20-22 october 2010
DESCRIPTION
Russian - Turkish Business Forum Thematic trend : Strategy of innovative development of Russian Federation automotive industrial cluster Report theme : Regions’ development by means of Industrial parks creation . Project of Dimitrovgrad Industrial Park creation - PowerPoint PPT PresentationTRANSCRIPT
11
20-22 October 2010.
Russian-Turkish Business Forum Thematic trend: Strategy of innovative development of Russian Federation automotive industrial cluster Report theme: Regions’ development by means of Industrial parks creation. Project of Dimitrovgrad Industrial Park creationReporter: Chairman of the Management Board of ОАО «United Automotive Technologies» Mihail Nikolaevich Dobyndo
22
1. Brief information about UAT plants2. Brief description and plants location3. The necessity of government support for operating plants4. Development trend of production line of UAТ plants5. Greenfield development in Samara and Ulyanovsk regions6. Choice of UAT plants development trends: Greenfield or Brownfield on the example of DIP
project7. Project development support from Ulyanovsk Region Government concerning Brownfield
development and Joint Ventures8. Brownfield project development and Joint ventures on the examples of DIP9. Availability of production areas for projects10. Proposals to change regulatory framework for automotive components manufacturers support
33
Brief description about UAТ plants UAT «United Automotive Technologies» was established in 2008. Company managers twelve industrial plants manufacturing automotive components which located in different regions of the country.
Actually UАТ is the first automotive component cluster in Russia
UAT «United Automotive Technologies » was established in 2008. Company managers twelve industrial plants manufacturing automotive components which located in different regions of the country. ОАО «United Automotive Technologies» brings in investments (including foreign) into Russian automotive Industry, raise competitiveness of manufactured products, extends production line, and as a result , increases business worth. At the present moment the main aim of UAT is formation of the instrument for AVTOVAZ strategy realization of formation automotive component «quasi-branch» around automotive manufacturer and to the highest extent is aiming to mother company activity – AVTOVAZ.Strategic Company’s plans include establishing Joint Ventures with foreign partners, oriented to automotive components production, assembled in Russia within production localization programs
44
55
66
77
Gas exhaust system
Rear suspension modules
Lock systems , access system and
door modules
Air and fuel electronic engine supply systems Steering system Front suspension
module
Cooling and heat exchanging
vehicle systems Braking system
Chassis
Wheels Suspension Bumpers and springs Steering Supporting elements Braking system
Engine/ Assist systems
Engine Additional power
systems Conditioning system Exhaust system Fuel injection
Body and exterior
Passenger seats Front section Rear section Roof Front doors/rear doors
Front/ rear part Trunk door Windows/glasses Lighting Systems of locks Windscreen wipers Additional equipment
Interior
Roof Saloon Passenger protection Doors Pedals Acoustic Ventilation
Power supply Tape recorder Engine control Chassis/actuator Comfort Safety
Electrics
JV
JV
JV
JV
JV
JV
JVJVJV
JV
Planning modules for assimilation by UАТ plants
Planning technologies for assimilation by UAT plants
Small stampings Average and big stampings
Automotive turning parts
Metal Powder metallurgy Aluminum casting Joint Venture Iron castings Upset forging
technologyRubber parts Production
Main functional vehicles modules (TIER I)
JV
JV
JV
Cimos CimosJV JV JV JV
Development of traditional competencies
Assimilation of new competencies
Development trends of UAT plants production line
88
The necessity of government support for operating enterprises
The plants owned by UAT were built in the beginning of 70-s years of the last century for supplying AVTOVAZ with automotive components. Most of the plants , due to application of the gradation system, used to be town-forming enterprises, which besides of population employment, provided towns with central heating, sewerage and drain waters cleaning. UAT’s plants fulfill their main task by supplying AVTOVAZ conveyer but together with out-of-dating old models «Classics» and minimum volumes of component development for new vehicles modules, plants are loosing production volumes very rapidly.
Understanding the situation, Ulyanovsk Region Government and OАО «United Automotive Technologies» signed the agreement about joint project creation «Dimitrovgrad Industrial Park» in Dimitrovgrad town in the manufacturing site of ОАО «DAAZ». ОАО «DAAZ» and a number of plants located in this territory, used to provide 100% of AVTOVAZ volumes on injection and cooling engine systems, heating saloon systems, locks, window regulators, mirrors and so on.
The aim of Industrial Park Creation is transformation of UAT’s plants from today-yesterday status into new supplier model, providing in such a way a traditional role of reliable supplier for automotive assembling plants, and the most important point, providing population employment at the expense of creation new jobs instead of the old ones which are going away together with old vehicle models.
To solve this task is possible only with the partnership with the leading world famous automotive component manufacturers. Meanwhile, leading automotive manufacturers do not hurry to localize production in Russia, offering direct parts deliveries from their abroad plants. If you were on their place you would do the same, as applicable regulations of 10-s years favor their activities:
• concessionary duties (0 to 14%) for components import, as for assembly, so as for resale at after market;• absence of possibility of bringing in government’s investments into energy communications, which are on
the plants’ balance;• absence of government support concerning investments into plants’ R&D .
A possible way out of this situation can be a federal, regional and local authorities support for the operating plants.
99
Greenfield Development in Samara and Ulyanovsk regions
.
SPECIAL ECONOMIC ZONE OF INDUSTRIAL TYPE«TOGLIATTI»
Territory area 660 HaREGULATION OF CREATION GEZ ISSUE
✍ Federal law «About Special Economic Zones in Russian Federation» №116-ФЗ of July, 2 , 2005.
✍ RF Government resolution of August, 12, 2010. N 621 «About creation of Special Economic Zone of Industrial Type in the territory of Samara region”
ОЭЗ ПТТ «TOGLIATTI»STAVROPOLSKYII REGION
Togliatti
Financing of creation engineering, transport, social, innovative and other infrastructure at the expense of:Federal budget- 53% (7193 millions of rubles);Samara region budget – 5,7% (734 millions of rubles);Samara region Stavropolskii district municipal budget – 0,3% (40 millions of rubles );Off-budget resources - 41% (5602 millions of rubles ).
But there are more than 300 000 m2 not being used production areas with prepared infrastructure in the territory
of Togliatti
.
Project is being realized at government support at expenses of budgetary appropriations from
Investment Fund of RF(RF Government directive of 28 August 2009 №1250-р)
SPECIAL ECONOMIC PORT ZONE (SEPZ) INDUSTRIAL ZONE «ZAVOLZHJE»
According to experts it is possible to expect start of production in 2014-2015
Comparison of Ulyanovsk region privileges with General Economic Zone (GEZ):
N п/п Privilege ОЭЗ «Alabuga" Ulyanovsk region
rate (%) Period of validity rate (%) Period of Validity 1 Income tax 15,5 For pay-off period 13,5 For pay-off period 2 Local taxes
Property tax 0 10 years, from the
moment of registration 0 For pay-off period, but not more than 8 years
Land tax 0
10 years, from the moment of property
right registration 0
For pay-off period, but not more than 8 years
Transport tax 0 10 years 0
For pay-off period, but not more than 8 years
3
Customs duties exemption and VAT at import of foreign equipment (raw material) for privileges
territory Exemption Privilege for SEPZ «Airport -
Vostochnyi»
4 Creation of industrial zones, provided by necessary engineering communications As a part of privileges As a part of privileges
5 Payment for connecting to power network Doesn’t impose Doesn’t need
6 Provision of subsidies for payment %% at
refinancing rate No information As a part of privileges
1010
.
.
Price reduction for manufacturing at the expense of prepared industrial buildings
Price decreasing for logistics Outsourcing or service functions Minimization of investments risks
Long-term contracts with OEM Sales market development at the
expense of partners’ sales markets Experience in execution of logistic
and service functions Formation of cooperation chains
concerning new products manufacturing
Choice of development trend of UАТ plants: Greenfield or Brownfield on the example of DIP projects
Prepared infrastructure, provision by personnel
Димитровградский
Индустриальный парк
Preservation of jobs Creation of conditions for social stability in the
region Investments to buildings repair and
infrastructures Tax revenue Positive influence on secondary industries
(building, maintenance service)
Greenfield Brownfield (operating plants)
Building of engineering infrastructure at the expense of federal, regional and local budgets
The necessity of houses and social infrastructure building for the personnel or organization of personnel delivery by buses from the nearest population centers
Competition with the operating manufacturing sitesAdditional costs of GovernmentNon-realization of automotive industry development program concerning development of trend «Partnership»
Diversion of funds for a long period
Personnel can’t wait for some years during building and starting of production at Greenfield and people have to find jobs in different regions
Strategy of plants development envisages usage of operating manufacturing sites of Brownfield, the process of Joint Ventures has already begun.
1111
Project development support from Ulyanovsk Region Government concerning development trend of Brownfield and Joint Ventures
1. Regulatory framework regarding to concessionary taxation of Industrial parks is being formed now
in October-November 2010
2. The system of «common window» is being created nowduring 2010 – 2011
3. Bringing in investments by means of Intergovernmental agreement is being organized
during 2010 – 2015
4. Social block development is being organized(hotel business, relaxing infrastructure)
during 2010 – 2012
5. Ulyanovsk region project development in the field of automotive industry, logistics and industrial cooperation, regional and urban infrastructure (investments bringing in)
in 2011
Increasing of tax revenue into regional budget Financial model
Tax preferences
New productions development
3
1
4
2010 - 2018
Bringing in investors
2
Plants are getting a new development impulseJoint Ventures are being created
Business structure of the current manufacturers is being changed, new products appearAdditional employees are involved – social status of region is being stabilized
EVEN TODAY,during 2010-2011 the product
localization process is going on !!!
1212
Brownfield project development and Joint Ventures on the example of DIP
Joint ventures
ООО «DAAZ»
TIER-I
ОЕМ
Other customers
market
services
услу
гиorder
productproduct
order
partner
R&Dtechnologies
ООО «Dimitrovgrad Industrial Park»
Investments and federal programs
(investment protection from the side of Ulyanovsk region Government)
investments
R&Dtechnologies
preferencesUlyanovsk region
Government
1313
Availability of production areas for projects
2-nd priority
1st priority
3-d priority
Free areas 6 408 m2
Areas, planned to be freed by 2012 70 337 m2
Areas for projects being realized 46 553 m2
1414
Proposals to change regulatory framework for automotive components manufacturers support
1. Continuation of government politics concerning support of automotive manufacturers components regarding to requirements on components production localization for OEM in the territory of Russia
2. Requirements on higher volumes localization – min 80% automotive components in the territory of RF
3. Creation of Joint Ventures at the operating Brownfield4. Increase of customs duties at the import of foreign components (at the present moment average
14%, to increase to 35%)5. Investments to Greenfield only in case of absence of operating productions at Brownfield6. Government financing of electric-power modernization, logistics and road building of operating
Brownfield7. Credit concessionary program for Russian party (at 5-6% annualy)8. Subsidization of 50% R&D for operating plants
1515
Thank you for your attention!