Online Exclusive: Tatarstan's Bid for Business

Courtesy of Tatarstan Ministry of Industry and TradeTatarstan Minister of Industry and Trade Ravil Zaripov. He said in an interview that Tatarstan is attracting investors because of its well-served business locations, "which are necessary for quickly starting up an investment project."
Tatarstan Minister of Industry and Trade Ravil Zaripov discusses how the Volga republic can attract further French investment — through its investment in a special economic zone, its fight against corruption and the potential of its capital, Kazan, to host games for the 2018 World Cup.

What did you do to form Tatarstan's reputation as a destination for foreign investment?
RZ: Our achievements are the result of comprehensive work by the leadership of the republic to bring to fruition the government's manufacturing and investment policies. The fact that, in 2010, manufacturing in Tatarstan had a production output of more than 1 trillion rubles ($36 billion) is evidence of the continuing development of the republic's economy. In 2010, the republic's economy attracted more than $4.15 billion in investment.
The results of export activity in the republic are fairly sizable. In 2010, the republic's foreign trade revenue was more than $15.9 billion, including $14.1 billion in exports and $1.8 billion in imports.

What measures did you take to develop a reputation for a low level of corruption, and what remains to be worked on in this area?
RZ: We have a strategic anti-corruption policy in place. A set of measures is being put in place to improve anti-corruption activities, including monitoring corruption and corruption-inducing factors, anti-corruption policies, control of the region's recruitment policy, setting up information security, and transparency in the activities of ... government organs and business entities.

In what ways is Tatarstan trying to attract foreign investment and in particular French investment?
RZ: A legal framework for the investment process is gradually being refined ... and the corresponding infrastructure is developing. We are effectively using the Republic of Tatarstan's representative offices ... to strengthen our investment image and attract foreign investors to the republic's economy. The Authorized Representative Office of the Republic of Tatarstan in the French Republic, which was created in 1996, is searching for partners to organize mutually advantageous trade and investment cooperation and to coordinate work on joint projects.
In 2010, France was in ninth place among the Republic of Tatarstan's foreign trade partners, and Tatarstan's foreign trade revenue with France was $483 million last year.
Regular visits to the republic by the leadership of France's diplomatic administration and missions of French business representatives facilitate cooperation between Tatarstan and France. The interregional cooperation between the republic and the French provinces of Lorraine and Champagne-Ardenne is actively growing.

Kazan will likely host World Cup matches in 2018. What would championship preparations mean for investors?
RZ: The choice of Kazan as one of the host sites ... is evidence of the common recognition of our republic and of Tatarstan's contribution to the development of the international athletic movement and the creation of advanced infrastructure.
An event on such a high international level will allow Tatarstan to attract the attention of the international athletic community, mass media outlets, retail, advertising, business and tourism — and at the same time facilitate an additional flow of investment into Tatarstan's economy.

What advantages do you have over other regions in terms of attracting investment?
RZ: Tatarstan is attractive because of the presence of already-constructed sites with infrastructure, which are necessary for quickly starting up an investment project. A network of industrial, innovation and technology parks has been created in the republic: the Alabuga Special Economic Zone, Technopolis Khimgrad [Chemgrad Technocity], five technoparks, three technology parks [which have academic affiliations], two industrial parks and seven business incubators.
Gaining ever more importance in the republic is the use of non-financial instruments for supporting investment: the lowering of administrative barriers and the development of a regional infrastructure of investment support. The Investment Committee of the President of the Republic of Tatarstan was created in 2010 with the goal of [having a committee that can make] timely decisions about co-financing innovative projects with funds from the republic's budget and applying various types of stimulus to the republic's economic priorities.

What are French companies building in your republic?
RZ: An example of successful Tatar-French cooperation is a project for building the Taneco complex of petrochemical and oil refining facilities. The well-known French companies Fluor and Foster Wheeler France are participating in the realization of this project. Its financial operator is French bank Paribas [BNP Paribas].
One example of French advanced technology in the republic's energy sector is the creation of a factory for producing special equipment with the participation of Schneider Electric. [Schneider Electric makes products ranging from light switches to building management systems.]
Saint-Gobain and its partners are working on a project to build a factory producing construction and automobile glass in the Alabuga SEZ. Total planned investment in the production of plate glass, coated glass and mirror glass between 2011 and 2013 is $325 million.
Air Liquide is continuing work on an investment project worth 35 million euros ($51 million) to build a factory for producing industrial gases.
In 2011, Danone's investment project to modernize and reconstruct the Kazan milk production plant Edelweiss M is expected to be completed at a sum of 14 million euros ($21 million).

In what sectors are French companies growing most actively?

RZ: The main areas of Tatar-French cooperation are petrochemicals, energy, auto parts manufacturing, instrument making and the retail and services sphere.

What difficulties and successes have you had with French companies?
RZ: In my experience as ... minister of industry and trade, difficulties in our relationships with French companies haven't arisen. Questions over the development of our bilateral collaboration are resolved efficiently, taking into account the interests of both sides.
In addition … the possibility of using Alstom Grid's equipment and technology in the electrical energy area is currently being worked out. The project to open a shopping center in the republic with Auchan is in its final stages of realization. A proposal to build a shopping center with Leroy Merlin is being worked out with the city administration of Kazan.

What role will the Alabuga Special Economic Zone play in attracting French business?
RZ: The customs and tax advantages there and the presence of necessary infrastructure, office space and "one window" service allow us to attract foreign companies for the realization of investment projects.
Currently, 15 resident companies are registered in the Alabuga SEZ. These include, first and foremost, the French companies Air Liquide and Saint-Gobain, as well as joint enterprises Sollers, Polymatiz, Sollers-Izuzu, P-D Tatneft-Alabuga Steklovolokno, Trakya Glass Rus, Rockwool-Volga, Kastamonu Integrated and Belaya Dacha Alabuga.
In all, the declared amount of investment in the SEZ is 30.8 billion rubles ($1.1 billion). Today, the level of investment is 16.3 billion rubles ($588 million), which has created 2,532 jobs. The amount of government funding invested was 14.6 billion rubles ($527 million).
The successful examples of projects brought about by Air Liquide and Saint-Gobain at the Alabuga SEZ show international partners and potential investors the prospects and possibilities of cooperation with Tatarstan.

This interview was edited for length.

Russia - France 2011
Russia - France 2011
Companies from France make up a sizable part of Russia’s business fabric, and French firms' strategies are covered in-depth in this supplement. What's more, for the first time in our country supplement magazines, you can view the extent of French business activity by federal district in a specially designed map.
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