kemerovo region investment profile · kemerovo region investment profile 555 lying in the southeast...

KEMEROVO REGION INVESTMENT PROFILE

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Section 1.Introduction

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We have been doing a lot to up-grade our automotive industry. OOOKuzbassAvto, Leninsk-Kuznetskiydistrict, in a joint project with the SouthKorean Hyundai Motor Company havebeen assembling Hyundai light trucksand high quality competitive buses ofsmall and medium class for suburbanand urban use.

In 2012, the holding company OAOHC SDS-Mash, in a partnership withthe Republic of Belarus, started as-sembling BelAZ trucks. Another Bela-rusian partner, OAO Belkommunmash,has helped us to set up a tram assem-bly plant in the region.

The Anzherskiy Refinery with acapacity of 150,000 tons of oil per yearand the Yaiskiy Refinery with a capac-ity of 3 million tons per year have beencommissioned to meet our demand forfuel, which is currently delivered toKuzbass from other regions.

The Kemerovo Region’s FavouredEconomic Zones Law No. 87-OZ of08.07.2010 offers ample opportunitiesfor the development of independentzones with favourable economic con-ditions for doing business in the region.

This Law makes provision for fa-voured economic zones in four areas,namely manufacturing, industrial ag-riculture, technology development anduse, and tourism and recreation.

The Kemerovo Region already hasseveral favoured economic zones in

Kuzbass is commonly known asthe largest coal and metallur-gy complex of Russia and one

of its most developed industrial cen-tres. However, we spare no effort tomake it more than just a region of bigcoal and chemistry. Today, Kuzbasscan also boast well-developed agri-culture, the best motor roads in Sibe-ria, year-round tourism, a high level ofculture, and significant scientificachievements.

Over the last few years, Kuzbasshas seen the development of new in-dustries, changing its traditional eco-nomic makeup. Our largest innovativeproject is a commercial extraction ofcoal bed methane, which is a com-pletely new sector in the economy ofthe region and the country as a whole.Today, we are already extracting meth-ane in Taldinskiy coalfield, Proko-pyevskiy district, jointly with OAOGazprom. Methane is used as motorfuel and can also be used in gas en-gine power plants. By 2020, we ex-pect to reach a commercial produc-tion of 4 billion m3 per year, which willfully provide the people and business-es of the Kemerovo Region with thisnew type of fuel.

This project is a major step towardscreating a new economic sector to shiftthe region’s focus from purely coalmining to coal and methane produc-tion.

Dear friends!It is my great pleasure to welcomeyou to our hospitable region!

the cities of Leninsk-Kuznetskiy andYurga and in Prokopyevskiy district,as well as a tourist and recreationalresort Gornaya (Mountainous) Shoriain Tashtagol, with the first 11 residentcompanies operating there.

The focal point of our innovativeinfrastructure is Kuzbass Technopark,a new generation developmental in-stitution that integrates efforts in edu-cation, research and manufacturingsectors.

Its core activities include deep coalconversion, coal bed methane extrac-tion, advancement of mining engineer-ing, development and use of high tech-nologies in medicine, education andnature management, as well as findingsolutions to environmental problems.

Today, the technopark’s data bankcontains over 100 ready-to-launchprojects. Some thirty-two companieshave been granted an official statusof a Kuzbass Technopark residentsince their projects are already in thepipeline.

On behalf of the Kemerovo RegionAdministration and our people, Ishould like to invite you to visit Kuz-bass and see its economic and recre-ational potential and all the opportu-nities that it can offer.

I wish us all a mutually beneficialand fruitful cooperation, success andprosperity!

Yours faithfully,Governor of Kemerovo Region

Aman Tuleyev


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Lying in the southeast of Western Siberia, the Kemerovo Region is almost equidistantfrom the western and eastern borders of the Russian Federation. The region is locatedat a latitude between 52°08' and 56°54' North and a longitude between 84°33' and89°28' East, in the fifth time zone. It is 3,482 km away from, and 3 hours ahead of,Moscow.

Occupying an area of 95,700 sq. km,which accounts for 4% of Western Si-beria and 0.56 % of the Russian Fed-

eration, the Kemerovo Region is the 10th larg-est territory in the Siberian Federal Okrug(SFO). It borders the Republic of Altai in thesouth, Altai Krai in the southwest, the Nov-osibirsk Region in the west, the Tomsk Re-gion in the north, Krasnoyarsk Krai in thenortheast and the Republic of Khakassia inthe east. Kuzbass stretches for almost 500km from north to south and 300 km from westto east.

The Kemerovo Region is located mainlyin the Kuznetsk Depression between theSalair Ridge (567 m) and the Kuznetsk Ala-tau (2178 m). The main river is the Tom. Theclimate is continental with average tempera-tures between -17 and -20°C in January andbetween 17 and 20°C in July. Annual precipi-tation amounts to 300-500 mm. The soils arepodzolic. Kuzbass has the largest depositsof coal in Russia, accounting for a quarter ofall energy resources of the country. The southof the region is famous for its unique touristand recreational resort, Gornaya (Mountain-ous) Shoria.

1.2.2. ADMINISTRATIVEAND TERRITORIAL DIVISIONS

In 1943, the Presidium of the Supreme So-viet of the USSR by its Edict No. 5 of 26.01.43separated Kuzbass from the Novosibirsk Re-gion and established the Kemerovo Regionthere. In 2013, the region will be celebratingits 70th anniversary.

As on 01.01.2012, the region had a popu-lation of 2,750,800 people, accounting for14.3% of the Siberian Federal Okrug and1.92% of the Russian Federation, where it isthe 2nd largest and 14th largest region, respec-tively. Kuzbass has the highest populationdensity of 28.7 people per 1 sq. km in the Si-berian Federal Okrug and east of the Urals.Some 85.4% of the population is concentrat-ed in urban areas.

Administratively, the Kemerovo Regionis divided into 223 municipalities, includ-ing 16 urban okrugs and 18 municipal dis-tricts (raions). Kemerovo, with a population

1.2.1. GEOGRAPHY

of 536,300people, is its ad-ministrative cen-tre. Altogether, thereare 7 cities in the re-gion with a population ofover 100,000 people, in-cluding Kemerovo, No-vokuznetsk, Prokopyevsk,Belovo, Kisselevsk, Le-ninsk-Kuznetskiy and Mezh-durechensk. By the number oflarge cities the Kemerovo Re-gion is second only to the MoscowRegion. Kuzbass is also the most ur-banised region in the Siberian FederalOkrug.

The Kemerovo Region’s location and nat-ural resources offer a number of economic ad-vantages, namely:::::

- the federal railway and motor roads run-ning across the north and a dense transport

1.2. General information

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network covering the developed parts of theregion;

- proximity to the regions with a highlydeveloped industrial sector (KrasnoyarskKrai), agriculture (Altai Krai) and a signifi-cant scientific potential (Tomsk, Novosi-birsk);

- opportunities for developing a diversi-fied economy thanks to abundant natural

1.3. The Kemerovo Regionratings

On 19 November 2012, the internaion-al rating agency Fitch Ratings assignedthe Kemerovo Region long-term foreignand local currency ratings of “BB”, a

resources and favourable climatic condi-tions;

- a well-developed territorial-indus-trial complex with strong horizontal linksbetween enterprises in the key sectors;and

- economic specialisation ensuringstrong positions in the interregional and in-ternational division of labour.

short-term foreign currency rating of “B”and a national long-term rating of “AA-(rus)”. The outlook for long-term ratingsis “stable”.


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Section 2.Economic and InvestmentPotential

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2.1. Resources2.1.1. NATURAL RESOURCESMineral Resources

The Kuznetsk Coal Basin (Kuzbass) is themajor coal producing region in terms of its re-serves and coal quality. There is no other placein the world where a small area of 26,700square kilometres could be so rich in coal de-posits with a wide range of coal grades suita-ble for coking, producing liquid fuels, beingused as raw materials for the chemical indus-try and other purposes. Kuznetsk coals arevalued for their quality, including low ash con-tent of 4.8-13% and a high heat value of 6426kcal/kg (up to 8650 kcal/kg from the bestgrades). Another important feature of Kuzbasscoals is their horizontal bedding with almost80% of flat and inclined seams.

The total geological coalcoalcoalcoalcoal reserves of theKuznetsk Basin down to a 1800-metre depthare estimated at 733,400 million tons, of which724,300 million tons meet the requirementsfor mineable deposits, namely for seam thick-ness and ash content of coal. Most of the coal

deposits in Kuzbass are multiple seam coalbeds with an average seam thickness of 4metres. A great advantage of Kuznetsk coalsis the variety of their grades, with coking coal,the main fuel for iron smelting, being the mostvaluable of them. Kuzbass accounts for 77 %of such coal reserves in Russia.

The western part of the Kansk-Achinsk lig-nite deposit is located in the northeast of theregion. The main lignitelignitelignitelignitelignite reserves of theKuznetsk Basin are estimated at 66,800 mil-lion tons.

The Kemerovo Region has 167 exploredpeatpeatpeatpeatpeat deposits with 128.6 million tons of rawpeat reserves. The main deposits are locatedin the northern and southern parts of the re-gion.

Iron oreIron oreIron oreIron oreIron ore deposits are mainly concentratedin Gornaya (Mountainous) Shoria and theKuznetsk Alatau. The Kemerovo Region’s to-tal potential reserves of iron ore, includingsiderite, are estimated at 5.25 billion tons, ofwhich commercial reserves reach 1.43 billion

There is no other place

in the world where

a small area of 26,700

square kilometres

could be so rich in coal

deposits with a wide

range of coal grades


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FOREST RESOURCESTotal forest area –

5.4 million hectares;total stock of main kinds of timber –

666 million cubic metres;allowable cut – 7,531,200 cubic metres.

SPECIAL CONSERVATIONAREAS

The biosphere reserve Kuznetsk Alatau(413,000 hectares),

the Shor National Park(414,000 hectares).

LAND RESOURCESTotal land – 9.6 million hectares,

including:forests and scrubs - 65.1%;agricultural land - 27.7%;

other land - 7.2%.

tons. The most significant reserves of 2,2,2,2,2,168.168.168.168.168.77777million tonsmillion tonsmillion tonsmillion tonsmillion tons, including 639.5 million tons639.5 million tons639.5 million tons639.5 million tons639.5 million tons ofcommercial A+B+C reserves, are located in theiron ore basin in Gornaya Shoria. The Tersinskdeposits in the Kuznetsk Alatau hold 68.68.68.68.68.1 mil-1 mil-1 mil-1 mil-1 mil-lion tonslion tonslion tonslion tonslion tons, including 1717171717.9 million tons.9 million tons.9 million tons.9 million tons.9 million tons of A+B+Creserves. The region’s commercial A+B+C goldreserves exceed 100 million cubic metres100 million cubic metres100 million cubic metres100 million cubic metres100 million cubic metres.Some 74% of gold is mined by sand dredging.Geographically, the gold reserves are locatedin Gornaya Shoria (43.7%), the Kuznetsk Ala-tau (31.9%) and the Salair Ridge (24.4%).

The region also holds deposits of silversilversilversilversilver,,,,,tungsten, mercurytungsten, mercurytungsten, mercurytungsten, mercurytungsten, mercury, molybdenum, cobalt, molybdenum, cobalt, molybdenum, cobalt, molybdenum, cobalt, molybdenum, cobaltand nickeland nickeland nickeland nickeland nickel.....

The reserves of non-metallic mineralsnon-metallic mineralsnon-metallic mineralsnon-metallic mineralsnon-metallic mineralsmainly cover the needs of iron and steel mak-ers. Nearly 20 deposits of fluxing limestone,dolomites, quartzite, fireclay and mouldingsands are explored and used for the steel sec-tor needs. The major fields are as follows:Tayezinskoe dolomite deposit (Gornaya Sho-ria), Guryevskoye, Karachinskoye and KiyaShaltyrskoye deposits of fluxing limestone,Antonovka quartzite deposit, 8 fireclay fieldswith 40.3 million tons of A+B+C reserves intotal, and 2 deposits of moulding sands, namelyZelenaya Zona (Green Zone) and Antibesskoe,with 161.3 million tons of A+B+C reserves.

Since the late 18th century, lead and zincores have been mined in the north-easternslope of the Salair Ridge. Today, there are fiveexplored barite-lead-zinc deposits, three cop-per-zinc and one copper-pyrite deposits there.All of these ores are of high quality. There is anexplored native copper deposit in GornayaShoria and rich manganese deposits of Usin-skoe in Gornaya Shoria and Durnovskoe inthe Leninsk-Kuznetskiy district.

2.1.2. LABOUR FORCEIn 2012, the population of the Kemerovo

Region was 2,750,829 people, a decline of212,600 people on the year 2000, including96,381 in the working age group.

The labour force fell by only 86,200 peo-ple on 2000, not as dramatically as the work-ing-age population, to reach 1,726,000 peo-ple. The reason for that is a six-fold rise in thenumber of foreign migrant workers (up to11,000) and a 30% increase in the number ofemployed teenagers and people over retire-ment age (up to 91,000). The average age of aKuzbass resident employed in the region’seconomy is 39.6 years, which is 1.5 years abovethe same indicator in 2000.

In 2011, Kuzbass employed 1,302,000people. Over the past 11 years, the share ofworkers with a higher vocational degree roseto 23%, whereas the percentage of those

1010101010

with secondary vocational education in-creased to a quarter of total employmentfrom about a third 11 years before. The shareof workers who have not completed generalsecondary education gradually decreasedfrom 10% to 6%.

Over 2000-2011, the percentage ofworking-age people who are not employedin the economy significantly dropped from

25% in 2000 to less than 18% in 2011. Thisfigure includes a gradually increasingnumber of Kuzbass residents who are ac-tively looking for jobs and are thereforeclassified as unemployed (according to theInternational Labour Organisation). In 2011,the total number of unemployed was119,000 people, a decline of 34,000 on2000, their average age being 34-35

Employment by Level

of Education in 2011

(survey data)

Primaryvocational – 24.1 %;General secondary(complete) – 20.4 %;Compulsory – 5.4 %;Incompletecompulsory – 0.6 %;Highervocational– 23.1 %;Secondaryvocational – 26.4 %.


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years. The share of unemployed people withhigher education went up from 7% in 2000to 13% in 2011, whereas the percentage ofthose with secondary vocational educationfell from 30% to 18%.

On 1 October 2012, there were 23,000unemployed residents of Kuzbass registeredwith the Kemerovo Region Employment Serv-ice, which was the lowest indicator over thepast 11 years, except for the year 2000, whenthis figure was equal to 19,600 people. Themaximum unemployment of 58,500 was reg-istered in October 2009, during the economiccrisis.

On the whole, the share of the economi-cally active population aged 15 to 72 has risenfrom 60% 10 years ago to 67%, which means

Under working-agepopulation –

476,353

Over working-agepopulation –

599,566

Working-agepopulation –1,685,300

Including

Employedover working-age population

and teenagers – 90,900

Employableworking-agepopulation

(excluding disabledpeople) – 1,624,100

Foreign migrantworkers –

10,800LABOUR FORCE – 1,725,700

Employedin the economy –

1,302,000

Pensionersseeking employment –

4,000

Registered with theEmployment Service –

39,000

Labour Force Composition, people

Unemployed in theeconomy, employable

working-age population –302,600

Working-agestudents, off-the-job

trainees –121,100

Unemployedaccording

to ILO – 119,400

that, despite a high level of demographic age-ing, the population of Kuzbass remains willingto stay in employment.

2.1.3. RECREATIONAL RESOURCESThe rich diversity of natural resources and

conditions makes the Kemerovo Region a tru-ly unique place in the world.

The Kemerovo Region is located at thejunction of the West Siberian Plain and themountains of Southern Siberia. Much of thearea lies in the Kuznetsk Depression sepa-rating the Kuznetsk Alatau (up to 2178 mtall), the Salair Ridge and the ridges of Gor-naya (Mountain) Shoria in the south. Theregion’s high recreational potentialhigh recreational potentialhigh recreational potentialhigh recreational potentialhigh recreational potential can beattributed to its climatic and orographic con-

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Employable Population by Urban Okrugs of Kemerovo Region

(as on 01.01.2011)

Employable Population by Municipal Districts of Kemerovo Region

(as on 01.01.2011)


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ditions, its scenery, culture and history, whichmake this area favourable for almost anykind of tourism such as hiking, water tour-ism, business, cultural, historical tourism andothers.

The region has great spa potential thanksto its mineral waters in the Kuznetsk arte-sian basin, including: 1) nitric water with acomplex chemical composition and a salin-ity of 2.8 to 11.2 g/l; 2) nitrogen-methanesodium-bicarbonate water containing io-dine, bromine and hydrogen sulphide witha salinity of 2-5 g/l; 3) sodium chloride-bi-carbonate water; 4) acidulous sodium-bi-carbonate and sodium-calcium water (Ters-inskoe deposit, 75 km away from No-vokuznetsk); and 5) sodium-bicarbonate-chloride water containing 10-20 mg/l of hy-drogen sulphide and over 33 mg/l of bro-mine, with a salinity up to 2 g/l (Boris-ovskoye deposit in Krapivinskiy District).Several balneotherapy resorts make use ofthese deposits. Apart from the mineral wa-ters, the Kemerovo Region has large re-serves of sapropelic therapeutic mud in thefreshwater lake Bolshoi Berchikul in Tissul-skiy District at the junction of the easternslope of the Kuznetsk Alatau and the Kay-chak forest steppe, in the interstream areabetween the Tom and Yenisei rivers.

A scenic mountain terrain spreads over thesouth, east and west of the region, with itsunique natural monuments such as theSpasskiye Dvortsy (Spassky Palaces) cliffs,Alguiskiye Tremolites, Pily Taizhesu (the Sawsof Taizhesu), the Skalistye Gory (Rocky Moun-tains) canyon, Krasniy Kamen’ (Red Stone),Gavrilovskiye caves, Orlinaya Gora (EagleMountain), the archaeological complexes of theUr river, Kamennye Vorota (Stone Gates), thegranite buttes of Mustag bald peak, Podnebes-nye Zubya (Sky-scraping Teeth), cave com-plexes along the upstream stretch of theMrassu river, and the Usinskiy karst area withthe famous Pamyatnaya (Memorial) cave, anunderground river, a lake and other sights.

The Tom is the major river in Kuzbass, run-ning through the region for almost 300 km,and a favourite route among water tourists,especially such of its tributaries as Belsu,Mrassu, Usa, Kondoma, Verkhnyaya (Upper)Ters, Srednyaya (Medium) Ters, Nizhnyaya(Lower) Ters and Taydon. However, this riverhas quite limited transport potential for indus-trial use. One of the most beautiful rivers inthe east of the region is the Kiya, which means‘rocky’ in Turkic. Rising on the slopes of theAlatau main ridge, it flows through a deepgorge over a stony bed. The Kiya abounds withluring and dangerous places, such as its rap-

The region’s high

recreational potential

can be attributed to its

climatic and orographic

conditions, its scenery,

culture and history

The region’s

climatic conditions

are favourable

for the development

of winter and summer

tourism

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ids Serdity (Angry), Kipuchiy (Seething),Lokhmaty (Shaggy) and Banditskiy (Bandit)and the reaches Barkhatny (Velvet), Mramorny(Marble), Zolotoy (Gold) and Belokamenny(White Stone). Just as attractive and pictur-esque are its tributaries Mokry (Wet) Berikul,Klyuch Dinamitny (Dynamite Key) and the riv-er Makarak.

The region’s climatic conditions are favour-able for the development of winter and sum-mer tourism. Summers are warm, with longsunny days totalling 2,118 hours per year. Win-ters are known for generally clear skies andmild frosty weather, with a solid and thick snowcover up to 1.5-2 metres in the mountain val-leys.

In 2011, Kuzbass

was visited

by over 700,000

holidaymakers,

including

about 58,000

foreign tourists

Kuzbass is an ideal location for alpine ski-ing and other winter sports. Among the mostpopular modern skiing facilities, both in Rus-sia and abroad, is the mountain ski resortSheregesh located in the amazing area ofGornaya (Mountainous) Shoria.

In 2011, Kuzbass was visited by over700,000 holidaymakers, including about58,000 foreign tourists. Tax revenues fromtourism in the year 2011 amounted to aboutRUB 997 million, whereas the volume oftourism services, including hotels andhealth resorts, totalled RUB 2.8 billion, anearly 260 million increase on 2010, ac-cording to the Kemerovo Statistics Agen-cy.


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2.2. Priority sectorsThe economic potential of the Kemerovo Region makes it thelargest industrial complex in the Russian Federation. Locatedin a small territory with a well-developed road network anda powerful diversified economy, Kuzbass plays a leading rolein the economy of Siberia. Holding about one-third of themajor production facilities in Western Siberia, it is a solidfoundation for the industrial development of not only Siberia,but also the whole country.

Today, Kuzbass accounts for 73.5% of bi-tuminous coal mining in Russia, 73.3%of all coking coals and 100% of some

most valuable grades of coking coal. Withabout 80% of Russian coal exports comingfrom Kuzbass, Russia remains among the topthree largest exporters of thermal coal world-wide.

Kuzbass exports about 1200 industrialproducts to 85 countries, including coal,coke, rolled steel, cast iron, aluminium, zinc,ferro-alloys, slate, cement, glass, nitrogenfertilizers, plastics, synthetic fibres, synthet-ic resins, electrics, heavy engineering prod-ucts and many others.

The composition of the Gross RegionalProduct (GRP) is dominated by the produc-tion of goods and commodities, with indus-trial production (mineral mining) prevailing.The four major sectors constituting the GRPproduction component are coal mining, met-allurgy, electric power engineering andchemistry.

In addition, Kuzbass is currently gen-erating new economic activities which willfundamentally change its economic make-up, namely:

- extracting methane from coal seamsto supply Kuzbass and the southwest of Si-beria with gas. Methane extraction and fur-ther conversion to motor fuel and electricityis an important driving force for the long-termdevelopment of the power system in the Si-berian Federal Okrug as a whole, and Kuz-bass in particular;

- establishing technoparks to create asymbiosis of science, manufacturing andbusiness as a major tool for developing in-novative economy in the region. KuzbassTechnopark is intended to ensure sustaina-bility of the regional economy and create newconditions for realising the professional andcreative potential of the regional workforce;

- developing tourism and recreation fa-cilities to realise the region’s recreational

Gross Regional Product 2011, %Composition by Sector 100.0Production of goods and commodities 61.63Mining 35.7Manufacturing 14.1including: Chemical production 2.3Metallurgy and production offinished metal products 4.9Machinery and equipment(excluding weapons and ammunition) 2.1Energy, gas and waterproduction and distribution 4.4Agriculture 3.1Construction 4.3Services 38.4Retail and wholesale, maintenanceand repairs of cars, motorbikes,household appliancesand personal items 12.1Transport and communications 7.8Other economic activities 18.5Industrial production 54.2Small enterprise share in GRP 8.6

potential, support small and medium-sizedenterprises and related industries, thus im-proving the social and economic situation inthe Tashtagolskiy District; and

- launching oil refineries to supply Kuz-bass and neighbouring regions with dieselfuel, fuel oil and petrol.

A recent growth of investment in the re-gional economy confirms the expert outlookon the region as the one with a significantinvestment potential. The share of the Ke-merovo Region in Russia’s investment po-tential in 2010-2011 was 1.671%, with a max-imum of 14.712% in Moscow and a minimumof 0.155% in the Nenets Autonomous Okrug.

In 2011, total investments in fixed as-sets amounted to RUB 225,131 million,which is 131.4% on the previous year. Mostof them support the key economic sectors,such as production of fuel and energy re-

The four major sectors

constituting the GRP

production component

are coal mining,

metallurgy, electric

power engineering

and chemistry

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sources, electric power generation andsteel production (Fig. 1).

In 2011, the largest share of investment wasinto mining (53.5%), this trend being consist-ent in the past three years at 45-54%.

At the year-end of 2011, private invest-ments predominated at 74.5%, net foreignand joint foreign and domestic investments

Fig 1. Fixed Asset Investments

by Sector in 2011, %

Fig 2. Investment Makeup

by Form of Ownership, %

Mining – 53.5 %;

Manufacturing – 8.3 %;

Electric power, gas and water productionand distribution – 8.6 %;Transport and Communications – 12.4 %;Other – 17.2 %.

Private – 74.5 %;Foreign – 3.3 %;State – 8.6 %;MixedRussian – 3.7 %;JointRussian – 8.9 %;Municipal – 3.9 %.

New sectors

in Kuzbass:

methane extraction,

tourism and recreation,

and oil refining

accounting for 12.2% (Fig. 2). Foreign invest-ments amounted to $ 1.303 billion, up 96.4%on 2010.

Of all the types of economic activity, min-ing proved the most attractive for foreign in-vestment in 2011, accounting for 51.2% of totalinvestment. The major foreign investors areSwitzerland and Germany.


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2.3. Economicindicators by sector

Coal mining accounts for about 50% ofthe region’s total industrial output.Employing more than 112,000 people,

this sector is composed of 118 underground andopencast mines and 37 coal preparationplants. Over 10 years, since 2002, the indus-try has attracted more than RUB 382 billion ofinvestment, set up 58 coal mining and process-ing enterprises equipped with the most ad-vanced safety facilities, and created morethan 20,000 new jobs. In 2011, the regionproduced 189 million tons of coal, including47.5 million tons of coking coal. Total invest-ments in the coal industry reached RUB 71.8billion, up 41.7% on 2010 (RUB 45.3 billion).The first 9 months of 2012 saw 146 milliontons of coal output and RUB 64.1 billion ofinvestments, up 7% and 24.6% on 2011, re-spectively. The Strategy for the Developmentof Kuzbass Coal Industry until 2025 envis-ages the construction of 19 new mining andprocessing enterprises and 17 preparationplants in 2012-2025.

Iron and steel sectorThe iron and steel sector accounts for

20% of the region’s total industrial output.Today, all major iron and steel enterprises inthe region are implementing long-term large-scale programmes of production retrofittingand upgrading. In 2011, total investments inthe sector amounted to RUB 4 billion, com-pared to RUB 3 billion in 2010.

The consolidation of two largest ironand steel plants, OAO Novokuznetsk Ironand Steel Plant (NKMK) and OAO WesternSiberian Iron and Steel Plant (ZAPSIB), intoOAO Evraz ZSMK has significantly contrib-uted to increased investment in the plant’smodernisation. At present, the newly con-solidated plant is completing the upgrad-ing of a rail and beam shop to produce ul-tramodern, highly competitive 100-metrerails. The launch of this shop in early 2013will give the plant a monopoly on this typeof product in Russia. Another project isabout using more economical pulverizedcoal in blast furnaces instead of expen-sive natural gas and coke, which will re-duce the cost of pig iron production by 5%,on average.

In 2011, the Tashtagolskiy District saw alaunch of a dressing plant to produce man-ganese ore concentrate on Selezenskoye

field. It is the only enterprise in Russia pro-ducing manganese concentrate for makingferrosilicon manganese, the most importantadditive used in steel production. The com-missioning of two new ferroalloy furnaces atthe Yurginsky Ferroalloy Plant in 2011 in-creased ferrosilicium production to 145,000tons per year.

The total output of the iron and steel sec-tor in 2011 rose by 2.8% compared to 2010.Steel production increased to 8.2 milliontons and rolled ferrous metals, to 7.2 milliontons.

The first 9 months of 2012 saw a 12.4%decrease in the metallurgical output on 2011due to the suspended production caused bythe upgrading of a rail and beam shop atOAO Evraz ZSMK and a decline in demandfor steel products in the domestic and for-eign markets.

Power sectorIn 2008-2011, the capacity of the Kuz-

bass power supply network significantly in-creased, thus optimising the reliability ofpower supply to the existing consumers and

Total investments

in the coal industry

reached

RUB 71.8 billion,

up 41.7% on 2010

(RUB 45.3 billion)

In 2011, total

investments

in the iron and steel

sector amounted

to RUB 4 billion

(RUB 3 billion in 2010)

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providing a possibility of joining new indus-trial enterprises.

The year 2011 saw the commissioning ofthe following components of the power sup-ply network in the region: a new Kuz-basskaya substation (500 kV), which solvedthe problem of power shortage in the southof the region, a renovated Anzherskaya sub-station (100 kV) in Anzhero-Sudzhensk, arenovated Kommunalnaya substation (110kV) in Prokopyevsk and a new high-voltageTemir-Tau-Kondoma power line (110 kV, 46km) in Tashtagolskiy District, enabling theimplementation of major investment projectsin the area, primarily the development of atourist and sports complex Sheregesh. Totalinvestments in the power industry reachedRUB 10 billion, twice as much as in 2010,which contributed to ensuring the securityof energy supply in the south and the northof the region and improving the reliability ofthe Kuzbass power network.

In 2012, Kuzbass launched three new 110kV substations and two high-voltage single-circuit 110 kV transmission lines from theTom-Usinsk GRES to the Raspadskaya minewith a total length of 104 km. The first 9months of 2012 saw RUB 6.8 billion of in-vestments in the power industry.

Petrochemical sectorAlthough petroleum chemistry is new to

Kuzbass, there are already three large en-terprises operating in this sector, namely theAnzherskaya Oil and Gas Company, theChernigovskiy Oil Refinery and the YaiskiyOil Refinery. Having a design capacity of 6million tons of oil p.a., the latter launched itsfirst phase with a capacity of 3 million tonsp.a. in October 2012. With RUB 16 billion in-vested in its construction, the total cost ofthe project is RUB 57 billion. Once the con-struction is over, the Yaiskiy Oil Refinery willbe the largest refinery in Siberia, providingKuzbass and neighbouring regions with die-sel fuel, fuel oil and petrol.

Housing developmentIn 2011, the region commissioned

1,083,000 square metres of housing, com-pared to 1,000,000 in 2010, with a focus on

individual and low-rise housing (60%). Totalinvestment in residential construction, madefrom all sources, exceeded RUB 31 billion.Altogether, there are currently more than 30integrated low-rise development sites inKuzbass, including such housing estates asCheremushki in Berezovskiy, Kvartal Sos-noviy (Pine Quarter) in Belovo, Solnechniy(Sunny) in Yurga and European Provinces inthe Kemerovo District. One of the most im-portant projects is a satellite town LesnayaPolyana (Forest Glade) near Kemerovo,whose population exceeded 3,000 residentsat the end of 2011 and is expected to reach35,000 by 2025.

The first 9 months of 2012 saw the com-missioning of 934,300 square metres ofhousing, up 2.3% on 2011.

EngineeringEngineering is the third largest econom-

ic sector in Kuzbass in terms of budget rev-enues, employment and fixed investments.With a share of 12.4% in the total manufac-turing output last year, this sector employsabout 37,000 people, which is 9.5% of to-tal employment in the region’s industrialproduction. In 2009-2011, investment infixed assets remained stable at around RUB1 billion. Kuzbass engineering mainly focus-es on meeting the needs of the coal andore mining sectors. It is dominated by heavyindustry, with 60.1% of mining equipmentand 27.1% of transport, mainly railway carsand transport wagons, in the 2011 total out-put.

In 2011, the region’s engineering outputamounted to RUB 47.6 billion, which is 40%higher on the previous year. The productionof machinery and equipment increased by27.3% to RUB 28.9 billion, electrical equip-ment by 25.4% to RUB 5.8 billion and trans-port by 90% to RUB 12.9 billion. The outputof transport engineering has risen more than3.5 times over the last three years, mainlydue to the production of rail cars.

Over the first 9 months of 2012, the pro-duction of machinery and equipment in-creased by 11% to RUB 20.7 billion and thatof transport facilities by 42% to RUB 12.1billion.

Total investments

in the power industry

reached RUB 10 billion,

twice as much

as in 2010

In 2009-2011,

investment in

engineering

fixed assets

remained stable

at around

RUB 1 billion


1919191919

2.4. Infrastructure2.4.1. FINANCIAL INFRASTRUCTUREBanking sector

Today, a stable and fully functioning region-al network of credit institutions is of crucialimportance for the development of the region-al economy. Regional banking is one of thetop priority mechanisms for attracting long-term financial resources into the region.

As on 1 December 2012, the KemerovoRegion’s banking sector comprised 9 lendinginstitutions, including one non-banking finan-cial company, and 29 bank branches, with theirhead offices located in other regions, of which10 belong to the Siberian Branch of Sberbankof Russia.

The regional banking sector is constantlychanging, with a tendency to reduce thenumber of bank branches and convert them tooperational offices. The rationale behind it isto optimise the costs of credit institutions, en-courage bank capitalisation and introduce the

latest banking technologies, such as remotebanking. As on 1 December 2012, the regionalbanking network consisted of 635 internalunits (operational, credit and cash units).

Although most of the banking units are lo-cated in Kemerovo and Novokuznetsk, thebanking institutions cover almost all the local-ities of the Kemerovo Region, providing thepopulation with a complete package of mod-ern banking services.

Apart from the Siberian Branch of Sberbankof Russia, the following banks have a largenetwork of branches in the Kemerovo Region:URALSIBURALSIBURALSIBURALSIBURALSIB (Novokuznetsk, Mezhdurechensk,Anzhero-Sudzhensk, Prokopyevsk, Leninsk-Kuznetskiy, Yurga, Ossinniki and Kemerovo),MDM BankMDM BankMDM BankMDM BankMDM Bank (Leninsk-Kuznetskiy, Anzhero-Sudzhensk, Tashtagol, Belovo, Kemerovo, Be-rezovskiy, Topki, Yurga, Mariinsk, Guryevsk,Kisselevsk and Novokuznetsk), SovcombankSovcombankSovcombankSovcombankSovcombank(Kemerovo, Kisselevsk, Leninsk-Kuznetskiy,

One of the main

tendencies in the

banking sector is

to reduce the number

of bank branches

and convert them

to operational

offices

2020202020

Yurga, Belovo, Novokuznetsk, Mariinsk, Mezh-durechensk and Anzhero-Sudzhensk), VTB-VTB-VTB-VTB-VTB-2424242424 (Anzhero-Sudzhensk, Kemerovo, Bere-zovskiy, Mezhdurechensk, Leninsk-Kuznet-skiy, Novokuznetsk and Prokopyevsk), RRRRRos-os-os-os-os-selkhozbankselkhozbankselkhozbankselkhozbankselkhozbank (Leninsk-Kuznetskiy, Mariinsk,Belovo, Anzhero-Sudzhensk, Novokuznetsk,Prokopyevsk, Guryevsk, Topki, Yurga, Kisse-levsk and the districts of Promyshlennovskiy,Yashkinskiy, Tissulskiy, Tyazhinskiy, Yaiskiy,Krapivinskiy and Chebulinskiy).

Lending to the real sector of the economyis on the increase. As on 1 October 2012, totallending to the real sector reached RUB 436.9billion, up 32% on the previous year. Most loanswere granted to the companies in coal mining,iron and steel sectors, chemical and electricpower sectors.

The Siberian Branch of Sberbank of Rus-sia, VTB-24, MDM Bank, Gazprombank, Ural-sib, Promsvyazbank, Novokuznetsk MunicipalBank and Kuznetskbiznesbank are making asignificant contribution to the regional econo-my.

Most of the banking institutions are ac-tively involved in mortgage lending. Theamount of mortgages granted by the banksover 11 months of 2012 increased by 80% toRUB 14.8 billion.

Insurance marketIn recent years, the Russian insurance

market has been under consolidation, and theKemerovo Region is no exception. Some 10insurance companies account for 62% of total

premiums collected over 9 months of 2012,with 20 companies accounting for 85%.

Consolidation reduces the number of com-panies operating on both the national and re-gional insurance markets. This decline has beenfuelled by the decision of the Federal FinancialMarket Service to increase the minimum size ofauthorized capital for insurance companies.

The federal insurance companies current-ly dominate the regional market.

There are just over 80 insurance compa-nies in Kuzbass, whose headquarters arebased in Moscow, St. Petersburg, Yekaterin-burg, Khanty-Mansiysk, Chelyabinsk and oth-er cities. Out of the remaining 12 regional in-surance companies, six specialise exclusivelyin health insurance, and only three provide avariety of insurance services, being among thetop twenty companies in terms of total insur-ance premiums collected. These are the Sibe-rian Insurance House (Sibirskiy Dom Stra-khovaniya), Sibirskiy Spas and Komestra.

However, the decline in the number of re-gional companies has not affected the quali-tative and quantitative indicators of the region-al insurance market.

In 2012, all types of insurance servicesshowed some growth. Overall, total premiumsfor 9 months of 2012 increased by 22% to RUB15.6 billion, voluntary insurance rising by al-most 20% (RUB 4.3 billion) and compulsory(less compulsory health insurance), by 40%(RUB 1.7 billion).

The top 10 insurance companies includeRosgosstrakh, Ingosstrakh, Siberian Insur-

As on 1 October 2012,

total lending to the real

sector reached

RUB 436.9 billion,

up 32% on the previous

year


2121212121

ance House (Sibirskiy Dom Strakhovaniya),Sibirskiy Spas, SG MSK, Soglasiye, VSK,SOGAZ and Uralsib.

SMO Sibir is a leader in health insurance.

Non-state pension sectorIn recent years, the pension market has

seen the arrival of new players, namely non-state pension funds.

The regional non-state pension networkcurrently includes one regional fund, NPFMechel Fund, and 15 branches, agencies andrepresentative offices of the following non-state pension funds (NPF): NPF Non-State Pen-sion Fund for the Electric Power Industry, NPFNational Non-State Fund for Pension and So-cial Security of Metallurgists, NPF StalFond,NPF Blagosostoyaniye (Welfare), NPF Renais-sance Life and Pensions, NPF Lukoil-Garant,NPF Social Development, NPF Norilsk Nickel,NPF Promagrofond, REGU NPF SberfondRESO, MN Bolshoi Pension Fund, NPFBlagovest, NPF Regionfond, NPF RGS and NPFEuropean Pension Fund.

There are gradually more and more peo-ple in Kuzbass who take part in non-state pen-sion schemes to increase the size of their fu-ture pension. At present, there are 117,000participants in such schemes, of which 47,500people are already receiving non-state pen-sions. The top leader in this sector, NPF Na-tional Non-State Fund for Pension and SocialSecurity of Metallurgists, has a customer baseof 46,900 people, of which over 37,000 arereceiving additional pensions.

Non-state pension funds are actively in-volved in compulsory pension insurance. Overa period of 2002-2012, some 384,000 peo-ple transferred the supplementary part of theirpension to non-state pension funds, while to-tal premiums received for the supplementarypart of pension amounted to RUB 11.7 billion.

The pension sector is of great importanceto the economy, which is twofold. On the onehand, people have an opportunity to activelysave for their future retirement and thereforeimprove their wellbeing. On the other hand,their savings can actively work for the econo-my on financial and capital markets through anetwork of private management companies.

Stock marketThere are four professional players in the

Kemerovo Region’s securities market that pro-vide personal financial services to their clients,namely OOO Brokerage and Consulting Com-pany «Gorizont», OOO Company «Primula»,OOO Financial Company «Intellect Capital»and the Kemerovo Office of BKS Company.Their package of financial services covers bro-kerage services on the Russian stock market,training in stock market trading and assetstrust management.

Two companies, ZAO Siberian RegistrationCompany and OAO Registrator R.O.S.T., keepregisters of registered securities holders onthe basis of contracts with joint-stock compa-nies. They currently maintain 603 registers ofjoint-stock companies containing 415,600accounts of registered securities holders.

In 2012, all types

of insurance services

showed some growth.

Overall, total premiums

for 9 months of 2012

increased by 22%

to RUB 15.6 billion

2222222222

2.4.2. TRANSPORT INFRASTRUCTURE

The Kuzbass transport network consists of railway, motor andmunicipal electric transport, aircraft, pipeline and rivertransport, ensuring stable internal and externalcommunications in the region.

Having the most developed networkeast of the Urals, the Kemerovo Re-gion is crossed by the Trans-Siberian

Railway and the Trans-Siberian Highway, whichare the basis of the Russian transport networkand a natural extension of the Pan-EuropeanTransport Corridor No. 2, recognised by UNES-CAP as a priority route between Europe andAsia.

Railway TransportToday, the Kuzbass branch of the West Si-

berian Railway is a powerful transport systemthat is second to none in Russia in terms offreight transportation. Every fifth ton of freightcarried by the country’s railways comes fromKuzbass (18% of total freight). The region’s pub-lic service railways are 1,718.3 km long, includ-ing more than 1,500 km of electrified railways.

Kuzbass is crossed by several stretches of twomajor railways of international importance,namely the Trans-Siberian and South Siberi-an Railways.

A distinctive feature of the Kuzbass branchis that its main railway lines serve the needs ofthe region’s major industries such as the coaland power sectors, ferrous and non-ferrousmetallurgy, engineering and chemical sectors.Coal transportation by rail, accounting for 90%of all coal shipments, is vital to Kuzbass whichsupplies coal not only to various regions ofRussia, but also to 47 countries worldwide.

Railway has always developed hand inhand with growing coal production. In 2002, aprogramme was adopted to develop the main-line and industrial railways in the KemerovoRegion. In 2002-2011, some RUB 34 billionwas invested in this programme, including RUB

The main railway lines

serve the needs

of the coal and power

sectors, ferrous and

non-ferrous metallurgy,

engineering and

chemical sectors


2323232323

22 billion by the Russian Railways (RZhD) andRUB 12 billion by the largest coal companiesand manufacturers of Kuzbass. As a result,the Kuzbass railway network has new 44 kmsecondary railway lines between Artyshta andMezhdurechensk, extended arrival and depar-ture lines at 20 stations, upgraded sortingdepots at Novokuznetsk-East and Artyshta-2, 89 new locomotives and a completely mod-ernised infrastructure at the key railway sta-tions, namely Topki, Anzherskaya, Taiga, Eru-nakovo, Prokopyevsk and Promyshlennaya.

In 2012, the RF Government approved anew programme for developing the coal in-dustry until 2030, which envisages the con-struction of 38 new coal mining and process-ing enterprises in Kuzbass. To remove infra-structure constraints on coal transportationand encourage further development of coalmining in Kuzbass, an agreement was signedin January 2012 by 24 largest shippers fromvarious sectors, accounting for over 80% ofrail freight, OAO Russian Railways (RZhD) andVnesheconombank, stipulating their joint ef-forts to develop the regional railway networkand ensure stable coal shipments.

Motor RoadsThe Kuzbass network of motor roads has

some stretches of the federal road M-53Baikal, as well as territorial, municipal anddepartmental roads, which link all parts ofthe region together. The total length of theentire network is 18,936 km, including 8,895km of municipal roads, 463.9 km of the fed-eral road M-53 Baikal, 6,852 km of territori-al and inter-municipal roads and 4,240 kmof departmental roads. On the whole, theKuzbass roads provide a fairly good level of

service, although their technical parametersand engineering facilities vary markedlythroughout the region. In particular, a largeshare of inter-municipal and municipal roadshas transition type pavement.

Kuzbass has the third densest road net-work in the Siberian Federal Okrug (SFO),with hard-surface roads accounting for 98.6%of all common-use roads (92.1% in Russia and88.5% in the SFO) and the share of improved-surface roads being 54.9% (65.6% in Russiaand 46.3% in the SFO).

The region’s largest road infrastructureproject in 2008-2011 was to construct a new25 km section of the modern road Kemerovo- Leninsk-Kuznetskiy from the Sukhovsky in-terchange up to the turning to Sheveli vil-lage. This is the first high-speed motorwayin Siberia with smart traffic control and aspeed limit of 110 km/h.

The route Kemerovo - Leninsk-Kuznet-skiy – Novokuznetsk, which joins the feder-al road M-53 Novosibirsk – Irkutsk, is theshortest way to the cities of Western Sibe-ria, and Russia as a whole, from the south ofKuzbass. The north of the region providesshortest routes to Altaisky Krai, Altai Repub-lic, Kazakhstan, Central Asia and Mongolia.

Another important road for Kuzbass, com-missioned in 2011, connects the settlementof Chugunash and the sports and touristcomplex Sheregesh. On the whole, 2008-2011 saw the commissioning of 779 km ofnew and repaired regional and/or intermu-nicipal roads, and 32 bridges and overheadroads. The output in 2012 was 18 new andrepaired bridges and 200 km of roads. Totalinvestment in the projects reached aboutRUB 10 billion.

Kuzbass has the third

densest road network

in the Siberian Federal

Okrug (SFO), with hard-

surface roads

accounting for 98.6%

of all common-use

roads (92.1% in Russia

and 88.5% in the SFO)

and the share

of improved-surface

roads being 54.9%

(65.6% in Russia and

46.3% in the SFO)

2424242424

Air TransportAir transport is of great importance for

the development of the region to ensure reg-ular passenger and cargo traffic both withinand outside the country. There are three air-ports in Kuzbass.

OOO Kemerovo International Airportis a Class III airport having a Class B pavedrunway and a round-the-clock operatingpermit. In 1998, it was certified to operateinternational flights. The airport has bordercontrol, customs, quarantine and immigra-tion control services. It operates scheduledflights to Moscow.

The Kemerovo International Airport is cer-tified to serve the following models of aircraft:DC-10, A310, A319, A320, A321, B737, B747,B757, B767-200, B767, Il-96, Il-86, Il-76, Il-62M, Tu-214, Tu-204, Tu-154, Tu-134, Il-18, An-124, An-74, An-30, An-26, An-24, An-12, Yak-42, Yak-40, ATR-42, BAe125 and its modifi-cations, as well as other class III and IV air-craft and helicopters of all types.

The runway is capable of serving aircraftwith a maximum take-off weight of 210 tonnes.The airport can handle 38 departing flights andover 118,000 passengers per week. Havinggreat potential for increasing air traffic, the air-port has two operational terminals, for domes-

tic and international flights, capable of han-dling 500 passengers and 200 passengersper hour, respectively.

Spichenkovo (OOO Aerokuzbass) is aninternational Class II airport with a Class Bairfield in Novokuznetsk. Operating round theclock, the airport is capable of serving suchaircraft as Boeing 737-300/400/500/800, Air-bus 319, 320, Il-76T (TD), Tu-204, Tu-154, Tu-134, Yak-40, Yak -42, Il-114, Il-18, An-24, An-26,BAE-125-700, ATR-42 and its modifications,as well as other class III and IV aircraft and alltypes of helicopters.

Covered with steel fibre reinforced con-crete, the airport’s runway is capable of serv-ing aircraft with a maximum take-off weight of185 tonnes. The Novokuznetsk airport has acapacity of handling 70 departing flights and7,000 passengers per week. Having greatpotential for increasing air traffic, the airport’sterminal can currently service 200 passengersper hour.

The local airport in Tashtagol (OOO Aer-okuzbass) is an unclassified airport with aClass E airfield. It is certified to serve Mi-8 hel-icopters and its modifications, as well as air-craft An-2, M101T, Yak-52, Yak-55, and otherclass IV and lower class aircraft in winter andsummer seasons during the daytime.


2525252525

2.4.3. POWER SUPPLYINFRASTRUCTURE

Over 2008-2011, the Kemerovo Region sawa significant increase in the capacity of thepower grid complex, which improved the relia-bility of power supply to the existing consum-ers and provided a possibility of servicing newindustrial enterprises. All the requests for join-ing the network made by new consumers ofelectric power in 2011 have been fully grantedto the capacity of 156.3 MW.

In 2011, the following major components ofthe power supply network were commissionedin the region:

- a new Kuzbasskaya substation in Proko-pyevskiy District (500 kV), which solved theproblem of power shortage in the south of theregion and relieved the pressure on the mainsupply centre, the Novokuznetskaya substa-tion (500 kV);

- a renovated Anzherskaya substation(100 kV) in Anzhero-Sudzhensk and a reno-vated Kommunalnaya substation (110 kV) in

Prokopyevsk, providing stable power supplyto housing, community facilities and the localindustries; and

- a new high-voltage Temir-Tau - Kondo-ma power line (110 kV, 46 km) in Tashtagol-skiy District, enabling the implementation ofmajor investment projects in the area, primari-ly the development of a tourist and sports com-plex Sheregesh.

Today, the Kemerovo Region is fully sup-plied with heat and electricity. One of the ad-vantages of the regional power network de-velopment programme is that after renovationthe original terms of consumers’ connectionremain the same. However, there are a numberof transformer substations in Kuzbass, serv-iced by a branch of OAO MRSK Sibiri - Kuzbas-senergo-RES, namely 18 (out of 141) at 110 kVand 10 (out of 139) at 35 kV, which are quitecostly for new consumers to join. Therefore, tominimize the cost of connection, the networkorganization drew up a plan to renovate theabove substations.

Over 2008-2011,

the Kemerovo Region

saw a significant increase

in the capacity of the

power grid complex.

Today, the Kemerovo

Region is fully supplied

with heat and electricity

2626262626

- engineering and building of high-techmining machinery;

- production, utilisation and processingof new functional and structural materials,secondary energy resources (mine meth-ane, waters and air) and waste, and cost-effective use of energy, materials and re-sources;

- medicine, education, environmentalmanagement and life safety; and

- creation of an integrated information en-vironment in the Kemerovo Region.

Today, 32 companies among innovativeproject applicants have a status of a KuzbassTechnopark resident, which offers them am-ple opportunity to receive state support. This,in turn, has a positive effect on the regionaleconomy in the form of investment, new jobsand tax revenues to all budgets and off-budg-et funds. In 2009-2011, the Technopark resi-dent companies invested over RUB 3.7 bil-lion in their production, paid about RUB 140million to the consolidated budget of the Ke-merovo Region and RUB 240 million to otherbudget and off-budget funds in taxes, and cre-ated 984 new jobs.

2.4.4. MANUFACTURINGAND TECHNOLOGYINFRASTRUCTUREKuzbass Technopark

Opened in 2007, Kuzbass Technopark isa key element of the region’s innovation in-frastructure. The Kemerovo Region is part ofthe Federal programme on the developmentof high-tech parks in Russia (RF GovernmentResolutions No. 904 of 20.12.07 and No.1912-r of 25.12.07), with the funding for cre-ating the innovative infrastructure being un-der way.

Kuzbass Technopark’s main areas of ac-tivity mirror the region’s profile. With its vastmineral resources (coal, iron ore, magnesi-um, silver, gold, molybdenum and others),Kuzbass has become one of the largest in-dustrial centres of Russia, hosting the coun-try’s leading enterprises in coal mining,metallurgy, engineering and chemical in-dustries.

Kuzbass Technopark’s major areas of ac-tivity focus on the development and use oftechnologies in the following sectors:

- production, delivery and processing ofcoal, ore and non-metallic minerals;


2727272727

The Register of Kuzbass Technopark Residents

Date of entry Resident Project title(grounds for entry) (name, address)

No.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

26.12.2008Resolution of the Kemerovo RegionAdministration BoardNo.593 of 26.12.2008

ООО Kuzbass Regional Mining Centrefor Occupational Safety650002, Kemerovo Region, Kemerovo,ul. Institutskaya, 3+7 (384-2) 643218

Design and production of safety monitorsfor underground mining


ZAO NeoKor650002, Kemerovo Region,Kemerovo, ul. Sosnovy b-r, 6+7 (384-2) 537988

Expanding and up-grading the manufacture of bio prostheses for cardiovascular surgeryto enter international markets


ООО Ecological Regional Centre654080, Kemerovo Region,Novokuznetsk,ul. Sverdlova, 20, office 5+7 (384-3) 390177

Production of synthetic fluxing agents for the steel industry,using aluminium production CFC waste inputs


ZAO Technoparkinvest-Kuzbass650002, Kemerovo Region,Kemerovo, pr. Shakhterov, 14А+7 (384-2) 640423

Creating a pilot power engineering complex Seraphimovskyfor deep coal conversion in Kemerovo Region


ООО Polymer-Vektor652644, Kemerovo Region,Belovo, p. Inskoy,Technologichesky microraion, 12

Launching a processing facility to convert ammonium nitratepolymer packaging to marketable products with wastewater recycling


ОАО Sukhovsky650517, Kemerovo Region,Kemerovskiy raion, Metallploschadka,b-r Stroiteley, 73+7 (384-2) 743580

Organising light-induced intensivevegetable farming in Siberia


ООО Scientific-ProductionEnterprise ELEKOR650002, Kemerovo Region, Kemerovo, ul. Institutskaya, 3,building 2+7 (384-2) 340079

Batch production of safe electrical equipment for open-cast mining


ООО EKOS-S654025, Kemerovo Region,Novokuznetsk, ul. Uyutnaya, 32+7 (3843) 740793,+7 (3843) 991634

Mass production of modular purification units to treat household,rainfall and industrial wastewater


ООО KuzbassPromResurs650036, Kemerovo,pr. Lenina, 90/4, floor 17, office 4+7 (3842) 496067;+7 (3842) 496058

Launching a facility to process waste tyres of all types and sizes

25.12.2009Resolution of the Kemerovo RegionAdministration BoardNo. 512 of 25.12.2009

ООО Gazprom Dobycha Kuznetsk650070, Kemerovo,pr. Oktyabrsky, 4+7 (3842) 755048

Extraction of coal-bed methane in the priority areas in Kuzbass


ОАО Promgazenergo650055, Kemerovo,ul. Sarygina, 27, office 406+7 (3842) 284830

Launching a pilot industrial facility for underground coal gasificationto produce electrical and thermal energy in Prokopyevsk


ZAO Scientific-ProductionAssociation Urskoye650060, Kemerovo Region,Kemerovo,b-r Stroiteley, 28/1+7 (384-2) 370657

Launching a high-tech, environmentally friendly productionof mullite and mullite compounds, highly competitive and marketable in Russiaand abroad, as well as some other marketable by-products

2828282828



No.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.


ООО Ekomash NK654000, Kemerovo Region,Novokuznetsk, ul. Rudokoprovaya, 26а+7 (384 3) 773255

Disposal of old waste from magnetic separation of ores at agglomeration plants


ООО KuzbassStroiNedra652645, Kemerovo Region, Belovo,Noviy Gorodok, ul. Musorgskogo, 39+7 (384 52) 33714

Integrated production and processing of natural stone in Kemerovo Region


ОАО Kemerovo Experimental MechanicalRepair Plant650021, Kemerovo, ul. Gruzovaya, 19b+7 (384 2) 571681

Production of up-to-date multipurpose road machinery with equipmentfor spreading de-icing agents


ООО EkoLend654080, Kemerovo Region, Novokuznetsk,ul. Zaporozhskaya, 21а+7 (384-3) 991260, +7 (384-3) 764755

Construction of a solid waste recycling facility in Novokuznetsk


ООО EkoLend-Kemerovo654080, Kemerovo Region,Novokuznetsk, ul. Zaporozhskaya, 21а+7 (384-3) 991260, +7 (384-3) 764755

Construction of a solid waste recycling facility in Kemerovo


ООО Siberian Centre of Glass-Novokuznetsk654010, Novokuznetsk,ul. Khlebozavodskaya, 9, building 5+7 (384 3) 793270

Mass production of energy saving and safety glass for Kuzbass and neighbouring regions


ООО Modern Medical Technology Clinic650065, Kemerovo,pr. Lenina,164, flat 37+7 (384 2) 518316+7 (384 2) 353361

New technologies in prevention and treatment of chronic diseases and rehabilitation of patientsof various age groups: current conservative treatment and rehabilitation of children with apathology of lymph pharyngeal opening, geroprotective therapy for rehabilitation of olderpatients


ООО Svarog654101, Novokuznetsk,ul. Zemnukhova, 91

Production of high pressure hoses complying with European standards EN853, EN856


ОАО Kemerovo Pilot Plant of Safety Tools650002, Kemerovo,ul. Institutskaya, 3а

Upgrading production of thermal power stations with air-heating plants to be used in mines andlarge production facilities

14.01.2011 Resolution of the KemerovoRegion Administration BoardNo.603 of 29.12.2010(worded as in Resolution of the KemerovoRegion Administration BoardNo.283 of 23.06.2011)

ООО Taezhny652648, Kemerovo Region, Belovskiyraion, p. Snezhinsky,ul. Sovetskaya, 27

Integrated reorganisation of OOO Taezhny production facilityfor harvesting and processing low-grade wood


ООО Kuzbass SKARABEY650021, Kemerovo,pr. Zapadny, 4

Launching production of high-quality cardboard from waste paper inputsusing the existing facility

14.01.2011Resolution of the Kemerovo RegionAdministration BoardNo.603 of 29.12.2010(worded as in Resolution of the KemerovoRegion Administration BoardNo.283 of 23.06.2011)

ООО PromEkoTekhnologii650055, Kemerovo,pr. Lenina, 27

Processing rubber and plastic waste by low-temperature pyrolysisto obtain commercial products of carbon residue


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No.

25.

26.

27.

28.

29.

30.

31.

32.


ООО Evroservis650070, Kemerovo,pr. Sovetsky, 2/14, office 313

Production of granulated coal fuel

14.01.2011 Resolution of the KemerovoRegion Administration BoardNo.603 of 29.12.2010 (worded as in Resolution of the KemerovoRegion Administration BoardNo.283 of 23.06.2011)

Kemerovo branch ofООО SUEK Specialty Minerals652644, Kemerovo Region,Belovo, p. Inskoy,ul. Dunaevskogo, 1

Production of light mineral fillers and products based on them


ООО Sibir-Energo654004, Kemerovo Region,Novokuznetsk, ul. Schorsa, 13

Setting up a plant for low-tonnage production of liquefied natural gas (LNG)and developing infrastructure for its consumption


ООО Ekomash654000, Kemerovo Region,Novokuznetsk,pr. Bardina, 25

Recycling old liquid and solid wastes from coke productionto produce sintering softener used as a bonding agent in coal charge


ООО RANK 2650055, Kemerovo Region,Kemerovo,pr. Kuznetsky, 119

Large-scale introduction of modern anchorage technologies


ООО DM Grupp650000, Kemerovo,ul. Shestakova, 6а, office 417

Introduction and development of the online advertising platform with feedbackDiscountMobile in Russia and CIS countries


ООО NPF PUL'SAR650000, Kemerovo,pr. Lenina, 41, building B, office 55

Development, manufacture and promotion of a new generationexplosion-proof switchgear for explosion-hazard production facilities


ООО VIST Grupp107078, Moscow,per. Dokuchaev, 3, building 1650002, Kemerovo, Sosnovy b-r, 1,office 502

Development of a robotic transport control systemfor the mining and agricultural sectors

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Business incubatorsStarted in 2006, the Kemerovo City Busi-

ness Incubator provides various facilities forthe implementation of business projects thathave passed a competitive selection proce-dure. In 2011, a number of business incubatorsoffering production and office facilities werecommissioned in the cities of Kaltan, Kisse-levsk and Mezhdurechensk and in TopkinskiyDistrict.

Apart from a reduced rent on premises, thebusiness incubator residents can enjoy:

- a free use of all the resources availablein the business incubator; and

- a comprehensive on-going support oftheir business projects.

The Kemerovo City Business Incubatorat the Municipal Non-Profit SmallBusiness Support FundKemerovo, ul. Stantsionnaya, 2tel.: +7 (3842) 45-49-62, 45-82-39e-mail : [email protected]

The Municipal Autonomous Institution«Business Incubator of Kaltanskiy UrbanOkrug»Kaltan, ul. Komsomolskaya, 7tel./fax: +7 (38472) 3-01-19e-mail : [email protected]

The Autonomous Non-ProfitOrganisation «Topki Innovation BusinessIncubator»Topki, ul. Dzerzhinskogo, 4tel.: +7 (38454) 4-80-10e-mail : [email protected]

The Kisselevsk City Business IncubatorKisselevsk, ul. Privolnaya, 17; ul. Mira, 34tel.: +7 (38464) 2-04-53e-mail: [email protected]

The Autonomous Non-ProfitOrganisation «Yurga–Technologies-Innovations Business Incubator»Yurga, ul. Komsomolskaya, 13tel./fax: +7 (38451) 4-74-33e-mail: [email protected]


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2.4.5. FAVOUREDECONOMIC ZONES

In 2009, the Kemerovo Region launcheda completely new mechanism of state sup-port to investors - Favoured Economic Zones(FEZ) - to increase its investment attractive-ness and implement the concept of public-private partnerships. The legal frameworkfor this mechanism is provided by the Ke-merovo Region Law No. 87-OZ «On Fa-voured Economic Zones» of July 8, 2010 andResolution No. 451 «On Measures to En-force the Law on Favoured EconomicZones» of October 19, 2010. The law makesprovision for the establishment of FEZs infour sectors, namely manufacturing, indus-trial agriculture, technology developmentand use, and tourism and recreation.

Currently, there are 3 favoured econom-ic zones in the region, namely in the citiesof Leninsk-Kuznetskiy, Tashtagol and Yur-ga. These are isolated areas with specialconditions for doing business such as sim-plified administrative procedure and accessto reduced-rate infrastructure, tax relief,subsidies and other forms of state support.The FEZ residents are entitled to a 100%

exemption from property tax and a profit taxreduction from 18% to 13.5%, and business-es choosing the simplified tax system, to athreefold reduction, from 15% to 5%. Thissupport is available for both legal entitiesand individual entrepreneurs whose activi-ties are in line with the FEZ specialisation.In order to facilitate the development ofFEZs, the government provides access tothe necessary infrastructure.

The manufacturing FEZSevernaya Promzona

The manufacturing FEZ SevernayaPromzona (Northern Industrial Zone) is lo-cated in the Leninsk-Kuznetskiy urbanokrug. With an area of 400 hectares, it fo-cuses on the production of conveyor sys-tems and other manufacturing activities.Total investment for 2011-2014 will reachRUB 2.6 billion.

The FEZ first resident, the SibEkoProm-N company, has set up a facility to recycleand process waste tyres of all sizes andtypes, including OTR tyres for the coal min-ing sector. The facility produces crumb rub-ber, cordage fibre and scrap steel cord.

Currently,

there are 3 favoured

economic zones

in the region, namely

in the cities

of Leninsk-Kuznetskiy,

Tashtagol and Yurga.

Another zone,

Tyrganskaya Promzona,

is to be created

in Prokopyevskiy

urban okrug

3232323232

Another two companies to be soon add-ed to the Register of FEZ Residents areOOO Kolchuginskaya Chemical Companyand OOO Transport Systems. The first isexpected to launch a project to produceconveyor belts for the food industry andfarming in 2013. The second company isconstructing a plant to produce modernconveyor systems, the project term being2012-2014.

The manufacturing FEZPromzona Yurga

With an area of 87.7 hectares, this man-ufacturing FEZ is located in the northernindustrial part of Yurga. Total investmentover the project term will reach RUB 2.5billion.

Although the FEZ hosts 14 enterprises,its key resident is the TekhnoNIKOL-Sibirplant producing modern types of insulationmaterials, such as rock wool, extruded pol-ystyrene foam and roof waterproofing ma-terials. The company is running a project tomodernise the production of roofing and in-sulation materials.

The FEZ infrastructure has all the nec-essary facilities such as roads, railways andheat and power networks. One of the initi-atives towards its further development isconstructing a sewer collector. It is also

planned to expand the FEZ area and builda plant to produce modules for the construc-tion of administrative, residential and oth-er community facilities (including kinder-gartens) by CHANDLER Group of Compa-nies (Germany).

The tourism FEZGornaya Shoria

The Tashtagolskiy district is recognisedas a favoured economic zone in tourism.With an area of 1965.9 hectares, the Gor-naya Shoria FEZ has 44 hotels, 6 ropeways,9 T-bar lifts and 23 kilometres of ski tracks.The FEZ hosts seven residents. Total in-vestment over 2011-2015 will equal RUB1.2 billion.

The investment attractiveness of thezone is expected to grow in 2011-2015 withan estimated rise in the number of touristsup to a million people a year as a result ofdeveloping summer tourism, the currentnumber of winter holidaymakers beingabout 370 people. This requires the provi-sion of high-quality, competitively pricedservices that meet international standards,which, in turn, calls for training the exist-ing staff, as well as introducing innovationsin the hotel management and using ener-gy-efficient and eco-friendly technologies.And, last but not least, this tourist zoneshould have a year-round resort of Group4, i.e. a resort certified to host internation-al competitions, service foreign tourists,organise both individual and group toursand offer spa treatment. With the view topromoting summer tourism on Mount Ze-lenaya (Green), the FEZ residents are plan-ning to invest their own funds in buildingaqua parks, improving beaches, develop-ing spa treatment and health rehabilita-tion services in hotels, and opening a med-ical centre.

The development of inbound and localtourism is one of the priorities of Kuzbasseconomic diversification. This favouredeconomic zone is being provided with allthe necessary infrastructure facilities, suchas roads, electricity and water supply. Aspart of the mono-company town moderni-sation programme, the new overhead pow-er line Temir-Tau-Kondoma (110 kV), builtin the Tashtagolskiy district, removed theinfrastructural constraints on the develop-ment of the Gornaya Shoria FEZ. The newlybuilt Chugunash-Sheregesh road signifi-cantly reduced the travel time to the FEZ.The year 2011 saw a launch of the projecton the FEZ improvement and beautifica-tion.


3333333333

Resident Municipality Type of Favoured Economic Zone Project

Residents of Favoured Economic Zones

The manufacturing FEZTyrganskaya Promzona(Prokopyevskiy urban okrug)

In November 2012, the Kemerovo Re-gion Administration Board approved a five-year project of creating Tyrganskaya Prom-zona (Tyrganskaya Industrial Zone) mainlyto increase the investment attractivenessand innovation potential of Prokopyevskand to reduce its dependence on one in-dustry.

The FEZ will host a number of majorprojects of social and economic signifi-cance. Its residents will be eligible for statesupport in the form of tax relief and subsi-dies.

One of its residents, OAO HC Novotrans,is planning to start the second phase of con-struction of a car-repair works. Another res-ident, HC SDS-Mash, will build a facility toassemble BelAZ dump trucks with a capac-ity of 250 trucks a year. ZAO Avtoselkhoz-snab will set up a moulding facility for theneeds of utilities and engineering sectors.Also, small and medium-sized businesseswill be launched in wood processing, furni-ture manufacturing and other sectors.

The estimated private investment in Tyr-ganskaya Promzona will total RUB 3 billion,creating over 1,300 new jobs.

ООО SibEcoProm-N Leninsk-Kuznetskiy manufacturing, Severnaya Promzona Disposal and recycling of large and average-size tyres

ООО Zavod TechnoNIKOL-Sibir Yurginskiy urban okrug manufacturing, Yurga Modernised production of roofing and insulation materials atOOO Zavod TechnoNIKOL-Sibir, Yurga, Kemerovo Region

ООО Kedr (Cedar) Tashtagolskiy district tourism and recreation, Gornaya Shoria Developing the Kedrovaya (Cedar) hotel services

ООО Egida Tashtagolskiy district tourism and recreation, Gornaya Shoria Opening a cafe-restaurant for 60 customers

Sole trader Dergunova M.V. Tashtagolskiy district tourism and recreation, Gornaya Shoria Renovating the Tyrol guest house, buildinga health centre and a ski hire facility

Sole trader Nikolaizen R.A. Tashtagolskiy district tourism and recreation, Gornaya Shoria Organising integrated tourist services

Sole trader Maltsev O.V. Tashtagolskiy district tourism and recreation, Gornaya Shoria Expanding the Freestyle hotel

ООО Kommunalnye seti Tashtagolskiy district tourism and recreation, Gornaya Shoria Renovating the potable water stationgory Zelenoy (GreenMountain Utilities)

ООО SV-Servis Company Yurginskiy urban okrug manufacturing, Yurga Modernised production of translucent PVC structuresand aluminium profiles

ООО Alpen Club Tashtagolskiy district tourism and recreation, Gornaya Shoria Building a year-round hotel complex witha developed integrated service infrastructure

ООО Transport Systems Leninsk-Kuznetskiy manufacturing, Severnaya Promzona Constructing a plant to produce modern conveyor systems

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2.5. Major industrialclustersThe Kemerovo Region’s Cluster Policy is a system of measures aimedto develop and maintain a sustainable regional network of partnersin competitive activities in order to strengthen their positions in theforeign markets.

A cluster is a geographically localisedgroup of interrelated companies, suchas suppliers of equipment and parts,

providers of specialised services, infrastructureand research facilities, universities and otherorganisations, complementing each other andstrengthening competitive advantages of in-dividual companies and the cluster as a whole.

The Expert Council on the Cluster Policy,established by the Kemerovo Region Admin-istration Board (Resolution No. 149 of20.04.2012) and represented by federal andregional authorities, company owners, indus-try experts, universities, research institutionsand innovative structures, has defined thestrategy for developing innovation clustersin the Kemerovo Region. Such innovationclusters are currently being established inengineering, coal power and biomedicinesectors.

has all the prerequisites for establishing it-self as a leading coal-mining country usinghigh technologies in coal mining andprocessing. Modern technologies enablethe use of coal to produce over 130 kinds ofchemical intermediates, which are thenused to manufacture over 5,000 kinds ofcommodities.

With a large number of ready-to-use tech-nologies developed by Kuzbass enterprisesand research institutions, Russia can maintainits technological leadership in deep coal con-version. Being in the core of the Russian coalindustry, the Kemerovo Region (Kuzbass) canoffer new conceptual solutions in this sectorby setting up an integrated coal and indus-trial waste processing cluster. The region hassufficient industrial, academic and human re-sources to make it happen.

The above cluster will enable the Russiancoal sector to change its technology platformand develop a fundamentally new type of eco-nomic activity with coal at the beginning of avalue adding chain.

Today, the total industrial turnover of theintegrated coal and industrial waste process-

The Cluster Policy Aims and Objectives

Modern technologies

enable the use of coal

to produce over 130

kinds of chemical

intermediates, which

are then used to

manufacture over

5,000 kinds of

commodities

2.5.1. THE INTEGRATED COAL ANDINDUSTRIAL WASTE PROCESSINGCLUSTER

Currently, Russia holds one fifth of totalproven reserves of coal in the world and


3535353535

ing cluster is over RUB 90 billion. On thewhole, the cluster enterprises, including theresearch infrastructure, employ over 26,000people, or 2% of the Kemerovo Region’s pop-ulation. By 2020, some RUB 121 billion will beinvested in the promising areas of the coal-chemical cluster.

The cluster residents operate in 5 key ar-5 key ar-5 key ar-5 key ar-5 key ar-eas of deep coal conversioneas of deep coal conversioneas of deep coal conversioneas of deep coal conversioneas of deep coal conversion, namely:

- coal chemistry (coal gasification to pro-duce chemical intermediates),

- coke chemistry (coal coking to producemetallurgical coke and chemical intermedi-ates),

- carbon materials (producing high-value-added nanomaterials from coal),

- electrical power production (developingtechnologies and equipment for clean and ef-ficient coal firing), and

- waste recyclingwaste recyclingwaste recyclingwaste recyclingwaste recycling (producing a range ofconstruction materials from industrial waste).

Within the current legal framework, thecluster residents implementing priorityprojects for the region can enjoy maximumtax benefits.

2.5.2. THE INNOVATIVE REGIONALBIOMEDICAL CLUSTER

The Kemerovo Region’s innovative bio-medical cluster aims to promote public healththrough prevention, diagnosis and treatmentof socially significant diseases in a large in-dustrial region, using innovative breakthroughtechnologies and advanced scientific re-search.

This innovative biomedical cluster is ex-pected to specialise in the following areas:

- providing high-tech medical treatment forcardiovascular diseases;

- designing advanced models of medicaltreatment for cardiovascular diseases;

- developing new biomaterials for cardio-vascular surgery; and

- training in the treatment, diagnosis andprevention of cardiovascular diseases.

Modern biotechnologies are extending thefrontiers of science. In Russia, they are recog-nized as one of the priorities of the innovationeconomy. Kuzbass has sufficient resourcesand conditions to make a significant contribu-tion to the development of this area, such asscientific potential, administrative support andthe innovation infrastructure, including OAOKuzbass Technopark, business incubators, andresearch and training centres.

The Kemerovo Region’s innovative bio-medical cluster includes groups of interrelat-ed companies, namely specialised suppliers,health care providers, and educational andresearch institutions.

2.5.3. THE HEAVYENGINEERING CLUSTER

Mechanical engineering is a third largestsector in Kuzbass that accounts for 12% of allshipments, works and services provided in themanufacturing sector. The industry employs41,200 people (as of 01.01.2011). Fixed assetsinvestments are consistent at about one bil-lion roubles a year. The Kemerovo Region’sengineering sector is a leader in the numberof patents for industrial property (14 patentsper a thousand employees), which is indica-tive of its high innovation potential.

Nearly 90% of engineering products aresold within the region. This sector acts as a«technological engine» for the other industriesof Kuzbass, providing them with up-to-datescientific and technical facilities, which advanc-es the development of innovative engineeringfaster than that of its consumers.

However, there are a number of objectiveconstraints that hamper the development ofinnovative engineering, including a criticalmoral and physical wear and tear of the equip-

The scheme of versatile deep coal conversion

3636363636

ment, and excess capacity of production facil-ities with outdated configuration and design.

Removing the above constraints requireschanging the engineering technology platformand developing a heavy engineering cluster,i.e. a group of independent companies (manu-facturing, commercial, etc.), developers andusers of innovation technologies (universitiesand research facilities), market-driven institu-tions (investment funds, banks, brokeragehouses, etc.) and consumers interacting witheach other in the region. The cluster can in-deed become a highly productive and com-petitive form of advancing the sector.

The cluster covers the development of newtechnologies, materials and machinery andtheir introduction into production, thus form-ing an integrated technological, manufactur-

ing and informational environment, contribut-ing to the dissemination of knowledge.

The heavy engineering cluster aims to:- develop a concept of a new technological

platform for heavy engineering at the cluster’sinnovative development centre;

- facilitate the promotion of the cluster’sinnovative products in the domestic and for-eign markets;

- set up a pilot centre for the cluster’s inno-vation development based on a network ofsmall innovative engineering companies;

- implement a continuous training pro-gramme based on a «self-learning enterprise»principle;

- create a mechanism to support the devel-opment of the cluster as a manufacturing andtechnological network, including informational,organisational and financial frameworks; and

- establish a state-owned leasing compa-ny to become a financial instrument facilitat-ing regional procurements.The development of the heavy engineeringcluster in the Kemerovo Region will resultin:

- providing more opportunities for creatingmodern enterprises (including foreign ones)and manufacturing facilities using advancedinnovation technologies in the region;

- advancing the mechanical engineeringresearch base;

- focusing the local authorities on solving theproblems of the Kuzbass engineering sector andraising additional funds for its development; and

- making the local engineering productsand the regional economy as a whole morecompetitive.

The cluster forms

an integrated

technological,

manufacturing and

informational

environment,

contributing

to the dissemination

of knowledge

Regional Heavy Engineering


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Section 3.State Support of Investment,Innovation and Manufacturing,including Small and Medium-SizedEnterprise

3838383838

The following authorities provide the ad-ministrative framework of state support in theKemerovo Region:

1) the Kemerovo Region AdministrationBoard,

2) the Kemerovo Region Governor’s Coun-cil on Investment and Innovation,

3.1. Administrative frameworkof state support

3) the Investment Policy Department at theKemerovo Region Administration,

4) the Department of Industry, Trade and Busi-ness at the Kemerovo Region Administration,

5) the Department of Agriculture and Food In-dustry at the Kemerovo Region Administration, and

6) Investment Commissioners.

The Kemerovo Region Governor’s Coun-cil on Investment and Innovation was set upin December 2008. Since then, the Councilhas held 12 meetings and reviewed 85 appli-cations for state support from various organ-isations in accordance with the local laws.Today, the Council runs a database of 71 or-ganisations, including 24 companies in theRegister of Investment Projects, one in theRegister of Technoparks, 32 companies in theRegister of Kuzbass Technopark Residents,11 in the Register of Favoured Economic ZoneResidents and one in the Register of Manu-facturers.

The state support granted in 2011 to-talled RUB 277.53 million, including RUB174.72 million of tax benefits and RUB 11.31million of partial subsidies for the intereston bank loans under the Kemerovo RegionLaw ‘On State Support of Investment, Inno-vation and Industrial Activities in the Ke-merovo Region’. Various budgets and off-budget funds received RUB 111 million,whereas the consolidated budget of the Ke-merovo Region, RUB 308 million. Total in-vestment reached RUB 16.7 billion (count-

3.2. The Kemerovo Region Governor’sCouncil on Investmentand Innovation

ing the 2011 projects), including RUB 15 bil-lion of capital investment.

In addition to the above, the investing ag-ricultural producers received subsidies total-ling RUB 86.49 million, including RUB 14.18million from the regional budget. The business-es invested 18 roubles, including 12.6 roublesof capital investment, per each rouble of statesupport (less the entities entered in the Regis-ters in 2011). The consolidated budget of theKemerovo Region received 1.13 roubles pereach rouble of state support.

The total amount of state support grantedsince the Council’s establishment in 2008 hasreached RUB 375.4 million. The organisationsincluded in the regional registers have invest-ed almost RUB 32.3 billion (counting the 2011projects), including RUB 27.8 billion of capitalinvestment. Taxes and other due payments tothe budgets and off-budget funds haveamounted to RUB 1.013 billion, including RUB0.749 billion to the consolidated budget of theKemerovo Region. Overall, the consolidatedbudget received two roubles per one rouble ofstate support. Total employment in all the in-vestment projects is 5,881 people.


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Tax relief can be granted to the followingcategories of entities:

----- companies running investment or in-novation projects in the Kemerovo Regionand investing only their own or their ownand borrowed funds in the priority areasof the region’s socio-economic develop-ment;

- legal entities and individuals, includingforeign businesses, that are involved in man-ufacturing products, processing raw materi-als or providing services in the priority areasof the Kemerovo Region;

- businesses and individual entrepre-neurs implementing innovation projects and

3.3. Company eligibilityfor state support

The Kemerovo Region has a network oflong-term targeted programmes aimed to at-tract investment and support investmentprojects, including:

- Increasing Investment Appeal of theKemerovo Region in 2012–2014 (adoptedby Resolution No.546 of the Kemerovo Re-gion Administration Board on 2 December2011). Any information on the region’sinvestment and innovation activities can

3.4. Federal and regionallong-term targeted programmesfor investmentand innovation support

be found on the official website, Ke-merovo Region’s Investment Portal(www.keminvest.ru), created within thisprogramme to make the region moretransparent and attractive for investors;and

- The Development of Innovations in theKemerovo Region in 2012-2014 (adopted byResolution No.538 of the Kemerovo RegionAdministration Board on 29 November 2011).

using technopark infrastructure facilities(residents);

- technopark managing companies thatprovide residents with a workspace in thetechnopark and access to its services;

- legal entities and individual entrepreneursregistered in a municipality of the Kemerovo Re-gion that has a Favoured Economic Zone (FEZ)and engaged in an economic activity in this FEZon the basis of an agreement on conducting thisactivity in line with the FEZ profile; and

- FEZ managing companies that attractbusinesses and individuals into the FEZ, ac-commodate them and provide access to theFEZ services.

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The following laws of the Kemerovo Re-gion aim to improve the investment climateinvestment climateinvestment climateinvestment climateinvestment climateand create favourable conditions for doingbusiness in the region:

1) On State Support of Investment, Innova-tion and Industrial Activities in the KemerovoRegion (No.102-ОZ of 26.11.2008);

2) On Favoured Economic Zones (No.87-ОZ of 08.07.2010);

3) On Technoparks in the Kemerovo Re-gion (No.55-ОZ of 25.06.2008);

4) On Tax Relief for Investment and Inno-vation Entities and Manufacturers, TechnoparkManaging Companies, Technopark Residents,Managing Companies of Favoured EconomicZones and Residents of Favoured EconomicZones (No.101-ОZ of 26.11.2008);

5) On Tax Rates in the Simplified Tax Sys-tem (No.99-ОZ of 26.11.2008);

6) On Tax Relief for Technopark Residentsand Investors Engaged in Coal-Bed NaturalGas (Methane) Extraction in the KemerovoRegion (No.5-ОZ of 28.01.2010);

7) On the Innovation Policy of the Ke-merovo Region (No.66-ОZ of 02.07.2008),and others.

Forms of state support(according to the Kemerovo Region laws):

1. Regional tax relief:- profit tax reduction from 18% to 13.5%;- 100% exemption from corporate property tax.2. Deferred payments, instalment plans,

credit for regional taxes:- transport tax;- corporate property tax;- credit terms – 1/4 of the RF Central Bank

refinancing rate, up to 5 years.3. Partial subsidies out of the regional

budget for the interest on bank loans takentowards the project implementation.

3.5. Legal frameworkand key formsof state support

Recipients: investment entities, residentsof technoparks of the Kemerovo Region, res-idents of favoured economic zones of the Ke-merovo Region.

The size of a subsidy is based on 1/2 ofthe RF Central Bank refinancing rate as atthe date of the loan agreement between theborrower and the lending company, but nomore than 1/2 of the actual interest on theloan.

4. Subsidies reimbursing expenses relat-ed to the development of innovative activi-ties in technoparks of the Kemerovo Region.

Subsidies are grants provided to techn-opark managing companies to the amount ofup to 90% of the actually incurred and docu-mented ongoing quarterly expenses, start-ing from the fiscal year following the techn-opark’s entry in the Register of Technoparksof the Kemerovo Region.

5. Subsidies out of the regional budgetto reimburse expenses for preparing projectdocumentation and project state appraisal.

Recipients: investment entities, innova-tion entities, residents and managing com-panies of favoured economic zones of theKemerovo Region; residents of technoparksof the Kemerovo Region.

Subsidies can equal up to 90% of the ac-tual expenses, subject to the investor’s con-firmation of participation in the project.

6. Tax relief for taxpayers choosing thesimplified tax system.

Tax rate reduction to 5%.Recipients:1) taxpayers engaged in one of the 24

economic activities stipulated by Law No.99-ОZ;

2) managing companies of favoured eco-nomic zones;

3) residents of favoured economic zones.


4141414141

1. Application to the Investment PolicyDepartment at the Kemerovo Region Admin-istration.

2. Preparing a package of applicationdocuments.

The list of documents to be submitted tothe Investment Policy Department:

- an application for state support of invest-ment activity in due form;

- copies of the foundation documents withall the subsequent amendments and annex-es;

- a copy of the certificate of state registra-tion;

- an extract from the Unified State Registerof Legal Entities obtained no earlier than tendays prior to the date of application;

- a copy of the certificate of registration withthe local tax authority;

- copies of documents verifying the man-ager’s powers;

- a business plan in electronic and paperforms, presented in due format;

- a resolution of the Kemerovo RegionAdministration’s departments or other ex-ecutive bodies of the Kemerovo Region, ac-cording to the sectoral affiliation of the in-vestment project (activity), on the advisabil-ity of providing state support to the invest-ment project (activity) in terms of the latter’ssignificance for the sector and its compliancewith the eligibility criteria, including the in-formation on any previously granted statesupport;

3.6. The procedurefor providing state supportto investment and innovationentities and manufacturers

- copies of balance sheets and appendi-ces thereto for the preceding year and the pre-ceding quarters of the year under accountsigned by the tax office;

- a statement from the tax office on thepayment of taxes, dues and fees, fines andpenalties received no earlier than ten daysprior to the date of application;

- a statement provided by the Arbitrationat the request of the investment entity show-ing the absence of insolvency (bankruptcy)proceedings in relation to the entity at the datenot earlier than ten days prior to the date ofapplication; and

- a statement showing the average listednumber of employees and average wages overthe previous reporting period, signed by themanager and certified with the entity stamp.

3. Expert review of the documents bythe Investment Policy Department.

4. Submitting the project to the Ke-merovo Region Governor’s Council on In-vestment and Innovation for consideration.

5. Submitting the project to the Ke-merovo Region Administration Board forconsideration (subject to approval by theCouncil).

6. Signing the Agreement between theKemerovo Region and the entity receivingstate support (subject to approval by theKemerovo Region Administration Board).

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3.7. Company eligibilityfor tax relief

Recipient Type of tax relief Terms for granting tax relief- Investment entities- Innovation entities- Technopark residents- Residents of favoured economic zonesof the Kemerovo Region

1. Profit tax - reductionfrom 18% to 13.5%2. Property tax -100 % exemptionPeriod of tax relief:1-5 years

1. Taxpayer's entry in the Register of Investment Projects of theKemerovo Region, the Register of Innovation Projects, theRegister of Manufacturers, the Register of TechnoparkResidents and the Register of Favoured Economic ZoneResidents of the Kemerovo Region.2. The share of earnings derived from the given project –not less than 70% of total earnings (for profit tax reduction).3. The share of fixed assets used towards the projectimplementation - not less than 70% of total fixed assets(for property tax exemption).

- Manufacturers 1. Profit tax - reductionfrom 18% to 13.5%2. Property tax –100 % exemptionPeriod of tax relief:up to 5 years

1. Engagement in activities stipulated in Law No. 102-ОZ (9activities according to the Russian National Classifier ofEconomic Activities).2. Entry in the Register of Kemerovo Region Manufacturers.3. The share of earnings derived from the sales of goods(services) produced as a result of the priority activity - not lessthan 70% of total earnings (for profit tax reduction).4. The share of fixed assets used for the given activity - not lessthan 70% of total fixed assets (for property tax exemption).

- Technopark managing companies- Managing companiesof favoured economic zones

1. Profit tax – reductionfrom 18% to 13.5%2. Property tax –100 % exemptionPeriod of tax relief:1-5 years

Entry in the Register of Kemerovo Region Technoparksand the Register of Favoured Economic Zonesof the Kemerovo Region.

- Taxpayers engaged in oneof the 24 economic activitiesstipulated in Law No. 99-ОZ- Managing companies of favoured economic zones- Residents of favoured economic zones

Tax rate reductionfrom 15% to 5 %for taxpayers choosingthe simplified tax system

1. Not less than 80 % of the company's income in the reporting(tax) period, calculated according to Article 346.15 of Section26.2 of the RF Tax Code, is derived from one of the 24 economicactivities stipulated in Law No. 99-ОZ, provided the taxableamount is income less expenses.2. FEZ managing companies entered in the Registerof Favoured Economic Zones.3. FEZ residents entered in the Register of Favoured EconomicZone Residents.


4343434343

3.8. The procedurefor providing state supportto technopark residents

1. Application to the technopark man-aging company.

2. Preparing a package of applicationdocuments.

The list of documents to be submitted tothe Investment Policy Department:

- a statement verifying the status of a tech-nopark resident, made in due form;

- an innovation project designed in dueform and in line with the technopark’s activ-ities;

- an approval of the innovation project bythe expert council of the technopark includedin the Register of Technoparks of the KemerovoRegion;

- an agreement between the applicant andthe technopark on the implementation of theinnovation project;

- a copy of the certificate of registration withthe local tax authority;

- copies of the foundation documentswith all the subsequent amendments andannexes;

- a statement from the tax office on theabsence (presence) of arrears to the budget;and

- a statement showing the average listednumber of employees and average wages overthe previous reporting period.

3. Expert review of the project by thetechnopark managing company and commu-nication of its favourable decision to the In-vestment Policy Department of the KemerovoRegion Administration.

4. Submitting the project to the KemerovoRegion Governor’s Council on Investmentand Innovation for consideration.

5. Submitting the project to the KemerovoRegion Administration Board for considera-tion (subject to approval by the Council).

6. Signing the Agreement on coopera-tion in the project implementation betweenthe Kemerovo Region, the technopark andthe resident receiving state support (subjectto approval by the Kemerovo Region Adminis-tration Board).

4444444444

On 16 November 2012, the Kemerovo Re-gion Administration Board and the PublicCorporation «The Bank for Development andForeign Economic Affairs (Vnesheconom-bank)» signed an Agreement on cooperationand a Plan of joint action for the integrateddevelopment of the Kemerovo Region in2012-2015.

The parties intend to cooperate in rais-ing funding to carry out major investmentprojects in the Kemerovo Region, providingfinancial support to small and medium-sizedenterprises, and implementing integrated

At the end of 2011, to enhance efforts toencourage investment in the region, Gover-nor Aman Tuleyev introduced a position ofan investment commissioner and appointedDeputy Governor for the Economy and Re-gional Development D. V. Islamov InvestmentCommissioner for the Kemerovo Region (theKemerovo Region Governor’s Order No. 185-rg of 23 December 2011 «On the Investment

3.9. InvestmentCommissioners

Commissioner for the Kemerovo Region»).The key function of the investment commis-sioner is to assist investors with implement-ing their projects in the region, including thesimplification of bureaucratic procedures atthe regional and municipal levels.Since 2012, investment commissioners havebeen appointed in every municipality anddistrict of Kuzbass.

3.10. Support of majorsocially significantprojects

investment plans to develop the mono-in-dustrial towns of Kuzbass.

The Plan of joint action for the integrateddevelopment of the region takes into ac-count the priorities of social and economicdevelopment of the region and makes useof the tools and facilities of Vnesheconom-bank’s subsidiaries. Its implementation willstrengthen the economic and industrial po-tential of the Kemerovo Region; in particu-lar, it will attract 140 billion roubles to financemajor economic and social projects, creat-ing more than 3,300 new jobs.


4545454545

3.10.1. THE KEMEROVO REGION'S MAJOR PROJECTS OF SOCIALAND ECONOMIC SIGNIFICANCE

No

1.

2.3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15. ОАО SKEK

Construction of a plant to produce OSB/OPB and wood chip boards with a capacityof 120,000 m3 p.a. in Mariinsk, Kemerovo Region

ZAO MPK

Construction of a plant to produce modern conveyor systems OOO Transport Systems, Leninsk-KuznetskiyOpening a foundry within the project "Production of multipurpose 12-9085 open wagonswith unloading hatches"

ОАО Novokuznetsk Carriage Works

Construction of the Severny Kuzbass oil refinery with a capacity of 2,000 tons p.a.in Anzhero-Sudzhensk

ООО Severny KuzbassOil Refinery,ZAO UK KEM-OIL

Construction of the Uchulensk cement plant with a capacity of 1.3 mln. tons p.a.in Tashtagolskiy District, Kemerovo Region

ООО Uchulensk Cement Plant,Tashtagolskiy District

Replacement of T-86 turbines No. 4,5 with new КТ-115 turbines at Tom'-Usinsk GRESwith a capacity 120 МW each (Block No.5 – Dec. 2013, Block No.4 – Dec. 2014)

ОАО Kuzbassenergo,ООО SGK

Replacement of К-200-130 turbines 4, 6 with new К-225-130 turbines at Belovsky GRESwith a capacity of 200 МW each (Block No.4 – Dec. 2013, Block No.6 – Dec. 2014)


Expansion of Kuznetsky TETS with gas-turbine units of 280 МW (2 blocks, 140 МW each),(Blocks No.14 and No.15 – Dec. 2013)


Construction of the Yaiskiy oil refinery(2nd construction phase)

ZAO NefteKhimServis,Yaiskiy District

Launching an industrial pilot facility for underground coal gasification to produceelectrical and thermal energy

OAO Promgazenergo

Construction of the Pervomaiskaya coal preparation plantwith a capacity of 6 mln. tons p.a.

ООО Shakhtoupravleniye Maiskoye(Maiskaya mine office), ZAO HC SDS

Construction of a thermal power plant with a capacity of 120 МW КОАО Azot,ZAO HC SDS, Kemerovo

Construction of a joint factory to assemble BelAZ dump trucks ОАО HC SDS-Mash,ОАО BelAz, Prokopyevsk

Construction of a new facility to produce porous ammonium nitratewith a capacity of 400,000 tons p.a.

ОАО SDS-Azot,ZAO HC SDS, Kemerovo

A potable water treatment plant with a capacity of 200,000 m3/dayon the water intake site in Metallploschadka settlement, Kemerovo

Project Title Project Initiator

4646464646

No

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

Date of entry Investor Project title(grounds for entry) (name, address)26.12.2008Resolution of the Kemerovo RegionAdministration BoardNo. 594 of 26.12.2008

КОАО Orton650036, Kemerovo Region,Kemerovo, ul. Tereshkovoy, 41+7 (3842) 313522, +7 (3842) 313502

Launching production of geosynthetic materials at KOAO Orton


ZAO AFK652470, Kemerovo Region,Anzhero-Sudzhensk, ul. Tulskaya, 9+7 (3842) 364938, +7 (3842) 345503

Building a facility to produce large size plywood with a capacity of 60,000 cubic metersin Anzhero-Sudzhensk


ОАО Novokuznetsk Carriage Works654000, Kemerovo Region,Novokuznetsk,pr. Proizvodstvenniy, 22+7 (3843) 794122, +7 (3843) 792421

Launching a facility to produce multipurpose 12-9085 open wagons with unloading hatches


ООО EkoLend654080, Kemerovo Region,Novokuznetsk, ul. Zaporozhskaya, 21а+7 (3843) 991260, +7 (3843) 764755

Construction of a solid waste dump in Novokuznetsk, Markino site


ООО Uchulensk Cement Plant652920, Kemerovo Region, Tashtagolskiyraion, pgt. Temirtau, ul. Tsentralnaya, 12+7 (38437) 49053

Construction of the Uchulensk Cement Plant


ООО SPK Chistogorsky654235, Kemerovo Region,Novokuznetskiy raion, p. Chistogorsky,+7 (38435) 51119

Upgrading the pig-breeding complexand the industrial wastewater treatment facility


ООО KuzbassAvto652571, Kemerovo Region, Leninsk-Kuznetskiy raion,s. Drachenino, ul. Yubileynaya, 1b+7 (38456) 64314

Launching a facility to assemble commercial vehicles of Hyundai County KUZBAS, Hyundai AeroTown KUZBAS and Hyundai HD-78 KUZBAS


ООО Anzherskaya Oiland Gas Company652106, Kemerovo Region,Yaiskiy raion, p. Bezlesny+7 (3842) 345656, +7 (3842) 345658

Construction of an oil refinery with a capacity of 400,000 tons p.a. in Anzhero-Sudzhensk


ООО City Tennis Centre654007, Kemerovo Region,Novokuznetsk, ul. Spartaka, 3+7 (3843) 466713, +7 (3843) 467543

Construction of a children's tennis school with 4 indoor Taraflex-coated courtswith a total area of 4,200 square meters and 4 outdoor clay courts


ООО Severny Kuzbass Oil Refinery652480, Kemerovo Region,Anzhero-Sudzhensk,ul. К. Marksa, 7-31+7 (3842) 345656, +7 (3842) 345658

Construction of the Severny Kuzbass oil refinery with a capacityof 800,000 tons p.a. in Anzhero-Sudzhensk


ООО Siberian Carriage Repair Company654007, Kemerovo Region,Novokuznetsk,ul. Pavlovskogo, 11а - 807+7 (3833) 358079, +7 (3843) 390810

Construction of a carriage repair shop with a capacity of 4,800 repairs p.a.in Novokuznetsk, Kemerovo Region

14.01.2011Resolution of the Kemerovo RegionAdministration Board No. 603of 29.12.2010 (worded as in Resolutionof the Kemerovo Region AdministrationBoard No. 283 of 23.06.2011)

ООО Selyana650513, Kemerovo Region,Kemerovskiy raion,p. Kuzbassky, ul. Yuferova I.S., 2+7 (3842) 607235

Construction of a dairy farm to house 1280 heads of cattle

3.10.2. THE KEMEROVO REGION'S PRIORITY PROJECTS


4747474747

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

No Date of entry Investor Project title(grounds for entry) (name, address)14.01.2011Resolution of the Kemerovo RegionAdministration Board No. 603of 29.12.2010 (worded as in Resolutionof the Kemerovo Region AdministrationBoard No. 283 of 23.06.2011)

ООО Lesinvest Yaya652100, Kemerovo Region, pgt. Yaya,ul. Krasnoarmeyskaya, 1а+7 (3844) 121286

Upgrading the wood processing plant of ООО Lesinvest Yaya

14.01.2011Resolution of the Kemerovo RegionAdministration Board No. 603of 29.12.2010 (worded as in Resolutionof the Kemerovo Region AdministrationBoard No. 283 of 23.06.2011)

ООО Joy Global652700, Kemerovo Region,Kisselevsk, ul. Lenina, 36+7 (3843) 777846, +7 (3843) 357887+7 (3843) 779354

A service centre for maintenanceand repair of mining equipment and excavators


The charitable foundation'Kuzbass Volleyball Club Sports Complex'650070, Kemerovo Region,Kemerovo,Airport, P.O.B. 3184

Construction of a sports centre to be engaged in physical education and mass sports,health promotion and health protection in Kemerovo

07.07.2011 Resolution of the KemerovoRegion Administration BoardNo. 308 of 05.07.2011

ООО Naturalnoye Moloko (Natural Milk)650070, Kemerovo Region,Kemerovo, ul. Tukhachevskogo, 108

Construction of a modular dairy plant to process 10 tons of raw milk per day


ООО Kemerovskiy DSK (house-buildingfactory) 650021, Kemerovo Region,Kemerovo, ul. Gruzovaya, 21g

Upgrading the Kemerovo House-building Factory


ООО Kuzbassptitseprom652038, Kemerovo Region,Yashkinskiy raion, s. Kolmogorovo,mkr. Molodezhny, 6

Upgrading the poultry farm


ООО AvtoElement654000, Kemerovo Region,Novokuznetsk,pr. Ordzhonikidze, 28а, office 9

Production of filters for high-combustion engines


ООО Kuzbass PowerNetwork Company650000, Kemerovo Region,Kemerovo, ul. N. Ostrovskogo, 32,office 209

Construction and upgrading of power supply facilities in Tashtagolskiy District


ОАО Vaganovo652395, Kemerovo Region,Promyshlennovskiy raion,s. Vaganovo, ul. Tsentralnaya, 13

Construction of a dairy farm for 2100 forage-fed cows with a full breeding cycle


ООО KDV-Agro652010, Kemerovo Region,Yashkinskiy raion, pgt. Yashkino,ul. Molodezhnaya, 1а

Launching an agricultural facility to grow potatoes for crisps production


ZАО NefteKhimServis654007, Kemerovo Region,Novokuznetsk, pr. Pionerskiy, 39

Construction of the Yaya oil refinery, phase 1


ZАО Mariinsk Board Factory650000, Kemerovo,pr. Kuznetsky, 15

Construction of a plant to produce OSB/OPB and wood chip boardswith a capacity of 120,000 cubic metres p.a. in Mariinsk, Kemerovo Region

4848484848

3.10.3. THE REGISTER OF MAJOR INVESTMENT SITESName Municipality Area, Conditions Uses/of site ha Sectors

No

Industrial sites Anzhero-Sudzhensk 102.33 NA Industrial production

of liquidated companies (total for 6 sites)

in Anzhero-Sudzhensk

Liquidated children’s Anzhero-Sudzhensk 175.0 NA Sport, tourism

summer camps in Rudnichniy settlement

Lake Mishikha Anzhero-Sudzhensk 9.5 NA Sport, tourism

Lake Pobeda (Victory) Anzhero-Sudzhensk 7.4 NA Sport, tourism

Plot of land Belovo 15.0 According to Article 38 Industrial production

in the northern industrial area of Belovo of the Land Code

Plot of land for low-rise residential development Belovo 84.0 According to Article 38 Construction

of the Land Code

Investment sites Berezovskiy 10.2 (total) Tender, rent Trade, public catering

No. 1-16 in and consumer services, car service,

Berezovskiy construction, petrol stations, hotels,

sports and health improvement

facilities

Free green area, 1.5 km from the Zolotaya Gora Guryevskiy district 1.0 Long-term rent Sport, tourism;

(Gold Mountain) skiing resort on favourable terms with construction

a possible buyout of land

Free site in Guryevsk Guryevskiy district 1.0 Long-term rent Industrial production

on favourable terms with

a possible buyout of land

Sites for comprehensive housing development Kaltan 24.7 NA High-rise housing development,

in Kaltan (total for 3 sites) comprehensive low-rise and mid-rise

housing development

Unused industrial buildings Kaltan 338,304 sq.m. NA Industrial production

(total for 5 sites)

Land for constructing a trade Kemerovo 0.47 The right to Construction

and exhibition centre land not registered,

for rent by tender

Plots of land No.1-7 in Kisselevsk Kisselevsk 146.87 Rent Production facilities

for construction (total for 7 sites) for heavy, light,

food or chemical industries

and agriculture

Plot of land No.8 for construction, Kisselevsk 20.0 Rent Construction of a sports

Krasniy Kamen’ (Red Stone) district and wellness centre,

an entertainment centre

Sites in Krapivinskiy district Krapivinskiy district 514.857 Auction Comprehensive

(total for up to 30 sites) and single-family housing

development, construction

of shops, development

of mineral deposits, recreation

and gardening

Premises of the former Yegozovskaya mine office Leninsk-Kuznetskiy 2 Subject to prior Industrial production

agreement

on location

Northern industrial area Leninsk-Kuznetskiy 400 Subject to prior Industrial production

agreement

on location

Site at ul. Levitana, 53 Leninsk-Kuznetskiy 5 Auction Industrial production

Sites in Mariinskiy district Mariinskiy district 3575 Rent Agricultural production

for agricultural production (total for 4 sites) (privity of contract)

1.

2.

3.4.5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.19.


4949494949

ООО Mariinsk Meat Canning Company Mariinskiy district 35,000 sq.m. Sale Industrial production

Snow tubing park Mariinskiy district 0.3 Rent Sport, tourism

Sites in Mariinskiy district Mariinskiy district 2.18 Rent Construction

for residential development (total for 7 sites)

Sports and health centre Mezhdurechensk 3.5 Auction Construction

Tourist complex: a track (tubing, Mezhdurechensk 8.2 Auction Sport, tourism, construction

snowboarding, all-season slalom), a hotel,

a cafe, a health centre and a lift

Tourist complex: Mezhdurechensk 5.6 Auction Sport, tourism, construction

a track (snowmobiles, mountain bikes),

a hotel, a cafe and a lift

Tourist complex: a track (hang gliding, slalom), Mezhdurechensk 6.2 Auction Sport, tourism, construction

a hotel, a cafe and a lift

High-rise residential buildings Mezhdurechensk 21.2 Auction Construction

and social facilities

Site for sports facilities Myski 5.8 Rent or buyout Sport, tourism

(a sports centre)

Sites for residential development, Novokuznetsk 366.6 Rent, auction Residential development,

Novoilyinskiy district, Novokuznetsk (total for 6 sites) low-rise housing development

Utility facilities Novokuznetsk 75.7 Rent, auction Utilities

and warehouses, and production facilities,

Novoilyinskiy district transport infrastructure

Zavodskiy district, Ostrovskiy settlement Novokuznetsk 3.59 Rent, auction Low-rise housing development

Production facilities, Talzhino settlement Novokuznetsk 1.3 NA Industrial production

Construction of production facilities Novokuznetsk 1.1 Auction Industrial production

Construction of a business centre Novokuznetsk 0.2443 Auction Construction

Sites in Ossinniki Ossinniki 7.77 According Industrial production

for industrial production (total for 3 sites) to the RF Land Code

I. I. Gorovets City Park Polysayevo 4.699 Rent on favourable Sport, tourism

terms for small and

medium-sized enterprises

Plot of land for individual housing Polysayevo 32 Sale by tender Individual housing development

development

Recreation area Polysayevo 8.4 Rent on favourable Recreation

terms for small and


Plot of land Polysayevo 0.98 Sale by tender Industrial production

in Titova street

Suvorov’s Park Polysayevo 8.5 Rent on favourable Recreation

terms for small and


Severniy Maganak (to the east Prokopyevskiy urban okrug 1.33 Rent for Industrial production

of Novokuznetskaya substation) a construction term;

tenant right by auction

Severniy Maganak Prokopyevskiy urban okrug 10.06 Rent for a construction term; Industrial production

(to the north-east tenant right by auction

of Novokuznetskaya substation)

Krasnaya Gorka (Red Hill) Prokopyevskiy urban okrug 8.27 Rent for a construction term; Industrial production

tenant right by auction

Industrial production site Prokopyevskiy urban okrug 45.6 Rent of land plots Industrial production

ООО KVRP Novotrans for constructing

new production facilities

with further purchase

Sites in Taiga for housing construction Taiga 4.87 Competitive tender Housing construction

(total for 3 sites)

Name Municipality Area, Conditions Uses/of site ha Sectors

No

20.21.22.

23.24.

25.

26.

27.

28.

29.

30.

31.32.33.34.35.

36.

37.

38.

39.

40.

41.

42.

43.

44.

45.

5050505050

Name Municipality Area, Conditions Uses/of site ha Sectors

46.

47.

48.

49.50.

51.52.

53.

54.55.

56.

57.

58.59.

60.

No

Investment Site IP-009, Taiga 6.2 Competitive tender Designing an inventory

Track Machinery Station area storage facility

(north-eastern part of dead-end tracks) with a hydrocarbon materials

processing unit

Investment Site IP-010, south-eastern part Taiga 6-10 Competitive tender Designing a brick factory

of town (to the south of Muslimovskiy park)

Investment Site IP-015 ul. Oktyabrskaya, 8 Taiga 0.5 Auction Construction of a sports

and health centre (Aqua park)

Investment Site IP-016 (north-eastern part of town) Taiga 9.0 For rent Municipal solid waste landfill

Favoured economic zone in manufacturing “Yurga” Yurga 88.7 1. Rent for construction Industrial production

with further agreement

on the location

of facilities

2. Rent of production facilities

Industrial site No. 2 Yurga 126 Rent Industrial production

Yuzhniy-2 residential estate, Promyshlennovskiy district 12 Contract of sublease Construction

Promyshlennaya settlement

Regional centre Tashtagolskiy district 120.99 Permanent (indefinite) use Sport, tourism

of skiing and snowboarding

Sheregesh tourist complex, sector E Tashtagolskiy district 1071.2 Auction Sport, tourism

Site for oil-refining industry Yaiskiy district 6 Rent followed by buyout Construction,

at the Sudzhenka station industrial production

Site for a recreational area Yaiskiy district 2 Rent followed by buyout Sport, tourism

in Yaya settlement

Sites for enterprises in the light, Yaiskiy district 6.63 Rent followed by buyout Construction

processing and food industries (total for 3 sites)

in Yaya settlement

Construction of an industrial logistics centre Topkinskiy district 120 Rent Industrial production

Site for individual Topkinskiy district 22 Rent Construction

housing development

High-rise residential housing Topkinskiy district 45 Rent Construction


5151515151

Section 4.Foreign Trade

5252525252

The region’s international and interre-gional cooperation is governed by theConcept for the development of foreign

and interregional economic activities of the Ke-merovo Region, adopted by the KemerovoRegion Administration Board (No. 1123-p of10.10.2006).

The KCCI efforts to facilitate the develop-ment of foreign and interregional economicrelations of Kuzbass enterprises and their par-ticipation in exhibitions and fairs focus on twomajor objectives, namely:

1) promoting local products and services inother regions of Russia and abroad; and

2) encouraging investment in Kuzbass.In order to attract domestic and foreign in-

vestment into the real sector of the Kuzbasseconomy and promote exports of local goodsand services, the KCCI is involved in the fol-lowing activities:

1) arranging Kuzbass participation in tradeand investment fairs and exhibitions;

2) facilitating regional participation in in-vestment forums;

3) organising business missions;4) representing the region and its business

community in Russia and abroad;5) disseminating information on Kuzbass

exports, investment proposals and on its in-dustrial and investment potential through for-eign embassies, the Russian network of cham-bers of commerce and industry and foreignrepresentative offices of the Russian Cham-ber of Commerce and Industry;

6) interacting with chambers of commerceand business associations in the CIS and non-CIS countries;

7) supporting Kuzbass enterprises in theirforeign economic affairs;

8) providing assistance to small business-es in entering foreign markets; and

9) training managers and professionals inforeign trade operations.

With almost all its departments involvedin the above activities, the KCCI can use notonly its own facilities, but also the whole in-frastructure of the Russian Chamber of Com-

4.1. The Kuzbass Chamberof Commerce and IndustryThe Kuzbass Chamber of Commerce and Industry (KCCI)is a coordinator of activities aimed to establish and strengtheninternational and interregional relations of the Kemerovo Regionunder the Agreement between the Kemerovo Region Administrationand the Kuzbass Chamber of Commerce and Industryon cooperation in developing foreign economic relations.

merce and Industry and its information re-sources.

Expanding cooperation with chambers ofcommerce and business associations in theCIS and non-CIS countries involves exchang-ing business information, organising fairs andexhibitions, supporting small and medium-sized enterprises and delivering business train-ing. The KCCI has so far come into 30 agree-ments on cooperation with chambers of com-merce and organisations in other regions ofRussia, as well as in both the CIS and non-CIScountries.

The KCCI has so far

come into 30

agreements on

cooperation with

chambers of commerce

and organisations in

other regions of Russia,

as well as in both the

CIS and non-CIS

countries


5353535353

According to the RF customs, some447 companies registered with thetax authorities of the Kemerovo

Region were involved in export-importoperations in the first 9 months of 2012 (up5.9%).

In January-September 2012, theKemerovo Region’s foreign trade turnovertotalled US$ 9,599.8 million, which is a666.7 million (7.5%) increase on January-September 2011. Exports and importsaccounted for 90.1% and 9.9%, respectively(93.6% and 6.4% the previous year).

The trade surplus decreased by 1.1% toUS$ 7,707.5 million.

ExportsIn January-September 2012, the region’s

exports totalled US$ 8,653.7 million, up292.3 million (3.5%) on January-September2011. By volume, they rose by 2.0% to 67.6million tonnes.

The region's exports to non-CIScountries increased by 0.9%, to the CIScountries, by 39.1%, amounting to US$7,866.8 mil l ion and 786.9 mil l ion,respectively. In value terms, non-CIScountries accounted for 90.9% of totalexports and the CIS countries, for 9.1%(93.2% and 6.8% in January-September2011, respectively).

In January-September 2012, theKemerovo Region exported commodities to79 countries, both CIS and non-CIS (70countries in January-September 2011).

Exports of fuel and energy products(mainly coal and coke) went up by 3.5%,compared to January-September 2011, andamounted to US$ 6,293.2 million. Byvolume, these exports increased by 2.0% to64.1 million tonnes.

Exports of metals and metal products(ferrous metals and raw aluminium) rose by4.0% to 2.6 million tonnes by volume andby 5.0% to US$ 1,883.7 million in valueterms.

4.2. The Kemerovo Region'sforeign trade

The Kemerovo Region’s cooperation with other regions of Russia and foreigncountries is based on its competitive advantages, including rich natural resourcesand internal reserves for modernising and developing various sectors of theregional economy, a well-developed industrial, financial and transportinfrastructure, and its human resources.

Kemerovo Region's Foreign Trade,

January-September 2012

Key Indicators of Kemerovo Region's Foreign Trade,

January-September 2011/2012 (US$ million)

Exports of chemical products decreasedby 8.4% to US$ 422.5 million in value termsand by 3.9% to 821.2 thousand tonnes involume. In January-September 2012, the mainexports were heterocyclic compounds to

5454545454

China, nitrogen fertilizers, including anhydrousammonia, to CIS and non-CIS countries.

The products in the table above accountfor 97.9% of all exports in value terms.

The principal exports to non-CIScountries were fuel and energy products(mainly coal, coke and technicalnaphthalene) accounting for 71.6% of allexports to non-CIS countries in value terms

Kemerovo Region's Exports

by Commodities,


Metals andmetal products – 21.8 %;Othercommodities – 0.6 %;Fueland energy – 72.7 %;Chemicalproducts,rubber – 4.9 %.

Kemerovo Region's Exports to CIS

and non-CIS Countries,


Key Trade Partners,



5555555555

(up 0.5% on January-September 2011),metals and metal products - 22.9% (up 4.9%)and chemical products - 5.3% (down 9.5%).

The main exports to the CIS countriesincluded fuel and energy products (coal and

Kemerovo Region's Exports by Key Commodities, January-September 2012

coke) accounting for 84.0% of all exports tothe CIS countries in value terms (up 38.8%),metals and metal products - 10.5% (up 6.6%)and engineering products - 3.4% (up 7.1times).

5656565656

ImportsIn January-September 2012, the region’s

imports totalled US$ 946.1 million, anincrease of US$ 374.4 million (7%) onJanuary-September 2011. By volume, theyrose by 23.3% to 178,500 tonnes.

In value terms, non-CIS countriesaccounted for 92.2% of all imports, whereasthe CIS countries, for 7.8% (90.4% and 9.6%in January-September 2011, respectively).Imports from non-CIS countries increased byUS$ 355.5 million (70%) to US$ 872.5million and from the CIS countries, by US$18.9 million (34.6%) to US$ 73.6 million.

In January-September 2012, theKemerovo Region imported goods from 64countries (62 countries in January-September 2011).

Imports of machinery and equipment(bulldozers, metal-rolling mills, mining anddrilling machinery, hoisting, handling, loadingand unloading equipment, railway containers,trucks and parts, engines, pulleys and hoistsand other equipment) totalled US$ 735.7million, up 80% on January-September 2011.Imports from non-CIS countries saw a 90%increase, whereas those from the CIScountries went down by 4.5%.

Imports of chemical products increasedby 27.6% to US$ 102.6 million, whereas byvolume they decreased by 4.9% to 17,400tonnes on January-September 2011. Theprincipal imports included new rubber andpneumatic tyres and plastic products fromnon-CIS and CIS countries, vulcanizedrubber conveyor belts and transmission beltsfrom non-CIS countries, and silicon fromChina.

Imports of metals and metal productsincreased 2.1 times to US$ 46.4 million,

Kemerovo Region's Imports from CIS

and non-CIS Countries,


Key Trade Partners,



5757575757

Kemerovo Region's Imports

by Commodities,


Metalsand metal products – 4.9 %;Other commodities – 4.8 %;Fuel andenergy – 1.7 %;Chemicalproducts, rubber – 10.8 %;Machinery,equipment and vehicles – 77.8 %.

whereas by volume they went up 5.3 timesand reached 29,000 tonnes. The principalimports from non-CIS and CIS countries wereferrous metals and products (mainly angles,iron or non-alloy steel shapes and sections,pipes, tubes, profiles and other articles madeof ferrous metals).

The main imports from non-CIS countriesincluded engineering products - 79.9% of

total imports from non-CIS countries in valueterms (up 90% on January-September 2011)and chemical products - 11.5% (up 26.0%).

The major imports from the CIS countriesincluded engineering products - 51.9% oftotal imports from the CIS countries in valueterms (down 4.5%), metals and metalproducts - 33.3% (up 6.7 times) and petroleumcoke - 10.3% (down 16.0%).

5858585858

4.3. Major foreignpartners

of the Kemerovo Region were involved inexport-import operations in the first 9 monthsof 2012 (up 5.9%).

According to the RF customs, theKemerovo Region’s foreign trade operationsin January-September 2012, compared to thesame period in 2011 (excluding trade with theRepublic of Kazakhstan and the Republic ofBelarus), showed a 7.5% increase in turnover,exports rising by 3.5% and imports by 70% (invalue terms). By volume, exports went up by2.0% and imports by 23.3%.

The rise in the value of exports waslargely driven by increased exports of fueland energy products and engineeringproducts to the CIS countries, and metalsand metal products to both CIS and non-CIS countries.

A significant growth of imports in valueterms is mainly attributed to increasedimports of engineering products from non-CIScountries, and ferrous metals and productsfrom both CIS and non-CIS countries.

Turnover by Major Trade Partners,


Foreign trade resultsof the Kemerovo Region’s enterprises:

Non-CIS countries remain the leading foreigntrade partners, accounting for 90.9% of allexports and 92.2% of total imports in value terms.

Imports have seen a 5.1 % increase in theshare of engineering products and a 3.3%decline in chemical products, as well as fueland energy. Exports, however, have not shownany significant changes.

According to the RF customs, theKemerovo Region’s foreign trade in January-September 2012 accounted for 30.3% of thetrade turnover in the Siberian Federal Okrugin value terms, 34.6% of total exports and 14.2%of total imports.

According to the RF customs, some 447companies registered with the tax authorities

The region’s foreign trade partners came from 91 countries(80 countries in January-September 2011). Non-CIS countriesaccounted for 91.0% of the total foreign trade turnover in valueterms (93.1% in January-September 2011). The share of the CIScountries was 9.0% (against 6.9% in January-September 2011).Compared to the same period in 2011, the trade turnover withnon-CIS countries increased by 5.1% to US$ 8,739.4 million,and with the CIS countries, by 38.7% to US$ 860.4 million.

kemerovo region investment profile · kemerovo region investment profile 555 lying in the southeast...

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