More evidence that sanctions don't amount to much.
Russia's manufacturing sector continues to grow, with Mercedes-Benz being one of its newer additions.
The automobile manufacturer is in the process of construction of three new plants in the Moscow region, as one of several other companies which are expanding their production in like manner.
The German auto maker is constructing a new plant to employ 1,500 workers. It will be joining existing pharmaceutical and dairy makers who have already settled operations in the region.
More than 1500 residents of the Moscow region will get jobs at the Mercedes factory which is now under construction in Solnechnogorsk district. The staff recruitment will start next year. And the first cars must roll off the production line in 2019. The German automobile manufacturer was choosing the site for a long time. Four Russian regions struggled for the right to get this factory.
Marina Gromova reports on why the Moscow region attracts foreign investors and what possibilities will open up for residents of the region.
Geometrical pattern, reliability of structure and quality of materials. I'm talking not about piles but about cars that will soon be manufactured on these shop-floors. And this is what millions of Euros invested by the German giant in the construction of the factory in the Moscow region look like.
Axel Bense, CEO of Mercedes-Benz Manufacturing Russia:
"Our decision to build the factory in Esipovo is based on series of research studies. First of all, we were thinking about the infrastructure: roads, airports, available communications, gas, water, electricity.”
The big construction occupies an area of 95,000 square meters. Workers have sunk piles. Now they're building a roof. This paint shop, where finishing work has started, has the highest ceiling. It is likely to be the first to be put in commission.
Mercedes cars will be manufactured at the factory from end-to-end. It is planned to be able to produce 25,000 cars a year.
"The production will start with Mercedes Sedan E-Class. Then we're planning to produce Mercedes GLE, GLC and GLS offroaders."
New Mercedes cars could be produced in Nizhny Novgorod, Novosibirsk or Kazan. But in 2016 Mercedes-Benz tied up a special investment contract on mutually beneficial terms with the Moscow Region Government at St. Petersburg International Economic Forum.
Andrey Vorobyov, governor of Moscow region:
"We provide Mercedes with the land at a nominal charge. We grant exemptions, prescribed by the regional law. We're trying to provide them with the necessary permits for construction of any given facility. We're very interested in creating new jobs. There's still something to strive for As you clearly understand, there are a lot of people who commute to Moscow. And our task is to create jobs where people live."
Almost 1,500 people will work at Mercedes factory. The company has already started to train personnel in Klin College and Road-Building College in Ramenskoye.
58 industrial parks, 12 technological parks and 3 special economic zones operate in Moscow region. 300 billion rubles are being invested in the construction.
"To create parks and zones is an easy task. It can be done. It is important for them not to be vacant. It is important to build factories there. For example, the free economic zone in Dubna was in little demand for a long time. Now each hectare is occupied. That's why we rank first in operational efficiency of economic zones. We had to enhance the territory by 35 hectares to "plant" there, as the professionals say, 70-75 enterprises."
The village of Shuvoe in Yegoryevsky District. There's a legend that Old Believers were exiled from here. They left this place with noise and wailing. That's why this village has such a name. Wide open spaces, birch-trees, little houses, and Gedeon Richter—the largest pharmaceutical company in Central and Eastern Europe. The only factory in Russia has been operating here for 20 years.
New opportunities opened for the company. The region supports the factory with tax exemptions. They signed a special contract with Gedeon Richter too. The investment volume is almost 1.5 billion rubles.
Zsolt Helmeczi, CEO of Gedeon Richter Russia:
"At first some people had doubts that it was a good idea to build a factory in the village of Shuvoe. And we could quietly answer: 'come here and take a look if you have doubts'."
Today the factory produces 57 million packs a year. Broad-spectrum medicines are delivered throughout Russia and CIS countries. The company is planning to expand the production.
"This is a supply from Hungary. From there we regularly get products of Sirio Pharma. In 2 years we're planning to use domestic sources for production."
For 11 years, Finnish cheese, butter, and yogurt are made in Odintsovo. After the imposition of anti-Russian sanctions, the production of goods for Russia at Valio factories in Finland has stopped. And the production volume in Moscow region increased 3 times.
Denis Zaveryaev, director of Valio factory in Ershovo:
"We're planning to boost production volume and to expand the assortment.”
Despite sanctions and pressure of the West, large foreign companies are still coming to the Moscow region.
"The Japanese have confirmed the construction of a small but very important factory in Spring. This factory in Khimki will produce 2000-3000 cars a year. It's very good for tonnage trucks. We're very glad that the careful Japanese made this first step."
Recently, the Moscow region has introduced itself at a road-show in Asia. A team from Russia was in Singapore, Japan, and South Korea. Around 10 companies from South Korea are ready to start their business in the Moscow region.
This post first appeared on Russia Insider
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