Saturday July 21, 2012
Russian republic Tatarstan invites investors from Malaysia
By CHOONG EN HAN
TOUTED as among the more prosperous states in Russia, the republic of Tatarstan is opening its doors to foreign investors looking for a gateway to penetrate the Russian market with its 140 million strong population.
The Tatarstan Investment Development Agency (Tida), headed by chief executive Linar Yakupov, was in Malaysia recently to promote the ready infrastructure and business-friendly regulations in Tatarstan.
“Well, the reason we are trying to promote greater investment relationship with Malaysia is because we see a lot of common values and things that we share. We have spent a lot of time to build the basic trust and I think the number of Malaysian companies that had visited Tatarstan is reaching a critical mass where many are now aware of the opportunities in Tatarstan. This is the entering point to the Russian federation,” he says after giving a seminar on the business and investment opportunities in Tatarstan.
Jointly organised by Tida and Matrade (Malaysia External Trade Development Corp), the seminar was well attended by industry players keen to venture out of Malaysia, and are leveraging on their own expertise to venture into higher growth target markets.
Yakupov says Tatarstan, being one of the more industrialised states in Russia, and among the 10 donors to the federal budget, presents an avenue for Malaysian businesses that are keen to enter the region.
Tida also promotes eight key industries that are poised for investments namely chemicals and petrochemicals, machinery and automotive parts, construction and building materials, health and pharmaceuticals, IT and telecommunication, agriculture, service industry and tourism, and the halal industry.
“Although we are a land-locked country, the technologies and the means of logistics that we have today allow us to stay in good connection with the rest of the world. About 50% of the products we produce right now is distributed all around the world,” he said.
Tatarstan has also put in place a set of legislative and organisational measures aimed at accelerating investment and spurring economic growth.
It has set up infrastructures including its flagship Special Economic Zone Alabuga that spans 2,000 ha with 60% already occupied.
So far, it had attracted US$3bil of investments, with the government pumping US$515mil to set up the infrastructure. Eight out of the 11 biggest cities in Russia are located within a radius of 1,000km from the flagship zone.
Numerous multinational companies like Ford, Mercedes Benz and firesafe insulation manufacturer Rockwool call Alabuga home in Tatarstan.
Meanwhile, among the first few Malaysian companies to venture into Tatarstan is Amanah Capital Group Ltd, an investment advisory and consulting company that is now spearheading the development of the Kazan Smart City.
Having formed a consortium with fellow Malaysian company Straits Consulting Engineers Sdn Bhd, both companies are now working closely with Tida, and have conduct feasibility and technical studies for the project for the past six months.
Works for large-scale projects have also begun as part of preparations of the 27th World Summer Universiade 2013, the 2015 World Aquatics and the 2018 football World Cup, where a number of games are planned to be held in Kazan, the capital city of Tatarstan.
Having proposed to be developed on a 360 ha located between the airport and city centre, the Kazan Smart City is expected to be the catalyst for Kazan to be the main hub for investments, financial centre, and offices of international companies, providing high-tech facilities including international schools, specialist hospitals, world-class hotels and international exhibition and convention centre.
Amanah Capital Group chief executive officer Abas Jalil says the Smart City’s infrastructure development will be funded via the establishment of a real estate mutual fund in cooperation with local and international investment banks, and the construction specific components will be undertaken by various international companies participating in the project.
According to Abas, Amanah is tasked with the job to look for investors from the Middle East and South-East Asia to develop the project.
“The first stage of the project will involve creating the necessary infrastructure for the city. The new constructions would involve investments of US$150mil to US$200mil. The funds would be spent on road construction, engineering and utilities, necessary smart elements incorporation and the basic framework,” he says.
Ultimately, Abas says the total size of investment for the smart city with all the facilities completed is about US$2.2bil.