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Newsletter for the Turkish businesses and investors (Issue 3, 2014)

Turkish investors develop Russian regions

During the Turkish-Russian summit organized by the Turkish Confederation of Businessmen and Industrialists (TUSKON) in Istanbul on 13-14 March, the business leaders of both countries discussed the perspectives of cooperation in development of Russia’s regions.

The event was attended by the delegation from the Chamber of Commerce and Industry of the Russian Federation (CCI RF), headed by its President Sergei Katyrin, along with Russian businessmen and representatives of regional Chambers of Commerce and Industry in Samara Oblast, Rostov Oblast, the Republic of Tatarstan, Lipetsk, and Volgograd.

The delegates noted that Turkish enterprises started investing not only in the Russian capital, but also in other regions of Russia. During the meeting, Sergei Katyrin, CCI RF President, pointed out that the Turkish investors are currently expanding their businesses from Moscow to Moscow Oblast and other nearby regions such as Vladimir, Ryazan, and Smolensk. The Head of the Chamber underlined that this new trend will not eventually lead to the shortage of investments in Moscow. Instead, it means that foreign businesses have finally switched their investment targets from the capital city to the regions, where less competition but more opportunities and open niches are expected.

In January-September 2013, Turkey’s investments in Russian economy amounted to US$ 413.3 million, while, at the same time, Russia’s investment in Turkey was US$ 845.8 million.

Turkey and the Republic of Tatarstan are rapidly developing their trade and economic relations, focusing mainly on investment cooperation. For example, many Turkish partners are interested in the Alabuga Exclusive Economic Zone, where a number of large Turkish enterprises are already involved. The Republic of Tatarstan is actively attracting Turkish economic cooperation.

At the summit, the members of the Russian delegation gave presentations on their regions, the activities of their regional Chambers of Commerce and Industry, and their investment projects.

Rostov Oblast attracts Turkish investors for cooperation in transport, construction, agriculture, and industry

A seminar presenting the constituent entities of Russia was held in Turkey on 27 March. The Administration of Rostov Oblast presented its investment potential, including the priority investment projects, the implementation of which may engage the participation of Turkish investors.

The seminar was organized within the 6th session of the task force for regional cooperation, under the Joint Intergovernmental Turkish-Russian Commission on Trade and Economic Cooperation. The Joint Intergovernmental Commission met in Turkey on 26-27 March 2014.

The Russian delegation was headed by the Russian Deputy Minister for Regional Development, Vasiliy Kopylov. The Rostov region was represented by the Deputy Minister for Economic Development of Rostov Oblast, Vladislav Esin. According to the regional government, the foreign trade turnover between the Rostov Oblast and the Republic of Turkey in 2013 amounted to US$ 1.8 billion. The major trade operation was exports worth US$ 1.3 billion. The most favored made-in-Don products in Turkey are food commodities and production supplies, which constitute 57% of the whole export structure.

For more information about seminar, please click on this link http://www.donland.ru/Default.aspx?pageid=78529

Turkey and Russia to jointly construct an automobile factory in Naberezhnye Chelny

An automobile manufacturing company from Turkey has decided to participate in joint ventures for construction of and production by an automobile factory in Naberezhnye Chelny (Republic of Tatarstan). The parties considered the plans for cooperation with the local business community in Tatarstan, during the delegation’s visit to study the investment potential of the city and to strengthen the business relationships.

The Deputy Head of Economic Development and Business Support, Radmir Belyaev, presented the investment prospects for the automobile sector and for Tatarstan overall. After negotiations the potential investor decided to prepare the investment plan, which will be presented to the administration of the Republic and the city in the near future.

Trabzon-Vladikavkaz logistics passage to be organized between North Ossetia and Turkey

The decision to create a logistic passage between Vladikavkaz in North Ossetia and Trabzon in Turkey was made at the end of March by representatives of the customs and border services, the Federal Service for Supervision of Consumer Rights Protection and Human Welfare (Rospotrebnadzor), and trade and industry sectors of Turkey and Russia.

The project to enhance the investment climate for Turkish and North Ossetian businesses will be implemented in Vladikavkaz, as the main base for attracting investors from Middle East and Far East. At this point, the most preferred trade road for import of Turkish goods is across the Black sea. If grocery goods from Turkey can be transported by land across the border, the price of the goods will fall dramatically due to the lower supply costs.

At the session, representatives of businesses from Eastern Black Sea region, Turkish government officials, and North Ossetian federal authorities discussed the perspectives of this route from Turkey to Vladikavkaz, which they call the “Green Passage.”

Participants at the event shared ideas about how to optimize the supply of fruit and vegetable goods from Turkish Trabzon to Vladikavkaz within the existing Turkish-Russian treaties on the development of business cooperation. Throughout the year, two meetings were already arranged by the partners: the Eastern Black Sea Exporters Association (Turkey); the chamber of commerce and industry of this region; and colleagues from North Ossetia. Businessmen also had special meetings during these sessions.

The Head of the North Ossetian Customs Control, Sergey Trotsko, stated that participation of his office in the “Green Passage” project offers simplified passage and customs clearance for cargo. Meanwhile, the customs office introduced an on-line customs filing system, through which 91% of the preliminary customs filings are made. This optimizes the customs process at the border, and allows customs officer to more efficiently and accurately check cargo.

The customs office and the border service have jointly introduced around-the-clock service at the border entry in Verkhniy Laris, as well as a flexible timetable and maintenance watch for officers on weekends. They plan to construct a customs logistics terminal near Verkhniy Laris port by the middle of the year. Mobile X-ray examination equipment will be relocated from Dagestan.

The officials also examined the possibility of a bus route from Istanbul to Trabzon to Vladikavkaz, which might further promote the development of business ties between the two countries.

According to Ahmed Hamdi Tyurdogan, the Turkish businessmen shared both humanistic and geographical similarities in communications with colleagues from North Ossetia. After the meeting, Ahmed Hamdi Tyurdogan invited the North Ossetian businessmen to the Silk Road Conference, which will be held in Turkey on 22 May.

Tatarstan looks for business development

The Turkish-Tatar Textile Forum was held on 6 March 2014, as a consequence of the visit by a delegation from the Tatar Government to Turkey in November last year. The Forum considered issues of joint cooperation in light industry.

Turkish businessmen interested in the development and expansion of their businesses in Tatarstan visited the Republic and suggested the administration should widen international cooperation in the textile and consumer goods industries. By the end of last year, Turkey had become the largest investor in Tatarstan. (Turkey was not one of the five largest investing countries in Tatarstan in 2011). The foreign trade turnover between Turkey and Tatarstan reached US$ 1 billion. About 80% (US$ 720 million) is refined oil products. Turkey exports leather and fur goods.

For Turkey, Tatarstan is the gate to the Russian market. Turkey is the fourth largest importing and the sixth exporting partner with Tatarstan. At the forum, Tatyana Fedorova, an executive member of Soyuzlegprom, and management chair of the Union on Entrepreneurs of Textile and Light Industry of Republic of Tatarstan (an associate member of Soyuzlegprom), shared her vision on cooperation between Turkey and Tatarstan. She mentioned that the main problem of light industry is the lack of raw materials and supplies in Russia. Therefore, she suggested establishing an inter-regional and international network to supply of raw materials and supplies. Another problem is the inaccessibility of small and medium businesses to financial resources and the slackening modernization of production.

The executive member of the Association of Turkish Textile Machinery Manufacturers, Aihan Bally, provided the manufacturers with a presentation about the textile industry and research work in the area. The primary mission for Tatarstan is to find suppliers of quality fabric. Accordingly, the region is entirely open for joint businesses.