Newsletter for the South Korea businesses and investors (Issue 2, 2014)
Ministry of Economic Development of the Russian Federation attracts South Korean enterprises to participate in Russian investment projects
Alexey Ulyukaev, Minister of economic development of Russia, during the working visit to Korea had a breakfast meeting with the representatives of Hyundai, CJ Group, Lotte, Daesung Group, KT, Korean National Oil Corporation and other major Korean companies that carry out investment projects in Russia.
On the course of meeting, the issues regarding the implementation of investment projects in energy, shipping, infrastructure development within Korea and Russia were discussed.
Alexey Ulyukaevnoted that the major investment projects successfully implemented by companies like Hyundai Motor, LG electronics, Lotte Group, Daewoo, Orion are good examples of mutually beneficial bilateral cooperation.
While inviting the investors to participate in the investment projects, the Minister of economic development of Russia dwelled on the issues concerning the designation and development of the Priority Socio-economic Development Zone in Far East. The Head of Russian economic administration mentioned towards the Korean investors that all investors in Russia, particularly Korean partners, will be provided with preferential conditions and alleviated administrative burden.
Currently, the regulatory framework is being actively developed for the Priority Socio-economic Development Zone in Far East. The draft law on designation of such zone was already examined on the session with the Prime Minister and will be finalized before 21 April 2014.
Alexander Osipov, First Deputy Minister for Development of Russian Far East, during the session on 6 March 2014 presented the report on executed work by administration in recent 6 months to Vladimir Putin, President of Russia, and outlined the main policies for perspectives of socio-economic development of the region.
Moreover, it was mentioned that more than 300 investment projects were studied and, among them, the most preferred ones, that could make immediate financial and economic effects, were selected. Based on the results of the analysis, the shortlist of 28 projects was prepared. According to Osipov, the investment of 99 billion rubles is necessary primarily for infrastructure sector in order to execute the projects. The aforementioned projects would enable to attract 2 trillion rubles to the economy of Russian Far East and create 36 thousand new workplaces in the coming years.
Accordingly, the Ministry of economic development came forward with the initiative to include the selected investment projects to the Federal special purpose program “Social and Economic Development of the Russian Far East and the Baikal Region”, establish the criteria and order for project selection and prolong the execution period of the program till 2025.
Such promising projects are: the exclusive vehicle-manufacturing economic zone of industrial type based on the existing “Sollers” and the oil-processing complex JSC “VNHK” where the organization of oil refining cluster is planned.
Besides, the project on designation of multifunctional platform in Shkotovsky district (Primorsky Krai), which includes the fish processing cluster with port infrastructure, coal terminal and container berths, has been designed. It is scheduled that the agricultural park will be established in Mikhailovsky district (Primorsky Krai), and, according to the project, the industrial park will be designated in Nadezhdinsky district (Primorsky Krai). Also, one more priority development zone will be organized at the premises of the Far Eastern Federal University on Russky island underneath Vladivostok.
According to the Governor of Primorye Vladimir Miklushevskogo, the first projects will be launched in this year.
Primorsky Krai and South Korean businesses strengthen cooperation
On 24 March 2014, Korea Trade-Investment Promotion Agency (KOTRA) and the Center for Export Development of the Primorsky Krai concluded the agreement on cooperation.
The agreement was signed by Roman Glushak, Director of the Center for Export Development and Kim Ha Neul, Director of the Commercial Department of the Consulate-General of the Republic of Korea in Vladivostok.
The Director of the Center for Export Development of the Primorsky Krai Roman Glushak noted that the businessmen of both countries will be able to find their business partners more easily and effectively by operation of the agreement. He also underlined that the cooperation with South Korea was designated as a separate policy in Primorye.
Moreover, the second business mission to South Korea is being organized at this moment. It is believed that the participants will be the businessmen of Primorye who are interested in collaboration with the Republic of Korea.
Russian authorities presented the investment potential of Tyumen Oblast and Chelyabinsk Oblast to South Koreaat the close of March 2014
The presentation on investment potential of the Tyumen Oblast was held in the Embassy of South Korea for development of mutually advantageous cooperation. During the talks, the parties expressed their interests in further development of relations and reached the provisional agreement on the arrangement of Korean delegation’s visit to Tyumen Oblast.
On the course of the promotion about commercial-industrial potential and investment climate of Chelyabinsk Oblast dedicated to the establishment of partnership relations with South Korean businesses, the meetings with the managements of Samsung, Hyundai Motor Group, Celltrion were organized, as well as the meetings with the President of KOTRA, governors and mayors of Kangwon province.
Additional 1.4 billion rubles for Industrial parks in Far East
In session on the establishment of industrial parks in Far Eastern federal district, Alexander Galushka, Minister for Development of Russian Far East, announced that the modification to the federal support system is necessary for strategic development of the region.
The ideal space for Far East industrial park is around 40 ha. Currently, the Government plans to allocate max 600 million rubles covering 80% of all required funds for the foundation of industrial parks in Far East. And the rest, 20%, is going to be covered by the regional budget. However, due to the shortage of state funds, it has been suggested to alter the current financing layout and increase the federal contribution up to 90%.
The session was held in Khabarovsk at the end of February 2014 under the direction of Yuri Trutnev, Deputy Prime Minister of Russia and Presidential Envoy to the Far Eastern Federal District. On the course of such meeting, the decision on financial subsidies for clusters was made. Moreover, the Programs for promotion of small and medium businesses are going to be altered for appropriation of technological clusters with regard to the Government’s concerns as to the development of Far East.
288 billion ruble Angaro-Eniseisky cluster in Krasnoyar Krai
Dmitry Medvedev, Russian Prime Minister, ordered Arkady Dvorkovich, Deputy Prime Minister of Russia, to work on the designation plan of Angaro-Eniseisky industrial cluster as proposed in Krasnoyarsk Economic Forum on 14 February 2014.
The purpose of this project is to utilize the rich natural resources of the central Krasnoyarsk Krai, primarily those of Eniseisky, North-Eniseisky, Motyginsky and Sayansky districts, as well as the development of metal mining, energy, metallurgy and forestry industries.
The total estimated value of the project is amounted to more than 280 billion rubles. And it is assumed that 216.8 billion will be financed by equity investments and 45.7 billion will be satisfied by the federal and regional budgets.
Lev Kuznetsov, Governor of Krasnoyarsk Krai, noted that the project implementation would increase Krasnoyarsk Krai’s GRP up to 54% and Russia’s GDP up to 1.5%.
Alongside with Boguchany Dam infrastructure, it is suggested to construct additional power generation plants that could help improve an annual gold extraction rate in the region for extra 14 ton (34% of current production rate), lumber production for more than 150 thousand cubic meters (8%) and employment elasticity by creating 6.5 thousand new workplaces. Moreover, it is also proposed to build highways for 640 km and a highway bridge for more than 2 km across Enisey in Vysokogorsky.
At this time, Krasnoyarsk Krai submitted the application to the Russian Investment Fund in order to co-finance the Angaro-Eniseiskycluster for 2012-2021 years.