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Region at Glance 0 – Moscow -3 – GMT Time difference: 3.35 mln. peoplePopulation: Nizhny NovgorodCapital of the region and Privolzhsky federal district.

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Presentation on theme: "Region at Glance 0 – Moscow -3 – GMT Time difference: 3.35 mln. peoplePopulation: Nizhny NovgorodCapital of the region and Privolzhsky federal district."— Presentation transcript:

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2 Region at Glance

3 0 – Moscow -3 – GMT Time difference: 3.35 mln. peoplePopulation: Nizhny NovgorodCapital of the region and Privolzhsky federal district (14 regions) sq. km.Area: Geographical position:Centre of the European part of Russia Distance from Moscow – 400 km UNESCO included the city of Nizhny Novgorod in the list of 100 cities of the world’s historical and cultural heritage

4 Automotive industry IT Petro-chemical industry FMCG production and distribution Science and education Strategic Priorities Regional Development Strategy up to 2020 Competitive Advantages Unique geographical position Well-qualified human resources Manufacture skills and traditions Centre of research and development Comfortable business environment Regional investment policy

5 Economy in Figures 2009 vs.2004 GRP growth rate: Foreign trade turnover growth: Foreign investment growth: 219,2% 224,6% 327,9% Components of GRP

6 Structure of Industry Region Share in Russian’s Output

7 Foreign Investors FIAT Severstal Freudenberg OMK Liebherr Procter&Gamble Knauf Danfoss Lanxess A.Raymond A.S.Creation Brano CIEB Saint-Gobain Ingersol-Rand Intel Rettenmaier Lugas Saint-Gobain, Stora Enso Solvay BASF Sibur Lukoil Valeo Intel Coca Cola Heineken Onduline Knorr-Bremse Stada Basel GAZ Asahi Group Europe Foods Schott Caterpillar Trosifol Bericap

8 Competitive Advantages

9 NIZHNY NOVGOROD Russia’s Crossroad CROSSROAD OF INTERNATIONAL TRANSPORTATION CORRIDORS EU TEN №2 & “NORTH – SOUTH” MOSCOW MINSK WARSAW BERLIN VLADIVOSTOK EKATERINBURG TEGERAN HELSINKI ST.PETERSBURG

10 Transport Infrastructure More than 12 thousand km of highways with the density 5 times higher than the average in Russia 1300 km of railroad with the triple density as compared with the Russia’s average Nizhny Novgorod – Moscow – Saint-Petersburg via “Sapsan” Federal logistic centre (1 out of 11) with container facilities by Russian Railways (RZD) up to 2014 River ports and about 900 km of water ways Water connection with the Baltic, White, Azov, Black, Caspian Sees International airport to be reconstructed up to hours duration regular flight “Nizhny Novgorod – Frankfurt/Main (Germany)”– 5 times per week

11 Largest Consumer Market in Russia ,3 Within 1000 km zone Within 500 km zone Saint – Petersburg Moscow Nizhny Novgorod Distance Number of inhabitants, mln.

12 Access to OEMs and Autocomponents’ Market Nizhny Novgorod

13 Education, R&D and Employment 18 higher schools and universities 99 trade and polytechnic collages 190 thousand of students in 2008/ foreign students in 2008/2009 Primary, secondary and higher education for foreign citizens First Intel division in Eastern Europe was founded in Nizhny Novgorod About 100 scientific, educational, R&D institutions and 50 thousand people engaged Strategic research institutions: Federal Nuclear Centre, Research Institution of Measuring Systems, Institution of Applied Physics of the Russian Academy of Science, Research Institution of Radio Engineering

14 Investment Infrastructure Investment council headed by the Governor of the Nizhny Novgorod Region: - Includes representatives of controlling, supervising and regulating authorities - Gives «green light» to an investment project - Determines measures of state support – priority status - Solves problems related to a project implementation Ministry of investment policy: - Supports investors implementing investment projects in the region inlc. land site search - Gathers permissive documents - Manages activities of the Investment Council and Board of Investors of the Nizhny Novgorod Region Board of Investors headed by the Governor of the Nizhny Novgorod Region : - Thematic forum for discussion with the Governor on investment projects’ implementation problems

15 Legislation & Procedures Federal law: Federal law of July 9, 1999 No.160-FZ: “Foreign investment in the Russia Federation.” Nizhny Novgorod region investment law: Regional law of December 31, 2004 No180-Z: “State support for investment activity in Nizhny Novgorod region.”

16 Measures of State Support -13,5%2,5%16%Incentive rate 1,5%-- Land tax 0%-- Incentive rate 1,1% -2,2%Property tax 0% - Incentive rate -17,5%2,5%20%Profit tax MunicipalRegionalFederal Budget levels Tax rateTax Financial and administrative support to be provided according to the Regional law of December 31, 2004 No180-Z: “State support for investment activity in Nizhny Novgorod region.” Tax incentives: Duration: years The Investor can fix the date when the incentives are put into action Documentation: Investment agreement, regional law to ratify Investment agreement Procedure timing: apr. 4 months

17 Dzerzhinsk Dzerzhinsk Industrial Park Area of industrial park: 400 Ha Distance to Moscow: 350 km to Dzerzhinsk: 9 km to Nizhny Novgorod: 5 km Located along the Federal Highway M-7 "Volga" (Moscow - Kazan) NizhnyNovgorod Residents: Danfoss, production of heating equipment A. Raymond, production of plastic fasteners LANXESS, production of additives for rubber industry

18 Dzerzhinsk Industrial Park Category of the land site: suitable for industrial usage and construction Distance to the nearest residential area (buffer area): more than 500 m Sites within the park shall be configured as per residents’ requirements Topographic map: appendix 1 Ground analysis: appendix 2 Land site surfacing and uprooting: to be done by the authorities* * the subject of investment agreement between Investor and the authorities: appendix 3

19 Dzerzhinsk Industrial Park Land site acquisition: Variant #2:leasing for the construction period and buy out Cost of land rent: RUR. per hectare per year Average construction period: 2 years Documentation: lease contract Procedure timing: apr. 3,5 months Buy out cost of land: RUR. per hectare One time payment Documentation: purchase contract Land site acquisition: Variant #1: purchasing after tender procedure Cost of land: – RUR. per hectare One time payment Documentation: purchase contract Procedure timing: apr. 4,5 months Decision on the variant of land site acquisition to be made by Investor

20 Dzerzhinsk Industrial Park Gas supply: connection and operation costs Connection fee: 0 RUR Wholesale price for natural gas: RUR per m3 Tariff for gas transfer: 380 RUR 69 kop. per m3 Extra charge on gas transfer: 55 RUR 11 kop. per m3 Extra charge for supply and sales: 77 RUR 25 kop. per m3 Total: 3217 RUR 05 kop. per m3 Total: 3217+VAT=3796 RUR 12 kop. per m3 Annual value per 5,6 mln m3: RUR* Tariffs are regulated by Federal Tariffs Agency *in the prices of the year 2010 Quality of gas (gas unit m3): temperature +200C pressure 101,325 kPa humidity 0% calculated combustion heat kcal/m3

21 Dzerzhinsk Industrial Park Electric power supply: connection and operation costs Connection fee: RUR per kW excl. VAT Electricity supplier’s tariffs valid for the electricity supplying company OAO “Nizhegorodskaya Sbytovaya Company”: 1270,001050,00 RUR/МW per month- energy rate RUR/МW per month- power rate Double-rate tariff***: RUR/MWh hrs RUR/MWh hrs RUR/MWh hrs Single-rate tariff (with annual hours of the declared power consumption)**:1 MV 2(10kV)*MV 1(35kV)*HV (110 kV)* Voltage Ranges Unit of Measurement Consumers Groups *The data on electricity cost depends on the voltage **The fee will depend on the number of hours to be consumed during a year. We assume that the industrial enterprise as the Continental company plans will consume 4 – 5/ 5-6/ 6-7 thos. hours per year. This will depend on the technological process and should be defined by the engineers of Conti. ***It’s also possible to pay for the power consummated and additionally for the energy. The optimal variant should be calculated basing upon the production process.

22 Government of the Nizhny Novgorod Region Ministry of Investment Policy Tel.: +7 (831)


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