Trade Mission to Krasnodar Krai
By Anna Ganeeva
AmCham Delegation Goes South to Learn More About Investment Opportunities in Krasnodar Krai
For two days in November, AmCham President Andrew Somers led a delegation of senior executives of member companies on a Business Development Mission to Krasnodar Krai. The delegation was comprised of representatives from Coca-Cola, 3M Russia, Monsanto and Special Information Service, as well as officials from BISNIS. Delegation members were encouraged by productive meetings with senior Krasnodar Krai administration officials and local businesspeople, all of whom pledged support for foreign investors and pursued discussions on specific business projects.
Senior administration officials prepared tailor-made programs for the AmCham delegation members. Meetings and site visits were held at Kuban Gazprom, the State Traffic Safety Inspectorate, Philip Morris Kuban, Krasnodar Chamber of Commerce and several agricultural enterprises. During these meetings, members of the delegation were able to discuss issues and business projects most pertinent to their respective companies.
Krasnodar Krai Industry Facts:
Krasnodar Krai features more than 300 companies with foreign investment, including Philip Morris, Chevron Texaco, Knauf, Pepsi-Cola, Nestle, Bonduelle, Tetra Lavalle and Klaas. In the fall of 2003, the second international economic forum was held in Sochi, attracting 1,300 participants. During this forum, 36 agreements were concluded worth a total of about $4.6 billion. Krasnodar Krai participated in an exhibition in Hanover featuring 200 enterprises, as well as a commercial real estate exhibition in Cannes.
Kuban Energo and Kuban Gazprom are the two leading companies in the energy sector. Kuban Gazprom manages the Blue Stream gas pipeline that crosses the Black Sea and supplies natural gas to Turkey. In the next ten years, the Gazprom pipeline project will most likely offer numerous business opportunities for various companies.
Philip Morris Kuban has a customs control zone on its premises to expedite the clearance of goods before they reach the Russian border. Philip Morris has been renting the land where its factory is located on a 49-year agreement, but the company is now in the final stages of negotiations to purchase the land.
One-stop service, which is still under consideration by Russian federal authorities, was introduced in Krasnodar Krai six months ago and is operating successfully. This system reduces bureaucratic delays and sets a timeframe of 1.5-3 months for receiving authorization and completing regulatory procedures. The efficiency of each department’s work is monitored, and measures are in place to deal with missed deadlines or unnecessary delays on a monthly basis. The system is transparent and easy to track and control.
Krasnodar Krai tax legislation allows investors to reduce tax payments by at least 25% for up to five years. Over 20 large investment projects currently enjoy these benefits.
Land can be rented for up to 49 years and can also be purchased.
Krasnodar Krai‘s mild climate is not only advantageous for agricultural enterprises, but also provides an opportunity for industrial manufacturers to offer products designed for warmer climates and expand their operations beyond northern Russia, Moscow and St. Petersburg to the new markets in southern Russia.
Building on the success of the Krasnodar Krai visit, AmCham will be expanding and upgrading its Business Development Mission program in 2004. Closely coordinated with regional briefings held for AmCham members in Moscow by regional governors, the program will provide enhanced business development opportunities for international investors.