times for the next 5 years to RUB 600 bln ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years of the project Fishery and aquaculture ✓ Duty-free zone regime ✓ Simplified land registration procedures ✓ Electronic visa for foreigners Wood harvesting and Optimisation potential for local inefficient power – over 500 processing MW with the volume of investment around RUB 30 bln ▪ Investors can resolve all and any issues based on one-stop shop principle Machine building Infrastructure ▪ Construction of the necessary infrastructure for the investor is subsidised by the state on a non-repayable basis Need to modernise over 1 GW of thermal power plants’ Real estate and tourism capacity with the volume of investment up to RUB 100 bln Financing ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund) Transport and logistics Dedicated industry-specific support measures Proximity to APR countries – power export potential of 2 GW ▪ Customer electricity tariffs are subsidised by the state of capacity for the total amount over RUB 30 bln per year Healthcare 15 16 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
▪ Construction of Ust Omchug – Omchak Novaya 220 kV dual circuit power Mining transmission line 135 km in length to supply the Natalkinskoye field in the Magadan Region ▪ Total investment ~RUB 10 bln Power industry
Agriculture ▪ Reconstruction of 2.5 MW wind power plant in Anadyr, Chukotka Autonomous Area ▪ Total investment – over RUB 40 mln Fishery and aquaculture
Wood harvesting and processing
▪ Reconstruction of Anadyr TPP in Chukotka Autonomous Area providing for the conversion of generators to natural gas Machine building ▪ Total investment – over RUB 0.5 bln
Real estate and tourism
Transport and logistics
Healthcare 16 17 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
Project 1 –1image – image ▪ Construction of solar power plants in the energy isolated districts of Yakutia to Mining reduce consumption of liquid fuel supplied from distant areas ▪ Total investment – RUB 6.0 bln, co-financing in the amount of up to RUB 3 bln required, IRR – 15% Power industry
▪ Power supply optimisation for the mining projects and the energy isolated Agriculture districts of the Russian Far East with the help of local generation ▪ Total investment – over RUB 1 bln, co-financing in the amount over RUB 700 mln required, IRR – 15% Fishery and aquaculture
▪ Power bridge construction to export electricity to China, Republic of Korea, or Wood harvesting and Japan processing ▪ Total investment – over RUB 400 bln, full financing required, IRR – 10%
Machine building
▪ Construction of Magadan – Chukotka power bridge to ensure power supply to the mining projects ▪ Total investment – over RUB 36 bln, full financing required, IRR – 10% Real estate and tourism
▪ Modernisation of power plants with the capacity over 1 GW (Khabarovsk TPP-4, Transport and logistics Artyom TPP-2, CCGT in Vladivostok) ▪ Total investment – over RUB 30 bln per generation project, full financing required, IRR – 12% Healthcare 17 18 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Agriculture Petrochemical industry Chukotka AAutonomous Area Mining
High-potential business lines
Power industry Vegetable greenhouses and warehouses Kamchatka Territory Soybean Agriculture
Corn
Republic of Fishery and aquaculture Sakha (Yakutia) Water Magadan Region Wood harvesting and Poultry processing Khabarovsk Territory Pig farming Machine building Sakhalin Wheat Region
Cattle Real estate and tourism
Legend of investment projects Transport and logistics Amur Region Jewish Autonomous Region Projects underway Primorsky Territory Healthcare Investment Opportunities 18 19 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Considerable land bank 2.5 mln ha of crop land, over ▪ The Russian Far East offers unparalleled preferences to businesses 4 mln ha of hayland and pastures. Huge land assets located – special legal treatment in the Advanced Special Economic Zones in Amur Region and Primorye Territory Power industry (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture Good agricultural climatic conditions: vegetation period of ✓ Zero property tax for the first 5 years of the project, and reduced 130-200 days per year in southern areas of the Russian Far by 4 times for the next 5 years East ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years of the project Fishery and aquaculture ✓ Duty-free zone regime ✓ Simplified land registration procedures Low self-sufficiency in meat (29%), milk (27%), and ✓ Electronic visa for foreigners Wood harvesting and vegetables (52%) in the Russian Far East Demand for processing additional food products – local output shortage exceeding ▪ Investors can resolve all and any issues based on one-stop shop USD 3 bln principle Infrastructure Machine building ▪ Construction of the necessary infrastructure for the investor is subsidised by the state on a non-repayable basis Geographic proximity of the Russian Far East to the major importers in the APR. In 2016, food imports to East Asia and Financing Real estate and tourism South-East Asia countries accounted for USD 280 bln ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund) Transport and logistics Dedicated industry-specific support measures Agricultural infrastructure development – wholesale and ▪ Reimbursement arrangements for the investor’s costs incurred to distribution centres, marine grain terminals create and modernise agricultural facilities in place Healthcare 19 20 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
▪ Construction of pig farms in Primorye Territory by Rusagro (Mikhailovsky ASEZ) with the capacity of 80 thou. tonnes of meat Mining ▪ Investments: RUB 32 bln, construction and installation works in progress Power industry
▪ Construction of pig farms in Primorye Territory by Merci (Mikhailovsky ASEZ) with the capacity of 40 thou. tonnes of meat Agriculture ▪ Investments: RUB 19 bln, construction and installation works in progress
Fishery and aquaculture ▪ Construction of 3 pig farms in Primorye Territory by Green-Agro with the total livestock of 5.4 thou. and reconstruction of the dairy plant with the Wood harvesting and capacity of 150 tonnes per day processing ▪ Investments: RUB 8 bln, commissioned Machine building ▪ Construction of the soybean processing complex with the capacity of 240 thous tonnes by Amuragrotsentr in Amur Region (Belogorsk ASEZ) ▪ Investments: RUB 5.6 bln, construction and installation works in progress Real estate and tourism
▪ Construction of a wholesale and distribution centre by WDC company in Transport and logistics Primorye Territory (Nadezhdinskaya ASEZ) for simultaneous storage of 50 thou. of food products ▪ Investments: RUB 5.2 bln, construction and installation works in progress Healthcare 20 21 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ beef strain farming in Primorye Territory with the capacity of 30 thou. tonnes meat per Mining year. ▪ Total investment – RUB 48 bln, full financing required, IRR – 30% Power industry
▪ Construction of poultry farms in Kamchatka Territory with the capacity of 2 thou. tonnes of poultry per year Agriculture ▪ Total investment – RUB 1 bln, full financing required, IRR – 20% Fishery and aquaculture
▪ Magadansky Agro-Industrial Park Development of under-glass production of vegetables – 1 thou. tonnes per year, turkey meat – 0.5 thou. tonnes, pork – 1.4 thou. Wood harvesting and tonnes processing ▪ Total investment – RUB 2.3 bln, full financing required, IRR – 20% Machine building
▪ Modernisation of Surazhevsky greenhouse complex in Primorye Territory. Reconstruction of 20 ha of tomato and cucumber greenhouses Real estate and tourism ▪ Total investment – RUB 3 bln, full financing required, IRR – 20%
Transport and logistics ▪ Construction of a vegetable oil refining and bottling production line in the Amur Region. Capacity – 7.5 thou. tonnes ▪ Total investment – RUB 0.35 bln, co-financing in the amount of RUB 0.2 bln required, IRR – 19% Healthcare 21 22 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Fishery Chukotka Petrochemical industry and aquaculture AAutonomous Area
Mining
Power industry
Kamchatka High-potential business lines Territory Agriculture Fish processing
Republic of Sakha Aquaculture Fishery and aquaculture (Yakutia) Magadan Region Wood harvesting and Projects underway Khabarovsk processing Territory Fish processing projects underway Machine building
Aquaculture projects underway Real estate and tourism
Investment Opportunities Sakhalin Region Transport and logistics Investment Opportunities Amur in fish processing Region Jewish Autonomous Primorsky Region Territory Investment Opportunities Healthcare 22 in aquaculture 23 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Value creation potential (over RUB 200 bln) by enhancing the ▪ The Russian Far East offers unparalleled preferences to businesses fish capture practices and expanding the production chain – special legal treatment in the Advanced Special Economic Zones Power industry (raising the processing depth from 10 up to 40%) (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture ✓ Zero property tax for the first 5 years of the project, and reduced Considerable export potential of high-processing products (fillet, by 4 times for the next 5 years minced meat, flour, fat, fodder) – 1 mln tonne (RUB 150 bln) ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years of the project Fishery and aquaculture ✓ Duty-free zone regime ✓ Simplified land registration procedures ✓ Electronic visa for foreigners Wood harvesting and Considerable potential of production and processing of the processing underutilised species (West Pacific sardine, Japanese squid, ▪ Investors can resolve all and any issues based on one-stop shop mackerel). Output – up to 500 thou. tonnes or RUB 60 bln principle Machine building Infrastructure ▪ Construction of the necessary infrastructure for the investor is Considerable aquaculture farming potential – up to 250 thou. subsidised by the state on a non-repayable basis tonnes (trepang, bay scallop, mussel, oyster, seaweed) – Real estate and tourism 100 RUB bln Financing ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund) Transport and logistics
Dedicated industry-specific support measures Potential growth of salmon production up to 100 thou. tonnes ▪ Quota arrangements for production in exchange for investment in (RUB 15 bln) in case of farming the construction of new fishing vessels and fish processing facilities Healthcare 23 24 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
▪ Construction of the fish processing plant for snack production in Slavyanka Mining settlement,Primorye Territory, with the capacity of over 10 thou. tonnes of fish and seafood per year (gourmet species: squid, salmon, mussels, etc.) ▪ Total investment – RUB 0.5 bln, commissioned Power industry
▪ Construction of the salmon deep processing plant with the capacity of 22 thou. tonnes per year by Okhotskoye Company for production of fillet, caviar, Agriculture by-products, fish flour in the Tigilsky District of Kamchatka Territory. ▪ Total investment – RUB 2.1 bln, design works in progress Fishery and aquaculture
▪ Creation of a fish processing complex with the capacity of 35 thou. tonnes per year on Shikotan island (Kurily ASEZ) in the Sakhalin Region by Wood harvesting and Rybokombinat Ostrovnoy Company processing ▪ Total investment – RUB 7.8 bln, construction and installation works in progress Machine building
▪ Creation of an aquaculture farm in Voyevoda Bay, Vladivostok, by Russkaya Marikultura Company (Free Port of Vladivostok) Real estate and tourism ▪ Total investment – RUB 0.2 bln, design works in progress
Transport and logistics ▪ Creation of an aquaculture farm with the capacity of 5 thou. tonnes of seafood per year in Primorye Territory. (Free Port of Vladivostok) by Nereida Company ▪ Total investment – RUB 3 bln, construction and installation works in progress Healthcare 24 25 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ Construction of the fish processing plant (salmon, pollock, herring) in Kamchatka Territory by Ukinsky Liman Company with the capacity of 20 thou. Mining tonnes per year ▪ Total investment – RUB 1.1 bln, co-financing in the amount of RUB 0.6 bln required, IRR – 20% Power industry
▪ Construction of the refrigeration and logistics and fish processing complex in the vicinity of Nazimov Peninsula in Vladivostok with the total capacity of 500 thou. tonnes per year Agriculture ▪ Total investment – RUB 8 bln, co-financing in the amount of RUB 2 bln required, IRR – 20% Fishery and aquaculture ▪ Creation of the aquaculture farm in Primorye Territory by Moryak Rybolov Company with the capacity of 15 thou. tonnes per year ▪ Total investment – RUB 1.6 bln, co-financing in the amount of RUB 0.8 bln Wood harvesting and required, IRR – 20% processing
▪ Construction of a trade and exhibition fishery complex, including a wholesale Machine building and distribution centre, refrigerated warehouse, and a fish exchange on Russky Island by Complex Solutions company with the capacity of 10 thou. tonnes ▪ Total investment – RUB 0.9 bln, co-financing in the amount of RUB 0.45 bln Real estate and tourism required, IRR – 30%
▪ Construction of the fish canning plant by Dobroflot Group of Companies with Transport and logistics the capacity of 120 mln cans per year ▪ Total investment – RUB 0.8 bln, co-financing in the amount of RUB 0.4 bln required, IRR – 20% Healthcare 25 26 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Wood harvesting Chukotka Petrochemical industry and processing AAutonomous Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Sakha Fishery and aquaculture (Yakutia) Magadan Region Wood harvesting and Projects underway Khabarovsk processing Territory Existing round timber harvesting and production Machine building
Existing carving wood production Real estate and tourism Investment Opportunities Sakhalin Region Transport and logistics Wood processing facility to be created Amur Region Jewish Autonomous Region Primorsky Territory Pulp mill to be created Healthcare 26 27 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Largest standing crop – 21 bln m3 (USD 1.5 trillion), or 51% of APR standing crop. Over 90 mln m3 (about USD 10 bln) ▪ The Russian Far East offers unparalleled preferences to businesses annual cut per year – special legal treatment in the Advanced Special Economic Zones Power industry (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture ✓ Zero property tax for the first 5 years of the project, and reduced High-quality timber – the “northern” wood stands out for by 4 times for the next 5 years excellent quality (Siberian and Dahurian larch – 58%, ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years whitewood – 15%, pine – 6%, cedar – 4%, Manchurian oak – of the project Fishery and aquaculture 2%, and other finewoods) ✓ Duty-free zone regime ✓ Simplified land registration procedures ✓ Electronic visa for foreigners Wood harvesting and processing ▪ Investors can resolve all and any issues based on one-stop shop principle
Accessible maritime transportation hubs, available seaport Infrastructure Machine building infrastructure for timber transshipment (10+ terminals) ▪ Construction of the necessary infrastructure for the investor is Available railways and transshipment infrastructure. subsidised by the state on a non-repayable basis Financing Real estate and tourism ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund)
Dedicated industry-specific support measures Stable, high, and rising demand for wood products in APR Transport and logistics countries (USD 20 bln per year, average growth – 7% per ▪ State subsidies for up to 90% of railway tariff for the transportation year) of timber to the processing location in the Russian Far East ▪ The price of logging areas halved for investors in wood processing projects in the Russian Far East Healthcare 27 28 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
Mining ▪ Construction of the timber factory by RFP holding (Amursk) with the capacity of 1 mln m3 of timber per year ▪ Total investment – up to RUB 22 bln, Stage 1 commissioned Power industry
▪ Construction of the timber factory by Rimbunan Hijau company in Khor Agriculture settlement, Khabarovsk Territory with the capacity of about 1 mln m3 of timber per year and fibreboard production facility with the capacity of 300 thou. m3 Fishery and aquaculture ▪ Total investment ~RUB 3.3 bln, production facility commissioned
Wood harvesting and processing ▪ Creation of the Russian-Chinese timber industrial park by Xing Chun Les and Hei Hua companies in Jewish Autonomous Region for the production of carving wood (including parquet board) with the capacity of 80 thou. m3 Machine building ▪ Total investment ~RUB 0.5 bln, production facility commissioned
Real estate and tourism
▪ Creation of Terneiles carving wood facility in Plastun settlement, Primorye Territory, with the capacity of 1.2 mln m3 Transport and logistics ▪ Total investment – RUB 6 bln, production facility commissioned
Healthcare 28 29 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ Construction of a pulp mill in Khabarovsk Territory with the capacity of 500 Mining thou. tonnes of kraft pulp per year and demand for 2.6 mln m3 of timber per year ▪ Total investment – RUB 80 bln investment-raising partner (up to RUB 40 bln) required, IRR 15% Power industry
Agriculture ▪ Development of the timber, house building materials, and prefabricated house assemblies cluster in Amursk, Khabarovsk Territory, with the capacity of up to 2 mln m3 of timber per year Fishery and aquaculture ▪ Total investment – RUB 10 bln, co-financing in the amount of up to RUB 8 bln required, IRR – 15% Wood harvesting and processing ▪ Construction of the timber facility by Vostok Les Resurs in Primorye Territory with the capacity of 225 thou. m3 of finished products per year Machine building (timber) ▪ Total investment – RUB 0.8 bln, co-financing in the amount of RUB 0.4 bln required, IRR – 15% Real estate and tourism
▪ Creation of the comprehensive wood processing facility by Logistik Les Transport and logistics company in Berezovy settlement, Khabarovsk Territory with the total capacity of up to 800 thou. m3 ▪ Total investment – RUB 3.4 bln, co-financing in the amount of up to RUB 2.7 bln required, IRR – 15% Healthcare 29 30 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Machine building Chukotka Petrochemical industry AAutonomous Area
Mining
Power industry
Kamchatka Territory Agriculture
Projects underway Republic of Sakha Fishery and aquaculture (Yakutia) Existing ship building facilities Magadan Region Wood harvesting and Existing helicopter engineering Khabarovsk facility processing Territory
Existing car industrial assembly facility Machine building
Existing aircraft engineering facility Real estate and tourism
Investment Opportunities Sakhalin Region Transport and logistics Machine-building component facility to Amur be created Region Jewish Autonomous Region Primorsky Territory Railway engineering facility to be Healthcare created 30 31 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Proximity to large APR markets (population with a 1,000 km range – 420 mln) ▪ The Russian Far East offers unparalleled preferences to businesses – special legal treatment in the Advanced Special Economic Zones Power industry (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years Good transit position between Central Russia and East Asia ✓ Employee insurance contributions reduced 4 times Agriculture ✓ Zero property tax for the first 5 years of the project, and reduced by 4 times for the next 5 years ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years Strong R&D and HR potential of the sector in Russia (about of the project Fishery and aquaculture 40 universities, 32% of population have university degrees) ✓ Duty-free zone regime ✓ Simplified land registration procedures ✓ Electronic visa for foreigners Wood harvesting and processing The state is maintaining large state procurement volume for ▪ Investors can resolve all and any issues based on one-stop shop aircraft and ship builders in the Russian Far East. By 2030, principle 600 SSJ-100 aircraft will be produced, along with 220 civil ship, large numbers of war ships and aircrafts, components Infrastructure Machine building and services for the entire list above for the amount over ▪ Construction of the necessary infrastructure for the investor is RUB 2 trillion subsidised by the state on a non-repayable basis Financing Real estate and tourism ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund)
High potential demand (over RUB 2 trillion) for machine Dedicated industry-specific support measures Transport and logistics building and machine tool products on the part of major ▪ State subsidies for the railway costs of delivering the machines infrastructure investment projects in the Far Eastern Federal manufactured in the Russian Far East to the European part of the District Russian Federation ▪ Special arrangements to subsidise the interest on machine-builders’ Healthcare loans 31 32 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
▪ Creation of Zvezda shipbuilding centre in Bolshoi Kamen town. Construction of 170 medium range and heavy- Mining tonnage vessels envisaged (with the tonnage of up to 250 thou. tonnes) ▪ Total investment – RUB 140 bln, construction and installation works in Power industry progress
▪ Commissioning of Sollers car assembly (Mazda) plant in Vladivostok Agriculture with the capacity of 24 thou. cars per year ▪ Total investment – RUB 2 bln, production facility commissioned Fishery and aquaculture
▪ Modernisation of production lines of United Aircraft Corporation (UAC) in Komsomolsk-on-Amur for SSJ-100, Su-35, Su-57 with the capacity of Wood harvesting and up to 100 aircraft per year processing ▪ Total investment – RUB 26 bln, production facility commissioned
Machine building
▪ Modernisation of production lines of United Shipbuilding Corporation (USC) in Komsomolsk-on-Amur for war and civil vessels Real estate and tourism ▪ Total investment – RUB 4.7 bln, production facility commissioned
Transport and logistics ▪ Modernisation of production lines of Progress plant in Arsenyev, Primorye Territory, for KA helicopters and Yak aircraft ▪ Total investment – RUB 1.5 bln, production facility commissioned Healthcare 32 33 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ Development of the machine building cluster under the auspices of Mining Zvezda shipyard – creation of the shipboard equipment factory and construction of housing and social infrastructure ▪ Total investment – RUB 30 bln, co-financing in the amount of up to RUB 15 bln required, IRR – 20% Power industry
▪ Creation of an aircraft components cluster in Komsomolsk-on-Amur including over 20 production facilities for aircraft Agriculture components ▪ Total investment – RUB 60 bln, co-financing in the amount of up to RUB 48 bln required, IRR – 20% Fishery and aquaculture
▪ Creation of a shipbuilding components cluster in Komsomolsk-on-Amur Wood harvesting and comprising over 5 production facilities for shipbuilding components ▪ Total investment – RUB 10 bln, co-financing in the amount of up to processing RUB 8 bln required, IRR – 15% Machine building
▪ Creation of an aircraft components cluster in Arsenyev, Primorye Territory Real estate and tourism ▪ Total investment – RUB 10 bln, co-financing in the amount of up to RUB 8 bln required, IRR – 20%
Transport and logistics ▪ Creation of a transport engineering cluster in Komsomolsk-on-Amur focusing on railway components ▪ Total investment – RUB 10 bln, co-financing in the amount of up to RUB 5 bln required, IRR – 15% Healthcare 33 34 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Real estate Chukotka Petrochemical industry and tourism AAutonomous Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Fishery and aquaculture Sakha (Yakutia) Magadan Region Wood harvesting and processing Khabarovsk Territory
Machine building
Real estate and tourism
Sakhalin Projects underway Region Transport and logistics
Amur Region Jewish Autonomous Primorsky Investment Region Territory Opportunities Healthcare 34 35 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Significant demand for new housing in the Russian Far East ▪ The Russian Far East offers unparalleled preferences to businesses (over 10 mln m2 – RUB 150 bln per year) – special legal treatment in the Advanced Special Economic Zones Power industry (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years 2 High demand for high-quality office facilities – 450 thou. m , ✓ Employee insurance contributions reduced 4 times retail and entertainment facilities – 650 thou. m2, logistical Agriculture ✓ Zero property tax for the first 5 years of the project, and reduced facilities – 500 thou. m2. Total investment potential – up to by 4 times for the next 5 years RUB 100 bln ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years of the project Fishery and aquaculture Shortage of high-quality hotel room stock in the Russian Far ✓ Duty-free zone regime East – about 10 thou. rooms required with the investment ✓ Simplified land registration procedures potential over RUB 180 bln ✓ Electronic visa for foreigners Wood harvesting and processing ▪ Investors can resolve all and any issues based on one-stop shop principle High tourist flow from PRC, Japan, and Republic of Korea – 170 mln tourist per year spending USD 275 bln per year Infrastructure Machine building abroad ▪ Construction of the necessary infrastructure for the investor is subsidised by the state on a non-repayable basis
Financing Real estate and tourism In the end of 2016, the tourist flow in the Russian Far East ▪ Preferential project financing is available for 5% p.a. in rubles for 10 exceeded 4.5 mln, the growth rate exceeded 30% years (operator – Far East and Baikal Region Development Fund) Transport and logistics Dedicated industry-specific support measures Additional growth potential for the tourist flow of cruise ▪ State subsidies for the air fare of the flights connecting the Russian tourists – up to 500 thou. per year spending USD 200 mln Far East to the other regions of the Russian Federation per year abroad Healthcare 35 36 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
▪ Construction of a hotel complex for 120 rooms by Hotel Pride Company in Bolshoi Mining Kamen ASEZ in Primorye Territory ▪ Total investment – RUB 600 mln, design works in progress Power industry ▪ Construction of the Dom Na More multi-purpose resort complex by QE company in Vladivostok ▪ Total investment – RUB 2.6 bln, design works in progress Agriculture
▪ Construction of a golf course for 18 putts with a hotel complex by LS Network Company on the territory of Primorye Integrated Entertainment Resort Fishery and aquaculture ▪ Total investment – RUB 1.6 bln, design works in progress Wood harvesting and ▪ Construction of Kalina Mall multi-purpose resort complex by Atayar Company processing (96 thou. m2) in Vladivostok ▪ Total investment – RUB 4 bln, construction and installation works in progress Machine building
▪ Construction of Kamchatka balnearies balneotherapeutic complex in Zelenovskiye Ozerki Recreational Complex in Kamchatka Territory Real estate and tourism ▪ Total investment – RUB 650 mln, design works in progress
▪ Construction of Parus Hotel Complex in Petropavlovsk-Kamchatsky, Kamchatka Transport and logistics Territory ▪ Total investment – RUB 900 mln, construction and installation works in progress Healthcare 36 37 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ Construction of the hotel recreational complex on Russky Island in Vladivostok Mining ▪ Total investment – RUB 1.3 bln, full financing required, IRR – 25%
▪ Construction of the congress and exhibition centre on Russky Island Power industry in Vladivostok (total area – 20.6 thou. m2) ▪ Total investment – RUB 3.2 bln, full financing required, IRR – 20% Agriculture
▪ Construction of a golf course for 18 putts with a hotel on Russky Island in Vladivostok Fishery and aquaculture ▪ Total investment – RUB 1.2 bln, full financing required, IRR – 35%
▪ Construction of the tourist recreational cluster in Kamchatka Territory, total area Wood harvesting and – 380 Ha processing ▪ Total investment – RUB 2.2 bln, co-financing in the amount of RUB 500 mln required, IRR – 20% Machine building ▪ Construction of Zolotaya Milya Shopping and Entertainment Complex in Blagoveschensk (area of the shopping complex – 5 thou. m2 ▪ Total investment – RUB 600 bln, full financing required, IRR – 25% Real estate and tourism
▪ Construction of Gornaya Derevnya Hotel Complex in Gorny Vozdukh Mountain Transport and logistics Ski Resort in the Sakhalin Region ▪ Total investment – RUB 2.5 bln, full financing required, IRR – 25% Healthcare 37 38 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Transport Chukotka Petrochemical industry and logistics AAutonomous Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Fishery and aquaculture Sakha (Yakutia) Magadan Region Wood harvesting and processing Khabarovsk Territory
Machine building
Real estate and tourism
Sakhalin Region Projects underway Transport and logistics
Amur Region Jewish Autonomous Region Primorsky Investment Territory Opportunities Healthcare 38 39 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining By 2030, the cargo turnover of the two Russia–China Unique business environment International Transport Corridors will reach ▪ The Russian Far East offers unparalleled preferences to businesses 45 mln tonnes, of which 23 mln tonnes will be – special legal treatment in the Advanced Special Economic Zones Power industry accounted for by bulk cargo and 22 mln tonnes – by (ASEZ) and Free Port of Vladivostok (FPV): containers ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture 34 sea ports, of which 14 are year-round ports and 6 ✓ Zero property tax for the first 5 years of the project, and reduced are arctic ports. In H1 2017, the cargo turnover grew by 4 times for the next 5 years 5.4% reaching 95.7 mln tonnes (25% of the Russian ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years nationwide cargo turnover) of the project Fishery and aquaculture ✓ Duty-free zone regime ✓ Simplified land registration procedures ✓ Electronic visa for foreigners Wood harvesting and The cargo turnover of the Far Eastern Railway processing accounted for 192 bln tonne-kilometres in 2016 and in ▪ Investors can resolve all and any issues based on one-stop shop 2017, it is expected to increase by 6.2% principle
Infrastructure Machine building ▪ Construction of the necessary infrastructure for the investor is Construction of two trans-border bridge crossings subsidised by the state on a non-repayable basis between the Russian Federation and the People’s Real estate and tourism Republic of China with the design cargo flow of Financing 20.6 mln tonnes per year ▪ Preferential project financing is available for 5% p.a. in rubles for 10 years (operator – Far East and Baikal Region Development Fund) Transport and logistics Dedicated industry-specific support measures RUB 542.2 bln is expected to be allocated to the ▪ Preferential railway fares for container trains infrastructural modernisation of all Far Eastern Federal ▪ Fixed schedule for transit container trains District airports, aircraft fleet renovation, staff training Healthcare 39 40 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
Mining
▪ Creation of Class A Aviapolis Yankovsky production and logistics complex in Artyom municipality by DNS Development. Power industry ▪ Total investment – RUB 712 mln, commissioned
Agriculture
▪ Construction of the grain terminal in Zarubino sea port (Primorye Fishery and aquaculture Territory) by Sodruzhestvo Group of Companies with the capacity of 3 mln tonnes of grain and oil crops per year ▪ Total investment – RUB 6 bln, design works in progress Wood harvesting and processing
Machine building ▪ Construction of the grain terminal in Vladivostok sea port by Far Eastern Railway with the capacity of 3 mln tonnes of grain and oil crops per year ▪ Total investment – RUB 1.3 bln, design works in progress Real estate and tourism
Transport and logistics
Healthcare 40 41 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
▪ Construction of new infrastructure in Khabarovsk airport, including a Mining hotel and business centre, exhibition complex, shopping and entertainment centre ▪ Total investment – RUB 17.2 bln, co-financing in the amount of up to RUB 8.6 bln required, IRR ~20%. Power industry
▪ Construction of airport complex Agriculture in Yuzhno-Sakhalinsk ▪ Total investment – RUB 6.2 bln, full financing required, IRR ~10% Fishery and aquaculture ▪ Modernisation of Shakhtyorsk sea port in the Sakhalin Region by Eastern Mining Company to raise the coal transshipment volumes up to 6.5 mln tonnes per year Wood harvesting and ▪ Total investment – RUB 760 mln, co-financing in the amount of up to processing RUB 380 mln required, IRR ~10%.
Machine building ▪ Renovation of Yakutia airline’s aircraft fleet in Yakutsk in order to expand the destinations network ▪ Total investment – RUB 7.4 bln, full financing required, IRR ~10% Real estate and tourism
Transport and logistics ▪ Construction of Yelizovo airport complex in Petropavlovsk-Kamchatsky ▪ Total investment – RUB 3.2 bln, full financing required, IRR ~10% Healthcare 41 42 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Healthcare Chukotka Petrochemical industry AAutonomous Area
Mining
Power industry
Kamchatka Territory Agriculture
Republic of Fishery and aquaculture Sakha (Yakutia) Magadan Region Wood harvesting and processing Khabarovsk Territory
Machine building
Sakhalin Region Real estate and tourism
Projects underway Transport and logistics Amur Region Jewish Autonomous Region Primorsky Investment Territory Opportunities Healthcare 42 43 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Sector Potential Petrochemical industry
Attraction Factors State Support Mining Unique business environment Demand for high-quality healthcare services – the ▪ The Russian Far East offers unparalleled preferences to businesses residents of the Russian Far East spend over RUB 6 bln – special legal treatment in the Advanced Special Economic Zones Power industry per year abroad on healthcare (ASEZ) and Free Port of Vladivostok (FPV): ✓ Zero income tax for the first 5 years of the project, and half income tax for the next 5 years ✓ Employee insurance contributions reduced 4 times Agriculture Lack of private Federal healthcare chains in the Russian ✓ Zero property tax for the first 5 years of the project, and reduced Far East, offering market entry opportunities for a major by 4 times for the next 5 years player ✓ Mineral extraction tax reduced by 2.5 times for the first 10 years of the project Fishery and aquaculture ✓ Duty-free zone regime ✓ Simplified land registration procedures Proximity to China provides the opportunities of ✓ Electronic visa for foreigners Wood harvesting and incoming health tourism: the annual growth rates of processing health spending in China accounts for 18% with the total ▪ Investors can resolve all and any issues based on one-stop shop market volume exceeding USD 200 bln principle
Infrastructure Machine building ▪ Construction of the necessary infrastructure for the investor is subsidised by the state on a non-repayable basis Over 7,000 alumni of medical universities in the Russian Far East form the staff resource for the creation of the Financing Real estate and tourism healthcare chain that would provide high-quality ▪ Preferential project financing is available for 5% p.a. in rubles for 10 healthcare services years (operator – Far East and Baikal Region Development Fund) Transport and logistics Dedicated industry-specific support measures State support of hi-tech healthcare cluster creation on ▪ RUB 57.2 bln allocated to the development of healthcare in the Russky Island Russian Far East for the years to come Healthcare 43 44 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Examples of projects underway Petrochemical industry
Mining ▪ Creation of the rehabilitation and recovery centre with Japan’s JGC and Hokuto in Vladivostok for 200 patients per day ▪ Total investment – up to RUB 150 mln, pre-opening activities Power industry underway
Agriculture
▪ Production of seaweed-based pharmaceutical substance by Biolam company in the Sakhalin Region with the capacity of Fishery and aquaculture 1,000 tonnes per year
▪ Total investment – up to RUB 250 mln, Stage 1 commissioned Wood harvesting and processing
▪ Implementation of digital medical solutions by Korea Telecom Machine building Corporation in Primorye Territory with potential subsequent localisation of medical equipment production ▪ Total investment – up to RUB 500 mln, pilot project underway Real estate and tourism
Transport and logistics
Healthcare 44 45 INVESTMENT OPPORTUNITIES IN THE RUSSIAN FAR EAST
Investment Opportunities Petrochemical industry
Mining ▪ Construction of the anti-cancer proton therapy centre in Khabarovsk Territory for 700 patients per year ▪ Total investment – RUB 6.5 bln, co-financing in the amount of Power industry RUB 4,5 bln required, IRR – 20%
Agriculture
▪ Construction of the nuclear medicine centre on Russky Island with the capacity of 6,000 medical procedure per year Fishery and aquaculture ▪ Total investment – RUB 1.4 bln, co-financing in the amount of RUB 1 bln required, IRR – 22% Wood harvesting and processing
▪ Construction of Stage 2 of oncology centre in Yakutsk, Machine building Republic of Sakha (Yakutia) ▪ Total investment – RUB 5,3 bln, full financing required, IRR – 20% Real estate and tourism
Transport and logistics ▪ Construction of the regional hospital in Kamchatka Territory ▪ Total investment – RUB 11 bln, co-financing in the amount of RUB 7 bln required, IRR – 20% Healthcare 45