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Population: 193,223
Main industries: coal, oil, gas, forestry and fishing.
Mayor: Andrei Lobkin
Founded in 1882
Interesting fact: On Sept. 1, 1983, a Soviet fighter jet shot down South Korean Airlines flight 007, killing all 246 passengers and 23 crew members onboard. Among the victims was U.S. Representative Larry McDonald. Two rescue operations were ordered by the Soviet Union immediately after the incident. The first search began from Smirnykh Air Base in central Sakhalin, with rescue helicopters from the Khomutovo airport in Yuzhno-Sakhalinsk. The second search involved civilian ships that were located in close proximity to the island. The incident was one of the tensest moments of the Cold War, causing an escalation of anti-Soviet sentiment, especially in the United States.
Sister cities: Asahikawa, Japan; Hakodate, Japan; Wakkanai, Japan; Yanji, China; Ansan, South Korea
Helpful contacts: Mayor Andrei Lobkin (173 Ulitsa Lenina; +7 4242 498199; yuzhno-sakh.ru)

YUZHNO-SAKHALINSK, Sakhalin Island — When Anton Chekhov decided to visit this remote island in Russia's Far East in 1890, his close friend, journalist Alexei Suvorin, argued, "There is nothing interesting on Sakhalin!"

At that time, the island's main settlement was a prison colony. It was nicknamed the island of "hard labor." Chekhov spent over three months here in what he described as "hell," far from the enlightened world of culture he was accustomed to. He interviewed thousands of convicts and settlers for a census and wrote one of his more famous nonfiction works, "The Island of Sakhalin."

Today's Sakhalin is a glorious contradiction to its previous sad embodiment. It has blossomed into a modern, developed region and its capital, Yuzhno-Sakhalinsk, has been dubbed a "city in the sunny valley" by the Japanese. It is uniquely situated between two mountain ranges and, therefore, sheltered from hurricanes, typhoons and blizzards.

In the span of its history, the city changed its name twice. Founded in 1882, it was originally called Vladimirovka, after the distant Golden Ring village of Vladimir. Following the end of the Russo-Japanese War the city became Japanese territory and, in 1905, was renamed Toehara, which means "valley of fertility" in Japanese. It became the capital of the Karafuto prefecture.

The city remained a possession of the empire of the rising sun until it was taken by Soviet forces at the end of World War II and rechristened Yuzhno-Sakhalinsk. Still, Japanese influence is evident in local architecture, as exemplified by the pagoda-roofed building housing the Sakhalin Regional Museum.

Major Businesses

SFERA — General manager Andrei Remualdovich Zalpin (96 Ulitsa Popovicha; +7 4242-46-79-05; sfera-construction.ru). SFERA is one of the largest and most successful investment and construction companies in Sakhalin, with projects ranging from production of concrete and mortar to cable and digital television services. It has been operating for more than 20 years.
Sakhalin Energy Investment Company (35 Ulitsa Dzerzhinskogo; +7 4242 662000; sakhalinenergy.com). Formed in 1994 to implement the Sakhalin-2 project and develop the Piltun-Astokhskoye oil field and the Lunskoye gas field. Shareholders include Gazprom with a 50 percent stake, Shell with 27.5 percent, Mitsui with 12.5 percent, and Mitsubishi with a 10 percent stake.
Sakhalin Machinery (1B Prospekt Mira; +7 4242-462181; sakhalinmachinery.ru). Official dealer of Caterpillar trucks and heavy duty construction equipment in the Sakhalin region. The main customers are large construction and mining companies.

Progress was slow in coming to this remote place. Up until 15 years ago, locals did not even have central heating; the only way to warm up was to stand next to a stove. Wooden floors were covered with mats. One misplaced match could immolate the entire house.

Journalist Karl Rendel, who lived in Yuzhno-Sakhalinsk for almost three decades, asked the chief architect of the city several years ago how he planned to facilitate urban development in Yuzhno, as the locals call their home town. "In line with how things burn down," the official replied.

"The city was gray, heavy and uncomfortable," Rendel wrote. "Returning from the mainland, you were inevitably preoccupied with the idea: again to this horror!"

Today, that feeling no longer permeates homecomings to a Yuzhno-Sakhalinsk that is an unrecognizable contrast to what it was before. This bustling town has only about 200,000 residents, but boasts 52 hotels, countless banks and shopping malls, as well as local and foreign businesses.

As with other aspects of modern Russia's existence, the dramatic change is due to natural resources.

Sakhalin is regarded as the most promising region in Russia's Far East. A variety of new businesses are popping up, leading to the latest moniker, "Treasure Island." 

Its huge thermal power plant provides enough kilowatts to supply the island and export more to neighboring Japan. It's just one example of the linkage of the two islands. Apart from a ferry that connects Sakhalin to the Russian mainland, Sakhalin also offers a Japanese-operated ferry service from Korsakov to the Japanese port of Wakkanai, a city in the northern part of Hokkaido, Japan's second-largest island. The trip between the two islands takes only about two hours.

For MT
Andrei Lobkin,
Q: What distinguishes Yuzhno-Sakhalinsk from other cities in the Far East?
A: Yuzhno-Sakhalinsk went through a difficult historical path, from a small Russian settlement on the outskirts of a vast country to a modern city. Our history is based on important events connected to relations between Russia and Japan. Yuzhno-Sakhalinsk is unique in terms of climate, combining in its territory the particularly harsh north and the warm south. Climate and nature are so contrasting that it amazes even the most experienced travelers. Here, northern taiga and the subtropics converge.

Q: Why should an investor set up business here?
A: Yuzhno-Sakhalinsk has industrial potential with its large mineral reserves. In the short term, housing, food, energy, communication, trade, consumer services, the financial and credit system, and tourism will be further developed. The city has many opportunities for investment projects, including comprehensive development of suburbs, and projects related to gas. The administration of Yuzhno-Sakhalinsk is working to improve the city's infrastructure and reduce administrative business barriers.

Q: What places would you recommend seeing in the city?
A: For active tourists, the city offers natural sites located in close proximity to the city. Such sites include the mud volcano and the natural state landmark Frog Butte. Visitors have the opportunity to visit mud baths and the mineral and hot springs. There are also opportunities for fishing, hunting and diving. In addition, to date in the Yuzhno-Sakhalinsk municipal district there are about 40 cultural heritage sites from the Karafuto period.

— Daria Lyubina

Yuzhno-Sakhalinsk is extremely rich in underground and offshore reserves of oil and gas. The local government, in partnership with such energy giants as Gazprom, Exxon Mobil, Sakhalin Oil & Gas Development, Royal Dutch Shell, Mitsui and Mitsubishi has developed the Sakhalin-1 and Sakhalin-2 production projects, which are operated and managed by the Sakhalin Energy Investment Company. There are five such projects that are seeking out, extracting and exporting oil and gas found on the island as well as immediately offshore.

The town's economy is also boosted by the forestry industry, as well as fish and food processing. The region is the third-largest producer of fish products in Russia's Far East. This international environment is why you can hear French, Korean, Chinese and English spoken on the streets. Chekhov's cynical friend Suvorin would definitely change his opinion of the island after visiting the new Yuzhno-Sakhalinsk.

What to see if you have 2 hours

The Gorny Vozdukh (Mountain Air) sports and tourism complex (49 Kommunisticheskiy Prospekt; +7 4242-762288; ski-gv.ru/news.php) is a must-see attraction. In the winter, it serves as a popular skiing spot. The ski lift from the bottom of the hill is open all-year-round, and you can ride up to the top to admire the panorama of the city and snap a couple of great shots. As you soak in the scenery at the top of the hill, you can enjoy a coffee and snack in one of the cafes. In the summer, the site is great for mountain biking and hiking. There is no entrance fee to the complex; however, a ski lift ticket will cost you 200 rubles.

The other option for visitors pressed for time is the Sakhalin Regional Museum (29 Kommunistichesky Prospekt; +7 4242-72–75–55; sakhalinmuseum.ru). The museum first opened in 1896 in the town of Alexandrovsk (Northern Sakhalin). In 1946, it was transferred to Yuzhno-Sakhalinsk, after the Soviet Union regained control over the city from the Japanese.  Today, the museum is located in the center, in a Japanese-era building. Explore the six different rooms, where valuable collections are displayed, revealing vast and unique blends of cultures and traditions. The exhibits span areas such as geology, aboriginal cultures, history and the economy of Sakhalin.  Then take a stroll in the park that surrounds the building. A ticket to the museum costs 70 rubles. A tour with a guide speaking a foreign language will cost 300 rubles.

What to do if you have 2 days

Considering that Sakhalin is a volcanic island, it makes sense to venture out and see the regions' natural wonders, located not far from the city. One such site is the Yuzhno-Sakhalinsk mud volcano. Located 18 kilometers northwest of the city, it is a 6-hectare field with several cones filled with volcanic mud which periodically erupt.

To get there you can take one of the two daily trains to the Novodereveskaya station, then take a nine kilometer hike along the abandoned railway tracks to the site. The old railway is also worth seeing, with its embankments, tunnels and rails. In good weather, the slopes of the hills offer great views of the surrounding valleys and hills covered with dense forest. Another route you can take is by bus to the Klyuchi village and then hike to the site. If taking a lengthy walk is not your idea of an enjoyable pastime, you can get to the mud volcano by taxi for about 800 rubles one way, or book a tour. A three-hour tour will vary in price from about 1,500 to 3,000 rubles per person, depending on how many people are in the tour group.

For MT
Yutaka Miyanishi,
chef and owner of Furusato Restaurant
Q: What were the main problems you encountered when starting your business here?
A: When I first came to Russia in 1990, I was surprised to find that there was no mutual trust between partners and they often did not meet their obligations and requirements. That was the main problem I had to overcome. It was very difficult because Russia and Japan are completely different. In Russia at that time, the business sector was not very developed and I had no previous experience living in a foreign country.

Q: What is your secret of success here?
A: Mainly, you need to understand the soul of Sakhalin and to build mutual understanding and trust. Then any business here will be successful.

Q: Why were you named an honorable citizen of Yuzhno-Sakhalinsk?
A: I was recognized for financial support in the organization of public events in the region and for sponsorship of various Russian sports teams. I was also appointed a certificate of merit for aiding children's homes in Russia and for contribution in the development of public catering. Such recognition is extremely important for me because it gives me the feeling that I am doing my job correctly.

Q: What are your favorite places in the city?
My favorite place is Gagarin City Park. In 2006, I brought 300 saplings of Sakura to Sakhalin, and we planted them in the park for the people to see and enjoy.

— Daria Lyubina

The main tour operators in Yuzhno Sakhalinsk are Mishka Tour (29B Khabarovskaya Ulitsa; +7 4242-461770; mishka-tour.ru) and Omega Plus (86 Kommunisticheskiy Prospekt; +7 4242 723410; omega-plus.ru).

Another relaxing option is a fishing trip to the Lake Tunaycha region. Lake Tunaycha is the largest and deepest lake on the island and is located on the Tonino-Aniva Peninsula only 45 kilometers away from Yuzhno-Sakhalinsk.

You can stay at one of the tourist centers, and spend several days in this picturesque corner of the island. You might be lucky enough to see seals basking in the sun along the coastline and catch a glimpse of migrating birds.

Here you can try your luck at fishing for salmon in August to September, and in the winter there is an abundance of herring, cod and smelt. Away from the hustle and bustle of the city, this is the place to enjoy clean air, fresh fish and other delicacies.

To get to the Tunaycha region, take Bus 174 or a shuttle bus from the railway station in the center of Yuzhno-Sakhalinsk on Vokzalnaya Ulitsa, bound for Okhotskoye village. This large settlement is located next to the lake. The region is also reachable by car. A more convenient option would be to book a tour. Prices start at 2,000 rubles for transportation and two nights' accommodation with full board.

What to do with the family

A great spot to visit with the family is the Gagarin Park of Culture and Leisure (1 Detskaya Ulitsa; +7 4242-722790; citypark.sakh.com). The 220-acre park close to the center of the city offers a large variety of entertainment for both kids and adults. There are numerous restaurants and bars where you can grab a bite to eat. As the sun sets, music can be heard filling the streets, as people dance under the stars. Take a walk along the several paths running through the park and enjoy the beautiful greenery and lake with elegant swan-shaped paddle boats. For those who prefer to do less walking, a mini-train runs through the park allowing you to sit back and enjoy the people and the nature. A large amusement-park area will keep the kids busy as they paddle a canoe, ride a jet ski or enjoy other attractions. The entrance to the park is free of charge.

On a rainy day, visit the Sakhalin Regional Puppet Theater (24 Ulitsa Karla Marksa; +7 4242-422498; molute.ru). Founded in 1981, the theater now entertains 25,000 visitors annually. While most shows are aimed toward children, some are also geared toward adults, with comedy shows regularly performed. A ticket for one person will cost about 500 rubles.


Despite the remoteness of the island, Yuzhno-Sakhalinsk is a town with a vibrant nightlife. For those who prefer a wild night out with a dose of booty-shaking, Club 777 (71 Ulitsa Chekovs; +7 4242-429462) is the place to go. Known as the most popular nightclub in town, the large two-story disco offers a mix of local and international tunes. Cover charge to enter the club is 300 rubles.

Mishka Pub (45 Ulitsa Chekhova; +74242-422811; rubin-hotel.ru/en/pub) is the happening spot for Yuzhno's expatriate society. Located in the basement of the Rubin Hotel, one of the town's most prestigious, the British-style pub offers American, Mexican and European food and drinks. The pub often transforms into a sports bar with live game broadcasts and rowdy gambling. Expect a pint of beer to cost about 150 rubles.

For a more cultural evening, Yuzhno-Sakhalinsk has two theatres. In the Chekhov International Theater Center (35 Kommunisticheskiy Prospekt; +7 4242-727278; chekhov-center.ru) you can watch a drama performance or attend a musical or concert. The Sakhalin Regional Philharmonic (25 Sakhalinskaya Ulitsa; +7 4242-728498; sakhfilarmonia.ru) offers a rich repertoire including ballroom dancing and performances by a Russian folk choir, folk ensembles and a symphonic orchestra. The ticket prices vary from about 200 to 500 rubles, depending on the performance.

Where to eat

Probably the most luxurious restaurant in the city, Marquis Restaurant (4 Detskaya Ulitsa; +7 4242-450520) offers exclusive and innovative dishes from the chef. For breakfast, guests are offered a buffet and for lunch and dinner — Russian and Korean cuisine. Opposite the maitre d's desk a pianist plays jazz music. Especially popular are the oysters and Caesar salad. Expect the bill to be about 1,500 rubles per person, excluding alcohol.

Furusato Restaurant (179 Ulitsa Lenina; +7 4242-742736) is the most popular Japanese restaurant in town. It is located in the heart of the city, next to City Hall. The owner of the restaurant is Yutaka Miyanishi — a well-known figure in the city, honorable citizen of Yuzhno-Sakhalinsk, patron of the arts and sponsor of local sports teams. The hit dish is, of course, sushi, made by the owner himself. The average bill is about 2,000 rubles per person, without alcohol.

Where to stay

The elegantly decorated luxury hotel Mega Palas (4 Detskaya Ulitsa; +7 4242-450450; megapalacehotel.ru) is located only 15 minutes away from the city center, in an ecologically clean district directly adjacent to Gagarin Park. The proximity of the hotel to the Susunaiski Mountains and the city lake transmits an aura of unprecedented tranquility and beauty. There are 166 rooms in the massive 10-story building. Mega Palace is the only world-class hotel (ranked by industry experts to have a superior level of customer service) in Russia's Far East. So if you're looking to mingle with the Sakhalin high society and the business elite, this should be your No.1 choice. One night in a deluxe suite will cost 5,600 rubles.

The Strawberry Hills Hotel (2, Ulitsa Solnechnogo Sveta; +7 4242-450700; strawberryhills.ru) was dubbed by one tourist as a "Western Oasis." The hotel is located just outside the city in an expat settlement, only 10 kilometers away from the airport. It offers 80 classicaly styled rooms, all overlooking a unique pear garden. Located on the third floor is the Evergreen Bar, serving drinks and coffee with a panoramic view of the city, allowing you to watch the planes take off and land at the local airport. For a pleasant evening, the hotel hosts Angelo's Bar which offers live music; there you are sure to meet a fun crowd of young locals and expatriates. Only five minutes away from the hotel is the biggest shopping mall in the Far East, City Mall. A standard business suite costs 5,700 rubles per night.

Alternatively, Rubin Hotel (85 Ulitsa Chekhova; +7 4242-424220; rubin-hotel.ru) is located in the heart of the island's capital. It is one of the more modern hotels of the city, recognized as the best business hotel of Sakhalin in 2008. With only 32 rooms, the building on the outside is decorated in an oriental style, reminiscent of the Japanese influence on the island. The beloved expat hangout spot, the Mishka Pub, is located here. Guests also have the opportunity to prepare their own meals in a fully equipped kitchen. One night in a two-room suite costs 4,500 rubles.

Conversation starters

While a typical conversation topic between locals and visitors may be the booming oil industry of Sakhalin, another source of pride and joy for natives is the visit of distinguished writer Anton Chekhov. Chekhov stayed on the island for over three months during which he wrote the story "Sakhalin Island." It not only describes the life of the locals but also contains in-depth information about surrounding nature, flora and fauna. Today, in Sakhalin there are two Chekhov museums, two memorial monuments, two plaques and five busts of the author. Read the story before you go, and you will not only have something to talk about; it will give you perspective on how the life of the island has changed from the 19th century to the present day.

How to get there

Yuzhno-Sakhalinsk is served by the Khomutovo airport (+7 4242-788390; airportus.ru), located only 10 minutes away from the city center. There are daily flights from Moscow via Aeroflot, S7 and the only surviving airline of the Far East, SAT Airlines. A one-way flight will last about eight hours, with round-trip prices starting from about 11,000 rubles. There are also direct flights to Yuzhno-Sakhalinsk from Khabarovsk, Vladivostok, and Sapporo, Japan, Seoul, South Korea and Harbin, China. Take a taxi for about 150 rubles or public bus 8, 63 or 93 from the airport to the city. The time difference between Moscow and Yuzhno-Sakhalinsk is a little over eight hours.

The island is also accessible by ferry. Ships depart from Vanino in the Khabarovsk region to Kholmsk in Sakhalin, about 90 kilometers from Yuzhno-Sakhalinsk. Be prepared to spend about 15 hours on the trip. The one-way ticket costs about 2,000 rubles in a double cabin and 3,600 rubles in a deluxe cabin.

You can get around the island via fixed-route shuttle buses; the price is about 250 rubles depending on how far you are going. Or you can take the train. The railway station is in the center of Yuzhno-Sakhalinsk on the Vokzalnaya street (+7 4242 712134), and is open from 5:30 a.m. to 11 p.m.

Contact the author at bizreporter@imedia.ru