Download - Success Story: Paratunka is waiting for Presentation ... · at the crossings as well," said Sergey Kole - snikov. "The main problem in the Russian Far East is demand, markets. We

Paratunka is waiting for new residentsof «Kamchatka» ASEZ

p. 18Presentation of the Investment Project

p. 22Cover Story: Fishery Industry

pp. 14–19

Everything is Just

Beginning in Country’s

EastPresident of TechnoNIСOL

corporation Sergei Kolesnikov on business development in the

Russian Far East pp. 10–11

Success Story: Synthesis of Two Technologies

p. 12

The Ministry for Development of the Russian Far East is continuing to improve legislative control

of the region’s advanced development с. 9

Also inside:

Government of Russia Expands Komsomolsk ASEZ

p. 8

#17 | MAY 2018EAST RUSSIA ECONOMIC AGENDA

Official Bulletin of the Ministry for Development of the Russian Far East. The document was prepared by ANO Far East Investment and Export Agency. Distributed by subscription. Reference to the source is required when using materials.

ECONOMY OF THE FAR EAST

2

The St. Petersburg International Economic Forum (SPIEF) was held on May 24-26. The reason to open the business program of the forum with a discussion entitled "Far Eastern Breakthrough: How to Become a Leader in the Growth of Private Investment?" was the statistics of 2017.

For the first time in several years, the Far Eastern Federal District has become the leader in the private investment growth rate with 17.1% against 4.4% of the national av-erage. 1200 investment projects are being realized in the Far Eastern Federal District with total financing of RUB 3.7 tn. 107 new enterprises were created by residents of the priority development areas (ASEZs) and the Free Port of Vladivostok (FPV) with a total investment amount of RUB 90 bn. Accord-ing to the Federal State Statistics Service, the growth rates in the Far Eastern Federal District exceeded the Russian average: the industry rate exceeded it by 2.2%, agricul-ture rate by 8.2%, construction rate by 9.2%. And the organizers of the discussion won-dered what is considered "advanced" at all, if not such economic development, calling the development of the Russian Far East a "breakthrough".

The moderator of the session was Al-exander Ivlev, Managing Partner of EY in Russia. The following people took part in the discussions: the Deputy Prime Minister – the presidential envoy to the Far East-ern Federal District Yury Trutnev, Head of the Far East Development Corporation De-nis Tikhonov, Head of the Far East Invest-ment and Export Agency Leonid Petuk-hov, as well as major businessmen: CEO of PJSC Polyus Pavel Grachev, CEO of Sibur Mikhail Karisalov, CEO of PJSC Sollers Vadim Shvetsov, presidents of two corpo-rations – TechnoNICOL Sergei Kolesnikov and Kinross Gold Paul Rollinson, Heads of Boards of Rusagro Group LLC Vadim Mos-hkovich, Kolmar Group LLC Anna Tsivileva and ESN Group Grigory Berezkin. Among the experts were also vice speaker of the State Duma Irina Yarovaya, Khabarovsk governor Vyacheslav Shport, dean of the

Faculty of World Economy and World Pol-itics of the Higher School of Economics Sergei Karaganov.

All these people represent the largest investments in the Russian Far East that ei-ther have already been implemented or are just planned (Sibur is planning to make the most significant contribution of RUB 500 bn to the Amur Gas Chemical Complex). The absence of representatives of Gazprom and Rosneft at the discussion about the "Far Eastern breakthrough" was somewhat dis-sonant, although it turned out that the Far Eastern agenda of the SPIEF also included them: Igor Sechin and the project of East-ern Petroleum Company was mentioned by Yury Trutnev during a media scrum, and at the discussion about gas several hours later, Alexey Miller said that by 2035 Gazprom ex-pects to supply as much as 80-110 bn cubic meters of gas to China from 180-190 bn cu-

SPIEF 2018 Opens with Discussion on Far Eastern Breakthrough & Requests to Authorities from Business

Investors to Receive Help In Entering Foreign Markets

EVENTSMAY 2018

3

bic meters which China will import through pipelines. Another major investor in the Russian Far Eastern economy, Viktor Veksel-berg, was speaking at the digitalization ses-sion at those moments.

Yury Trutnev, began the session by an-swering the question of "what are we going to do next?". "First of all, we will continue to support the conditions for better business. The world is changing every day, and hav-ing once created a matrix favorable for the investor does not mean that one can count on winning", stressed the Deputy Prime Minister and promised to start transform-ing the sectoral legislation in the inter-ests of entrepreneurs this year, since "gen-eral preferences are not enough," as well as "continue reducing administrative pressure on business."

"Most industries have significant obsta-cles to investments, with your help, we will try to understand to the letter what needs to be eliminated," said Yury Trutnev. "It's also very important to have a sufficient number of trained specialists. Currently, while there is demand for certain professions, people are trained for others. Within two months we should complete the "balance" through-out the Russian Far East, and then start the education reform," he added. Thus, changes are promised not only for legislation on tim-ber processing or aquaculture, for example, but also for the system of the Ministry of Education, which is new to the Russian gov-ernment.

Many speakers thanked Yury Trutnev for the system of preferences for invest-ments in the Far Eastern Federal District created with his participation, and in-deed asked for amend-ments to certain areas of legislation. For ex-ample, Pavel Grachev proposed extending last year's alignment of electricity tariffs in the Russian Far East to the federal level be-yond the originally defined period of three years. "It's not a long period for any in-vestor: with three years, one just has time to create the project and, maybe, to start the construction, but not to commission it. The initiative to extend this measure for 10 years, which is now discussed, would be very useful as an incentive for attract-ing new players," said Pavel Grachev. He also proposed to allow concluding con-tracts on tariffs in isolated power systems for a period of five years instead of one

year, as it is now (the draft law is in the State Duma).

Paul Rollinson called again attention to the fact that the current threshold for assigning deposits to the federal level is set at a rate of 50 tons of recoverable gold reserves, but the Ministry of Natural Resources "intends to suggest raising the threshold to 200 tons in the autumn, and we continue to make such proposals." Vad-im Moshkovich noted that "optimal con-ditions for investments aimed at meet-ing domestic demand have been creat-ed" in agriculture, but it is difficult to start exporting Russian products. "We haven't solved the problems of biosafety in the country. The government is aware of the problem. It's clear what to do: we've been talking about this at all levels for sever-al years. However, there is still no central-ized solution," said Mr. Moshkovich. "The Russian Far Eastern region alone can eas-ily feed all of Southeast Asia even with-out involving the central part of Russia; there is the task to double our exports, we can easily send 10 mn tons of pork abroad. That's USD 20 bn, a doubling if you will," he stressed.

Anna Tsivileva also drew attention to the problems of entering foreign markets and the need to refine the mechanisms of inves-tor benefits. In a number of Chinese ports, there are re-strictions on the import of coal from Rus-sia, but according to her, that's not the only problem. "It's up to the level of the inter-governmental commission and business, to make us a competitive partner in the Chi-nese market. The import duty on coking coal is 3%, and on energy coal is 6%. And Australia and New Zealand import goods under agreements without duties. We are a bit uncompetitive here: we either have to lower the price, dump, or increase purchas-ing prices. In addition, there is the prob-lem of reducing the customs clearance time in China, we are faced with the fact that sometimes our shipment stands up to three months without customs clearance," said Anna Tsivileva.

For Russian products to enter for-eign markets more successfully, Grigory Berezkin suggested "creating technolog-

ical clusters along the border, where dif-ferent redistribution chains would work in stages, in a related manner." "We have not reached this stage, but we will soon. This way we will bond consumers to us more", he stressed (ESN plans to supply grain al-cohol, produced from gas of "Sila Sibiri," to the countries of the Asia-Pacific Region). "And the second is the cost of financing: it's much cheaper all over the world. This is the next frontier because while we have solved administrative problems and tax planning, this problem still remains com-pletely," added Mr. Berezkin.

Products of the Khabarovsk TechnoN-ICOL plant entered the Chinese market through automotive thermal insulation supplies, but 80% is still sold in the Rus-sian Far East market. "We don't have a sin-gle automobile corridor from the Russian Far East deep into China. We have to trans-ship our stone wool to Chinese cars. This is a waste of time because the builder always wants the products "yesterday", and we lose a week. In addition, there's also dam-age, as with any transshipment. The third thing is the number of cargo-and-passen-ger crossings on the border of Russia and China; there are only 4 of them, which is a catastrophically small number for such a long border. And when timber trucks start going, traffic jams begin, and we lose time at the crossings as well," said Sergey Kole-snikov.

"The main problem in the Russian Far East is demand, markets. We can't supply Mazda parts to the north of China, where there is no production; that's only in the south. But a 25% export duty, of course, hinders supplies. If we applied the same mechanism as Kazakhstan did creating a duty-free trading zone along the border, this would help develop the engineering cluster in the Russian Far East," said Vad-im Shvetsov. "What is needed today to at-tract investment? We have the tools, and the technology works. Preferences are good, but at the initial stage, it's neces-sary to help businesses find markets. In the Khabarovsk Territory, the population den-sity is 1.7 people per square kilometer, in China it's 144, in Japan it's 340, in South Korea it's 510 people per square meter. From 2 to 4 bn consumers live near our re-gion. We need to help investors get there. Sales markets plus human capital plus preferences equal to investments," said the governor of Khabarovsk Vyacheslav Shport in support of entrepreneurs.


4

ASEZ RESIDENT CONCLUDES LARGE CONTRACT FOR EXPORT OF SAWN TIMBER

The company Bellesprom, a resident of the Amur Belogorsk ASEZ, has signed a contract for EUR 9 m for the supply of sawn timber. According to the general di-rector of Bellesprom Viktor Eremenko, the contract with Idea Serviss (Latvia) is considering an advance payment of EUR 550 thousand, which makes it possible to start production ahead of schedule.

The plan provided for the beginning of production at the end of this year, but in the case of prepayment, the production line will start earlier, as under the con-tract Bellesprom is supposed to send the first shipment within three months of re-ceiving funds.

Currently, 5 investment projects with a total volume of RUB 4.5 bn are being implemented in the Belogorsk ASEZ.

NEW FPV RESIDENT TO BUILD SPECIAL PORT IN PRIMORYE, COSTING RUB 30 BN

Sukhodol Sea Port LLC, a FPV resi-dent, will build a specialized port to pro-vide access to port infrastructure to small and medium-sized coal mining enterpris-es. The project investment will amount to more than RUB 30 bn rubles, and it will create about 660 new jobs.

The first and second stages of the coal port will provide the transshipment of 12 m tons of cargo per year. The con-struction will be completed in 2021. The third stage, which will be built in 2022,

increasing the coal transshipment vol-ume by another 8 mn tons.

The created specialized coal termi-nal will be located on the lands of indus-try and transport of the Romanovsky rural settlement of the Shkotovsky Municipal District of the Primorsky Territory, in the northern part of the Sukhodol bay. It will solve the existing problems in the ports of the region in terms of storage volumes, car processing speed and limited ship calls; it will create conditions for the de-velopment of the coal industry and trans-port in general.

"The permission for the construction of all port infrastructure facilities and external infrastructure facilities was ob-tained. Preparatory work is already under-way. Active construction will begin in the second half of 2018," said Olga Kornien-ko, the financial director of Sukhodol Sea Port LLC.

FACTORY OF ASEZ RESIDENT TO BUILD UP TO 100 THOUSAND METERS OF HOUSING PER YEAR

In July, "Domostroitelniy Kombi-nat Primorye" (Primorye House-Build-ing Factory), a resident of the Nadezh-dinskaya ASEZ, will launch the produc-tion of prefabricated housing made of re-inforced concrete products. The compa-ny will be able to build up to 100 thou-sand meters of housing a year. The vol-ume of investments in the creation of the plant of concrete products amounted to RUB 772 mn. By the time it reaches the full capacity (Q2 of 2018), there will be 134 workplaces.

DNS-Development will build the first houses using reinforced concrete prod-ucts manufactured by the house building factory. The draft design of the "Format" residential complex has already been completed. Its construction will begin in September this year. The first houses will appear by next spring. The work will be completed by the end of 2019.

According to the director of "Do-mostroitelniy Kombinat Primorye" LLC and DNS-Development Alexander Golut-vin, the problem of providing afforda-

Contract Between "Bellesprom"

and Idea Serviss (Latvia) Amounts to

EUR9m

NEWS ABOUT ASEZ AND THE FREE PORT OF VLADIVOSTOK RESIDENTS

EVENTSMAY 2018

5

ble housing is acute in the Primorye Ter-ritory. To develop large-scale construc-tion in Primorye and the Russian Far East, high-quality reinforced concrete products should be available; with their help it's possible to build affordable and comfort-able housing in a short time. The prod-ucts of the ASEZ resident will also be sup-plied abroad.

TECHNONICOL TO BUILD TWO NEW ENTERPRISES IN THE KHABAROVSK TERRITORY

TECHNONICOL, the resident of the Khabarovsk ASEZ, will build two new plants for recycling polymers and produc-ing modern plastic drainage systems in the Khabarovsk Territory. The total invest-ment will be about RUB 600 mn. The com-missioning of the new production facili-ties is planned for 2018-2019.

The agreement on construction was signed between KRDV and TECHNONICOL at SPIEF 2018. TECHNONICOL company became one of the first ASEZ residents in the Far Eastern region of Russia and it al-ready produces products that are in de-mand, actively developing exports.

"It's been almost two years since we launched the enterprise for the pro-duction of basalt heat insulation in the Khabarovsk ASEZ. The plant reached its designed capacity. It was thanks to the support of the regional authorities and the provided tax benefits that it was pos-sible to build the project quickly and re-duce the payback periods from 10 to 7 years," said the co-owner and president of TECHNONICOL Sergei Kolesnikov.

FPV RESIDENT SIGNS AGREEMENT ON SUPPLY OF HEAVY DUMP TRUCKS WITH CHINESE CCMF

Yubo-Sumotori, a FPV resident, has signed an agreement on supply of heavy dump trucks with the Chinese CCMF cor-poration. The large contract was signed on the fields of the 2nd International "Vladivostok" Auto Show, which was held on the "Primorsky Ring" from May 11 to May 13.

At the VIAS site, the company exhibited heavy dump trucks with a carrying capac-ity of up to 30 tons, which are assembled at the "Sumotori" production site in Artem. "At the exhibition, we signed contracts for the delivery of 50 units of dump trucks, 20 of them were purchased by the Chinese CCMF corporation", said the head of "Yu-bo-Sumotori" LLC Konstantin Gurkovich.

According to the commercial director of the CCMF corporation Weibing Su, the special equipment will be used at the con-struction of the "Zvezda" shipyard in the city of Bolshoy Kamen in Primorye. The company plans to purchase another batch of dump trucks in the future. The head of Yubo-Sumotori added that the first batch released by the company is already suc-cessfully working at construction and in-dustrial enterprises of Primorye.

KHABAROVSK ASEZ RESIDENT TO OPEN PIG FARM IN AUTUMN

At the Rakitnoye site, SkifAgro-DV, a resident of the Khabarovsk ASEZ, is im-plementing a project for the construction of a modern pig-breeding complex. This autumn, the company plans to launch the

Investment in Construction of Two TECHNONICOL

Factories Totaled

RUB

600 M


6

first stage: five buildings of sow farm, where they will place 1240 pigs delivered from Canada.

The project of the Skif Group is one of the largest in the agricultural sector of the Khabarovsk Territory. Its total cost is RUB 2.2 bn. The number of pigs raised will be 70,000 units a year. After commis-sioning, the livestock complex will annu-ally produce 5.2 thousand tons of meat. The project of the construction of the pig-breeding complex should be com-pletely implemented by 2019. It provides for the construction of a sow farm, an ele-vator, a feed mill, three gas boiler houses and other related infrastructure. The new complex will provide 165 new jobs.

ONION ON SAKHALIN WILL BE CHEAPER

«Sovkhoz Teplichny», ASEZ «Yu-zhnaya» resident, introduces Japanese technology in growing onions. The main advantage of this technology is to in-crease the accuracy and speed of sowing. Without increasing the greenhouse areas, agricultural producers were able to dra-matically increase the volume of produc-tion. If last year on one hectare of agrar-ians harvested about 150 thousand tons of onions, then this year the volumes should be twice higher. Benefit from in-novation will feel the buyers of onions, because by saving on greenhouses, fuel and lubricants, the cost of the product will also drop.

«A year ago, we were planting a on-ion with a cabbage plant-machine. The work required a lot of time and human resources. But this is a modern, high-per-formance, economical, mobile and com-pact equipment from Japan», – said the general director of the «Sovkhoz Teplich-ny» Viktor Butkov.

RESIDENT OF "IP KANGALASSY" ASEZ TO PRODUCE 100 WOODEN HOUSES PER YEAR

Until the end of 2018, WoodenPark, a resident of the IP Kangalassy ASEZ, will launch a workshop for the production of

finished wooden panel and frame house units, using German technology. The cost of the project is RUB 139.6 mn; the new production will create 31 jobs.

The main advantage of panel and frame housing is the high speed of con-struction and energy efficiency. Such fa-cilities are suitable for living in the Far North and can be built in nomad camps and remote areas of Yakutia.

According to Nikolay Andreev, Gen-eral Director of "Wooden Park" LLC, the house fragments are connected like in a construction set in strict accordance with the technology. This provides re-cord-breaking construction time, about 1-1.5 months, depending on the build-ing area. It's planned to produce 10,000 square meters of housing, which is about 100 houses, a year.

RESIDENT OF FREE PORT OF VLADIVOSTOK LAUNCHES FILM PRODUCTION

The company Sea Wolf. Cinematic Sto-ries Creation, a FPV resident, successfully realizes the production and promotion of film projects. In total, the project invest-ments amounted to 4.1 mn rubles.

During the implementation of the project, a start-up set of equipment for the studio was acquired, as well as a car to transport employees, an advertis-ing campaign and information support for the project were organized. Current-ly, the film studio has already produced full-length documentary films "Norman-dy – Niemen. Monologue" and "Coubertin Rule" to participate in film festivals.

The new machine is controlled by only one specialist (previously this work was done by 5-6 people)

RUB

139,6 mn

invested in the project the «Wooden Park» LLC

NEWS ABOUT ASEZ AND THE FREE PORT OF VLADIVOSTOK RESIDENTS

EVENTSMAY 2018

7

"We founded an independent film production company that acts as an in-novative platform for supporting and promoting the brand of the Russian Far East. Bringing together the efforts of the state authorities, the film industry, busi-ness and specialized non-profit associ-ations, this project goes far beyond the usual territory branding," said Alexandra Maksimets, the General Director of "Sea Wolf. Cinematic Stories Creation."

FIRST RUSSIAN REHAB CENTER OPENS IN FPV

JGC "Hokuto Medservice" Medical Center, a FPV resident, started conducting effective rehabilitation treatment of trau-matological and neurological patients. Investments in the project amounted to more than RUB 19.5 mn.

With the support and supervision of Japanese specialists, the rehabilitation center provides high-level medical care, namely rehabilitation after sports inju-ries, fractures, endoprosthetics, strokes and spine disorders.

Russian doctors, who have successful-ly completed an internship in Japan, work with patients under the guidance of ex-perienced rehabilitation specialists.

FPV RESIDENT STARTS PRODUCING MODULAR ALL-SEASON HOMES IN VLADIVOSTOK

"DoobleDom" ("IdeaDom Plus"), a FPV resident, started producing, installing, and selling modular all-season homes. Investments in the launch of housing production amounted to RUB 2.2 mn.

The FPV resident is aimed at creat-ing a modern, cozy and affordable hous-ing with quality finishes, completely equipped, including communications and a bathroom with sanitary equipment on a turn-key basis. Modular houses are suita-ble for permanent residence and are also considered for placement in recreation centers.

"Modular frame house construction is a good alternative for those who want to build an attractive modern house, but don't have the opportunity to get spa-cious housing immediately because mod-ular buildings can be expanded over time," says Julia Tsytsarets, CEO of IdeaD-om Plus.

NEW TRADE AND WAREHOUSE COMPLEX COMMISSIONED WITHIN FPV IN VLADIVOSTOK

"DOTI", a FPV resident, built and launched a trade and warehouse complex in Vladivostok. Investment in the project amounted to RUB 3.7 mn.

A modern roadside trade and ware-house complex with a total area of 911 square meters provides warehouse space for wholesale and retail. Wholesale, small wholesale and retail companies, engaged in sales of non-food products, can use the services of the complex equipped with lots for entry points, unloading and load-ing.

"The privileges and preferences grant-ed to residents of the Free Port of Vlad-ivostok help us provide services at com-petitive prices," says Denis Oratovsky, the head of "DOTI" LLC.

911 square meters

has an area of the modern trade and warehouse

complex


8

To launch new investment projects, the territory of the Komsomolsk ASEZ (Khabarovsk Territory) has been increased. The corresponding decree was signed by the Chairman of the Government of Russia Dmitry Medvedev.

"Rusolovo" PJSC plans to launch two in-vestment projects for the extraction and processing of tin ore. Launch these two projects will create at least 956 jobs and attract more than RUB 9.5 bn of private investments. Total revenues to the con-solidated budget from taxes and fees (in-cluding tax subsidies) for the period from 2018 to 2027 will amount to more than RUB 7.4 bn.

Rusolovo PJSC (part of the Seligdar Polymetallic Holding) is implementing projects in the Verkhnebureinsky and Sol-nechny Districts of the Khabarovsk Territo-

ry. As a result of the past year, more than a thousand tons of tin were mined in the re-gion, which is almost a quarter of the an-nual demand of the Customs Union (60% of 2016). At the beginning of the year, the company announced an increase in annual metal production by 10%.

The first project of the company is con-nected with the construction of a mining en-terprise with the necessary infrastructure on the basis of the Pravourmiyskoye tin ore de-posit. Thanks to this, the company will in-crease the production of tin concentrate to 4,000 tons. When the designed capacity is reached, the production volume will cover the internal demand for tin concentrate. The to-tal estimated volume of investment is RUB 8.7 bn. It's expected to create 806 workplaces.

The second project is connected with the modernization of the Solnechnaya concen-trator. The project is aimed at creating new production capacities of the enterprise op-erating at the Festivalnoye deposit in the Khabarovsk Territory, as well as increasing tin production in the Russian Far East. The total estimated volume of investment is RUB 802 mn. It's expected to create 150 workplaces.

INVESTOR SUPPORT

Government of Russia Expands Komsomolsk ASEZ

IEA TO CREATE ELECTRONIC DATABASE OF AGRICULTURAL LAND IN FAR EASTERN FEDERAL DISTRICT

The Far East Investment and Ex-port Agency will create an electronic database of agricultural land in the Far Eastern Federal District. The da-tabase will have information on land plots, including their size, boundar-ies, ownership, type of law, as well as qualitative characteristics. The agen-cy will act as a database operator.

"Businessmen need this informa-tion when making investment de-cisions," said Valery Dubrovsky, the Agency's investment director. "Now they will receive all the information they need about land plots in a 'one-stop shop', that is, from one base."

Today, about 35% (about 1 mn ha) of agricultural land in the territory of the Far Eastern Federal District has not been put into circulation. In par-ticular, in Amur Region, 560 thousand ha can be provided to businessmen for implementing agriculture invest-ment projects, 430 thousand ha in the Primorsky Territory, and 15 thou-sand ha in the Jewish Autonomous Region.

FEDC TO BUILD TWO BUILDINGS FOR RESIDENTS OF KOMSOMOLSK ASEZ

Far East Development Corporation JSC be-gan the construction of industrial and admin-istrative buildings at the Parus site (Komso-molsk ASEZ) as part of the process of creat-ing infrastructure for residents. Two identical buildings with a total area of 2,748 square me-ters will be used to accommodate productions of various profiles. The construction will be completed in Q4 of 2018.

ASEZ residents will be able to lease new production facilities on preferential terms. Each building will have electricity, water and gas supply networks, equipped with drainage systems and storm sewage. Heat supply of in-dustrial and administrative areas will be pro-vided by gas boiler houses. Within the bound-aries of the Parus site, 2.2 km of the road with asphalt concrete pavement will be built.

The new production buildings at the Komsomolsk ASEZ will allow representa-tives of small and medium-sized businesses to work in qualitatively new conditions and create production associations. At present, a similar industrial and administrative building for entrepreneurs is being built at the Rakit-noye site of the Khabarovsk ASEZ, another building will be built in the Nadezhdinska-ya ASEZ in Primorye Territory, its design is be-ing led by FEDC.

INVESTMENT PROJECTS IN FAR EASTERN FEDERAL DISTRICT TO BE INCLUDED INTO STATE PROGRAM IN DECLARATIVE MANNER

The Government of the Russian Federation has determined the procedure for introducing changes in the methodology for selecting in-vestment projects planned in the Far Eastern Federal District and Baikal Region. This intro-duces the declarative procedure for including private investment projects in the state pro-gram entitled "Social and Economic Develop-ment of the Far East and the Baikal Region."

Now the initiator of the investment proj-ect can submit documents to include the proj-ect in the state program. The document pack-age includes a business plan, a financial mod-el with a conclusion, confirming its validity and a cover letter. The Ministry will review the ap-plication within 30 days, the decision on in-clusion will be taken by the subcommittee un-der the chairmanship of Acting Deputy Prime Minister – presidential envoy to the Far East-ern Federal District Yury Trutnev.

At the moment, 22 investment projects, to-taled in RUB 147 bn, have been approved for inclusion in the state program of development of the Far Eastern Federal District and Baikal Region. Two more projects were sent for revi-sion; they are planned to be considered at the next meeting of the subcommittee.

EVENTSMAY 2018

9

The Ministry for Development of the Russian Far East is continuing to improve legislative control of the region's advanced development. Here, we cover the most important initiatives.

DRAFT LAWS BY THE MINISTRY FOR DEVELOPMENT OF THE RUSSIAN FAR EAST SUPPORTED BY SENATORS

ISSUANCE OF FAR EASTERN HECTARES TO PARTICIPANTS IN CITIZEN RESETTLEMENT PROGRAM

The Council of Federation Committee on Agrarian and Food Policy and Environmen-tal Management supported the draft law on granting land plots to citizens resettling in the Far Eastern Federal District within the Far Eastern Hectare Program.

According to the State Secretary, Deputy Minister for the Development of the Russian Far East Pavel Volkov, the proposed initiative is aimed at solving two problems. The first is to make the Russian Far East more attrac-tive for participants of the State Program when choosing a permanent place of resi-dence. The second is solving demographic problems and attracting a population fit for work to the territory of the Russian Far East.

According to the estimates of the Minis-try for Development of the Russian Far East, the implementation of this bill will make it possible to attract up to 3,000 people addi-tionally to the territory of the Russian Far East on an annual basis. In 2017, less than 5% of the total number of all participants in the State Citizen Resettlement Program moved to the regions of the Russian Far East, which is about 5,500 people.

SPREAD OF ELECTRONIC VISAS TO FAR EASTERN AIR HARBORS

The Council of Federation Committee on Constitutional Legislation and State Build-ing sent a positive opinion to the State Duma on a draft law on the extension of the simplified procedure for the entry of foreign citizens with electronic visas to technically equipped airports in the Russian Far East.

Foreign citizens who have arrived to the Russian Federation through the points of entry of international airports on the basis of electronic visas will have the right to freely move within the territory of the sub-

Russian Far East Getting Closer and More Attractive

ject of the Russian Federation, which they entered.

Earlier, the State Duma Committee for the Development of Civil Society, Issues of Public and Religious Associations recom-mended this bill for consideration in the first reading.

RF GOVERNMENT COMMISSION APPROVES ZERO VAT RATE FOR AIR CARRIERS OF RUSSIAN FAR EAST

The Commission on Legislative Activ-ity approved the draft law on the exempt-ing services for domestic air transport to the regions of the Russian Far East from VAT. It is covered in the draft federal law "On Amend-ing Article 164 of the Tax Code of the Rus-sian Federation".

The bill was drafted by the Ministry of Finance to implement solutions following the meeting of the Government Commission on the social and economic development of the Russian Far East and Baikal Region. The initiative to abolish VAT for flights to the Russian Far East originated with the Min-istry of Regional Development of the Rus-sian Far East. It is proposed to establish a zero rate for VAT for organizations provid-ing services for domestic air transportation of passengers and baggage, provided that the point of departure and/or destination of passengers and baggage is located in the Far Eastern Federal District. Now, the airline services are subject to VAT at a rate of 10%,

only carriers flying to the Crimea and abroad are freed from the tax. Exemption from VAT would increase the profitability of flights to the Russian Far East, reduce the cost of air tickets, and increase passenger traffic by 2-3% per year.

STATE DUMA APPROVES GRANDFATHER CLAUSE AND EXTENSION OF APPLICATION TERM FOR LOWERED INSURANCE PREMIUMS FOR INVESTORS IN FAR EASTERN FEDERAL DISTRICT IN FIRST READING

In the first reading, the State Duma Com-mittee on Budget and Taxes approved bills on the "grandfather clause" and on improv-ing the procedure for calculating and pay-ing insurance premiums by ASEZ and FPV residents.

It has been proposed to amend Article 5 of Part 1 of the Tax Code of the Russian Federation that guarantees ASEZ and FPV residents the invariability of the conditions of doing business within 10 years from the moment of obtaining the resident status. It is also planned to amend Article 427 of the Tax Code of the Russian Federation aimed at extending the term of application of ben-efits on insurance premiums. Under the ini-tiative, preferential insurance premium rates will be set for 10 years for ASEZ and FPV residents, who will come to the Russian Far East until 2025, solely with respect to indi-viduals employed in new jobs.


10

– Enterprises of TechnoNICOL Group have become one of the first residents of the ad-vanced special economic zones in the Russian Far East. Can you already say how successful this mechanism is for attracting investors?

– I think that it’s one of the strongest and most successful tools. I think that it gives one of the only reasons for coming to the East. For us, this has turned into reduc-tion of the payback period for the construc-tion project of rock wool production, provi-sionally, from 10 to 7 years. I am sure that in other business projects this significant-ly reduces the payback period and makes the commercial project attractive too. And this, I think, is a powerful incentive to come to ASEZs. Of course, there are problems there as well: with infrastructure, with the regime, there are plenty of yet unresolved problems. And Deputy Prime Minister Yury Trutnev honestly says that there are many problems, and he tries to solve them, al-though the process is slow.

– Would you have started building new pro-duction facilities in the Russian Far East if the government hadn’t created the ASEZ regimes?

– I’m sure we would still be moderniz-ing the rock wool plant and wouldn’t even

launch the new production facilities. An-drey Belousov once said that the notori-ous Russian «dashing 90’s» with their law-lessness ended only recently in the Rus-sian Far East. I agree in that for me per-sonally they ended in 2014, when the new team for the development of the Russian Far East emerged in the Russian govern-ment. So in fact, everything is just begin-ning in the country’s east, and the ASEZ mechanism in this sense is a powerful pen-dulum. In my opinion, if it weren’t for these regimes, there wouldn’t be such interest in the Russian Far East that Russian, Japanese and other investors are now showing in the first place, there would be nothing to talk about, there wouldn’t be any incentive.

– What is currently happening on the Asian construction markets, and what are your Group’s plans for business development in the Russian Far East in this regard?

– Now, about a third of TechnoNICOL revenues come from foreign markets. The markets that interest us are growing: a new cyclical upswing in the European Union, I hope, will last for another 7 years, and the building material market is in a strong phase there, as well as in China. There-fore, we are trying our luck in the European Union because it’s closer, and we are tak-ing our first steps in China. Our goal in Asia is to export 20% of the products manufac-tured by the company in Khabarovsk. For now, we sell up to 95% of the produced goods in the Russian Far East. Deliveries to China are not easy to develop.

– What are the main difficulties? – There are few automobile crossings

on the Russian-Chinese border, and the throughput capacity is low. That’s why we are very supportive of the idea of creating a cargo checkpoint on Bolshoi Ussuriysky Is-land, which would allow us not to ride ex-tra kilometers from Khabarovsk to check-points in Primorye. The second problem is

Everything is Just Beginning in Country’s EastPresident of TechnoNIСOL corporation Sergei Kolesnikov on business development in the Russian Far East

Our goal in Asia is to export 20% of the

products manufactured by the company in Khabarovsk

FACTS AND OPINIONS

11

MAY 2018

the need to reload the products onto Chi-nese vehicles when crossing the border. We still don’t have an intergovernmental agree-ment that trucks from Russia can carry cargo across China, as is the case with the Europe-an Union for example. And in China we pay a higher import duty than in Europe, which adds another 12-15% to the price.

– Nevertheless, TechnoNICOL is building two more production facilities in the Rus-sian Far East. Will they focus on the domes-tic market?

– We are now building two polystyrene waste processing plants. We will make sec-ondary polystyrene and PVC drainage sys-tems: pipes, gutters, transitional elements. There are no plans to export PVC products. It’s very light; in fact it’s only air boxes, and it’s designed for transportation over a short distance, from Chita or Yakutsk to Vladi-vostok. Secondary polystyrene, most likely, will be used for our own consumption.

– But do you expect to increase the export of the main products of rock wool?

– Compared to these productions, rock wool is more technological. And we’re hop-ing to find consumers in South Korea, Japan, and Vietnam. Currently, 30% of rock wool capacity in Khabarovsk is free. On average, we export 20% of the goods, produced by all the group’s enterprises in Russia. And we expect to reach such indicators in the Rus-sian Far East too.

– Do you regard India as a potential market?

– The transportation tariff from the Rus-sian Far East to Mumbai is 2-3 times more expensive than the tariff from Vyborg to Mumbai. Therefore, although the distance

is shorter, while such costs remain, it’s eas-ier for us to supply products to India from the western part of the country.

– The costs for everything are higher in the Russian Far East, from maintaining per-sonnel to electricity. It’s somewhat unfair, isn’t it? How business can deal with this?

– It used to be harder with personnel, but now it’s easier. We have solved this prob-lem for ourselves, but for a new company it would be a problem. In general, we, entre-preneurs, should survive and act positive-ly regardless of the conditions. In the Rus-sian Far East, electricity and labor are more expensive, and this can be explained from an economic point of view. Markets are ex-tremely broadly distributed over a vast ter-ritory, the population density is low, and the industry is based on scale economies: the higher the output, the lower the nominal cost. In the Russian Far East, transporta-tion costs for distributing products over a large area are enormous, and therefore no one can use this scale effect. It’s just impos-sible to supply a large technological com-plex. We have a factory in Ryazan producing 4 mn cubic meters, and that’s not enough, while in Khabarovsk, there are only 700 thousand cubic meters, and 30% of pro-

duction is superfluous. Obviously, the price per unit is higher. It’s the same with ener-gy and specialists. But our task, as business-men, is very practical: to reach the goal in a short time, with a tight budget. Like run-ning a marathon. We, entrepreneurs, work with practical tasks.

– In other words, do you perceive the fact that it’s more difficult to build a business in the Russian Far East as normal?

– The Russian Far East, i.e. Pacific Russia, is another Russia: it has other local and for-eign markets, different regulations, differ-ent neighbors. This is for starters. Moscow and Vladivostok are two different agglom-erations. So, I see no reason to make the same laws in Moscow and the Russian Far East. The key is to raise the average stan-dard of living, use particular features, be-cause the Russian Far East has its own ad-vantages, as well as Moscow. Why do we have to do everything the same way inside the country? I hear many conversations like this. But I can’t make the cost price in Khabarovsk the same as in Ryazan either, for a variety of reasons.

– In your opinion, what needs to be done so that people would come to the Far East first to work, and then stay forever? Author-ities say the salaries should be twice as high.

– If we pay twice as much, then some of the projects will be simply unprofitable. This is a problem, which lacks a clear answer. This is a balance of interests. I think we have many federal decisions, which in fact nei-ther Moscow nor the Russian Far East needs. Therefore, it’s necessary to give more pow-ers and more budgets on the ground. As they say, help us with money, and we’ll manage it ourselves. And what is going on in the Rus-sian Far East with its highest growth rates of investment per capita shows that something still can be done about it.

Our task, as businessmen, is very practical: to reach the

goal in a short time, with a tight budget


12

The opening ceremony of JGC "Hokuto Medservice" in Vladivostok was held on May 16, but they started receiving patients a little earlier. In early 2018, Russian doctors, including rehabilitation specialists, manual therapists and an exercise therapy doctor, underwent training at the 200-bed Hokuto hospital in Japan, which has 20 years of invaluable experience in recover-ing patients after orthopedic and neurological disorders.

"We've just opened in Vladivostok, we have four rehabilitation specialists and three doctor consultants in the staff. We will invite more specialists and expand because there are many appeals from Russian patients, and not only from the Primorye Territory. Every-one wants to be helped by Japanese doc-tors. They are present at the receptions with an interpreter. The Japanese have a delicate approach; they try to endear patients. I con-stantly see how patients come to us with stern faces, but after talking with Japanese specialists they leave with a smile, in high spirits. In regard to rehabilitation, I will say something as a doctor who has worked in Russian practical public health services for 20 years. When an urgent operation is need-ed, people in our country find money, borrow it, take loans; but rehabilitation, our main profile, is considered somewhat second-ary. And this is fundamentally wrong," says Sergei Kolchanov, the head physician, trau-matologist and orthopedist of JGC "Hokuto Medservice".

The project of the Japanese medical cen-ter was established by the shareholders of JGC Corporation and Hokuto Social Medical

Corporation in July 2017, and in September of last year, an agreement on investment activi-ties between the FEDC and the Medical Cen-ter JGC Hokuto Medservice was signed at the Eastern Economic Forum. The investments amounted to RUB 150 mn. The decision to implement the project was made against the backdrop of cooperation agreements be-tween the countries that were reached by President Vladimir Putin and Prime Minister Shinzo Abe in May 2016. The mission of the new center is to provide residents of the Pri-morye Territory and beyond with high-qual-ity medical services in the organic synthesis of Japanese and Russian technologies.

"The methodology in the Japanese tra-dition is completely different than in Rus-sia. We use a range of rehabilitation medi-cine, which includes mainly manual thera-py, manual work, an individual approach, and hardware medicine has an auxiliary func-tion. Disorders are the same everywhere, but there is a difference in the characters of Jap-anese and Russian patients. Russian patients can initially show disbelief in the medical staff: many come with their own strategy, they trust the Internet and their experience

based, among other things, on self-treat-ment. To help such patients, we have to per-suade and coax them. There are such peo-ple in Japan too, but there are fewer of them," said Oshima Masao, General Director of JGC "Hokuto Medservice."

The rehabilitation center of JGC Hoku-to Medservice accepts patients after strokes, neurological disorders, endoprosthetics, or-thopedic injuries, surgical intervention, etc. Soon, the center's professionals will get an exoskeleton, which helps restore lost func-tions.

"Japanese rehabilitation is based on spe-cial assessment systems, international scales of the patient's physical condition (e.g. the walking speed, the muscle tone, the time the patient can stand on one leg, and so on). All this is digitized and assessed. After a few days, the evaluation is carried out again, in order to measure the rehabilitation effect to revise the program. For the patient, even tiny progress is an incentive for recovery. The Russian rehabilitation school itself is strong, but there are not enough specialists. It's of-ten the case that in some post-stroke cen-ter, like one in Vladivostok, there's one reha-bilitation specialist for 20 beds and one ex-ercise therapy physician," says Alexander Se-livanov, coordinator of the international re-lations department at the Hokuto hospital in Japan. "And the intensity and timeliness are important for rehabilitation. After the stroke, for example, the therapeutic window is open for the first six months, then the treatment effectiveness decreases. It often happens that the patient returns home after the sur-gery and doesn't lead an active life, lies and withers, not rehabilitating properly after the surgery. While young people all heal quickly, an elderly person breaking a leg spends half a year with a plaster bandage, not moving the leg, and the muscles atrophy as a result. The person begins to walk less, the quality of life worsens—they rarely go outside, get sick more often. It's a vicious circle."

According to the experts, they not only treat but also try to inform the population. Doctors conduct lectures and workshops on health rehabilitation. Over time, JGC Hokuto Medservice plans to accept up to a hundred people a day, with Russian doctors and truly Japanese hospitality.

First Foreign Medical Company Becomes FPV ResidentSynthesis of Two Technologies

FACTS AND OPINIONS

13

MAY 2018

The city of Artem in Primorye, Aviapolis Yankovskiy more precisely (production and logistics zone with an area of 688,053 m2), where Jay Tea was located, became the tea capital of the Far Eastern Federal District in just one year. The total volume of capital in-vestments in the region's first packaged and weighted tea factory amounted to RUB 176 mn. Registered in Artem in 2016, Jay Tea is a continuation of the "Jay Rus" LLC project, opened in Vladivostok in 2003 as the Rus-sian branch of the Indian holding company Madhu Jayanti International Ltd, which sup-plied ready-made products from Kolkata to Russia. Now, only the raw materials come from India. The founder of Jay Tea, Jay Rus, as well as Jay Foods is the limited liability company Multitrade Overseas PTE. LTD, reg-istered in Singapore.

"We needed 5,000 m2 under one roof, and Yankovskiy provided us with such premises. In addition, it's located in an ideal location in terms of our logistical needs. We're able to supply our western and northern customers, ship products to all settlements of Primorye, including Nakhodka. The only downside was problems with finding employees because the company is situated outside of any settlement. But the Ministry for the Development of the

Russian Far East is providing us with full in-formation support," says Tanmay Chakrabarty, Director General of Jay Tea.

Today, there are 50 employees at the fac-tory of the FPV resident, Jay Tea, and about 50 more jobs were created through a contractor company. The company has achieved 75% of the planned capacity and covered the main price segments with its "tea portfolio" – from ultra-economy to premium.

"We focus exclusively on the Russian tea market, as tea is the No. 1 drink for Russians (Russia ranks 4th in the world for tea consump-tion after China, India and Turkey, average con-sumption is 1.2 kg/person per year. – Note). Our company produces various kinds of tea – large

leaf, leaf, granulated, packaged black and green teas, as well as teas with additives. Our brands: Zolotaya Victoria, Indus, Gold Bond, Korol Djun-glei, Old England, Ussuriyskiy Tigr, Siniy Almaz. Raw materials are 100% Indian, the bulk of our tea is grown in the northeast, in the highland plantations of the State of Assam. The tea from there is famous for a particularly strong infu-sion and a pronounced flavor. It's shipped by steamships from the tea capital of India, Kolka-ta. For several types of granulated Indus™ tea, we use raw materials from southern India, the Nilgiri area. The tea from there is very astrin-gent and gives a rich, dark red infusion. We pro-duce tea for the mass consumer and we would like all Russians to be able to buy quality prod-ucts at an affordable price. After all, Indian tea is especially loved by many of you since the time of the Soviet Union!" said Tanmai Chakrabarty.

Mr. Chakrabarty knows what he is talking about, as he has been living in Vladivostok for almost 30 years. According to him, the Russian tea market is very consolidated and saturated with strong competitors like Orimi, Mai, Unile-ver and others. The advantage of Jay Tea is its own laboratory for monitoring the quality of raw and other materials and finished products. The resident launched three workshops for different types of products and bought auto-matic machines of Chinese and Italian origin.

"Unprocessed tea is an agricultural prod-uct, so it doesn't have constant quality char-acteristics. When accepting a new batch, our laboratory staff always makes a strict selec-tion; they compare it with the standard before further admission to the filling shop. Qualities of the tea's taste and physical parameters are checked such as the size of leaves and gran-ules, fragility, presence of extraneous inclu-sions of non-tea production. During the pack-aging process, high-tech equipment ensures compliance with eco-standards: the tea bag is sealed only with a thread, without clips or glue; it provides the ideal taste of natural tea. There is another control stage immediately after release: we exclude any, even insignifi-cant, defect in the finished product, and the consumer receives not only a high-quality, but also an aesthetic product," said the General Di-rector of Jay Tea.

Today, the main range of Jay Tea can be found in the trading networks of the Russian Far East and Siberia. The businessmen plan to seize the western market and establish ex-ports to Belarus, Kazakhstan and China. Ac-cording to the manufacturers of the strategic product, Mongolia has already fallen in love with the genuine Indian tea packaged in the Primorye Territory.

"We produce tea for the mass consumer"A tea-packing factory in the Russian Far East reached 3/4 of its capacity

The advantage of Jay Tea is its own

laboratory for monitoring the quality of raw and other materials and

finished products


14

The main priorities of the fishery industry in the Russian Far East are the development of local large fish processing productions within special economic regimes (ASEZ, FPV), as well as attracting investments in the industry through the introduction of "quotas under keel." Introduction of investment quotas will stimulate the construction of fishing fleet vessels at domestic shipyards, as well as the establishment of enterprises for the production of fish products. Today, this measure is supported by the majority of fish producers, the first contracts were concluded in Kamchatka and Sakhalin. Unresolved remains the situation with "crab quotas", and market participants are developing a comprehensive solution based on them. The issues of development of Russian Far Eastern aquaculture, as well as the consequences of various restrictions on catching fish resources, are topical.

Fishery Industry:Analytical Review

IMPLEMENTATION OF INVESTMENT QUOTAS

The most important task of this year is the renewal of agreements on assigning quota shares to users for a new historical period. Par-ticular attention is paid to the introduction of investment quotas. Initially, this innovation did not cause appreciable support from the fishing industry, but today the majority perceive "quo-tas under keel" positively. For the most part, dis-putes are caused by the course of the campaign and the technical issues of quota distribution.

In general, the introduction of investment quo-tas will provide an opportunity to stimulate the construction of fishing fleet vessels at domestic shipyards and the establishment of enterpris-es for the production of fish and other products.

The first agreements on fixing quotas for in-vestment purposes, which affected the regions of the Russian Far East, were signed. For exam-ple, the contracts were concluded between Rus-sian Federal Agency for Fishery and the Lenin Fisheries Collective Farm (Kamchatka). The in-vestments will go towards three medium-ton-

nage fishing vessels for the Far Eastern basin. The construction of a series of trawler-seiners is already underway at the Yantar Shipyard in Kaliningrad (United Shipbuilding Corporation). The supply of the entire series to the custom-er is scheduled for 2019. The total volume of in-vestments exceeds RUB 4 bn.

In turn, the Granis company has pledged to build an investment bank for a coastal plant in Sakhalin Region, the construction of which is expected to be completed in September 2019. The investment volume is RUB 350 mn; the ob-

15

MAY 2018 COVER STORY

ject of D-3 investment is a low-power process-ing plant for the aquatic bioresources of the Northern Kuriles.

According to the legislation, the users will receive the volumes for development within the investment quotas after commissioning the in-vestment object—either the ship or the plant. It is worth noting that in February 2018 alone, a special interdepartmental commission selected 10 investment projects for consolidating quota shares. Another 46 projects are allowed to par-ticipate in the reverse auction.

In the middle of March, the situation with the transfer of the distribution of the remain-ing "ship" investment quotas for Alaska pollock and herring to 2019 received a wide response among the fishing industry. During the first ap-plication campaign, held until December 7, 2017 and concluded on February 15, 2018, applica-tions for "ship" investment quotas for Alaska pollock and herring were submitted by six com-panies registered in the Primorsye Territory, af-filiated with the owners of the Russian Fishery (RRPK, the main owner is Gleb Frank), claiming in aggregate for an annual catch of 137 thou-sand tons of Alaska pollock and 22 thousand tons of herring. The order of the Russian Federal Agency for Fishery assigned corresponding quo-ta shares to the six companies of the holding, and the undistributed balance of the "ship" in-

vestment quotas for Alaska pollack and herring amounted to about 125,000 tons and 20,000 tons, respectively. However, these limits will not be distributed in the 2018 campaign, accord-ing to the provision on fixing quota shares, their distribution was postponed to 2019.

This situation has caused dissatisfaction on the part of the fishing industry, including the members of the VARPE association (All-Rus-sian Association of Fisheries Enterprises, Entre-preneurs and Exporters). Investment quotas for Alaska pollock and herring make up approxi-mately 20% of the annual total allowable catch of these marketable fish in the Russian Far East-

ern basin (or about 350 thousand tons of Alas-ka pollock and 55 thousand tons of Pacific her-ring). As a result, market participants are inter-ested in commencing the construction of ships as soon as possible, and the delay in distribu-tion of shares of investment quotas slows down the process. In addition, since 2021, the require-ments for constructing ships for investment quotas have become tougher.

Quotas for the crab catch are still attract-ing particular attention, a decision on which has not yet been adopted: whether auctions for crabs are necessary or they can be replaced by investment quotas (both mechanisms definite-ly won't be launched at the same time). For now, the Russian Federal Agency for Fishery supports the auctions: Despite the fact that the profitabil-ity of fish-producing enterprises may decrease, it is expected that enterprises will withstand such a load. The agency presented this position to the government, although the issue of chang-ing the current mechanism for allocating quo-tas is broader than the functionality of the Fed-eral Agency for Fishery, it concerns, among oth-er things, the Ministry of Economic Development and the Ministry of Finance; therefore the posi-tion should be consolidated. Minister of Agricul-ture Alexander Tkachev instructed that the proj-ect on securing investment quotas for the con-struction of ships for the production of crab be

Investment in Construction

of Series of Trailer-Seiners for

Russian Far Eastern Basin Amounted to RUB 4 Billion

Herman Zverev, President of the VAPRE:"First, over the last 6-7 years, the yields of old markets have been falling and the yields of new ones have been growing around the world, and this is not only a product category, but also a geographical one. What is happening on the Alaska pol-lock market is an example of wilting. There is a significant price reduction of Alaska pol-lock roe, by 30-40%, and by 50-60% for fillets; commod-ity substitutes are appearing that seriously affect the pric-es. The result is obvious: two transnational corporations, which were in the world top 10, found themselves in a very difficult financial situa-tion. One went bankrupt, and the other is going through a financial recovery. At the same time, many companies are trying to find new types of

products and niches. There are unexpect-ed examples of new markets: crabs and seaweed. The crab

began to grow af-ter the Chinese market

opened for the supply of live product. As for seaweed, it al-ready accounts for a quarter of the world's aquaculture – 24 mn tons – and the growth began in the last five years.

In Russia, this was not so acute: anti-sanctions and the devaluation of the ruble have had their effect without seek-ing new ways. Our compa-nies have not changed any-thing in production strategy and marketing. However, the overall decline in sales and the growth of retail prices have led to the fact that the volume of the fish market has declined, and many are be-ginning to face a sales crisis. So the global trend of grow-ing demand for new products

and new marketing communi-cations comes to us, and the coming years, it will be very acutely felt in the market.

The second phenomenon is the enlarging gap between the market leaders and the rest of its participants. The first include those who suc-cessfully use the regulatory system. Unfortunately, Rus-sian fishermen are trying to catch up with modernization. It was the case with envi-ronmental certification, with Alaska pollock roe. The Alas-ka pollack roe market, I recall, was created artificially thanks to the actions of players from Japan 40 years ago. Russia was getting profit from it, but could not manage it. So now, Russian Alaska pollack fish-ermen are working to create such a market in China. This is an interesting project and a great research work, which started a few months ago. I think that soon we will pres-

ent the results in the form of a ready-made promotion strategy.

And thirdly. The last de-cade, there has seen a ma-jor change in fish regulatory in all countries of the world. Three years ago, the Europe-an Union completely changed the directive regulating the fish market. Iceland is taking serious initiatives to devel-op coastal fishing. Japan is re-writing its fishing law, which is 70 years old. So the initia-tives of Russian Federal Agen-cy for Fishery, put forward two years ago, fit into the world trend. Another thing is that all this should be discussed with the business, and the department is ready for this. But we are more concerned about the position of the oth-er part of the regulatory bloc: Those regulators that set the requirements for the market structure, ignoring, for exam-ple, the need for traders."


16

finalized and submitted to the government be-fore June 1. According to the estimates of the Ministry of Agriculture, about 40 medium-ton-nage vessels will be built for these quotas.

DEVELOPMENT OF FISHERY PROJECTS AND COMPLEXES

The fishery industry in the Russian Far East is actively developing with the help of the ASEZ and FPV tools. It's still planned to create "sea-based" ASEZs in the macroregion, or more precisely, to include the water areas in ASEZs, which Yury Trutnev, the Deputy Prime Minister, presidential envoy to the Far Eastern Federal District, mentioned last year. As a result, in was decided to finalize the law on ASEZs in this area.

In general, it is planned to create sever-al fish processing complexes in the Russian Far East within the framework of ASEZs, primari-ly in Sakhalin and Kamchatka. The largest com-plex will be built by Rybokombinat Ostrovnoy LLC (the founder is Sevrybflot LLC with 98% of the capital), which is the anchor investor of the Kurily ASEZ. The total investment in the project is RUB 7.4 bn. Three large fish processing plants are planned in the Kamchatka ASEZ: a high-tech processing complex by Ukinsky Liman LLC; a modern complex for processing seafood by AK-VAFI LLC; as well as a shop for high-tech process-ing of fish products by Rusak.

Representatives of the fishery business are starting to take advantage of the benefits of FPV. Local company Margaritovsky LRZ LLC in-tends to build a fish-breeding plant to grow salmon fry (chum salmon) within the Free Port of Vladivostok. Another FPV resident, Morskaya Akvakultura He Xiang LLC (a subsidiary of Chi-

na's Yantai Tongxiang Foods) has started the construction of a scallop and trepang farm (Ol-ginsky District, the Moryak-Rybolov bay). In ad-dition, there is a fish processing shop of Mo-ryak-Rybolov LLC in the bay, a partner of the Chinese investor.

In the Far Eastern Federal District in gener-al, many investment projects in fish processing are being implemented. For example, a large fish processing plant will be established in Ka-mchatka in the Olyutorsky District. KZB-Don-ka LLC plans to invest RUB 505 mn in the cre-ation of this complex. A modern fishery complex will be built in Primorsky Territory in coopera-tion with a South Korean company, Korea Trad-ing & Industries. The Russian partner of the Ko-rean company will be the fishing company Mag-Si International LLC. Investors are considering the Cape of Nazimova as one of the sites for placing the production.

As the attention of the federal center to the development of the fishery industry in the mac-roregion grows, one can notice the competition between major fishery companies. In particular, large fish producers compete for fishery plots in Kamchatka. In February, the fish-producing company Delta Fish Ltd (part of the Okeanryb-flot holding company, associated with the sen-ator of Kamchatka Territory Valery Ponomarev) appealed the results of the bidding for the right to use a fishery plot in the Kamchatka Gulf. The winner of the competition was the company Ust-kamchatryba LLC, which is close to Boris Nevzor-ov, the second Kamchatka senator. As a result, we are talking about a collision of interests of the two largest companies in Kamchatka. According to preliminary estimates, on the disputable site

in a good year it's possible to extract 1-1.5 thou-sand tons of sockeye salmon worth USD 5-6 mn. Thus, for 20 years, which is the term of the right to lease, revenue can reach USD 100-120 mn. At the same time, according to market experts, the structures of Boris Nevzorov already control the areas where about 15% of all sockeye salmon harvested in Russia is caught. The Federal An-ti-Monopoly Service may recognize the auction as invalid in case of revealing the facts of the provision of incorrect information by Ustkam-chatryba LLC.

Successful expansion in the Russian Far East was demonstrated by RRPK, which lost one of its shareholders at the beginning of the year. Maxim Vorobyov agreed to sell his share to an-other co-owner, Gleb Frank (who will increase the share in the company to more than 90%). Industry experts associate the sale of Voroby-ov's share with the divergence of the views of the partners on the further business develop-ment. In particular, Maxim Vorobyov proba-bly didn't support the investment program of RRPK, which provides for expensive modern-ization and renewal of the fleet, construction of ships (investments amount to about USD 900 mn), processing plants (investments amount to more than USD 30 mn). In addition, it is Voroby-ov who is credited with the proposal to change the rules for issuing quotas for the crab catch, which caused active criticism of those fearing the redistribution of the industry sector of the market. Nevertheless, Vorobyev announced his intention to focus on the development of an-other asset, "Russkaya Akvakultura" (the produc-er of Atlantic salmon and trout, working in the North-West of Russia). At the same time, RRPK

Sergey Darkin, President of PJSC Pacific Investment Group:

"The tendencies that have developed in the world market re-quire us to do more and more to meet the challenges fac-ing the country, including the task of joining the "big five" in the production of GRP, which was set by President Vladi-mir Putin. Sustainable fish-eries are, first and foremost, the result of sustainable leg-islation. Today, the industry is developing very efficiently and dynamically, and all this is thanks to the legislative framework formed in recent

years, and our quota management system, I think, is one of the best in the world. In 2003, a law on fish-

ing was adopted, and a decision was made

on the "historical" principle of quota allocation. It was a complete victory.

But there are also neg-ative aspects. For example, crab auctions are now be-ing discussed: whether to introduce them or not. Last year, our group of companies bought at an auction a quo-ta of 33% for the blue crab in the area of the Primorye Ter-ritory; this equated to nearly 120 tonnes, which we were

allowed to catch. And after receiving the quota for 2018, it turned out that we can catch only 58 tons because scientific forecasts have de-creased. And how do we buy modern vessels worth EUR 55 mn with such uncertain-ty? Here's another example, last year we bought 55 tons of squid in the Southern Kuril Islands, at an auction as well. And this year, it's planned to be excluded from objects for which the total allow-able catches are determined. What should we do? Make a claim? And there are a lot of questions like this.

I think that there is an el-ementary way out of the cur-

rent situation on the mar-ket: The state can easily deal with several unscrupu-lous participants who vio-late the law, but in no case should we avoid the "histor-ical" principle. If there's not enough money in the bud-get, it's possible to raise fees for aquatic bioresources. For example, USD 5 for each ki-logram of crab is about RUB 24 bn of additional feder-al budget revenue per year. With these funds, it'd be pos-sible to modernize our pro-duction fleet and bypass auc-tions that we don't need. Al-though, of course, these are more political decisions than economic ones."

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MAY 2018 COVER STORY

continues to successfully expand its activities in the Far Eastern Federal District.

In addition, new players are beginning to take interest in the fishery business. For in-stance, at the end of last year, representatives of Roman Abramovich's team, the former Chukot-ka senator Efim Malkin and Natalya Panchen-ko registered Dalneye LLC, which might acquire several small fishing companies in the Russian Far East that own quotas and combine them. Earlier, the above-mentioned RRPK did the same: it acquired a number of enterprises in the Russian Far East in 2013 (Intraros, Turnif, Sovga-vanryba, Vostokrybprom) and received the right to catch more than 200 thousand tons of fish. In the past year, Okeanrybflot of Valery Ponomarev agreed on the purchase of the "Dalintorg" and "'Ogni Vostoka" fishing companies. Neverthe-less, although Dalneye confirms that the com-pany was created for a possible industry project, it has not yet shown any activity.

RESTRICTIONS ON RULES FOR CATCHING FISH

At this point, preparations for the salmon path of 2018 have already begun. Last year, the difficult path attracted a lot of attention. Last year's fore-cast for the country as a whole assumed the de-velopment of about 319 thousand tons of Pacif-ic salmon, but more than 350 thousand tons were caught, which is a fairly good result. The lead-er of the catch is Kamchatka, where production volumes amounted to more than 241 thousand tons (or 75.5%). However, in other regions of the Far Eastern Federal District, the indicators were worse, which is largely due to a decrease in salm-on stocks. In particular, about 50 thousand tons

were caught on Sakhalin. Recently, the Ministry of Agriculture has posted a draft amendment to the fishing regulations for the Russian Far Eastern Basin. It's proposed to introduce fishing restric-tions for Pacific salmon. These changes are envis-aged for industrialists, amateur fishermen, repre-sentatives of indigenous peoples. In particular, it was proposed to ban fishing Pacific salmon with set nets in fishing areas of the Kamchatka Terri-tory and Sakhalin Region, as well as change the fishing regulation for Pacific salmon on the Amur River and in the Amur Estuary.

At the beginning of the year, there was an initiative to amend the rules for catch-ing river fish. At that time, the market partici-pants were split in their opinions; there were fears about another attempt at monopolizing the industry. The annual turnover of the riv-er fish market is estimated at up to USD 1.5 bn and is mainly provided by salmon fishing in Sakhalin and Kamchatka. At the moment, several enterprises can lead the extraction in

one reservoir, and now it's proposed to con-sider the "one river – one fishing site" mecha-nism. It should be noted that this mechanism is most familiar to Sakhalin, where tradition-ally only one user company operates on each river, as there are no large rivers in the region that could be "divided" between several com-panies (therefore, the governor Oleg Kozhe-myako is called the initiator of these chang-es). On the contrary, the situation when sever-al companies work on the same river, is more typical for Kamchatka Territory.

The very initiative to reduce the number of users on commercial reservoirs is formally moti-vated by the need for careful development of the territories. Representatives of the industry, fish-ing communities in their turn regard the idea with caution: The mechanism for choosing one company for one site is unknown. Fishermen of Khabarovsk Territory immediately demonstrat-ed categorical rejection of the initiative. The pro-posed principle is acceptable for small rivers that directly flow into the sea, but in general, according to fishermen, a differentiated approach is needed. This principle is not applicable to the Amur either technically or economically, since there is a huge water area where there are dozens of users and hundreds of fishing areas. In turn, fishermen from Magadan Region noted that, from a legal point of view, changing the current rules for granting land plots is unfounded, since in Magadan Region, as well as in Kamchatka, the bulk of them was dis-tributed in 2008 for 20 years. In the event of re-moval of sites from bona fide users, negative so-cial and economic consequences are inevitable, like job cuts, bankruptcy of enterprises, a decrease in tax revenues.

Kamchatka Becomes Leader of Pacific Salmon Catch in

2017. The production volumes were more than 241 thousand

tons (or 75.5%)


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We present you the Paratunka tourist and recreational cluster within the Kamchatka ASEZ. At the moment, several residents with investment projects amounting to RUB 2.7 bn successfully operate in the cluster. But most of the territory is still free.

Promoting the territory of the Paratunka site, lo-cated within the borders of the Paratunsky ru-ral settlement, is a social and economic task car-ried out by the institutions for development of the Russian Far East. In many respects, this is be-cause Paratunka is the most preferable territory for the development of tourist facilities among the existing zones in the Kamchatka ASEZ. First of all, it's due to transport accessibility, proximity to thermal springs and the possibility of placing a large number of facilities in one area.

The area of the territory for the develop-ment of the Paratunka tourist and recreational cluster is about 362.5 ha. The construction of commercial facilities is provided for with RUB 5213 mn; the construction of infrastructure fa-cilities is provided for with RUB 4,203.37 mn. The main tourist facilities: a health-improving complex, a rehabilitation center for athletes, a camping site, a hotel complex, a ski center on the slope of the Topolov mountain range, a sports and entertainment park. Simultaneous-

ly, the zone will be able to accommodate more than 4 thousand people.

To develop the Paratunka site, it's necessary to build engineering infrastructure, as well as an automobile road at the site. The entire infra-structure will be built at the expense of the gov-ernment.

As of the end of May 2018, more than 10 km of pipeline networks have been laid, preparation of the treatment facility site on the right bank of the Paratunka river is under way. The construc-

tion of a bridge over the Paratunka River is com-ing to an end. The bridge will enable the con-struction of treatment facilities with a capacity of 3,000 cubic meters per day.

The design of a 20 km transportation system for thermal waters (heat supply system) from the territory of Verkhne-Paratunskoye thermal water deposit to the borders of the Paratunka tourist and recreational cluster and the Paratunsky ru-ral settlement has been completed. Start of con-struction of the facility is planned for Q3 of 2018. The creation of the facility will give a tremen-dous impetus to the development of the territo-ry of the Paratunka site and tourism activities, as well as increase the reliability of the heat supply system of the existing residential and social fa-cilities of the Paratunsky rural settlement.

The construction of the main 3.8 km long road of the Paratunka tourist and recreation-al cluster is also planned in Q3 of 2018. It is planned to complete the construction of pow-er supply networks for the Paratunka tourist and

Territory for Tourism

More than 300 ha of the Paratunka tourist and recreational cluster are free for new residents of the Kamchatka ASEZ

Paratunka can simultaneously

accommodate more than 4 thousand

people

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MAY 2018 INVESTMENT SHOWCASEINVESTMENT SHOWCASE

recreational cluster with a total capacity of 7.1 MW, which will make it possible to provide res-idents with electricity already this year, includ-ing for the period of construction of facilities by residents.

At the moment, the creation of electricity and heat supply networks for the Aquapark facility in the territory of the Paratunka site has been completed: a 1.2 km deep thermal water well was constructed and put into operation, provid-ing swimming pools and a heat supply system for the Chudo-Ostrov water park; electric grids are available at the border of the resident's site to connect a facility with a capacity of 1 MW.

AQUAPARK AND CHILDREN'S HEALTH CENTERSNine residents with investment projects to-taling RUB 2.709 bn currently operate on the Paratunka site of the Kamchatka ASEZ, with 703 workplaces to be created.

Installation of temporary supports for the bridge necessary for the construction of the site and installation of treatment facilities on the other side of the Paratunka river during spawning of valuable species of red fish. At the end of Q3 of 2018, after the end of spawning processes, the installation of the main pile supports of the main bridge.

INFRASTRUCTURE OF THE PARATUNKA SITEOksana Gerasimova, Head of

the Investment and Entrepre-neurship Agency of the Kam-chatka Territory:

«The Paratunka tourist and recreational cluster is a unique

investment site within the Kam-chatka ASEZ regime. The territory

is located in close proximity to the Verkhneye-Para-tunskoye thermal water deposit, known for its me-dicinal properties throughout the world. Today, the Paratunka tourist and recreational cluster has free land plots with an area of more than 65 ha for the implementation of projects of potential residents. These land areas are provided to residents of the Kamchatka ASEZ without bidding.

In addition, the management company of the Kamchatka ASEZ, Far East Development Corpora-tion JSC, is carrying out a complex of works on the construction of communal and transport infrastruc-ture of the site, including the thermal water pipeline, transformer substations, and backbone power grids. Completion of the construction of basic infrastruc-ture is scheduled for 2018-2019.»

ZHEMCHUZHINA KAMCHATKI FAR EASTERN CENTER

Project: 1) Reconstruct the building and in-frastructure facilities of Zhemchuzhina Kam-chatki Far Eastern center in order to improve the treatment and diagnostic process; 2) Re-construct the Voskhod children resting camp for the year-round use for the children of the Kamchatka Territory.

Project implementation period: 2016-2020 Investments: RUB 200 mn Jobs: 278 people

CHILDREN RESTING CAMP METALLIST Project: Modernization of the year-round

children's health camp.Project implementation period: 2016-2018Investments: RUB 200 mnJobs: 20 people

IP VETCHINOVA V.A. Project: Сonstruction and operation of the

Aquapark water attraction complex on the ter-ritory of the Lesnaya sports center, village of Paratunka.

Stage: construction completedProject implementation period: 2015-2017 Investments: RUB 525 mnJobs: 60 people

TULUACH LLC Project: Recreation center, hotel for 300

people. Project implementation period: 2017-2022Investments: RUB 1350 mnJobs: 150 people

THE MOST INTERESTING RESIDENTS OF THE PARATUNKA TOURIST AND RECREATIONAL CLUSTER


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Kamchatka is traditionally one of the main Russian exporters of aquatic biological resources. At the moment, there are more than 500 enterprises in the Kamchatka Territory that are engaged in fishery activities with a year-round or seasonal production cycle. More than 200 of them catch aquatic biological resources. There are also more than 190 fish processing plants in the region with a total capacity of more than 12 thousand tons of frozen products and 1200 tubes of canned food.

Development of Fish Processing in Kamchatka

The strategy of social and economic de-velopment of Kamchatka Territory provides for the modernization of fish-producing and fish-processing production and strengthen-

ing of positions in the world market by 2030. Kamchatka's enterprises are actively working to expand and modernize existing produc-tion facilities, as well as to create new ones.

We present you the examples of investment projects in the fish-ery industry in the Kamchatka Territory.

Investment Showcase

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MAY 2018 INVESTMENT SHOWCASE

Fish processing plant in the district of former Krasnoye village of the Karaginsky District Aim: To establish a fish processing enterprise

Description: Construction of a fish processing plant with a pro-duction capacity of 360 tons of finished products per day. The main activity is the production of salmon fish products. It’s planned to organize the extraction and processing of aquatic bi-ological resources (ABR) using the quota of Tymlatskiy Rybokom-binat LLC and its own fleet for the production of the ABR.

Project cost: RUB 1204 bn

Payback period: 7 years

Project implementation period: 2016-2020

Fish processing plant in the Olyutorsky DistrictAim: To construct a fish processing plant for flounder of three types with a capacity of up to 100 tons per day

Description: The investment project of KZB-Donka assumes the creation of a fish processing complex in the Olyutorsky District of the Kamchatka Territory. The peculiarity of this enterprise is non-waste technology. In addition to the plant, the investor provided for the construction of the necessary infrastructure in the project (roads, berthing facilities, dormitory for employees), which is an important stimulus for the development of the re-mote northern region.

Project cost: RUB 506 mn



Fish processing complex in Ustyevoe village of the Sobolevsky DistrictAim: Highly effective development of quotas for the extraction of aquatic biological resources by VITYAZ-AUTO LLC through con-structing and operating a fish processing plant

Description: The investment project provides for creating a fish processing complex in the village of Ustyevoe of the Sobolevsky District of the Kamchatka Territory. The produc-tion capacity of the enterprise will be 140 tons of finished products per day.

Project cost: RUB 200 mn




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The project provides for the construction of a fish pro-cessing enterprise, consisting of a complex of industri-al, residential, utility, warehouse and auxiliary build-ings and facilities in a total area of 14.6379 ha. With-in the project, it’s planned to create a production fa-cility for freshly frozen salmon fish products, fresh-fro-zen and salted salmon roe, as well as processing ser-vices for fish and seafood. It is also planned to pur-chase fillet machines and machines for the production of minced salmon to expand the product range and assortment of finished products.

Fish processing complex in Karaginsky District

Aim: To establish a fish process-ing enterprise

Description: OOO Ukinsky Li-man invests in the construction of a fish processing complex in Karaginsky District with a pro-duction capacity of 132 tons of products per day, as well as a warehouse for frozen products with a capacity of 1.1 thousand tons of simultaneous storage.

Project cost: RUB 1.6 bn

The project is being implemented using new technological automated lines, which allow stabilizing the quality of production and minimizing the impact of negative ex-ternal and internal production factors.

The site for the construction of the fish processing plant capacity is located at the mouth of the Uka river of Karaginsky Dis-trict, 90 km to the south of the village of Ivashka. The area is relatively more pop-

ulated and has more developed econom-ics, year-round transport accessibility of the whole river and its main tributaries for the population of this territory and the Petropavlovsk-Elizovskaya agglomeration.

By sea, the distance to the regional cap-ital, the city of Petropavlovsk-Kamchatsky, is about 900 km. Thanks to the favorable location of the site, the approach to the plant is possible both by river-sea and

sea-sea vessels with intermediate trans-shipping.

The Uka river is one of the most sta-ble and productive spawning rivers on the Russian East Coast. This is confirmed by the activities of the initiator company, the fishing grounds of which are located in the said territory since 1930.

The combined river basin is one of the largest river basins in Eastern Kamchatka.

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MAY 2018 INVESTMENT SHOWCASEINVESTMENT SHOWCASE

It covers a significant part of the territo-ry of the Karaginsky District. Its total area is about 8 thousand square kilometers. All six species of Pacific salmon, which have a significant intraspecific diversity, as well as several species of loaches are repro-duced in the basin. Fishing productivity for all types of salmon in the basin ranges from 10 thousand tons in even years to 30 thousand tons in the «fish» years.

It should also be noted that the initi-ator company has been fishing for a long time in the Karaginskaya subzone, which allows to speak about the exceptional ex-perience of fish and seafood production, as well as the knowledge of the features and specifics of the territory.

The climate in the area is marine with moderately severe winters (Novem-ber-March) characterized by heavy snow-falls and frequent thaws. Spring is short and cold. The summer period (June-Au-gust) is cool and cloudy, autumn (Septem-ber, October) is relatively warm.

As of December 31, 2017, the follow-ing buildings were built: production workshop, refrigerator, engine room, die-sel power plant, female dorm, male dorm, canteen. The following general construc-tion works were carried out for these facil-ities: the installation of foundations, met-al frames, external sandwich panel walls, roof. In the diesel power plant building, diesel generators and an overhead crane with a load capacity of 5 tons were in-stalled and commissioned; engineering networks, ensuring an uninterrupted oper-ation of the production cycle, have been finished. In the engine room and refrigera-tor buildings, 100% of refrigeration equip-ment is installed and commissioned. In the production workshop building, 90% of technological and refrigeration equip-ment is installed. The refrigeration system of the complex is based on the compo-nents of well-established global brands, MYCOM (Japan), THERMOFIN (Germany), Danfoss (Denmark), and it has two cir-cuits: the first provides freezing capacities of tunnel freezing systems and the second provides the storage refrigerator with a capacity of 1,100 tons. In the heart of the first circuit are three MYCOM 2016 LLC-LBL screw compressors. The advantages of these compressors include high resistance to reactive loads, high MTBF and cold gen-eration in a wide range of temperatures. The system is designed with 20% pow-er reserve per compressor, which allows

maintaining high cooling rates even if one of the compressors fails, which is especial-ly important due to the geographical re-moteness of the complex. In the basis of the second circuit, in turn, are three MY-COM F62WBHE reciprocating compressor units. These units are more suitable for maintaining stable subzero temperatures, have a long service life before mainte-nance, and, in general, are easier to main-tain. The system of the second circuit is also designed with a 20% power reserve per compressor, which has a positive ef-fect on the reliability of the system.

Sales MarketsIn 11 months in 2015, Russian fishermen caught 4.6% more fish year on year. Such

data was provided by the Russian Federal Agency for Fishery. In total, almost 4 m tons of fish were caught from January to November 2015. The largest basin, Dalne-vostochniy, brought 2.5946 m tons of fish, which is 70.3 thousand tons more than in 2014.

Nevertheless, only a smaller part of this volume makes it onto the Russian table. The lion’s share of the seafood is exported. After the fish is caught on the high seas, fishermen take it to ports of neighboring countries, where the checking and unload-ing procedures take less than one day, and the payment is in local currency, which is particularly advantageous in the current conditions.

In Russian ports, in addition to numerous inspections, there may be other prob-lems; first of all, there is the condition of the port infrastructure and coastal fish pro-cessing plants, which is not always satisfactory. Many types of equipment are still of Soviet origin. According to the Russian Federal Agency for Fishery, the export vol-ume of seafood caught and sold outside the customs control zone in January-Sep-tember of 2015 amounted to 572 thousand tons, and this includes only official sta-tistics. In reality, this number may be much higher due to illegal catch or incomplete registration.

The main production characteristics of the complex:• refrigeration production systems with a

total capacity of 132 tons/day (80 tons/day of air IQF, 32 tons/day of tiled IQF, 20 tons/day of fillet);

• a processing line for fish raw materi-al with a capacity of 5,000 tons/year for raw materials and 3,933 tons/year for fin-ished products,

• Refrigerating storage capacity is 1,100 tons.


Official Bulletin of the Ministry for Development of the Russian Far East. The document was prepared by ANO Far East Investment and Export Agency. All published information is current as of May 30, 2018. Distributed by electronic subscription. Using materials reference to the source is required.

The bulletin uses photographs by: TASS, ROSKONGRESS, administration of the Far Eastern Federal District, Kremlin.ru, Shutterstock.

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OPERATOR OF THE EASTERN ECONOMIC FORUM:

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MINISTRY OF THE RUSSIAN FEDERATION FOR DEVELOPMENT OF THE FAR EASTМИНИСТЕРСТВО РОССИЙСКОЙ ФЕДЕРАЦИИ ПО РАЗВИТИЮ ДАЛЬНЕГО ВОСТОКА+7 (495) 531 06-45 [email protected] www.minvr.ru

FAR EAST INVESTMENT AND EXPORT AGENCYАГЕНТСТВО ДАЛЬНЕГО ВОСТОКА ПО ПРИВЛЕЧЕНИЮ ИНВЕСТИЦИЙ И ПОДДЕРЖКЕ ЭКСПОРТА+7 (495) 540 41-33 [email protected] www.investvostok.ru

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AGENCY FOR THE DEVELOPMENT OF HUMAN CAPITAL IN THE FAR EASTАГЕНТСТВО ПО РАЗВИТИЮ ЧЕЛОВЕЧЕСКОГО КАПИТАЛА НА ДАЛЬНЕМ ВОСТОКЕ+7 (495) 123 47-27 [email protected] www.hcfe.ru