TIDA - Overview of Tatarstan


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TIDA - Overview of Tatarstan

  1. 1. ! ! ! ! ! ! ! ! ! ! ! Overview of the Republic of Tatarstan May 2013 ! ! ! ! ! ! ! ! ! ! !
  2. 2. 1 Tatarstan Investment Development Agency · invest@tatar.ru · +7 (843) 570 4001 · tida.tatarstan.ru Overview The Republic of Tatarstan is one of the most economically developed regions of the Russian Federation. The republic lies just 800 kilometers east of Moscow on 68 thousand square kilometers of land at the confluence of the Volga River and the Kama River, Russia’s two largest waterways. The republic has a population of 3.8 million and boasted 1.4 trillion rubles ($44.7 billion) of Gross Regional Product in 2012, a 5.5% increase over the previous year, and almost triple the GRP of 483 billion rubles posted in 2005. Foreign Direct Investment into Tatarstan totaled $577 million in 2012. Quick Facts Capital City: Kazan Largest City: Kazan Official Languages: Russian, Tatar Population: 3.8 million Gross Regional Product (GRP): 44.7 billion USD GRP real growth rate: 5.5% GRP per capita: 11,770 USD Exports: 21.1 billion USD Imports: 3.7 billion USD Labor force: 2.05 million Investment (gross fixed): 14.7 billion USD GRP composition by sector: Heavy industry (44.1%) Construction (8.6%) Transport & communications (7.7%) Agriculture (7.1%) Main Exports: oil & oil products, plastics, tires, trucks, helicopters, ships Export partners: Italy, the Netherlands, Poland, Turkey, Czech Republic, Germany Main Imports: plastics, organic chemistry compounds, ferrous and non-ferrous metals Import partners: Germany, China, USA, Turkey, Ukraine, Belarus
  3. 3. 2 Tatarstan Investment Development Agency · invest@tatar.ru · +7 (843) 570 4001 · tida.tatarstan.ru Regulations on foreign investment Tatarstan has established a rock-solid regulatory framework within which investors can work. The republic has passed a series of laws (“On Investment Activity in the Republic of Tatarstan,” “On Foreign Investment in the Republic of Tatarstan,” “On Public-Private Partnerships in the Republic of Tatarstan”) and cabinet resolutions (“On Approving the Investment Memorandum for the Republic of Tatarstan”) which enhance the legal protections that Russian law already provides to foreign investors. In 2011, the Republic of Tatarstan founded the Tatarstan Investment Development Agency (TIDA), a special executive body of the government to carry out investment promotion and facilitation. TIDA is responsible for all international investment and business projects in the Republic of Tatarstan, reporting directly to the President. The wide range of TIDA functions includes: • Attracting investment to Tatarstan • Supporting the entry and successful establishment of foreign business in Tatarstan • Facilitating investment projects • Improving the investment climate of Tatarstan • Promoting public-private partnership 5 Reasons to Invest in Tatarstan 1. Tatarstan is strategically located in the heart of Russia and seven of Russia’s 14 largest cities (in other words, 50% of Russia’s population) are located within a 1,000 radius of Kazan. This ideal location in the center of Russia’s vast consumer basin also puts the republic at the crossroads of major rail, air, water, and overland corridors, linking Tatarstan not only with Russia but also with Europe and Asia. 2. Tatarstan has set out on a plan to diversify and modernize its economy by integrated innovative technologies and developing new sectors. To the point, the republic has identified eight priority sectors for attracting foreign investment: chemical & petrochemical, machinery & automotive parts production, construction & building materials production, agriculture & food processing, medicine & pharmaceuticals, IT & telecommunications, halal industry, and service industry & tourism. 3. The Government of the Republic of Tatarstan is committed to making the investment process as hassle free as possible. It has eliminated unnecessary red tape, and is open to dialogue with investors about their specific needs. The Tatarstan Investment Development Agency was specially created as a one stop center for investors. 4. Quality investment infrastructure lies at the heart of Tatarstan’s attractiveness for investment. The Republic has invested in a range of fully-equipped industrial, business, and technology parks to make
  4. 4. 3 Tatarstan Investment Development Agency · invest@tatar.ru · +7 (843) 570 4001 · tida.tatarstan.ru setting up a company and doing business in Tatarstan has hassle free a process as possible. Contact us at invest@tatar.ru for detailed information about each of these parks. 5. Tatarstan benefits from a highly-qualified, affordable workforce of over 2 million people and a low unemployment rate of 1.2%. Tatarstan has 28 institutes of higher education and a student population of roughly 230,000. The average monthly salary for the Tatarstan workforce is 23,240 RUB (734 USD). 8 Priority Investment Areas Including chemical production, rubber & plastics production, and petroleum product manufacturing, the chemical & petrochemical industry is a key driver to the economic growth of Tatarstan. Since 2000, TAIF alone has invested 158 billion rubles in its subsidiary companies. Tatneft has invested nearly 200 billion rubles in TANECO, an oil refinery project in the city of Nizhenekamsk. Among foreign companies that have invested in this industry are Pixar Coatings (Italy), Clariant (Switzerland), P-D Tatneft-Alabuga Steklovolokno (Germany), and Air Liquide Alabuga (France). Machinery and metal processing includes metallurgical production and production of finished metals, machinery and equipment production, production of electronics, electrical and optical equipment, and production of transport vehicles and equipment. Tatarstan is one of the main hubs of machinery production in all of Russia, housing such automobile producers as KAMAZ, Ford-Sollers, Elabuzhskiy Avtomobilny Zavod, ICUZU, Kazan Aircraft Production Association, Kazankomresormash, and the A.M. Gorky Zelenodolsk Plant. In 2012 Ford Sollers Alabuga began assembling Ford automobiles in Tatarstan. In this first year of production, the company manufactured five new models and a total of 18,000 automobiles for the sum of 16.4 billion rubles. Other foreign companies working in this industry are Daimler AG (Germany), Honeywell (USA), Schneider Electric (Germany), Cummings Kama (USA), and Kiekert AG (Germany). Construction & building materials production encompasses construction of commercial buildings, residential housing, and infrastructure. The real estate market is currently driven by construction of facilities for the 2013 Summer Universiade, a republic-wide renovation program, and transport infrastructure development. In 2012, the average cost per square meter was 43,900 RUB (1,387 USD) in the primary market and 43,200 RUB in the secondary market. Foreign companies operating in construction include Rockwool-Volga (Denmark), Wienerberger-Kurkachi (Germany), and Kastamonu Integrated Wood Industry (Turkey). Agriculture & food processing in the Republic of Tatarstan includes crop and livestock production. Tatarstan has 2.2% of Russia’s arable land, and accounts for 5% of the countries agricultural output. Sustainable agricultural development in Tatarstan is based on a number of factors, including its top- priority status (10% of the republic’s budget is allocated to agricultural subsidies), multi-format nature (only roughly half of farmland and livestock are owned by large investors), the use of innovative and
  5. 5. 4 Tatarstan Investment Development Agency · invest@tatar.ru · +7 (843) 570 4001 · tida.tatarstan.ru resource-saving technologies, and insured farmland accounts. Family farms lie at the heart of a promising new approach to developing rural small business. Some 405 high technology family farms have already been built in the republic. This figure should double over the next few years. Tatarstan’s leading agricultural companies include Agrosila Group, Chelny Broiler, and Krasny Vostok Agroholding. Medicine & pharmaceuticals includes production of medical equipment and pharmaceuticals, provision of health care services, and pharmacy retail. Tatarstan has nine medical centers offering high- technology medical treatment and seven large medical clinics that serve as bases for clinical research and training. Kazan State Medical University, with its 200-year history, is one of the most respected medical schools in the country. Tatarstan’s pharmaceutical market in 2012 totaled 18.4 billion RUB, a 13% increase over 2011. Expects predict that the market will grow another 18% this year. The main local players in the market include Kazan Medical Instrument Plant, one of Russia’s largest medical instrument companies, and Tatkhimfarmpreparaty, a major pharmaceutical company with a chemical and pharmaceutical plant and the only catgut producer in Russia Foreign investors in the industry include Saria Bio-Industries Alabuga and FAVEA (Czech Repbulic). Over the past few years, Tatarstan has become one of the regional leaders in IT & telecommunications, including mobile telecommunications, internet services, and software development. Tatarstan’s largest software developers include ICL-KPO VS, BARS Group, OCS, Softline and TAXNET. Fujitsu Russia GDC is one of the foreign investors in this industry. To boost the role that IT plays in the republic’s economy, Tatarstan is developing Innopolis, a city designed to boost high technology and IT output. Innopolis will feature an IT University in partnership with Carnegie Mellon University, technoparks and business parks, and a special economic zone. The target population for Innopolis is 155,000 people, of which 60,000 will be IT specialists. Halal industry is one of the most rapidly developing industries in Tatarstan, Russia’s leader in this sector. Kazan Halal Hub is Russia’s first halal transport and logistics center for storing and distributing halal products made by domestic and foreign producers in both Russia and CIS countries. Baltach agricultural park was founded to house investment projects in this industry. In 2012, the Eurasia Leasing Company was established by the Tatarstan International Investment Company to offer Ijara leasing products. A Halal Standards Committee was set up in 2005 under the Spiritual Board of Muslims of Tatarstan to oversee the production and sale of halal products, which has been growing rapidly in Russia in recent year. A private foreign investor and the Republic of Tatarstan are currently in the process of founding a Hajj savings fund, in which people can deposit money to save for the pilgrimage to Mecca. Tatarstan has witnessed remarkable growth in the service industry & tourism. Over the past five years the republic has seen internal tourist flow increase by an average of 12%, with some 1.3 million tourists visiting Tatarstan in 2012, making the region on of the leading tourist destinations in Russia. Tatarstan has 186 hotels with a total of 11 989 rooms. The average price of one night in a 3-star hotel
  6. 6. 5 Tatarstan Investment Development Agency · invest@tatar.ru · +7 (843) 570 4001 · tida.tatarstan.ru is 2674 RUB, 4-star hotel – 3484 RUB, 5-star hotel – 5278 RUB. The republic has a number of foreign companies operating in this sector, among them YIT (Finland), Marriott, Ibis, Park Inn, Fly Dubai, Turkish Airlines, McDonald’s (USA), and KFC (USA). Where to Invest in Tatarstan With eight priority investment sectors and a number of industrial, business, and technology parks, the Republic of Tatarstan has a range of investment opportunities available. One of the most attractive sites for foreign investment in the republic has been the Special Economic Zone Alabuga, a special economic zone in Tatarstan which provides a host of tax and other preferences to companies seeking to open manufacturing operations. With 20 square kilometers of land and a strong management company with clear residency procedures, SEZ Alabuga has attracted 33 residents, who have investment more than 1 billion USD and created 2,527 jobs. The Republic of Tatarstan is trying to repeat this success story with Kazan Smart City, a groundbreaking urban development project designed to spur investment into high technology, medicine, education and tourism. The project will help transform the Republic of Tatarstan’s capital of Kazan into an international business hub with ideal conditions for working and living. Kazan Smart City lies on 650 hectares of land 3 kilometers from Kazan International Airport and 15 kilometers from the city center of Kazan. An Aeroexpress commuter railway links Kazan Smart City with both the airport and city center. The development is divided into four main zones or precincts: an international business center (220 ha.), a knowledge and education center (209 ha.), a special economic zone for high tech manufacturing (102 ha.), and a parkland green area (100 ha.) In order to boost the role that IT plays in the republic’s economy, Tatarstan is also developing Innopolis, a new city designed to boost high technology and IT output. Innopolis will feature an IT University in partnership with Carnegie Mellon University, technoparks and business parks, and a 192 ha. special economic zone. The Tatarstan Investment Development Agency also has a catalogue of 110 investment projects. Investors can familiarize themselves with this catalogue on the official investment website of Tatarstan. Contact Us For more information, or to schedule a visit to the Republic of Tatarstan, please contact us: Tatarstan Investment Development Agency 50 Peterburgskaya Street Kazan, Russian Federation 420107 Tel./fax.: +7 (843) 570 4001 invest@tatar.ru tida.tatarstan.ru