Persian campaign: Germany is looking for a safe way to Iran through Tatarstan
The result of the recent visit of Tatarstan delegation to Saxony and Thuringia is at least two agreements on the localization of the German production on the territory of the Republic. In July, the Tatarstan Investment Development Agency welcomes foreign colleagues to choose a location for the production. Besides, it was signed a number of treaties between Tatarstan and German educational institutions. As it turned out, Germany is also interested in entering the market of Iran through Tatarstan.
The interregional cooperation in educational field and petrochemistry
The head of the Ministry of Industry and Trade of Tatarstan Albert Karimov told that Germany is one of the main trade partners of Tatarstan. In 2015, the bilateral trade turnover between Germany and Tatarstan amounted to almost $1.2 billion. The share of exports amounted to $649.6 million, of imports – $549.1 million. In comparison with 2014, the figures decreased 1.6 times. As the main reasons for the fall of turnover Karimov named political ones. The sanctions, in one word.
The central event during the visit on 1-2 June of Tatarstan delegation headed by President of the Republic Rustam Minnikhanov was the economic forum 'Saxony-Tatarstan' in Dresden. In the framework of the forum there were presented the industrial, commercial and economic potential of the Republic and Tatarstan investment platforms, including the SEZ Innopolis, the German-Russian Institute of new technologies at KNRTU-KAI (Kazan State Technical University named after A. N. Tupolev), the technopolis Khimgrad.
The great importance during the visit was devoted to educational programmes. In Saxony it was signed an agreement on establishment of the Tatarstan-Germany engineering centre in the field of energy efficiency and environmental safety. Beisdes, in the Institute for materials and laser technologies of Fraunhofer it was signed a memorandum of understanding between the Fraunhofer Institute and Kazan State Technical University. According to Karimov, Tatarstan delegation also visited educational institutions and research centres of the free state of Saxony.
The result of the visit was the meeting of Rustam Minnikhanov with the President of Bundesrat, the Prime Minister of Saxony, Stanislaw Tillich, who reported about the willingness to visit this year the Republic of Tatarstan.
'We also agreed that the exposition of the Republic will be presented in March next year at the exhibition in Leipzig,' said Karimov.
The visit to Thuringia, according to the head of the Ministry of Industry and Trade, was a response to the visit to Tatarstan of the delegation of Thuringia in April. In the result of the visit, at the meeting of the RT President and the Prime Minister of Thuringia Bodo Ramelow it was signed the Road map and the Memorandum of understanding between the company CRYOTEC Anlagenbau and RariTEK PLC – the Chelny company working in the field of application of new developments in gas engine machines.
Investments under the sauce of localization of production
Answering the question of Realnoe Vremya, Karimov said that there have not been signed any concrete agreement on the export of goods from Tatarstan during the visit, but we are talking about the localization projects with a further possibility of exporting, including in Germany.
In general, Karimov noted that the German side is most interested in localization of production on the territory of the Republic.
'Because today the external economic situation is developing in such a way that it is cheaper to produce own products in Russia – it will be cheaper than in Germany. Therefore, we with all partners discussed the possibility of localization. This is the first. Second, we now are already reaching the discussion of specific projects, we are talking not about the general declarations. As I said, we signed the Road map — it includes more than 20 positions, each of which has a specific organization, enterprise. It is also the cooperation in the field of exhibition activities, also the activities of our universities. It includes the specific projects and we, in compliance with this Road map, need to continue to monitor and promote their implementation,' said Karimov.
120 million euros to build a plant in Tatarstan
The head of Tatarstan Investment development Agency Taliya Minullina told that Saxony and Thuringia take 8 and 12 places respectively in terms of GDP between the regions of Germany in 2015. In Saxony, it is 112.6 billion euros with the population of 4 million people, in Thuringia – 56.8 billion euros with the population of 2 million people.
'These are significant figures that show us the level of economic development of regions,' believes the head of Investment Development Agency.
According to her, Russia in 2015 received investments at the amount of $1.4 billion from Germany, Tatarstan – $13.4 million, which, according to Minullina, is not enough for the Republic.
Currently, the investors from Germany continue their work in Tatarstan. So, in the SEZ Alabuga there works the German company in the field of oil and gas industry RMA Pipeline Equipment, which produces ball valves. There is also a German company Kiekert, which produces locks for cars.
According to Taliya Minullina, in the framework of the visit, in the first place they discussed cooperation in the areas of engineering and manufacture of the industrial equipment, petrochemistry, manufacture of plastic products, medical equipment and biotechnology. There is also the mutual interest in the field of agriculture and food industry. According to the head of Investment Development Agency, they also discussed the projects in the sphere of information technologies, but any agreement has not been reached yet.
'I must say that the sanctions that are currently operating had a negative impact on sales of products to the Russian market. In these circumstances, our German colleagues are suffering large losses – the companies in Germany. Accordingly, the localization of production capacities seems highly relevant for them, and given the devaluation of the ruble, it is more profitable economically,' said Minullina.
The result of the visit was the development of a number of investment projects. As an example the head of the Agency gave the tech engineering company operating in the field of machine tools – the visit of the German delegation to the Republic for the choosing of the facility is scheduled for July 2016.
The second project is the construction of a plant for the production of maleic anhydride at 45 thousand tonnes per year. Maleic anhydride is used in the manufacture of films, synthetic fibers, detergents, pharmaceuticals. Despite the demand, today there is no such plant in Russia. The project cost is estimated at 120 million euros.
'So, now we have started the correspondence, as I said, we expect the first visit in July 2016 for the site choosing. In addition, there is the task to arrange the visit of a delegation from Saxony – the period is by 1 October,' said the speaker.
Taliya Minullina also noted that a good impetus for regional development will be the opening of the flight Kazan-Frankfurt.
'What are the difficulties in Germany? The people there are very disciplined'
The chairman of the Board of the Chamber of Commerce and Industry of the Republic of Tatarstan Shamil Ageyev said that during the sanctions the number of German companies in Russia has reduced from 6000 to 5600.
The speaker noted that the difficulty in the cooperation with Germany is that the German business in the regions is willing to establish good relationships, but the Central federal government discourages relations with Russia.
'What are the difficulties in Germany? People there are very disciplined. If they are said not work with Russia — it happens. We are facing this in a number of our businesses, in completeness, and other things,' said Ageyev.
Another challenge he named the high cost of German engineering, however, he noted that though it has a high quality.
'In this respect, our delegation headed by the President, active Ministry of Industry, the Investment Development Agency tried to find assistance to enterprises: in order it was profitable for both parts. In this respect, Germany is a unique country and the general attitude is good. And we should preserve this good attitude,' believes the Chairman of the Board of CCI RT. According to him, it is important to maintain the close economic ties. In general, summing up the trip, he called it very useful.
At the end of the briefing, Ageyev suddenly remembered about one more aspect of cooperation between Germany and Tatarstan. According to him, the Republic is interesting for the German business as a link between Germany and Iran.
'German businesses are interested in our contacts with Iran. The direct entrance of Germany to Iran is difficult due to a number of political issues, but through us they are looking for access to the Iranian market.'
As the speaker told Realnoe Vremya later, the interest in the Republic by German companies is caused by the fact that in Tatarstan there is the Consulate General of the country and the waterway to Iran. According to him, the navigable path through the Caspian Sea is cheap and reliable. Tatarstan in this scheme of cooperation should act not as a third part but as a participant – in order a certain added value remained in the Republic.