RUSSIA – UPPER VOLGA NEWS REPORT

August 2006

 

Monthly News Report

Submitted by Roman Vvedensky, BISNIS representative in Nizhny Novgorod, Russia

 

The report summarizes commercial, political and business development news in the Nizhny Novgorod region and Republic of Tatarstan for the period of July – August  2006. The information is received from the Russian news agencies (INTERFAX, NTA), TATAR-INFORM.RU, INTERTAT.RU, REGNUM.RU, REGIONS.RU, regional periodicals, PR departments, and web-cites of the regional governments and local companies.

 

******************************************************************

The report highlights:

 

Nizhny Novgorod Region:

 

·        Microsoft announces $100,000 project with Nizhny Novgorod State University

·        IT techno-park project in Nizhny Novgorod to attract $375 million investment 

·        IFC and UMC sign $60 million loan agreement

·        Liebherr to invest $250 million in production projects in Nizhny Novgorod region

·        Siemens to take part in modernization of Nizhny Novgorod airport

·        FAUN GmbH to assemble garbage trucks in Nizhny Novgorod region

 

Republic of Tatarstan:

 

·        Standard & Poor’s increases Tatarstan rating to BB-

·        Island Pyrochemical Industries considers US-Russian JV in Kazan

·        EBRD plans to issue Euro 20 million loan to Kazan Water Supply Company

·        Severstal-Avto to produce Fiat Ducato in Tatarstan

·        Durr Systems GmbH signs Euro 10 million contract with KAMAZ automotive company

 

 

NIZHNY NOVGOROD REGION 

 

Microsoft announces $100,000 project with Nizhny Novgorod State University

 

Microsoft plans to invest US$100,000 in its Center of Excellence on the campus of the Nizhny Novgorod State University.

 

The center is equipped by Microsoft, and it will run projects on research, training, and consulting. The Nizhny Novgorod State University has been successfully cooperating with Microsoft for the last few years.

 

IT techno-park project in Nizhny Novgorod to attract $375 million investment

 

According to Nizhny Novgorod region’s government, a new IT techno-park will be open in Nizhny Novgorod in 2010. The construction works on the project will start next year. The region’s government has provided a 125-acre land parcel in the city, which will host modern offices, research labs, hi-tech production facilities, conference sites and residential area for the techno-park tenants. The region’s government plans to invest $53.5 million in the project; other investment will come from private companies and funds.

 

The local IT leaders – Intel Nizhny Novgorod Lab, TELMA, and MERA – expressed interest for the project.

 

IFC and UMC sign $60 million loan agreement

 

The International Finance Corporation, part of the World Bank, and United Metallurgical Company (UMC) signed US$60 million loan agreement with 8 year maturity.

 

The funds will be allocated for modernization of Vyksa Metal Works, located 130 miles to the south west of Nizhny Novgorod.  Vyksa Metal Works is the largest metallurgical company of the region, owned by UMC. The modernization program also provides for removal of open-hearth furnaces, currently operated by the company.

 

Liebherr to invest $250 million in production in Nizhny Novgorod region

 

According to the Nizhny Novgorod region’s government, it agreed with Liebherr, Switzerland, to launch a US$ 250 million production project in the region.

 

The project will be carried out in three steps. Firstly, the company would set a plant to produce components for earth-moving machines. Secondly, it would launch assembly of construction machinery for the Russian market. Thirdly, Liebherr would build a plant to produce components for aerospace projects. The plant, producing earth-moving machinery components, will be opened by mid next year. The project is estimated at US$ 80 million, and it provides for creating of 200 new jobs in the region.

 

Liebherr has long-term business relations with Nizhny Novgorod based company Hydromash, a producer of hydraulic units for aircraft and earth-movers.   

 

Siemens to take part in modernization of Nizhny Novgorod airport

 

Valery Shantsev, Governor of the Nizhny Novgorod region, met with senior officials of Siemens AG, who visited Nizhny Novgorod on July 25, 2006.

 

Siemens expressed interest to take part in modernization of Nizhny Novogrod airport facilities, including development of a new data management system, luggage handling, and a new lighting system for a tarmac.

 

The Siemens delegation also discussed projects in telecommunications, electrical engineering, and medical equipment.

 

FAUN GmbH to assemble garbage trucks in Nizhny Novgorod region

 

FAUN GmbH, a producer of heavy trucks, truck cranes and communal vehicles, announced plans to set a joint venture to assemble garbage trucks, and to produce plastic garbage cans in the Nizhny Novgorod region.

 

The company plans to start from leasing of its 70 garbage trucks, assembled on a chassis of a MAZ heavy truck, Byelorussia. FAUN garbage trucks, equipped with a RotoPress system, are capable to collect twice more garbage, compared to local communal vehicles. 

 

 

Republic of Tatarstan

 

Standard & Poor’s increases Tatarstan rating to BB-

 

Standard & Poor’s increased the long-term rating of the Republic of Tatarstan from ‘B’ to ‘BB-’ with a forecast ‘stable’.

 

Island Pyrochemical Industries considers US-Russian JV in Kazan

 

The President of Island Pyrochemical Industries (IPI), NY (www.islandgroup.com), met with Prime-Minister of Tatarstan, to discuss the issue of setting a joint venture with Kazan-based TASMA-Holding to produce cellulose triacetate film for the Russian and European markets.

 

TASMA-Holding launched a cellulose triacetate plant in 1978, which was mothballed in mid 1990s due to a decreased demand in the domestic market. The production capacity of the Kazan plant is 6 million tons of cellulose triacetate per year.

 

The US company plans to invest its technologies and funds to modernize the existing facilities at TASMA-Holding. The proposed share of IRI is 51% in the joint venture. The JV would employ 200 people, and its annual sales are estimated at Euro 25 million after two years of operation. 

 

EBRD plans to issue Euro 20 million loan to Kazan Water Supply Company

 

The European Bank for Reconstruction and Development (EBRD) signed a preliminary loan agreement with the city government of Kazan to allocate Euro 20 million for reconstruction of the municipal water supply company Vodokanal. The grace period of the loan is 3 years, and the annual interest rate is approx. 8%.

 

The EBRD experts will assist the municipal company Vodokanal to attract over one million Euro in grants for a technological and financial audit of the company. The audit should be completed by late this year, when the loan agreement will be signed by the EBRD and the city government of Kazan. 

 

Severstal-Avto to produce Fiat Ducato in Tatarstan

 

Fiat Group and Severstal-Avto agreed on assemble of Fiat Ducato light commercial vehicles (LCVs) in Alabuga, eastern Tatarstan.

 

The project, financed by Severstal-Avto, provides for the output of 75,000 LCVs Fiat Ducato annually. Most of the vehicles will be exported from Russia. The first Fiat Ducato should be assembled at the plant in Alabuga in late 2007. 

 

Durr Systems GmbH signs Euro 10 million contract with KAMAZ automotive company

 

Durr Systems GmbH signed Euro 10 million contract with KAMAZ, manufacturer of heavy trucks, to supply a new paint line to the Russian company. 

 

The equipment will be leased to KAMAZ for the period of two years.