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How Primorye Attracts Foreign Investors to Agriculture and the Entertainment Industry - EastRussia |






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Bet on food and excitement

Primorye Attracts Foreign Investors to Agriculture and Entertainment Industry

Bet on food and excitement
Photo:, photo from the opening of the casino Tigre de Cristal
Ancient Roman "Bread and circuses!" Is quite suitable for describing the current situation in the investment sector of Primorsky Krai's economy. The outgoing 2016 year demonstrates: foreigners are ready Investing money and technology in the regional agro-industry and entertainment industry. Companies from Japan, China and South Korea expect the benefits of these investments, since Primorye, objectively, due to its climatic and geographical characteristics (a relatively warm and vast region) is a place where you can make good money on the oldest human needs - in food and excitement .

Sbiten, honey and acid for Japanese
In Primorye, the southernmost constituent entity of the Russian Federation in the Far East, the Russian government has been counting on a powerful logistic and industrial center for almost five years now. Introduced from 2015, the regime of the free port covering the good half of the region, plus three territories of advanced development (TOP), are intended, among other things, to become a giant pump to attract domestic and foreign investments into the economy of the Far Eastern region as a whole. First of all, from Russia's largest neighbors in North-East Asia - Japan, China and South Korea. And, it seems, there is already some progress. In particular, with regard to agriculture and the entertainment industry.

So, this year the Japanese engineering company JFE Engineering Corporation concluded an agreement with a large vegetable farm in the Primorsky Territory - FSUE "Dalnevostochnoe" - on the construction of greenhouses in the village of Surazhevka, at 60 kilometers north-east of Vladivostok. The area of ​​greenhouses is five hectares. The volume of investments is about one billion rubles.

In November of this year, the Chamber of Commerce and Industry of the Japanese prefecture Akita provided an official guarantee to the company "Ecoresources of Primorye" (specializing in the production of food products made according to old Russian recipes - teas, sbiten, jam, dried fruits, etc.) for signing an exclusive contract with The largest supermarket chains in Japan.

And Asia Union, a producer and exporter of seaside honey, agreed with potential partners from Japan to supply a pilot batch to this country before the start of the New Year holidays.

A number of agreements reached at the second Eastern Economic Forum in Primorye are confirmed in the framework of the recent official visit of Russian President Vladimir Putin to Japan. This was announced by the Governor of the region Vladimir Miklushevsky. The head of Primorye noted that within two days the delegation of the Plenipotentiary Representative of the President of the Russian Federation in the Far Eastern Federal District Yuri Trutnev, which included the Governor of Primorsky Krai, held several meetings with large Japanese business, including participants of the presidential economic forum in Vladivostok.

Separately, the governor of Primorye singled out the large trading house Marubeni Corporation, which has been working with the Dalnegorsky GOK seaside enterprise for the purchase of boric acid for more than 40 years. This is a premium product used in Japan for the production of LCD monitors. The head of the region noted that during the meeting they talked about the possibility of reconstructing the port of Rudnaya Pristan in Primorye for the possibility of calling foreign ships.

"Such changes would improve the economy of the enterprise, since it would be possible to transport raw materials for production, sulfuric acid, not through the whole country, as now, from Norilsk, but from Japan. This issue we began to discuss, "- said the head of the region.

Vladimir Miklushevsky noted, as well that Dalnegorsk can get the status of the territory of advanced development, - the corresponding application has already been sent to the Ministry of Economic Development of Russia. "We expect that the preferences provided by this regime will give a serious impetus to the development of the economy and attract investment. Creation of priority development territories on the basis of mono-cities will allow to speed up the diversification process, as it will serve as an incentive for creation of additional production facilities and will improve the social and economic situation of the settlement, "the head of the province stressed.

Relations between Primorye and neighboring regions are experiencing a new stage of development: the region is strengthening cooperation ties in the Asia-Pacific region in a new, trilateral format. The meeting was attended by representatives of the Primorsky Chambers of Commerce and Industry, the Japanese Akita Prefecture and the Yanbian-Korean Autonomous Region of the People's Republic of China. For the neighboring territory of the PRC, Primorye is the main trading partner. The turnover between regions last year exceeded 386 million dollars. And his nomenclature continues to expand, said Deputy Chief of the Secretariat of the People's Government of Cao Yongji County.

“We are developing cooperation in new industries, for example, in seafood processing, the volume of imports from Primorye last year was eight billion yuan, and this will exceed 10 billion,” added Cao Yongji.

Trilateral cooperation opens up new markets for China and reduces the time and cost of cargo delivery, the head of the Chinese delegation added. The president of the Chamber of Commerce and Industry of the Japanese prefecture Akita Miura Hiroki also confirmed that cooperation in this format is in the interests of the three territories.

According to the head of the Primorsky Chamber of Commerce and Industry Boris Stupnitsky, three territories are linked by close cooperation ties.
"If we look at the map, the distance from Akita to Vladivostok is 780 kilometers, from Akita to Yangtze - 950 kilometers. In this "triangle" is concentrated a large cargo base, which can be more efficiently distributed and used by the transit opportunities of Primorye. The conjugation of the strategies of the Primor'e-2 transport corridor and the new silk route gives another impetus to the expansion of foreign economic relations. We have accumulated a certain experience of cooperation and are ready to expand and convert it, "says Boris Stupnitsky.

Cows from China
China also keeps up, which, by the way, accounts for more than half of the foreign trade turnover of Primorsky Krai (about $ 3,5 billion in 2015). According to EastRussia in the regional department of agriculture and food, this year the Chinese livestock company "Tan Yuan" became a resident of the "Free Port Vladivostok". She intends to invest from 0,7 to 2,1 billion rubles in the construction of a complex for breeding cattle (cattle) meat and dairy breeds in Shkotovsky municipal district of Primorye.

Together with Chinese partners-investors agro-industrial companies of Primorye are already implementing a number of projects. Thus, OOO "Armada Company" is building a complex to grow cattle and produce pork (the volume of investments is about 600 million rubles). LLC "Elena" is building a complex for the production of feed (20 million rubles). LLC KH "Victoria" engaged in the reconstruction of dairy farms (90 million rubles.). LLC "Milk-Primorye" is building a livestock complex for 1800 cows (1,2 billion rubles).

- The agriculture of Primorsky Krai has a huge and not yet fully realized potential - we have only 65 – 70% of arable land, and in our immediate vicinity there are large sales markets: Korea, Japan, China. At the same time, competent application of modern technologies and scientific research allows us to avoid the negative impact of natural conditions on crops, to increase crop yields, as well as agricultural worker’s income, ”said the acting director of Primorsky Research Institute of Agriculture of the Russian Academy of Agricultural Sciences, Alexey Emelyanov.

By the way, more than 200 enterprises with investments from the PRC already work on the territory of the region. About a quarter of them are directly related to agricultural activities. The rest make a profit on trade, tourism, logistics and construction.

At a recent meeting with Vladimir Miklushevsky, Governor of Primorsky Krai, which took place on December 12 in Vladivostok, He Zhenwei, Secretary General of the Chinese Association for the Development of Enterprises Abroad, said that the PRC State Council had already received approval to establish the Russian-Chinese Regional Development Fund specifically for investment in the economy. The total amount of the fund will be 100 billion yuan. And the first tranche of 10 billion yuan (about 90 billion rubles) will be sent to Primorye Territory.

Koreans are interested in "Mikhailovskaya"
Businessmen from the Republic of Korea are also showing an active interest in the emerging prospects in Primorye. In the summer of this year, a number of South Korean companies showed interest in joining the agricultural “Mikhailovskaya” PDA, on a land plot of 25 thousand hectares. Investors are planning to implement a project for the production of vegetable products. The estimated investment is $ 28 million.

Moreover, in June, the ministers of agriculture in both countries - Alexander Tkachev and Lee Don Peel - signed a memorandum of understanding in conducting a joint study of the agricultural development of the Primorsky Territory. In fact, several South Korean agricultural enterprises are already successfully operating on the territory of the region. In particular, established by Univera and Hyndai Heavy Industries - in Khasansky, Ussuriysky, Khorolsky districts of Primorye.

Play East!
As for the entertainment industry, it is most vividly represented by the Primorye Integrated Entertainment Resort Zone (IRPK) created in the region.

Recall, the project began to be implemented three years ago, as part of a government strategy to distribute the entire gambling and entertainment business (with elements of gambling) across several regions of the country. One of them was chosen Primorye. Here, near Vladivostok, on the coast of the picturesque bay "Muravyynaya", it is planned to build over thirty hotels and guest villas, a yacht club, a ski slope and the infrastructure accompanying all this before 2023. The marketing calculation was made primarily for tourists from China’s neighboring Primorye, famous for their passion for roulettes, poker and all kinds of jackpots.

Several foreign companies from Southeast Asia have invested in the project: G1 Entertainment together with Melco International Development Limited, Malaysian company NagaCorp Ltd, Royal Time Primorye and Diamond Fortune Holdings Prim. The total amount of investment contracts signed was more than 113 billion rubles.

As a result, by November of last year G1 Entertainment launched the first entertainment complex (casino and hotel) in the Primorye gambling zone - Tigre De Cristal, having invested over eight billion rubles in its construction. During the year of work, the income from his work amounted to more than a billion rubles, and the amount of tax revenues to the Russian budget - 448 million rubles.

Today, G1 Entertainment intends to invest $ 500 million in the second part of its project in the Primorye IRKZ. The new complex with an area of ​​about one hundred thousand square meters will include: a hotel on 400-500 rooms, a shopping center, a food court, restaurants and bars, as well as conference facilities and a spa.

Another investor in the seaside entertainment industry has decided to become the Chinese corporation "Govay Tsayfu." Its head, Shi Weirsue, announced this intention to the governor of Primorsky Krai Vladimir Miklushevsky on December 12, during the above-mentioned meeting in Vladivostok. The volume of investments is not yet specified.

Representatives of the profile business themselves believe that little by little the construction will be completed and the wheel of the gambling entertainment business will be developed here, and the costs incurred will pay off with interest, bringing to the budget of Russia and the Primorsky Territory multimillion-dollar revenues.

According to the Governor of Primorye, Vladimir Miklushevsky, the main emphasis in the work of the entertainment resort zone "Primorye" will be made on the tourist-recreational, cultural and congress-exhibition component of the project.
"Many call the complex a gambling zone, but I tend to exactly the full name. After all, world experience shows that the income from gaming in such projects is no more than 40 percent of the total number of services. Therefore, we are going to focus on the tourist-recreational, cultural and congress-exhibition component of the project, "Vladimir Miklushevsky said.

- The calculation for Chinese tourists was true. Yes, in China there is now a slight slowdown in economic growth. But this does not in the least reduce the inherent in this nation all-consuming love of gambling. And Vladivostok is at their side. Residents of the North China provinces where it is more convenient to go here than in Macau. And for many fans to have fun from the same Japan or South Korea, Vladivostok has long been almost a native city. In addition, we must not forget about the resort component of IRKZ "Primorye". Here you can relax with the whole family on weekends or on holidays, not only to foreigners, but also to our citizens. Someone, for the sake of the Far Eastern exotics, is ready to come here even from central Russia. So, all investments will be repaid, - the optimistic expert in the field of gambling, the deputy executive director of the Russian association of development of gambling business (RARIB) Samoil Binder expresses optimistic confidence in the conversation with ER.

EastRussia Help
In 2016, the Investment Agency of the Primorsky Krai (the body responsible for attracting strategically important investors to the region) received 54 investment requests for support from economic entities. The total amount of declared investments is more than 491,5 billion rubles. In total, more than 160 investment projects worth about 1,3 trillion rubles are currently being escorted to the Agency.