COMMERCIAL NEWS UPDATE FROM LOWER VOLGA VALLEY
April 2006
Submitted by Marina Johnson, BISNIS
Representative in Samara, Russia
This report summarizes commercial and business
development news in the South of Russia and the Lower Volga regions for April
2006.
This report contains the following information:
LOWER VOLGA VALLEY
-
Samara Region: Automotive, Industrial Development, Russian-American
Cooperation
-
Saratov Region: International Cooperation
SOUTH OF RUSSIA
-
Volgograd: Food Processing and Retail
-
Astrakhan
Region: Construction
-
Rostov Region: Food Processing
-
Krasnodar Region: Investment Projects, Food Processing, Trade Shows
Samara Region
Automotive
AvtoVAZ to renew production
AvtoVAZ intends to cease
production of Lada Niva by 2008 and extend manufacturing of Lada Kalina to
300 000 a year. Another present model to remain in production is the “Samara.”
The rest of the current range of models is to be replaced with a number of
modernized models, including a hatchback, minivan, station wagon and SUV-based
crossover, expanding the carmaker's current range. In terms of production,
AvtoVAZ plans future annual production targets of 150,000 hatchbacks, 90,000
minivans, 60,000 station wagons and 40,000 SUV-based crossovers. In addition to
its Lada cars, AvtoVAZ currently makes a sport-utility model, sold under the
Niva brand.
The carmaker is
negotiating with some of the industry's leading design bureaus, including
Italy's Peninfarina, whose services have been used by Ferrari, Hyundai and
Rolls-Royce, said a company spokesman, who declined to be named. It is also in
talks with Bertone, which has come up with designs for Alfa Romeo and Citroen,
and ItalDesign, whose clients include Volkswagen, Volvo and Toyota.
Source: www.volgainform.ru, www.themoscowtimes.com, www.regions.ru
AvtoVAZ Agrees to Give Up Its Testing Ground to State
The AvtoVAZ board of
directors agreed to transfer the ownership of the company's testing ground to
the state, part of Russia's largest carmaker's effort to pay off some of its
debt to the federal government. It cost around $80 million to build the testing
ground, AvtoVAZ spokesman Vladimir Yakushenko said, adding that the company
would be able to use it in the future.
Following the
installation of state-friendly management late last year, the struggling
automaker embarked on a major revamp in February, pledging around $5 billion in
new investment. It plans to build a new plant and begin production of a dozen
new models in the next five years. To carry out its sweeping plans, AvtoVAZ has
been seeking to restructure or entirely pay off its debt
Source: www.themoscowtimes.com
AvtoVAZ to better LADA quality
JSC
AvtoVAZ and the federal agency for testing and regularizing
RosTechRegulirovaniye have signed a protocol of agreement to cooperate on
improving quality of car parts supplied to the automaker as well as creation of
certification center and a chain of service stations. In 2006 the agency is to
start regular examination of car parts, the list of which should be completed
by April 30.
GM-AvtoVAZ
launch a new model
GM-AvtoVAZ is to launch production
of Chevrolet Niva with the engine Opel FAM1. The model is expected to be at the
dealers’ by May-June 2006. The new model will be positioned as a foreign make
and will cost considerable $6600 more. Yet analysts and dealers are uncertain
about the demand as the price shifts the model to a higher level, where
competition is tougher. So far only a few pilot cars have been sold and it is
difficult to predict the sales.
Source: www.vedomosti.ru
Samara holds Auto Show
On April 12-15 Samara held the 13th annual
“Samara Auto Show”. The exhibition contained several divisions: passenger cars,
lorries, tuning and sport and technologies. The show gathered 71 companies from
Russia and abroad, including dealers of Mazda, Audi, Hyundai, Renault,
Mitsubishi Motors. The show is the best attended motor show in the region and
is annually visited by some 17 000people.
Source: www.gateway2russia.com, www.interfax.ru, www.autoshow-samara.ru
Industrial Development
“Alcoa” launches a new production
line in Samara
On 17 April, “Alcoa Russia” announced launching of a new production line
at the metallurgic plant in Samara, which will enhance modernizing the plants
purchased by the enterprise in Russia and is vital for supplying the Russian
market with flat rolled aluminium products. US Ambassador in Russia W.G.Burns,
and the regional administration attended the ceremonial opening. Presently 50%
of the production is imported and subject to duties, the president of “Alcoa
Russia” Bill O’Rourke explained. The investments into the project amounted to
$6mln.
Source: www.samara.ru
MICROSOFT widens assembling in Samara region
Microsoft intends to work with
average computer assembling businesses directly. The program is open for
assemblers with capacities of 50-250 PCs per months, which account for 20% of
sales in Russia. To facilitate the fulfillment of the project, managers for
work with suppliers have been appointed in 24 cities, including Samara.
Microsoft also added a regional
distributor in Saratov to guarantee uninterrupted sales of soft products.
Source: www.samara.ru
Russian-American
Cooperation
American Ambassador visits Samara
On April 17-18, 2006 US Ambassador in Russia William G. Burns
visited Samara. The agenda of the visit included ceremonial opening of a new
aluminium production line at “Alcoa”, a meeting with the minister of economy
and development of Samara region G.Hasaev and a meeting with representatives of
the largest American enterprises in the region: “Pepsi Cola”, “Coca Cola”,
“Alcoa”, “General Motors”, “Delphi Systems”, “Amerada Hess”, “Corning”,
“Marriott International”, City Bank, Corning and Saratov’s ExpoPul.
The meeting with the minister of
economy was dedicated to discussion of mutually beneficial cooperation between
the region and the US. Presently Samara region hosts 15 industrial and
agricultural joint projects. As of January 1, 2006 the volume of US investments
into the economy of Samara region reached $86.2mln. The region exports to the
US organic and non-organic chemicals, chemical tread, rolled aluminium,
synthetic rubber, oil products, tools, etc. Samara imports industrial and
medical equipment, electrical and optic devices, plastics, etc.
Source: www.samara.ru, www.volgainform.ru, www.interfax.ru,
http://moscow.usembassy.gov/embassy
Saratov Region
International Cooperation
Saratov awaits Korean investor
“Lime House”, (Korea) failed to acquire a land plot for construction of
its Europe’s biggest factory of razor in Saratov region. The failure was
accounted for by rigid time restrictions, which allegedly had not been
announced by the region administration well ahead. Yet the manufacture is
positive that the plot will remain unsold and the price will go down from $4mln
to a more acceptable sum of $2.5-3mln.
Source: www.interfax.ru
Volgograd Region
Food
Processing and Retail
Cargill
mulls constructing oil-extracting plant in Volgograd
“Cargill Yug” (a Russian subsidiary
of “Cargill”) negotiates with the governor of Volgograd region on investing
$55mln in construction of an oil-extracting plant with a capacity of
500 000tons of seeds a year. “We mull opportunities for development on the
Russian market and oil segment is one of the priorities for the company,” a PR
department manager of “Cargill” announced. The Volgograd region is favorable in
terms of slack competition and rich raw materials resources. Yet, analysts say
the producer may need more than one brand of oil to gain considerable
success.
Source: www.vedomosti.ru
IKEA comes to Volgograd
A Volgograd regional presentation at
the Russian Chamber of Commerce and a number of embassies in Moscow resulted in
several contracts, including the agreement for the construction of an IKEA store
outside Volgograd, a joint mortgage program with a Hungarian bank and
construction firm. Other spheres included agriculture, transportation and
communications. Volgograd is among the 20 most attractive regions of Russia for
investments.
Source: www.volgainform.ru
Astrakhan Region
Construction
Astrakhan hosts
construction show
The construction show “Construction Industry Communal
Housing-2006” was held in Astrakhan on March 23-25. The show hosted some 83
enterprises from 10 regions of Russia and some 10 000 visitors. Presently
Astrakhan construction industry is experiencing a rapid growth, a number of
enterprises advance production output and welcome competitive partners.
However, the local market tends to have few wide-scale projects, such as large
residential areas complex construction.
Source: www.interfax.ru
http://exhibitions.stroybm.ru/russia/astrahan/stroiindustrija_-zhkh-2006/index.html
Astrakhan
constructs dry carrier for export
The 3-rd International Shipbuilding Plant (Astrakhan),
a part of “Sea and Oil Projects” have started the second body of dry carrier
for Rensen Shipbuilding BV in the framework of “Azolla” project. The contract
for construction of 2 ship bodies were signed in summer 2005 and extended for
one more ship in December 2005.
Source: www.volgainform.ru
Rostov Region
Food
Processing
Rostov
boosts oil production
GC “Donskoy Yantar”, the owner of
vegetable oil refinery in Rostov region, has purchased a land plot and prepared
a business plan for construction an oil extracting plant to increase the
profitability of the enterprise which currently buys oil for refining. The
daily capacity will soar threefold to 450 tons. The investment volume exceeds
$71mln and should be followed by investments into grain terminal and river
port. The project payback is announced as three years.
Source: www.vedomosti.ru
Krasnodar Region
Investment Projects
Italy to help reconstruct
Krasnodar
A delegation from Milan visited Krasnodar to extend the economic
cooperation between the regions which presently consists of 6 JV enterprises.
In particular, Italian construction companies are interested in a large-scale
reconstruction of Krasnodar. Other fields of cooperation include agriculture,
trade, light industries and furniture production.
Source: www.regions.ru
Krasnodar seals 6 investment
projects at MIPIM-2006
The Krasnodar region has sealed 6 investment projects, totaling 650 mln
euros at the international estate show MIPIM 2006. 92 mln euros is to be
invested into beach zone and down town reconstruction and business center
construction in Tuapse. Some 57 mln euros is allotted for sports center and
golf-club construction in the city of Gelendgik. The overall projects of the
region presented at the show reached 4.7bn euros and included construction of
beaches, hotels, office and trade centers in the area.
Source: http://economy.kuban.info
Krasnodar region
may accommodate special economic zone
1 to 4 special
economic zones for tourism and recreation are likely to be created in the
Krasnodar region, Russian Economy Minister German Gref announced during today's
meeting with Krasnodar businessmen.
"Consultants
suggest creating four zones, but we might consider the option of consolidating
them into one", - he commented. Gref underscored that the amendments to
the law on special economic zones for tourism and recreation might be passed in
April 2006, and the Russian regions to accommodate these zones chosen within
this year. "The Krasnodar region is one of the main candidates for a
special economic zone," the Minister explained.
Source:
www.rbcnews.com
Krasnodar participates in Anuga Show
On April 4 “Krasnodarsky Oil and Fats
Combine” took part in the world’s leading food and drink technologies show
“Anuga Food Inc” in Cologne, Germany, the event that attracted over 7 000
participants from 100 countries of the world. The combine regularly visits the
annual show and implements presented innovations to boost and modernize its
production. In 2005 the output soared 175% against 2004 to 50mln bottles of
oil; a new department of margarine production was opened.
Source: http://economy.kuban.info
Food Processing
Cecab to launch green peas production in
Krasnodar
In May 2006 Cecab, a major French canned vegetable producer, will start
construction of a plant for canning green peas, beans and sweet corn in
Timashevsk, Krasnodar Region. The plant will take up 30 hectares and 6 hectares
of farms for growing its own vegetables. The project will acquire 20mln euros
and the capacity is to be 80mln cans a year. Production is expected to be
launched in summer 2007.
Source: http://economy.kuban.info
Novorossiysk Poultry Factory invests $1mln in
reconstruction
JSC “Novorossiysk Poultry Factory”
has invested some USD800 000 in modernization and equipment reconstruction
of one of its egg complexes. Most processes have been automated with Italian
devises, which should boost production 4-4.5 times. The investment is expected
to be recovered in 2 years.
Source: http://economy.kuban.info
Trade Shows
Krasnodar holds agribusiness show
On
May 24-27 2006, an agribusiness show “Golden Field” will be held in the town of
Ust-Labinsk, Krasnodar region, and gather leading Russian and foreign producers
of agricultural equipment. On the final day over 40 tillage, seeding and
harvesting machines will be demonstrated at work.
Source: http://economy.kuban.info
http://bearings.kuban.ru/vistavka/niva.html