RUSSIA – UPPER VOLGA NEWS REPORT

 

November 30, 2006

 

Author: Roman Vvedensky, BISNIS representative in Nizhny Novgorod, Russia

 

INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2006. ALL RIGHTS RESERVED FOR USE OUTSIDE OF THE UNITED STATES.

 

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

 

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The report highlights:

 

Nizhny Novgorod Region:

·        Magna International plans to produce auto components with Russkie Machiny group

·        Liebherr to build plant next to Nizhny Novgorod

 

Republic of Tatarstan:

 

·        Tatneft search for strategic investors to develop natural bitumen deposits

·        Severstal-Auto to invest US$130 million in car assembly project in Alabuga

 

Republic of Udmurtia:

 

·        IzhAuto signs license agreement with KIA Motors 

 

 

NIZHNY NOVGOROD REGION 

 

Magna International plans to produce auto components with Russkie Machiny group

 

Magna International, Canada, signed a memorandum on cooperation with Russkie Machiny (Russian Machines) and the GAZ (Gorky Automotive Works) group of companies to launch production of automotive components in European Russia, and in Nizhny Novgorod, in particular.

 

Magna International plans to set three joint ventures with Russkie Machiny to produce plastic parts (dash boards, bumpers, seats, interior and exterior components), to produce metal parts (car body components), and to provide service for vehicles, assembled at the GAZ group of companies. The joint ventures would produce components for 250,000 vehicles per year. The components would be used to assemble Chrysler Sebring and Dodge Stratus models, and some other vehicles locally.

 

Liebherr to build plant next to Nizhny Novgorod

 

Liebherr, Switzerland, announced plans to launch construction of its plant in the city of Dzerzhinsk, next to Nizhny Novgorod, in May 2007. The plant should start working in 2009. Primarily, the plant would produce construction machinery and its components.

 

The company has chosen a 296,500-acre land parcel for construction, approximately 20 miles to the west of Nizhny Novgorod. The $250 million investment project will be carried out in three stages. In the first stage, the plant will produce components for construction machinery. In the second stage, it will assemble construction machinery for the Russian market. In the third stage, the plant will produce aircraft components.

 

 

REPUBLIC OF TATARSTAN

 

 

Tatneft search for strategic investors to develop natural bitumen deposits

 

Tatneft petrochemical company expressed interest to attract strategic investors to develop natural bitumen deposits in Tatarstan. Currently, the company has forwarded its business proposals to representatives of five other companies, whose names are not disclosed.

 

The geological reserves estimates for heavy crude oil and natural bitumen in Tatarstan vary from 1.65 to 7.71 billion short tons.  The average cost of oil development in Tatarstan is US$ 160 per short ton, and the cost of natural bitumen development is US$ 1,973.8 per short ton.

 

The government of Tatarstan, which has a control stake in Tatneft, announced plans to develop 2.2 million short tons of natural bitumen annually by 2020.

 

Severstal-Auto to invest US$130 million in car assembly project in Alabuga

 

Severstal-Auto has announced $130 million investment in car manufacturing equipment to launch assembly of Fiat Ducato cars in Alabuga free economic zone in eastern Tatarstan. The company plans to produce 75,000 Ducato cars in Tatarstan annually. The equipment will be shipped to the region by European and Asian companies since early next year.

 

The Alabuga plant will be the second production site of Severstal-Auto in eastern Tatarstan. The facilities of ZMA midget car plant, another local asset of Severstal-Auto in the city of Naberezhnye Chelny, are currently used for assembly of Korean SUVs (sports utility vehicles): SsangYong Rexton and SsangYong Kyron.

 

This December, Severstal-Auto will begin assembly of the Fiat Albea model, and next January - Fiat Doblo and SsangYong Action in the region. The assembly of Fiat Linea and Fiat Ducato would be launched late next year.

 

 

REPUBLIC OF UDMURTIA

 

 

IzhAuto signs license agreement with KIA Motors

 

IzhAuto (Izhevsk automotive works) has signed a license agreement with KIA Motors to assemble KIA Sorento SUVs in the region.

 

The company plans to assemble 8,100 KIA Sorento vehicles in 2007. IzhAuto plans to fully localize production of components for KIA Sorento in 2008.

 

IzhAuto has been assembling KIA Spectra cars since mid-2005, and it plans to launch assembly of KIA Rio cars later this year.

 

 

For more information on Upper Volga region, Russia, visit BISNIS online at http://www.bisnis.doc.gov/bisnis/country/volga.cfm

 

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