Kostroma region investment passport 2012

KOSTROMA REGIONADMINISTRATION

3

Dear Ladies and Gentlemen,

Kostroma region that I have the honour to represent has an abundant history of the successful partnership, the unique productions and natural resources.

Today the region follows the line of intensive development on the side of investment attraction, business sector improvement, promotion of social sphere, creation of the new technologies and innovative products.

The Kostroma region possesses all preconditions for the further progress of the investment collaboration: convenient transport-and-geographical location as regards home and external markets; rich potential of the natural resources permitting to head on to the dynamic production development; affl uent historical and cultural heritage; high scientifi c and labor potential of our people.

The edition you are reading now enables investors to fi nd the challenging targets for the effi cient use of their talents and capitals. The Kostroma region is always open to the new projects realization. In support we work steadily to create maximal comfort conditions for the investors, we maintain the projects at every stage of their implementation, we form the industrial grounds provided with the necessary well-developed infrastructure.

We are interested in the partnership progress and we are sure that our collaboration will be successful, mutually benefi cial and productive.

Welcome to the hospitable Kostroma region.

Sergey SitnikovKostroma region Governor

4

Competitive strength factors ................................................................. 5

General information about the Kostroma region .............................. 7

Tourism ..................................................................................................... 19

Conditions of the investment activities implementation

in the Kostroma region ......................................................................... 21

Regulations of the basic administrative procedures ...................... 25

Rate of tari� ............................................................................................. 29

Examples of the e� ective cooperation .............................................. 31

Investment proposals ............................................................................ 33

Free ground areas inventory ................................................................ 37

CONTENT

COMPETITIVE STRENGTH FACTORS

6

KOSTROMA REGION

RUSSIAN FEDERATION

Unique Eurasian geopolitical location of the Russian State(central part of Eurasia).

Rich potential of the natural resources that meets the most of the home requirement in raw materials and energy carriers.

High educational level and spiritual traditions of the population directing people to the creative and constructive labour, to the social justice and partnership, to the personal self-realization for the benefi t of the community.

Huge territory and capacious home market, providing the high variety of the people needs and activities.

Numerous free savings capable to triple the investment activity level in case of their drawing into the economic turnover.

Advanced scientifi c and technical potential , availability of the new process developments in some perspective brunches of knowledge and industry (power-saving technologies, bioengineering).

Availability of the regional scientifi c schools and original advanced technologies, which being used in practice are capable to provide the competitive business on an international scale.

A lot of free production capacities making it possible to increase productivity promptly at relatively low costs.

Availability of the experienced manpower resources.

Primary transport-and-geographical location

(central part of Russia).

Affl uent historical and cultural heritage of all-Russian importance.

Availability of the mineral deposits highly remunerative for the commercial development

(clay, loams, claydite, mason's sand, sand-gravel, lime, peat, sapropel, mineral waters etc.).

One of the biggest in the European part of Russia forest resource.

Large area of the region territory with relatively low land value.

Energy duplication of the region.

High scientifi c and personnel potential of the region.

Improved legislative basis enables to invest with minimal risks.

Well-developed infrastructure.

Existence of the production capacities of all-Russian and international scale (textile, jewelry, woodworking and engineering industries).

GENERAL INFORMATION ABOUT THE KOSTROMA REGION

8

GEOGRAPHY AND POPULATIONThe Kostroma region is one of the largest subjects of the Russian Federation forming the Central Federal

District. It is contiguous with fi ve regions: Yaroslavl, Vologda, Kirov, Nizhny Novgorod and Ivanovo.

According to the data from the 1st April 2012 the population size of the Kostroma region is 660,8 thousand people. By birth rate the Kostroma keeps lead among another CFD regions – 12,7 newborns for 1000 people.

HISTORICAL BACKGROUND SUMMARYIn the year of 1152 in order to strengthen the northern border of his principality the lord of Rostov and Suzdal

– the princeYuriy Dolgorukiy had laid the foundation of the frontier town Kostroma at the two rivers` confl uence – the Volga and the Kostroma.

More than once the Kostroma land became a center of the political, cultural and spiritual life of Russia. Just here Mikhail Federovich Romanov had been crowned by the Assembly of the Land resolution in 1613. Later on Kostroma was called “the House of Romanov`s cradle”. At the same time the patriot of the Russian land –the peasant of the Kostroma government Ivan Susanin – had performed a feat of valour at the cost of his own life.

In 1767 after visiting Kostroma Yekaterina II introduced the emblem of the town with an image of the boat which brought the empress to Kostroma. According to the legend when Yekaterina II was asked about how she would like Kostroma to look like, the empress unfolded her fan. This reply caused designing a fan-shaped planning of urban streets network.

On the 13th of August 1944 the presidium of the Supreme Soviet of the USSR offi cially stated by its decree the establishment of the Kostroma region in its actual borders with Kostroma as a chief town.

9

INFRASTRUCTUREThe transport artery Sankt-Peterburg – Yekaterinburg including the

motorway Kostroma - Shar`ya – Kirov – Perm` passes through the territory of the Kostroma region. This motorway is of a great importance not only for the Kostroma region, but for the Russian Federation on the whole, because it has a going out from Kostroma city to the federal motorways: M-8 Kholmlgory and A-113 Kostroma – Ivanovo and passes through the territories of 8 metropolitan regions to the East from Kostroma. By the traffi c increase due to the transit freight fl ow from the eastern parts to Moscow the signifi cance of this motorway for the economy of Russia will grow. In prospect there are plans to build one more motorway “roundabout Kostroma” with the new bridge across the Volga.

The Northern Railway – a brunch of OAO “Russian Railways” is a basis of the rail traffi c on the territory of the Kostroma region.

The convenience of the transport-and-geographical location of the Kostroma region is also connected with the main waterway - the Volga river. The system of the river transport has exits to the Black, Caspian, Baltic and Northern Sea.

ENERGYSecure energy supply of the region is guaranteed by the Kostromskaya State District Power Plant which is

one of the largest and most effi cient power stations in Russia. According to one of the most important projects planned for the implementation in the nearest future there should be the Central Nuclear Power Station built.

The power consumption for the needs of the region accounts about ¼ from the produced power volume including losses.

Energy excess of the Kostroma region determines the expedience and economical reasons for the placement of the energy-intensive productions at the local territory.

10

LABOR POTENTIALThe number of the labor resources in Kostroma region accounts about 400 thousand people including the

able-bodied population at the employable age in the quantity of 364,6 thousand people. The number of the economically active population is 337 thousand people.

Major parts of the employed population are engaged at the following types of the economic functioning: Manufacturing activities, wholesale and retail trade, Agriculture.

Three State high-educational establishments perform the human resource development at the Kostroma region for the needs of the contemporary economy. In 2011 the number of the graduated specialists was 4 051 people.

NAME GENERAL COURSES OF EDUCATION ADDRESS

Kostroma State-run Technological university

- woodworking;- machine-building;- jewelry design and production;- textile and sewing;- IT;- economics;- jurisprudence;- tourism.

17, Dzerzhinskogo Street, 156000 Kostroma, Kostroma region, RussiaTel.: 007(4942) 31-48-14 Fax: 007 (4942) 31-70-08 [email protected]

Kostroma State-run university named after N.A. Nekrasov

- humanities and natural sciences;- foreign languages;- economics;- jurisprudence;

14, The 1st of May Street, 156000, Kostroma, Kostroma region, RussiaTel.: 007(4942) 31-82-91 Fax: 007(4942) [email protected]

Kostroma State Agriculture Academy

- farming;- economics;

KSAA campus, Karavaevo township, Kostroma district, Kostroma region Tel.: 007(4942) 65-75-97, 65-71-10Fax: 007(4942) 65-75-99 [email protected]

Well-developed system of the vocational technical training schools (26 institutions) train the skilled workers for all economic activities in the Kostroma region. Training of the qualifi ed industrial workers is performed as well by the Educating and advanced training Center of Nordrhein-Westfalen (Germany). Many students graduated from this center have the international standard diploma.

Furthermore there were 9 innovation small-scale enterprises created on the basis of the Kostroma Universities.

11

INDUSTRIAL PRODUCTIONIndustrial system is a foundation of the regional economy, it includes about 238 large and medium enterprises

and 464 small businesses. The most in the industrial production structure of the region is occupied by the processing industry (more than 70%).

Processing industry structure

The leading branches of the industrial operations performed on the territory of the Kostroma region are:- Electric power and thermal energy production;- Wood processing and woodwork manufacturing;- Pulp-and-paper industry;- Metallurgy and machinery;- Jewelry production;- Foodsfuffs production;- Textile and sewing industry;- Chemical and petrochemical industry;- Production of building materials.

Dynamics of the industrial production growth rates

Contribution of the Kostroma regionto All-Russian Industry

The Kostroma region is well-known as a land of jewelers, where the largest Russian jewelry plants and enterprises are concentrated.

The Kostroma region`s part in the all-russian production is as follows:

- more than 60% of jewelry;- 21% of automotive cranes;- 25% of linen fabrics;- 6% of wall blocks made out of cell concrete; electric-

welded steel pipes (except those ones of a big diameter).

In 2011 the growth rates of the industrial production in the Kostroma region have exceeded the mean all-russian value for 3,4% and in 2012 – for 2,1%.

Among the processing industries the most significant production rise was achieved at the leather goods production – in 1,4 times, at the machinery and equipment manufacturing – 24% rise and at the chemical industry – 23,7% rise.

12

Projects successfully implementing in the processing industry1. One of the largest productions of the Kostroma region is OAO “Gazpromtrubinvest”. Pump-compressor

pipes, pipe liners, gas-and-oil pipes and shaped tubes are the basic products of the plant. At present OAO “Gazpromtrubinvest” supported by the regional administration is putting into practice the investment project for the production of the mean diameter pipes. The total volume of investment accounts 10 billion roubles. This project has been included in the Register of the Investment projects of the Kostroma region with the preferential terms of taxation.

2. ООО «Joint venture «Kokhloma» - the cotton spinning mill of the latest technology - the only enterprise in Kostroma and the fi rst textile company in Russia that has replaced the old equipment with the new effi cient processing lines permissive to manufacture environmentally safe product competitive at the world market. Two investment projects has been successfully implemented. The total volume of investments was 545 million roubles. Due to this the automatic spinning mill has been started up, the total reconstruction of the mill has been completed and the planned mill performance – 1 000 ton of the high-quality yarn - has been achieved. At present OOO «Joint venture «Kokhloma» is putting into practice the investment project for the organization of the advanced technology ring spun yarn production. The total investment volume exceeds 540 million roubles. This project has been put on the list of the priority investment projects of CFD.

3. The implemented project for the building of the coppered wire manufacturing shop at OOO «Sudislavskii welding materials plant» can be an example of the successful cooperation between the Kostroma region Administration and private investors. The total investment volume exceeds 110 million roubles. Modernization of the existent facilities and creation of the new production capacities helps the plant to increase signifi cantly the volume of output and improve the quality of the product.

13

FOREIGN ECONOMIC ACTIVITYAccording to the data of 2011 the volume of the

export products was 201 million US dollars, same indicator in the 1st quarter of the year 2012 accounts 43,2 million US dollars.

The products of wood processing and machinery prevail in the commodity composition of export in 2012. The same can be said about metals and wares made out of it. The volume of the imported goods in 2011 was 162,2 million US dollars, in the 1st quarter of the year 2012 import volume accounts 40,7 million US dollars.

BUILDINGThere are 865 organizations and enterprises on the

territory of the Kostroma region belonging to the building industry: 705 of them are the building companies and 63 are busy with the construction materials production and building industry; inter alia 14 enterprises are quite large; there are also 83 design engineering fi rms.

The existent capacities completely satisfy the demands of the region for housing and building sites of industrial and civilian purposes.

The average workload of the hardware productions for the building industry is 60-70% from the rated capacity.

Industrial production occupies 95% in the industrial mix of the hardware and building constructure productions; non-metallic minerals extraction occupies 5%.

Industrial mix of the hardwareand building structures

Commodity composition of export in 2012Commodity composition of export in 2012

Commodity composition of import in 2012

Deliveries of equipment, transport facilities, paper, cardboard, ferrous metals and wares made out of them make the major part of the import commodity composition in 2012.

Main trade partners of the Kostroma region are: the Netherlands, Kazakhstan, Ireland, China, Germany, Ukraine, Italy, Uzbekistan, Czech Republic, Latvia, Turkey, USA, Poland, Great Britain, France, Egypt.

Many enterprises of the Kostroma region perform their production facilities renovation and the new technologies adoption which cause a signifi cant diversifi cation of the products and quality improvement.

At present ZAO “Mezhregion Torg Invest” (Kostroma) is putting into practice the investment project for reconstruction of the plant for the cement bonded particle board production. The plant merges two works: the cement bonded particle board production and manufacturing of the wrought and saw timber. The investment volume of the project accounts about 800 million roubles.

14

AGRICULTURAL SECTORAgricultural sector of the Kostroma region is one of the

most important branches of the regional economy. Farming make 11,8% of the regional gross product. The animal breeding share is 49%, the crop sector share - 51%.

Regional farming is specialized in the dairy-and-meat cattle breeding. Natural climatic conditions, state of soils are favorable for the herbage cultivation which permits to satisfy the needs of the cattle breeding branch in feeding stuffs. It is profi table to produce milk, grains, vegetables, potatoes, long-stalked fl ax and rape in the Kostroma region.

Index of the agricultural productionoutput in all types of farming

For the development of the prior areas of the agricultural sector in the Kostroma region there were the goal-oriented programs approved: “Cultivation of the milk cattle breeding and increase of the milk production in the Kostroma region” and “Development of the meat cattle breeding in the Kostroma region” aiming to create economical and technological conditions for the stable progress of the milk and meat cattle breeding in the Kostroma region.

The structure of the agricultural areas in the Kostroma regionLand category Area, thousand hectars % to the total value

Arable land 436,8 80,1

Pasture 54,0 9,9

Hayfi eld 42,7 7,8

Permanent grasses 11,9 2,2

TOTAL 545,4 100

A number of the investment projects in the sphere of farming are successfully implemented on the territory of the Kostroma region.

15

ZAO “Shuvalovo” (Kostroma district) puts into practice the investment project for the building of the pig-breeding closed cycle complex with the meat-processing plant. At present in order to increase the output for 20% the company is reconstructing the sausage shop at “Shuvalovo-1” and plans to arrange a new production space with complete comprehensive mechanization “Shuvalovo-4”.

OAO “Hothouse garden ing complex “Vysokovskiy” (Sudislavl` district) is organizing the pedigree stock-breeding center to breed the cows of the French breed “limousine”. The company has already bought 700 livestock units of this breed. The total investment volume according to the project is 200 million roubles.

OOO “Agroindustrial fi rm “Planeta” (Bui district) is putting into practice the investment project for establishing the pedigree stock-breeding center to breed the cows of the Kostroma breed. According to the project the company has to build the new and to reconstruct the old cattle-breeding farms, to renew the machine and tractor fl eet, to buy the heifers of the Kostroma breed.

It is already invested more than 70 million roubles in this project. The project of OOO “Voskresenje-Agro” (Bui district) stipulates the integration of the producers of the

farm goods and milk processors. The new cheese-making plant has been already put into operation. Its capacity is up to 50 tons of the processed milk per day. The shop is fully automated. The number of necessary workers does not exceed 3 persons. The volume of investments accounts 110 million RUR.

16

NATURAL RESOURCES POTENTIALMineral resources base

Mineral resources base of the Kostroma region is mainly presented by the deposits of the structural and agrochemical raw materials (deposits of peat and sapropel, deposits of carbonate strata for the soils liming).

Mineral resources deposits on the territory of the Kostroma region

1156 deposits of the current mineral resources are prospected and explored on the territory of the Kostroma region. 514 of them are deposits of the structural raw materials, 614 – peat deposits and 28 deposits of sapropel.

MineralNumber of

the explored deposits (2011)

Resources (million m3)

as of the year 2011, January,

the 1st

Number of the explored deposits

(2011)

Resources (million m3) of the explored deposits

(2011)

State as of the year 2011

Mason's sands 72 86, 03 16 17,08 exploit

Sand-gravel 29 212,6 8 85,3 exploit

Moulding sands 2 46,8 mil. ton 1 39,4 exploit

Glass-making sands 1 0,2 1 0,2 not exploit

Clays and loams (for bricks ) 22 41,2 5 8,7 exploit

Clays (for silicate cotton) 1 1,8 1 1,8 not exploit

Raw material for clayite 3 5,3 2 2,3 exploit

Limestone 1 12,1 Bedinskoe 12,1 exploit

Peat 358 311,2 mil. ton 8 29,4 mil. ton exploit

Sapropel 28 303,1 mil. ton - - not exploit

Peat (curative) mud 1 1,5 mil. ton - - not exploit

Pyroshales (coaly) 4 6,1 mil. ton - - not exploit

Phosphorite 1 2,3 - - not exploit

Gold 3 0,0000593 - - not exploit

Notation conventions

SandLoamClaySand-gravelLimestoneClayitePeatPhosphoritePyroshale

17

Volume of the current mineral resources extraction on the territory of the Kostroma region

There were expected reserves of hydrocarbonic stuff, titanium zirconium placer, gold, common salt and mineral pigments on the territory of the region discovered. Ground mineral waters of a different composition and stage of mineralization are widely spread on the territory of the Kostroma region.

The right to use the mineral wealth is granted by the auction.The investment projects for the subsoil usage are successfully implemented in the Kostroma region.OOO “Kostromaregiontorf” is putting into practice the project for the increase of the peat extraction at the

Miskovskoe peat enterprise. It is planned to deliver the peat briquettes to the municipal services of Kostroma and to the farms of the Kostroma region. Estimated capacity is about 100,0 thousand ton per year. The investment volume accounts 60 million roubles.

OOO “Sudislavl-torf” performs the extraction at the Slavnovskoe peat deposit in the Sudislavl` district. Enterprise estimated capacity is 70,0 thousand ton per year. Total investment volume – 93,5 million roubles.

18

Forestry sectorThe percentage of forest land in the Kostroma region is 74,1%, wood resources exceed 700 million m3

occupying the area larger than 4,5 million hectars. The region ranks high among other regions of the European part of the Russian Federation by its forest stock and it takes fi rst place in CFD.

Prescribed cut, thousand m3

Actual cut, thousand m3

exploitation percent of the prescribed cut, %

Forest composition

TOTALincluding softwood

forestTOTAL

including softwood

forestTOTAL

including softwood

forest

11 366,7 3 934,0 4 690,65 1 891,72 41,27 48,09 3F2P4B1As

Average rental for the wood resources accounts 83,3 RUR/m3 and depends on the volume, composition and location of the prescribed cut.

The right to use the wood resources is granted by the auction.

Several investment projects for the forest exploitation have been already implemented on the territory of the Kostroma region.

The Swiss concern “KRONOHILDING AG” has put into practice the investment project for the production of the wood-based panels and workpieces for the furniture and building enterprises in Shar`ja (Kostroma region). The production is based on the wasteless processing of the low-grade timber and wood-scrap. The investment volume accounts 12 350,1 million RUR. There were 1 500 new jobsites created.

OAO “Manturovskiy plywood complex” successfully operates on the territory of the Kostroma region (Manturovo district). The modern wood-processing plant for the plywood production has been constructed with the direct participation of the Kostroma region Administration. The investment volume accounts 1 143 million RUR. Today the plant is one of the city-forming enterprises employing 900 workers. The annual plywood output volume accounts about 100 thousand m3.

Land lotsLand-use pattern on the territory of the Kostroma region

NN Land category Area, thousand hectar % to the TOTAL

1 Agricultural lands 1969,3 32,7

2 Human settlement lands 122,7 2,04

3 Industry, energy, transport, communications and other lands 51,0 0,85

4 Lands of the protected zones and objects 0,9 0,01

5 Forest resources 3712,2 61,65

6 Water resources 71,7 1,19

7 Reserve land 93,3 1,56

TOTAL 6021,1 100

TOURISM

20

The Kostroma region is a unique territory where amazing nature, original culture and rich historical traditions are blended in harmony with the hospitality and cordiality of the Kostroma people.

The jewelry handicraft is a very important heritage of the Kostroma region. Though nowadays the production of jewels reaches the industrial volumes (a half of the golden and a quarter of the silver articles produced in Russia come from the Kostroma region) the goldsmiths from Kostroma keep and develop their unique skills in making the real pieces of art in gold and in silver. One of the centers of the jewelry art in the Kostroma region is the township Krasnoe-on-the Volga, where you can fi nd a museum of the jewels and articles of the national applied art. Every year at the end of June there is a major International festival and a jewelry exhibition “Golden Ring of Russia” held in Kostroma. The representatives of the leading Russian and foreign jewelry companies always come to take part at the exhibition.

A romantic fairy-tale about the fragile girl Snegurochka (Snowmaid) and Tsar` Berendey`s kingdom inspires the tourists from all-over the world

to visit the wildwoods of Kostroma land. The birthplace of this winter character is situated in the backwoods of the Kostroma region - the Shchelykovo estate. This country seat belonged to the great russian dramatist A.N.Ostrovskiy, the author of the famous story.

There are more than 2,5 thousand of old relics and monuments of architecture and archaeology, national historic landmarks, pieces of art, settlements of the past, protected relict national parks. The Kostroma region is recognized as a model of the Russian midland landscape.

In 2013 Russia celebrates the remarkable date – the 400th anniversary of the Romanov Dynasty and revival of the Russian nationhood. Kostroma along with the most signifi cant cities of Russia will rightly take its place in the celebration because it is Kostroma that is considered to be the cradle of the Romanov House.

CONDITIONS OF THE INVESTMENT ACTIVITIES IMPLEMENTATION IN THE KOSTROMA REGION

22

MEASURES OF THE ADMINISTRATIVE SUPPORT OF THE INVESTMENT ACTIVITIESLegal and organizational background and institutional conditions created on the territory of the Kostroma

region favour the implementation of the effi cient investment activities with the minimal investment risks. The developed system of the investment legislation stipulating many forms of the administrative support of investors at all stages of the investment project realization creates the conditions of transparency, logical simplicity and high protection of the investment activities, which minimize signifi cantly the investment risks.

Level Form of support

Federal

Budget assignments from the Investment Fund of the Russian Federation for the implementation of the regional investment projects in the sphere of transport, municipal, energy infrastructure development.Ordinance of the RF Government dd 01.03.2008 No. 134 «Concerning the adoption of the regulations for formation and usage of the budgetary provisions of the Investment Fund of the Russian Federation»

Possibility of the double lowering of the woodlot rental, used for the investment project implementation, listed as prior in the area of the forest development within the period of its payback.Ordinance of the RF Government dd 30.06.2007 No. 419 «Concerning the prior investment projects in the area of forest exploitation»

Loans issuance, crediting, provision of guarantee and fi nancing on the refunding base of the investment projects with the payback period exceeds 5 years and if the total investments account more than 2 billiard RUR.Federal Law dd 17.05.2007 No. 82-FL «Concerning the Development Bank», Edict of the RF Government dd 27.07.2007 No.1007-r

Financing for account of State corporations.Certain legislative acts of the Russian Federation

Regional

There is the most favorable treatment for the investment activities in the Kostroma region. This treatment is realized through the package of the following measures:Tax remissions within the payback period of the investment project (referred to the taxes of the regional budget). Objects of the investment can be completely exempted from the property taxes which is particularly important by implementing the large investment projects with the signifi cant material and technical basis. A part of the profi t tax subject to pay to the Kostroma region budget is also to be lowered from 18% up to 13,5%;Using the lower limits (among those stipulated by the current legislation)of payment for the Kostroma region resources usage including rental;Support in organization and maintenance of the investment project;Support of the investors by their applications and appeals to the Federal bodies of state power, to the bodies regulating the price formation on the monopolies services, to banks and other fi nancial intermediary regarding the most favorable treatment usage towards them.Law of the Kostroma region dd 14.10.1997 No. 12 «Concerning the investment activities in the Kostroma region»

Municipal

Tax remissions and other benefi ts provided by the bodies of the local authorities. It is about possibility of the complete or partial land tax exemption and about minimization of the rental for the property and land lots belonging to the municipality.Certain legislative acts of the Kostroma region local authorities

23

MEASURES OF THE ADMINISTRATIVE SUPPORT OF THE BUSINESS ACTIVITIESMeasures of the business activities support on the territory of the Kostroma region includes numerous forms

of the business activities stimulation at all stages of the business development. The main measures are as follows.

Level Form of support

Regional

1. Subsidizing of the small business beginners:- small innovative company subsidy;- self-business grants;- target grants for self-business establishment (entrance fee as per the leasing contract).

2. Subsidizing for the reimbursement of:- part of the small and medium business costs connected with the improvement of the - production effi ciency;- part of the costs of small and medium business, infrastructure subjects of the small and medium business support in the sphere of technological connection them to the power supply (in case their maximal power consumption is under 500 kilowatt).

3. Small and medium business subsidizing to recover the costs or defi cient income due to the innovative goods production (realization), innovative operations performing or innovative services extension.

4. Assistance in development of the youth business.Resolution of the Kostroma region Administration dd 31.03.2009 No 144-а «Concerning the regional target program «The development of small and medium business subjects in the Kostroma region» for the period from 2010 up to 2013»

Municipal

1. The small business beginners subsidizing for the self-business establishment.

2. Small and medium business subsidizing to reimburse a part of the credit interest rate in the spheres of business prior for the municipality.Certain legislative acts of the Kostroma region local authorities

24

LIST OF GENERAL NORMATIVE LEGAL ACTS CONCERNING THE INVESTMENT ACTIVITIES:1. Federal Law dd 25.02.1999 No. 39-FL «Concerning investment activities implemented in the Russian

Federation and performed by way of the capital contributions»;2. Federal Law dd 09.07.1999 No. 160-FL «Concerning the foreign investments in the Russian Federation»;3. Federal Law dd 17.05.2007 No. 82-FL «Concerning the Development Bank»;4. Federal Law dd 29.11.2001 No. 156-FL «Concerning the Investment Funds»;5. Federal Law dd 03.12.2011 No. 392-FL «Concerning the territorial development zones in the Russian

Federation and the alternation of certain legislative acts of the Russian Federation»;6. Federal Law dd 22.07.2005 No. 116-FL «Concerning the special economic zones in the Russian

Federation»;7. Federal Law dd 21.07.2005 No. 115-FL «Concerning the Concession agreements»; 8. Ordinance of the RF Government dd 01.03.2008 No. 134 «Concerning the adoption of the regulations for

formation and usage of the budgetary provisions of the Investment Fund of the Russian Federation»;9. Ordinance of the RF Government dd 30.06.2007 No. 419 «Concerning the prior investment projects in the

area of forest exploitation»;10. Law of the Kostroma region dd 14.10.1997 No. 12 «Concerning the investment activities in the Kostroma

region»;11. Law of the Kostroma region dd 03.03.2006 No. 8-4-LKO «Concerning the lowering of the organisation

profi ts tax for the users of the investment activity subjects»;12. Law of the Kostroma region dd 24.11.2003 No. 153-LKO «Concerning the assets tax on the territory of

the Kostroma region»;13. Resolution of the Kostroma region Governor dd 07.06.2010 No. 121 «Concerning the procedure for

maintaining a register of the investment projects of the Kostroma region»; 14. Resolution of the Kostroma region Administration dd 16.09.2008 No. 320-а «Concerning the adoption of

the regulations for the scheduling the payback period of the investment projects»;15. Resolution of the Kostroma region Administration dd 08.02.2011 No. 39-а «Concerning the Authorized

Body for carrying out the expert examination of the investment projects, the adoption of the regulations for carrying out the expert examination of the investment projects and for delivering of the investment agreements»;

16. Resolution of the Kostroma region Administration dd 13.09.2011 No. 348-а «Concerning the adoption of the regional program « The investment climate improvement in the Kostroma region for the period till 2015»;

17. Decree of the Kostroma region Governor dd 09.07.2012 № 762-r «Concerning the Investment Attraction and Investment climate Improvement Council of the Kostroma region»;

18. Decree of the Kostroma region Administration dd 03.12.2009 No. 382-ra «Concerning the adoption of the list of the priority areas of the investment activities in the Kostroma region»;

19. Decree of the Kostroma region Administration dd 31.08.2009 No. 279-ra «Concerning the concept clearance of the industrial policy of the Kostroma region till 2020».

PROGRAM OF THE INVESTMENT CLIMATE IMPROVEMENTRecently there was a regional program

“The investment climate improvement in the Kostroma region for the period till 2015” adopted. The aim of the program is to improve the investment climate by forming the political, fi nancial, economical, organizational, legal, social and cultural mechanisms which support the investments providing the economy increase, the goods and services production growth, the quality of life improvement, the operational efficiency advance and new jobsites creation.

All these measures will provide the stable socioeconomic progress of the region.

REGULATIONS OF THE BASIC ADMINISTRATIVE PROCEDURES

26

PROCEDURE OF RECEIVING WOODLOTS BY LEASE

Procedure Terms of performance

Holding an auction for selling the right to conclude a contract of a woodlot lease 60 days

Concluding a contract of a woodlot lease 11 daysRegistration of a contract of a woodlot lease (Kostroma regional Offi ce of the Federal Registration Service) 15-30 days

Providing a forest exploitation project – depending on the woodlot character 30-60 days

Carrying out a State expert examination of the forest exploitation project 30-40 days

Consideration of a forest declaration 10 days

PROCEDURE OF ACQUISITION A LICENSE TO USE SUBSOIL


Compiling the documents to hold an auction to acquire the right to use natural resources 10 days

Holding an auction 45-90 days

Issuing a license to use regional subsoil 20 days

Endorsement of the current mineral resources losses that exceeds the norms stipulated in the project documentation 20 days

27

LAND LOTS1. Procedure of the land lots assignment by lease for the building in Kostroma city with the not-demarcated

national property of the land lots. The object location is a subject of the preliminary endorsement.


Application acceptance, preparation of the request to the Kostroma city Administration about the possibility to place an object 5 days

Request processing at the Kostroma city Administration, request consideration at the Land Commission (choice of the land lot, determination of the permitted usage (target usage), preparation of the act for the land lot choice and preparation of the land lot layout)

60 days

The department of the land and property of the Kostroma region adopts a resolution for the preliminary endorsement of the object location, which approves the land lot choice

14 days

Providing the cadastral works on the account of the person applying for the land lot assignment 90-120 days

Land lot registration in the cadastre (Kostroma regional Offi ce of the Russian State Register) 30 days

The department of the land and property of the Kostroma region adopts a resolution to assign the land lot by lease 14 days

Concluding a contract of a land lot lease 14 days

State registration of the contract of a land lot lease (Kostroma regional Offi ce of the Federal Service of Registration, Cadastre and Cartography) 30 days

The average rental for the land lots in Kostroma calculating on 1 m2 varies from 2 up to 500 RUR per year depending on the type of the permitted usage of the land lot.

2. Land and land lots transfer from one category to another


Acceptance, registration and consideration of the documents performing by the department of the land and property of the Kostroma region 8 days

Preparation and endorsement of the Decree of the Kostroma region Administration project concerning the land lot transfer from one category to another 17 days

Adoption of the resolution of the land lot transfer 6 days

Providing an applicant with the resolution 5 days

28

TERMS OF THE ADMINISTRATIVE PROCEDURES IN THE BUILDING SECTOR


Issue of the resolutions for the artifi cial land lot creation in case of such creation on the territories of two or more municipalities 7 days

Preparation and issue of the resolutions for building or rebuilding of the capital construction objects which is planned to perform on the territories of two or more municipalities (districts) or which is planned to create on the artifi cial land lot. Prolongation of the validity terms of the stated resolutions and their alternations.

7 days

Preparation and issue of the resolutions for the commissioning of artifi cial land lots 7 days

Preparation and issue of the resolutions for the commissioning of capital construction objects built on the artifi cial land lots 7 days

Preparation and issue the town-planning of a district situated within the limits of the specially protected natural territories of the regional importance in the Kostroma region (except the medioprophilactic areas and health resorts), where building or rebuilding of the capital construction objects is planned

30 days

Issue (validity terms prolongation) of the resolutions for the building permit 10 days

Issue of the resolution for the object commissioning 10 days

RATES OF TARIFF

30

Power rates in 2012 (RUR/kilowatt/hour without VAT)

Power rates

Voltage levelHV

(110 kilowatt and more)

AV-I(35-20 kilowatt)

AV-II(20-1 kilowatt)

LV(0,4 kilowatt and

lower)From 01.01.2012 till 01.07.2012 2,71 3,49 3,54 3,95From 01.07.2012 3,01 3,87 3,93 4,38

Technological networking1. Rates of tariff of the technological networking for the consumer (applicant) applying for the technological

connection of the energy-consuming devices with maximal installed load not exceeding 15 kilowatt (including consumption of the same power outlet connected before) providing that the distance from the applicant`s lot limits to the objects of the power supply network of the required voltage level is not more than 300 meters in the towns and townships and not more than 500 meters in the countryside:

Applicants Rates of tariff of the technological networking

For legal entity, RUR/connection (per each power outlet), VAT not included 466,10

For private person, RUR/connection (per each power outlet), VAT included 550,00

2. Rates of tariff of the technological networking for the consumer (applicant) not coming within item 1 of the present rates of tariff of the technological networking of OAO «Interregional power distributing networking company of the Centre» - «Kostromaenergo»:

Voltage levelPower consumption to be connected

(together with the one connected before)

Rates of tariff of the technological networking (RUR/kWt/h without VAT)

2 category of safety

3 category of safety

up to 1,0 kW inclusive (0,4 kW)

up to 100 kWt inclusive 6 192 5 757From 100 kWt up to 750 kWt inclusive 6 911 6 090

3. Rates of tariff of the technological networking to the distributing networks of the branch of OAO «Interregional power distributing networking company of the Centre» - «Kostromaenergo» are calculated individually:

1) by the technological networking of the consumer power plants to the network with the voltage level higher than 35 kW and capacity higher than 10000 kWA;

2) by the technological networking of the consumer power plants to the network with the voltage level from 1,0 kW up to 35 kW (6-10 kW);

3) by the technological networking of the consumer power plants to the network with the voltage level lower than 1,0 kW (inclusive) and capacity higher than 750 kWA;

4) by the technological networking of the consumer power plants to the network with the installed load higher than 15 kWt and applying for the category of safety increase.

Weighted rates for the heat energy in 2012 (RUR/Hkal)

Weighted rates VAT not included VAT includedfrom 01.01.2012 up to 01.07.2012 1110,49 1286,00from 01.07.2012 up to 01.09.2012 1160,22 1343,50from 01.09.2012 1187,59 1375,31

Weighted rates for the water supply and draining in 2012 (RUR/m3)

Water supply Water drainingwithout VAT with VAT without VAT with VAT

from 01.01.2012 up to 01.07.2012 14,57 16,77 14,62 16,97from 01.07.2012 up to 01.09.2012 15,29 17,60 15,28 17,74from 01.09.2012 15,83 18,23 15,79 18,34

EXAMPLES OF THE EFFECTIVE COOPERATION

32

Nn Project name InvestorInvestment

volume, million RUR

Job sites

Agricultural sector

1 Construction of pig-breeding farm “Shuvalovo” in the Kostroma region ZAO “Shuvalovo” 425,7 17

2 Reconstruction of pig-breeding farm for 7000 heads OOO “Sharjinskiy bacon” 49,8 12

3 Creation of livestock farm for meat cattle breeding

OOO ARS “Russian Halloway” 148,0 17

4 Creation of pedigree centre for cows of French limousine breed

OAO “Hothouse gardening complex “Vysokovskiy” 200,0 14

Timber industry

5Production of plywood in assortment and work-pieces out of it for the furniture and building industries on the base of wasteless processing

Swiss concern “KRONOHOLDING AG” 12 350,1 1 501

6Expansion of big-sized plywood production at the industrial base of Kostroma mechanical plant

“SVEZA” Group 684,0 81

7 Reconstruction of plywood production at OAO “Manturovskiy plywood plant” “SVEZA” Group 1 148,0 844

Industry

8 Creation of pump-compressor pipes and pipes with insulation fi nish production OAO “Gazpromtrubinvest” 9 000,0 1 415

9Organization of mean diameter pipes production as per development strategy of OAO “Gazpromtrubinvest”

OAO “Gazpromtrubinvest” 10 043,0 560

10 Creation of enterprise for metal goods production with annual output of 30 000 ton

Finnish-Swedish company “Specta AG” 614,3 89

11 Technical re-equipment and reconstruction of production areas of cotton-spinning mill

OOO “Joint Stock venture “Kokhloma” 545,0 269

12 Creation of production of spare parts for sleeve assembly

ZAO “Kostroma autocomponent plant” 310,0 889

13Creation and putting into operation the crane truck production with elevating capacity of 60-100 ton

OAO “Galichskii crane truck plant” 250,0 1 474

14 Creation of the shop producing the welding coppered wire

OOO “Sudislavskiy welding materials plant” 110,0 264

Energy

15 Construction of building block boiler rooms OOO “RK “Energoprominvest” 65,5 17

INVESTMENT PROPOSALS

34

AGRICULTURAL SECTOR

Investment project Location TargetInvestment

volume, million RUR

Contacts

Construction of the refrigerated slaughterhouse with feedlot for heavy beasts

Sudislavl` district,Kostroma region

Creation of the infrastructural object in the meat livestock sector

200

The department of the Agricultural sector of the Kostroma region

Tel.: 007 (4942) 55-16-31Fax: 007 (4942) 45-65-41

Construction of the livestock farms on the territory of the Kostroma region

Municipal districts of the Kostroma region

Milk livestock sector development exceeding 100

Construction of the milk processing plant

Sudislavl` district,Kostroma region

Creation of the up-to-date milk processing production

150

Creation of the bioethanol production

Ostrovskiy district,Kostroma region

Ecologically clean production of the fuel performed out of the renewable raw materials

2 000

Organization of the fl ax-cultivation


Creation of the modern production for fl ax growing and stocking

1 700

BUILDING


volume, million RUR

Contacts

Construction of the cement plant, annual capacity - 2,7 million ton

Soligalich district,Kostroma region

Creation of the modern cement production

14 800 The department of building, architecture and town-planning of the Kostroma regionTel.: 007 (4942) 31-28-12Fax: 007 (4942) 47-10-94

Construction of the housing estate “Agashkina Gora”

Kostroma

Creation of the up-to-date residential complex

3 569,5

FUEL-ENERGY COMPLEX


volume, million RUR

Contacts

Construction of the building block boiler rooms


Creation of the modern system of the heat supply

100

The department of the fuel-energy complex and tariff policy of the Kostroma regionTel.: 007 (4942) 31-52-13Fax: 007 (4942) 37-34-01

35

WOOD PROCESSING COMPLEX


volume, million RUR

Contacts

Construction of the pulp-and-paper mill

Manturovo district,Kostroma region

Production of the competitive production capable to replace the imported paper and cardboard

51 000

The forestry department of the Kostroma regionTel.: 007 (4942) 55-15-12Fax: 007 (4942) 55-80-32

Creation of the oriented shaving board (OSB)

Bui district,Kostroma region

Satisfying the needs of the home market by the creation of the productions with the new technologies and equipment

5 500

Construction of the plant producing granulated timber-fuel (pellets) and lumber

Galich district,Kostroma region

Production of the granulated timber-fuel (pellets) and lumber

2 000

Creation of the production of furniture workpieces made out of birch

Shar`ja district,Kostroma region

Organization of birch sawing and processing

1 500

Creation of the integrated house-building factory

Chukhloma district,Kostroma region

Creation of the complete wood-processing production

900

Creation of the modern wasteless timber processing production

Vokhma district,Kostroma region

Production of the competitive goods 400

36

NATURAL RESOURCES


volume, million RUR

Contacts

Extraction and processing of sapropel at the deposit “Galichskoe”

Galich district,Kostroma region

Organization of the extraction and processing of sapropel, construction of the processing plant

580

The department of the natural resources and environmental protection of the Kostroma regionTel.: 007 (4942) 51-35-91

Construction of the ferrosilicon plant

Bui district, Kostroma region

Creation of the ferrosilicon production – the fi rst one in the European part of Russia

4 020

Peat extraction at the deposits “Kremnevo”, “Chapyzhnoe”, “Petrovskoe” and construction of the peat pellet plant

Pyschug district,Kostroma region

Extraction and supply of the peat fuel for the heat-generating companies

101,5

Loam extraction for the brick production

Bui district,Kostroma region

The natural minerals usage 150

Open-pit mining of the boulder-gravel-sand mixture

“Arkharovo”, Chukhloma district, Kostroma region

The natural minerals usage 245,7

INDUSTRY


volume, million RUR

Contacts

Creation of the energy-effi cient lamps production

Nerekhta district,Kostroma region

Production of the advanced technology products – energy-effi cient lamps

2 000The board of the investment and industrial policy of the Kostroma regionTel.: 007 (4942) 31-20-01Fax: 007 (4942) 31-87-33Creation of the

industrial park “Industrial`nyi”

Kostroma

Providing with the most comfortable conditions for the modern production organization

FREE GROUND AREAS INVENTORY

38

No Location Area, hectar Infrastructure description

Kostroma city district

1Land lot limited by the streets Industrial`naya-Bazovaya-Galichskoe highway

23,6There are all supply terminals available along the borders of the land lot. Transport: distance to the railway station - 5,4 km; to the river port – 11,5 km

2Land lot in the Moskovskaya street near the Klyuchevka -river

38,0 There are all supply terminals available along the borders of the land lot. Transport: distance to the railway – 1,2 km

3 Claster in the Magistral`naya street 59,6 There are all supply terminals available along the borders

of the land lot. Transport: distance to the railway – 1,0 km

4 Land lot in the Moskovskaya street 137,0

1) Power supply - own step-down substation for 220/110/10 kW with the capacity reserve of 20 MVt.Total consumption - 191,88 MVA

2) Gas supply – from distributing net of Kostroma city. Free gas capacities – 1000 m3/h

3) Heat supply – own boiling room with the water heating (4PTVM 50) and steam (2DKVP 20/13 – DKVP 10/13) boilers. Released energy – 75 Hkal/h with reserve of 50 Hkal/h. Total capacity in delivery water – 200 Hkal/h, in steam – 10 ton/h

4) Water supply – water is delivered from the Volga and from the artesian wells. Household water supply –up to 100 m3/h, total debit – 250 m3/h, free capacities – up to 100 m3/h. Water recycling is provided by 5 water-cooling towers with capacity of 1300 and 1200 m3/h. Free capacity – up to 500 m3/h

5) Water drain – water escape is performed via city collector in volume of 150 m3/h

6) Water treatment – buffer pool equipped with the aeration system, through load – 900 m3/year. Neutralization system:- Coolant drain – 20 000 m3/year;- Acid-based substance drain – 100 000 m3/year;- Chrome-containing drain – 36 000 m3/year.

Transport: distance to the Kosrtoma-Yaroslavl` motorway – 10m; 3,342 km of the railway runs in the territory of the lot.

5 Land lot in the Solonikovskaya street, close to No.6 4,35

The supply terminals are available in 300-500 m from the land lot borders. Transport: distance to the railway – 600 m;

39

No Location Area, hectar Infrastructure description

Kostroma district

6Land lot on the territory of Baksheevskoe rural settlement close to OAO “Motordetal”

40,0 There are all supply available along the borders of the land lot. Transport: distance to the railway – 300 m;

7 Land lot situated from the west side of the village Pustoshki 35,4

Gas and power terminals are 250 m far from the land lot. From the South the lot has the common border with the motorway Kostroma-V.Spasskoe (Nikol`skoe rural settlement) and with the railway from the North

8 Land lot surrounding the village Pesikovo 59,3

Power supply – VL-35 kW; has the common border with the railway on the South; distance to the motorway – 3 km.

9 Land lot to the North of the village Kharino 66,5

Gas and power terminals are 200 m far from the land lot. Distance to the motorway – 500 m; From the South the lot has the common border with the railway.

10 Land lot 500 m to the West from the village Gubachevo 1,5

Power supply – 500 m. Distance to the city centre – 7 km; distance to the motorway Kostroma-V.Spasskoe – 800 m; distance to the railway – 1,5 km.

Volgorechensk township

11

Land lot limited by:Volgorechensk-Ivankovo-Vladychnoe-Rostilovo-hole Pozdeevo-the Ivanovo region border up to Volgorechensk

3 600

1) Power supply – there two lines VL-220 kW on the territory of the land lot. The substation is needed;2) Gas supply – distributing net is 1 km from the land lot border;3) Heat supply – there are two variants: gas boiling room or central heating supply from Kostroma regional power station – distance from the land lot border – 6 km;4) Water intake facility are 1,5 km far from the land lot border;5) Sewerage system is 5,5 km far from the land lot border;6) Motorways:Volgorechensk-Ivankovo-Vladychnoe – 6 km of asphalt; Ivankovo-Tolstokvasovo-Gorki-Neronovo – 11 km of asphalt;Tolstokvasovo-Mikshino – 3 km of earth road;Vladychnoe-Rastilovo-hole Pozdeevo-the Ivanovo region border – 5,5 km of earth road.

40

CONTACTS

Kostroma region Governor

Sergey Konstantinovich SITNIKOV

tel.: 007 (4942) 31-34-72fax: 007 (4942) [email protected]

First Vice Governor

Ivan Vladimirovich KORSUN

tel.: 007 (4942) 31-35-16fax: 007 (4942) [email protected].

Vice Governor Deputy

Pavel Vladimirovich ALEKSEEV

tel.: 007(4942) 31-20-01fax: 007(4942) [email protected]

Kostroma region Duma Chairman

Andrei Ivanovich BYCHKOV

tel.: (4942) 31-62-52fax: (4942) [email protected]

Kostroma region Duma

Chairman of the committee on economic policy and business activity

Sergey Vyacheslavovich GALICHEV

tel.: (4942) 31-57-51fax: (4942) [email protected]

41

ADDITIONAL INFORMATIONIn case you have not fi nd the information you are looking for in this booklet and if you have any offers for

cooperation with the Kostroma region Administration, we ask you to fi ll in the following application form and send it to our e-mail address: [email protected].

This form can be found as well at the Kostroma region authority portal: www.adm44.ru.

1 Investor

2 Investment project name

3

Necessary resources, namely:

Land lot area

Civil engineering infrastructure with the capacity indication (electricity, gas, water)

railway, motorway

other resources (nature, forest etc.)

4Preferable location of the industrial site (city/town, region, distance to the regional or district centre)

5 Other conditions

6 Contacts

42

Notes

Kostroma region Administration15, Dzerzhinskogo Street 156013 Kostroma

Tel.: +7 (4942) 31 34 72www.adm44.ru

Body of Investment and Industrial policy of Kostroma region Administration

15, Dzerzhinskogo Street 156013 KostromaTel.: +7 (4942) 31 20 01

Kostroma region investment passport 2012

Investor Relations

Transcript of Kostroma region investment passport 2012