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Investment potential of the region
The Volgograd region is one of the most dynamically developing Russian regions possessing unique advantages for implementation of investment projects in different economy branches.
Volgograd region is one of the most investment-attractive regions of the South of Russia.
In the course of the last several years the economy of the Volgograd region showed stable growth in investment inflow, which amounts to 35–55 % annually. Despite the crisis of the world economy the investment volume into the region’s economy grew in 2008 and equaled 82.6 bn rubles. The Volgograd region takes the third place in investment attraction among the regions of the Southern Federal district, following the Krasnodar krai and the Rostov region. Major investments are spent on development of processing industries, transport and communications. Growth of the Volgograd region investment potential, positive tendencies in economy and finances are confirmed by Russian and international rating agencies.
High industrial potential
The Volgograd region is an important industrial region of the South of Russia. It produces some 30% of industrial output of the Southern Federal District. This index counted on a per capita basis places the Volgograd region into a leading position among the regions of the Russian Federation. The region’s industry outputs approximately 30% of the gross regional product.
The most developed industrial sectors are: machine building and metalworking (cranes, bearing parts, tractors, agricultural machinery, metal-cutting machines, cables), ferrous and non-ferrous metallurgy (steel, rolled steel), chemical and petrochemical industries (oil, petrol, diesel, caustic soda, chemical plant-protecting agents, synthetic resin and plastic, tires, fibers and chemical yarns, synthetic rubber); food industry, construction material production.
Developed transport infrastructure
The Volgograd region has a favourable geographical position in the Southern Federal District of Russia. Its borders with the Rostov, Voronezh, Saratov and Astrakhan regions, Kalmykia and Kazakhstan Republics enable to create an optimal logistics infrastructure.
Transport infrastructure of the region includes Privolzhskaya railroad, large highways, such as Mosow – Volgograd – Astrakhan; Kharkov (Ukraine) – Volgograd – Astrakhan – Kazakhstan; Moscow – Volgograd – Rostov; Volgograd – Saratov and Volgograd – Elista (Kalmykia), which ensure reliable transport connection between the cities. The lower courses of the Volga and Don rivers, linked by the Volga-Don navigable channel, create suitable conditions for transportation of different cargoes from the ports of European states to navigation zones of Africa and Middle East.
Volgograd has an international airport servicing regular air tracks to large Russian and near foreign cities. The Volgograd region is an important corridor of business activity of Central Russia with Russian and foreign southern regions. The Volgograd region is the main Russian gate to Iran, Iraq through Caucasus and to India through the Kazakhstan Republic.
Developed engineering infrastructure and generating capacity potential
The Volgograd region disposes of considerable electric power reserves presented by Volzhskaya Hydro-Power Station and thermal power stations. Volzhskaya Hydro-Power Station is considered to be one of the largest power stations in the world.
The region has a well-developed engineering infrastructure and all the necessary power reserves of water and gas supply.
Various mineral resources
The Volgograd region favourably differs from other Russian regions by significant reserves of natural resources, such as:
• raw hydrocarbons – oil, condensate, gas. The Volgograd region is an old oil-extracting area, characterized by deep extraction of oil;
• chemical raw materials – potassium, magnesium and sodium salts, phosphorites, which make the prerequisites for creation of a large complex of complementary chemical production lines and organization of mineral fertilizers and polymers output;
• raw materials for metallurgical and construction materials industries – carbonate and sand rocks, cement, clays for different purposes, iron ores, non-ferrous and rare metals;
• bischofite – a raw material for medical, agricultural, building and finishing materials.
Favourable natural and climate conditions for agricultural development
The Volgograd region is one of the biggest producers of agricultural products in the Russian Federation. It is one of 10 Russian leading regions in production of grain. The Volgograd region agricultural complex numbers more than 12 thousand farms and more than 500 large and medium collective agricultural enterprises. Crop sector accounts for 65% of the region’s agricultural output, while the rest 35% is produced in animal breeding sector. Total area of cultivated lands equals 8.8 mln hectares, including 5.9 mln hectares of tilled land. By the area of cultivated land the Volgograd region ranks third among other Russian regions. Good natural and economic conditions and resources define the role of the region as a big grain producer, including production of hard and strong wheat, sunflower, mustard and vegetables. The Volgograd region is a large sales market of agricultural produce.
Unique tourism and recreation potential
Rich historical, cultural and recreation resources, such as warm climate, health improvement conditions, mineral waters, therapeutic muds and brine of the Elton lake as well as a number of nature parks form the region’s potential for organization of historical and ecological tourism, development of services sector, education and culture.
In Volgograd there are: “Old Sarepta” State Historical-Ethnographic museum and “Stalingrad battle” State Historical-Memorial museum, 447 unique historical monuments. Main sites of the city are the Mamaev Hill and the 52 m high sculptural composition “Mother-Russia calls for!” weighing 8 thousand tons. The sculpture, standing on top of the hill, is the symbol of the city.
Those who like active rest can choose among dozens of possibilities: trips by the Don, Khopyor, Medveditsa and Akhtuba rivers, biking and horse riding tours, hiking.
Advantageous conditions for real estate development projects
Today more and more investors are becoming interested in implementation of real estate development projects in Volgograd and the Volgograd region. Construction of logistics complexes, business centres, hotels and housing are of major interest. Such well-known world companies as OOO “IKEA MOS”, OOO “Ashan” and “Accor” Group have already chosen Volgograd for implementation of their construction projects.
A lot of undeveloped territories, possibilities for reconstruction of built-up areas and strong demand for real estate property ensure competitive advantages for implementation of large-scale investment projects in the urban areas of the Volgograd city.
High science and technical potential
The Volgograd region is characterized by a huge potential of skilled workforce. The Volgograd agglomeration reserve amounts to 840 thousand people of employable population. Volgograd is a historical scientific centre of the South of Russia. In the region there are more than 60 state and non-state institutions of higher education, 38 research and engineering organizations and laboratories including 4 R&D establishments of the Russian Academies of Medical and Agricultural Sciences.
A technology transfer centre, venture fund and regional business-incubator are successfully functioning in the region. Development of regional technological parks is a near-term prospect.
Stable links with foreign countries
The Volgograd region is successfully collaborating with partners from 103 distant and near foreign countries. The most important trade partners are Germany, Ukraine, Kazakhstan, Iran, Turkey, the USA and the Netherlands. Major export products are oil and oil products (42%), the second position is taken by metals and metalware (36%), followed by chemical products (11%).
Dynamic financial infrastructure
Today more than 80 financial organizations are functioning on the territory of the Volgograd region. The biggest financial organizations dealing with investment project financing are: “Sberbank of Russia’, “VTB-Bank”, “MDM-Bank”, “Gasprombank”, “Uralsib”, “Vozrozhdenie” Bank.
Besides, on the territory of Volgograd there are offices of practically all large Russian insurance companies: “Rosgosstakh-South”, “Military Insurance Company”, “Ingosstrakh”, “RESO-Insurance”, “Renaissance-Insurance”, “Yugoria”, ‘Rosno”, “Russia’ and others, which can render risk-insurance services.
The regional financial organizations are collaborating with about 30 leasing companies, the largest o which are: “Volgograd Regional Leasing Company”, “Karkade-Leasing”, “Europlan”, “Likon”, “RMB- Leasing” and others.
The local law foresees a number of preferences for leasing companies in the form of budget loans, guarantees, tax privileges.
Volgograd region is one of the largest Russian regions
The Volgograd region is situated on the territory of 113.9 thousand sq kilometers. This is the largest region of the Southern Federal District of Russia with 1506 settlements united into 39 municipal entities.
Volgograd region ranks 17th among the Russian regions in population.
Today there are 2.7 mln inhabitants in the region with 75.2% of urban and 24.8% of rural population.
Volgograd is the centre of the Volgograd region and one of 12 Russian million-cities
Volgograd is the centre of the “Big Volgograd” agglomeration, where the major region’s industrial and labour resources are concentrated. The city stretches for more than 90 km along the Volga river occupies the territory of 56.5 thousand hectares. The population of the city exceeds 1018 thousand people. Volgograd is the geographical centre of the southern Federal District. The city’s unique geographical position ensures economic links with the regions of the Caucasus, Urals and Donbass and enables to locate new factories.
Region’s progressive investment law foresees a number of preferences for potential investors
The Volgograd region pursues liberal investment policy and offers a lot of legislated impetuses for investors.
The Volgograd region law from 14.02.2002 № 668-ОД «On investment activity in Volgograd region» defines the following state support measures:
• partial repayment of bank interest rates;
• support in infrastructure development;
• tax privileges for investors and participants of investment activities.
According to the Volgograd region law from 28.04.2007 № 1455-ОД «On state guarantees in Volgograd region» investors are provided with state guarantees. Administration of the Volgograd region renders support to investors at different stages of project implementation – from concept elaboration, selection and approval of a land plot to putting the objects into service.
Considerable remoteness of Volgograd region from zones of conflicts and risk investments
One of the factors of investment appeal of the Volgograd region is its remoteness from the zones of social and international conflicts.
Nowadays the Volgograd region disposes of all the economic conditions necessary both for implementation of investment projects in different sectors of economy (including construction of new factories) and for organization of constituent parts production at the existing factories.
Today the Volgograd region offers very comfortable and attractive terms for investment projects implementation in Russia.