Republic of Tatarstan
Territorial and economic prerequisites
for establishment of new production facilities
Republic of Tatarstan constitutes a part of the Volga River economic area of Russian Federation. The Republic is located in the east of the Eastern European Plain of Russian Federation, between the Volga and Kama rivers.
Capital of the Republic is the city of Kazan.
Kazan is 797 km away from Moscow, the capital of Russian Federation.
Republic's population amounts to 3.78 mln. inhabitants.
Population average age - 35.5 years.
Republic of Tatarstan is one of economically developed regions in Russia.
Republic of Tatarstan's economy structure:
- industry - 71.2%;
- agriculture - 17%;
- construction - 11.8%.
Main industry branches of the Republic of Tatarstan:
- chemical and petrochemical industry:
- OJSC “Kazanorgsintez”, Kazan - production of organic synthesis products, polymers, plastics and resins;
- OJSC “Nizhnekamskneftechim”, Nizhnekamsk - production of oil and gas processing products;
- tire industry:
- JSC “Nizhnekamskshina”, Nizhnekamsk -production of tires for passenger vehicles and trucks, agricultural machinery;
- power engineering:
- Nizhnekamsk hydraulic power station, Naberezhnye Chelny;
- Zainsk power station, Zainsk;
- automotive industry:
- JSC “KamAZ”, Naberezhnye Chelny - production of heavy duty trucks, class “A” passenger vehicles;
- aircraft industry:
- “Kazan aircraft production association”, Kazan - production of planes;
- “Kazan helicopter plant”, Kazan - production of helicopters;
- Kazan motor building production association, Kazan - production of aircraft engines;
- shipbuilding industry:
- “Zelenodolsk shipbuilding plant”, Zelenodolsk - production of hovering ships and oil tankers of “River-Sea” class;
- instrument making industry:
- OJSC “Kazan medical instruments plant”, Kazan - production of medical equipment;
- OJSC “Kazan mechanical optics plant”, Kazan - production of microscopes, photo objectives, binoculars;
- PA “Teplopribor”, Kazan - production of heat measuring instruments, automation equipment.
In neighboring regions within the range of 300-350 km are located the following industrial enterprises:
- Metallurgy - Izhevsk
- Automotive industry - Izhevsk, Ulianovsk, Togliatti
- Petrochemical industry - Ufa, Perm
Railway, motor roads and waterways of federal importance pass through the territory of the Republic of Tatarstan.
Free Economic Zone “Alabuga”
Is located on PA “ELAZ” industrial site in Elabuga district of the Republic of Tatarstan 210 km east from Kazan.
FEZ “Alabuga” infrastructure
- Ready facilities of water, gas and power supply, network of main utility lines
- Modern communication system
- Non completed buildings and facilities available enabling investors, with considerable saving of capitals invested in new facilities establishment, within short time term to complete construction of production premises and put into operation new production capacities
- Large cities with developed industrial infrastructure located in close proximity, restructuring of industrial enterprises create market of highly skilled labour resources for FEZ “Alabuga”
- International airport 50 km away
- Railway connection with major railway junctions of Russia
- Industrial site is located near highway of federal importance
- Access through deep waterway transport system to the Black and Baltic seas from April till November
- Support at regional level, granting of investment incentives
Taxation
Considerable tax privileges are granted to FEZ “Alabuga” participants on the basis of the Law of the Republic of Tatarstan “About Free Economic Zone “Alabuga”. They are exempted from a number of tax payments and charges to the local and republican budgets and off budget funds of the Republic of Tatarstan. This will allow to reduce production cost and enhance competitiveness of products being produced, increasing production profitability. Tax privileges are granted for the part of activity carried out on FEZ territory. Special privilege status and additional guarantees for investors are provided for by the Law of Republic of Tatarstan of 17.08.94 # 157 “About foreign investments in Republic of Tatarstan”.
Comparative taxation regime in the Free Economic Zone “Alabuga”
|
Taxes and charges |
Rate, % |
Tax payment is effected according to the following rates, |
|||||
|
Outside FEZ “Alabuga” |
In FEZ “Alabuga” |
||||||
|
Federal budget |
RT Republican budget |
Local budget |
Federal budget |
RT Republican budget |
Local budget |
||
|
Profit tax |
24 |
7,5 |
14,5 |
2 |
7,5 |
- |
2 |
|
Property tax |
2 |
- |
0,04 |
1,96 |
- |
- |
- |
|
Transport means owners tax |
Rates acc. to h/p and transport type |
- |
Rates acc. to h/p and transport type |
- |
- |
- |
- |
|
Land tax |
Rates acc. to land category |
15 % payment |
35 % payment |
50 % payment |
15 % payment |
- |
50 % payment |
Status of the Russian market of washing machines
Three types of washing machines are produced in Russia:
- Small size with hand wringing out and loading volume up to 2 kg;
- Semiautomatic with centrifuge for wringing out and loading volume up to 3 kg;
- Automatic with programmable control, with or without drying mode.
Some 90 enterprises produce washing machines in Russia.
Major producers of washing machines in Russia (58 % of total Russian production) are:
- Sverdlov plant (Dzerzhinsk, Nizhny Novgorod region);
- Starooskolsky plant of automotive and tractor equipment (Stary Oskol, Belgorod region);
- PA «Votkinsky plant” (Votkinsk, Republic of Udmurtia);
- Omsk plant of washing machines SE PA “Polyot” (Omsk);
- PTF (Kirov).
Volumes of washing machines production in Russia:
|
1999 |
2000 |
2001 |
2002 |
1 half of 2003 |
|
999 thous. un. |
953 thous. un. |
1037 thous. un. |
1357 thous. un. |
671,3 thous. un. |
According to the data of the Ministry of production and science of Russia, the share of automatic washing machines in total Russian production is 10%, semiautomatic machines - 15%, and washing machines with or without hand wringing out - 75%.
Russian producers retain over 74 % of Russian market of washing machines, with inexpensive models of activator type. Evaluated annual capacity of the Russian market of washing machines is 1.6-1.7 mln units.
Washing machines importers retain today 26 % of the sale market, chiefly with automatic washing machines with programmable control. 300-350 thous. automatic washing machines are imported annually, with sale volumes growing by 5 % in average.
Companies from the following countries are leaders in supplies to the Russian market: Italy - 47 %, Germany - 11 %, Republic of Corea - 10 % and Poland - 8 %. The most demanded among imported washing machines are Italian «Ariston», «Indesit», «Ardo», and German “Bosch” č “Siemens”.
In view of growing demand of automatic washing machines in the Russian market, it is expedient to set up production of this type of washing machines on PA “ELAZ” premises with participation of foreign companies.
Domestic gas cookers market status in Russia
Russian customers widely use gas cookers and an insignificant number of electric and combined cookers (gas + electric power).
The following enterprises determine current situation in the market of gas cookers:
Russian producers
producers from CIS countries
importers
Some 20 plants produce gas cookers in Russia and CIS. Main producers are:
- OJSC “Brestgazoapparat” (trade mark “Gefest”) - Brest, Belarus;
- Penza PA “EVT” (trade mark “De Luxe”) - Penza, Russia;
- Chaykovsky gas cooker plant (trade mark “Darina”)-Chaykovsky, Perm region, Russia;
- Novovyatsky mechanical plant-Kirov, Russia.
Volumes of gas cookers production:
|
1999 |
2000 |
2001 |
2002 |
|
780 thous un. |
820 thous. un. |
920 thous. un. |
1380 thous. un. |
Russian made cookers account for 85% of the whole Russian market of gas cookers. Annually, some 230 000 units are imported into Russia from abroad.
Considering insignificant quantities of gas cookers exported by Russian producers (mainly to Central Asia republics), last year's market volume was about 1.6 mln units.
According to the experts, in 2003 Russian market of gas cookers could grow by 30-35% against 2002. Growing demand of gas cookers in Russia is due to their natural wear and necessity of replacement.
A number of European producers are also aiming at the growing Russian market of gas cookers: Italian company “Merloni” promotes in the Russian market “Indesit” trade mark products of Polish assembly (annual production volume 250-300 thous. units, of which 40-50% go to the Russian market); other companies such as Turkish company “Beko” distribute their products through dealership being created, targeting price niche between the best Russian marks and famous European makers marks.
In view of growing demand in the Russian market, it is expedient to set up gas cookers production on PA “ELAZ” premises with foreign companies participation.
