Doing business in St. Petersburg 2012

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Get in-depth information about the city's economy, clusters, business solutions as well as details of doing business in St. Petersburg by reading fully-fledged English language guide designed specially for exporters and importers, investors and start-ups.

This publication was developed by St. Petersburg Foundation for SME Development by the order of St. Petersburg Government - Committee for External Relations in collaboration with professional legal, human resources, certification, research and real estate firms with the aim of providing start-ups, potential exporters and investors with the relevant information on starting and running business in St. Petersburg.

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Doing business in St. Petersburg 2012

  1. 1. Doing business in St. PetersburgSt. Petersburg Government - Committee for External Relations 1 St. Petersburg Foundation for SME Development
  2. 2. Doing businessin St. PetersburgGuide for investors, exporters and start-upsThe current publication was developed by St. Petersburg Foundation for SME Development by theorder of the St. Petersburg Government - Committee for External Relations in collaboration with thefollowing international legal, certification, real estate and human resources firms: Baker & McKenzie,SGS Group, Adecco, Jones Lang LaSalle.© 2012 St. Petersburg Government - Committee for External Relations. St. Petersburg Foundationfor SME Development. All rights reserved. International copyright.Any use of materials of this publication is possible only after written agreement of St. PetersburgFoundation for SME Development and relevant contributing firms.Online version is available at: www.kvs.spb.ru and www.doingbusiness.ru Doing business in St. Petersburg2 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  3. 3. Table of contents1. The city ....................................................................................................................... 6 1.1. Geography ............................................................................................................................. 6 1.2. Public holidays and business hours ....................................................................................... 7 1.3. Population ............................................................................................................................. 7 1.4. Political system...................................................................................................................... 8 1.5. Economy .............................................................................................................................. 11 1.6. Foreign trade ....................................................................................................................... 13 1.7. Foreign investment ............................................................................................................. 15 1.8. International cooperation ................................................................................................... 16 1.9. Culture ................................................................................................................................. 17 1.10. Science and education ........................................................................................................ 18 1.11. Transport infrastructure...................................................................................................... 192. Key industry sectors .................................................................................................. 20 2.1. Overview of St. Petersburg’s industry ................................................................................. 20 2.2. Transport machinery and equipment ................................................................................. 23 2.3. Electrical and optical equipment ........................................................................................ 26 2.4. Food and beverage production ........................................................................................... 303. Key business clusters ................................................................................................ 34 3.1. Automotive cluster .............................................................................................................. 34 3.2. Software and information technology services .................................................................. 37 3.3. Pharmaceutical cluster ........................................................................................................ 48 3.4. Shipbuilding cluster ............................................................................................................. 574. Business solutions..................................................................................................... 62 4.1. Headquarters ...................................................................................................................... 63 4.2. Research & Development ................................................................................................... 65 4.3. Production сenter ............................................................................................................... 68 4.4. Distribution сenter .............................................................................................................. 75 4.5. Test market ......................................................................................................................... 775. Doing business .......................................................................................................... 79 5.1. Russian Judicial System ....................................................................................................... 79 5.2. Promoting Foreign Investment in Russia ............................................................................ 85 5.3. Establishing a Legal Presence .............................................................................................. 89 5.4. Competition Protection Law ............................................................................................... 96 5.5. Corporate Compliance ...................................................................................................... 105 5.6. Taxation ............................................................................................................................. 109 5.7. Customs ............................................................................................................................. 130 5.8. Currency Regulations ........................................................................................................ 143 5.9. Employment ...................................................................................................................... 146 5.10. Property Rights .................................................................................................................. 153 5.11. Privatization ...................................................................................................................... 165 5.12. Language Policy ................................................................................................................. 167 5.13. Civil Legislation .................................................................................................................. 169 5.14. Intellectual Property ......................................................................................................... 171 5.15. Product conformity assurance in Russia ........................................................................... 175 5.16. Banking .............................................................................................................................. 181 Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 3 St. Petersburg Foundation for SME Development
  4. 4. 6. Costs of doing business ........................................................................................... 187 6.1. Costs of starting a company .............................................................................................. 187 6.2. Human resources .............................................................................................................. 189 6.3. Office, retail and warehouse market ................................................................................ 195 6.4. Communication ................................................................................................................. 201 6.5. Utilities .............................................................................................................................. 2027. Contacts of business support infrastructure ............................................................ 204 7.1. Overview of the business support infrastructure in St. Petersburg................................. 204 7.2. Authorities......................................................................................................................... 204 7.3. Investment support ........................................................................................................... 207 7.4. SME business cooperation support................................................................................... 209 7.5. SME support ...................................................................................................................... 211 7.6. Financial support ............................................................................................................... 213 7.7. Techno parks and business incubators ............................................................................. 215 7.8. Educational programs and internships ............................................................................. 217 7.9. Chambers of commerce and industry ............................................................................... 218 7.10. Business associations ........................................................................................................ 218 7.11. Audit, tax and consulting firms ......................................................................................... 219 7.12. Banks ................................................................................................................................. 220 7.13. Certification and testing .................................................................................................... 220 7.14. Exhibitions ......................................................................................................................... 221 7.15. Law firms ........................................................................................................................... 221 7.16. Real estate ......................................................................................................................... 222 7.17. Recruitment....................................................................................................................... 222 7.18. Transport and logistics ...................................................................................................... 2238. Authors and contributors ........................................................................................ 224 Doing business in St. Petersburg4 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  5. 5. Welcome to St. Petersburg I would like to welcome you to St. Petersburg, one of the largest centers of international cooperation in Russia and Europe. The city is a member of leading international and regional organizations and has bilateral cooperation agreements with 89 foreign cities and 27 foreign regions. Every year St. Petersburg hosts more than 200 international events, including the world’s famous St. Petersburg International Economic Forum. St. Petersburg has always been and remains an attractive location for foreign investors due to an established and effectively operating system aimed at supporting investment activity. In 2011 foreign trade turnover reached 53.2 billion US dollars. St. Petersburg has trade relations with 187 countries, including such major trade partners as China, Germany, Netherlands, Finland, Japan and USA. 1,192 large and medium-sized companies with participation of foreign capital operate in the city. The city has successfully implemented a number of large-scale international projects, including the construction of car manufacturing plants of the world car giants. Some of the actively developing clusters with participation of international companies include pharmaceutical cluster and information technologies cluster. St. Petersburg welcomes you and is ready for cooperation! Alexander Prokhorenko Member of St. Petersburg Government Chairman - Committee for External Relations Welcome to St. Petersburg, the city of enormous business opportunities and development potential. St. Petersburg is one of the largest economic, transport, academic, cultural and tourism centers in Russia as well as a growing economy with a thriving private sector and an attractive business environment. Favorable economic and geographical location in the European part of Russia, developed infrastructure, extensive scientific, research and educational potential, highly skilled workforce as well as broad market and competitive operating costs facilitate the development of efficient, safe and stable business. During the recent years many international companies, including Coca-Cola, Pepsi, Gillett, Wrigley, British American Tobacco, Bosch Siemens and many others, have already implemented investment projects in St. Petersburg. All of them considered the city as an ideal location for their business needs, whether it is an R&D center, test market, production center or distribution hub. We welcome you to St. Petersburg and will be glad to see you among our partners and clients! Maxim Balanev Executive director - St. Petersburg Foundation for SME Development Regional coordinator - Enterprise Europe Network, Gate2Rubin Consortium – Russia, Module A Branch - St. Petersburg Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 5 St. Petersburg Foundation for SME Development
  6. 6. 1. The city1.1. GeographyCoordinates: Latitude: 59° 57 North Longitude: 30° 19 EastArea: 1,439 sq.km.Climate: Maritime, with warm damp summers and moderately cold long wintersAverage temperature: July: + 25 C January: - 2 CTime: MSK ( UTC+4)Dialing codes: International country code: + 7 (Russia) Area code: 812 Doing business in St. Petersburg6 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  7. 7. 1.2. Public holidays and business hoursOfficial holidays:  January 1-5 - New Year holidays  January 7 - Russian Orthodox Christmas  February 23 - Armed Forces Day  March 8 - Women’s Day  May 1 - International Labor Day  May 9 - Victory Day  June 12 - Day of Russia  November 4 - National Unity DayBusiness hours:  Offices: Mondays through Fridays - 9.00-18.00 (9 a.m. till 6 p.m.), lunch break – 13.00-14.00 (1 p.m. till 2 p.m.)  Banks: Mondays through Fridays - 9.00-18.00 (9 a.m. till 6 p.m.)  Stores: Mondays through Saturdays - 10.00-19.00 (10 a.m. till 7 p.m.), most stores are also open on Sundays  Restaurants: Mondays through Sundays – 12.00-23.00 (12 p.m. till 11 p.m.), many restaurants and cafes are open 24 hours1.3. PopulationPopulation 4,953,200 people(01.01.2012):Economically active 2,677,000 peoplepopulation (2011):Unemployment rate 0.5%(to % of economicallyactive population, 2011):Population density 3,288.3 per sq. km.(2010):Gender ratio  male: 44.9%(2011):  female: 55.1%Population age Male and female (0-15) Male (16-59); Malecomposition: female (16-54) (60 and above);(2010): female (55 and above) 12.9% 61.6% 25.5%Median age  Total: 41.3 years(2010):  Male: 38.2 years  Female: 43.9 yearsBirth rate 11.6(per 1,000 people, 2011):Death rate 12.5(per 1,000 people, 2011):Official language: Russian Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 7 St. Petersburg Foundation for SME Development
  8. 8. 1.4. Political systemCity day: May 27. The city was founded on May 27, 1703City name:  Conventional long form: Saint-Petersburg  Conventional short form: St. Petersburg  Local long form: Sankt-Peterburg | Санкт-Петербург  Local short form: С.-Петербург | Петербург  Former names: St.-Petersburg (1703-1914), Petrograd (1914-1924), Leningrad (1924-1991), St.-Petersburg (1991- till present)Administrative division: While the city is divided into 18 districts (rayons), each district is divided into municipal formations. At the moment there are 111 municipal formations (munitsipalnye obrazovaniya). 1. Admiralteysky District 10. Kurortny District 2. Vasileostrovsky District 11. Moskovsky District 3. Vyborgsky District 12. Nevsky District 4. Kalininsky District 13. Petrogradsky District 5. Kirovsky District 14. Petrodvortsovy District 6. Kolpinsky District 15. Primorsky District 7. Krasnogvardeysky District 16. Pavlovsky and Pushkinsky Districts 8. Krasnoselsky District 17. Frunzensky District 9. Kronshtadsky District 18. Central District Doing business in St. Petersburg8 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  9. 9. Political system: Source: Business Support Structure in St. PetersburgExecutive branch: The City Administration (www.gov.spb.ru) is the superior executive body of St. Petersburg headed by the Governor. The St. Petersburg Administration is formed of the Governor, the Government, the Governors Chancellery, the city committees and the subordinate administrative-territorial departments of the Administration.Legislative branch: The Legislative Assembly of St. Petersburg (www.assembly.spb.ru) is the standing effective supreme and sole legislative (representative) body of the state authority in St. Petersburg.Judicial branch: Charter Court of St. Petersburg (www.spbustavsud.ru), Judges of the Peace of St. Petersburg (www.mirsud.spb.ru), City Court of St. Petersburg (http://sankt-peterburgsky.spb.sudrf.ru), Arbitration court of St. Petersburg and Leningrad region (www.spb.arbitr.ru) and Leningrad Military Circuit Tribunal (http://leningradskyovs.spb.sudrf.ru).Suffrage: 18 years of age; universal Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 9 St. Petersburg Foundation for SME Development
  10. 10. Symbolsof St. Petersburg: Coat of arms FlagDiplomatic 55 consular offices are accredited in St. Petersburg, including:representations:  34 consulates,  1 embassy office,  3 honorary consuls general,  19 honorary consuls. Doing business in St. Petersburg10 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  11. 11. 1.5. EconomyGRP ofSt. Petersburg(billion roubles): 2,137.9 1,917.4 1,673.7 1,431.8 1,473.3 1,119.7 825.1 666.4 2005 2006 2007 2008 2009 2010 2011E 2012E Source: Committee for Economic Development, Industrial Policy and TradeGRP per capitain St. Petersburg(thousand roubles): 428.9 389.2 343 310.6 321.5 245 180.3 145.2 2005 2006 2007 2008 2009 2010 2011E 2012E Source: Committee for Economic Development, Industrial Policy and TradeGRP sectoralcomposition 19% Industrial production 29%(2012E): Other 7% Real estate Transport, communications, tourism 10% Construction 17% Wholesale and retail trade 18% Source: Committee for Economic Development, Industrial Policy and Trade Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 11 St. Petersburg Foundation for SME Development
  12. 12. City budget(billion roubles): 404 355.8 322.2 358.6 399.5 339.1 315.6 347 278.1 259.3 186.2 179.9 120.3 129.9 2005 2006 2007 2008 2009 2010 2011 Revenues Expenditures Source: Committee for Economic Development, Industrial Policy and TradeCity debt Total: 8,520.7 million roubles, including(01.01.2012): Share of internal debt: 100% Share of external debt: 0%Credit ratings : Long-term credit international scale ratings in foreign currency:  Standard&Poor’s – BBВ (May 2012), forecast – stable  Moody’s Investors Service – Baa1 (May 2011), forecast – stable  FitchRatings – BBВ (January 2012), forecast – stable Long-term credit national scale ratings:  Moodys Interfax – Aaa.ru (July 2005)  FitchRatings – AAA(rus) (January 2012), forecast – stableLeading industries: Machinery, vehicle and equipment manufacturing, electronic and optical equipment, food, including beverages and tobacco; metallurgy and metalworking; chemical production.Priority sectors/clusters: Automotive, pharmaceutical, shipbuilding, power plant engineering, information technology, radiology, electronic engineering. Doing business in St. Petersburg12 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  13. 13. 1.6. Foreign trade Foreign trade turnover 32,656 (million USD): 25,734 23,643 24,524 20,685 20,577 17,786 17,839 14,177 12,658 13,437 11,817 10,116 4,914 2005 2006 2007 2008 2009 2010 2011 Export Import Source: Territorial branch of the Federal State Statistic Service (Petrostat); Northwestern Customs Directorate, Federal Customs Service Main trade partners (2011): Ukraine 2.8% South Korea 3.7% UK 3.9% Italy 4.1% USA 4.2% Japan 4.6% Finland 5.2% Netherlands 8.2% Germany 8.7% China 14.4% Source: Northwestern Customs Directorate, Federal Customs Service Currency (code): Russian rouble (RUB) Exchange rates:  RUB per EUR – 40.38 (2012)1, 40.28 (2011), 38.2 (2010), 43.35 (2009), 36.68 (2008), 34.63 (2007), 34.06 (2006)  RUB per USD – 31.69 (2012)1,27.9 (2011), 31.45 (2010), 30.91 (2009), 23.67 (2008), 26.04 (2007), 27.08 (2006) Source: Central Bank of the Russian Federation, Ministry of Finance of the Russian Federation Fiscal period: calendar year1 Official exchange rate as of November 16, 2012 (www.cbr.ru). Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 13 St. Petersburg Foundation for SME Development
  14. 14. 1.6.1. ExportExport volume (2011): 20.6 billion USD (170% to the previous year)Largest exporters JSC Gazprom Neft, CJSC PNT-GSM, CJSC British American Tobacco-Spb,(2011): JSC Nevsky Mazut, JSC TransoilExport structure (2011): 2% 9% 3% Food products 7% Mineral products 2% Chemical products, natural 2% rubber Timber, pulp and paper products 75% Metal and metal products Machinery, equipment, vehicles Other Source: Northwestern Customs Directorate, Federal Customs Service1.6.2. ImportImport volume (2011): 32.6 billion USD (133,6% to the previous year)Largest importers LLC Nissan Manufacturing Rus, LLC Hyudai Motor Manufacturing Rus,(2011): LLC General Motors Auto , LLC Petro, LLC Toyota Motor Manufacturing RussiaImport structure (2011): Machinery, equipment, 6% vehicles 23% Metals and metal products Mineral products Timber, pulp and paper 43% products Chemical products, natural rubber Textiles, textile goods, 6% footwear Food products 11% 7% 3% Other 1% Source: Northwestern Customs Directorate, Federal Customs Service Doing business in St. Petersburg14 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  15. 15. 1.7. Foreign investmentVolume of foreign 6,284 6,121investment 5,928(million USD): 5,525 5,255 5,231 1,171 1,417 1,160 881 696 985 706 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Territorial branch of the Federal State Statistic Service (Petrostat)Structure of foreigninvestments(million USD, 2011): 1,074 Foreign direct (18%) investment (FDI) 211 (3%) Foreign portfolio investment (FPI) Other foreign investment 4,836 (79%) Source: Territorial branch of the Federal State Statistic Service (Petrostat)Foreign investment by 5% Manufacturingsector of the economy 12%(2011): Wholesale and 5% retail trade 6% Transporation and communication 72% Real estate Other Source: Territorial branch of the Federal State Statistic Service (Petrostat) Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 15 St. Petersburg Foundation for SME Development
  16. 16. Major investors 4%(2011): 3.5% UK 3.8% 17% South Korea 5% Cyprus 4.3% China Germany Austria 4.6% 9.5% Kazakhstan Switzerland 4.9% Sweden Belgium 5.1% 9.3% Finland Kyrgyzstan 6.8% 8.8% Belarus Source: Territorial branch of the Federal State Statistic Service (Petrostat)1.8. International cooperationBilateral cooperation  with 89 foreign cities and 27 foreign regionsdocuments:  with 41 regions and 3 cities in RussiaParticipation in  The Union of Baltic Citiesinternational and  The Conference of the Major Cities of the Baltic Sea "Balticregional organizations: Metropolis”  The Organizations for Sub-regional Cooperation of the Baltic Sea Countries  The Tourism Commission of the Baltic Sea CountriesCooperation with  The Council of the Baltic Sea Countriesintergovernmental  The Nordic Council of Ministersorganizations:  The Forum Regions of the Coast of Europe  The Baltic Development Forum  The Association of Chambers of Commerce and Industry in the Baltic regionMembership in  Associate member of the Association of European citiesinternational "EUROCITIES"associations:  Member of the International Congress and Convention Association Doing business in St. Petersburg16 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  17. 17. 1.9. CultureCultural sites: 8,464 cultural sites located in the city, including 4,213 sites of federal significanceUNESCO World Cultural Historic Center of St. Petersburg and Related Group of MonumentsHeritage List:Museums: 182 museums , including:  41 (with branches) museums and local reserve museums;  24 (with branches) museums of federal jurisdiction;  31 departmental museums;  86 other museums.Libraries: 1,103 libraries, including:  2 libraries under federal jurisdiction;  1 library of the Academy of Sciences of Russia ;  196 local libraries;  904 libraries of institutions and organizations.Theatres: 82 theatres, including:  24 local theaters;  5 theaters under federal jurisdiction ;  3 theatres of regional subordination operating in the city;  50 non-state theaters.Concert organizations: 17 concert organizations, including:  15 local concert organizations;  2 concert organizations under federal jurisdiction.Cultural and leisure 52 cultural and leisure institutions, including:institutions:  26 local cultural and leisure institutions;  26 cultural and leisure institutions under the supervision of other agencies.Educational 71 educational institutions, including:institutions:  7 local secondary vocational schools;  63 music and art schools, local art schools;  1 music school under federal jurisdiction.Parks: 5 parks, including:  4 recreation and entertainment parks in the city network;  1 Zoo.Cinemas: 46 cinemas, including:  8 cinemas of the city network ( 6 - for children);  38 cinemas of non-state network. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 17 St. Petersburg Foundation for SME Development
  18. 18. 1.10. Science and educationScientific organizations: 350 scientific organizations, including:  more than 70 organizations of the Russian Academy of Sciences and other state academies,  more than 250 governmental organizations involved in research and development,  10 state research centers.Scientific personnel 165,000 employees of research institutions and Universities, including:potential:  more than 9,000 Doctors of Science,  more than 26,000 Candidates of Science.State educational 1,909 educational institutions, including:institutions:  1,054 preschool educational institutions,  690 general educational institutions,  58 institutions of supplementary education for children,  18 childrens homes,  36 beginners vocational schools,  12 institutions of secondary professional education,  1 academy of postgraduate pedagogical education.Number of school 368,390 school children, including 187,791 school children enrolled in inchildren: preschool educational institutionsHigher and vocational  45 civil public institutions of higher education;education institutions:  6 branches of civil institutions of higher education;  43 private higher educational institutions;  45 public educational institutions of secondary vocational education;  30 state civil institutions of higher education offering training in secondary vocational education;  5 non-governmental educational institutions of secondary vocational education.Number of students: 493.1 thousand people, including:  400.9 thousand students enrolled in state and private civil institutions of higher education programs of higher education,  61,600 students enrolled in secondary vocational education.Teaching staff: 73,425 people working in educational institutions, including:  30,000 - in higher educational institutions,  5,100 - in educational institutions of secondary vocational education. Doing business in St. Petersburg18 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  19. 19. 1.11. Transport infrastructureUrban passenger  Metro (5 lines);transport:  Ground electric transport (40 tram routes and 44 trolleybus routes);  Buses (677 bus routes);  Commuter rail transport (80 stations of the suburban passenger line);  Passenger taxis.Annual traffic of the About 2 billion trips (5 million trips a day):urban passenger  Metro - 41%;transport:  Coaches - 40%;  Ground electric transport - 16%;  Commuter rail transport - 3%.Transportation  12 radii of railroads;complex:  15 highways;  sea and river ports;  Airport;  5 railway stations.Large Port of Ranks 1st among the ports of the Russian Federation and the Baltic Sea inSt. Petersburg: container trans-shipment and 3d in Russia in terms of total cargo volume (60 mln. tons in 2011).Marine Passenger  Commissioned in 2011Terminal:  Port facilities include 7 berths and 4 stations  214 cruise ships and 113 ferries with about half a million passengers (2011)Rail transportation:  Mainly represented by "October Railways", a branch of OJSC "Russian Railways"  2d in volume of rail freight in Russia (following Moscow)  Includes 10 rail lines and connects Russia to Finland and EstoniaAir transport:  Pulkovo Airport is one of the largest airports in Russia and ranks 3d in passenger traffic (9.6 mln by end of 2011)  New terminal scheduled for completion in 2013 will increase the Airport’s capacity to up to 14 million peopleUrban water passenger  20 stopping pierstransportation:  4 city routes commissioned in 2010 Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 19 St. Petersburg Foundation for SME Development
  20. 20. 2. Key industry sectors2.1. Overview of St. Petersburg’s industry2.1.1. Structure and main indicatorsSt. Petersburg is one of the largest industrial centers in Russia. The city ranks second in the volume ofmanufacturing shipments, thus providing 8% 0f the total production volume in the country.St. Petersburg’s industrial complex represents the basis of the regional economic growth, accountingfor the major source of budget.Efficient operation of the industrial complex significantly affects the development of other sectors ofthe economy, including transportation, construction, communication, trade and provides realopportunities for the solution of socio-economic goals of the city.Industrial complex of the city is represented by almost all industries. 730 large and medium enterprises,a number of which represent the leading industrial enterprises of the Russian Federation, constitute thebasis of the city’s industrial complex. More than 21 thousand small enterprises, includingmicroenterprises, also contribute to the development of the local economy.Number of large and medium-sized enterprises, 2011Manufacturing (total) 676Electronic equipment, electronic and optical equipment 148Machinery and equipment 96Food, including beverages and tobacco 84Metallurgy and metal products 65Pulp and paper, publishing and polygraphic products 62Motor vehicles and equipment 47Non-metallic mineral products 44Chemical products 37Rubber and plastics 24Textiles and clothing 17Timber processing and timber products 14Leather, leather and footwear products 6Petroleum coke and petroleum products 5Other 27Electricity, gas and water production and distribution 54Mineral resources extraction 2Source: Committee for Economic Development, Industrial Policy and Trade, 2012In 2011 industrial production growth of St. Petersburg (113.8%) significantly exceeded the similarindices of the Russian Federation and Northwestern Federal District.In 2011 the industry shipments of St. Petersburg’s enterprises constituted 1,966 billion roubles whichrepresents 135% to the level of 2010. Manufacturing enterprises determine operation of the localindustry. Such enterprises account for more than 90% of the total volume of industrial products Doing business in St. Petersburg20 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  21. 21. produced in St. Petersburg (1,827 billion roubles). Machinery (138%) enterprises contributed the mostto the growth of production volumes.2Structure of the volume of industry shipments, 2011 Mineral resources extraction 0.4% Manufacturing 93% Electricity, gas and water production and distribution 6.6%Source: Committee for Economic Development, Industrial Policy and Trade, 20122.1.2. ProfitabilityIn 2011 industrial complex accounted for 349.8 billion roubles in profit, including 327.1 billion roublesfrom manufacturing industries. The share of profitable enterprises within the total number ofmanufacturing enterprises constituted 81.2% (79.6% in 2010). The most significant growth in profit incomparison with the previous year is reported in the production of motor vehicles and equipment (2.6times). In 2011 a high level of profitability remained in the production of food, beverages and tobacco(19.8%) as well as machinery and equipment (15.1%).3Profitability of manufacturing enterprises, 2011 Russian Federation 13.2% St. Petersburg 14.8%Source: Committee for Economic Development, Industrial Policy and Trade, 20122.1.3. Budget receiptsIn 2011 the tax revenues from industrial enterprises constituted 161 billion roubles (more than 36% ofthe total amount), including 149 billion roubles received from manufacturing enterprises. Food2 Committee for Economic Development, Industrial Policy and Trade, Government of St. Petersburg3 Committee for Economic Development, Industrial Policy and Trade, Government of St. Petersburg3 Committee for Economic Development, Industrial Policy and Trade, Government of St. Petersburg Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 21 St. Petersburg Foundation for SME Development
  22. 22. production, including beverages and tobacco, motor vehicle and other types of equipment productionaccounted for approximately 80% of all budget receipts from the manufacturing sector.4Dynamics of receipts into the budget of the Russian Federation from St. Petersburgs industry,2010-2011 160.9 160 149.2 Industry in total billion roubles Including manufacturing 124.8 116.1 100 2010 2011Source: Committee for Economic Development, Industrial Policy and Trade, 20124 Committee for Economic Development, Industrial Policy and Trade, Government of St. Petersburg Doing business in St. Petersburg22 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  23. 23. 2.2. Transport machinery and equipment2.2.1. General overviewMajor production sectors include power plant engineering, handling machinery, household appliancesmanufacturing, mining and construction equipment manufacturing.Characteristics of transport machinery and equipment industry, 2011Number of large and medium-sized enterprises, units 96Volume of shipped products, 70bln RUBNumber of employees, 34.2thousand peopleSource: Committee for Economic Development, Industrial Policy and Trade2.2.2. Industry in numbersThe products of power plant engineering, including steam, hydraulic and gas turbines, turbo and hydrogenerators and nuclear power plants equipment, represent a considerable share of transport machineryand equipment industry of the city. OJSC Silovye Mashiny, which unites the Leningrad Metal Plant,Electrosila, Turbine Blades Plant, accounts for the major share of production. These enterprises are theleading Russian manufacturers of equipment for hydraulic, thermal, gas-fired and nuclear power plants.OJSC Silovye Mashiny is ranked 4th in the world in terms of the volume of installed equipment and islisted among the five world’s leading energy companies. The company accounts for 80% of the energyequipment market in Russia and CIS. Currently, the company is engaged in construction of a newenergy machinery plant organized on a principle of integrated complex, one of the largest investmentprojects in St. Petersburg.Another leading enterprise, OJSC Izhorskie Plants, is a Russian leader in engineering, manufacturing,sales and servicing of nuclear power plant equipment and machinery. The company also manufacturesequipment for storage and transportation of used nuclear fuel.During the recent years St. Petersburg’s energy machinery enterprises supplied equipment forhydraulic, thermal and nuclear power plants in China, India, Vietnam, Iran, Mexico and Chili.2.2.3. CompaniesPower plant engineering Electrosila Established more than hundred years ago, today Electrosila is the largest manufacturer of generators in Russia. The plant manufactured more than 2.7 thousand turbine-generators and more than hydro-generators. It is the first plant in the world to manufacture hydro-generators with the capacity of more than 200 MW. Electrosila supplies its products in more than 57 countries in Europe, Asia, South and North America, Africa. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 23 St. Petersburg Foundation for SME Development
  24. 24. Leningrad Metal Plant Established in 1857, Leningrad Metal Plant is one of the oldest enterprises of the city. The plant has manufactured more than 2.7 thousand steam turbines and more than 780 hydraulic turbines. Today, the plant is the largest Russian energy machinery enterprise engaged in design, manufacturing and servicing of steam, hydraulic and gas turbines of various capacities. In 2000 the plant was incorporated in OJSC Silovye Mashiny. Nevsky Zavod JSC Nevsky zavod (NZL) is one of the leading companies in Russia engaged in design and manufacturing of power engineering equipment, including gas and steam turbines, centrifugal and axial compressors, blowers. NZL® is the registered trade mark which belongs to the plant since 1965. The products of Nevsky Zavod are famous in 30 countries of the world. The largest customers abroad are National Iranian Gas Company, iron and steel plants in India, China, Egypt, Turkey, Hungary, Poland, Rumania, chemical plants in Bulgaria, China. Silovye Mashiny (Power Machines) OJSC Power Machines is the leading Russian manufacturer and supplier of end-to-end products and solutions for the power-plant industry, including engineering, production, supply, assembly, service and equipment upgrades for thermal, nuclear, hydraulic and gas-turbine power plants. The company has manufactured equipment with a combined capacity of 300,000 MW, which is installed and is successfully operating in 57 countries across the world. Established in 2000, OJSC Power Machines unites engineering, production and intellectual resources of Russia’s largest enterprises, including the ones located in St. Petersburg - Leningrad Metal Plant, Electrosila, Turbine Blades Plant, Polzunov Power Engineering Research and Design Institute. Turbine Blades Plant Turbine Blades Plant is the major enterprise in Russia specialized in production of blades for steam and gas turbines. The plant started its production in 1964 and since then has been providing turbine blades for all types of power units in the CIS and in about 20 countries abroad. The plant is a permanent partner of the Leningrad Metal Plant.Handling equipment Otis Elevator Company The worlds largest manufacturer of vertical transportation systems has three manufacturing plants in Russia, including the one operating in St. Petersburg since 1994. Otis St. Petersburg was established in 1991 to meet the elevator need for new construction as well as for the replacement market. With 470 employees, Otis St. Petersburg is the only company that manufactures European standard elevators in Russia. Since the opening of the production line, St. Petersburg’s plant has shipped more than 3,000 elevator units to CIS countries and other Russian regions. Doing business in St. Petersburg24 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  25. 25. Household appliances Bosch and Siemens The largest manufacturer of home appliances in Europe and one of the leading home appliances companies in the world opened its manufacturing plant in St. Petersburg in 2007. Today, two full cycle manufacturing lines with the capacity of 500 thousand two-compartment refrigerators per year manufacture more than 20 refrigerator models with A+ Energy Efficiency Class. In 2007 the company laid the foundations for a washing machine factory with the capacity of 350,000 machines per year, which is due to be launched in 2012.Mining and construction equipment IZ-Karteks The company, which is a part of JSC United Heavy Machinery Plants, specializes in engineering, manufacturing, supply and servicing of mining equipment. IZ-Karteks manufactures high-performance equipment used in all stages of mineral surface extraction and processing, including rock drilling machines, mine excavators, crushing and grinding equipment. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 25 St. Petersburg Foundation for SME Development
  26. 26. 2.3. Electrical and optical equipment2.3.1. General overviewMajor production sectors include production of electric machines and electrical equipment, electronics,radio, television and communication systems, medical devices, measurement, control, managementand testing instruments, optical equipment, photo and cine equipment.Characteristics of electrical and optical industry, 2011Number of large and medium-sized enterprises, units 148Volume of shipped products, 133.1bln RUBNumber of employees, 57.4thousand peopleSource: Committee for Economic Development, Industrial Policy and Trade2.3.2. Industry in numbersProduction of electrical products, electronics and instrumentation is one of the key industrial sectors ofSt. Petersburg. St. Petersburg’s enterprises produce almost the entire range of electrical products,including welding equipment, batteries, wiring products, electro gas high-voltage equipment, electroporcelain, power and fiber optic cables and other equipment.The consumers of electrical products manufactured by St. Petersburg’s leading enterprises, such asCJSC REP Holding and OJSC Electroapparat, include almost all types of mining and manufacturingindustries, including oil and gas, shipbuilding, metallurgy, military-industrial sector, agriculture andothers. The long-term partners include OJSC Gazprom, OJSC Russian Railways, CJSC AvtoVAZ as wellas Russian and international oil and energy companies.The products of electronic instrument companies located in St. Petersburg include aircraft avionics,equipment for professional radio and television stations, telephone and telecommunications systemsof closed and open communications, radar and instrumentation safety for air passenger transport, andcell component bases. The leading businesses in this area include OJSC HK Leninets, OJSC Svetlana,OJSC SPE Radar MMS, OJSC Research Institute Vektor, JSC Russian Institute of Radio navigation andTime, OJSC Inteltech, OJSC Avangard.The leading companies producing electrical, electronic and power equipment include OJSC New Era,CJSC NIIEFA-Energo, and CJSC NPF System Service. These companies design and manufacture high-tech transformer substations, complete switchgear, power units, automation and control, mainswitchboards, power semiconductor converter systems used by OJSC Gazprom, OJSC Russian Railwaysas well as other leading oil companies in Russia. Doing business in St. Petersburg26 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  27. 27. 2.3.3. CompaniesElectric machines and electrical equipment Efremov scientific research institute of electrophysical apparatus (NIIEFA) NIIEFA is the leading scientific, design and research, production center of Russia in electrophysical equipment and installations for research in plasma physics, nuclear physics, elementary particle physics, health care, radiation and energy technologies, nondestructive inspection. More than 2,000 of NIIEFA facilities were designed as inventions. Units designed in NIIEFA are successfully operated in many scientific research and industrial organizations of Russia, CIS countries, Bulgaria, Hungary, Germany, Egypt, India, China, Cuba, USA, Finland, France, Japan, Korea. NE NE Open Joint Stock Company is a modern industrial enterprise specialized in producing a wide range of low-voltage & medium-voltage electrical equipment for marine and industrial application. NE was established in 1993 on the basis of apparatus manufacturing of the Leningrad state enterprise «ERA». Today, NE manufactures electrical equipment for almost all branches of industry, including power engineering, nuclear industry, oil & gas industry, offshore projects, shipbuilding, ore mining & metallurgy, communal services, construction, transport system, chemical industry.Electronics, radio, television and communication systems INTELTECH INTELTECH is one of the leading Russian companies in the fields of scientific research, development and production of telecommunication and automatic control systems. Today, the company is a well-known provider of hardware and software systems for automatic control and data exchange, digital networks for secured telephone communication and protected telecommunication systems for government, civil and military departments of the Russian Federation. Leninets Holding Company Leninets holding company is a leading Russian developer and manufacturer of avionics, navigation equipment and high precision target systems. The company is specialized in development and manufacturing of on-board avionics, navigation equipment, high precision arms guidance systems for heavy aircraft and target-seeking equipment for air-to- surface rockets. Leninets holding company includes a number of enterprises engaged in R&D, design and experimental, project and construction activities as well as warranty services. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 27 St. Petersburg Foundation for SME Development
  28. 28. Radar MMS Research and scientific enterprise Radar MMS, established in 1950, is a leader in development of intelligence guidance systems. The company is engaged in a full cycle of R&D and manufacturing activities, including R&D, testing, manufacturing, distribution and maintenance. Russian Institute of Radionavigation and Time (RIRT) RIRT is the leading organization engaged in development of systems and coordinate-time support. The systems developed by the Institute are used to determine the current time and mestopo-proposal objects in sea- surface of the Earth, the worlds oceans and inland waters, airspace as well as solve problems in astrophysics, geodesy and geodynamics. Svetlana JSC Svetlana is one of the leaders of electronic industry in Russia. The history of the enterprise dates back to 1889. Today, Svetlana involves a parent company and subsidiaries specialized in output of specific production lines. The enterprise has the strongest positions in development and production of power electrovacuum devices, klystrons and x-ray tubes. Svetlana-microelectronics is one of the major Russian design centers for sophisticated microprocessors with original architecture and standard instruction sets and information and control systems. Svetlana – Electrondevice is the only enterprise that develops and produces protective microwave devices and discrete phase shifters as well as vacuum and semiconductor microwave devices mainly for radar engineering. Svetlana-SED-SPb is a leading enterprise of Russia in field of development and production of power transmitting, modulator, regulator and receiving tubes. Scientific and Research Institute Vektor Scientific and Research Institute Vektor is engaged in development and manufacturing of electronic equipment used in the following application areas: EM waves propagation physics, radio reception at communication complexes, monitoring of electromagnetic radiation, acoustic monitoring, testing of radioelectronic equipment and many others.Medical devices, measurement, control, management and testing instruments, optical equipment,photo and cine equipment NPO Impuls NPO Impuls is one of the main Russian organizations engaged in development of state-of-the-art automated control systems for Russian armed forces and strategic rocket forces. Tekhpribor Founded in 1942, JSC Tekhpribor is one of the oldest air instrument- making companies. The company focuses on development, production, certification and technical operation of various airborne equipment for all airplanes and helicopters manufactured in Russia and CIS. Doing business in St. Petersburg28 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  29. 29. ElectronElectron is one of the leaders in the Russian market of X-ray anddiagnostic equipment as well as programming solutions for healthcare.The company’s product line of digital X-ray diagnostic equipmentincludes chest examination devices, two workplace X-ray devices,multipurpose X-ray diagnostic complexes, including remotely operatedcomplexes, interventional radiology devices.LOMOFounded in 1914, LOMO is a leading Russian and international companyas well as the largest Russian company involved in production and salesof optic-mechanical and optic-electronical devices. LOMO manufacturesa wide range of products, including microscopes, endoscopes, spottingscopes - telescopes and night vision devices and cameras. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 29 St. Petersburg Foundation for SME Development
  30. 30. 2.4. Food and beverage production2.4.1. General overviewFood complex in St. Petersburg is represented by 11 major industries, which include more than 80 largeand medium as well as 180 small enterprises. Brewing and tobacco manufacturing are the two mostdeveloped sectors of the local food industry.High investment activity of St. Petersburg’s enterprises is one of the major factors accounting for thesuccessful development of food industry in the city. Increased automation and productionimprovements allowed companies to significantly diversify the assortment of produced food productsand improve their consumer appeal. Continuous renewal of assortment is one of the characteristics ofthe food industry in St. Petersburg. St. Petersburg’s enterprises develop at least 100 new sorts ofvarious bakery and pastry products, including bread and rolls, dried bread and biscuits, pies andcookies. Assortment of the produced bakery products totals more than 400 items which makes it themost diversified assortment present in Russia.2.4.2. Industry in numbersIn 2011 the volume of food industry shipments, including beverage and tobacco, constituted 12% of thetotal manufacturing industry in St. Petersburg. Structure of industry shipments, 2011 Investment in fixed assets by industry, 2011 4% 3% 8% 81% 10% 50% 12% 7% 12% 13% Food manufacturing, including beverargres and tobacco Other manufacturing industries Food manufacturing, including beverages and tobacco Other manufacturing industries Motor vehicle and equipment manufacturing Other manufacturing industries Machinery and equipment Electric power, gas and water production Metallurgy and metal product manufacturing Electronic and optical equipmentSource: Committee for Economic Development, Industrial Policy and Trade, 2012As of 2011, food and beverage industry employs 11% of the total number of employees occupied in theSt. Petersburg industrial complex. Food industry, including beverage and tobacco, is the mostprofitable industrial sector in St. Petersburg (19.8%), which is attributable to high production indices oftobacco (34.9%), alcohol (25.8%) and beer (24.8%) producing enterprises. Approximately 13% of allinvestment into industrial sector accounts for food manufacturing, including beverages and tobacco. Doing business in St. Petersburg30 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  31. 31. 2.4.3. CompaniesBakery Hlebny Dom JSC Hlebny Dom has operating at the Russian market for more than 70 years and is one of the largest baking enterprises in Russia. The company became a part of the Fazer Group in 1997. It is represented by 4 production sites in St. Petersburg as well as one in Moscow. Hlebny Dom produces bakery and confectionery products, long term storage foods as well as frozen and flaky dough products. Karavay JSC Karavay was established in St. Petersburg more than 80 years ago. Today, it is a modern fully-equipped bakery which produces more than 170 items of fancy and bakery products. Karavay is one of the leaders of baking industry in St. Petersburg. It currently possesses 4 baking plants.Beverage production Carlsberg Group Baltic Beverages Holding, a leader at the Russian beer market which manages Baltika, became a part of the Carlsberg Group in 2008. Carlsberg currently owns 89.01% of Baltika stock. Today, Baltika Brewery, founded in 1990, is the largest brewery in Eastern Europe and the second-largest brewery in Europe after Heineken Brewery. Coca-Cola Company Coca-Cola’s plant, opened in St. Petersburg in 1995, produces Coca-Cola products for more than 13 million customers in St. Petersburg and Northwestern Russia. It employs more than 1,000 people, while creating up to 200 additional seasonal workplaces during the peak seasons. Heineken Heineken has been operating in Russia since 2002 when it acquired the Bravo plant in St. Petersburg. St. Petersburg’s Heineken brewery also produces and distributes Budweiser beer, having signed a licensing agreement with Bud’s brand owner Anheuser-Busch. Pepsi Bottling Group, Inc. (PBG) PepsiCo drinks are produced by Pepsi Bottling Group at its four plants in Russia. One of the top global FMCG companies in Russia opened its St. Petersburg’s plant in 1992. PBG produces and distributes all PepsiCo products, including carbonated soft drinks, water, snacks, juices, teas. Russian Standard Company A leading Russian premium vodka producer opened its distillery in St. Petersburg in 2006. Total investments into the facility amounted to 60 million dollars. The distillery produces 3.6 million dekaliters of vodka annually. A 30,000 square meter facility handles the production of the companys entire vodka portfolio, including Russian Standard Original, Russian Standard Platinum and Imperia. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 31 St. Petersburg Foundation for SME Development
  32. 32. Candy Chupa Chups S.A. The Spanish candy maker launched its St. Petersburg’s production facility in 1991. Neva Chupa Chups produces Chupa Chups caramel lollipop candies of various flavors and colors not only for the Russian market but also for export to CIS countries. St. Petersburg’s factory has the capacity of making up to 200 million 200-gram rolls per year. Confectionery factory named after N.K. Krupskaya The history of the Confectionery factory began in 1938. In 2006 the factory was acquired by the Norwegian Concern Orkla which is one of the leading suppliers of branded consumer goods to Nordic food retailers as well as Central and Eastern Europe and Russia. Today, the factory is a modern industrial complex with capacity to produce more than 20 thousand tons of confectionery products per year. It produces more than 130 confectionery products, including chocolate of different sorts, diabetic products, chocolate semi-finished products for food industry.Chewing gum Wm. Wrigley Jr. Company The world’s largest maker of chewing gum has been operating a 70 million dollar plant in St. Petersburg since 1999. Wrigley is planning to expand its St. Petersburg plant with an investment of 100 million dollars. The company also announced that it might build a second factory in Russia and acquire local producers to tap its growth at the Russian market.Dairy Petmol dairy plant, Unimilk Petmol dairy plant launched the production of dairy products in 1934. In 2003 LLC Unimilk became the main shareholder of the company. Today, Unimilk is one of the leading manufacturers of dairy products in Russia and CIS. Established in 2002, the company employs more than 14 thousand people and unites 28 enterprises in Russia, Ukraine and Belarus specialized in the production of dairy products and baby food. Baltic Milk, Wimm-Bill-Dann Baltic Milk Dairy Factory was launched in 1987. The factory became a part of the Wimm-Bill-Dann production and trade group in 2000. Will-Bill- Dann is the leader at the Russian market of dairy products and baby food as well as one of the leading producers at the soft drinks market in Russia and CIS. The company operates more than 35 processing plants in Russia, Ukraine and Central Asia and employs more than 18 thousand people.Tobacco British American Tobacco (BAT) BAT’s plant in St. Petersburg operates 13 production lines producing five premium brands. It provides about 25% of BAT’s production volume in Russia. The company completed the construction of new production facilities at its plant in St. Petersburg in 2007 with the total investment of 110 million dollars, thus increasing St. Petersburg plant’s production capacity to 40 billion cigarettes a year. Doing business in St. Petersburg32 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  33. 33. Japan Tobacco International (JTI) PetroJTI Petros cigarette making facility in St. Petersburg is the company’sbiggest worldwide plant with the total of 400 million dollars invested. Thebrand portfolio includes over 30 brand names, both international andlocal. It supplies the firms Russian and Ukrainian plants with maintobacco components used for cigarette production.Philip Morris International (PMI)Philip Morris Inc. officially opened its third Russian cigarette factory in St.Petersburg in 2000. The total investment of 335 million dollars made thisproject the company’s largest cigarette plant in Europe. The plant, whichemploys 750 workers and operates 15 conveyer belts, produces theMarlboro, Parliament, Virginia Slims, L&M, Chesterfield and Bond Streetbrands. In 2002 the company began construction of a new processing lineand a warehouse with the total investment estimated at 240 milliondollars. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 33 St. Petersburg Foundation for SME Development
  34. 34. 3. Key business clusters3.1. Automotive cluster3.1.1. General overviewAutomotive industry and automotive parts manufacturing play an important role in St. Petersburg’stransport machinery complex. The city locates production facilities of the world’s leading carmanufacturers, including Nissan, Toyota, General Motors, Hyundai and Scania.Leading car manufacturing plants in St. Petersburg, 2011Brand name Opening Production Volume of Employees Model range volume, investment th.units/yearToyota 2007 25 133 mln USD 600 Toyota CamryGeneral Motors 2008 60 303 mln USD 1,300 Chevrolet Cruze, Opel AstraNissan 2009 50 200 mln USD 1,500 Teana, X-trail, MuranoHyundai 2010 120 650 mln USD 2,400 Solaris, Kia RioScania 2010 6.5 10 mln Euro 600 all types of trucksSource: Committee for Economic Development, Industrial Policy and Trade3.1.2. Industry in numbersDevelopment of automotive cluster is one of the prerequisites of successful development ofautomotive industry. St. Petersburg has one of the fastest-growing and promising automotive clusters,which makes the city a leading center of Russian car manufacturing industry. During the first stage ofcluster development from 2005 to 2010 Nissan, Toyota, General Motors, Hyundai, Scania built their carassembling facilities in the city. With the total area of allocated land lots of 686.3 hectares and morethan 6 thousand workplaces created, the volume of investment into the construction of new carmanufacturing facilities constituted 1.3 billion dollars. The total volume of budget spendings directedtowards the implementation of investment projects constituted 6.6 billion roubles.The first quarter of 2012 saw significant growth in the volume of motor vehicles and equipmentproduction (123.2% to the first quarter of 2011) which is attributable to increase in car volumesmanufactured at all car manufacturing plants located in St. Petersburg. Hyundai Motor ManufacturingRus showed the largest production growth rates. Total volume of car manufacturing reached 182.2thousand units during the first quarter of 2012 which is 2.7 times larger than the corresponding periodin 2011.Volume of car manufacturing in St. Petersburg, thousand units, 2011 1st Q 2012 182.2 2011 259 2010 69.4 2009 19.9 2008 47.5Source: Committee for Economic Development, Industrial Policy and Trade Doing business in St. Petersburg34 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development
  35. 35. 3.1.3. CompaniesLight motor vehicles General Motors General Motors opened its automobile factory in St. Petersburg in 2008. Global car making giant became the second foreign carmaker to open a factory in St. Petersburg. Investment in the project totalled 300 million dollars with up to 1,700 jobs created, followed by the opening of a second production line in 2010. Hyundai Motor Company Hyundai officially launched its full-cycle manufacturing plant in St. Petersburg in 2010. St. Petersburg’s plant is Hyundai’s sixth production facility outside its home market of South Korea. The facility is expected to roll out 105,000 vehicles in its first year of operation with the rise to 150,000 in 2012. Hyundai plans to create 5,300 jobs by 2012 in St. Petersburg together with eleven parts suppliers from Korea. Nissan Nissan Manufacturing Rus was established in St. Petersburg in 2009. The plant currently represents approximately a 150 million euro investment with the total volume of 28,500 units since the start of production. The plant currently employs 2,000 employees. Toyota Motor Corporation Toyota became the first Japanese carmaker to start production in Russia with its car assembly plant opened in St. Petersburg in 2007. The plant, with an annual output capacity of about 50,000 vehicles, initially built 20,000 Camry sedans per year while gradually expanding its production since then.Trucks Scania Scania opened its industrial facility for assembling and bodyworking trucks for the Russian market in St. Petersburg in late 2010. This Russian facility is Scania’s sixth delivery center. From the new Delivery Center in St. Petersburg, Scania supplies complete trucks that are adapted to the requirements and operating conditions that apply in Russia. St. Petersburg’s facility has a technical assembly capacity of about 5,000 truck chassis and 1,500 superstructures per year. It employs about 70 employees. Yarovit Motors Yarovit is a Russian manufacturer of cargo trucks, dump trucks, bolster trucks and concrete mixers. Yarovit’s manufacturing facility was set up in St. Petersburg in 2003. In 2012 ë-Auto, a joint venture of Yarovit and the Onexim investment group, are planning to start the production of a hybrid electric car yo-mobile. Doing business in St. Petersburg St. Petersburg Government - Committee for External Relations 35 St. Petersburg Foundation for SME Development
  36. 36. Components suppliers Magna International A global automotive supplier currently operates five production sites in Russia, three of which are located in the St. Petersburg region since 2010. The Cosym stamping and assembly plant in Shushary has 170 employees and produces body, chassis and energy-management systems for OEM customers such as Hyundai, General Motors, Nissan and Volkswagen. The Cosym assembly and sequencing plant in Kamenka is a Hyundai- dedicated production site that employs 50 employees. Magna announced the opening of a Magna Exteriors and Interiors facility in Kolpino which has approximately 25 employees producing exterior and interior components for OEM customers, including Ford and Nissan.3.1.4. Supporting institutions3.1.4.1. Associations St. Petersburg Association of Manufactures of Automotive Components (SPbAPAC) St. Petersburg Association of Manufactures of Automotive Components is the largest professional association of automotive components manufacturers in Russia which functions on the principle of a cluster. At present the association unties more than 60 enterprises which manufacture over 1,500 products. Active participation in regional, interregional and international exhibitions and conferences as well as support of the Government of St. Petersburg and the Union of Industrialists and Entrepreneurs makes the association one of the key players at automotive and automotive components market of the Russian Federation. Doing business in St. Petersburg36 St. Petersburg Government - Committee for External Relations St. Petersburg Foundation for SME Development

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