COMMERCIAL
NEWS UPDATE FROM LOWER VOLGA VALLEY
February
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 February 2006.
This
report contains the following information:
LOWER
VOLGA VALLEY
-
Samara Region:
Automotive and Aerospace, Industrial Production
-
Ulyanovsk
Region: Automotive and Airspace, Industrial Production
SOUTH
OF RUSSIA
-
Volgograd
and Astrakhan Regions
-
Rostov region
-
Krasnodar region
-
Stavropol region
Samara Region
Automotive and Airspace
AvtoVAZ announces plans till 2020
AvtoVAZ
announced plans to launch at least three principally new models in the next 5
years, all front geared and 4x4. Total production output is to exceed 1mln cars
per year. To guarantee fulfillment of all plans the plant will construct a new
assembling line with annual capacity of 450 000cars.
Source: www.volgainform.ru
Lada Kalina production grows
In
2005 LADA KALINA assembling reached the planned capacity of 60 000cars a
year. The plans for 2006 are to reach the projected capacity of
220 000cars a year. Currently personnel training is underway to increase
the number of workers to the necessary 2 000 people.
Source: www.volgainform.ru
AvtoVAZ sums up January production
In
January 2006 JSC AvtoVAZ manufactured 49 181cars, which is 2.2% above the
same period of 2005. Export production reached 5 000cars, LADA 110
production was 13 292 cars and Lada Kalina cars – 4 012cars. Sales of
January amounted to 43 000cars, being 3.2% higher the same period of 2005.
Source: www.volgainform.ru
AvtoVAZ employs Standard Euro-4
On
February 6 JSC AvtoVAZ started production of LADA110, LADA 4x4 and LADA KALINA
in conformity with the environment control standard Euro-4. The measure is
aimed at increasing export to countries with Euro-4 standard requirement. The technological changes necessary are
slight as the measure was planned before. In February testing lots are to be
assembled.
Source: www.volgainform.ru
GM-AvtoVAZ defines
plans for 2006
General Motors defended its production partnership
with AvtoVAZ on Tuesday, but said its growth in Russia this year would stem
from sales of its own models. The U.S. car giant said it would open 34 new
dealerships by the end of the year in an effort to increase sales in Russia by
30 percent, to around 100,000 vehicles, and increase its market share. It
declined to say how much it would invest.
In the same period, production of models by the
GM-AvtoVAZ joint venture in Tolyatti are due to fall by 9 percent, to 47,000
vehicles.
In terms of its own plans, General Motors wants to
reestablish its Chevrolet brand as the best-selling foreign model in Russia,
said Warren Browne, GM's director for Russia.
Source: www.themoscowtimes.com
GM-AvtoVAZ Halts
Production
Output at General Motors' joint venture in Russia has
been halted. Russian newspapers said AvtoVAZ had stopped delivering parts to
the venture's plant in Togliatti, but the GM spokesman declined to go into the
reasons for the stoppage.
AvtoVAZ announced this month that it would build a new
state-funded car plant and might close the joint venture with GM. The strategy
shift comes as Russia seeks to create an auto industry champion to meet the
challenge of foreign rivals, whose sales of imported and locally assembled cars
are booming.
Vedomosti, quoting a source close to AvtoVAZ
management, said AvtoVAZ was losing money by supplying car kits to the venture
at 15 percent below cost. That amounted to losing $20 million per year, given
an annual output of 50,000 cars.
The Tolyatti plant, in the Samara region, builds
50,000 Chevrolet Niva sport utility vehicles and Viva sedans per year. AvtoVAZ
and GM each own 41.5 percent of the venture, while the European Bank for
Reconstruction and Development owns the remaining 17 percent. GM has used the
venture to fuel sales growth and win market share in Russia since 2002, as
sales stagnate or decline in Europe and the U.S.
Sales in Russia of the Chevy Niva and Viva models fell
by 14 percent last year to 46,000, industry figures show.
Source: www.themoscowtimes.com
GM-AvtoVAZ Set to
Restart Production
GM-AvtoVAZ is set to restart production Tuesday
following a shutdown that lasted more than a week after the company's main
shareholders reached an agreement at an emergency meeting on Monday. In the
dispute, AvtoVAZ had argued it was losing money on the supply price. A
spokesman for GM Europe said Monday that the venture was paying the market rate
for parts.
The GM-AvtoVAZ venture and its parent companies
declined to disclose what terms had been agreed on, saying only that the
companies remained in negotiations. The deal allowing GM-AvtoVAZ to restart
production comes as speculation mounts over a government plan to pump $5
billion into the country's automotive industry.
A spokesman for the Industry and Energy Ministry, of
which Alyoshin's agency is a part, said late Monday that the ministry had yet
to sign off on the plan. Finance Ministry spokesman Vitaly Krasnyuk said his
ministry could not agree to the plan, as it was seeking to give AvtoVAZ
tax-exempt status.
Source: www.themoscowtimes.com
GM-AvtoVAZ JV sums up
Since
September 23, 2002, when the first Chevrolet Niva car of GM-AvtoVAZ joint
venture was produced, the enterprise has manufactured and sold 131 465
cars. In September 2004 the joint venture launched production of a new front
geared model Chevrolet Viva of Class C, based on Opel Astra T-3000. The
production was halted for two weeks in February due to management discord.
Source: www.volgainform.ru
AvtoVAZ to get new
suppliers
“Krista”, a car parts and accessories producer, (Syzran) and AvtoVAZ
have signed a contract for steering wheels supplies and mull car seats
supplies. The enterprise is ready to provide the car maker with 60 000car
seats a year. Later “Krista” will start production at a workshop of AvtoVAZ,
which will raise the output to 120 000 car seats by 2007. So far the only
provider of car seats has been “AvtoVAZagregat”, which is presently investing
into developing seats for Kalina and Priora models.
“Krista” has also started plastic coloring works at AvtoVAZ? Which
should reach the capacity of 240 000 plastic sets a year.
“Krista” has its own textile production with annual capacity of
150 000sq m and plans to launch seat carcass and filling production as
well.
Source:
www.vedomosti.ru
Samara Airlines to lease TU-154 to Iran
JSC “Samara Airlines” plans to
lease two TU-154 to an Iranian airlines company. “Samara Airlines” face a
discrepancy between the existing air fleet and transportation load. Presently
TU-154 are too capacious for Samara and need to be replaced by An-148 and
Boeing-737-300.
Source: www.regions.ru
Samara Airport to modernize equipment
JSC “International Airport
Kurumoch” has reached an agreement for cooperation with several leasing
companies in the framework of modernization and development program. The
cooperation is aimed first of all at leasing supplies of equipment and special
devises. The modernization program is meant for 3-5 years and will involve
re-equipment of all necessary services.
Source: www.regions.ru
Samara Government Buys Tu-154
Samara
Oblast Government is to purchase 2 TU-154 from JSC “Aviakor-Aviation Plant”.
The planes will be used for official flights of the government members and the
local football team. The estimated cost of the deal is $11.42mln. Both planes
will be transferred to “Samara Airlines” under the monthly rate of
$71 000.
Source: www.samara.ru
Industrial
Production
Volgotanker Says
State Takeover Is Inevitable
Volgotanker, former shipper of embattled oil major
Yukos, made a plea to the government Tuesday to be taken under state control,
saying the nationalization of the shipper was inevitable. "At this point,
the only possible option for us is to come under government control in order to
save 10,000 jobs," Vladimir Zhukov, chairman of Volgotanker's board of
directors, said. The tax claims, put forth by Samara regional tax authorities
for 2001 through 2004, exceed the shipper's net assets, Volgotanker said. The
Samara regional prosecutor has also frozen Volgotanker's property, including
its fleet -- Russia's largest fleet of river tankers and barges.
Volgotanker is 76 percent owned by a number of
offshore companies believed to be linked to the shipper's management, and
minority shareholders own about 4 percent. The state last year announced plans
to sell its 20 percent stake in the shipper.
Kleimyonov said Volgotanker did not have the $50
million it needed to maintain and renew its fleet, whose shipment volume is set
to drop 30 percent this year, to 4 million tons. The railways would be able to
pick up the slack from waning river shipments, but the majority of Russia's
exports, which amounted to 251 million tons of crude and 100 million tons of
refined products last year, are routed through Transneft pipelines.
Volgotanker operates in 17 regions in Russia and
delivers shipments to 144 sea and river ports in Western Europe, the Middle
East and North Africa. Yukos was Volgotanker's major client until 2004, using
river shipments to bypass the country's clogged pipelines operated by state
monopoly Transneft. Yukos was also one of the main Volgotanker owners until
2000, when the oil company sold its stake in the shipper. Volgotanker had
contracts with state-run Rosneft, Tatneft, TNK-BP, Turkmenneft, Bashneft and
other oil companies last year. The shipper has yet to sign any 2006 deals,
which are normally sealed in spring, Kleimyonov said.
Source: www.themoscowtimes.com
Zhiguly Construction Materials
raised production 7%
In
2005 “Zhuguly Construction Materials Plant” produced 888 000tons of
cement, which is 7% above 2004. Chalk production output was 2 700tons and
macadam production output reached 765 000tons. The capacity of the plant
is 1.9mln tons a year.
Source: www.volgainform.ru
KuibyshevAzot sums up 2005
In
2005 the sales of JSC “KuibysheAzot” (mineral fertilizers producer) soared
34.4% against the year before, revenue being 8% higher (total $76.4mln).
Production growth reached 9.1%, the product which reached the highest output
were: mineral fertilizers (4.9% up against 2004), ammonium nitrate (12.5%
increase against 2004), polyamid-6 (31.9% growth verse 2004). The high results
root in technical modernization, which received $51mln of investments, and in
the fact that polyamid-6 production was increased up to the project capacity.
Export
of 2005 amounted to $360.1mln (26% up verse 2004) and domestic sales of 2005
totaled $117mln (27% increase against 2004).
Source: www.volgainform.ru
Ulyanovsk Region
Automotive and Airspace
UAZ fires 15% staff
JSC UAZ announced
that 15% of the present personnel are to be made redundant due to low sales and
perspectives. The plant intends to slowly change production to UAZ-Patriot,
older models to be halted.
Presently the plant
produces 15% of all Russian off-roaders. In 2005 68 000cars were
manufactured.
Source: http://news.samaratoday.ru/
Japanese automakers visit Ulyanovsk
On
February 1 representatives of the largest Japanese car maker KANEMATSU Co.
visited Ulyanovsk Regional Union of Entrepreneurs and the holding “AMS-Group”
to discuss probable cooperation and supplies of engineering equipment to
Russia. The parties agreed upon holding a conference of small and average size
businesses in Ulyanovsk.
Source: www.volgainform.ru
Industrial Production
Ulyanovsk production grows
For
the first time in three years Ulyanovsk region economy starts to steadily grow.
Production output reached $2.472bn (106.8% against 2004). 76.3% of all
enterprises in the region belong to processing industries. Metallurgy was the
most rapidly developing field with 276% advance, mineral resources excavation
was the 2nd with 128.2% increase.
Source: www.volgainform.ru
Ulyanovsk to better investment climate
As the framework of Ulyanovsk
administration Investment Facilitation Program for 2006, investment volume
should reach $714mln (against $428mln in 2005). To promote the region and
attract new investors, Ulyanovsk held a series of potential presentations on
national and international levels, and an investment forum in the region. A
business catalogue of regional enterprises was issued and a registrar of
available industrial sites was started.
Source: www.regions.ru
Ulyanovsk sums up 2005 construction
In
2005 Ulyanovsk region construction grew 1.8 times to 288 000sq m of
dwelling, including 117 600sq m by individual citizens (44.8% above the
volume of 2004). Construction output equaled $166mln (104% of the output of
2004). Thus, the region’s negative trend to remain among the lowest in dwelling
construction in the Volga District was overcome.
Source: www.volgainform.ru
Ulyanovsk Cement Plant to be
modernized
Ulyanovsk
Cement Plant is to realize a large scale modernization including investing
$4.1mln in re-equipment and $3.92 in environment protection technologies.
Launching of a stepping excavator ES-11/70, which took 6 months, became the
first stage of the program. Nest the plant intends to provide its sites with 7
Byelorussian dump-trucks. Ulyanovsk Cement Plant is a part of “Eurocement
Group”, uniting 15 enterprises.
Source: www.volgainform.ru
Volgograd Region
Volgograd retailer moves to Rostov
“Tamerlan”,
the largest franchisee of “Pyatyorochka”, announced plans to expand to Rostov
and constructing up to 100 stores of economy class, including some 20 in 2006.
The chain operator intends to create the infrastructure with training and
logistics centers. The general investment volume is some $30mln. The future
brand is not decided upon, as “Pyatyorochka” is asking $1mln for it.
Source: www.volgainform.ru
Volgograd ups sales of agricultural
equipment
In 2005 “Volgograd Tractor Plant”
(“VTP”), the Volgograd branch of JSC “Agromashholding” sold 2 479items of
agricultural equipment. Leasing schemes accounted for 8% of the sales, direct
commercial sales grew by 25.7%. The plant has also increased production of a
modernized model by 52%. Export sales of “VTP” grew 1.5 times up to 879 items.
Spare parts sales had 6% advance up to $8mln against 2004. In 2005 “VTP”
cooperated with 31 dealers, including 24 in Russia and 7 in CIS, and took part
in 16 regional trade shows.
Source: www.volgainform.ru
Volgograd and Astrakhan to construct
barges for Switzerland
Volgograd
Shipbuilding Plant (a part of GC “Sea and Oil Projects”) has started production
of a barge P-248 for the Asian division of “Panalpina” – “Panalpina Central
Asia Ec, Bahrain. The contract signed in October 2005 presupposes construction
of 2 barges, construction of the second was started at Astrakhan Shipbuilding
Plant “Lotos” (also a part of GC “Sea and Oil projects”).
The
barge with horizontal cargo processing is meant for transferring of heavy cargo
(up to 2 760tons) and can be employed in the Caspian, Baltic and North
Seas, rivers and shallow waters, as well as support off-shore drilling
platforms. The barges will be used by Agip KCO, an operator developing
Kashagansky site in Kazakhstan.
Source: www.volgainform.ru
Astrakhan Region
Koppern to launch engineering in
Astrakhan
In
February Astrakhan was visited by representatives of “Koppern”, a wood
processing equipment seller (Germany). The visitation was aimed at selecting
Astrakhan as location for an engineering plant with 100% German capital.
Previously the company’s representatives evaluated political and economic
situation in the region and now are choosing a site for the plant. Among the
enterprises observed as prospective grounds are “Vetroenergomash” and
“Antikormash”. The German party chooses the region as convenient for supplies
to Europe and Asia.
Source: www.volgainform.ru, www.regions.ru
Astrakhan to construct entertaining
center
Late
February 2006 in Astrakhan, a fitness and entertaining center construction is
to be launched. The investor of the project is Glekel Holzbau (Germany) and the
investment volume is estimated to reach $37mln euros. The center is to comprise
a stadium, a concert hall and an aqua park. Later the contractor may also
construct a hotel nearby.
Source: www.volgainform.ru
Astrakhan raises industrial
production
In 2005 Industrial production output in Astrakhan grew by 3.5% against
2004, the regional statistics committee reported.
Source: www.interfax.ru
Krasnodar Region
Wimm-Bill-Dann
to construct dairy farm in Krasnodar Krai
JSC “Wimm-Bill-Dann”, the largest
juice and milk producer in Russia, plans construction of a dairy farm in
Krasnodar Krai. The farm is to have 2 400 cows, the CEO of “Wimm-Bill-Dann”
southern division, Pavel Prokhorenko said.
Over
the past 7 years “Wimm-Bill-Dann” has invested $12mln in reconstruction and
mounting equipment at 86 farms and $86mln in reconstruction of the dairy
combine in Timashevsk.
Source: www.interfax.ru, http://economy.kuban.info
Krasnodar holds Tourism Show
Krasnodar
Expo hosted the South Tourism Show “Profitable Hospitality”. Over 400
enterprises of resort, recreation, hospitality, restaurant and entertaining
sectors took part in the show. The show had two subdivisions: “Southern Russia
Resorts”, presenting every resort area of Russian South and “Profitable
Hospitality”, presenting restaurant, trade, entertaining and hotel running
technologies and equipment.
Source: www.volgainform.ru
Rostov Region
Agricultural equipment show starts
in Rostov
On February 9 a permanent show of tractors and other agricultural
equipment and inventions from all over the world was opened in Rostov-on-Don.
Source: www.interfax.ru
Rostov launches truck plant
“Rostov Truck Plant”, Ltd is to start production in August, 2006, the
management of the plant announced. The construction of the plant was started in
2005.
Source: www.interfax.ru
Russian-Turkish
JV starts equipment production in Rostov
“Ekstek-Nord”, Ltd, a Russian and
Turkish joint venture, started technological equipment for pressing aluminium
shapes in the town of Belaya Kalitva (Rostov region), the press service of
Rostov Ministry of Economy reported.
Source: www.regions.ru
Rostov expands quicklime production
The ore extracting company “Ruda” (Rostov
region) finishes construction of its new terminal for quicklime production with
one baking oven; three more ovens are to be added by 2007. The capacity is
projected to be 160 000-170 000tons of quicklime per year. The company has
already signed a frame agreement for supplies with Rostov Electrometallurgic
Plant. Analysts are of opinion that the
demand for quicklime is growing and the company may become the largest producer
in the Southern Federal District.
Source: www.interfax.ru
Rostov
grows GDP by 11%
In 2005 the GDP of Rostov Region
grew by 10.7% up to $9.78bn against 2004, the vice-governor of Rostov region
Ivan Stanislavov reported.
Source: www.interfax.ru
Rostov
gets 27 investment awards
Rostov region received 27 awards at
the 6th International Innovations and Investments Show held on
February 17th in Moscow, Igor Dergilev, the chief of department of
investments and innovations at the Rostov region’s Ministry of Economy, Trade
and International Relations announced.
Source: www.interfax.ru
Stavropol Region
Stavropol
compiles investment projects
Stavropol region is to present over
70 investment projects at the investment program “Start”, the regional ministry
of economic development and trade reported.
Source: www.interfax.ru