p. 18 p. 21 p. 24 p. 28 The Far East success story The Indian diamond of The tasty result of Investments showcase of the Korean way the Free port Japanese investments the Far East EAST No. 9 | AUGUST 2017 ECONOMIC AGENDA

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Welcome to the !

Official Bulletin of the Ministry for development of the Russian Far East. This document was prepared by The Far East Investment and Export Agency, an autonomous non-commercial organization. Distributed by email subscription. When using materials, reference to the source is required. 6–7 September6–7 September 2017 2017

2 AUGUST 2017 GREETING

DEAR COLLEAGUES!

The Far East is a territory with a great Thirdly, investors in Far East get an advan- economic potential. More than a half of for- tage due to low costs. Price of electricity in estry reserves and a third of fresh water re- the region is currently just below $0,06 kWh, serves of Asia-Pacific are to be found on its water supply —$0,62 per cubic metre, gas six m square km, as well as 27% of gas, 17% supply — $80,3 per thousand cubic meters. of oil, above 30% of gold and almost all di- Fourthly, the region offers investors a amond deposits. Offshore zones here are preferential tax treatment for 10 years. abundant with fish resources and there are Zero corporate income, corporate property major world railways onshore. and land taxes rate for the first five years. Development of this land full of riches Only half of full tax rates in Russia for the is a national policy priority for the President next five years. Insurance premiums in Ad- of our country, Vladimir Putin. vanced Special Economic Zone and Free Important changes to the Far East in- Port of Vladivostok are set at 7,6% of sala- vestment environment are being imple- ry. Moreover, VAT and import duties are not mented with the aim to make the region payable for importation of equipment and competitive among other Asia-Pacific -re raw resources for processing. gions. Fifthly, The most important step has First of all, we developed, using the best been taken to open the Far East for foreign practices, and implemented a number of investors. Starting August this year citizens services for investors, to make administra- of 18 countries are allowed to visit Vlad- tive procedures faster and more favora- ivostok with eight-days electronic business Alexander Galushka ble. An online information system was be- visa. For the first time in Russian visa histo- Minister for the Development come available in the beginning of August, ry a foreign citizen can obtain an entry visa of the Russian Far East so today investor need not visit hundreds of to our country with just his computer. agencies and authorities but uses just one It is quite obvious, nonetheless, that personal member area to get support. The there is still much to be done. The process services would eventually become a single of developing a competitive investment en- point of contact portal for investor to get in vironment is not finite, it requires incessant touch with supporting institutions as well search for new solutions. We will continue as tax and regulation agencies. Far East In- to work on creating a friendly environment vestment and Export Agency is responsible for doing business in the region and to sup- for maintaining the portal. port investors who work in the Far East. Secondly, the state provides investors Dear colleagues! We are happy to dis- with ready to use infrastructure. A resident cuss all those subjects with business com- of the Advanced Special Economic Zone munity during the Third Eastern Econom- is well informed now of the conditions of ic Forum. The Far East is open to coopera- connecting to gas, water and energy supply tion. You are welcome to invest in develop- networks, and of the use of a plot of land ment of one the most promising regions of and roads. our country!

3 EASTERN RUSSIA ECONOMIC AGENDA EEF-2017 RECOMMENDED

FREE PORT OF PLENARY SESSION VLADIVOSTOK: SUCCESSES AND CHALLENGES. «THE FAR EAST: THINKING TOGETHER 6 September, 12:45 – 14:15 » More than 300 investors became residents CREATING NEW REALITY of the Free Port of Vladivostok, more that 20 new enterprises started. How successful is the modern porto-franco in the opinions of the residents of the Free Port of Vladivostok? Sin- gle tax for the residents of the free port: how businesses’ tax and administrative burden is going to change?

ADVANCED SPECIAL ECONOMIC ZONE 2.0. 7 September, 14:00 – 16:00 INVESTORS SPEAK Speech by the President of Russia Vladimir Vladimirovich Putin 7 September, 9:00 – 10:30 Speech by the President of Republic of Korea Moon Jae-in 18 ASEZs have been created since 2015, Speech by the President of Mongolia Khaltmaagiin Battulga involving capital from Russia, , Japan, Speech by the Prime Minister of Japan Shinzō Abe Australia, Singapore and other counties, more Moderator: Ronnie Chan Chi-chung — Chairman, Hang Lung Properties than 300 investments projects are being im- plemented there and more than 20 manufac- HOW TO DO BUSINESS IN THE FAR EAST tures established. What do investors think of ASEZ regime effectiveness and its influence COAL AND LOGISTICS: EX- AQUA- AND MARICULTURE: on projects’ economics? To what extent the ASEZ regime is competitive compared to pref- PORT POTENTIAL LOOKING AT THE NEW erential regimes in Asia-Pacific countries most 6 September, 10:30 – 12:00 INDUSTRY attractive to investors? Investors have access to just 27% of IN THE FAR EAST known coal reserves in the Far East. What INFRASTRUCTURE available niches and ongoing projects in the 6 September, 12:45 – 14:15 SUPPORT FOR LARGE way of coal could be interesting for investors There are more than 2 m ha of offshore from Asia-Pacific countries? What are the pros- zone suitable for growing highly valued and INVESTMENT PROJECTS. pects of coal exports in the Far East? popular on Asia-Pacific markets mariculture WHAT NEXT? products. 1% of that area is available for such 7 September, 9:00 – 10:30 WOODS AND WOOD PRO- businesses. How to use the internet-service to Targeted infrastructure support mecha- lay out sea areas for mariculture? nism was developed and implemented in 2015 CESSING: FROM “LOGS” TO for Far East investors. Essentially it means that PULP-AND-PAPER MILLS AGRO-INVESTMENTS. HOW public funds are provided for construction of 6 September, 10:30 – 12:00 TO FEED THE ASIA-PACIFIC? new infrastructure facilities necessary for new 51% of forest reserves in the whole enterprises. 14 investors have already used Asia-Pacific are in the Far East. Just 16 mof 7 September, 11:30 – 13:00 that mechanism to start their projects. Does cubic metres of timber is currently being har- The Far East, thanks of its unique location the infrastructure subsidy mechanism live up vested annually in the macroregion, i.e. 18% and ecology, could become one of the key sup- to investors’ and state’s expectations? How it of the maximum allowed set at 90 m of cubic pliers of food to the Asia-Pacific. What are cur- has influenced returns on private investments metres. What projects are being implemented rent mid and long term trends in demand for so far? and what niches are still available? food products in the Asia-Pacific?

4 AUGUST 2017 EVENTS

BUSINESS–DIALOGS INVESTMENT PROJECTS PRESENTATIONS RUSSIA — INDIA ects in the Far East involving Chinese capital 6 September, 10:30 – 12:00 have already been realized and proven their It was 2017 when the first investments viability and which are at their starting stage? 34 investment projects, which are from India were made into non oil-and-gas What mechanisms could become additional being implemented in the Far East, will businesses in the Far East — the first stage of drivers for growth of investments from China hold presentations during the EEF-2017. Russian-Indian cooperation for creating a di- in the Far East? Sessions will be held at the exposition stand amond and jewelry cluster in Vladivostok is «Development of the Far East» in the building about to start. A number of Indian companies — A, level 6. are close to making decisions on investments RUSSIA JAPAN in engineering and coal mining. Which proj- 7 September, 09:00 – 10:30 ects of Indian companies are already being im- A year has passed since the start of a joint 6 SEPTEMBER plemented in the Far East and what is the key realization of an eight-items plan of economic to their success? cooperation proposed by Japanese Prime Min- 10:00 - 11:00 Investment projects ister Shinzō Abe, and it is possible now to talk in transportation and logistics — of a significant improvements in the area of co- RUSSIA ASEAN operation between businesses of the countries. 11:15 - 12:25 Investment projects 6 September 15:15 – 16:45 Which projects by the Japanese companies are in agriculture and food The current year is marked with a start of a already being realized in the Far East? What is industry number of projects in the way of engineering, the key to their success? What reservation do agriculture, wood processing, transportation Japanese companies have that stop them from 12:40 - 13:10 Investment projects and tourism in the Far East involving compa- investing in the Far East? in fishing industry nies from ASEAN countries. But there is still a sizable investment potential awaiting realiza- — 13:25 - 13:55 Investment projects tion. Which projects involving companies from RUSSIA REPUBLIC OF in chemistry and ASEAN countries are being implemented in KOREA petrochemistry the Far East? How to unite investors from sev- 7 September, 11:30 – 13:00 eral ASEAN countries in one project? Investors from the Republic of Korea in- 15:40 - 16:50 Investment projects vest more and more in the Far East while extraction and processing of — learning of new investment support measures natural resources RUSSIA CHINA in the macroregion. Background for exponen- 7 September, 09:00 – 10:30 tial growth of volume of trade is created by a 17:00 - 17:30 Investment projects Eighty per cent of investments from free trade agreement between Russia and the in public healthcare Asia-Pacific in the Far East in the last two Republic of Korea, which is currently being ne- years were made by the companies from Chi- gotiated. What keeps down investments from 7 SEPTEMBER na. More than 20 investment projects with the Republic of Korea in the Russian Far East? combined volume of investments exceeding What measures businesses need to work in the 11:35 - 12:15 Investment projects in USD 3 bn are being implemented. Which proj- macroregion with confidence? production of construction materials «FAR EAST STREET»

Large exhibition on the quay of Far East- ern Federal University campus has already become a tradition of the Eastern Econom- ic Forum. Spectacular pavilions are await- ing guests once again this year, ready to tell them about economy, nature and culture of the regions of the Russian Far East. An excit- ing program has been drawn up for the con- cert venue. Far Eastern delicacies are avail- able at the traditional fish market where one could also learn more about culinary tradi- tions of the region. See current program at www.forumvostok.ru

5 EASTERN RUSSIA ECONOMIC AGENDA ASEZ AND FREE PORT OF VLADIVOSTOK RESIDENTS NEWS

ADVANCED SPECIAL ECONOMIC ZONE legal architecture underpinning their cooper- CREATED IN THE KURIL ISLANDS ation. But that doesn’t mean life on the is- The head of the Russian government, lands should stop before a comprehensive Dmitry Medvedev, signed a resolution creat- solution is reached. Bilateral negotiations ing the eighteenth Far Eastern ASEZ, the Ku- should not halt the process of socio-eco- ril Islands ASEZ. “This is an additional impe- nomic development in the Kurils. The Kurils tus to the development of this very import- ASEZ is being created because Russian inves- ant part of ,” the Prime Min- tors showed interest in undertaking projects ister said. there and willingness to do so. The ASEZ re- The Kuril Islands ASEZ site was created gime also allows foreign investors to fulfill on Shikotan Island in the village of Maloku- their projects on an equal footing with Rus- billion rilskoye, Sakhalin Oblast. The decision to cre- sians.” rubles ate a new ASEZ in the Kurils was based on 7,4 a proposal from the leadership of the Ostro- BOUNDARIES OF THE «MIKHAILOVSKY» Invests fish processing vnoy fish factory to construct a production ASEZ TO BE EXPANDED IN THE plant «Ostrovnoy» in the complex specializing in high-quality frozen INTERESTS OF THE INVESTOR and chilled fish products and canned foods. Yuri Trutnev, Deputy Prime Minister and «Kuriles» ASEZ The investor plans to appropriate 7.4 bil- Plenipotentiary of the President in the Far lion rubles for the project. More than 700 Eastern Federal District, announced his in- new jobs will be created. The project will be tention to extend the maritime boundaries implemented in three phases. In 2017, the ad- of «Mikhailovsky» ASEZ for the implemen- ministration building will be rebuilt as a ho- tation of the investment project of the Viet- tel for staff. The second phase, in 2018, will namese corporation TH True Milk. see construction of a new canning plant, fish The TH True Milk corporation plans to im- mill plant building, a freezer warehouse for plement a large agricultural project in the Far 15,000 tons of one-time storage, a new ad- East: the construction of two livestock breed- ministration building and a cafeteria. By ing complexes with total capacity of 15 thou- 2020, two robotic freezer plants will be put sand head and a milk processing plant with into operation, and a plant for deep process- the capacity of up to 300 tons of milk per day. ing of cod and salmon will be launched. The size of investment in the project, based Besides the anchor resident, the Ostrov- on the construction of three farms and a dairy noy fish processing plant, a number of Rus- plant, can reach 16 billion rubles, according sian companies expressed interest in imple- to preliminary estimates. menting projects in the new ASEZ. To wit, In the interests of the investor, the plots there are projects for construction of fish of land have already been chosen — with an processing plants, development of maricul- area of approximately 50 thousand hectares. ture and fish farming, creation of small-scale Now, these plots are expected to be included billion power plants using renewable energy sourc- in the «Mikhailovsky» ASEZ boundaries. After rubles es, infrastructure projects for development of the «Mikhailovsky» ASEZ boundaries are ex- 16 ecological tourism and creation of tourist and panded, the Far East Development Corpora- the estimated amount of recreational zones and mini-hotels, as well as tion will register the plots of land in the ca- investments for the project the project for development of the gold ore dastre and calculate the investments to be of corporation TH True Milk deposit in the southern Kuril Islands. Accord- put into the infrastructure. ing to estimates by the Far East Development As Ms. Thai Huong, the representative of in Primorye Ministry, overall private investment in these TH True Milk, previously noted, «The Primor- projects will be no less than 10 billion rubles. sky Krai has all the necessary conditions for As Far East Development Minister Alex- the development of livestock breeding, and ander Galushka said, “the Kurile Islands ASEZ its competitive advantages are its sea ports is a unique platform for an array of invest- and developed agricultural infrastructure.» ment projects in the fishing industry, clean The TH True Milk corporation is one of the energy and mining. Russia and Japan are in leading dairy companies in Vietnam. In Rus- negotiations about joint economic activity in sia, the company already works in the Kalu- the Kurils, a definitive set of projects and the ga and Moscow Regions. The investor became

6 AUGUST 2017 EVENTS

interested in the Far Eastern Federal District A FREE PORT RESIDENT IS LAUNCHING because of its proximity to sales markets in A CONTAINER LINE BETWEEN countries of the Asia-Pacific Region as well as KAMCHATKA AND KOREA because of the exemptions in the framework The LLC «Seroglazka Terminal» in Pet- of ASEZ. ropavlovsk-Kamchatsky, a resident of the Free Port of Vladivostok, is launching a reg- CANDY MANUFACTURING WILL APPEAR ular international container line from Kam- IN THE «NADEZHDINSKAYA» ASEZ chatka. Acting as test ship entry, the contain- The «Primorsky Confectioner» company er carrier Papa Mau of the international com- continues to work on the creation of a man- pany «Maersk» took up the company’s berth ufacturing complex of confectionery and bak- for loading. The ship follows the route «Bu- ery products, as well as a food production fa- san (Republic of Korea) —Petropavlovsk-Kam- cility in the «Nadezhdinskaya» ASEZ. chatsky — Busan.» The company was granted resident status The ship arrived at the port on August 11. in December 2015. The size of investments in In Petropavlovsk-Kamchatsky the ship un- Loading containers on a ship the project will total more than 3 billion ru- loaded 300 empty, refrigerated 40-feet con- bles. One thousand jobs are to be created. tainers and will take on board 125 refrigerat- Within the framework of the project, the ed 40-feet containers with the fish produce of company will launch seven new production Kamchatka companies. This is the first direct lines for the production of confectionery and haul which will take Kamchatka produce to bakery products, and a food production facili- the international market, bypassing the port ty for manufacturing high-quality products of of Vladivostok. varying degrees of readiness. The future ca- At the present time, LLC «Seroglazka Ter- pacity will amount to 90 thousand tons of minal» is building an industrial cold-stor- production per year. age plant with a capacity of 15 thousand At the present time, the resident has al- tons and finishing the installation of an over- ready implemented the engineering survey head traveling crane and the retrofitting of works. The future production projecting and the berth to accept heavy-tonnage vessels. territory planning are underway. The plant’s The size of investments in the project will to- construction is scheduled to begin in ear- tal about 876 million rubles. Its implementa- ly 2018. The completion of the construction tion will help increase the volume of trans- works is planned for the beginning of 2019. shipment in the native port of the company to up to 800 thousand tons per year, create THE FIRST INVESTORS CAME TO THE a large marine refrigerating terminal on the FREE PORT OF CHUKOTKA East Coast of Russia and establish direct de- The first two residents of the Free Port of livery of cargo to ports in Asia, Europe and the Vladivostok have been registered in the town United States. of Pevek in the Chukotka Autonomous Okrug. The individual entrepreneur, Maxim THE 20TH RESIDENT HAS BEEN Verbin, will build a year-round greenhouse in REGISTERED IN THE Chukotka. Cucumbers, tomatoes and culinary «BERINGOVSKY» ASEZ herbs will be grown in the year-round green- The fish processing enterprise of the LLC house. The first batches are planned to be «Beringovsky Plant» became the twentieth put on grocery shelves as soon as the fourth resident of the «Beringovsky» ASEZ in the Chu- quarter of 2017. Investments in the project kotka Autonomous Region. The investor will will total about 5 million rubles. put forward more than 600 thousand rubles Resident of the Free Port The second project involves water produc- for the creation of a new production hall for in Pevek will produce a drinking tion. The «Ekovod» company intends to open fish drying. Smelt was selected as a raw mate- water a treatment and bottling plant for carbonated rial for processing. and non-carbonated drinking water. The size of At the present time, a total of twenty res- investments will total more than 5 million ru- idents with total declared investments of bles. The first products will also be available 15.2 billion rubles are registered in the «Berin- for retail in the fourth quarter of 2017. govsky» ASEZ.

7 EASTERN RUSSIA ECONOMIC AGENDA ASEZ AND FREE PORT OF VLADIVOSTOK RESIDENTS NEWS

NEW WOODWORKING PRODUCTION REGIME OF THE FREE PORT OF APPEARS IN THE FREE PORT OF VLADIVOSTOK IS IN HIGH DEMAND VLADIVOSTOK AMONG DEVELOPERS The «Olginskie Timbermen» company, a The modern residential complex «Soyuz», resident of the Free Port of Vladivostok, has im- designed to contain 621 apartments, commer- plemented the first stage of an investment pro- cial premises and a three-tier parking lot, will ject for the creation of a non-waste round tim- be built in Vladivostok under the regime of the ber processing enterprise in the Olginsky Dis- Free Port. Developer-company «Vostok Stroy trict of the Primorsky Kray. The company was Soyuz» Officially Becomes Resident of the granted Free Port resident status in Septem- Free Port of Vladivostok. The total area of the ber 2016. The size of investments in the project three 24-storey, Comfort-class buildings will A production shop of the will total about 50 million rubles. Within the be over 40 thousand square metres. An inves- company «Bige» framework of the project, the resident organ- tor plans to start the building and installation ized production within an area of 1,600 square works in 2018 and fully put the object in com- meters, equipped the plant with all the neces- mission in 2024. The announced investment sary facilities for wood-working and sawing en- amount totaled 1.42 billion rubles. tire tree trunks for the purpose of further man- The LLC «RKSK» also expressed similar in- ufacturing of boards, timbers and other build- tentions of building a residential complex in ing materials from them. The company plans to Vladivostok. The new «Three Bogatyrs» micro- end up with a production output of 22,000 cu- district and complex, replete with its own in- bic metres by the year 2018. frastructure, will be located in an ecologically clean area surrounded by a forest, with a view th RESIDENT OF «PRIVATE of the Bay. The building area includes cubic m ENTREPRENEUR KANGALASSY» ASEZ 936 apartments and underground parking for 22 INTENDS TO DOUBLE ITS PRODUCTION 170 cars. Half of the non-residential premises of timber processing The «Bige» company, a resident of «Private of the total area of 3,681 square meters will Entrepreneur Kangalassy» ASEZ in Yakutia, plans be allocated for the accommodation of com- products are planned to be to double production in 2018 and release one mercial facilities and a kindergarten. The ob- produced by the resident thousand tons of paint and varnish products per ject is planned to be put in commission in of the Free Port in Olginsky year for the regional construction market. 2021. The construction cost of the complex The line of the plant currently comprises is estimated at 1.35 billion rubles, including district of Primorye about 20 products, including furniture varnish which includes foreign investments. and furniture enamel. This year the plant will release 500 tons of paint. Next year, the intro- SOLID HOUSEHOLD WASTE duction of another shift is planned, as well the PROCESSING COMPLEX TO APPEAR IN release more than a thousand per year. PRIMORYE In 2018, the investor LLC «Azimuth» ex- RESIDENT OF ASEZ DEVELOPS pects to build a complex for the processing of TECHNOLOGY TO PLANT VEGETABLES solid household, production and consumption IN A YEAR-ROUND GREENHOUSE waste, with a capacity of 120 tons per day, in In mid-August, the Russian-Japanese compa- the Free Port of Vladivostok. Waste process- ny «Sayuri», a resident of «Private Entrepreneur ing will be carried out on the territory of the Kangalassy» ASEZ in Yakutia, planted cucumbers polygon, followed by peak output in the form on a pilot site. Previously, only tomatoes were of standard secondary raw materials and die- grown in the year-round greenhouse complex. sel fuel. The creation of year-round greenhous- The initiative is aimed at aiding in the es is being realized together with the «Hok- ecological sanitation of the Shkotovsky Dis- Resident of ASEZ, the Russian- kaido Corporation» using Japanese technolo- trict and another three municipal districts of Japanese company «Sayuri» gy. Cucumbers will become a core product of the Primorsky Kray — , Artemy- Develops Technology to Plant the second stage greenhouses scheduled for evsky and Partizansky. Vegetables in a Year-round launch next summer. In two years, the third At the present time, the documents for the Greenhouse stage of greenhouses will be launched — for performance of works on the assessment of tomatoes, just like the first one. the object’s environmental impact are being

8 AUGUST 2017 EVENTS

prepared. The size of investments will total the complex will be of a variable number of 723 million rubles. storeys. As envisioned by the architect, the ho- tel tower will remind people of a volcano with NEW TOURIST COMPLEX TO APPEAR ON lava flowing out of it. THE PESCHANY PENINSULA IN PRIMORYE MODERN MULTIMODAL COMPLEX In 2020, a special infrastructure for ecot- BEGINS OPERATING IN OLGA PORT ourism and fishing will appear on the Pescha- The «Olga Bunker» company, a resident of ny Peninsula in the vicinity of Vladivostok. The the Free Port of Vladivostok, implemented an parent company, LLC «Vinograd-8», plans to investment project on the creation of a multi- provide places for short-term accommodation modal complex on the territory of the current and the organization of tourist excursions. The port in the Olginsky District of the Primorsky project also involves the cultivation of their Kray. Within the framework of the project, the own plant and animal products. The announced investor executed the retrofitting of the termi- investment amount totals 5.7 million rubles. nal — a reach-stacker, jetty and harbor cranes were purchased, as well as additional equip- RESIDENT OF «BERINGOVSKY» ASEZ TO ment. BUILD GAS PIPELINE NETWORK Thanks to the retrofitting, the terminal will The «Sibneft-Chukotka» company, which be able to handle vessels of greater capacity. became the 22nd resident of the «Beringov- The terminal processes cargo such as: seafood, sky» ASEZ, is investing in the development of round timber and sawn lumber, marble slabs a gas pipeline network. The announced invest- and crushed stone, automobile tires and con- ment amount in the project is 20 million rubles. tainers with goods. The company plans to build up the re- The company plans to repair and strength- A resident of the Free Port, source base of the Zapadno-Ozerny production en the pier, as well as to build an intra-port re- is building a new hotel field and implement construction of the first frigerator with an area of 700 square meters in Petropavlovsk-Kamchatsky. gas pipeline network in Chukotka for connec- which will allow for the storage and trans- tion and supply of corporate and private con- shipment of fish produce. The size of private sumers, taking into account the tax benefits. investments in the project will total 479 mil- «Sibneft-Chukotka» is the only company lion rubles. that extracts gas in the territory of the Chu- kotka Autonomous Okrug. The enterprise has «HARLEY-DAVIDSON» DEALERSHIP been developing the Zapadno-Ozerny pro- IN THE FAR EAST TO APPEAR IN duction field in the Anadyr District. The com- PRIMORYE pany supplies natural gas to the Anadyr The LLC «Research and Production Enter- gas-engine thermal power station through prise Experiment», an investor of the Free Port the «Zapadno-Ozerny production field — of Vladivostok, will open an official «Harley-Da- Anadyr» pipeline, which is 103 km long. vidson» motorcycle dealership in the city of Ar- tem in the . The company intends million NEW HOTEL COMPLEX UNDER to invest 69 million rubles in the project. rubles CONSTRUCTION IN KAMCHATKA The dealership will become the sole offi- 69 The LLC «New House», a resident of the cial representative of the «Harley-Davidson» the size of investments in Free Port, is building a new hotel complex company in the Far East. Within the framework the opening of the «Harley- with 180 rooms in the very heart of Petropav- of the project, the company will sell and real- lovsk-Kamchatsky. An office block, a sports ize the warranty and routing repair of motor- Davidson» dealership in center with a 25-meter swimming pool, spa cycles of the Harley-Davidson brand, as well Primorye and a concert hall with 600 seats will appear as the diagnosis and repair of other motorcy- on the hotel’s premises. The total area of will cle brands. be 218 thousand square meters; the planned The company will establish a training site, size of investments is1.3 billion rubles. The a park area and parking for cars and bikes in hotel will start operating in 2019. the territory of the dealership. The center is The building is being constructed to meet scheduled to begin operating in September– all the requirements of seismic safety. As such October of 2017.

9 EASTERN RUSSIA ECONOMIC AGENDA

Free Port has matured Experience shows that the new business-friendly regime is in high demand by investors

HISTORICALLY FREE Duty-free trade in foreign goods in in the Far East to adopt the status of por- The Free Port concept that of a du- the outlying areas of the country was first to franco. But it became the most well- ty-free space for trade has been a concern authorized for a ten-year period in Ka- known because, as people of that time for humanity long before. We know that mchatka in 1828. As Eastern Siberia and wrote, American goods could be bought the first Free Port was established in the the River region continued to de- cheaper than in America itself. Howev- Italian city of Livorno in the 16th century, velop, ports in the region, including Amur, er, once relations with the western part and most European languages have words introduced similar modes of operation: of the country had been established, first denoting a duty-Free Port: Freeport, Frei- the economic situation in the Far East by means of regular sea connection and hafen, Porto Franco. Something similar ex- needed to be improved, but regular con- then by means of the Trans-Siberian rail- isted in Russia as well. In the 19th centu- tact with Europe lacked. The vast lands of way, the regime turned out to be not so ry, Odessa became the first «seaside har- the Priamursky Governor General and the much useful as harmful: it made the de- bor to enjoy the right of duty-free import Trans-Baikal region of the Irkutsk Gover- velopment of new local plants unprofit- of foreign and all indigenous products». nor General enjoyed preferential customs able, and in 1909, it was canceled. Irrevo- But in the Russian Far East, it all was com- duties. cably, it seemed. pletely different, as is the case with a lot Starting in the mid-19th century, Vlad- Russia had nothing resembling the of things there. ivostok became one of many Russian ports porto franco of imperial times until De-

10 AUGUST 2017 FACTS AND OPINIONS

cember 2014, when President Vladimir tendees of the first Eastern Economic Fo- Then, the regime was extended to oth- Putin, addressing the Federal Assembly in rum, which was held on Russky Island. er local governments in the Far East. At the his annual message, said, «I propose giv- first Eastern Economic Forum, Vladimir Pu- ing Vladivostok the Free Port status with THE ONLY ONE LIKE IT — AND NOT tin instructed the Government to consider an attractive and simplified customs oper- THE ONLY ONE the question of extending the FPV regime ation.» And furthermore, «We will contin- At first glance, the Free Port regime to other harbors. «I think we’ve succeed- ue cooperation with the countries of Asia. duplicates the advanced special econom- ed in finding a good, competitive formu- The Asia-Pacific Region is moving forward, ic zone (ASEZ) regime: similar tax benefits la for the Free Port, drawing on our own and Russia, as a Pacific country, will take and customs and administrative prefer- historical experience and on best inter- advantage of this potential.» ences are offered to companies that apply national practice, and I therefore propose for residency at the Free Port of Vladivo- that the Government consider the ques- THAT PHRASE WAS USED stok (FPV). Companies that invest at least tion of extending the Free Port regime IN A NEW LAW 5 million rubles in construction of new to other major ports in the Far East,» the Immediately after the President’s an- plants or upgrades of existing ones are President said. nouncement, the Russian Ministry for Far entitled to these benefits. The state does Since July 2016, the FPV benefits have East Development drafted the Free Port not develop infrastructure in the Free Port gone into effect in the Vaninsky munici- draft law. Primorsky Krai officials and the zone as it does not in the ASEZ, although pal district ( Krai), Korsakovsky general public, ranging from diplomats infrastructure can be developed in pub- (Sakhalin Oblast) and Petropavlovsk-Ka- to businessmen, all joined the discussion lic-private partnership. Everything else is mchatsky () administrative of possible characteristics of the revived very similar: no taxes due on profits, prop- districts, Pevek (Chukotka) and Lazovsky porto franco regime. Special public hear- erty and land in the first five years,- re municipal district of Primorsky Krai. Be- ings were vital: given that the President duced insurance premiums for employees, ginning on July 1, 2017, the regime was had stated the task in just one sentence, eligibility for the duty-free zone regime — extended to the Uglegorsk administrative and nobody really understood the «sub- everything the same as it is in the ASEZ. district in Sakhalin Oblast. The Ministry of stance» of implementing the Free Port However, by area, the Free Port cov- Far East Development also proposed that idea. This was real brainstorming: the first ers more ground than all the ASEZs com- the Government extends the regime to in- version of the draft law appeared toward bined, and that is the first differentiating ternational airports in Khabarovsk (Novy), the end of January 2015, and more than feature. Petropavlovsk-Kamchatsky () and 700 experts took part in the discussion. The original version of the draft law the Sovetskaya Gavan administrative dis- One of the key problems that had to proposed to extend the benefits structure trict. And in August, it became known that be solved by means of the new regime to seven municipalities in Primorsky Krai: the regime might be extended to Bla- was optimization of the customs proce- besides Vladivostok, the city that had de- goveshchensk. dures. «The main problem to be solved is veloped around the seaport over time, the administrative barriers. Today, port activi- benefits structure applied to Artyom, the BREAKTHROUGHS IN BATTLING ty is controlled by many organizations. All Nadezhdinsky and Shkotovsky districts, RED TAPE this drags out customs clearance proce- and the municipalities leading into the The second distinguishing feature of dures, which we must keep to a minimum. Primorye-1 and Primorye-2 international the Free Port is its aversion to bureaucra- The same applies to port charges; they transportation corridors: the Partizansky, cy. In the nearly two years since the law should be minimal,» Deputy Prime Minis- Pogranichny and Khasansky districts. took effect, it has shown itself applica- ter Yuri Trutnev, the Presidential Envoy to Later, the number ble in a variety of ar- the Far Eastern Federal District, explained of porto franco mu- eas. For reducing ad- in 2015. nicipalities grew to More than 700 ministrative pressure On April 2, 2015, the Public Chamber 12 and then to 15. and redundant con- held preliminary readings of the draft law. The scope of this area experts took part trol procedures, the On May 6, 2015, the draft law was submit- is difficult to appreci- in the discussion FPV regime has been ted for consideration by the Government. ate unless it is viewed a master key that can On June 5, it was approved. On June 19, the on a map. The FPV re- on the draft law pick even the most draft law was discussed on the first read- gime applied in the complicated bureau- ing by the State Duma. On July 3, it was first phase to a vast cratic lock. adopted on the third reading. On July 8, area along the land As the authors of it was approved by the Federation Coun- border with China and North Korea, and the draft law proposed, customs opera- cil, and on July 13, it was signed by Pres- along the coastline of the tions in the Free Port zone must run 24/7, ident Vladimir Putin. The law was to take bordering Japan. The regime also ap- instead of several hours a day as was the effect within 90 days — before October 12. plied to all the marine resorts of the case at the Russian-Chinese border. Start- During this time, assorted amendments to southwest of Vladivo- ing October 1, 2016, checkpoints in the Russian laws and regulations were passed stok and to the coastal strip a few hun- Free Port zone have been running 24/7, in by the Government and various agencies dred kilometers to the east of Vladivo- accordance with the law. «A single enti- to make the law work. In early September stok, including , the chief port ty has taken charge of border operations. 2015, the Free Port was presented to at- in Primorye. Furthermore, a Government mandate

11 EASTERN RUSSIA ECONOMIC AGENDA

Aviapolis Yankovski was the first business up and running at the Free Port has cut wait times for customs control. introducing a new type of entry permit, an BILLIONS FOR PEOPLE A time limit for this process was estab- electronic visa. An entire system of inter- The Free Port promises to grow in that lished. E-clearance was introduced. This agency cooperation was developed, while same manner. Indeed, its main purpose is was done only at the Free Port of Vlad- special equipment and software were in- to attract investment. And its haul is signif- ivostok,» Far East Development Minister stalled. As a result, as of August 8, 2017, icant. Overall investment is in the hundreds Aleksandr Galushka said. citizens of 18 countries can apply on- of billions of rubles. According to experts’ Another example comes from a differ- line to the Russian Foreign Ministry for preliminary assessment, construction of the ent agency: the state border guard service. an e-visa, receive a response within four Free Port of Vladivostok is expected to lead The law prescribed a simplified visa - re days and, if approved, enter the Free Port to significant GRP growth in Primorsky Krai: gime for the FPV zone. Bringing that pol- zone for up to 8 days. First tourists are lik- more than twofold by 2025 (up to 1.4 tril- icy into effect took considerable time, al- ing this innovation, and the flow of tour- lion rubles) and more than threefold by 2034 most two years. A separate law was passed ists will only grow. (up to 2.1 trillion rubles). GRP growth in the Far Eastern Federal District by 2025 could be as much as 1.97 trillion rubles. The number of new jobs is estimated at 84,700 by 2021; 108,000 by 2025; and 468,000 by 2034. According to investors, the FPV re- gime helps reduce the final cost of goods. This increases competitiveness, which is critically important for small and medi- um-sized businesses. According to the Far Eastern Customs Administration, since the beginning of 2017, for example, the FPV residents have been granted customs duty exemptions of 18 million rubles. The port has a special legal framework for entre- preneurs that provides a number of ben- efits. Residents can put their goods under the customs procedure of the free customs zone (FCZ), which allows import of tax- and duty-free goods without non-tariff regula- tion of equipment and raw materials. This applies only in a specially apportioned customs zone in the residents’ section. Tourist and recreational cluster Primring There are now two of those: Russky Island

12 AUGUST 2017 FACTS AND OPINIONS

launched polypropylene pipeline system production in . The plant’s capaci- ty is 20 tons of finished products per month. The production process is automated but is staffed by 10 workers. Construction started in late 2016. About 7 million rubles was invest- ed in the company and the investor intends to further develop the project: plans are in the works to increase capacity to 35–40 tons of finished products per month. Pipes pro- duced at the Free Port are delivered to over a dozen Russian regions. The Free Port is also being developed in other Far East locales. Brick factory Tokin- sky Brick Factory LLC has launched in Vanino. The plant has a capacity of 5 million bricks per year. Investment amounted to 14 mil- lion rubles. Two residents arrived simultane- ously at the Free Port in Pevek in Chukot- ka. One will produce drinking water, and the other will grow foodstuff in a greenhouse. New port capacities are being built in Korsa- Vladivostok Free Port resident Artayar is building a shopping center on the bank kov (Sakhalin), while the coal industry is be- of Golden Horn Bay. ing developed in the Uglegorsk district. Ini- tial approvals have also been given to appli- LLC and Promyshlenny Park Ussuriysky LLC. The first phase of the project was fin- cations for residency at the Vladivostok Free Since the beginning of the year, customs ished with the arrival of Olginskie Lesopro- Port in Kamchatka. authorities at the port have issued 12 dec- myshlenniki, a processor of round timber in In total, as of August 1, 2017, 417 new in- larations for goods placed under the FCZ the Olginsky district of Primorye. The compa- vestment projects have been announced at customs procedure. ny obtained Free Port resident status in Sep- the Vladivostok Free Port, with total invest- Two years after the Free Port law was tember 2016. Fifty million rubles will be in- ment of 388 billion rubles. Of that number of signed, 396 applications for a Free Port zone vested in the project. The company launched new projects, 251 are already underway with residence status totaling 374 billion rubles production of edged boards, floor boards, legally binding agreements. Private invest- have been received. Nearly half of the appli- pallet boards and timber. ment on those projects totals 308 billion ru- cations filed by prospective residents are for Small projects are being launched in bles, and 29,000 new jobs are in store as a Vladivostok (191), and 37 applications are for the Free Port one after another. KB Plast result. the Artyom administrative district. The ap- proved investments are expected to create 30,000 new jobs. «A summary of residents’ productivity over the past two years: 10 proj- ects have been completely implemented, in- vestment is over 10 billion rubles, more than 1,500 new jobs have been created. Before the end of the year, we expect another 25– 30 investment projects to be completed,» said Denis Tikhonov, CEO of Far East Devel- opment Corporation. So the reality is that the Free Port is al- ready paying off for new businesses. DNS Development was the first FPV res- ident in the Aviapolis Yankovski industrial park in Artyom. The industrial park is being built in phases on a 180-hectare site. DNS, El Dorado, Kari, Mir Upakovki, Nevada and Sam- sung are located there. Industrial warehous- es and storage facilities are in operation and are being built. The amount already invested is over 700 million rubles, and the number of jobs created is over 130. Korsakov Port

13 EASTERN RUSSIA ECONOMIC AGENDA NATALKA POWER A major gold-mining project is taking shape in Oblast.

In the Kolyma region, a major under- erational before the end of 2017, af- taking for mining precious metals is ready ter which the plant will increase ore ex- for launch: Matrosov Mining JSC is com- traction and processing volumes. Accord- pleting construction on a state-of-the-art ing to forecasts, after the designed capac- production process at the Natalka gold ity is reached, the annual output of Ma- deposit. On account of that, Magadan trosov Mining will be about 420,000– Oblast, a leader in Russia’s mining indus- 470,000 ounces, or as much as 13–14.6 try, will be able to increase the annual vol- tons over the lifetime of the operation. ume of gold mining by more than a third The Natural Resources and Ecology Min- over the current level. The project also of- istry for views develop- fers a solution for a complicated task. Cre- ment of the Natalka deposit a major eco- ating new power facilities will make pos- nomic breakthrough in the mining sector sible the development of other resources and the region as a whole. in the Yano-Kolyma gold-mining province. On the back of Matrosov Mining’s out- This gold deposit in the upper reach- put and other assets, forecasts for Poly- es of Natalka Creek, about 400 km from us PJSC have improved. According to CEO Magadan, was discovered in the early Pavel Grachev, in the next few years, the 1940s. The mine, named after World War company expects an increase in aggre- II hero Alexander Matrosov, consistent- gate gold production of up to 2.35–2.4 ly had an annual output of 1 to 1.5 tons million ounces in 2018 and up to 2.8 mil- during the Soviet period. Later, a decision lion ounces in 2019. «This exceeds the was made to further explore the gold re- previously announced forecast, which was sources at the Natalka deposit and update at least 2.7 million ounces by 2020, due production capacity in anticipation of the to high operational results and the brisk start of mining production. Further, geo- pace of implementation of development logical study has shown that the mine projects. Our project portfolio is well-bal- contains significant gold deposits. The anced and includes seven highly attrac- confirmed and probable gold resources in tive projects for development of exist- the deposit amount to 16 million ounces. ing assets and the development of the The deposit is not easily developed. Natalka deposit, which is nearly ready,» The developer, Polyus (which owns Ma- Grachev said. trosov Mining JSC), ran into infrastructure The Natalka deposit is one of the main limitations above all. However, construc- deposits in the Yano-Kolyma gold-min- tion has now reached the final stage. All ing province. Pavlik, another strategic de- technical equipment has been delivered; posit, is also being developed successful- the start date is nearing at the gold ex- ly. A year and a half ago, a gold extraction traction plant, which has the world’s larg- plant was set up there. In 2016, ZRK Pav- est ore-grinding ball mill (the ore-break- lik JSC mined 3.8 tons of gold. The inves- ing conveyor complex and other units tor (the company is developing the Pav- were adjusted during the summer); and lik, Pavlik-2 and Rodionovskoye deposits) auxiliary infrastructure facilities are un- plans to increase production to as much der construction. as 12 tons per year. Polyus’ Natalka GOK (mining and pro- According to Magadan Oblast Gover- cessing facility) is expected to be op- nor Vladimir Pecheny, by 2025, the region

14 AUGUST 2017 FACTS AND OPINIONS

will be able to produce 50 tons of pre- of promising deposits to hook up to great- now, here it is, about to be launched. This cious metals, of which 30.5 tons is expect- er power generation. is a big project for Magadan Oblast, repre- ed to be gold. «This will create new jobs «Natalka GOK’s launch is expected senting an investment of 1.5 billion dol- and budget revenues,» the Governor em- to occur at the 2017 Eastern Econom- lars.» phasized. ic Forum,’ Far East Development Minis- According to Grachev, the government Needless to say, ter Alexander Galush- support to stimulate investment activ- the Natalka proj- ka said. «This pro- ity is vital. «This mechanism is effective ect could not have The Government spective gold depos- in and of itself, and it can and should be been implemented it in Magadan Oblast developed in the future. This doesn’t ap- if the electrical in- will provide was explored as ear- ply just to existing support measures. The frastructure problem ly as 1947. But for Far East Development Ministry is devising had not been solved. infrastructure decades, there was a spate of new measures, including ones Last year, an agree- support to 14 nothing more than to engage investors. We can say that this ment between Ma- talk. No infrastructure team is moving in the right direction,» trosov Mining and projects, an was available nearby, Grachev said. the Far East Devel- and building it would This is not the first successful project opment Ministry was investment of 294 have been very ex- in the Far East, for which the state financed reached at the sec- billion rubles. pensive. Why were infrastructure development by providing a ond Eastern Eco- you able to launch direct subsidy to the investor. A total of 14 nomic Forum, ac- the GOK today? We projects in the broader region are being cording to which found the mechanism, implemented this way, and overall private the gold miner would receive a 9.9-bil- the key that «opens» this deposit. The in- investment amounts to 294 billion rubles. lion-ruble subsidy for construction of a vestor received a state subsidy for con- Three gold mining projects, two coal-min- 220 kV high-voltage transmission line struction of power lines, nearly 10 billion ing operations, three agricultural facilities from Ust-Omchug to Omchak Novaya with rubles. If these funds had been invested in the , a timber plant, a a distribution center and power substa- on expenses, the business would have be- port terminal and other investment proj- tion in Omchak Novaya. That will enable come unprofitable, and the investor would ects are among the businesses that will to Matrosov, Pavlik and other developers have decided not to build the lines. But enjoy state infrastructure support.

15 EASTERN RUSSIA ECONOMIC AGENDA FROM FEED TO PROCESSING How the ASEZ regime helps develop livestock projects

Far East livestock projects are mak- In the Spassky district, the company al- ing a strong showing. Having ample ag- ready has two pig farms. One farm has ricultural resources allows businesses to 36,000 pigs, the other, 83,000. In 2016, the develop their own food stocks. There is businesses produced 4,000 tons of pork. A a favorable outlook in the market, which third facility for another 83,000 pigs and is linked to local import substitution and a feed factory with a capacity of 15 tons number the prospect of exporting products to the per hour are being built in the ASEZ. This of pigs in APR, giving sufficient incentive for people will allow for a production boost of up to invest in the region. to 10,000 tons. The investor is willing to thousands Mercy Invest Group, located in the build seven complexes with a total capac- 83 coastal region, is one of the most active ity of up to 540,000 pigs per year. These capacity of Mercy Agro’s companies. It is implementing similar ag- will be full-cycle businesses whose activ- pig-breeding complex ricultural projects in two advanced spe- ities will range from producing their own cial economic zones — in Primorye and feeds to thoroughly processing pork. Capi- in the Mikhailovsky ASEZ Sakhalin. tal invested in the project is more than 20 One of the companies in the group, billion rubles. Mercy Trade LLC, is the anchor investor of The group’s second investment proj- the Mikhailovsky ASEZ in Primorsky Krai. ect is in Sakhalin. In 2014, the company

Строящийся свиноводческий комплекс «Мерси Агро Сахалин»

16 AUGUST 2017 FACTS AND OPINIONS

proposed building a pig-breeding facility the first slaughter will be in October. Op- with 12,000 pigs at the start. Construction erations at the entire complex are main- in the village of Taranay, in the southern tained by only 7 people working in shifts. part of the island, was completed in 2015. The facility uses a closed cycle: even ma- In 2016, the facility produced 1,323 tons nure is reprocessed into water. of pork. In March, the company started The next step for Mercy Agro is ad- construction on a facility in the Yuzhnaya dressing the high cost of delivering mixed ASEZ that is to house 50,000 pigs. The fodder to Sakhalin. It is currently deliv- project is being co-financed by the - ered from . «The main ingre- lin Oblast Development Corporation JSC. dients of mixed fodder for pigs are soy- The investor kicked in 230 million rubles, beans and corn,» CEO Alexei Pakhomov the corporation, 2.03 said. «But on Sakha- billion rubles. The lin, you can’t just get money was loaned After the project ripened soybeans at a favored interest and corn. We plan to rate of 5%. is implemented, bring them from the producer in the country based on 2016 re- In October, the mainland and process sults, is also a Mikhailovsky ASEZ resident. first 2,205 pigs of Sakhalin’s pork them here. That way, Rusagro-Primorye is building a pig-breed- the large white self-sufficiency we’ll cut down on the ing cluster with an annual capacity of up breed were deliv- cost of both the feed to 112,000 tons by live weight. The Ka- ered to the Mercy will rise from and the consumption mchatka ASEZ includes the Kamchatsky Agro Sakhalin com- of it.» Pig Breeding Complex. The project capac- plex from Kursk, 6 to 67% Mercy Trade is not ity of the company is 12,000 pigs a year. and on April 5 this the only company in Two more pig-breeding projects — in Ka- year, the first litter — 135 pigs — was re- the agriculture using the new tools of Far mchatka and in Khabarovsk Krai — are re- ceived. Once the business reaches its full East development for livestock projects. ceive a government subsidy to create the capacity, it will yield up to 6,500 tons of Rusagro Group, the second-largest pork necessary infrastructure. meat per year. For Sakhalin, that means self-sufficiency for pork will grow from 6% to 67%. The presence of a major local producer is already having a positive ef- fect on residents’ wallets: whereas in Feb- ruary 2015, chilled pork in Sakhalin cost more than 600 rubles per kilogram, pric- es now range from 280 to 400 rubles per kilogram. It’s abundantly obvious what not hav- ing to depend on supplies from the «main- land» means for the island: it’s a matter of both cost and security. So far, the pork supply has come mainly from Brazil and frozen pork from western Russia. «Sakha- lin must develop agriculture and ensure that this region provides its own food at affordable prices. And it would be even better if we supplied our surpluses to neighboring countries of the Asia-Pacific Region. That is absolutely indisputable,» Deputy Prime Minister Yuri Trutnev said. A modern pig facility is not highly technical operation. Pigs are delivered to a sow farm, where they are fattened for 175 days. Before going to the stock feed- er, each pig must be weighed. After that, a door opens on the compartment for either enriched or conventional feed, depend- ing on dietary needs. Each pig gains 700 grams a day, eventually reaching a weight of 110 kg. There are 14,000 pigs now, and A new fodder plant in Primorsky Krai

17 EASTERN RUSSIA ECONOMIC AGENDA CHEMISTRY BUSINESS Production of Unique Household Chemical Goods Opens in the Free Port

In February of this year, the «Vostok-Polycor» company opened the production of ecologically friendly household chemical goods using Korean components and technology in Artem. Korean cosmetics and household chemicals are internationally recognized for being of the highest quality.

Korean partners became the source of needs of the market. «We do not refuse investments. A resident company of the to release liquid detergents, but we have Free Port invested 17 million rubles in the already found a good plant and signed a workshop of semi-automatic and automat- contract with it for the supply of powders. ic modules for pouring products into soft For the present, we import it as a finished packaging (doypack) and the PET tare. Out- product. However, as soon as we discover put is about 40 tons of products per month. markets, we will transport the technology At the moment, the lineup of constantly here and, on the basis of our production, produced goods consists of about 12 prod- we will produce the powders using Kore- ucts, but because the company is in a con- an technology. The Korean powders have stant search for consumers, about 10–12 a nice feature: they wash well in both hot additional items can be attributed to the and cold water. It is necessary to use this «floating» category: they regularly appear advantage», he said. and disappear to be replaced by new ones, The company currently produces laun- explains Pavel Serov, the company’s CEO. dry detergents, conditioners, dishwashing The consumption of household chemi- liquids, childcare products, shampoos and cal goods in Russia has its specificity, con- shower foams. It is stressed in all the pack- tinues a representative of «Vostok-Poly- aging and advertising that all the products Chi Yong Yanakawa, CEO of the company cor». For example, Russians buy liquid de- are made in the Free Port of Vladivostok. «Vostok-Polycor» tergents less willingly than powders. But They already have their own brand under this resident is ready to respond to all the which five kinds of products are sold: three kinds of liquid laundry detergent and two conditioners. In the near future, the pro- duction of branded shampoos and hair conditioners will be launched — samples have already come to Russia. «We’re going to introduce, for example, facial masks for men and women, which are now very pop- ular. We want to produce them here. We’ll import the equipment, as such the pack- aging and fabric will be from South Korea, the liquid will be imported, but part of it will be produced in Primorye, for example, using trepang extract. These products will be able to be sold under our brand», ex- plains Pavel Serov. «In general, the population in the Far East is relatively small, and the consumer market is saturated with household chemical goods. Of course, our production is represented in al- most all the major local networks, and if it is not represented somewhere, it is only a mat- ter of time. But in any case, our goal is West- ern Russia, the capital cities. We are negotiat-

18 AUGUST 2017 PRACTICE

The automated production line is serviced by a small number of personnel ing with the largest networks. There is no fi- significantly helps new manufacturers con- full-cycle production in the «Nadezhdin- nal decision, but we hope that we’ll be repre- duct product promotion in new markets, skaya» ASEZ. The advantage of a site in the sented in the federal networks sooner or later. and in particular to seek support from the ASEZ is that it provides a plot of land and Once this happens, the production output will State government bodies, continues Pavel infrastructure. However, a plant of such lev- grow manyfold. We have capacity reserves to Serov. «Small business has a problem of en- el should serve at least the market of Rus- this effect. Provision is made for the conclu- try into the federal networks and the Rus- sia and the CIS. sion of bilateral con- sian market at large», «The company plans to launch full pro- tracts on raw materi- he says. The compa- duction involving raw material procure- als: with the purchas- «Eventually, ny was also able to ment and manufacturing of its own com- ing network and direct- quickly reclaim VAT. ponents and finished products. Now the ly with the supplier of it is planned to However, the inves- production of our plant is sold in the terri- raw materials. Now, due send 50% tor has not yet expe- tory of all the Far East. In the near future, to the ‘low’ market, we rienced a big benefit the company plans to enter the market actually even restrain of the production from the reduced con- of Western Russia and the markets of the ourselves a bit», says tributions to social countries of the Customs Union. Eventual- a company represent- volume funds: the automat- ly it is planned to send 50% of the produc- ative. for export» ed line is served by a tion volume for export to China and South Chi Yong Yanak- small number of per- Korea», says Chi Yong Yanakawa, CEO of awa, CEO of the sonnel. the enterprise. Pavel Serov specifies that «Vostok-Polycor» company, explains that According to forecasts of the top man- the company could enter the Korean mar- thanks to the tax exemptions, the econom- agement of «Vostok-Polycor», over the next ket with some unique product which can ic performance indicators of the project are year or two the plant will continue to op- be produced only in the Far East. The Chi- significantly improved: they increased by erate under the regime of the Free Port of na’s market is more complicated — special an average of 32%, and the investor was Vladivostok, but then, as the project pro- studies and experts are necessary to enter able to reallocate funds and reinvest them gresses, it will feel itself tight in its exist- it. However, the export prospects of pro- in the production development. The status ing workshops. Therefore, the medium-term duction are constantly under investigation, of resident of the Free Port of Vladivostok plans of the manufacture are to create new he assures.

19 EASTERN RUSSIA ECONOMIC AGENDA

STEEL COILS FOR EASTERN RUSSIA A resident company with Chinese capital has launched production of galvanized steel in Ussuriysk

The Leader Steel East company re- The founder of Leader Steel East LLC is For now, the Chinese equipment, bought ceived residential status in the Free Port of a businessman from China who has been from one of the local enterprises, is placed in Vladivostok in September of last year. Less working in Russia for a long time, explains a rented location, but the resident expects to than a year later it opened its own produc- the company’s representative Olga Polyako- build their own workshop in the future. The tion in Ussuriysk. At the factory, galvanized va. The idea to create the production of pol- company is planning to install a line for ap- steel imported from China in large-ton- ymer coated steel in Primorsky Krai came plying zinc coating to steel there. «The ex- nage coils is cleaned, polished, dried, cut, to the investor in view of the obvious de- emptions of the resident of the Free Port of covered with ground and polymer coating mand on the part of the local market: The Vladivostok made it possible to reduce the and rolled into coils again. The end prod- nearest location of similar production is in cost of finished products and enter the re- uct, coiled steel with a polymer coating, Khabarovsk. «There is no such line in Pri- gional market. The company plans to open a goes to the enterprises that produce con- morsky Krai; the products have to be trans- representative office in Moscow and launch struction materials: metal roofing, corru- ported from outside the region. In Primor- a line for applying galvanized coating in gated board, sandwich panels, pipes. The sky Krai, our goods are cheaper due to sav- the Primorsky Krai, which will allow it to re- size of investments in the project will to- ing on delivery», explains the representative place imported goods in the domestic Rus- tal about 58 million rubles. The capacity of of the company. Steel coils produced in Us- sian market», said Zhou Ili, General Director the enterprise is about 80 thousand tons of suriisk are spreading throughout the Russian of the company. steel per year. Far East. According to Olga Polyakova, the re- gime of the Free Port of Vladivostok al- lowed the enterprise to bring some work- ers from China. «There are simply no such specialists in Primorye, there’s no training. Thanks to the benefits of the Free Port, we brought certified employees without quo- tas. And we can resolve issues with the em- ployees at any time. This is a very big ad- vantage, it’s just huge», admits a represent- ative of the investor company. The enter- prise has already experienced savings on payments to social funds, and in the future it plans to use the right to create a free customs zone for the import of equipment: this is stipulated by the business plan, and the site for the customs post has been de- The production process at the Leader Steel East enterprise signed.

20 AUGUST 2017 PRACTICE

THE DIAMOND OF THE FREE PORT A leading global producer of faceted gemstones opens a diamond factory in Vladivostok

Indian behemoth KGK Group timed the launch of the diamond cutting factory to coincide with the third Eastern Econom- ic Forum. The new Primorsky Krai facility opened at the Vladivostok Free Port. “At the moment, we are proud of the positive experience we’ve had cooper- ating with Russia. Our company has met with success at our branches in Yakutia and Moscow. We expect Vladivostok to be the next strong point for promoting our production in Russia,» said Navrattan Ko- tari, President of KGK Group. A certificate of residency at the Free Port was given to Navrattan Kotari by Deputy Prime Minister Yuri Trutnev in March during a working visit to Mumbai, where the company is headquartered. The document was issued for a subsidiary of KGK Holding that was specially created for its Russia operations, KGK DV LLC. «The launch of a new production fa- cility in the Far East as a resident of the Free Port of Vladivostok allows us to take KGK Group factory at the Vladivostok Free Port advantage of the relevant preferences for business development in the region and project over this period will total 496.6 countries. In light of the investor’s staffing opens up ambitious opportunities for ex- million rubles. demands, we decided to create a special- porting cut diamonds to the Asia-Pacif- The launch of the KGK diamond cut- ized center to train local personnel on the ic countries,” Managing Director of KGK ting factory will create 500 new jobs in key competencies of the industry,» said Group Sandip Kotari said. Primorye. Trutnev said that, at first, the Valentin Timakov, CEO of the Human Cap- The diamond cutting factory of the In- new factory will be staffed primarily by ital Development Agency in the Far East. dian giant considers experts from abroad. The diamond cutting training center such APR countries But the number of established with the KGK’s support at Col- as China, India, Japan Up to 9,000 carats employees from Rus- lege of Entrepreneurship No. 11 is already and South Korea as sia will gradually admitting new students. Graduates of the the key sales markets of uncut diamonds grow. diamond cutter program receive a college for its products. Un- A specialized diploma and a KGK certificate. With this cut diamonds will be will be processed center is being set document, applicants will qualify for jobs delivered to the new here monthly. up in Primorye to in any country where diamond cutting en- factory by a global di- train qualified per- terprises operate. amond mining lead- sonnel. Its work is The arrival in the Far Eastern regions er, Russia’s own Alro- coordinated by the of investors such as KGK Group encourag- sa. Up to 9,000 carats of uncut diamonds Primorsky Krai Education Department and es Russia to further reduce barriers relat- purchased from Alrosa will be processed the Agency for Human Capital Develop- ing to diamond cutting and jewelry pro- monthly in closed-cycle production. ment in the Far East. duction. According to Far East Develop- KGK’s long-term outlook is not limit- “The gemstone-processing technology ment Minister Alexander Galushka, a set ed to just the diamond-cutting business. requires qualified, trained personnel. Due of tax, finance and administrative - mea It also envisions opening a jewelry pro- to the specific character of the industry, sures to further development of the dia- duction line at the Vladivostok Free Port. there are very few specialists in the mar- mond industry will soon be enacted. The The business plans to reach its expected ket. They must be trained and brought in measures are the result of collaboration capacity in two years. Investment in the from elsewhere in Russia and from other between the ministry and Alrosa.

21 EASTERN RUSSIA ECONOMIC AGENDA

REVIVING COAL

How a resident of the Beringovsky ASEZ brought people to the desert region of Chukotka

The model of Advanced Special In the first seven months of 2017,- ac deposits in the basin are mostly high-qual- cording to the Department of Industrial and ity energy coal: G (gas), Zh (fat) and D (long- Economic Zones is aimed at mak- Agricultural Policy of the Chukotka Auton- flame). The project of developing the depos- ing the produced products com- omous Okrug, 257.6 thousand tons of coal its of the Bering coal basin is aimed at cre- petitive not only in the domestic were mined in Chukotka. Only 166.1 thou- ating a mining complex with a capacity of Russian market, but also in the sand tons of coal were mined a year earlier at least 10 million tons of coal per year, fo- markets of the countries of the in the same period. The growth of coal out- cused on the export of hard coal, including Asia-Pacific region. Chukotka al- put by 55% was ensured by one of the two coking coal, to the countries of the Asia-Pa- coal-producing enterprises, Beringpromugol cific region. ready leads by example due to its LLC. This subsidiary of the Australian Ti- For now, eight cars are loaded with coal successful accomplishment of this gers Realm Coal Limited is a resident of the at the Fandyushkinsky field daily, which then task: the Fandyushkinsky field de- Beringovsky ASEZ. The company has owned a go to the port of Beringovsky along the posit, developed by the Australian license for the reserves of the Fandyushkin- 40-kilometer road constructed by the resi- company Tigers Realm Coal, has sky field deposit since 2012, active develop- dent company in May-July of this year. The begun to produce coal for China. ment of which began in the summer of 2016. fuel is then loaded to ships that carry it both The company believes that the deposit can to the Chukchi settlements and outside the Thanks to receiving the resident yield up to 2 million tons of coal annually, region: the first bulk carrier, Achilles, with status, the Beringovsky ASEZ man- and will provide no less than 600 thousand 38.5 thousand tons of coal for China, depart- aged to get different approvals for tons in 2018. ed in July. Until the end of navigation in 2017, the project faster, including the At the moment, coal reserves in the Fan- China should receive no less than 200 thou- most important one of all: permis- dyushkinsky field are confirmed for category sand tons of coal. sion to start exporting products B (750 thousand tons of G grade coal), cate- It should be noted that in order for Achil- gory C1 (5,559 thousand tons) and category les to leave for the voyage, a lot of work had through the Beringovsky port. C2 (4,081 thousand tons). The total resourc- to be done, and building the road to the new es of the entire Bering coal-bearing basin port, though important, was far from being in Chukotka are 4 billion tons of coal. Coal the only part. The Federal Customs Service

22 AUGUST 2017 PRACTICE

Bulker Achilles exports the first batch of coal to China and the resident company spent a lot of time censing documents with the full cooperation transport availability of deposits above all. In agreeing all the nuances of the port’s export of the Ministry for Development of the Russian this regard, the development of deposits in work in supervisory instances. After all, the Far East, the highest executive bodies of the Chukotka that are not tied to the railway or sea checkpoint with its temporary scheme state, as well as the executive and administra- other ports is of special interest to us», says was actually created tive bodies of munici- Denis Kurochkin, CEO of Tigers Realm Coal. from scratch. The res- pal entities in the ter- The company is ready to invest not only in ex- ident was advised by Tigers Realm ritory of the Chukotka tractive infrastructure, but also in transport, as the Far Eastern Cus- Autonomous Okrug. To well as its own power generation. The total toms Administration Coal has already finance construction, as amount of private investment in the project is and the Magadan Cus- created 120 well as for geological estimated at $2.25 million. toms Office. There is no exploration, the com- It is worth noting that the area of oper- need for a permanent jobs in Russia, pany uses the share- ation was completely uninhabited. The near- checkpoint in Berin- holders’ funds. How- est settlement, Beringovsky village, is 40 km govsky for now: it’s fo- including 30 ever, we consider the away from the basin. In addition to the shift cused on shipping 10– residents provision of all neces- camp and the facilities at the Fandyushkin- 15 ships per year dur- sary documentation a sky field itself, the resident will build not ing five months of nav- of Chukotka, great help in the devel- only a road, but also a railway to the port. igation. But even for opment of our project», Tigers Realm Coal has already given jobs to working on the tempo- involved in the says Peter Balka, Chief 120 people in Russia, including 30 residents rary scheme, the resi- development Executive Officer of Ti- of Chukotka that are directly involved in the dent required a whole gers Realm Coal. development of the basin. As long as the in- series of approvals of the field Of course, the com- dustrial facility has a small turnover, a hun- from customs, border pany’s project in Rus- dred workers are enough. By 2019–2020, with and sanitary authorities. sia was successful not only because of state increasing production volumes, the company «The creation of the Beringovsky ASEZ sig- support, but also due to proper business plan- will create about 500 jobs at the deposit site nificantly facilitated all the business process- ning. «In the current situation, competitive- and in the port. And if previously uninhabited es in the Chukotka Autonomous Okrug. Thanks ness depends on the quality of the extract- territories are brought to life, isn’t it the suc- to this, we quickly obtain all the necessary li- ed raw materials and logistical factors — the cess of the Beringovsky ASEZ?

23 EASTERN RUSSIA ECONOMIC AGENDA A DELICIOUS RESULT The success story of the Japanese investor in the Khabarovsk ASEZ: having realized the first stage, the company continues its development

The project of Japanese greenhouses in Khabarovsk was the first produc- Corporation, and the limited liability in- vestment partnership Dogin Dosanko tion launched by a foreign resident of the Advanced Special Economic No. 3, which supports high-tech projects Zone. The combination of strong support from regional authorities, the of small and medium-sized businesses. presence of a key Russian partner in the form of an industrial park, as Each of the three partners has invested well as modern technology with Japanese diligence and capital, has cre- their strengths in the project. ated a uniquely strong and significant story. Energoimpulse+ is one of the co-own- ers of the Avangard industrial park, the first in Khabarovsk, and so the - compa ny was able to offer the project a con- To provide residents of the Russian Far In February 2015, JGC Evergreen LLC venient site with some ready infrastruc- East with products of the highest quali- was registered in Russia. The compa- ture, as well as its contractor services for ty, produced using advanced technology ny’s capital came from three sources. the installation of electrical equipment. with the participation of foreign invest- The Russian partner of the project was JGC Corporation had already built sever- ments, seems to be the ideal formula for the Energoimpulse+ company, founded al Greenhouses in Japan, so it had expe- any project within any Advanced Special in 1995 and known for supplying electri- rience of using information and commu- Economic Zone. The first one was realized cal equipment for projects important for nication technology, robotics and some in the eponymous one in Khabarovsk, and Khabarovsk. The Japanese partners were of the other latest developments in the this is the merit of many people. Japan’s first engineering contractor, JGC greenhouse industry. Finally, Dogin Dos-

24 AUGUST 2017 PRACTICE

anko No. 3 provided the project with much-needed funding: primarily of the greenhouse complex, occupying 2.5 hec- tares; 556 million rubles were invested in total. «Having such an investor is, of course, the hallmark of our industrial park. It creates a favorable image of the compa- ny when negotiating with new residents. On the other hand, the developer of the industrial park provided the site with all the necessary engineering infrastruc- ture: an 11 kilometer gas pipeline, inter- nal power lines, water supply and sew- erage systems, as well as internal roads. In a word, everything that is necessary for production. And the fact that JGC is implementing its project on the territo- ry of the industrial park proves the abil- ity of our site to create a favorable en- vironment for foreign investments», says Denis Gros, Executive Director of the in- dustrial park. Thanks to the well-coordinated work of all the partners and the support of the authorities, the Evergreen greenhouse complex was built in just six months: the work on the construction site be- gan on July 1, 2015, and the first plants in the greenhouses were planted on De- cember 29. Several contractors, both Rus- The greenhouses of Japanese investor JGC Evergreen work on Dutch technology sian and foreign, participated in the con- struction. The main contract was made and illumination are completely automat- achieved: the construction of the second with the Greenhouse Technology compa- ed. At the same time, operators monitor stage of the complex, which has already ny, which was engaged in the direct con- all indicators 24 hours a day. The Dutch begun, will double the output. struction of structures. Dutch specialists Priva system is used to control the auto- «It can be considered a great victory installed and tuned the mation. The system is that in June the JGC Evergreen company automation. programmed for each started construction of the second stage «We chose Dutch greenhouse individu- of greenhouses with an area of 25 thou- technology because the The ally, in accordance with sand square meters», says Denis Gros. «Al- Netherlands has prov- its particularities. though the project is being implement- en itself as the most implementation Currently, the Ev- ed by the same company, the decision to experienced producer ergreen greenhous- begin construction of the second stage of high-quality green- of the second es produce two vari- was taken solely on the basis of the ex- houses. All the equip- stage of the eties of cucumbers, perience of the last two years. And that ment in our green- Meva and Kibria, and means the experience was positive.» house is Dutch-made, complex will four varieties of to- «Construction is planned to be complet- except for the seedling matoes, including the ed in October this year, and the first har- chamber, which was double the most beautiful cher- vest in the new greenhouses of the sec- brought from Japan. output ry tomatoes. The prod- ond stage should take place in time for As they say in Japan: ucts are packed in the New Year», he continues. «The project «Good sprouts bring original branded pack- for the development of the greenhouse a good harvest», ex- ages. These products complex of JGC Evergreen also includes plains Tomoyuki Igarasi, CEO of JGC Ever- are in very high demand and always in the construction of the third and final green. The greenhouses constantly main- short supply on the shelves of shops in stage with an area of 50 thousand square tain a microclimate comfortable for plant Khabarovsk. The vegetables of the first meters, which will grow Japanese straw- growth. Such processes as the top dress- harvest were sold at markets and in shops berries. We very much hope that nothing ing and watering of plants and maintain- like hot cakes. And the resident compa- will prevent the company from realizing ing the necessary temperature, humidity ny doesn’t intend to stop at what it has its plan to the end.»

25 EASTERN RUSSIA ECONOMIC AGENDA

INVESTMENT PASSPORT:

Primorsky Krai Anadyr Main factors

The area of the Primorsky Krai: 164,673 sq km Population: 1,929 thousand people Magadan

GRP: RUR 716.7B Petropavlovsk - Kamchatsky GRP per capita: RUR 371.1k RUSSIAN FEDERATION Capital investment: RUR 123.5bn As of 2016 Yuzhno - Sakhalinsk The Primorsky Khabarovsk Workforce: 1,045,800 people Ulaanbaatar Krai MONGOLIA Vladivostok

As of September 2017 China JAPAN

Beijing DPRK Tokyo Pyongyang Seoul PERSPECTIVE BRANCHES OF THE ECONOMY REPUBLIC OF KOREA Petrochemicals Fish industry Electric power Core capabilities: Core capabilities: Core capabilities: • Possession of a developed oil & • High profitability of the sector • Installed capacity of the stations ~ gas transportation system. (~40–60%). 2.8 GW. • Projects for the production of basic raw • Significant export potential. • Electricity shortage in the Primorsky Krai. materials — a number of projects in the • The main Far Eastern hub for transship- • Much of the electrical energy is generated us- field of oil and gas chemistry are being ment and delivery of capture from the Far ing coal. implemented. Eastern fisheries basin. • Complex petrochemical projects require > • Favorable geographical position (proxim- • Essential potential to improve capture 0.6 GW of capacity. ity to the largest Asian markets), ports for efficiency and expand the production • Installed capacity of boiler houses operating shipping large-tonnage cargo by sea. chain. on fuel oil ~ 1,200 GCal/h.

Investment activity: Investment activity: Investment activity: 4 investment projects with a total Operating companies, as well The implementation of investment projects with amount of over 1.0 trillion rubles. as new investment projects. a total investment of about 200 billion rubles.

Shipbuilding Tourism Agriculture

Core capabilities: Core capabilities: Core capabilities: • Dependency of the petrochemi- • Large flow of tourists from the • 754 thousand hectares of land cal industry on the transport fleet China, Japan and South Ko- for cultivating ecologically pure and oil platforms. rea — 170 million tourists who crops. • Significant obsolescence of the fishing in- annually spend $275 bn. •~ $192 billion — food product import to dustry fleet (average lifespan of 28 years) • Two large-scale tourist projects are being China, Japan and South Korea. These coun- and high investment demand of the in- developed in the region: the integrated tries annually import > 5 million tons of dustry. resort Primorye and Russky Island. meat, ~ 100 tons of oil crops and 70 million • Pacific Fleet renewal program. • In the Primorsky Krai, there is a significant tons of grain crops. shortage of quality rooms (~ 5,000). •The need for additional production: 102 thou- sand tons of meat, 495 thousand tons of milk, Investment activity: 216 thousand tons of vegetables. FESRC Zvezda, the investment volume is 145 billion rubles, 4 investment projects Investment activity: Investment activity: with a total investment volume of more 40 investment projects with cumulative 11 investment projects with cumulative than 10 billion rubles. investment of 300 billion rubles. investment of RUR 137 bn.

26 AUGUST 2017 PROJECTS

INVESTMENT IN UPCOMING SECTORS

Industry Investment, billion rubles Jobs, thousand people Number of projects Transport and logistics 200 6 40 Agroindustrial complex 137 4 11 Construction (real estate) 218 5 11 Fish industry 105 1,5 18 Tourism 300 2,6 40 Oil and gas chemistry 1210 6,6 4 Electric power 200 2 4 Shipbuilding 145 6,5 4 Timber 7 1 6 Total 2522 35,2 138

Transport Distance from major transport hubs Core capabilities: Distance and flight time to the nearest major cities* • The largest port region of the Russian Federation (60% of transshipment). Tok yo (Japan) — 1,063 km / 2 hour flight • The development of transport corridors Primor- Seoul (South Korea) — 742 km / 2 hour flight ye-1 and Primorye-2. Beijing (China) — 1,335 km / 2 hour flight • A growing flow of goods from China for transship- Hong Kong (China) — 2,820 km / 3.5 hour flight ment through the ports of the Primorsky Krai; •Lack of container infrastructure. Internal aviation is rather developed in the region: • Lack of up-to-date warehouse infrastructure. there are 11 routes, the annual passenger traffic is 30 thousand people. Comparative throughput capability of the Far Eastern Federal District * at a speed of 850 km/hr ports, million tons and additional landing/take-off time, 248 The Primorsky Krai million tons The Khabarovsky Krai The Sakhalin Region Contacts Other Cargo turnover of the ports of Primorye, Alexei Mayorov, million tons 186 Far East Investment and Export Agency, director of the Current throughput: 169 million investment department, head of special division in Vladivostok tons [email protected], 126 118 +7 964 443 37 68 100 99 86 89 46 53 46 46 72 73 42 43 Georgy Kolpachyov, 54 53 44 46 Far East Investment and Export Agency, director of the investment department 2010 2011 2012 2013 2014 2015 2019 [email protected], Investment activity: +7 985 761 5007 40 investment projects worth more than 200 billion rubles.

27 EASTERN RUSSIA ECONOMIC AGENDA

FAR EAST INVESTMENT SHOWCASE

In this section, we publish examples of investment projects implemented in the Far East. Detailed infor- mation on participation in these or other projects in the region can be obtained from the Agency of the Far East for attracting investments and supporting exports.

CONSTRUCTION OF A FERTILIZER PLANT

INITIATOR: NZMU CJSC AMOUNT OF INVESTMENT: 402 billion rubles INDUSTRY: Chemical production EQUITY CAPITAL: 116 billion rubles PHASE: Design and survey work INVESTED: 1 billion rubles REGION: Primorsky Krai CAPITAL REQUIRED: 285 billion rubles

PROJECT DESCRIPTION: NZMU CJSC is building a high-tech, eco-friendly fertilizer production plant in the Nakhodka administrative district of Primorsky Krai. Gross production capacity of the projected plant is 2.2 million tons of ammonia (1.1 million tons per year of commodity ammonia), 2 million tons of carbamide and up to 2 million tons of meth- anol per year. A phased implementation of the project is envisaged: methanol plant construction in the first phase and ammonia and carbamide plant construction in the second phase. The plan is to start methanol production in 2021. In the second quarter of 2022, the whole complex will be put into commercial operation.

CONSTRUCTION CONSTRUCTION CONSTRUCTION OF OF THE KHABAROVSK OF MAGADAN A SHIPYARD TO BUILD BYPASS HIGHWAY AIRPORT SHIPS MADE OF (CONCESSION PROJECT) TERMINAL (SOKOL) COMPOSITE MATERIALS

INITIATOR: Transportation Ministry of INITIATOR: AIRPORT Magadan OJSC INITIATOR: Composite Shipbuilding LLC Khabarovsk Krai INDUSTRY: Transportation and logistics INDUSTRY: Shipbuilding INDUSTRY: Transport and logistics PHASE: Business plan development PHASE: Commissioned (in commission process) PHASE: Design and survey work REGION: Magadan Oblast REGION: Primorsky Krai REGION: Khabarovsk Krai AMOUNT OF INVESTMENT: 2.9 billion AMOUNT OF INVESTMENT: 10 billion rubles AMOUNT OF INVESTMENT: 43.7 billion rubles EQUITY CAPITAL: 1 billion rubles rubles EQUITY CAPITAL: 490 million rubles INVESTED: 1 billion rubles EQUITY CAPITAL: 30.4 billion rubles INVESTED: 0 billion rubles CAPITAL REQUIRED: 8 billion rubles INVESTED: 800 million rubles CAPITAL REQUIRED: 2.4 billion rubles PROJECT DESCRIPTION: CAPITAL REQUIRED: 13.3 billion rubles PROJECT DESCRIPTION: The project entails construction of a high-tech PROJECT DESCRIPTION: This project in the village of Sokol, Magadan shipbuilding center in Primorsky Krai. The plan The project calls for construction of a highway that Oblast, is intended mainly to ensure that covers a period from 2017 to 2021 and calls for includes engineer works for transportation infra- Magadan International Airport complies with construction of 126 vessels of various types, in- structure, roadbed, bridges, overpasses, interchang- modern air-passenger standards. A new terminal cluding high-speed passenger trimaran ships, es, traffic management features, toll booths other at the Sokol international airport is planned. The chilled fish transportation vessels, aquatic tour- road facilities. Traffic capacity is 4,000 vehicles per terminal will be at least 20,000 square meters ism boats, aquatic monitoring boats and pleasure hour. Construction starts in 2017. The investment and be able to handle up to 600 passengers per catamarans. Primary sales markets: Russia, China, stage per the concession agreement is 3.5 years. hour. South Korea.

28 AUGUST 2017 PROJECTS

MODERNIZATION AND RECONSTRUCTION OF THE USSURIYSK CARDBOARD MILL

INITIATOR: Ussuriysky Industrial REGION: Primorsky Krai Park LLC AMOUNT OF INVESTMENT: INDUSTRY: Pulp and paper pro- 2.7 billion rubles duction EQUITY CAPITAL: 700 million rubles PHASE: Purchase INVESTED: 600 million rubles of equipment CAPITAL REQUIRED: 2 billion rubles

PROJECT DESCRIPTION: The project provides for gradual modernization of existing cardboard and paper production, corrugated packaging production, development of new production fa- cilities, equipment replacement, maintenance and repair measures, creation of new high-tech jobs. The project is also intended to expand the production scale and improve the quality of paper products in order to meet the needs of the fish- ing and fish processing industry, agriculture and other industries in high-quality corrugated packaging for the purposes of import substitution within a number of state and regional fishery development programs. The project is aimed at forest resource conservation and environmental protection.

CONSTRUCTION OF A HIGH- VERTICALLY INTEGRAT- INDUSTRIAL TECH PLANT FOR PRODUC- ED POULTRY COMPLEX IN PARK ING ANIMAL FEED KHABAROVSK KRAI IN KHABAROVSK INITIATOR: ARNIKA LLC INITIATOR: Khabarovsk Grain Mill JSC INITIATOR: Khabarovsk Building Ceramic INDUSTRY: Agriculture INDUSTRY: Agriculture Plant LLC PHASE: Purchase of equipment PHASE: Design and survey work INDUSTRY: Production REGION: Primorsky Krai REGION: Khabarovsk Krai PHASE: Commissioned (in commission pro- AMOUNT OF INVESTMENT: 4.4 billion AMOUNT OF INVESTMENT: 5.3 billion cess) rubles rubles REGION: Khabarovsk Krai EQUITY CAPITAL: 680 million rubles EQUITY CAPITAL: 1.42 billion rubles INVESTMENT VOLUME: 1.8 billion rubles INVESTED: 300 million rubles INVESTED: 1.02 billion rubles EQUITY CAPITAL: 1.5 billion rubles CAPITAL REQUIRED: 3.72 billion rubles CAPITAL REQUIRED: 3.88 billion rubles INVESTED: 1.5 billion rubles PROJECT DESCRIPTION: PROJECT DESCRIPTION: CAPITAL REQUIRED: 300 million rubles The project involves creation of a high-tech, re- The project provides for gradual production PROJECT DESCRIPTION: source-efficient and environmentally safe plant to capacity development: in the first phase, KhZSK Industrial Park is based on an existing ceramic provide fodder products (biotech fodder protein, ami- 10,200 tons of live-weight turkey; in the sec- brick plant. On August 30, 2016, it was officially des- no acids, vitamins, enzymes and enzyme-based prod- ond phase, 13,700 tons of live-weight turkey. ignated as an industrial park. The key participants in ucts) in the Nadezhdinskaya ASEZ of Primorsky Krai. Production volume will be 11,300 tons of the project are the management company, which is The main goals are import substitution in the fodder finished products per year (fresh meat, meat also the project investor. The industrial park anchor industry and supplying the cattle-breeding industry in semi-finished products). Project time frame: residents are Teploeffektivny Blok LLC (concrete wall Russia and the Asia-Pacific countries with biologically 2016–2020. The strategic partner is M.A.D. material production), Dalenergogaz LLC (construction valuable raw materials for producing feed that is not Developing Agricultural Projects Ltd. 2003 (an of gas compressor stations for bus refueling) and made in Russia. Project time frame: 2016–2020. Israeli company) RBU-DV LLC (concrete production).

29 EASTERN RUSSIA ECONOMIC AGENDA

TOURISM AND RECREATION CRAFT BREWERY CLUSTER SEVERNAYA MOZAIKA CONSTRUCTION

INITIATOR: The Ministry of AMOUNT OF INVESTMENT: INITIATOR: Russky Produkt AMOUNT OF INVESTMENT: Investment Development 1.1 billion rubles LLC (Rusprod) 19 million rubles and Entrepreneurship of the EQUITY CAPITAL: INDUSTRY: Food production EQUITY CAPITAL: Republic of Sakha (Yakutia). 0 billion rubles including 70 million rubles INDUSTRY: Tourism INVESTED: beverages and tobacco INVESTED: PHASE: Construction and in- 600 million rubles PHASE: Design and surveying 60 million rubles stallation work CAPITAL REQUIRED: work CAPITAL REQUIRED: REGION: Republic of Sakha 300 million rubles REGION: Jewish Autonomous 120 million rubles (Yakutia). Oblast

PROJECT DESCRIPTION: PROJECT DESCRIPTION: The project is meant to establish a tourism base to provide for sustain- Construction of an automated plant to produce 7.2 million liters of beer able tourism development in the Republic of Sakha (Yakutia) founded on per year in the . Main annual production figures: the natural, climatic, ethnographic and cultural features of circumpolar light beer, 6 million liters; dark beer, 1.2 million liters. Residents of the Far civilizations. The project will make it possible to provide tourist services East (20%) and China (80%) will be the main consumers. The project site to 150,000 people per year (145,000 Russian tourists and 5,000 foreign measures 1 hectare. A 3,800-square-meter building has already been built tourists). and acquired.

CONSTRUCTION CONSTRUCTION GINSENG OF A YEAR-ROUND OF POKROVSKY GROWING AND GREENHOUSE AGROINDUSTRIAL PARK PRODUCTION COMPLEX INITIATOR: Republic of Sakha (Yakutia) INITIATOR: Formula Rosta LLC IN MAGADAN Development Corporation JSC, Municipal INDUSTRY: Other industries District Khangalassky Ulus PHASE: Design and survey work INITIATOR: Agro Invest Greenhouse Com- INDUSTRY: Agriculture REGION: Jewish Autonomous Oblast plex LLC PHASE: Business plan development AMOUNT OF INVESTMENT: 1.384 billion INDUSTRY: Agriculture REGION: Republic of Sakha (Yakutia) rubles PHASE: Design and survey work AMOUNT OF INVESTMENT: 1.236 billion EQUITY CAPITAL: 416 million rubles REGION: Magadan Oblast rubles INVESTED: 0 billion rubles AMOUNT OF INVESTMENT: 1.77 billion EQUITY CAPITAL: 200 million rubles CAPITAL REQUIRED: 968 million rubles rubles INVESTED: 0 billion rubles PROJECT DESCRIPTION: EQUITY CAPITAL: 430 million rubles CAPITAL REQUIRED: 1.036 billion rubles The project involves construction of a plant for INVESTED: 15 million rubles PROJECT DESCRIPTION: processing, packaging and storing ginseng roots, CAPITAL REQUIRED: 1.33 billion rubles The project involves construction of Pokrovsky as well as a laboratory and an office. Main annu- PROJECT DESCRIPTION: Agroindustrial Park. The first stage is construction al production figures: common ginseng, 157 tons; The project involves construction of a 5-hectare of a year-round greenhouse complex with a total western ginseng, 41 tons. Ginseng roots will be greenhouse complex in Magadan. Fresh toma- area of 2 hectares. The second stage includes con- cultivated and processed on a plot measuring 168 toes, cucumbers and greens are to be cultivated in struction of a vegetable storehouse, a wholesale hectares. The project start is scheduled for July greenhouses-year round. Output is estimated to be logistical center and a trout pond complex. The 2017. Harvesting and processing of the first crop is 3,250 tons per year. total area of the site is 309 hectares. planned for 2021.

30 AUGUST 2017 PROJECTS

CONSTRUCTION OF A MARITIME REFRIGER- ESTABLISHMENT OF AN ADVANCED TIMBER ATION TERMINAL IN KAMCHATKA PROCESSING CENTER IN KHABAROVSK KRAI INITIATOR: AMOUNT OF INVESTMENT: INITIATOR: AMOUNT OF INVESTMENT: Terminal Seroglazka LLC 876 million rubles RFP Group 12 billion rubles INDUSTRY: Transport and lo- EQUITY CAPITAL: INDUSTRY: Forestry EQUITY CAPITAL: gistics 599 million rubles PHASE: Commissioned (in 10.5 billion rubles PHASE: Construction and in- INVESTED: commission process) INVESTED: 10 billion rubles stallation work 17 million rubles REGION: Khabarovsk CAPITAL REQUIRED: REGION: Kamchatka CAPITAL REQUIRED: Krai 1.5 billion rubles Krai 277 million rubles PROJECT DESCRIPTION: PROJECT DESCRIPTION: The project also involves construction of: a plant producing rota- The project will cover comprehensive maintenance and service of fishing ves- ry-cut larch veneer with a capacity of 300,000 m3/year, a plant for pro- sels, including ship repair, supplying and outfitting vessels for fishing voyages, ducing sawed spruce and fir lumber with a capacity of 240,0003 m /year, mooring, bunkering with water and fuel, dispatching, loading and unloading. and a plant for producing wood pellets with a capacity of 100 thou- It also includes: construction of a modern marine refrigeration terminal with sand tons per year. The main processing facilities are on a 200-hect- a capacity of at least 300,000 tons of finished fish products per year; logistics are site in Amursk. The products are widely used in production of var- services to companies for sending finished products to Russian and foreign ious types of plywood, bases for flooring and glued structural beams, markets; decreasing the cost of product delivery to the Russian market due to and they are intended for export to Asia-Pacific countries (Japan, China, development of the Northern Sea Route. South Korea) and European countries and also for the domestic market.

CONSTRUCTION OF A FISH CONSTRUCTION ESTABLISHMENT PROCESSING COMPLEX OF A FISH PROCESSING OF A FISHING STOCK EX- FACTORY CHANGE IN SAKHALIN INITIATOR: Kamchattralflot LLC INDUSTRY: Fishing INITIATOR: RPZ Maksimovsky LLC INITIATOR:Yuzhny Terminal LLC PHASE: Design and survey work INDUSTRY: Fishing INDUSTRY: Transport and logistics REGION: Kamchatka Krai PHASE: Design and survey work PHASE: Design and survey work AMOUNT OF INVESTMENT: 1.4 billion rubles REGION: Kamchatka Krai REGION: Sakhalin Oblast EQUITY CAPITAL: 0.4 billion rubles AMOUNT OF INVESTMENT: 1.088 billion AMOUNT OF INVESTMENT: 998 million INVESTED: 300 million rubles rubles rubles CAPITAL REQUIRED: 900 million rubles EQUITY CAPITAL: 391 million rubles EQUITY CAPITAL: 100 million rubles PROJECT DESCRIPTION: INVESTED: 171 million rubles INVESTED: 14 million rubles Kamchattralflot is building a facility for thorough CAPITAL REQUIRED: 917 million rubles CAPITAL REQUIRED: 898 million rubles processing of sea products in the Kamchatka PROJECT DESCRIPTION: PROJECT DESCRIPTION: ASEZ. The business will have an output capabil- The project involves construction of a fish The project calls for creation of an integrated ity of 25,000 tons of products per year. The proj- processing factory in the village of Ivashka, fish logistics-processing complex through- up ect involves the processing and preservation of in the Karaginsky district of Kamchatka Krai. grades to existing port infrastructure. The main sea products to meet the needs of the population. The plant's capacity is expected to be up to goal is to create the conditions for developing The production launch is scheduled for December 175 tons of finished products per day. Some a new method of organizing trading relations 2021. In furtherance of the project, shops for land- examples of products: frozen salmon products, using a "fishing stock exchange." Demonstration based fish processing and rapid deep processing of frozen slice-in vacuum sealing, frozen salmon areas for products, logistics services (storage and raw materials as well as a shop for production of caviar, minced salmon. The investment phase handling of goods), auctions and fish processing high-quality fish products will be constructed. ends in Q2 2019. are planned.

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CONSTRUCTION MODERNIZATION OF A CERAMIC BRICKS AND OF WATER TREATMENT THERMOBLOCK FACTORY FACILITIES IN YAKUTSK INITIATOR: Smidovichsky Brick AMOUNT OF INVESTMENT: INITIATOR: Vodokanal JSC AMOUNT OF INVESTMENT: Factory LLC (SKZ LLC) 1.818 billion rubles INDUSTRY: Water supply and 5.12 billion rubles INDUSTRY: Manufacturing EQUITY CAPITAL: sewerage, waste treatment EQUITY CAPITAL: PHASE: Design and surveying 18 million rubles PHASE: Construction and in- 200 million rubles work INVESTED: 18 million rubles stallation work INVESTED: 2.28 billion REGION: Jewish Autonomous CAPITAL REQUIRED: REGION: Republic of Sakha CAPITAL REQUIRED: Oblast 1.8 billion rubles (Yakutia) 2.84 billion rubles

PROJECT DESCRIPTION: PROJECT DESCRIPTION: Construction of an automated ceramic brick and thermoblock factory will The project is designed to improve the quality and reliability of the drinking provide durable and affordable eco-friendly facing bricks and porous water supply in the city and nearby villages; to ensure reliability of the blocks for construction in the Far East. The capacity of the plant as de- water supply engineering systems; to eliminate drinking water shortages in signed is 30 million bricks and thermoblocks per year. The project will Yakutsk; to improve water quality in the Lena River, which is the source of help address the challenges of homebuilding in the regions of the Far locals' drinking water, by treating wastewater; and to contribute to overall Eastern Federal District. environmental recovery in the region.

DEVELOPMENT OF THE JEWELRY AND DIA- DEVELOPMENT OF KHA- RUDNY KONDYOR PLATI- MOND-CUTTING CLUSTER KANDZHINSKOYE GOLD AND NUM DEPOSIT IN THE KANGALASSY ASEZ SILVER MINE INITIATOR: Artel Starateley Amur JSC INITIATOR: SAYBM LLC INITIATOR: Khakandzhinskoye LLC INDUSTRY: Mining INDUSTRY: Manufacturing INDUSTRY: Mineral (excluding fossil fuels) PHASE: Design and survey work PHASE: Design and survey work extraction REGION: Khabarovsk Krai REGION: Republic of Sakha (Yakutia) PHASE: Commissioned (in commission process) AMOUNT OF INVESTMENT: 1.4 billion AMOUNT OF INVESTMENT: 660 million REGION: Khabarovsk Krai rubles rubles AMOUNT OF INVESTMENT: 1.15 billion EQUITY CAPITAL: 0 billion rubles EQUITY CAPITAL: 160 million rubles rubles INVESTED: 660 million rubles INVESTED: 60 million rubles EQUITY CAPITAL: 0 billion rubles CAPITAL REQUIRED: 740 million rubles CAPITAL REQUIRED: 500 million rubles INVESTED: 650 million rubles PROJECT DESCRIPTION: PROJECT DESCRIPTION: CAPITAL REQUIRED: 500 million rubles The project is aimed at sustaining and expand- The jewelry and diamond-cutting cluster is a shared PROJECT DESCRIPTION: ing platinum production in the northern part of knowledge center that provides access to modern The company holds a license to develop the Kha- Khabarovsk Krai by using the hard-rock source of equipment for residents of the cluster. The company kandzhinskoye deposit in the Okhotsky district of a major alluvial platinum deposit. The first phase managing the cluster will provide analytical, organi- Khabarovsk Krai. Total balance resources of the involves exploration. Two platinum deposits will zational and consulting services; arrange and ensure deposit for underground mining amount to 8.7 be opened as a result. The second phase involves continuous sales of finished products; offer services tons of gold equivalent. The explored resources preparation of a seasonal pilot-industrial area for on relationship management; and represent the of gold-silver ore are 800,000 tons. At present, be- developing free-milling platinum ores with a first- interests of the cluster before regulatory and other tween 9,000 and 9,500 tons of ore is mined per line capacity of at least 600,000 tons of ore per year. agencies. month. The payback period is 4 years.

32 AUGUST 2017 PROJECTS

CONSTRUCTION LOGISTICS COMPLEX OF A LIQUEFIED NATURAL WITH A BORDER I GAS MINI PLANT NSPECTION POST INITIATOR: PSK AMOUNT OF INVESTMENT: INITIATOR: AMOUNT OF INVESTMENT: Sakhalin LLC 824 million rubles Most OJSC 7.823 billion rubles INDUSTRY: Production, EQUITY CAPITAL: INDUSTRY: Transport and lo- EQUITY CAPITAL: energy 123 billion rubles gistics 0 billion rubles PHASE: Construction and instal- INVESTED: 644 million rubles PHASE: Business plan devel- INVESTED: 0 billion rubles lation work CAPITAL REQUIRED: opment CAPITAL REQUIRED: REGION: Sakhalin Oblast 18 million rubles REGION: Amur Oblast 7.823 billion rubles

PROJECT DESCRIPTION: PROJECT DESCRIPTION: The project involves construction of an LNG mini plant with a capacity Construction of the largest multimodal transport and logistics complex in of 1.5 t/h and related infrastructure, as well as construction of an auto- the Far East will ensure creation of a new Amur 1 international transport motive fuel compressor station. The plant's consumers will be munici- corridor, which is primarily needed to transport cargo. This will be a mod- pal boiler stations and municipal vehicles that transport passengers on ern combination transportation-logistics complex on the Russian-Chinese urban and intercity routes and operate road and other special-purpose border. A construction agreement is scheduled to be signed in September at equipment. the Eastern Economic Forum.

COAL EXTRACTION IN THE DEVELOPMENT YUZHNAYA YAKUTIA ASEZ OF THE PYRKAKAYSKIYE SHTOKVERKI TIN DEPOSIT INITIATOR: UK Kolmar LLC INDUSTRY: Extraction INITIATOR: NPO Chukotka Development TELEKAYSKOYE OIL PHASE: Construction and installation work Fund JSC AND GAS DEPOSIT REGION: Republic of Sakha (Yakutia) INDUSTRY: Mineral (excluding fossil fuels) AMOUNT OF INVESTMENT: 32.4 billion ru- extraction DEVELOPMENT bles PHASE: Business plan development INITIATOR: Chukotneft LLC EQUITY CAPITAL: 13.7 billion rubles REGION: Chukotka Autonomous Okrug INDUSTRY: Fossil fuels extraction INVESTED: 142 billion rubles AMOUNT OF INVESTMENT: 17 billion rubles PHASE: Business plan development CAPITAL REQUIRED: 18.2 billion rubles EQUITY CAPITAL: 0 billion rubles REGION: Chukotka Autonomous Okrug PROJECT DESCRIPTION: INVESTED: 0 billion rubles AMOUNT OF INVESTMENT: 400 million Kolmar Group is implementing a project that rep- CAPITAL REQUIRED: 17 billion rubles EQUITY CAPITAL: 0 billion rubles resents the entire business chain of high-quality PROJECT DESCRIPTION: INVESTED: 0 rubles. coking coal production, coking coal enrichment Investors are being sought for a project to de- CAPITAL REQUIRED: 0.4 billion rubles using state-of-the-art solutions; transportation to velop the Pyrkakayskiye Shtokverki tin deposit PROJECT DESCRIPTION: its port in the Far East; and sales. The businesses and build a mining and processing plant. De- The site is in the Anadyrsky district of the Chukot- of the Kolmar Group are in the Yuzhnaya Yaku- posit reserves are estimated at about 350,000 ka Autonomous Okrug. The license area is 4,071 tia ASEZ. The company's stock balance exceeds 1 tons. Pyrkakaysky tin site is a part of Kuyvivee- square meters. Investment term: 2017–2025. billion tons, most of which is made up of scarce mo-Pyrkakaysky tin district on the eastern coast Phased development: exploration and geological grades of top-quality quality coking coal. In 2016, of the Chaunskaya Bay that covers an area of activities, construction of deposit facilities, oil Kolmar produced nearly 3.7 million tons of coal. 4,000–5,000 km². pipeline, an oil refinery and a tank farm.

33 EASTERN RUSSIA ECONOMIC AGENDA INVESTOR SERVICES IN THE FAR EAST

Leonid Petukhov, CEO of Far East Investment and Export Agency: «Our Agency has been active for a lit- tle more than a year. It is, essentially, the single point of contact for all investors who are already working in the Far East of Russia or just planning to do so. The macroregion is changing rapidly, 1 MARKET ANALYTICS 5 LOOKING FOR PARTNERS becoming one of new economic centers AND MARKETING IN THE FAR EAST of Russia, and our task is to promote the changes, knowing that every investment Assessment of size and dynamics of a tar- Making a choice — together with an inves- project implemented means new manu- get market in Russia, Far Eastern Federal Dis- tor — of target potential partners for a project, factures, new jobs, new infrastructure and, trict, Asia-Pacific countries and countries out- taking into account its technological, market- consequently, new quality of life for every side the former Soviet Union. ing, logistical and other requirements. resident of the Far East. Competitive landscape analysis for chosen Detailed project business model and presen- We have analyzed investment poten- market niches today and in the long term. tation materials, taking into account what chosen tial of every Far East region and have per- business partners could bring to the project. fect understanding of what kind of inves- tors we would be able to attract and to 2 SELECTION AND 6 ADVICE what industries. The fact that such world PREPARATION OF ON ANY MATTER renowned companies as Tata Power, TR PROJECTS ON DEMAND True Milk, RFP, Rusagro and many more Support for large projects by dedicated in- show growing interest in the Far East of Selection, assessment and prioritization of vestment directors and the use of CRM-system. Russia proves that that is the right way investment ideas portfolio in any region and Development of investors feedback chan- to go. for any industry. nels — «hotline», online member area for an Among our tasks there is not only at- Set-up of an investment ideas portfolio investment project. traction of investors, but also all-round according to a strategy of a particular investor. support for their projects on all stages of implementation. With that purpose in 3 SELECTION OF STATE 7 PROMOTION OF EXPORT mind we developed and launched the first SUPPORT MEASURES OF PRODUCTS TO ASIA- system in Russia of project support in the PACIFIC Far East of the country, which was noted Selection, together with the investor, of state Analysis of barriers for FEFD products ex- by the President of Russia Vladimir Putin support measures necessary for the project. port to Asia-Pacific countries and formulation during his visit to Amur Region. Calculation of financial and economic pa- of necessary suggestions for intergovernmen- The system allows for resolving inves- rameters of state investments and project’s tal discussion and engagement. tors issues online. 448 investment proj- expected contribution to the development of Support during the application process for ects by residents of Advanced Special Eco- Far Eastern Federal District (FEFD) measures of state support for export. nomic Zones and Free Port of Vladivostok have already been entered into the sys- 8 SUPPORT DURING THE tem, as well as 14 projects which get Fed- 4 FINANCING APPLICATION PROCESS FOR eral subsidy for construction of external THE STATUS OF RESIDENT infrastructure. The round the clock «ho- Detailed business plan of the project and tline» is also available for investors to ask preparation of funding rationale for financing OF ASEZ OR FREE PORT OF questions and get an advice quickly». for investors and lending banks. VLADIVOSTOK Projects promotion to potential investors Development and update of a «potential res- and lending banks using intergovernmental ident road map», including examples of necessary cooperation mechanisms, including invest- documentation and key contacts for an investor. ment platforms, industry and business forums Step by step support for a large invest- and direct contacts. ment project by dedicated investment director. Advice for potential residents concerning the road map.

34 AUGUST 2017 EVENTSSERVICES TOFAREAST.COM: NEW OPENING Integrated Far East Service and Information website is being set up.

The primary goal of the portal is to col- lect reliable information about the Russian Far East and possibilities there and to pres- ent it in a user-friendly way. Perhaps the principal multimedia project of the Ministry for the Development of the Russian Far East will come online in Septem- ber, dedicated to promotion of exports and attraction of investments — integrated Far East Service and Information portal. All the information — news, reference and services — about the FEFD regions, presented in a us- er-friendly way, would be available in one place for the first time. The website, which would be available land plot to develop standable for the visitors. starting September at tofareast.com, resem- or cultivate, or for So, for entrepreneurs and bling a construction set, would have a number information about Reliable investors it would the lan- of topical sections: «News», «Reference Infor- the benefits. All that guage of numbers, analyt- mation», «Possibilities», «Services», «Far East- information would information ic reports and legislation. ern Hectare» and other. Inside the sections be available on that on the Far For tourists and those who there would be selected and verified informa- universal website, — want to learn more about tion pertaining to the relevant topic. said the project East would be the eastern part of the — The task for our team is to create not manager Alexander country — the language of just a portal, but a handy, practical tool for Okhrimenko. presented on the travel articles and imag- those who would want to know more about According to the website in a user- es, taiga trails and islands the Far East: for businessmen interested in project team mem- in the sea. For compatri- investment opportunities, for tourists con- bers, the information friendly way ots wishing to make use sidering the Far East regions as a holiday on the portal would of possibilities available destination, for people looking for a job or a be easily under- in the Far East — the lan- guage of news and suggestions, university ed- ucational programs, job adverts and manuals More than a 1 000 mass media are More than 100 support measures are for all occasions, from starting own business to registered in the Far East. More than a available for those who would like applying for the «Far East Hectare». 1 000 news items daily. to move to the Far East. More than We aim to speak everyone’s language, — 35 support measures available for added Alexander Okhrimenko. tofareast.com: 25-50 news items selected daily, those who would like to cultivate The finishing touches are being applied covering all the important topics of the day in «Far East» hectare. More than a 100 to the project. The site would be coming on- the Far East. various business support measures line in stages. News and service information available. would be available on the first stage. Devel- More than 30 services are provided by opers are going to collect feedback from ref- institutes of development of the Far East. tofareast.com: All available support measures erent groups for several months and then and reference information would be presented as to update technical and graphical solutions, tofareast.com: All the services would be available interactive guides with a set of filters. taking also expert opinions into account. on the single site.

35 EASTERN RUSSIA ECONOMIC AGENDA

CONTACTS

MINISTRY FOR DEVELOPMENT OF THE RUSSIAN FAR EAST МИНИСТЕРСТВО РОССИЙСКОЙ ФЕДЕРАЦИИ ПО РАЗВИТИЮ ДАЛЬНЕГО ВОСТОКА +7 (495) 531-06-45 [email protected] www.minvr.ru

FAR EAST INVESTMENT AND EXPORT AGENCY АГЕНТСТВО ДАЛЬНЕГО ВОСТОКА ПО ПРИВЛЕЧЕНИЮ ИНВЕСТИЦИЙ И ПОДДЕРЖКЕ ЭКСПОРТА +7 (495) 540 41-63 [email protected] www.investvostok.ru

CORPORATION FOR DEVELOPMENT OF THE RUSSIAN FAR EAST КОРПОРАЦИЯ РАЗВИТИЯ ДАЛЬНЕГО ВОСТОКА +7 (800) 707-55-58 [email protected] www.erdc.ru

AGENCY FOR THE DEVELOPMENT OF HUMAN CAPITAL IN THE FAR EAST АГЕНТСТВО ПО РАЗВИТИЮ ЧЕЛОВЕЧЕСКОГО КАПИТАЛА НА ДАЛЬНЕМ ВОСТОКЕ +7 (495) 123-47-27 [email protected] www.hcfe.ru

Official Bulletin of the Ministry for development of the Russian Far East. This document was prepared by The Far East Investment and Export Agency, an autonomous non-commercial organization. All published information is relevant as of August 24, 2017. Distributed by email subscription. When using materials, reference to the source is required. Published photos provided by: TASS, ROSCONGRESS, administrations of subjects of the far Eastern Federal district, Kremlin.ru, Shutterstock.

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