Introducing New Approaches to Investor Relations at Lipetsk SEZ
On 15 March, the territory of the Lipetsk SEZ turned into ‘a small Rome’. A representative delegation involving businessmen from Piedmont to Sardinia visited the investment site. Ambassador Extraordinary and Plenipotentiary of Italy to Russia Pasquale Terracciano led the delegation to learn more about the place that turned to be the “place of power” for most companies from the Apennine Peninsula.
Following the meeting with Governor Igor Artamonov and visit to Fondital’s plant, the ambassador highly praised the prospects for Russian-Italian economic cooperation.
“We see great opportunities to invest in the Lipetsk Region,” he said. “Italy can contribute much to the diversification of the regional economy. Our companies are interested in new opportunities. We are ready to invest in the Lipetsk Region and bring our technology here.
The Italians announced the so-called ‘love formula’ that attracts new Italian investments to the Lipetsk SEZ. Its components are a convenient location ensuring prompt delivery of products to the main logistic centers in Central Russia, guaranteed economic benefits for the tenants, and presence of technical educational institutions to train qualified employees.
As it often happens, though, every love story goes hand in hand with envy, not just joy for somebody’s happiness. Envy can be exemplified by the article published on a Voronezh website soon after the visit of the Italian delegation in Lipetsk. The author was wondering why the Lipetsk Region was so attractive for Italian businesses. According to him, the Voronezh Region with its own federal-level special economic zone established in early 2019 had a more favorable geographic location and qualified human resources.
LipetskMedia contacted Ivan Koshelev, General Director of the Lipetsk SEZ, and asked him to explain why the Italians selected our region.
“One may claim that a new SEZ operates on the federal or even galactic level”, he said. “It does not mean, though, that the expected results will be achieved immediately. It takes years to build a team of highly qualified and goal-oriented professionals, create a modern engineering infrastructure, and develop an investment policy that will attract new businesses without long-term negotiations.”
According to publicly available data, the Lipetsk SEZ spent 14 years to make progress in every area. The necessary infrastructure is available for tenants. For example, a new transformer substation constructed with advanced technology was launched in April 2017. Its construction cost more than RUB 2 billion..
Advantages of the Lipetsk SEZ advantages were appreciated by the world-known companies, such as Yokohama, Bekaert, PPG, OBO Bettermann, ABB, Honeywell, etc. These advantages include a free customs zone allowing to import feedstock and export ready-to-use products without delay, considerable tax reliefs (2% income tax for the first 5 years, 7% for the next 5 years and 15,5% for the next 10 years and zero vehicle and property taxes for 10 years), and easy contacts with local authorities. As for the last mentioned advantage, the Lipetsk SEZ follows the best global practices.
“A few years ago the one-stop-shop approach was considered the best for tenants to file and receive necessary documents,” Koshelev explained. “Nowadays it is an absolutely outdated approach – that is why we are introducing digital solutions. Not long ago it took investors three months to obtain an approval of the Expert Council. Thanks to the smart technology, it now takes 15 to 20 days to review an application. Ideally, we strive to use one-cloud solutions in our cooperation with investors.”
Such an approach plays a decisive role in attracting more world-known industrial producers to the Lipetsk site. For 14 years the number of tenants has reached 65 companies from 16 countries (Italy, Germany, USA, Japan and others). According to Ivan Koshelev, some companies have studied up to 37 variants before opting for the Lipetsk Region.
An absolute record was set in 2018 with 10 contracts signed for the total investments of EUR 2 billion. Demonstrating such impressive performance, the Lipetsk SEZ remains one of the leading world economic zones according to the reputable annual ranking by fDi Magazine. But it is not just about ratings and awards.
“Along with launching new factories on our site, businessmen from Italy and other countries strive to expand their existing capacity by constructing the second, third and more production lines. This proves their confidence in high revenue. This shows their trust in the Lipetsk SEZ and the Russian economy,” Koshelev said. One may build advanced facilities and make no profits because there are no sales markets. This is not our case, And investors understand it perfectly well.
Another advantage is a new site of the Lipetsk SEZ near the town of Yelets. This site will host as many tenants in a few years as the site near Gryazi despite such competitors as the Voronezh SEZ and economic zones to be established in the Central Federal District (Tula, Orel and others). They should take their lumps and prove their competence. It is well known from experience that investors appreciate reliability, stability and predictability – this is what the Lipetsk SEZ is ready to offer. According to Governor Igor Artamonov, the Lipetsk Region will continue making foreign companies offers they almost cannot refuse
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