Talia Minullina: “Global investment activity decline hasn't affected Tatarstan”
Alabuga SEZ, where a petrochemical project worth 20 billion rubles is being prepared, will become the growth driver in the republic
Investments in the global economy has been falling by 10-20% for three years in a row, but the unlucky streak is still bypassing the investment field of Tatarstan, the head of the Investment Development Agency of the Republic of Tatarstan Talia Minullina said at a recent report board meeting. The “harvest” of investment projects for the republic turned out to be encouraging on the general background: 69 new residents entered the PSEDA and the SEZ, and the total investment amounted to 19 billion rubles. What repels investors, what Talia Minullina asked for, and how her Kurgan colleagues “persuaded” the chairman of the board of directors of Gazprom, Viktor Zubkov, to give them gas, water, and then money — read in the report of Realnoe Vremya.
Without the president
By coincidence or not, the report of the head of the Investment Development Agency, Talia Minullina, began almost simultaneously with the opening ceremony of the World Economic Forum in Davos. President Rustam Minnikhanov is among those who are taking part in the Swiss investment forum this year. As you know, big billionaire businessmen and Russian bankers try not to miss this respectable platform to consolidate business contacts with Western business partners, sign contracts or just have a friendly conversation. Almost no one leaves there with an “empty portfolio” — without agreements.
Talia Minullina told in the first minutes of the board meeting that the president of Tatarstan was being in Davos. So far, there are no details about the agenda of the Tatarstan leader. Emphasizing the importance of the forum, the head of the Investment Development Agency only said that this year it has brought together 119 billionaires from 36 states with a total fortune of about $500 billion. According to her, one of the main topics of discussion on the world platform would be environmental development issues. “It is the theme of environment that is heard in every investment discussion," she added. For the second time in a row, the president has missed summing up the results in the agency, Prime Minister Aleksey Pesoshin attended the meeting instead. By the way, in the conclusion of the board meeting, Minullina admitted that “she enters the prime minister's office in different moods” but always finds mutual understanding and support.
Davos à la Tatarstan
The report meeting gathered Russian politicians, MPs and foreign billionaires. State Duma Deputy Ayrat Farrakhov, lobbying for amendments to the federal law on investment protection, expert of the Organization for Economic Co-operation and Development (OECD) Andrea Goldstein, Director General of the investment development agency Invest in Sharjah (UAE) and member of the managing committee of the World Association of Investment Promotion Agencies (WAIPA), Mr Mohammed Al Musharrah, arrived. The representatives of investors sat in special white chairs in the front row. Later, CEO of the Turkish company Polistroycapital, part of Polimeks Group, Onmus Hikmet Umut and CEO of Karbofarm JSC Sergey Myakochin (the construction of a plant to produce resinы — the linking element for construction materials worth 1,3 billion was approved in late December by Alabuga SEZ — editor's note).
The head of the Investment Development Agency began with a description of the investment market as a whole: “Global investments have been falling for three years in a row," she said. “According to Kearney experts, the decline is from 10% to 20%," she stressed the “depth” of the fall, making it clear that pessimistic investor sentiments can not be reversed at one stroke. What makes the situation worse is that Russia ranks the 22nd in the world attractiveness rating, behind the United States, China and Singapore. Japan, China, France, Bangkok and Germany are the most active investors. The head of the Investment Development Agency explained their interest by that large foreign investors are attracted by technological and innovative opportunities. “Pharmaceuticals, chemical production, electronics, automotive and aerospace industries attract the most investment in the world," she called popular trends in foreign direct investment, adding to them the “green” and circular economy.
How 19 billion rubles rolled into investment “holes”
No matter how much investment flows in the global economy have weakened, the activity of residents in the Tatarstan market is impressive. Sixty-nine new residents entered the PSEDA and the SEZ, said Talia Minullina. The concrete results of each PSEDA could be seen on the stands set up before the start of the board meeting in the lobby of Korston Hotel & Mall.
Interestingly, the parent of tax zones in the republic Alabuga SEZ has attracted the most investments this year — 16,4 billion rubles. However, in terms of the number of future jobs, the PSEDA of Zelenodolsk has become the leader. With the volume of agreements signed worth 7,6 billion rubles, a record number of jobs will be opened here — 6,400. For comparison, Alabuga SEZ will announce 682 vacancies. Quite a lot, but half as many as in the Volga Region, it is planned to open jobs in Innopolis SEZ. With a declared investment of 12,6 billion rubles, “the smart city” is going to put 3,200 vacancies on the labour market (mainly for IT specialists).
On the territory of Innopolis SEZ, the Hungarian company NNG started a project in the field of information technology, with an investment of 689 million rubles. The “newborn PSEDA in Mendeleevsk at the start attracted a modest 308 million rubles, creating 104 jobs. The PSEDA in Chistopol with the lowest entry threshold collected 568 million investments, which will open 346 jobs. An investor is preparing to enter there to create a confectionery factory with an investment of 385 million rubles. Khimgrad showed good results against this background — 1,5 billion of investments and 518 jobs.
Aleksey Pesoshin said that the investment council had considered 16 projects worth 19 billion rubles. The volume of investments in fixed assets amounted to 640 billion rubles. The foreign investment totalled $1,6 billion.
Alabuga SEZ will take three more zones under its wing
Summarizing the results, the head of the agency noted that Kazan, Nizhnekamsk, and Naberezhnye Chelny are the leaders in terms of private investment. At the same time, she boasted a small but still growth. According to her, 10 districts of municipalities showed an increase in private investment by more than 1 billion rubles compared to 2018. Growth points are Naberezhnye Chelny, Agryzsky district, Novosheshminsky district, Zelenodolsky district, Sabinsky district, Laishevsky district, Vysokogorsky district, Aktanyshsky district, Pestrechinsky district and Tukayevsky district, she listed when thanking the district leaders. Then she immediately addressed to the head of the government of the Republic of Tatarstan “to allocate some material encouragement to stimulate activity”.
Alabuga SEZ will be the driver of investment growth next year. According to Talia Minullina, a petrochemical project worth 20 billion rubles is being prepared for launch, and the management company itself is preparing to take control of three more sites in Russian regions. “Alabuga special economic zone (Tatarstan) will open three new investment sites in Russia's regions in 2020. The first will be a project in Tyumen Oblast," Talia Minullina said. Last October, the authorities of Tyumen Oblast agreed with the leadership of Tatarstan that they will take as partners the management company of the special economic zone (SEZ) Alabuga for the development of the same site in Tobolsk together with the company Sibur.
What beckons in Tatarstan
There are many reasons why an investor chooses a particular region. For example, Onmush Hikmet Umut, the head of Polistroykapital, part of Polimeks Group, said that investors are attracted by sensitivity in communication, so the Turkish developer is investing $100 million in the construction of a multifunctional shopping and entertainment complex on Vakhitovsky hill in the centre of Kazan. Earlier, they invested $50 million in the reconstruction of the Shamovsky hospital and the creation of a hotel in it, and in August they will open the second stage for $20 million. At the same time, the company intends to build a greenhouse complex and implement a project in the field of green energy.
“A sense of trust and reliability is important to us," so Onmus Hikmet Umut explained the interest to Tatarstan.
The director general of Karbofarm JSC, Sergey Myakochin, honestly say that he has nothing to complain about: “I was asked to be critical of the work of the investment agency, but there is nothing to say.” He said that they started searching for a land plot for the construction of a plant in Ivanovo Oblast and Moscow Oblast, and even considered Ulyanovsk Oblast, after which they were “intercepted” by Tatarstan residents. Here they chose between Chistopol, Zelenodolsk, Naberezhnye Chelny, as well as Mendeleevsk, but ended up choosing Alabuga. However, the choice is easy to explain — suppliers of materials work nearby.
How Gazprom enriched the district centre of Safakulevo
Enticing investors away — the right decision, because due to sanctions they are becoming less and less, says Rafael Khusyainshin, the executive director, deputy chairman of NAAIR (National Association of Investment and Development Agencies). However, it turns out that you can make money out of nothing if you are able to approach the problem outside the box. The speaker told a funny story about how Gazprom became a permanent investor in the district centre of Safakulevo, Kurgan Oblast. Then there was no gas or water, young people were leaving, business was not developing.
“We decided to go back to the sources: who of the famous and successful people lived here or has local roots?" Rafael Khusyainshin intrigued. “And suddenly they discover that, it turns out, relatives lived here on the father's side of the chairman of Gazprom's board of directors Viktor Zubkov. Then they send him a letter and invite him to visit their small homeland. The landing party arrives, checks everything. When it is confirmed that relatives lived there, Zubkov himself arrives. They meet him, show him their native penates. He asks — how can I help you? “We need gas!” representatives of the agency ask with hope. Six months later, gas appears in the district centre.
Colleagues decided to thank Viktor Alekseevich and invited him to the opening of the Zubkov Museum. Accordingly, six months later, he comes back and asks: “Is there anything else I can do for you?" “We need water!” answer the villagers. Six months later, water appears. After that, investment projects that were financed by Gazprombank began to appear. Another six months later, Viktor Alekseevich invites a large investor to the district to open an agro-industrial complex. In a word, they gave a new life to the district out of nothing!