Chemicals Cluster In The Urals Region Of Russia By 2014

A chemicals cluster will be established on the basis of OAO Uralchimplast by 2014. 

Investment in the project will exceed 13.7 billion roubles.

The project envisages construction of a gas chemicals complex with the capacity of 600 thousand tons of methanol annually. Production of novolac resins will also be organised. 

At the moment the enterprise has two lines producing formaldehyde; another line will be commissioned in 2011.

The project will be implemented in accordance to the tailor-made long term financing through the Czech Export Bank which will provide 70% of the needed resources. Some of the investment will be issued by the Austrian UCP Chemicals AG - the owner of 92% of shares in the Uralchimplast Group. 

Dmitry Vorobyov, the Financial Director of Uralchimplast  said  that the company is conducting negotiations on cooperation with Sumitomo Bakelite (Japan) and BASF (Germany). 

German Companies In The Russian Market

The classic way to develop the Russian market by German firms is as follows: first sales through representatives or through their own trading partners. If these transactions are successful, German firms establish their representative offices in Russia, in order to serve customers better. 


German companies usually take a decision to invest or establish manufacturing only in a few years in the Russian market. 


German medium-sized businesses today are represented in Russia mainly in the production of food and construction materials in the construction industry. 


Among the advantages of the Russian market are: first of all, it is every year increasing purchasing power of the Russian population, which is evident from the impressive data on the growth of retail turnover. Revenues are growing three times faster than the supply of goods and services. The Russian economy is still unable to meet this growing demand. 
Second, continued economic growth leads to an increasing demand for investment goods. Since the degree of deterioration of Russian machinery and equipment is high, it should be updated. Therefore, almost half of Russian imports are machinery and equipment, one third of which is German production.
And, last but not the least: political stability in Russia  is also an important argument for investment in Russian market. 

Among the most important and interesting projects can be called an assembly production of BMW Group in the Kaliningrad region, a joint venture with DaimlerChrysler to produce agricultural machinery, the project company Bayer for the production of rubber and construction of chemical factory in St. Petersburg , the construction of chemical plant for methanol production in Arkhangelsk with the participation of MAN Ferrostaal, as well as participation of BASF (through a subsidiary - the company Wintershall) in projects for exploration and production of oil and natural gas. Store network of wholesale and retail company Metro, the German retail branch Swedish company IKEA, as well as the company's AVA (Edeka), which begins building its own network of hypermarkets «Marktkauf". 

It is noteworthy that in recent years, the Germans began to invest actively in the information sphere, realizing that most effectively exploit the potential of Russian market of programming can not by inviting specialists to work in Germany, and the execution of orders directly to German companies in Russia and the creation of joint companies. Good examples of such cooperation could be joint projects in Zelenograd, St. Petersburg and Novosibirsk. Unfortunately, in absolute terms such investments remains slow. 

If we talk about regional cooperation German investors prefer regions with political stability, good economic potential, rich labor and natural resources, with a constructive attitude toward foreign investors and having access to transportation and other infrastructure. Therefore, the highest priority for the region of the Russian Center and the North-west. Considerable interest has been shown also to the Volga and Ural regions. 

In recent years, not only Moscow and St. Petersburg, but also other Russian regions are becoming more attractive for investments of German investors.  In other words, more than half the funds were sent to other Russian regions.

Russian & German Businesses Have a Jump-Start

Russian President Dmitry Medvedev and German Chancellor Angela Merkel visited Ekaterinburg on July 14, 2010 for a two-day summit that devoted special attention to strengthening the business relationship between the two countries.

The Siemens corporation was one of the key players in the process. Siemens is going to partner with the Rostekhnologiya corporation in a joint venture to produce hydroelectric power plants and also plans to supply the public corporation Rossiiskie Zheleznye Dorogi (Russian Railways) with over 200 commuter trains worth 2.2 billion euros. In addition, Siemens is ready to help build Skolkovo, the Russian science town.

Representatives of Volkswagen, Airbus, E-On, BASF, and Metro were a part of the German delegation. The last two companies are well known in Ekaterinburg - BASF is an active participant in the Energy-Efficient City and Metro operates two stores in town. 

In January - April  2010 total trade between Russian and Germany increased by 50%, amounting to $15.2 million, and the total German investment in the Russian economy has been calculated to be more than $20.2 billion.