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Primorsky investment disposition

Every year Primorye becomes more and more popular territory among investors. Now that restrictions associated with the coronavirus pandemic are gradually being lifted, entrepreneurs from the Republic of Korea and other countries are again showing interest in the region. And enterprises, forced to suspend their activities last year, are again embarking on active phases of the implementation of initiatives.

Igor Trofimov, director of the Primorsky Territory Investment Agency, tells EastRussia in figures and facts about what investment projects have been launched recently, how the pandemic affected the plans of investors investing in the gambling zone, and about initiatives in the field of public-private partnerships.

Primorsky investment disposition
Photo: Investment Agency of Primorsky Krai

- What was the total volume of investments in fixed assets aimed at developing the economy and social sphere in the Primorsky Territory last year? How does it compare with the indicators of previous years?

- The total volume of investments in fixed assets in Primorye in 2020 was fixed at around 184,7 billion rubles - this even exceeds, albeit relatively “not much”, the indicator of 2019 - then investments in fixed assets amounted to 182 billion rubles.

If we consider the structure of investments in the past year, then of the total volume of investments in fixed assets of the Primorsky Territory, investments of organizations amounted to 75,6%. At the same time, slightly more than half - 51,2% - are the organizations' own funds (over 71,6 billion rubles), another 48,8% are borrowed funds (over 68,1 billion rubles). In the structure of attracted funds, bank loans amounted to 15,7 billion rubles, budgetary funds - 31,3 billion.

The locomotive for the growth of investments in Primorye, including foreign ones, remains special economic zones - these are the territories of advanced socio-economic development (TOP) and the Free Port of Vladivostok (FPV).

As of April 2021, 198,5 billion rubles were invested in the TOP. The implementation of all the projects available today will provide the creation of about 32,6 thousand new jobs, at the moment they have created about 12 thousand. 115 companies of the region received the status of the TOP resident.

- Which of the directions arouses the greatest interest of investors - in terms of the amount of invested funds and the number of investors themselves? What kind of real-world projects can we talk about?

- The largest share in the volume of investments in the Primorsky Territory is traditionally the sphere of transportation and storage - 29,5%. Investments in agriculture, forestry, hunting, fishing and fish farming accounted for 14,7% in total, in the provision of electricity, gas and steam, air conditioning - 10,2%, in manufacturing - 8,6%, in activities in healthcare and social services - 6.3%, in the field of information and communication - 5,7%.

Among the investment projects being implemented in Primorye, I would single out the Arnika Group of Companies, which has built several enterprises for the production of feed additives for animals at the Nadezhdinskaya ASEZ.

On the initiative of the Arnika Group of Companies, high-tech enterprises Kormbiosintez and Pharmasintez with a modern scientific R&D center Agrobioeconomics LLC Arnika have already been erected at the Greenfield site of the Nadezhdinskaya TOR. In 2021, at the Zapadny site of the Nadezhdinskaya ASEZ, the construction of an elevator complex of Arnika-Holding LLC, the first stage of the Agrobioeconomic Cluster mega-project of Arnika Group, began.

Enterprises will be the first in Russia to engage in the production of essential feed components - vitamins (A, D, E, B2, B12, H, B4 -choline chloride), “smart” smart forms of essential amino acids and other special biologically valuable ingredients for animals using biotransformation and biomolecular technologies. In addition, the Agrobioeconomic Cluster megaproject is the first in Russia to implement the concept of creating a complex of high-tech enterprises of a full innovation cycle for deep and biotechnological processing of corn with a powerful elevator complex, obtaining starch, gluten, dextrose and biotechnological products based on them (probiotics and synbiotics, substances amino acids, vitamins).

Already in 2022, about 30% of manufactured products will be exported to China, Japan, Thailand, Vietnam. Foreign partners have already received samples of industrial batches of manufactured components from the first high-tech enterprise "Kormbiosintez" LLC "Arnika" for the purpose of registration in their countries.

- Has the pandemic affected the plans of investors investing in the gaming zone of Primorye?

- Cambodian investor Naga Corporation Ltd was forced to suspend work on the construction of a casino in the gambling zone. The company relied on attracting labor from the PRC, and due to restrictions, workers were ultimately unable to come.

Now the investor is already preparing to resume work and is looking for a Russian contractor for this. The Primorye government has already prepared a list of potential contractors for them. They have to dive into construction this year, they have obligations, as we create infrastructure for them

- How can we talk about attracting investors to the territory, which after the notorious "freezing rain" was for a long time without electricity and practically in transport isolation? What decisions on infrastructure development have been made and are being implemented after this emergency?

- It should be borne in mind that, according to Primhydromet, freezing rain in Primorye was the first time in 30 years. Such natural phenomena, as well as their consequences, are difficult to predict. Yes, after this natural disaster, the Pervomaisky district of Vladivostok was left without electricity for about a week, and Russky Island was also without electricity and in partial transport isolation. At the same time, the Government of Primorye made every effort to eliminate all accidents in the shortest possible time and clear the ice from the bridge on the bridge that leads to the island. So, in 2,5 weeks, about 2,3 thousand tons of ice deposits were removed from the bridge cables. In addition, while the bridge was closed, it was possible to get to Russky by a ferry, the regular flights of which were helped by the regional government.

I think that such cataclysms are unlikely to be repeated in the near future. And if so, local authorities will be ready to make every effort to eliminate their consequences. And already now, in order to improve the safety of the Pervomaisky District, Primorsky Electric Networks (a branch of DRSK JSC) are equipping its territory with a backup cable line, which is necessary in case of massive emergency outages, and other measures are planned that will increase the reliability of power supply in Vladivostok, and on the Russian island.

- Now a lot is being said about public-private partnership. What projects and in what industries are being prepared for launch in Primorye?

- The Investment Agency of the Primorsky Territory, together with the relevant bodies of the regional governments, is preparing documentation for the implementation of projects in the field of public-private partnership.

There are several projects at one stage or another of implementation in Primorye.

This is the construction of a kindergarten for 240 children and a school for 450 children in the Zima-Yuzhnaya cottage village in the Nadezhdinsky district of Primorye. At the moment, the administration of the municipality has published an investor's proposal for the implementation of the project to receive applications for readiness to participate in the competition from other entrepreneurs.

An indoor ice rink is being built in Nakhodka in a PPP format. In addition to the actual training rink with artificial ice, there will be a gym and a spectator tribune for 300 people. There are also dressing rooms, technical rooms, an office for the provision of medical care, a workshop for sharpening skates. Local teenagers will train here, as well as hockey competitions of various levels. The volume of investments in the development of the initiative is 406 million rubles. Entrepreneurs can take part in a tender for concluding a concession agreement.

I would also call the information system “Digital Primorye”, which includes, among other things, the website “Single portal of“ Digital Primorye ”, mobile applications, and technologically related property.

Also, a number of other agreements are currently being implemented, mainly in the field of housing and communal services.

- Doesn't the recent offer to the Primorye investors to invest in the economy of Belarus contradict the plans to attract investments into the economy of Primorye?

- We offer Primorsky business, together with partners from the Republic of Belarus, to engage in the development of joint business projects. For example, Primorye retailers can open their stores on the territory of the Union State, which will stimulate the development of their business in Primorye. And the Primorsk Investment Agency will help entrepreneurs to establish a dialogue with the Belarusian executive authorities and take advantage of local government support measures.

The Regional Investment Agency, together with the executive authorities of Primorye, is ready to help Primorye investors in case they want to scale their business to Belarus or to any other state. We will also support Belarusian entrepreneurs who want to organize the supply of products to Primorye or create a production here.

- Quite recently, a resident of the free port of Vladivostok from the Vladivostok urban district opened a plant for the production of baby diapers. What other examples of launched or preparing to launch production can be cited?

- Resident of SPV LLC DVSK "Armada" is building an industrial road-building complex in Dalnegorsk. After the launch of all stages of the project, about 40 people will be employed at the new enterprise.

The resident of the Free Port of the companies "EcoToys" launched the second stage of its project last year. A key element of the initiative is the production of environmentally friendly wooden toys, which are marketed under the Kubi Dubi brand. The refurbished production line has already been put into operation in a purpose-built new building. Such toys are in high demand abroad and are becoming more and more popular in the domestic market.

There is also a diamond cutting enterprise in Vladivostok, launched by a resident of the Free Port of Vladivostok, an Indian investor, KGK DV LLC.

- What is your forecast - where will Primorsky Krai be in the national rating of investment attractiveness this year?

Traditionally, the results of the National Rating of the Investment Climate in Russian Regions will be summed up at the St. Petersburg International Economic Forum on June 2-5. For two years in a row, Primorye rose to 21st line in the ranking and now occupies 34th position - this is a good indicator.

This year, colleagues from the Government of the Primorsky Territory have done a great job to improve the conditions for doing business in the region. I think that this time too we will demonstrate good dynamics.

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