Investment potential of construction and building sector of Smolensk region

CONSTRUCTION AND BUILDING SECTOR OF SMOLENSK REGION

Construction and building sector is one of the most significant constituents of Smolensk region economy and determines its economic status to a large extent.

The major potential of Smolensk region building complex is made up of 503 subcontracting organisations with 39 thousands of people involved – which amounts to 8% of average annual number of employees engaged in the region economy; as well as 126 enterprises of construction materials supply and 38 design and survey organisations. The vast majority of building firms (94%) are small enterprises with up to 100 personnel employed.

The most significant organisations and enterprises of building sector are concentrated in Smolensk and Desnogorsk as well as in Dorogobuzh, Roslavl, Vyazma, Safonovo, Gagarin and Yartsevo districts.

Building sector is laid responsibility upon to solve a number of first-priority state tasks. The most important of them is to provide housing as a part of delivery of the national project

“Affordable and comfortable dwelling for Russian Federation citizens”. Currently there has been developed a number of regional programs implementation of which will ensure present increase of dwelling building growth, since the most important task was and still remains to be maximum enhancement of housing conditions for low-income groups of citizens, citizens entitled to benefits and placed on the waiting list. For this purpose there are reviewed issues of moving citizens from ramshackle and dangerous houses, reconstruction of old housing facilities, building of decent and individual housing facilities.

In 2009 there were commissioned 4587 flats with the total area of 345.7 thousands square meters which makes up 100.2% of 2008 rate.

The best performance indicators in Smolensk region were achieved in the following districts and towns: Smolensk –53.8% of dwelling facilities commissioned over Smolensk region; Vyazma district – 6.8%, Smolensk district – 6.1%, Roslavl district – 5.8%, Yartsevo district – 3.8%, Gagarin district – 2.7%.

The best performance indicators in blocks-of-flats commissioning among the leading build organisation were achieved by: AN “Garant-zhilyo” Ltd., that provided commissioning of 27.0 thousands m² otherwise 12.5% of the total dwelling commissioned in Smolensk region; closed company«Vash Dom» - 23,3 thous.sq.m. or 10,8 %; limited company «Smolenskaya Stroitelnaya Kompaniya» - 15,5 thous.sq.m. or 7,2 %; closed company «Smolstrom-Service» - 14,5 thous.sq.m. or 6,7%; public corporation trust «Smolenskagropromstroy» - 5,7 thous.sq.m. or 5,7%.

Furthermore, the basis for increase of housing property rate in Smolensk region is provided through low-rise apartments building.

In Vyazma district, Gagarin district, Yartsevo district, Kardymovo district, Smolensk districtе of Smolensk region and Smolensk and Desnogorsk 13 areas are laid out for low-rise building, 3 of them are provided with engineering infrastructure.

The following estates have been allocated for low-rise building:

-  village Borovaya (Smolensk district) – responsible builder - “Manufacturing company K-44” Ltd.

-  village Demenschina (Smolensk district) – responsible builder - “Grazhdanstroy” Inc.;

-  village Bylniki (Smolensk district) – responsible builder “Grazhdanstroy” Inc.;

-  cottage township “Euroderevnya” – responsible builder “Smolenskgazifikatsiya” Ltd.

In 2009 in compliance with the Regional target investment program there was undergoing building process of 38 regional facilities.

Within the program of social and civil engineering infrastructure development in 15 municipal districts of Smolensk region there were being built 16 facilities. One of the priority objectives of Smolensk region Administration activities is provision of gas supply over Smolensk region. Consideration of gas supply today guarantees establishment of real basis for living conditions enhancement and the region economy development. No wonder, the area of gas supply is equated with national projects.

In 2009 343,4 mln. rubles, or 66 % as compared to the prevoius year were provided on the account of all sources of finansing for construction and building gas pipelines. On the account of these means 332.2 km. of gas pipelenes were constructed, including – 238.4 km. of pipelines in rural areas.

As of 01.01.2010 gas supply with natural gas in Smolensk region made 64,26 %, in towns – 83,61 %, in villages – 27,99 %.

In 2008 social subprograms of the federal target program «Apartment housing» was being developed.

In the network of a subprogram «Apartment housing for young families» 189 young families residing at Smolensk region got certificates on social payment right for housing purchase.

111 participants of the subprogram «Apartment housing for categories of citizens specified by federal legislation and government obligation» got public housing certificates.

It is provided a stepwise increase of financing of the abovementioned programs.

In 2009 new production enterprises for construction and building works are put into operation, they are:

-   Safonovo plywood factory with capacity 90 thous.m3 per year.

-   Gagarin plywood factory with capacity 528 thous.м3 per year.

-   Glinka woodworking workshop (Chantsovo village) with capacity 2,2 thous.м3 per year.

-   Plant on production of dry construction mixtures closed company «Bautek» (Smolensk district) with capacity 60 thous.tons per year.

-   Limited company «Dorogobuzh» have made a reconstruction on restructure of the existing production for processing of calcium carbonate to produce cement clinker, in November of the current year facilities for 170 thous. tons of cement clinker per year were put into operation.

- Limited company «Dorogobuzh» is planning at a later date to complete works on the reconstruction and modernization of the technology on cement production by way of construction of milling facilities that is 400 thous. tons of cement per year.

Availability of cement plays a great role for our region. The new project is of great importance for the region economy, as at present cement is delivered from other regions. The estimated capacity of the plant will partially satisfy cement needs of our region, it will have a positive influence on economy of organizations and enterprises of construction complex.

The Smolensk region Administration made a decision to render a financial support to development of territorial planning and urban zoning aimed at Smolensk region complex development, in particular, growth development of housing construction volumes.

In 2008 and 2009 all municipal districts and town settlements, besides 40 rural settlements of Smolensk region got subsidies from the region budget for development of the layouts of territorial planning of districts, general plans, rules of land use and building to the amount of 92,6 mln. rubles.

Development of layouts of territorial planning is completed in all 25 municipal districts. In 11 of them layouts are approved, the rest are on the agreement stage.

Development of general plans, rules of land use and building in 25 town settlements is completed, in 8 of them – general plans, rules of land use and building are approved, the rest – on the agreement stage.

Besides, development of general plans, rules of land use and building in 21 rural settlements is completed, in 1 of them – general plan, rules of land use and building are approved, the rest – on the agreement stage.

Co-financing of the development of general plans and rules of land use and building of rural settlements is in progress in 2010. For these purposes 10 mln. rubles are provided in the regional budget. At present general plans, rules of land use and building of 22 rural settlements are on the stage of its development.

In accordance with the federal law dated 27.12.2009 № 354-ФЗ«Introduction of changes into the article 3 of the Federal law «Enforcement of the Land Code of the Russian Federation» and separate legislative acts of the Russian federation» is prolonged per 2 years until 01.01.2012 deadline for development of documents of territorial planning and urban zoning.

Over this period of time all municipalities of Smolensk region will be provided with documents of the territorial planning.

KEY ENTERPRISES OF CONSTRUCTION SECTOR OF SMOLENSK REGION

Construction organizations

The best showing among key construction organizations on multifamily housing reached the following ones:

•   «Garant-zhilie» Ltd.,
•   Group of companies «Grazhdanstroy»,
•   «Smolstrom-Service» Inc.,
•   «Vash dom» Inc.,
•   «Smolensk construction company» Ltd.,
•   «FSK «Vezh» Ltd.,
•   «Smolenskinveststroy» Ltd.,
•   «Megapolis» Ltd.,
•   «STROYGARANT-01» Ltd.,
•   «Firm «Podryad» Ltd.,
•   «Nash Dom» Inc.,
•   «Vyazmazhilstroy» Ltd.,
•   «Gagarinzhilstroy» Ltd.,
•   «Smolenskagropromdorstroy» Ltd.;
•   «Smolenskagropromstroy» Inc..

Enterprises of construction materials industrial production

•   «Smolensk plant of reinforced concrete construction-2» Ltd., «Reinforced concrete construction plant» Inc., «Vyazemsky DSK» Inc. (production of precast concrete);
•   «Brick factory» Ltd., «Gnezdovo» Ltd., «Tellura» Ltd. (manufacture of walling (brick);
•   «Smolensky DOK» Inc. (finish manufacture);
•   «Gnezdovo» Ltd., «Fayans» Inc. (manufacture of sanitary and ceramic fittings).

Plants on production of materials for low-rise building

•   assembly units for quick built houses on the basis of frames made of steel galvanized thermal profiles and metal sheets – «Arsenal ST» Ltd.;
•   wood houses (econom, elite) made of high quality log – «Krumis – S» Ltd., «Lespromsnab» Ltd.;
•   houses made of profile dry slid glued woodblock – «DOMOVIT» Ltd..

Gas supply organizations

•    «Smolenskoblgaz» Inc., «Smolenskgazstroy» Inc. et.al.. – construction of gas-distributing network, inside gas supply system works done;
•   «Tsentrmontazhavtomatika» Inc. – armory and assembly of BBS boiler-houses.

Planning and survey organizations

• Regional public unitary enterprise «Institute «Smolenskgrazhdanproekt»,
• Public unitary enterprise «Smolenskkommunproekt»,
• «Smolenskagropromtekhproekt» Inc.,
• «Smolenskagropromproekt» Ltd.,
• «Smolensk TISIZ» Inc.,
• «Arkhstroy» Ltd.,
• «Servicestroyproekt» Ltd.,
• «Smolensky promstroyproekt» Inc..

OUTLOOK

In the field of production:

• development of renewed output potential and material and technical infrastructure of construction sector on the basis of innovative technologies;
• reconstruction   and   reequipment   of   industrial   areas,   enterprises,   buildings, engineering network;
• development of new facilities and reconstruction of operating facilities being a constituent part of the enterprises using universal space-and-planning decisions, which provide quick adaptation of building facilities to changes of technological processes, load reduction of building facilities, time terms of construction of building facilities applied for production decrease;
• use of functional materials, including high-strength lightweight concrete with porous aggregates, light-gauge constructions, polymeric products.

In the field of architectural documentation:

• financial support of local government authorities of Smolensk region in development of documents for territorial planning;
• coordination, update, issue and approval of the general layouts and rules of land use and development of Smolensk region.

In the field of housing construction:

• while developing one of the priority national projects «Available and comfort appartment housing – to citizens of Russia» in the yaer 2009-2012 it is expected to build 1510 thous. sq. metres in Smolensk region according to the following schedule:
• development of new territories for multistoried complex building: - multistoried complex building in Milovidovo;

-   development of buil-over land in the streets of Bolshaya Sovetskaya -Krasina - Bakunina and landscaping of the Dnieper river in the city of Smolensk;

-   development of buil-over lands in the street of Shevchenko of the city of Smolensk;

-   low-rise complex building in Pasovo;

• providing the construction and reconstruction    volume    growth, development of qualitative charachteristics in building sector in accordance with the demand and social norms;
• construction   of  frame-type  houses   with   the  advanced   number   of  storeys development;
• development of low-rise building in two ways: low-rise dense building and building of single-family houses.

In the field of housing:

• to  provide  schemes  of  advance engineering  and transport network on the construction sites while planning new apartment blocks;
• to apply mostly materials, products and constructions of new generation with the longer validity time-term;
• to provide an autonomous (decentralized) heat supply systems per each apartment and not use outside heating network;
• to develop work activities on gas supply in Smolensk region.

In the field of regional programs:

• it is planned to build 38 facilities of regional importance in accordance with the Regional address investment program in the year 2010;
• the construction of the Federal centre of traumatology, orthopedics and endoprosthesis in the city of Smolensk will be going on;
• the development of the regional address program of resettlement of the citizens from old houses being under emergency aimed at promotion of housing market will be going on in 2009 - 2010;
• a work team on development of concept and project of the long-term regional program «Development promotion of house building in Smolensk region» for 2011 – 2015» is created.

The program activities will be developed with a glance of the complex approach to provide low-rise buildings with all necessary types of infrastructure, including rural areas. In Smolensk region more than 13 thous. families are out of comfort house conditions, every third family is waiting for 10 years and even more for the house condition improvement, More than 1,6 % of the population share of Smolensk region has slum dwelling.

The program activities will afford to improve housing conditions of citizens and families, who has a right to use maternal (family) capital. The program will create conditions for complex development of territories, for development of the local construction industry.

The region budget will be the source of financing of the subprogram. We do not exclude a chance to get a federal budget support in case of development and approve of the corresponding program by the Government of the Russian Federation.

Is  approved  a  long-term  regional  target  program  «Development  of  housing construction in Smolensk region» in 2009-2011. This Program includes: construction of municipal housing stock provided for social rent in accordance with the contracts; providing land lots with housing infrastructure for complex low-rise building; project development of territory planning which are provided for complex development of housing construction.

In the field of gas supply:

in the network of the existing gasification programs of Smolensk region it is planned to construct 420,9 km. of gas pipelines of high, medium and low pressure in the year 2009 the total amount of financing will make 349166,6 thous. rubles, that is:

- under the program of gasification of regions of the Russian Federation in 2010 projecting of gas pipeline to the Akatovo village – Shapkino village of Gagrin district and gas pipeline to Knyazhoe village of Pochinok district of Smolensk region is going to be financed.

In 2010 gas pipeline construction to Ekimovichi settlement of Roslavl district is going on, at present 15 km have already constructed (40,7 km – length on project);

- under the region investment project in 2010 it is planned to construct gas pipelines with its extent – 151,24 km, expected amount of financing 139036,0 thous. rubles; §under long-term regional target program «Development of agriculture and regulation of markets of agriculture, raw material and food in Smolensk region» in the year 2010 – 2012» there are sources of financing for construction of objects for gas-distributing networks at the cost of 125130,6 thous. rubles, with extent of – 164,5 km; §under the program of gas supply in Smolensk region which is financed on the account of special premium to the tariffs on gas transportation by gas distributing organizations construction of 13 objects for gas-distributing networks, at the cost of 85000,0 thous. rubles, with extent of – 64,474 km is planned.

In the field of construction materials production:

• new production capacities for construction materials output is planned to be developed in 2010: - stationary concrete-mixing plant МВ-25; - plant on production of cellular concrete;
• in 2011 limited company «Smit-Yartsevo» is planning to construct a new workshop on production of sandwich panels.
• efficient use of the local nature resources, in the first place wood and peat, is considered;
• modernization of operating enterprises is made, new outputs are made for mass production of the following construction materials and ware:

-         heat insulators including on the basis of peat, waste wood, porous concrete;

-         finish, including those which are made of modified wood;

-         high quality facing brick;

-         sanitary ware and ceramics products;

-         roof and waterproofing materials on the basis of weatherproof rubber, polymeric asphalt mastic, increasing its life duration and freeze resistance per 2 - 3 times.

In the field of education:

To provide the construction sector of Smolensk region with qualified specialists on the 22-nd of August 2008 the Smolensk region Administration and the Federal agency of railway (Roszheldor) made a target agreement of cooperation on education of specialists with high professional education. Furthermore four-sided target agreements were made between Smolensk branch of the RGOTUPS (РГОТУПС), enterprises of construction sector, school leavers, who showed the best results at the entrance exams, and Department of construction and architecture of Smolensk region.

Smolensk Construction College

33 thousandss of specialists were graduated from the college within the period of 65 years. At present 2000 students study at full-day and distance faculties. College has two buildings, dormitory accommodation per 400 places. 40 study cabinets are equipped with modern furniture, demo equipment, video- and audio, computers. 70 teachers have been working there, among them 4 honored teachers of the Russian Federation, 35 teachers of the first and highest category. College teachers are widely use binary and modular classes, role and business cases, focus group seminars, competitions, conferences, different kinds of computer and testing programs. Leading specialists from enterprises and city administration moderate certain kind of classes there.

EXPERIENCE IN INVESTMENT ACTIVITY

In recent years as a result of systematic activities of the region Administration on creation and development of the favorable investment atmosphere in the region, development of investment projects for new construction productions are developing together with the advanced ones.

The results of the major investment project of the last years in the town of Yartsevo of Smolensk region a public unitary enterprise of Moscow city «Foundry plant»was established. Upcoming full-size output of the enterprise makes 220 thous. tons or 4,2 mlrd. rubles. In April 2008 train of rolled section was put into operation. Further development of productive capacity of the foundry plant will be connected with the reconstruction of the productive capacity of the Мoscow plant «Serp i molot», moreover it is planned to create and develop the cast pipes production. The abovementioned will make possible to manufacture up to 440 thous. tons per year. Total output volume will amount 6,1 mlrd. rubles.

«Festalpine Arkada Profil» Inc.is a joint Russian Austrian company which produces metal shape of different use, basically it is used in a dry-type construction technology. This year the company plans to increase production volume in 137 % and output to the amount of 1,8 mlrd. rubles. Further growth is considered on the account of the development of new metal and assembly adjusting elements for cabling of routes and engineering systems use.

«Gagarin plywood plant» Ltd.– is a plant on wood particle board and plywood production including laminwood. The project of Gagarin plywood plant is considered to be one of the priority ones in a forestry industry of the Russian Federation, it is as large as European ones. It is planned to produce about 500 thous. cubic metres of the lamin wood particle board, 77 thous. cubic metres of laminwood and 68 thous. cubic metres of exposed wood. The estimated sales volume will make 4,5 mlrd. rubles per year.

«Arsenal ST» Ltd.opened the production of thermal metal shape for skeleton-type building (used for quick construction).

«Harper – Production» Ltd.– an enterprise with foreign investment of sanitary and hygienic pads production. Investment volume makes 368,3 mln. rubles, it is going to be put into operation in the year 2009.

«OSRAM» Inc.jointly with a German firm OSRAM GmbH, the latter has the majority interest, has completed the investment project «Development of luminescent lamps production at «OSRAM» Inc. in 2004-2008» in the year 2008. Total investment volume made more than 800 mln. rubles.