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Bashkortostan May 2013 FINAL to PRESS.Indd 1 30/04/2013 17:21 Euromoney special report: Bashkortostan Published in conjunction with: The Republic of Bashkortostan May 2013 www.bashkortostan.ru Bashkortostan May 2013 FINAL TO PRESS.indd 1 30/04/2013 17:21 Contents Open for business An introduction by Rustem Khamitov, Contents President of the Republic of Bashkortostan 2 Macroeconomic focus: a positive performance 4 Interview: Alexander Maryin 5 Modernizing the oil industry 6 Building on success 8 A warm welcome for international visitors 10 Towards 2015 12 This guide is for the use of professionals only. It states the position of the market as at the time of going to press and is not a substitute for detailed local knowledge. Euromoney Trading Ltd Nestor House Playhouse Yard London EC4V 5EX Telephone: +44 20 7779 8888 Facsimile: +44 20 7779 8739 / 8345 Chairman: Richard Ensor Directors: Sir Patrick Sergeant, The Viscount Rothermere, Christopher Fordham (managing director), Neil Osborn, Dan Cohen, John Botts, Colin Jones, Diane Alfano, Jane Wilkinson, Martin Morgan, David Pritchard, Bashar Al-Rehany, Andrew Ballingall, Tristan Hillgarth Advertising production manager: Amy Poole Journalist: Lucy Fitzgeorge-Parker Cover image: Dina Aira Research guide associate publisher: Melissa Roache Printed in the United Kingdom by: Wyndeham Group © Euromoney Trading Ltd London 2013 Euromoney is registered as a trademark in the United States and the United Kingdom. Bashkortostan May 2013 FINAL TO PRESS.indd 1 30/04/2013 17:21 Open for business priority. In May, Ufa will host the third annual Bolshaya Khimiya (Big Chemistry) forum, an international event initiated by the government of the republic that brings together leaders in the field from Open for business both Russia and abroad. Meanwhile, regional corporate giants such as Bashneft, Gazprom Neftekhim Salavat and Bashkhim are already working on large-scale projects in the region and planning further investment. A wealth of natural resources, a strategic location and Over the next five to seven years, we advanced technological know-how make Bashkortostan expect the total volume of investment in the petrochemical sector to reach a natural venue for business $10 billion, with the emphasis on high value-added production. The republic An introduction by Rustem Khamitov, President of the itself produces 15 million tonnes of oil a year and we also have the connectivity Republic of Bashkortostan to import raw materials from the north of Russia and Kazakhstan for processing in Bashkortostan. The republic of Bashkortostan is one of and for the future. We are in the centre of We have all the necessary the most advanced industrial regions a major industrial zone that encompasses components for the development of a of the Russian Federation. We are in the the Volga and Ural regions, a territory that sophisticated petrochemical complex: top five of large Russian regions in terms is home to almost one-third of the Russian expertise, research and development of industrial output and agricultural population. It is a huge market with facilities, and specialist universities. We production. In spite of the effects of huge potential, and our well-developed have the capability to realize these global crisis, the republic has manifested infrastructure and accessibility give us a ambitions and, more importantly, we very positive dynamics of development. crucial competitive advantage. have the will to do so. The reason is that our economy is very Even during the Soviet era, Looking beyond petrochemicals, diversified. Inevitably, the predominant Bashkortostan was one of the core we are also working on leveraging our share of input belongs to oil extraction, oil industrial regions of Russia and the significant competence in machine processing and the wider petrochemical republic has for many years occupied a building and tool engineering. The sector, but other branches of the prominent position on the economic map republic is already home to leading economy are also operating efficiently. of the country. Our task is to build on this manufacturers of oil and gas servicing Machine building and tool engineering traditional strength, which has in the past equipment, helicopters, aircraft engines are developing, chemical companies and will in future ensure that Bashkortostan and passenger buses, and there is huge are advancing well and we are actively is able to maintain its economic stability scope for further investment in the sector. cooperating with large businesses even in the face of external turmoil. Bashkortostan’s natural resources also in copper and zinc extraction and What is more, new opportunities are extend well beyond its hydrocarbon processing. Even the agricultural sector is constantly arising. The new international and mineral wealth. The republic is one showing positive progress, despite adverse highway from Europe to western China of the top five agricultural producers in climatic conditions in recent years. will pass through Bashkortostan and our the Russian Federation and the national Our region is also characterized by a position midway between the two will leader in terms of milk production. very low debt burden and we are in the offer the potential to export our goods to Meanwhile, extensive and relatively top five Russian regions in terms of credit both east and west. Local businesses are undeveloped forest regions offer ratings from international agencies. We already working on projects to leverage significant potential for timber processing are keen to show that our republic is this advantage by exporting agricultural and associated industries. very stable, that it possesses sustainable and other products to China, and the Our beautiful landscapes are another development prospects, that we are new highway will also strengthen our valuable resource and we are actively open to businesses and that we support historic ties to Kazakhstan. encouraging the development of businesses that want to develop their Bashkortostan’s tourism industry. Reliable operations in Bashkortostan. Economic diversification snow cover and accessible slopes make The petrochemical industry is vital to the the republic a natural centre for downhill In pole position future of Bashkortostan but its potential skiing, and we are also looking to Bashkortostan’s location is a key factor in has not yet been fully realized, so promote the renewal and expansion of its industrial development, both historically development of this sector is our main our well-regarded spa and resort sector. 2 Bashkortostan May 2013 FINAL TO PRESS.indd 2 30/04/2013 17:21 Open for business Supporting investment All of these industries offer extensive scope for investment. Foreign and local investors are equally important for us and we are working to attract both. Clearly at present, however, external companies have the advantage in terms of efficiency, cost of production and quality of goods, which makes them key to our goal of modernizing Bashkortostan’s economy and achieving higher standards of living for our citizens. We have passed regional legislation that allows us to offer very significant benefits to investors, from tax breaks to Rustem Khamitov, assistance with documentation for new President of the Republic projects. These measures are rapidly of Bashkortostan establishing the republic’s image as a reliable partner, helped by our hands-on approach to dealing with investors. and municipal level. We are actively task, but one that is crucial to the In all cases, we do our best to meet promoting a culture of open-mindedness modernization of our economy. the needs of investors coming to towards and positive engagement with Another top priority for the government Bashkortostan. We are prepared to invest private sector investors throughout the is the development of Bashkortostan’s heavily in both time and resources to various tiers of administration. human capital. The republic is already ensure that businesses find a positive home to some of Russia’s most advanced atmosphere for development in the Small is beautiful universities, which between them address republic, whether that takes the form It goes without saying that small and all of the region’s needs in terms of of establishing an industrial park or free medium-sized enterprises (SMEs) are industrial production and the agricultural economic zone, or simply smoothing the very important for any economy and complex, and we are working to develop process of procurement. developing this sector is a priority for these institutions further to ensure that I personally meet foreign investors, us in Bashkortostan. We have a unique our most talented high-school graduates both large and small, and personally opportunity here to nurture smaller remain in the republic. guarantee that they will find conducive companies that can work in synergy with conditions for investment, predictability in our leading industrial firms in sectors such A warm welcome the terms of cooperation and a positive as petrochemicals and metallurgy. If further proof were needed of both the working attitude in Bashkortostan. Our Our task in government is both to republic’s national importance and the recent success in attracting sizeable encourage large-scale producers to hard work already undertaken by the investment projects in industries such as establish cooperation with SMEs and government and people of Bashkortostan, machine building, timber processing and help smaller firms find opportunities it has been provided by the selection of petrochemicals is proof that investors for collaboration
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