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Bet on food and excitement

Primorye Attracts Foreign Investors to Agriculture and Entertainment Industry

Bet on food and excitement
Photo: primorsky.ru, photo from the opening of the casino Tigre de Cristal
Ancient Roman "Bread and circuses!" Is quite suitable for describing the current situation in the investment sector of Primorsky Krai's economy. The outgoing 2016 year demonstrates: foreigners are ready  Investing money and technology in the regional agro-industry and entertainment industry. Companies from Japan, China and South Korea expect the benefits of these investments, since Primorye, objectively, due to its climatic and geographical characteristics (a relatively warm and vast region) is a place where you can make good money on the oldest human needs - in food and excitement .


Sbiten, honey and acid for Japanese
In Primorye, the southernmost constituent entity of the Russian Federation in the Far East, the Russian government has been counting on a powerful logistic and industrial center for almost five years now. Introduced from 2015, the regime of the free port covering the good half of the region, plus three territories of advanced development (TOP), are intended, among other things, to become a giant pump to attract domestic and foreign investments into the economy of the Far Eastern region as a whole. First of all, from Russia's largest neighbors in North-East Asia - Japan, China and South Korea. And, it seems, there is already some progress. In particular, with regard to agriculture and the entertainment industry.

So, this year the Japanese engineering company JFE Engineering Corporation concluded an agreement with a large vegetable farm in the Primorsky Territory - FSUE "Dalnevostochnoe" - on the construction of greenhouses in the village of Surazhevka, at 60 kilometers north-east of Vladivostok. The area of ​​greenhouses is five hectares. The volume of investments is about one billion rubles.

In November of this year, the Chamber of Commerce and Industry of the Japanese prefecture Akita provided an official guarantee to the company "Ecoresources of Primorye" (specializing in the production of food products made according to old Russian recipes - teas, sbiten, jam, dried fruits, etc.) for signing an exclusive contract with The largest supermarket chains in Japan.

And Asia Union, a producer and exporter of seaside honey, agreed with potential partners from Japan to supply a pilot batch to this country before the start of the New Year holidays.

A number of agreements reached at the second Eastern Economic Forum in Primorye are confirmed in the framework of the recent official visit of Russian President Vladimir Putin to Japan. This was stated by the Governor of the Territory Vladimir Miklushevsky. The head of Primorye noted that within two days the delegation of the plenipotentiary representative of the President of the Russian Federation in the Far Eastern Federal District Yuri Trutnev, which included the governor of the Primorsky Territory, held several meetings with large Japanese business, including with participants in the presidential economic forum in Vladivostok.

Separately, the Governor of Primorye has allocated a large trading house "Marubeni Corporation", which has been cooperating with the Primorsky enterprise "Dalnegorsk GOK" for the purchase of boric acid for more than 40 years - this is a premium product used in Japan for the production of LCD monitors. The head of the region noted that during the meeting they discussed the possibility of reconstructing the port of Rudnaya Pristan in Primorye for the possibility of entry of foreign ships.

"Such changes would improve the economy of the enterprise, since it would be possible to transport raw materials for production, sulfuric acid, not through the whole country, as now, from Norilsk, but from Japan. This issue we began to discuss, "- said the head of the region. 
 
Vladimir Miklushevsky also noted that Dalnegorsk can receive the status of a priority development territory - a corresponding application has already been sent to the Ministry of Economic Development of Russia. “We expect that the preferences provided by this regime will give a serious impetus to the development of the economy and to attract investments. Creation of priority development territories on the basis of single-industry towns will speed up the diversification process, as it will serve as an incentive for the creation of additional production facilities and improve the socio-economic situation of the settlement, ”the head of the region emphasized.

The relations of Primorye with neighboring regions are going through a new stage of development - the region is strengthening cooperation ties in the APR in a new, tripartite format - a meeting of representatives of the chambers of commerce and industry of Primorye, the Japanese prefecture of Akita and the Yanbian-Korean Autonomous Region of the PRC was held in the Administration of the Territory. For the neighboring territory of the PRC, Primorye is the main trading partner. The trade turnover between the regions exceeded $ 386 million last year. And its nomenclature continues to expand, said the deputy head of the secretariat of the People's Government of the county Cao Yongji.

“We are developing cooperation in new industries, for example, in seafood processing, the volume of imports from Primorye last year was eight billion yuan, and this will exceed 10 billion,” added Cao Yongji.

Trilateral cooperation opens up new markets for China and reduces the time and cost of cargo delivery, the head of the Chinese delegation added. The president of the Chamber of Commerce and Industry of the Japanese prefecture Akita Miura Hiroki also confirmed that cooperation in this format is in the interests of the three territories.

According to the head of the Primorsky Chamber of Commerce and Industry Boris Stupnitsky, three territories are linked by close cooperation ties.
“If we look at the map, the distance from Akita to Vladivostok is 780 kilometers, from Akita to Yangtze - 950 kilometers. This "triangle" contains a large cargo base, which can be more efficiently distributed using the transit potential of Primorye. Combining the strategies of the Primorye-2 transport corridor and the new Silk Road gives another impetus to the expansion of foreign economic relations. We have accumulated a certain experience of cooperation and are ready to expand and convert it, ”says Boris Stupnitsky.


Cows from China
China also keeps up, which, by the way, accounts for more than half of the foreign trade turnover of Primorsky Krai (about $ 3,5 billion in 2015). According to EastRussia in the regional department of agriculture and food, this year the Chinese livestock company "Tan Yuan" became a resident of the "Free Port Vladivostok". She intends to invest from 0,7 to 2,1 billion rubles in the construction of a complex for breeding cattle (cattle) meat and dairy breeds in Shkotovsky municipal district of Primorye.

Agro-industrial companies of Primorye are already implementing a number of projects jointly with Chinese investment partners. Thus, LLC "Company Armada" is building a complex for raising cattle and producing pork (the volume of investments is about 600 million rubles). LLC "Elena" is building a complex for the production of feed (20 million rubles). LLC KH "Victoria" is engaged in the reconstruction of dairy farms (90 million rubles). OOO Moloko-Primorye is building a livestock complex for 1800 cows (RUB 1,2 billion).

- The agriculture of Primorsky Krai has a huge and not yet fully realized potential - we have only 65 – 70% of arable land, and in our immediate vicinity there are large sales markets: Korea, Japan, China. At the same time, competent application of modern technologies and scientific research allows us to avoid the negative impact of natural conditions on crops, to increase crop yields, as well as agricultural worker’s income, ”said the acting director of Primorsky Research Institute of Agriculture of the Russian Academy of Agricultural Sciences, Alexey Emelyanov.

By the way, more than 200 enterprises with investments from the PRC already work on the territory of the region. About a quarter of them are directly related to agricultural activities. The rest make a profit on trade, tourism, logistics and construction.

At a recent meeting with Vladimir Miklushevsky, Governor of Primorsky Krai, which took place on December 12 in Vladivostok, He Zhenwei, Secretary General of the Chinese Association for the Development of Enterprises Abroad, said that the PRC State Council had already received approval to establish the Russian-Chinese Regional Development Fund specifically for investment in the economy. The total amount of the fund will be 100 billion yuan. And the first tranche of 10 billion yuan (about 90 billion rubles) will be sent to Primorye Territory.


Koreans are interested in "Mikhailovskaya"
Businessmen from the Republic of Korea are also showing an active interest in the emerging prospects in Primorye. In the summer of this year, a number of South Korean companies showed interest in joining the agricultural “Mikhailovskaya” PDA, on a land plot of 25 thousand hectares. Investors are planning to implement a project for the production of vegetable products. The estimated investment is $ 28 million.

Moreover, in June, the ministers of agriculture in both countries - Alexander Tkachev and Lee Don Peel - signed a memorandum of understanding in conducting a joint study of the agricultural development of the Primorsky Territory. In fact, several South Korean agricultural enterprises are already successfully operating on the territory of the region. In particular, established by Univera and Hyndai Heavy Industries - in Khasansky, Ussuriysky, Khorolsky districts of Primorye.


Play East!
As for the entertainment industry, it is best represented by the Primorye Integrated Entertainment Resort Zone (IRKZ), which is being created in the region.

Recall, the project began to be implemented three years ago, as part of a government strategy to distribute the entire gambling and entertainment business (with elements of gambling) across several regions of the country. One of them was chosen Primorye. Here, near Vladivostok, on the coast of the picturesque bay "Muravyynaya", it is planned to build over thirty hotels and guest villas, a yacht club, a ski slope and the infrastructure accompanying all this before 2023. The marketing calculation was made primarily for tourists from China’s neighboring Primorye, famous for their passion for roulettes, poker and all kinds of jackpots.

Several foreign companies from Southeast Asia have invested in the project: G1 Entertainment together with Melco International Development Limited, Malaysian company NagaCorp Ltd, Royal Time Primorye and Diamond Fortune Holdings Prim. The total amount of investment contracts signed was more than 113 billion rubles.

As a result, by November of last year G1 Entertainment launched the first entertainment complex (casino and hotel) in the Primorye gambling zone - Tigre De Cristal, having invested over eight billion rubles in its construction. During the year of work, the income from his work amounted to more than a billion rubles, and the amount of tax revenues to the Russian budget - 448 million rubles.

Today, G1 Entertainment intends to invest $ 500 million in the second part of its project in the Primorye IRKZ. The new complex with an area of ​​about one hundred thousand square meters will include: a hotel on 400-500 rooms, a shopping center, a food court, restaurants and bars, as well as conference facilities and a spa.

Another investor in the seaside entertainment industry has decided to become the Chinese corporation "Govay Tsayfu." Its head, Shi Weirsue, announced this intention to the governor of Primorsky Krai Vladimir Miklushevsky on December 12, during the above-mentioned meeting in Vladivostok. The volume of investments is not yet specified.

Representatives of the profile business themselves believe that little by little the construction will be completed and the wheel of the gambling entertainment business will be developed here, and the costs incurred will pay off with interest, bringing to the budget of Russia and the Primorsky Territory multimillion-dollar revenues.

According to the Governor of Primorye, Vladimir Miklushevsky, the main emphasis in the work of the entertainment resort zone "Primorye" will be made on the tourist-recreational, cultural and congress-exhibition component of the project.
"Many call the complex a gambling zone, but I tend to exactly the full name. After all, world experience shows that the income from gaming in such projects is no more than 40 percent of the total number of services. Therefore, we are going to focus on the tourist-recreational, cultural and congress-exhibition component of the project, "Vladimir Miklushevsky said.

- The calculation for Chinese tourists was correct. Yes, China is now experiencing a slight slowdown in economic growth. But this in no way diminishes the all-consuming love of gambling inherent in this nation. And Vladivostok is at their side. It is much more convenient for residents of the North Chinese provinces to travel here than in Macau. And for many fans of fun from the same Japan or South Korea, Vladivostok has long become almost a hometown. In addition, we must not forget about the resort component of the Primorye Irkutsk Museum. Here you can relax with the whole family on weekends or on holidays, not only for foreigners, but also for our citizens. Someone, for the sake of Far Eastern exoticism, will be ready to come here even from central Russia. So, all investments will pay off, - Samoil Binder, a recognized expert in the field of gambling business, Deputy Executive Director of the Russian Association for the Development of Gambling Business (RARIB) expresses optimistic confidence in an interview with an ER correspondent.



EastRussia Help
In 2016, the Investment Agency of the Primorsky Territory (the body responsible for attracting strategically important investors to the region) received 54 investment applications for support from economic entities. The total amount of announced investments is over 491,5 billion rubles. All in all, the Agency is currently supporting more than 160 investment projects worth about 1,3 trillion rubles.

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