Rostov Region
Total Page:16
File Type:pdf, Size:1020Kb
From the publisher Dear colleagues! As the Managing Principal of MARCHMONT Capital Partners I am pleased to welcome you to our latest edition of Marchmont’s Investment Guide to Russia, focusing on the Rostov region. So much has been written about this fabled land of Dons and Cossacks, but very lit- tle about the growing business expertise and investment potential of its many industri- al enterprises. Our latest issue profiles the tremendous energy here – what Rostov means for the re- gion, for Russia and for the world. You’ll read about the explosive growth in coal mining, machine building, metallurgy and chemicals and how the region is harnessing the poten- tial of its waterways to increase both its domestic and export potential. Like the legendary Dons, Rostov is home to companies whose reputations both here and abroad are synonymous with quality and performance. Firms like Taganrog Automotive Works (TagAZ), which makes minibuses and is on track to produce more than 100,000 Kendrick D. White Hyundai vehicles each year; Krasny Kotelschik, whose high capacity generating equipment Managing Principal is exported to 22 countries worldwide, including EU countries, India and China – and Rost- MARCHMONT selmash, Russia’s leading manufacturer of agricultural machinery with 80 % of the Rus- Capital Partners, LLC sian market, and ranked as one of world’s top 5 producers of combine harvesters. Rich in minerals and raw materials, Rostov is being discovered by world-class players as the place to be to participate in its booming construction industry. You’ll read about how LaFarge, a world leader in cement production, is investing tens of millions in Ros- tov to take advantage of double digit demand and triple digit price increases due to the enormous shortage of locally produced cement. You’ll read about this and much, much more in this issue. Our goal is to give you in- formation found nowhere else about what’s really happening in Russia’s regions. Tell us what you think, what more you’d like to know. Our staff of economists and writers wants to hear from you. Next month the Marchmont team focuses on the Southern Urals and Chelyabinsk. If you are an investor or a business interested in the Chelyabinsk region, we hope you will join us for Marchmont’s first Regional Investment Conference, a two day event to be held in Chelyabinsk on Jan. 30 and 31! MARCHMONT Investment Guide to Russsia 2007, vol. 1, #4 3 CLICK HERE FOR MORE INFORMATION Marchmont’s comprehensive coverage of Russia’s regions, their economies and potential investment opportunities doesn’t end with the back page of this journal – we cover all of these topics and more on our bi-lingual website (www.marchmontcapi- tal.com), every day. We cover business and investment news on Russia, international investment trends and a growing number of Russian regions, every day, covering everything from international mergers to local construction projects. We work with different news providers who are on the ground in each region. Our goal is to become the site of choice for investment-re- lated news on Russian regions, covering key regional capitals, every day and in two lan- guages. We also publish all our journals online as well as in print, meaning you can access back is- sues and read them either in your browser or via downloadable PDF files. All our region- al and national sponsors are reflected on our site, and we have recently begun offering our partners the chance to be sector sponsors. Yet all of this represents just the tip of the ice- berg. We are currently working on implement- ing paid subscriber services whereby premi- um members will be able to not only read and download our journals but also search them, access sector-by-sector in-depth reviews writ- ten by our professional economists, and gen- erate custom reports which can be saved or distributed among colleagues. So for exam- ple if you wanted to see how prices for com- mercial real estate differed between cities in the European part of Russia and cities in Si- beria, or compare the number of freesheet newspapers in Rostov-na-Donu and Tomsk, this would take just a few clicks. Blogs written by our directors, economists and regional ed- itors, highlighting interesting stories or events at which they attend or speak, are also some- thing we are looking to begin. You’ll find us at www.marchmontcapital.com From the editorial team Guest editorial One of the great pleasures of living and working in Russia for the past 10 years has been the ability to travel to so many regions. Each has its own unique culture and personality. To me Rostov-on-Don and the Rostov region are quintessential Russia, a rich mix of contrasts and textures. Seeing endless fields of sunflowers with their faces lifted to follow the sun, explor- ing the fascinating excavations at Tanais (and then enjoying the best roadside shashlik I ever had on the drive back to the city) are indelible memories. It was clear when I first visited the region 5 years ago that good things were starting to happen in Rostov-on-Don. At South Federal University, Russia’s young best and brightest are learning how to partner with business to make innovation a reality. Take a look at what a global powerhouse Rost- selmash has become and it’s clear that with vision and top quality management, the Soviet legacy can be a launching pad for greatness. The hotbed of new sci-tech coming out of the region reminds me of Silicon Valley start-ups. Scientists, inventors and entrepreneurs here are starting to figure it all out. Their dreams are proof that cutting edge technology can be Robert Aronson anywhere people with talent are willing to put in the sweat-equity to realize their passion. As the region continues to attract more attention (this year foreign investment will top $4 billion here), one wonders why did it take so long? Like its marvelous fields of sunflowers, now is Rostov’s time to shine. Pots of gold The Rostov region is traditionally associated with sunflowers, combine harvesters, the book And Quiet Flows the Don and Cossacks. But all these associations are just the tip of the iceberg. They are interesting to foreigners only if they are fond of tourism. Foreign investors will not be surprised by the warm climate either. It’s a rather pleas- ant bonus. Rostov’s climate is similar to that of Toronto in Canada, which also benefits from this advantage. If we decide to focus solely on the financial aspect of this issue, then a mild climate means the opportunity to save heating energy, to have roads that can last longer as well as enjoy a good number of tourists visiting the region. But again everything depends on your point of view. For tour operators or restaurateurs the number of sunny days per year is more important than the cost of heating their homes or offices. Far-seeing investors are well aware of the fact that a good idea may generate a fabulous profit and lead to the creation of absolutely new kinds of business. One who is very good Olga Soldatenkova at looking at the facts and then forecasting future tendencies may find a pot of gold in a Regional Editor – Southern Russia place where others have passed it by. For example, if an investor plans to set up production MARCHMONT Capital Partners facilities in Russia he or she should know that Rostov regional authorities are interested in launching new factories in the region, that they have already allocated land lots and started financing the construction of engineering infrastructure here. Having this infor- mation at hand the next step could include analysis of the regional labor market to make sure that there are all the necessary resources needed for new production processes. There are quite a few pots of gold in the Rostov region. For example, the region is a leader in producing oil-containing seeds which may be used both in the food industry and in the production of biofuels. A number of projects concerning the production of biofuels are already being launched in the region. In order to fully understand and forecast the region’s potential it is necessary to first analyze the current situation and complete the puzzle by assessing the region’s strengths and weaknesses. MARCHMONT offers you a helping hand in this quest. The Rostov Re- gion issue invites you for a trip around the rich south of Russia. MARCHMONT Investment Guide to Russsia 2007, vol. 1, #4 5 9 Community Leaders MARCHMONT INVESTMENT GUIDE TO RUSSIA Information and Analytical Journal, 2007, Vol. I # 4 Vladimir Chub, The Rostov Region Governor Regional Profile: Rostov-on-Don and the Rostov region Michael Chernishev, Rostov-on-Don Mayor Publisher MARCHMONT Capital Partners, LLC 5/6, Teatralnaya Square, Nizhny Novgorod, 603005 Russia Viktor Deryabkin, Minister of Economy, Trade, International and Foreign Relations Registered by Federal Service for Monitoring Law Observance Welcome to the Rostov Region In Mass Media and Safeguarding Cultural Heritage, Russian Federation Certificate ПИ # ФС77-27527 issued March 16, 2007 Viktor Sedov, Executive Director of the US-Russia Center for Entrepreneurship How to balance the sector interests of big businesses and fund start-up in- Authorized for printing on 03,12, 2007 Order # 636 Circulation 12,500 copies novation is the real challenge Printed in the RIDO printing house Anna Palagina, Deputy Minister of Economy, Trade and Foreign Relations of the 2a, Shalyapin Street, Nizhny Novgorod, 603074 Russia Rostov region Project Leader Mr Kendrick White, Managing Principal Small business is the engine that drives regional growth