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DMG Mori and HMS Livgidromash has got the special investment conditions

DMG Mori and HMS Livgidromash signed SPICs at Sochi international investment forum 2016. Photo of Alexander Utkin (minpromtorg.gov.ru)

Two Special Investment Contract (SPIC) with companies of DMG Mori (machine tools) and Livgidromash (mechanical engineering) was signed in the framework of the XV International investment forum “Sochi-2016”. The total investment of these high-tech projects amounted to about 7.5 billion.

SPIC means the agreement between the Government of the Russian Federation with the investor on creation or modernization of industrial production in Russia, and its subsequent localization. In exchange for investments (not less than 750 million rubles), the Government provides tax and other preferences for the duration of the project until operating profit plus 5 years, but not more than 10 years.

Since 2002, the international investment forum “Sochi” is held for the 15th time. Last year the forum became place where 315 agreements worth 279 billion rubles have been concluded. In 2016, 215 agreements for a total amount of 704 billion were signed there. The main topic of this forum is a new quality of government: the projects for growth projects, for life.

The German-Japanese machine tool innovative company “DMG Mori” has already launched production of machines in Russia. Now it additionally invests in the project of construction and development of the Ulyanovsk machine tool plant (owner DMG, Gildemeister). Globally the company has 22 factories. In Ulyanovsk region it will develop and produce Metalworking lathes and milling machines (1’000 pieces per year). Their components will be localized. The project will create 240 new jobs. The main consumers are industrial company “United aircraft Corporation” (UAC), “Rostec”, “United engine Corporation” etc. The contract is provided for 10 years, with a total investment of 5 billion rubles.

Cyprus HMS “Livgidromash” (HMS Hydraulic Machines & Systems Plc), which has production of pumps and compressors in Russia, Belarus and Ukraine, plans to invest in production in the Orel region in high-tech pumping equipment of large capacity for the oil and gas sector (API standards), as well as for energy and water utilities. According to Forbes, the company entered the top 10 private engineering companies of the Russian Federation. The anchor customer of new products is JSC “Gazprom Neft”. The new plant will reduce Russian dependence on imports, providing basic needs of the target industries. The total investment into the project will amount to RUR 2.6 billion. The contract term is 6 years.

Thus, at the moment 4 Spics are concluded in Russia. Earlier in the St. Petersburg economic forum 2016 Spic contract was concluded with German “Claas” in order to build a plant of agricultural machinery in the Krasnodar region. And the Eastern Economy Forum 2016 it was signed with the company “Mazda Sollers manufacturing Rus” on the construction of plant in Vladivostok.

Source: Government.ru, Russian Ministry of Industry and Trade, Russian Ministry of Industry and Trade, Kommersant, Garant.ru, Livgidromash, HMS Group, International investment forum Sochi 2016.