Sakhalin needs managers and ready to pay for technologies

O. Kozhemyaka represents Sakhalin region in AEB 2016

The Sakhalin region Governor Oleg Kozhemyako, together with his team presented his region in the Association of European Businesses (AEB). “This is a very competent presentation,” said at the meeting General Director of AEB Dr. Frank Schauff, and other parties showed interest to Sakhalin projects. Negotiations on the investment projects started already in the hallway, because today Sakhalin offers excellent conditions for investors.

The island is rich in natural resources (oil, gas, coal, sea, fish etc), has a favorable geographical position, it is surrounded by ice-free seas.

Thanks to the implementation of oil and gas projects in the region, it is currently experiencing economic growth, taking this indicator #7 in the country. Foreign trade turnover is $10 billion of investment in the region of $4 billion (+11% YoY).

The population of Sakhalin is 487.8 thousand people. The birth rate exceeds the death rate, and the region supports large families and plans to expand this support. The third child is supported by 1 million rubles + zero mortgage, 5 children – by free accommodation + bonuses. For families with low incomes it is planned to offer a “newborn pack” and food packages. As explained by O. N. Kozhemyako in an interview with “E Vesti”: “In Russia, of course, such a program is popular, but each region has its own opportunities, and each region is interested in economic growth. As we are the far East, the North, where the outflow of population has always been the greatest, we must be the first who endeavoured to increase the population in relation to the rest of Russia, where the migration outflow is traditionally less. So we’re targeting such programmes”.

Investment in the region is handled by a special “Sakhalin Agency for attracting investment (SAPI). Today there are free port Vladivostok-Korsakov’s” with year-round navigation and 2 territories of priority development (TPD).

  1. TPD “Yuzhnaya” is a step towards self-sufficiency of the island in food. Until 2018, the region needs to reach 70% local feed in poultry, milk, fruits and vegetables, and then it will provide deliveries to China, which needs the products of the European level, and other countries.

Investors of TPD will be able to receive concessional income tax (0-10%) and zero tax on land, 0-1.1% property tax and etc.

  1. The resort area of “Gorny Vozdukh” plans to attract 6 billion rubles of private investments in tourism on the basis of public-private partnerships. “We can enjoy with 5% if you give project documentation”, – said O. N. Kozhemyako, offering investors the redemption of shares as the implementation of the project. The government of Sakhalin will invest in this project more than 10 billion rubles.

To participate in these projects will require a Sakhalin company, the investment not less than 500’000 and a business appropriate TPD. The main interest the region have in food production and the European technology of building materials, wood processing, energy, getting alternative energy sources, as well as hotel and restaurant business. “We are ready today to purchase the technology and equipment,” says O. N. Kozhemyako.

Those who can offer new projects for the port needs to invest at least 5 million rubles for 3 years. Investors get 0% rate for land, property, profit, duty-free delivery of the equipment, pit 8%, etc.

В.Н. Беспалов представляет банки Сахалина в АЕБ

Due to the presence of a major oil and gas projects (Sakhalin-1,-2,-3), there is a developed banking system, which are Sberbank, VTB, Gazprombank and others. A presentation on the Sakhalin banks did Valery Bespalov, the Vice-President, managing branch of Expobank. We asked Valery , are there differences in Sakhalin banking system comparing to other Russia, he explained: “In a rate there is no difference. In Moscow, or Sakhalin, the rate is always the same, it is based on the rates of refinancing of the Central Bank. Cash flow is instant, no matter where You are, it’s not the wagons with the furniture and not watermelons. There is a difference only in speed of decision making, because in Sakhalin You really see the object, who is involved in it, who supports it. Here all is seen. Issues are resolved quickly”.

Investment map of the region, at our request, he described as follows: “for the most part is public investment when the budget invests in the development of the region. This is the “pod”, looking for enterprising people.

There is an investment and at the local level. As a rule, these are investments in the retail network, minor construction, housing construction. Today, industrial facilities are invested always with the participation of state capital. Either the investor gives 10% of their money in the initial stage, and the rest is due to the state budget.

If we talk about foreign investment, the Sakhalin the Diasporas play greater role there. There is a big Korean Diaspora, which has strong ties with South Korea. European companies are represented by a major European economies. Among the total investment in the region half comes from Netherlands, but also there are British, Germans, Italians and French investors. The United States are widely represented, especially in projects Sakhalin-1 and Sakhalin-2; they have service, drilling, transport and other companies. Sakhalin today is not under the sanctions, except for Sakhalin-3. Japanese business is hindered by the absence of a peace Treaty, so it is actually not. Chinese businesses are traditionally small, except oil Corporation Sinopec (Sinopec Corp), which still can not decide to develop the project Sakhalin-3 and the “slow” him. Hindus are also represented, but in the form of state corporations (ONGS).

Russian business in the region – corporations “Rosneft” and “Gazprom”, as well as local service companies. If there is an order from “Gazprom”, logistics, geophysical companies appear too.

On Sakhalin there are small business, it is also very successful. All has risen from the oil and gas projects: construction, homes, residential villages for foreigners, infrastructure, hotels, restaurants. There was also a car service company. The salaries are very good. Today half the population lives in their homes”.

Emphasizing the attractiveness of the investment conditions, V. N. Bespalov told the participants: “If You’re not too late, I’ll be on the latest bandwagon».

Association of European Businesses

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