The Governor of Khabarovsk Krai Vyacheslav Shport about what the region will present at the EEF

Did the Eastern Economic Forum actually become an efficient platform for expanding the possibilities of regions when it comes to investment attraction; what do big business representatives look for at such events, and what unique conditions is Khabarovsk Krai able to offer them – tells Governor Vyacheslav Shport.

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– One year has passed since the last Eastern Economic Forum was held. Is it already possible to summarize the performance of agreements reached back then?

– The First EEF, on the one hand, turned out to be very fruitful, in terms of signed memorandums of understanding and agreements. On the other hand, it was a kind of introductory meeting for investors. We have already initiated active work on most of the projects first voiced at the EEF. For example, on the sugar plant, a project of a Thai investor. Last year, they said that such a project would be interesting, we signed an agreement, and today we are examining this issue in detail. We met the company’s representatives in Singapore, and at the second EEF they intend to arrive with a ready designed solution, and we identified the land we are ready to provide for this plant. Here is a specific example of a project with significant amount of investments – USD 200 million at the first stage, when the sugar production line will be created, and at the second stage it is proposed to already move to sugar derivatives as well, and it is a brand new level.

– Were there any changes in the sphere of accelerated development of the Far East during this past year?

– There is something very important for us – at the fist forum, the Free Port of Vladivostok was mentioned, and now there is also the Free Port of Vanino already. During this time, we managed to initiate a proposal and to validate it, to defend it and to get approval from the President of Russia. This year at the forum we will present what directions may be developed in the Vaninsky District.

– What other new sites and projects will be presented by the region?

– We will put emphasis on the promotion of the region’s intelligence potential. This year investors offered the Ministry for Development of Russian Far East for Khabarovsk Krai 23 projects, seven of which were selected for presentation during the Forum. Business program of the EEF will include a discussion of our steps on the development of very different spheres: forest industry complex, touristic infrastructure of the Far East, logistics, industrial clusters – everything connected with investments, production, mastering of Advanced Special Economic zones. The second part – as in the previous year, is “The Street of the Far East”, where we will show, for sure, many things, including the lives of our indigenous minorities. However, based on the experience of the previous forum, we will try to build a more specific exposition.

– What will it consist of?

– We will present, for example, the Komsomolsk-on-Amur Aircraft Factory – the leader of aircraft engineering – through such innovations as assembling workplace of the assembler-riveter. All forum guests will be provided with a possibility to approach a work bench and to assemble the model of the Sukhoi SuperJet-100 aircraft from parts – to rivet it fast and to take it home. Such actions, first of all, are a good way to introduce Khabarovsk Krai to the people, and secondly – a possibility to take something home as a tangible memento. The most advanced technologies will also be presented interactively, such as real know-how – assembly instructions for one very complicated unit of the aircraft will be printed on the screen. This is a brand new theme, it has never been presented by anyone before; I think it will be interesting.

– So the bets are placed on external effects as well?

– Our pavilion is built in the form of a cube. It embodies the idea of intelligent production, different mathematical formulas used during aircraft designing are reflected on it. This is our strategy – everyone has to see that people with high IQs live in Khabarovsk. Our region is not intended for simple ground boring and oil pumping. We are sending a signal – let’s build production facilities. The first thing people coming with industrial projects ask – is not even land plot allocation, land plots go without saying. They ask: “Do you have staff and training facilities?” We have an entire system of personnel training and retraining here, and when an investor sees this, then specific talks start.

– And what else, except aircraft, can the Khabarovsk Krai surprise people with?

– There will be one more exhibit as well – the so called, full sized exhibit. The first vessel of the project A-45-2 constructed by Khabarovsk Shipyard, ordered by the government of Khabarovsk Krai, will be exhibited at the docks of Russky Island. It is unlikely that someone else has done something similar during the last few years in our country, and it is unlikely that some constituent entity of the Far East will be able to present something similar. This is a natural sample of success of our shipbuilding, and it will show that our region is tailored for production in any knowledge intensive industries. This will be the sense of all our exhibits, both real and virtual. My position is steadfast: the most important thing – is the person and his intelligence, which may be used to make life better. If there is no intelligence, someone can, let’s say, run around the exhibition with a shovel, but will not be able to convince anyone of anything this way. And we will show that our residents can create highly intelligent products.

– Are you planning to sign new cooperation agreements or execute certain investment projects?

– There will definitely be at least four – this is the number of projects already on my desk. Maybe there will be more. However, our task is not to run after someone and sign a bunch of documents. Negotiations with different potential investors and partners are ongoing. Agreements will refer to personnel training, support of small exporters of Khabarovsk Krai; we are also planning to sign agreements with Sberbank and RAO Energy System of the East. Regarding the projects, seven projects will be presented in detail – they have already passed the selection procedure. And of course, we will talk about all projects which may be implemented on the territory of Khabarovsk Krai. This Forum is a platform where everyone must show possibilities and specific features to the utmost. The better we present how we support and protect investments, the higher is possibility that we will attract investors.

– And to what place is the region inviting them to first of all?

– For example, to the Free Port of Vanino. We can show what preferential conditions are being created there, and investors will have to define by themselves what the business possibilities exist there. There are already coal and grain handling projects, as well as ship repairs, but it is not nearly the full potential of Vanino. One more site will be presented at this forum – the ASEZ in Nikolayevsk-on-Amur. It has neither been created nor confirmed yet, but the idea has been approved, a couple of investors have been found – and we will be looking for others. The region there is, of course, very remote, but also very promising.

– Did you have any new ideas during this past year in respect of existing ASEZ?

– A big work continues on those sites of Advanced Special Economic zones which belong to the greenfield category, i.e., without any infrastructure. To provide gas, water, energy supply are the responsibilities undertaken by the state, this is clear. However, we are faced with such nuances in the process of interaction with investors: not all of them are ready to build production facilities, although they want to invest into production. Thus there is an idea to create an industrial park, the Parus, on one of these sites, and to construct buildings there, tailored for the needs of specific investors. I think this will advance the process of attracting investors – finished sites ready for equipment installation will be snapped up faster. This idea came to us when we compared the Parus site with Amurlitmash site, on which there are, although old, but existing production buildings, and for business it is more easy to enter the latter, both psychologically and economically. Life experience shows that not every investor needs a site in an open field.

– What else does a major foreign investor need, to come to Khabarovsk Krai, in addition to preferences, staff and land with infrastructure?

– I held many meetings with foreigners. When I worked as a member of the State Duma, for instance, I interacted with investors building an oil terminal in De-Kastri under an agreement on production sharing. They were afraid that they would invest money and the money would be stolen. Such cases occurred, but those were hard times back then. They also worried about our technical inability to participate in the project, since they presented documents for the platform of the Amur Shipyard with all calculations made in inches. And as everyone knows, our production facilities operate in milliliters. And inches cannot be converted to the metric system accurately – giving integer numbers and a lot of digits after the decimal point. They said: you will not be able to do this. Nevertheless, we managed to convert all the documents and to build the platform. Such fears today do not exist. All investors say that we have a good investment climate here in the Far East, and this is specifically the achievement of the last few years. However, the relevance of personnel issues is obvious, and today we are rebuilding the entire system of staff training, we will introduce new qualifications and change the educational programs – tailoring them for specific investment projects.

– One of the sessions of the forum will be devoted to one more growth point – the development of the city of Komsomolsk-on-Amur. What will be discussed here?

– This is an instruction from President Vladimir Putin, issued in April by means of a special resolution adopted by the government of Russia on the comprehensive development of the city. We will present 27 development projects at this session of the forum. We will complete the construction of three facilities this year, including reconstruction of the drama theater and a new water intake structure. Next year, we are planning to construct an additional 11 facilities. We will show all the attractive infrastructural stuff – for example, the sports complex. Besides this, the Epsilon-2 Company will show what production it plans to organize on the site of the Komsomolsk Advanced Special Economic zone. This will be a separate complete story, focused on the work done following the results of the last message of the president to the federal assembly. Of course, it does not have any material results yet – the idea was made public only at the end of the last year, and converted to a governmental document this spring. However, the projects are being prepared already, and financial estimates are being calculated. The main work, in terms of construction, will start next year. For now, we are able to show at the EEF only a presentation of the infrastructure development of Komsomolsk-on-Amur, in a comparative format – how it was before, and how it is now: what is being done now, and what effect we expect to obtain.

– In which sessions on Far East development will the delegation of Khabarovsk Krai participate?

– We will participate in all sessions and all round tables – we are registered everywhere. However, we intend not only to discuss. Together with the TechnoNIKOL Company, we will conduct a grand opening ceremony of a new plant already built on the site of the Khabarovsk Advanced Special Economic zone – this will be a dramatic moment. We are the one in the Far East who has operating food production on the ASEZ – a greenhouse complex by the Russian-Japanese JGC Evergreen Company. We will show this as well. And in general, we have may implemented projects in the region, there are successful examples in all sectors, into which we can attract investors.

– The past EEF was a little bit chaotic, many investors visited it just to have a look. Is it clear that now the people are coming here purposefully, do they know what to ask and what to offer?

– Last year, and this is no secret, many foreign investors did not manage to join the forum at all, although they wanted very much to do so. Today negotiations of businessmen, potential investors and state authorities of all levels are held in order to reach the stage of document execution at this second EEF. This is the case with the progress of the sugar project by the Sutech Company, which I have already mentioned. The process is alive, and negotiations are ongoing. With knowledge of whom and what will be presented at the forum, people will have an opportunity to conduct talks one day, and then determine with whom they are planning to have a meeting the next day. However, here we have no such a technology of bringing together a project initiator and his potential partner with 100% probability. I, for example, have visited all leading global air shows during my lifetime, and some several times. I have even been to Australia, Chile, not to mention the leading sites. It never happens that, coming to such events, their participants already know everything in advance. At all such events have an element of chaos to them, and people meet by chance, get to know something unexpected and new, and they communicate. After all, if it were possible to build everything in accordance with preliminary agreements, maybe there would no need for forums: people would meet in the offices, sign a contract and start working.

– It seems that the element of novelty is mandatory for the success of any forum?

– I can give an example. Once our delegation from Komsomolsk-on-Amur took samples of ammunition rounds to one air show. Products from our munitions factory in the neighboring city of Amursk. They were not able to come, but I proposed that they prepared their samples and we would place them on our exhibition stands – in Farnborough, and in Le Bourget. And what was the result? Here are our airplanes, and the ammunition rounds close to them. And everyone came to touch the ammunition rounds since people, naturally, had become used to seeing aircraft at air shows. As a result – the factory now supplies ammunition rounds to the USA. And everything started with a presentation at an air show. Later they exchanged contact details, conducted meetings and started working together. This is an ideal example of what meetings at discussion platforms should end with.