The governor said: “Our programme will include strategies for the implementation of our priorities, notably in industry, energy, innovation and tourism. I believe the Tula Region’s potentially large market, highly skilled labour force, an efficient research and development base, and advantageous location at a crossroads of transport routes connecting central Russia with European countries, are objective incentives for investment creating conditions for profitable investment.
The new programme will take into account all our advantages and adapt them to boost the regional economy and living standards of our citizens.” He said that a programme of socio-economic development until 2010 was adopted for the region in February 2007. The new document will specify the key ideas of the previous programme, focusing on investment projects.
The governor said fixed capital investment from all sources exceeded RUR23bn ($890.09mn, or €659.21mn at the current exchange rate) in 2006.
Most funds were invested in transport, communications, the production of foodstuffs and agriculture.
Foreign investment amounted to $276.2mn.
Last year the United States, Switzerland, Britain and Germany were the largest investors in the economy of the Tula Region. The regional administration has also established cooperation with foreign and Russian investors in projects to open and modernise production facilities. Dudka said the world’s major brands, such as Procter & Gamble, Cargill and Knauf, came to the region in the early 1990s, when market mechanisms were in the making in Russia. Today the region’s partners also include Unilever, SCA, EuroChem and Baltika. Bills were adopted to encourage investment and guarantee a balance of public and private interests in the region. Some of them offer a four-year tax relief for investors of over RUR500mn ($19.35mn, or €14.33mn) and a half-sized tax for other investors. The profit tax to be transferred to the local budget was fixed at 13.5%.
The Tula Region’s administration has been monitoring important investment projects, which helps to lower administrative barriers to coordinating the investment of more than RUR90bn ($3.48bn, or €2.58bn). The investors who are ready to promote long-term cooperation and develop their projects in the Tula Region include electricity monopoly RAO UES, HeidelbergCement (Germany), SCA (Sweden), Avgol (Israel), Hidria (Slovenia), Knauf Gypsum, Procter & Gamble, and wholesale generating company OGK-3.The contracts are to be implemented with five years. There are plans to make large investments in construction, energy, chemical production, mechanical engineering, pulp and paper factories, and agriculture. The GOTEK Tsentr packaging company has already invested over RUR5bn ($193.5mn, or €143.31mn) in a project. Fifteen projects are being implemented under earlier signed contracts, and several other projects are being drafted and coordinated. Over six months, 15% of the total investment agreements have been implemented, the governor said.
Dudka said he believed 2007 should see industrial growth in the region. The location of production facilities in the region is favourable for the introduction of cluster schemes, primarily at the operating steel and chemicals plants, the region’s infrastructure potential being highly instrumental. The performance of the region’s railways is sevenfold superior to the country’s average.
The region also has a dense network of motor roads and an advanced communications infrastructure.
“There are plans to establish several production clusters in the region in the next few years,” Dudka said. “The cluster in the Novomoskovsk District was developed first. The project involves the administration of the Novomoskovsk District, Knauf Gypsum Novomoskovsk, the Novomoskovsk State District Power Plant, GOTEK Tsentr, Procter & Gamble Novomoskovsk, and EuroChem, which have established the NovomoskovskInvest Corporation. Investment in a project to increase local production will exceed RUR25bn ($967.49mn, or €716.54mn).
An application has been drafted for RUR5bn ($193.5mn, or €143.31mn) in state financing from the Russian Investment Fund to develop the cluster’s infrastructure.” He said it was planned to set up the second cluster on the basis of companies in Tula, and four other clusters will be located in the Tula Region as part of a local socio-economic development programme. “The promotion of the Tula Region as a region with a huge potential for attracting large investments has created the image of a solid and reliable business partner,” the governor said. “Our major achievement is that we have provided a basis for long-term sustainable economic growth in the region. In 2007- 2008, Knauf Gypsum Novomoskovsk plans to increase output 200%-300%, while Procter & Gamble and Orgsintez want to double production. Kosaya Gora Iron Works will increase steel output 40% this year.” In 2006, the construction of a glass container plant, Aleksin Glass, to become Europe’s secondlargest glass container plant, was launched in Aleksin, Tula Region. GOTEK is building a cardboard packaging and a hygiene products plants in the Novomoskovsk District. Sibnerud will soon start producing crushed rock at the Novo-Aleksandrovskoye limestone field in the Suvorov District.
“Industrial growth is pushing up electricity demand in the region,” Dudka said.
“On the initiative of the Tula Region’s administration, provisions to introduce new generating facilities in the region were included in a RAO UES investment programme until 2010. The Cherepetsk GRES state district power plant with a capacity of 450 MW, two power units (225 MW each) at the Novomoskovsk Hydro Power Plant, and the Shchekino GRES (225 MW), to be put on stream under the project, will supply local companies with domestically generated electricity.” The governor also said a requisite railway and motor road infrastructure was being developed for these investment projects. Investment in projects to enhance transport infrastructure will amount to RUR3.3bn ($127.71mn, or €94.58mn).
