Russia moves industry abroad

“The Russian authorities are creating technology parks and industrial zones in Central Asia and North Africa. Plans include China and Cuba. This should make it easier for enterprises to access foreign technology and facilitate marketing. Kazakhstan goes its own way,” writes the MASHNEWS portal.

Parks of Uzbekistan

In the Jizzakh region of Uzbekistan, on April 24, the chemical-industrial park "Jizzakh" began to work. This is the second joint technopark created by the Uzbek and Russian authorities. A year earlier — March 23, 2022 — Technopark "Chirchik" was opened in the Tashkent region. He works in cooperation with the Kazan technopolis "Khimgrad".

In "Chirchik" it is planned to attract about 50 residents associated with the chemical industry on an area of 31.2 hectares. According to the press service of the rais of Tatarstan, now in «Chirchik» work began on 20 projects with a total investment of 127 million US dollars.

So, Rustam Ramazanov's Bionovatic Group of Companies will produce in Chirchik biopesticide — biological plant protection products (investment — 1 million US dollars). OJSC "Krastsvetmet" (refinery, work with precious metals, owned by the Agency for State Property Management of the Krasnoyarsk Territory) will invest 8.9 million US dollars in the production of catalytic systems from platinum group metals for the production of nitric and hydrocyanic acids. OOO "VR-Plast" (founder — Vasily Novokshonov from Kazan) — thermoplastic elastomer granules and products thereof: window seals, watering hoses (USD 3.5 million).

New industrial park "Jizzakh" is designed to attract 36 residents and 60 million US dollars of investments. As in Chirchik, there are tax incentives here, a partial refund of the interest rate on loans is offered, customs duties on the import and export of equipment, as well as raw materials and materials for the production of products intended for export, have been abolished.

Marked "Made in Egypt"

The Ministry of Industry and Trade of the Russian Federation reported to MASHNEWS that the department is looking for potential sites in the format of special economic zones and special economic zones for locating Russian production facilities on the territory of friendly countries.

"The countries of Central Asia and North Africa are considered as potential sites", — said in the Ministry of Industry and Trade.

The most relevant example, officials consider the Russian industrial zone (RPZ) in the economic zone of the Suez Canal. Following the results of the 14th meeting of the Russian-Egyptian Inter-Parliamentary Commission (held on March 20, 2023), a protocol was signed on amending the intergovernmental agreement. This document assumes the expansion of opportunities for RPZ resident companies.

"This industrial zone will become a reference point for Russian enterprises to enter the markets of Africa and the Middle East", — consider in the Ministry of Industry and Trade.

It is assumed that the industrial zone will have two sites, but now they are gathering residents for the first — at the southern entrance to the Suez Canal.

The advantages of the Egyptian site include the absence of the need to create a joint venture with an Egyptian partner and the ability to do without a licensed local exporter / importer. Duty-free supplies of equipment for the needs of production in the industrial zone. The possibility of obtaining the Made in Egypt label on products.

Restrictions for residents: no more than 10% of foreign workers in production (they promise that the share of foreigners can be increased, but with special permission from the zone management).

Agreements of intent to become participants in the industrial zone were signed by 29 Russian enterprises. Including — Kursk electrical apparatus plant, Belgorod hydromechanical plant, NPO "Radio engineering systems" from Chelyabinsk, an electrical equipment plant from the Pskov region, the Botlikh Radio Plant from Dagestan.

Produce in Asia, import to Russia

Such projects have great potential, says Yuri Shilov, business ambassador of Delovaya Rossiya. in Uzbekistan. Partner countries provide Russian companies with specialists, infrastructure and access to foreign technologies.

“To solve the problem of anti-Russian sanctions completely, of course, will not work, but cooperation with partners will certainly help to solve some problems. We can produce part of the products on the territory of Uzbekistan and import them to Russia in the future, — says Yuri Shilov.

In Uzbekistan, there is a huge demand for a variety of products — from solar panels to airport equipment, he notes. So Russian manufacturers are expanding markets.

Central Asian countries also win — they get the opportunity for technological development, transfer and testing of new technologies, they add to the Association of Industrial Parks of Russia (AIP). “Particularly relevant are joint projects in science-intensive sectors of the economy and in those niches that have suffered as a result of sanctions: radio electronics, pharmaceuticals, biotechnology, mechanical engineering, machine tool building, instrument making, etc.”, — comment in AIP.

Tajikistan plus Cuba

Other former Asian republics of the USSR are also ready to open technoparks jointly with Russia. Projects are being discussed with Tajikistan, Lilia Gumerova, head of the committee of the Federation Council of the Russian Federation on science, education and culture, reported in December 2022.

In April 2022, an agreement was signed on the creation of a joint Eurasian Technopark "Ala-Too" on the basis of the academic consortium "International University of Kyrgyzstan". This technopark should specialize in projects in the field of agriculture, energy and satellite technologies.

Russian-Chinese projects of industrial zones and industrial parks are being discussed, AIP says.

In Cuba, it is proposed to create an industrial park of the EAEU on the territory of the special development zone "Mariel" (45 km from Havana).

Kazakhstan went its own way

It is noteworthy that there are no plans to create joint technology parks at the state level between Russia and Kazakhstan.

According to the National Bank of the Republic of Kazakhstan, in 2022 Russia reduced the volume of direct investments in the economy of Kazakhstan by almost 20% (to $1.5 billion) compared to 2021. The Russian Federation ranks fifth in terms of investment, behind the Netherlands (they invested $8.33 billion in Kazakhstan in 2022), the United States ($5.1 billion), Switzerland ($2.76 billion) and Belgium (1. USD 56 billion).

On the other hand, Russian enterprises are actively transferring their business to Kazakhstani jurisdiction without any involvement of the authorities. According to the Bureau of National Statistics of Kazakhstan, as of April 1, 2023, 17,138 legal entities from Russia were registered in the country — this is almost 1.5 times (by 5672 units) more than in January 2022. According to this indicator, the Russian Federation ranks first in Kazakhstan (in second place is Turkey, whose representatives registered 5,026 legal entities in Kazakhstan by April 1 this year against 4,770 as of January 2022).

For example, the Irbit Motorcycle Plant (Sverdlovsk Region) last spring postponed the production of Ural motorcycles. in Kazakhstan's Petropavlovsk. As the owners of the plant explained, if it were not for the move to Kazakhstan, the enterprise would have to be closed, since it became impossible to import components or sell motorcycles abroad due to sanctions.

The manufacturer of car covers and rugs Rival (Yekaterinburg) relocated the company to Kostanay. The Ural Spring Plant also intends to launch the production of springs, springs and wire products.

Analyst at the Institute for Economic Research (Astana) Vadim Novikov believes that businessmen from the Russian Federation tend to relocate to Kazakhstan, since it is easier to do business here, many bureaucratic procedures are more transparent than in other Asian countries.

Kazakhstan is more oriented towards Western countries than other Asian countries (for example, English common law operates on the territory of the Astana International Financial Center). Therefore, for Russian enterprises that want to maintain contacts with Western partners, this country today — the best platform for business, experts say.