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Commercial News Update – Southern Russia/Lower Volga

November 2006

Prepared by Olga Kutuzova, BISNIS Representative for Southern Russia/Lower Volga

This Monthly News Update provides news briefs on the major economic and social developments in November 2006 in the Lower Volga and South of Russia: Krasnodarskiy Krai, Samarskaya Oblast, Astrakhanskaya Oblast, Rostovskaya Oblast, Penzenskaya Oblast, Saratovskaya Oblast, Ulianovskaya Oblast and Stavropolskiy Krai

1.Krasnodarskiy Krai

a) The stevedore companies of port Yeysk have increased cargo handling on 15 %.

Cargo handling by the stevedore companies of port Yeysk has reached more than 2,659 million tons for 10 months 2006 and raised 15,2% in comparison with the same period of 2005.

Source: IA REGNUM

b) S7 and committee " Sochi-2014 " open new flights for mountain skiers

Airline S7 ("Siberia") starts new daily flights on a route Moscow-Sochi from January, 2007. It was announced by Application committee " Sochi - 2014 " representing the Russian city-candidate to host Olympiad in 2014. Opening of new flights supports growing popularity of Sochi as winter resort. For mountain skiers and snowboarders on new flights will be organized free-of-charge transportation of sports equipment.

Source: travel.mail.ru

c) German company Prokon Energiesysteme will build a factory on Kuban

The German company Prokon Energiesysteme GmbH has bought in Mostovskiy region of Krasnodarskiy Krai 12 hectares of land for construction of a factory, manufacturing biodiesel fuel from rapeseed with a capacity of 250 tons per day. The Russian-German OSC " Prokon- Kubanraps " is building the future enterprise. It also can process sunflower seeds. Estimated cost of the project is 15 million Euros.

Source: Kommersant

2. Samara Oblast

”Samaranedra” announced an auction for 5 oil sites

The territorial agency on natural resources of Samarskaya Oblast (Samaranedra) will lead auctions on five oil sites on December, 19th, 2006. The following are being put up for sale: Irgizskiy site under the starting price $ 1,8 million (50 million roubles), Vostochno -Furmanovskiy - $ 190 thousand (5 million roubles), Krepostnoy - $ 380 thousand (10 million roubles), Yuzhno-Zolotarevskiy - $35 million (100 million roubles), Bazhenovskiy - $ 80 thousand ( 2 million roubles).

Source: IА RusEnergy

3. Astrakhan Oblast

First business-incubator has been opened In Astrakhanskaya Oblast

It is created with support of the federal grant of 22 million roubles ($ 800 000) which was won by the government of Astrakhanskaya Oblast at All-Russia competition.

The business-incubator gives its inhabitants privileges for two years. In particular, in the first year of work the companies will pay 40 % of rent, in the second - 80%, for the third year of the organization should pay full cost of rent.

Now 14 businessmen, including representatives of the foreign companies, have submitted applications for rent of office premises in business-incubator.

Source: IA "VolgaInform"

4. Rostov Oblast

a) Japanese business delegation area has visited Rostovskaya Oblast

A Japanese business delegation was led by the head of representative office of the Japanese association on trade with Russia and the East Europe (ROTOBO) in Moscow, Mr. Masahiro Ikeda.

During the meetings were discussed prospects of cooperation in the field of motor industry, agribusiness, co-production of consumer goods.

Source: www.yugmedia.ru

b) Federal budget will direct $370 million (10,7 billion roubles) for restructuring of coal industry on Don

$370 million ( 10,7 billion roubles) are secured in the federal budget to implement measures for liquidation of coal mines of the Rostov Oblast, which will take place from 2006 to 2010.

These measures include resettlement of 4488 families from shabby habitation ( cost of the project is $ 150 million ( 4,17 billion roubles)). $ 37 million (1,18 billion roubles) are approved for reconstruction and replacement of the social infrastructure in connection with liquidation of coal mines and $ 134 million (3,62 billion roubles) - on recultivation of the used land and liquidation of other ecological damages caused by mountain works conduction.

Source: IА REGNUM

5. Penza Oblast

Administration of the Penza Oblast will give credits to farmers for development of greenhouse facilities
In the regional budget for the next year special funds are secured for support of farmers to receive materials and equipment for construction of greenhouses. This program will be implemented in the form of commodity crediting through regional agencies of business support. Loan amount per per one agribusiness can reach 3 million roubles ($110 thousand).

Source: GTRK "Penza"

6. Ulyanov Oblast

Ulyanovsk Joint-Stock Company " Aviastar-SP " raises planes of TU-204 family to the international level

Civil planes of the last generation: ТU-204С and ТU-204-300, assembled on Ulyanovsk Joint-Stock Company" Aviastar-SP", have been presented on the international Air Show China 2006 which was held in Chzhuhai Free Economic Zone on the south of the Peoples’ Republic of China. Chinese businessmen have started negotiations about delivery of 14 passenger planes.

Source: IPA "Mosaic"

7. Saratov Oblast

II Saratov Conference of Inventions, Innovations and Investments took place on November 21st

Innovative projects were presented at the Saratov State University during the Conference on the following sections: construction of equipment, electronics, electrical engineering; chemical industry; new materials; nanotechnologies; investigation, extraction and oil refining, gas and other minerals; mechanical engineering for various industries; power and power saving technologies; technological safety and ecological monitoring of ability to live; biotechnologies and medicine; IT-technologies; education.

Source: Saratov.gov.ru

8. Stavropol Krai

Stavropol Krai is chosen as a "pilot" region within the frames of international cooperation project between Russian Federation and European Union (TACIS).

The project, named «Strategy of regional development," is directed at stimulation of development of the regional economy in the Russian Federation based on practices applied by the European Union, which includes creation of a climate for development of business and attraction of investments, and also assistance to steady economic growth of the Russian economy. The main aim of the project is establishment of close cooperation between regions of the Russian Federation and regions of the European Union. The period of realization of the project is up to the end of 2007.

Source: www.stavinvest.ru

For more information on Southern Russia,, visit BISNIS online at http://bisnis.doc.gov/bisnis/country/southern.cfm

BISNIS (www.bisnis.doc.gov) is part of the U.S. Commercial Service (www.export.gov).