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Krasnodar region - Success stories - EY - Russia

Greetings from the Governor of Krasnodar region


Dear Ladies and Gentlemen,

Krasnodar region is one of the best regions of Russia for effective capital investments.

The region's enormous potential, its unique geopolitical position, natural and recreational resources, fertile land, a developed transport infrastructure and especially comfortable conditions
for developing business brought Kuban to the top of the most prestigious investment ratings.

Experts from Forbes magazine, the Ministry of Regional Development of the Russian Federation, and several Russian and international publications say that our region is the best
place for business.

Over one trillion rubles were invested in the region's economy in the last three years. In 2010, Krasnodar region drew investments worth roughly 493 billion rubles at a growth rate of over 118%. This year, we intend to draw at least 550 billion rubles into the region's economy.

The hundreds of large-scale projects implemented in our region by foreign and Russian investors are confirmation of the high ratings and figures. Many of these investors have been working in Kuban for years and have become its good friends.

We are proud to say that the region's strategic investors include such world renowned companies as Knauf, CLAAS, Nestle, Philip Morris, Bonduelle, CECAB and Metro Cash and Carry, to name but a few.

Krasnodar region is always open for a dialog with Russian and foreign business circles. There are enormous opportunities for investments in our region, ranging from the establishment of agrarian and industrial enterprises as well as ports and housing units to the implementation of Olympic projects, the construction of Formula 1 routes and preparations for the 2018 World Cup.

All investors in Krasnodar region receive benefits and preferences, access to state procurements and orders and maximum support at the administration's level. It is advantageous and reliable to do business in our region.

Welcome to Krasnodar region.

Governor of Krasnodar region
А. N. Tkachev


Raiffeisenbank


Company profile
CSJC Raiffeisenbank is a subsidiary of Raiffeisen Bank International AG. The bank has been operating in Russia since 1996. It offers a full range of services to retail and corporate customers, both resident and non-resident, in rubles and foreign currencies.

Raiffeisenbank, which aims to strengthen its position as one of the leading universal banks in the region, is regarded as one of the most reliable banks in Russia by the ratings agencies.

Raiffeisenbank ranks 9th among Russian banks in terms of assets, based on Q1 2011 results (Interfax-CEA). According to the same Interfax-CEA data, Raiffeisenbank ranked 5th in terms of private deposits and 8th with regard to consumer lending.

Activity in the south of Russia
The history of Raiffeisenbank in the South of Russia starts in 2006. First, the Kubanskiy branch of Raiffeisenbank opened in Krasnodar (Krasnodar region). Later, it was renamed South branch and became the Bank’s regional center in the Southern Federal District and Northern-Caucasus Federal District. Currently, the Southern Regional center consists of 16 offices all around the South of Russia: Krasnodar, Sochi, Anapa, Novorossiysk, Rostovon-Don, Taganrog, Stavropol, Pyatigorsk, Volgograd, Volzhskiy.

The branches offer a full range of banking services for individual clients, including current accounts service, issuing and distribution of debit cards, fixed-term deposit intake, credit programs for individual clients (consumer loans, credit cards, car loans, mortgages) as well as money transfers in rubles and foreign currency. Like at other branches of the bank, clients are able to receive detailed consultations and make use of the bank’s network companies, Raiffeisen Capital Asset Management Company and Raiffeisen Non-Governmental Pension Fund.

Intesa Bank

Description
CJSC Intesa Bank is a Russian subsidiary of the Intesa Sanpaolo group, which, by virtue of its market capitalization, is a major banking group in the Euro zone and the absolute leader of the banking services market in Italy. The history of Intesa Sanpaolo dates back over 400 years. Today, the company has over 20 million customers. Intesa Sanpaolo has foreign branches, representations and subsidiary banks in over 40 countries. The Italian banking group Intesa Sanpaolo has been represented in Russia for almost 40 years, where it has become one of the key participants in the economic relations between Russia and
Italy.

Company’s activity in the South Federal District and Krasnodar region
Intesa Bank has been represented in the South Federal District for over 10 years already, opening its first department in Rostov-on-Don in February 2001 and a year later, in July 2002, another department in Krasnodar. Today there are eight divisions in the South Federal District. They are located in five cities of the region: Krasnodar (three divisions), Sochi, Rostov-on-Don (two divisions), Volgograd and Volzhsk, and are combined into Yuzhny CJSC Bank Intesa.

In Krasnodar region, the bank grants loans to corporate business, actively finances small and medium-sized enterprises and offers services to individuals. The growth of the bank’s loan portfolio in Krasnodar region shows that the bank is active in the market, that it is integrated in the region’s economy and that it has long-term plans for financing the enterprises in the Region.

The bank’s clients in Krasnodar region are energy companies, food manufacturing companies (dairy production), agricultural and retail enterprises, hotels and restaurants and transportation and construction companies.

Intesa Bank takes an active role in the work of social organizations and associations operating in Krasnodar  region such as the Chamber for Trade and Industry of Krasnodar region, the Association of Financial Managers of the Southern Financial Club etc.

In its work in Krasnodar region, Intesa Bank takes account of the agreement on the general principles of organizing cooperation in attracting investments into Krasnodar region. During the implementation of the agreement, which took three years, the bank allocated over 5 billion rubles for the programmed support of small and medium-sized businesses. The bank also invested over 85 million rubles in the infrastructural development of Krasnodar region by opening three new bank divisions: two in Krasnodar and one in Sochi.

Knauf Gips Kuban LLC

Company profile
The international industrial group Knauf was established by the brothers Alfons and Karl Knauf in 1932 as a small enterprise for processing gypsum stone. The company is now a leading global producer of construction materials. It incorporates about 150 enterprises with 22,000 employees in over 40 countries.

Today, Knauf is a major German investor in the construction industry of Russia, Ukraine, Kazakhstan, Moldova and Uzbekistan. It produces high-quality goods from local raw materials and works with local specialists.

History of success in Russia and Krasnodar region
Knauf Gips Kuban LLC is a major construction enterprise in Krasnodar region which has been operating in the region since 1995. The enterprise is based in the populated area of Psebay in Mostovsk District, which has rich deposits of Europe’s best gypsum.

Knauf Gips Kuban has been holding the leading position for several years now in the rating of 100 enterprises of the construction materials industry as well as the construction industry that are leaders of the building complex of Russia.

Investment projects in Krasnodar region
Our enterprise is an indisputable leader of the construction industry of Krasnodar region. The main directions of the enterprise’s investment policy are the further modernization of production, the replacement and repair of equipment, and the acquisition of spare parts.

In 2011–2012, eight million rubles will be spent on the expansion of the railway approaches. One of the major investment lines (in the amount of 100 million rubles) will be the projection and construction of the enterprise’s own production unit with the grinding and sorting factory to produce powder and lime sand.
In the next few years, the Northern Departure, a roundabout motorway, will be built along the perimeter of our enterprise. It will settle the inhabited area’s environmental problems because traffic will be outside the Psebay settlement.

Under the auspices of Knauf Gips Kuban, the agricultural enterprise Knauf Agro Kuban will be formed to breed cattle for milk and meat by using intensive land cultivation methods with farm machinery of a high European standard and by engaging advisors from the Company for Project Management and

Agricultural Development, GmbH & CO KG, from Germany. This project is very important in promoting agricultural development in the piedmont area of Kuban.

Anadolu Cam Sanayii A.S.

Company profile
Anadolu Cam Sanayii A.S. company is the glass packaging part of the Sisecam group of companies.
The Sisecam group of companies was established in 1936 and occupies 98% of Turkey’s total glass market. It also owns enterprises in Russia, Bulgaria, Georgia, Egypt, Bosnia and Herzegovina and Italy.

Nowadays, the Sisecam group of companies is one of the world’s top ten glass manufacturers and has ambitious plans both for Russia and other countries in Europe and Asia.

Activity in Russia: facts and figures
Since 2001, Anadolu Cam has opened gigantic plants in Russia – in the Vladimir Region, Vologda Region, the Republic of Bashkortostan and Leningrad Region. Total investments in Russia amount to more than USD300 million. The company’s current plant construction plans call for around USD400 million to be invested.

Investment projects in Krasnodar region
The current capacities of existing glass packaging plants in Krasnodar region fail to meet the latest requirements of glass containers. The annual requirements of major Kuban processing, wine producing and distilled beverages enterprises alone figure up to 500 million glass containers.

Therefore, a modern production system of high quality glass packaging for a wide range of processing, wine producing, brewing and distilled beverages enterprises was established in the Krymsk district of Krasnodar region.

The history of partner relations between the company and Krasnodar region began in 2006. In Istanbul on 11 December 2006, Alexander Tkachev, Governor of Krasnodar region, and the President of Anadolu Сam Sanayii A.S. signed a protocol of intent to implement the construction of a new glassware plant.

On 12 May 2009, the grand opening of the first line of a new glassware plant with a capacity of 350 million glassware units annually, RUSJAM-KUBAN LLC, was held in the town of Krymsk. Today RUSJAM-KUBAN LLC serves 80 companies which are not only in the South Federal District, but also abroad (in Turkey and Kazakhstan).

At the beginning of 2012, the company plans to start construction on a second line of the plant with a capacity of 350 million glassware units annually. When the enterprise starts working at full capacity, its productivity will reach 700 million glassware units annually.

CLAAS KGaA mbH


Company profile
The German machine-building company CLAAS KGaA mbH (CLAAS), founded in 1913, is among the leading manufacturers of farm equipment in the world.

CLAAS has 14 plants in Europe, Asia and America, with more than 8 thousand employees. In North America, the company’s products are sold under the LEXION trademark. The list of CLAAS’s manufactured goods includes grain and forage harvesters, tractors, press pickups and telescopic loaders.

History of success in Russia and Krasnodar region
CLAAS’s management and Krasnodar region’s leaders signed an agreement on cooperation in Hannover, Germany in 2003. The agricultural orientation of Krasnodar region and the southern regions of Russia was the main reason why the company’s management decided to build a plant producing grain harvesters and tractors in Krasnodar region.

The plant, with a capacity of 1,000 CLAAS harvesters, the first of its kind in Russia, opened in Krasnodar in 2005. At the plant, workers learned how to assemble the Mega-350/360/370 harvesters, the Atles 946 RZ and Xerion 3800 tractors, and the Tucano 320, 430, 450, 470 and 480 grain harvesters.

The construction of that plant was a decisive step in providing Russian agriculture with modern, highly productive equipment. The plant became a full-fledged Russian producer five years after CLAAS began its production in Krasnodar. Its output is found in all the Russian regions where crops are cultivated.

Plans and prospects

In the long term, CLAAS plans to expand capacity in an effort to meet the demands of a growing market. In the next three years, CLAAS will build new production units in Krasnodar to ensure a full production cycle, including coloration and independent production of several components.

Philip Morris Kuban


Company profile
The Philip Morris Kuban factory is one of the affiliates of Philip Morris International in Russia together with the Philip Morris Izhora factory and Philip Morris Sales and Marketing, with offices approximately. Today, more than 4000 professionals work for the affiliated companies of Philip Morris International in 100 cities of Russia.

Philip Morris Kuban (Krasnodar, Russia) is a technologically advanced production facility and one of the biggest production centers of Philip Morris International in the world. Philip Morris Kuban has been successfully working for over 17 years thanks to investments, high-skilled personnel and the efforts of the Krasnodar region administration to create an environment conducive to foreign investment.

Today, Philip Morris Kuban is one of the largest companies in the region. It is an integrated production enterprise which comprises all steps of the production process, from primary treatment of raw tobacco to production and packaging of high quality cigarettes.

History of success in Krasnodar region
The history Philip Morris International in the Krasnodar region is one of the most successful examples of direct investments in the regional economy of the country.

Since 1943, the region has had a tobacco plant, which was among the largest tobacco enterprises in the Soviet Union. By the early 1990s, the factory did not have the financial resources to invest in facility modernization.

On 17 October 1993 Philip Morris Investment Corporation won the investment project tender and acquired the controlling shares in JSC Krasnodartabakprom. The factory was renamed Philip Morris Kuban in 2000.

Since that time, the factory has increased its production capacity by almost nine times and has become a modern tobacco full-cycle factory with an annual production capacity of more than 30 billion cigarettes. The factory manufactures about 30 line extensions of such cigarette brands as “Appolo Soyuz,” “Optima,” “Next” and “Bond Street.”

Nestle Kuban LLC


Company profile
Nestle is the largest manufacturer of foodstuffs and beverages in the world; the expert in the sphere of  nutritious and healthy lifestyles. In Russia, Nestle has 12 enterprises and the company is
constantly investing in their development.

History of success in Krasnodar region
The company came to Kuban in 1998. That is when Nestle Group’s Khladoprodukt began to produce Nestle® ice cream in Timashevsk. In 2001, Russia’s first line in packaging NESCAFE® Classic instant coffee was put into operation.

At the Sochi International Forum in 2004, Nestle signed an investment agreement with Krasnodar region’s administration on the construction of a new plant. A year later the Nestle-Kuban plant, Russia’s first complete cycle plant producing instant coffee, was put into operation in Timashevsk. Investments in the project amounted to roughly USD120 million.

From 2006–2008, the variety of products produced at the Nestle-Kuban plant was enlarged. About 950 million rubles were invested in the development of production, the social sphere and environmental safety.

Today, Nestle-Kuban is a major enterprise of the food industry of Krasnodar region and Russia as a whole. The company produces a large variety of natural instant coffee and soluble coffee beverages under the NESCAFE® trademark.

Development of the plant
In October 2008, an agreement between Krasnodar region

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