Investment potential of industrial sector of Smolensk region

INDUSTRIAL SECTOR OF SMOLENSK REGION

There are 750 industrial entreprises including more than 260 big and medium-sized ones in Smolensk region. The major part of the industry is located in Smolensk and Desnogorsk, besides, in Dorogobuzh, Roslavl, Vyazma, Safonovo, Gagarin, Yartsevo districts.

The key industries of the region are power industry, machine-building, jewelry, food industry, chemical industry, production of construction materials. Their share makes more than 90 % of the total volume of industrial production in the region.

There are big industrial enterprises which are important both for the region economy and the economy of Russia («Industrial Enterprise «Kristall» Inc., «Dorogobuzh» Inc., Federal public unitary enterprise «Analitpribor», «Smolensk printing plant» Inc. etc.).

The machine-bulding and metal working industries consist of enterprises

for power machine-building, electrotechnical industry, instrument making industry, road construction and housing, machine-building for light and food industry, computing enterprises. The biggest enterprises are: «Roslavl autoaggregate plant АМОZIL» Inc., «Roslavlsky vagonoremontny zavod», «Arkada - Engineering» Ltd., «Smolensk aircraft plant» Inc., «Vyazma machine-building plant» Inc., «OSRAM» Inc., Federal public unitary enterprise «Analitpribor», «Smolensk autoaggregate plant АМОZIL» Inc., «Dorogobuzhkotlomash» Inc., «Aysberg» Inc., «Safonovo electric machine-building plant». Inc..

Machine-bulding and metal working are specialized in three major segments – metal working and casting, transport machine-building and equipment engineering.

The first segment enterprises are: public unitary enterprise of Moscow city

«Yartsevo   foundry   plant»,   «Sychevsky   electrode plant» Ltd., «Festalpine Arkada Profil» Inc..

The transport machine-building is presented at first by: «Smolensk aircraft plant» Inc., Roslavl and Smolensk autoaggregate plants, being the branches of Moscow «AMO ZIL» Inc., Yartsevo technological company, «Complex road machines plant named after M.I. Kalinin» Inc., «Roslavlsky vagonoremontny zavod».

The leading enterprises spesialized in the equipment output in Smolensk region are «Vyazma machine-building plant» Inc. and «Arkada - Engineering» Ltd..

The instrument making in Smolensk region is one of the most important sectors in industry of the region. The industry outputs control equipment (gas analyzers, power and heat supply meters etc.), automatic equipment, navigation and meteorological instruments, production of spare parts for use in complex machine manufacture. A great deal of of enterprises make products for military industrial complex. The main enterprises of instrument making are Federal public unitary enterprise «Analitpribor», «Smolensky zavod radiodetaley» Inc., «Izmeritel» Inc., «Piramida» Inc..

The electrotechnical industry is presented by such types of activity production as lightning, cabeling. The basic enterprises are: «OSRAM» Inc., «Gagarin lightning plant» Inc., «Engineering centre «Elektroluch»         Inc.,  «Smolensky elektrotekhnichesky zavod» Ltd., «Smolcabel» Ltd.. The electric tool production is a separate type of activity. It is presented by «Diffusion - Instrument» Inc..

Small and medium-sized businesses of Smolensk region are developed there.

The chemical and petrochemical industry is presented by plastic and chemical product manufacture. The key businesses of the chemical industry are: «Dorogobuzh» Inc., «Avangard» Inc., «Vayzma plant of synthetic products» Inc., «Roslavl chemicals plant» Inc., «Koltek-Spetsreagenty» Ltd., «Polimer» Ltd..

The light industry is presented by textile, clothing and shoe production. The following businesses output the major share of the field of the industry: «Smolensk hosiery factory» Inc., «Yartsevo cotton factory» Inc., «Sharm» Inc., «Roslavl knitting factory «April» Inc., Firm «Voskhod» Inc., «Vyazma clothing factory» Inc..

There are 75 enterprises of light industry. At present the key types of activity of light industry development are: clothing, textile and hosiery production. A wide range of textile products is made in Smolensk region: covers, pillows, mattresses, furnishing, cotton cloths, string and toys.

The forestry and wood working industry of Smolensk region includes 395 timber and wood working enterprises, developing such types of industrial activity as logging and transportation of wood, bold timber production, finish making, plywood making, manufacture of wood particle boards, furniture, log-houses, building structures. The leading enterprises of the industry are: «Igorevsky DOK» Inc., «Smolensky DOK» Inc., «Gagarin plywood plant» Ltd., «Smolensky DOZ» Inc., «Smolenskmebel» Inc., «Smolenskfanera» Ltd..

Smolensk region has a considerable store of larch wood at its disposal. Total amount of the store makes 321,4 mln. cubic metres. Annual increase of the wood reaches 3,6 mln. cubic metres and make it possible to log 3,1 mln. cubic metres per year without damage for nature.

The printing industry in Smolensk region is presented by such enterprises as the leader of national printing industry – «Smolensk printing kombinat» Inc., «Smolensk regional printing house named after V.I. Smirnov» Inc., «Smolensk city printing house» Inc., «The Mikhaylov printing house – S» Ltd..

The glass industry in the region is presented by: «Sitall» Inc., «Pervomaysky glass plant» Inc..

The food industry develops processing of the region agricultural raw materials. It occupies the fourth place in the region as regard to its production volume and has a wide specialization (milk, meat, flour-milling, baking, alcohol, alcohol beverage, fat-and-oil, fruits and vegetables). For several years Smolensk region occupies one of the first places in the Central federal okrug for production of tinned milk, dry milk, cheese and animal oil per head.

The industry of construction materials in Smolensk region is presented by precast construction, wall materials, construction ceramics, sanitary-ceramic fabrics, materials and fabrics made of polymeric raw materials, non-metallic construction materials. The key enterprises in the region industry are: «Vyazma concrete ties plant» - branch of «Russian railways» Inc., «Vyazemskoe kar’eroupravlenie» Inc., «Smolensk plant of reinforced concrete construction-2» Inc., «Polymerkrovlya» Inc., «Gnezdovo» Inc., «Vyazemsky DSK» Inc., «Vyazemsky schbenochny zavod» Inc.. A share of these enterprises makes 64 % in the total volume of the construction materials industry.

KEY ENTERPRISES OF INDUSTRIAL SECTOR IN SMOLENSK REGION

The Association «Smolensk diamonds»includes «Kristall» Inc. and its joint ventures. The «Kristall» Inc. has modern equipment; it is a leading cutting factory in Russia. The trade network of the association is presented in the world trade centres of diamonds and jewellery. The output goods are mostly exported. Foreign affiliated companies are opened: «Smolensk Diamonds» in Belgium (Antverpen), «Smolensk Diamonds Asia» in Hong Kong, «Smolensk Diamonds Israel» in Tel Aviv. In Russia the Smolensk «Kristall» delivers its goods to 30 Russian firms.

«Dorogobuzh» Inc.produces mineral fertilizers, it is a constituent part of the agroindustrial holding «Akron». The output goods are delivered both to agricultural enterprises of Russia and countries of near and far abroad.

The federal public unitary enterprise «Analitpribor»is a leading Russian enterprise in the field of development and production of gas-analysis devices. The enterprise produces more than fifty names of gas-analyzers. Among them: simple signalling devices used in housing, complex gas-analyzers and gas-analysis systems used in petroleum and gas industries, in chemical and coal mining, in metallurgy and energy.

«Smolensk aircraft plant» Inc.is specialized in manufacturing of multipurpose airplanes ЯК-18Т, СМ-92, СМ-92Тand some other models, and in rocket engineering. Several years ago the plant made more than 60 % of works under the program of development of orbital complex «Buran». In 2004 the Smolensk aircraft plant entered the corporation «Tactical rocket arming».

«Roslavl autoaggregate plant «АМОZIL» Inc. produces pneumatic braking devices for motor truck ZIL, КамАZ, МАZ and buses, spare parts for motor truck ZIL, modern hardware parts, fuel pumps.

«Smolensk autoaggregate plant» named after V.P. Otrokhov «АМО«ZIL» Inc. is a highly organized enterprise with modern production technology. The main product: different kinds of transmission (gear boxes) for motor truck, buses and tractors, road cleaning units.

«Sitall» Inc.is a leading enterprise of the region glass industry. The compan manufactures glassware (bottles, pots, perfume bottles) for such famous producers as: CocaCola, Baltimor, Bakhus, Putinka and others. The company is an affiliated entity of the concern «San-Goben Dejonker» (France).

«Safonovo electric machine-building plant» Inc.is specialized in production ofsynchronous and asynchronous motors of three phases AC with capacity 30 to 2000 kilowatt, synchronous generatos AC with capacity 50 to 1000 kilowatt, explosion-proof generatos, inductor motors. Since December 2003 the plant enters the RUSELPROM concern.

«Sychevsky electrode plant» Ltd.manufactures welding elecrodes for electric arc welding including electrodes with special characteristics used for welding of the equipment and pipelines of atomic electric stations, for welding of alloy thermal steel with maximum welding operation temperature up to 565°С.

«Roslavlsky vagonoremontny zavod» Inc. makes maintenance and repair works of open wagons, tanks for petrochemicals, tanks for chemicals, wagon spare parts.

«Complex road machines plant named after M.I. Kalinin» Inc.is specialized in highway engineering for summer and winter roads service. In 2008 the company started manufacturing a new product – dump-trucks Volvo (manufacture of the body and trucks assembly).

«Vyazma machine-building plant» Inc.makes different kinds of laundry washers for industrial use. The main kind of the product is a washer with loading up to 7 kg and a washer with maximum loading up to 240 kg of linen. By the end of the year 2002 a joint venture with Chinese firm «Vyazma-SI-LAYON» Inc. was made. It manufactures dry cleaners which were not made in Russia before.

«Arkada-Engineering» Ltd..The enteprise designs and makes automatic metal- working lines of sheet metal. It is specialized in quick building using steel thermal section profiles.

«Aysberg»  Inc. makes  a  wide  range  of refrigerators  and  freezers having improved consumer properties including new ozone safe technology. Their trade marks are «Atlant» and «Smolensk».

«Dorogobuzhkotlomash»    Inc.    produces    hot-water thermalclamping boilers with capacity 0,05 to 209 megawatt, hot-water boilers-utilizers for burning of wood wastes at wood-working industrial enterprises. The launching of new hot-water boilers of different heating capacities, boilers for combined operation of hot water and saturated vapor is developing. 

«Igorevsky DOK» Inc.manufactures high quality wood particle board. Every year the enterprise works up to 450 thous. cubic metres of wood.

«Smolensk printing kombinat» Inc.prints textbooks, magazines, books and workbooks.

OUTLOOK

For the last years a positive dynamics of industrial production is seen. In this respect the economic growth possibilities are subject to be influenced by the following macroeconomic and specific factors of the region:

-         favourable  infrastructure  of communications;

-         proximity to the main megapolises of the country;

-         increase of investment activity;

-         availability of natural resources for opening of new productions on deep processing of wood, cement, petrochemicals;

-         competitive ability of the leading region manufacturers of jewelry, chemical, printing, machine-building production, electric products in the world market;

-         precondition availability for development of clusters;

-         clear regional government industrial policy which includes organizational, economic, law, innovation activities aimed at providing a steady development of the region industry.

One of the positive tendencies of the industrial development is an expansion of the investment process, for instance engineering updating of fixed assets, use of free areas (including the Moscow productions development), organization of new enterprises and enterprises in perspective sectors of the economy: construction materials production, wood working, machine building and electric industry.

The Smolensk region Administration pays much attention to increase of the potential of the region industry, diversification of its branches, providing a complex system for creation and development of facilities.

-    A systematic and hard work with potential investors is being made.

-    A long-term region target program «Development of small amd medium-sized business in Smolensk region» in 2009-2011 is developed. The program provides a complex approach to creation of favorable business atmosphere. All ways of its implementation are developed. In the last year work activities on microfinancing of small business were organized.

- Cluster-based policy of modern instrument was put into practice, provided a complex approach to the development of enterprises with the same kinds of activity, located closely to each other. Development of clusters is based on self-organization of enterprises and educational and scientific establishments, materials suppliers, providers of business and specialized services, government authorities of different levels. By the end of 2008 instrument-making enterprises and educational establishments signed an agreement of Innovative technological electronic cluster in Smolensk region initiative.

For       industrial       areas       engineering communications the land lots are allocated in the districts of the region. To achieve the abovementioned purposes the Department of economic development and trade of Smolensk region established «Agency for investment development» Inc. with 100 % participation of Smolensk region.

To achieve the Program objectives and estimate its resuls it is necessary to make the following purpose tasks:

– to single out point areas for economic growth and organize industrial enterprises there;

– to develop a government support to the investors implementing investment projects in Smolensk region;

– to develop more active presentation and exhibition activity. To achieve the established purposes and objectives it is planned to develop the following areas.

– Industrial store area (park) «Smolensky». It has the following chracteristics: area more than 640 ha, favorable transport and future logistic location; availability of engineering communications; availability of labour market; a lot of transport ways for future employees. An optimal place for store – park is considered Smolensk district of Smolensk region. As a result it is planned to make 6 000 new jobs.

– Industrial area for production of autocomponents in Roslavl of Smolensk region. Its characteristics are: an area of more than 200 ha; favorable transport and future logistic location (three federal routes – Minsk, Moscow and Bryansk); availability of engineering communications (electricity, gas, water supply, sewerage); availability of labour market; a lot of transport ways for future employees; the industrial area will enable the development of spare parts production for vechicles manufacture. As a result it is planned to make 6 800 new jobs.

– Multimodal transport and logistic centre in Vyazma district of Smolensk region. In connection with raise in prices of resourses (labor force and lands area) in the capital of Moscow some of productions will be developed outside it, among them large-size cargo operations, transit traffic and other types of activity.

That is why it is necessary to develop transport-logistic centres with the following characteristics: total area 296 ha; place location – nearby the Moscow transport hoist ring; living area is located far; road access for multimodal types of transport; arrangement possibilities for production enterprises on assembly, pick-and pack, sorting by commodity in its territory. The centre will optimize the territorial development of transport-logistic service facilities for international and interregional cargo transportation and integrate Smolensk region into a single and the one transport-logistic system of the Russian Federation.

– Industrial store area (park) on construction materials production (Vyazma district, village of Stepanikovskoe near Pyzhovka village) is planned to develop. Total area 346,2 ha (two stage development), with 100 ha for future development; the enterprises will use the local raw materials: keramzite clay, lime sole, gravel sand, sand ballast; sales markets: Moscow, Moscow and Smolensk region. The market of construction materials is rapidly developed (20 % per year). The land area is located near sales markets; there is a high road access. At present several enterprises make their activity there: plant of concrete products, Vyazma brick plant, plant of concrete ties etc.. The area startup will develop an industrial centre of Vyazma. The output product will influence on the development of construction industry in Smolensk and Moscow region.

The abovementioned factors, by no means, will influence on future economic development of Smolensk region.

In the near future the following industries will be of top priority for Smolensk region:

-   production of plastic goods;

-   production of metal hardware;

-   production of equipment;

-   production of transport facilities;

-   production of arming and military facilities;

-   production of chemicals;

-   production of construction materials.

EXPERIENCE IN INVESTMENT ACTIVITY

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

As a result of the major investment project of the last years in the town of Yartsevo of Smolensk region a public unitary enterprise of Moscow city «Yartsevo 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.

«Koltek-Spetsreagenty» Ltd.makes 4000 tons of biocide per year to the amount of more than 500 mln. rubles. At present it develops projects on three new industrial installations (with total power more than 10000 tons per year).

«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 e