Tatarstan Is Still Feeling the Energy from the Spectacular Celebra- 4 Tion of Kazan’S Milennium Anniversary in 2005: Investment Is at Record Highs

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Tatarstan Is Still Feeling the Energy from the Spectacular Celebra- 4 Tion of Kazan’S Milennium Anniversary in 2005: Investment Is at Record Highs Community leaderS Tatarstan is still feeling the energy from the spectacular celebra- 4 tion of Kazan’s Milennium Anniversary in 2005: investment is at record highs. TATARSTAN in foCuS Tatarstan is one of the richest and most economically developed 9 regions in the RF. It’s second in economic development after Mos- cow. GRP in 2007 was a robust $30bn. modern teChnologieS Although technology transfer centers are in their infancy, there 13 is very aggressive funding by both the government and private sector – now approaching $500m. natural reSourCeS For more than 1000 years Tatarstan has been building on its rich legacy The critical issue for Tatarstan is what to do when its black gold as one of the world’s great mercantile 21 runs out. Companies are responding not only by searching for centers. With such dazzling architec- new fields, but on more efficiency and value-added operations. ture, natural beauty and legendary history it’s easy to forget that Tatar- induStry stan has always been an engine of op- portunity. Tatarstan’s GRP increased by more than 10% last year, with in- 25 vestment in fixed assets reaching $6bn. Now the plan is to double Fueled by its tremendous oil, petro- GRP by 2010 – without increasing oil production. chemical and automotive industries, you’ll read how the region is using its black gold to develop sustainable, tranSport and logiStiCS long-term strategies to keep its econo- Geographically, Tatarstan is right where the action is – in the my diverse and vibrant. 35 middle of the European part of Russia. But infrastructure needs Although manufacturing reigns su- massive investment. Regional officials are racing to catch up. preme here, there’s world-class inno- vation going on too. This issue is filled with company profiles about pioneer- MARCHMONT INVESTMENT GUIDE TO RUSSIA. ing firms developing everything from February – March, 2008 Republic of Tatarstan/ Kazan parachutes that save the plane as well Published by MARCHMONT Capital Partners,LLC 5 / 6, Teatralnaya Square, Nizhny Novgorod, 603005 Russia as the passengers, Russia’s first biofu- Registered by Federal Service for Monitoring Law Observance In Mass Media and Safeguarding Cultural Heri- el plant to patented technology that tage, Russian Federation reclaims chemical by-products worth Certificate ПИ # ФС77-26183 issued November 16, 2007 $73/kilo. Authorized for printing March 20, 2008 Order #194 Circulation 8,500 Business stories like these are what Printed by RIDO printing house, 2a, Shalyapin Street, Nizhny Novgorod, 603074 Russia makes Marchmont’s Investment Guide Publisher Kendrick White, Managing Principal, Marchmont Capital Partners, LLC so exciting to create and I hope, to Managing Editor Robert Aronson Kazan Editor Alla Sharapova Senior Journalist Alexander Blagov Journalist read. I look forward to hearing your Larisa Levanova Analysis Tatyana Shilova, Alexandra Starikova & Anna Balashova Design & Color Correction comments. Maria Kovalenko Distribution Elena Ilyichyova, Kseniya Puchnina Database Manager Olga Yanina Advertising Elena Dovgal, Stanislav Zanozin & Olga Shayakova Conference Manager Lubov Ivanova Advertising Designer Sincerely, Alexey Udalov Financial and Administrative Director Ekaterina Makhalina Assistant to the Publisher Elena Kendrick D. White Voitenko Secretary Svetlana Varnosova HR Manager Natalya Lebedeva HR Specialist Olga Samygina Chief Accountant Svetlana Shuvalova Assistant Accountant Elena Vyalova IT Manager Mikhail Kulikov Programmer Alexander Belyavsky Translation Manager Dmitry Babushkin Translation Editors Alexander Galkin, Olga Laricheva & Valentina Molotovschikova Photography Vadim Shimanov, Sergey Krasikov, Philip de Leon, cover photo Pavel Korchagin (photo bank of Tatneft) Proofreading David Coghill Web Design Andrey Smirnov English Language Editor Andrew Croxall We extend our thanks to the following organizations for their contributions: Executive Committee of Kazan, Investment Venturing Fund of the Republic of Tatarstan, Chamber of Commerce of the Republic of Tatarstan, Technopark Idea, Tatar Center for Scientific & Technical Information, Tatneft, Laconix, Microsoft, Kazanorgsintez, Tatarstan Office of the Federal Agency for Special Economic Zone Management, KamAZ, Kazan Helicopter Factory, MVEN, Air company Tatarstan, StelsAviateh, Nefis, Agrosila Group, the Privolzhsky Office of Intalev Group of 2 Contents fmCg and retail diStribution The big news is biofuels and rape seed. A $650m proposal to cre- editorial staff / Kazan 39 ate the country’s first biofuel plant here is now on the table. Rape seed is joining soy as the wondercrop of the 21st century. finanCial inStitutionS & buSineSS ServiCeS Unlike many other regions, local banks in Tatarstan continue to 47 dominate the financial sector. robert aronson alla Sharapova managing editor editor ConStruCtion and real eState Kazan is undergoing radical transformation. It’s not just the 53 frenzy of commercial building going on, as in other Russian re- gions, it’s massive urban renewal. eduCation alexander blagov anna balashova Despite a growing number of university graduates, there are not senior journalist economist 65 enough qualified technical specialists and engineers. An innova- tive long term strategy to solve the problem is now in place. SpeCial foCuS: TOURISm Tatarstan and Kazan are filled with glorious architecture. The 69 region has picturesque rivers, lakes and countryside. But lacking world-class transport, hotels and services, investors are wary. alexandra Starikova tatiana Shilova economist economist Companies, Millenium Zilant City, Antika, Suvar, Intercity, Tatar Academy of Management, Kazan State Financial Economic Institute. Editorial Headquarters 5/6, Teatralnaya Square, Nizhny Novgorod, 603005 Russia Phone: +7 (831) 419-4565, Fax: +7 (831) 419-5011, E-mail: [email protected], web sites: www.marchmont.ru, www.marchmontcapital.com Subscriptions please fill out the request form on our web site www.marchmontcapital.com or contact Olga Yanina at +7 (831) 419-4565 Publication and Website Advertising contact Elena Dovgal or Stanislav Zanozin at +7 (831) 419-4565 The primary sources of information used for this publication were: website of the government of the Republic of Tatarstan, official site of Tatarstan, official site of Kazan's Mayor's Office, Program of Social and Economic alena Kostyk olga pokrovskaya Development of the Tatarstan Republic for 2005 – 2010, materials of the area body of Federal Service for State analyst, FiBr (Tomsk) analyst, FiBr (Tomsk) Statistics, www.standardandpoors.ru, www.fitshrating.ru, www.moodys.com, Program on Increasing Investment Attractiveness of Tatarstan for 2007 – 2010, materials of Advisory Council for Foreign Investment in the Republic of Tatarstan, Republican Program of Developing Innovative Activity in the Republic of Tatarstan for 2004 – 2010, Program of Developing Prioritized Sectors of Science for 2004 – 2010, materials for the report of Minister of Education and Science of Tatarstan at the republican forum Modernizing Higher Education in Tatarstan: problems and prospects, www.troika.ru, www.ivfrt.ru, www.mcrt.ru. The view and opinions expressed in this publication by invited authors and experts do not necessarily reflect the opinions of the publisher. While every effort has been made to avoid any errors, the publisher is not responsible and cannot accept liability for any errors, however caused, in this publication © MARCHMONT Capital Partners, LLC All copyright reserved. Reproduction of this journal or any part of it, in whatever medium, is only granted provided a clear attribution to Marchmont Capital Partners LLC is featured visibly with it. Marchmont Capital Partners LLC is maria Kovalenko larisa levanova not responsible for the content of advertisements inside this journal. All advertised goods and services are certified designer journalist Total circulation 18,500 copies (8,500 English copies & 10,000 Russian copies) No fixed price Marchmont Investment Guide / February – March, 2008 3 Dear readers! I’m glad to welcome you on behalf of the hospitable residents of Kazan, the capital of Republic of Tatarstan, which recently celebrated its 1000th anniversary! Historically formed at the junction of two cultures Kazan became a place where Europe and Asia meet. There are architectural and cultural monuments from the ancient Bulgarian, Golden Horde, Khan, Russian and Soviet periods here. Around one million tourists visit Kazan every year. The larg‑ est mosque in Europe and an orthodox cathedral are located side by side inside the Kazan Krem‑ lin. Kazan is home to a Christian shrine worshipped by pilgrims all over the world – the icon of Our Lady of Kazan, also called Theotokos of Kazan, which was returned from the Vatican to Russia by Pope John Paul. To receive these pilgrims and tourists from all over the world an International Pil‑ grim Center is being developed. In 2005 Kazan celebrated its 1,000‑year‑old anniversary. The capital of Tatarstan is a member of seven international organizations: UN, UNESCO, Council of Europe, United Cities and Local Gov‑ ernments, Organization of World Heritage Cities and others. A unique historical monument, the Ka‑ zan Kremlin, is included on the UNESCO list of World Heritage sites. The city is famous for its universities: 37 higher education establishments with more than 150,000 Ilsur Metshin, Mayor of Kazan students. Kazan State University is 200 years old – it is the oldest in Russia. Kazan also has a well developed sport infrastructure: the Tatneft‑Arena
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