Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8

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Meeting/Event name – Month date, 2011, Type of event, Country – Arial regular size 8

ROCKWOOL – RUSSIA factory in SEZ ‘ALABUGA’

A Case Study

September 17th, 2012

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Rockwool InternationalWorld No1 manufacturer of stone wool insulation

Quoted on the Danish stock exchange

Business is Energy Saving, also Fire & Acoustic protection

27 production lines, and businesses in over 40 countries

Purchased 1st factory in Russia in 1999

Now 4 factories and 7 sales offices in Russia

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MURMANSK

Rockwool factories approximately 1,000km apart

Cities with population more than 1 000 000 Cities with population more than 1 000 000

St.Petersburg

N Novgorod

Rostov-na-Dony Samara

Kazan

Yekaterinbourg

CheliabinskUfa

NovosibirskOmsk

Volgograd

OdessaDnepropetrovsk

Kharkov

Astana

850

1030870

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Rockwool factory Alabuga SEZ

$ 150,000,000 investment

48 Ha (including environmental area)

Highest output stone wool line in the world

Commissioned Q1 2012

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ROCKWOOL factory in SEZ ‘ Alabuga’

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ROCKWOOL factory in SEZ ‘ Alabuga’

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One of the biggest challenges of investing in Russia is to convince your Head office Supervisory Board

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Nice Tax incentives in Alabuga SEZ

No Customs duties on imported machinery when constructing the factory

Profit tax reduction from 15.5% to 2% for the first 5 years

Profit tax reduction from 15.5% to 7% for the 2nd 5 years

tax concession on property tax during 10 years

(0% instead of usual 2.2% of net assets)

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1. Support from Business orientated Authorities

List of 22 criteria when we

Build or Buy a factory

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Why are supportive business like authorities so important ?

•We are a “white” foreign company with strong Scandinavian values

•It is inevitable to encounter problems during such a major project.

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Why we chose Tatarstan ?

1/ We have been importing into Russia since the 1970s and already knew the landscape

2/ Spent time meeting short listed Authorities

3/ Personally discussed with General Directors of 9 companies already doing business in Tatarstan

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29.11.201129.11.2011

Meetings with President Minnikhanov

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Quote from senior Customs Authorities in Alabuga,

”Its our shared goal to commission your factory on time”

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Rockwool factory Alabuga SEZ

Whole project delivered on budget

…… and 2.5 months ahead of schedule.

Run 24 / 7 since start up,

Performing ahead of the planned learning curve.

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Official Opening event - 04.04.2012

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1. Support from Business orientated Authorities

2. Proximity to customers and markets

3. Large site to allow expansion (min 20 Ha.)

4. Reasonable price  of land

5. Stable soil conditions (for building foundations)

6. No pollution or contamination

7. Railway connection

8. Easy access to Public roads

9. Possible to erect high chimney

10. Airport within reasonable distance

11. No immediate residential neighbours

22 criteria when we build/buy a factory

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12. Suitability of any existing buildings

13. Electrical power supply 7 MVA

14. Natural Gas 1,000 Nm3/h

15. Sewerage for 250 employees

16. Availability of raw materials

17. Tax concessions

18. All necessary industrial permissions and approvals

19. Clear ownership of land

20. Suitable hotel accommodation for engineers building the factory

21. Local technical universities (availability of skilled staff)

22. Good availability of local blue collar labour force

22 criteria when we build/buy a factory

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…… finally the Dream becomes Reality

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Questions?