‘Turn from West to East’: how residents of Tyulyachi going to expand production
The Turks have entered federal retail chains, Dutch tulips have been replaced with Moscow region ones, and search for a replacement for Italian machines in China
Industrial parks in Tatarstan are adapting to new economic conditions by developing import substitution. Tyulyachi industrial park since its creation has increased the gross product of the district from 4 to 7 billion rubles. Now they hope to attract Iranian and Turkish manufacturers here, and there is already one resident from the Bosphorus country, thanks to Nizhnekamskneftekhim, they were able to practically oust Turkish and Chinese plastic from the market and enter federal retail chains. The new realities, however, have somewhat changed the conditions for 11 residents of the park. Too strong ruble made Chinese goods competitive again for one manufacturer, the second one will have to take Turkish or Chinese instead of the Italian semi-automatic line, and the third one was able to “import-replace” Dutch cuttings for growing tulips near Moscow and began to grow them himself.
Gross regional product of the district grew from 4 to 7 billion
The occupancy rate of Tyulyachi industrial park (located 80 km from Kazan) today is more than 50%, but only because the park area was expanded last year from 32,4 to 40 hectares. Residents recycle tyres, produce doors, plastic dishes, and grow flowers.
This year, a new production for the processing of secondary raw materials, polyethylene, has been created, thanks to the organisation of separate waste collection in the area. In total, there are 11 residents in the industrial park, and the park itself, despite the sanctions, continues to expand. “Time is on our side," said Nazip Khazipov, the head of the Tyulyachinsky district. The gross regional product of the district, after the creation of the Tyulyachi industrial park, has already grown 1,8 times — from 4 to 7 billion rubles. The budget of Tatarstan receives about 250 million rubles a year from local residents, another 35 million from the district budget, which is very significant for a small area such as Tyulyachinsky, Khazipov admitted. The Tyulyachinsky executive committee also said that following the results of the Agrovolga exhibition held in Tatarstan, the park may soon be replenished with two foreign residents, including from Turkey and Iran.
How the Turks entered the federal retail chains
One Turkish resident, in fact, already operates in the industrial park, and not for the first year. LMR Plast PLC has investors precisely from Turkey. Here, to date, the production of polymer household products from recycled waste has also been opened (including polyethylene bottles, which, we recall, decompose for a very long time and are one of the serious pollutants of nature all over the world), and the production of plastic goods itself has been brought to an assortment with more than 200 names. At the same time, the products are 80% sold in the largest federal retail chains: Leroy Merlin, Megastroy, Metro, X5 (Pyaterochka chain), Magnit.
Since the establishment of the enterprise, almost 2 billion rubles have been invested, 260 jobs have been created, the company has reached an annual turnover of 2,8 billion rubles (in the past it slightly decreased to 2,5 billion), and last year the volume of investments amounted to 880 million. Net profit has exceeded 150 million rubles for 3 consecutive years. Director General of the company Gosman Kabirov recalled that 8 years ago the company started with only seven machines — and today there are already 80 working here (by the way, purchased from European manufacturers): they produce furniture, containers, dishes and other household containers made of plastic.
“The products are manufactured on SIBUR's material, previously on the material of Nizhnekamskneftekhim (SIBUR acquired 100% of the shares of TAIF JSC, and with it — the shares of Nizhnekamskneftekhim, Kazanorgsintez and TGC-16). That is, we have a short logistics, a convenient location [of our production]. We sell finished products all over Russia.
It was not the sanctions that have affected more, but the ruble exchange rate
Kabirov admits that in the event of a breakdown of Western equipment, the cost of spare parts will now be noticeably higher due to sanctions, and there may be difficulties with delivery, since some of the representative offices of European firms have left the Russian market. In the meantime, the machines are serviced by the Tatarstan enterprise itself. But “globally”, these changes have not affected production, he assures.
Interestingly, in the case of LMR Plast, the changes affected not so much the “sanctions-western line”: the company considers the challenge associated with the need to reduce the cost of production to be key one, since with the current exchange rate of the ruble (which, as you know, has been strengthened in every way by the Central Bank since its spring fall), it has even become more profitable for many enterprises to purchase materials from foreign companies rather than from domestic ones. So, according to Gosman Kabirov, the same China offers “more competitive solutions” today, although until recently, specifically in the company LMR Plast, which offered high-quality products at low prices due to a short logistics leg, it was exactly the opposite: the company produced goods that were just replaced in local Russian markets goods produced by Chinese or Turkish manufacturers.
Another resident, Kryazh+ PLC, is engaged in the industrial processing of worn-out car tyres and waste rubber products (RTI) “to improve the environmental situation and obtain an independent end product” — rubber granulate, as well as metal cord and textile cord. In particular, the company provides services for the disposal of old tyres and simultaneously produces soft self-levelling rubber coatings for open and closed areas, rubber tiles and granules. By producing “unique secondary raw materials” from waste, the company intends, no less, to solve important environmental tasks: “to preserve natural resources and improve environmental well-being”. At the same time, it is noted in Kryazh+, today rubber granules itself is in demand by factories of rubber products, tyre factories, enterprises using granules as a substitute for valuable rubber — including enterprises from Mari El and Udmurtia. The company has been operating for already 10 years. The processing capacity reached 1,7 thousand tonnes annually.
“The sanctions have not affected us in any way," says the managing director of Kryazh+ Marat Nurmukhametov. “Here is rubber granules that go to the production of children's sports grounds. With adhesives (they were foreign) going to the manufacture of such sites, it became a little problematic with them. But we switched to Russian glue. Now we continue to work in the standard mode.
Italian semi-automatic line will be replaced by Turkish or Chinese
The interlocutor of the publication also noted that the industrial parks themselves are convenient because they actually work “in one window mode”: all the problems that, for example, arise at Kryazh+ are solved not alone, but with the help of the management company of Tyulyachi park. Another resident of the industrial park is launching a new workshop right now. Avangard-Stroy company allocated a preferential micro-loan for 22 million rubles for the construction of metal doors and hatches for a period of 5 years, while the project itself is estimated at 23 million rubles.
By now, the construction of the “construction of the production building (walls, roof, windows, gates, floors) has already been completed, and the installation of lighting and heating will be carried out “in an economic way as funds become available”. They promise to put the facility into operation in the fourth quarter of this year. The company intends to produce single-leaf and double-leaf fire-fighting metal doors EI60, fire hatches and ordinary apartment doors. In addition, Avangard-Stroy will be engaged in artistic metal cutting for the production of original fences and gates. Among other construction companies of Kazan and Innopolis among its clients, the enterprises such as Ak Bars Stroy and Kazliftservice Municipal Unitary Enterprise can be noted.
“Unfortunately, because of the sanctions, the cost of imported equipment has increased significantly," admits Dmitry Penkin, the deputy director for technical issues at Avangard-Stroy. “And we have to change our actions in terms of buying new equipment. So, we wanted to purchase a semi-automatic Italian line. But now we have problems with the West. And, moreover, the price of it has risen sharply. There are also problems with logistics and delivery. We are looking for an alternative. But, unfortunately, there is no similar equipment in Russia, so today we are working with Turkey and China.
Another challenge facing the company is not caused by sanctions, but is familiar to many industrial enterprises of the republic for several years — it is a personnel shortage, that is, a shortage of qualified specialists, in particular welders, door assemblers, installers, whom the company actively invites, promising even to provide them with housing. The company's plan is to increase the area of the workshop from 1,200 to 3,500 sq. m. But it is already capable of producing about 2,5 thousand doors not a year, but a month. Avangard-Stroy works today with clients from the Penza region, Mordovia, Chuvashia.
Another resident of the industrial park, the horticultural company Bogorodsky Roses, had to “transplant” supplies from foreign to domestic ones, whose agronomist said that if earlier plant cuttings were purchased in Holland (the company grows mainly tulips in greenhouses with an area of 5 thousand square metres in winter, mainly plants for planting in urban flower beds in summer), now they had to reorient to a domestic manufacturer — a nursery garden in the Moscow region. The main customers are wholesalers from Tatarstan.
“If earlier we bought cuttings from the Netherlands, by now we are already growing up to 70 percent ourselves," said agronomist Elena Ivanova. “And we bring some of them from near Moscow. Now we are building additional sites, expanding. We are gradually switching to the cultivation of junipers and shrubs and are no longer only engaged in flowers. We have reached an annual turnover of 60 million rubles.
Support for industrial park residents
To obtain a loan for construction, residents of the industrial park must conclude an agreement with the Ministry of Economy of the republic, which will allow them to receive benefits for property, transport and other taxes. Now in Tatarstan, there are industrial parks in almost every district. They employ about 1,5 thousand residents, who have created up to 52 thousand jobs. Since the beginning of 2022, the number of employees only in industrial parks that fall under the Concept of development of industrial parks of the republic has increased by 4 thousand.
Back in the pandemic year 2020, support programmes were developed in the republic specifically for residents of industrial parks. Including the construction of infrastructure facilities — the aforementioned Kryazh+, for example, received 3 million rubles in 2021 for concreting and landscaping of its own site. Among other things, residents can receive a micro-loan of up to 5 million rubles for current needs at 4,5% per annum, a micro-loan for the construction of infrastructure facilities up to 30 million rubles for up to 5 years at 5% per annum. For 2 years, 15 enterprises have already received the latest loans, four facilities built on them have been put into operation, four more have submitted documents for the act of commissioning. The total amount of financing in 2020-2021 in support of residents of industrial parks of Tatarstan amounted to 364 million rubles.