Events
External Economic Activity / Cooperation between Krasnodar Region and foreign states
Cooperation between Krasnodar Region and the Federal Republic of Germany
(reference information)
Krasnodar Region and Germany are linked by close trade and economic contacts. Over the last five years Germany has been constantly among the top three foreign trade partners of the Region.
1 Visits by delegations from Krasnodar Region and Germany
One of the established forms of business cooperation with the Federal Republic of Germany is mutual exchange of official and working visits by delegations.
Thus in 2002 and 2003 Krasnodar Region was visited by delegations of representatives of Knauf company led by the co-owner and managing partner of the Knauf company, Honourary Consul of Russia in Germany, Dr Heinz Jurkowitsch. The result of these visits was the signing of an agreement on cooperation with Knauf and construction of a CLAAS factory to produce agricultural equipment.
The result of regular working visits by representatives of the combine harvester producer CLAAS was the signing of an agreement on construction of a factory in the Region which has been successfully operating over a number of years and supplies equipment to many Russian regions.
In 2004 Krasnodar was visited by the Extraordinary and Plenipotentiary Ambassador of the Federal Republic of Germany in the Russian Federation, Hans Friedrich von Plötz, to take part in the 11th YugAgroProm: YugAgroPischemash international agricultural exhibition within the framework of the holding of the German Days event in Krasnodar Region.
In 2006 a delegation from the Heidelberg Cement group of companies visited Krasnodar to discuss questions on construction of a modern ecologically safe factory to produce cement in the area of Tuapse.
With the aim of expanding trade economic cooperation between Krasnodar Region and the Federal Republic of Germany in September 2006 a meeting was held between the Extraordinary and Plenipotentiary Ambassador of the FRG in Russia, Walter Jürgen Schmid, and heads of the Administration of Krasnodar Region. The result of the meeting was the setting out of main areas for further development of bilateral cooperation.
In May 2007 the Commercial Director of the Union of the Wood Industry in Germany, Norbert Furche, held a meeting in Krasnodar with the Deputy Head of the Administration of the Region Evgenii Muravev, during which questions were discussed on establishing new contacts, looking for economic partners in the Region for cooperation in the production of furniture.
In February 2008 a delegation of representatives of German businesses specialising in construction, architecture and housing and utilities maintenance arrived in Krasnodar Region. The businessmen visited Sochi and Krasnodar, holding business meetings there, and also took part in the XII Southern Architectural Construction Forum.
A delegation from Germany takes part every year in the Sochi International Investment Forum. In 2006 and 2007 the German party organised a separate display. The number of German participants grows from year to year: 147 people travelled to the Sochi Forum held in September 2007, including the Chargé d'Affaires of the Embassy of Germany in the Russian Federation, Detlef Lingemann, the Minister of Regional Development and Transport of Sachesen-Anhalt, Karl Daehre, manager of affairs of the Eastern Committee of the German Economy Oliver Wick, and managers of major German companies.
From Sochi the delegation headed for Krasnodar, where the German Days in Krasnodar event was held from 24 to 30 September on the initiative of the Embassy of the Federal Republic of Germany in the Russian Federation and with the support of the Robert Bosch Fund.
A similar event took place also in November 2004. The idea of holding a German Days event was to organise in addition to Moscow and St Petersburg similar forums in dynamic centres of Russian regions, and in total the geography of the event took in more than 25 Russian towns.
Within the framework of the German Days programme there are performances by musical and performing groups from Germany, theatrical troupes, showings of documentaries and films, and exhibitions of works by German experts are organised.
The German Days event in 2007 included organisation of business meetings aimed at establishing direct contacts between businesses in Germany and the Southern Federal District. A visit also took place by the Mayor of Karlsruhe, Heinz Fenrich, dedicated to the 15th anniversary of the twin town link between Karlsruhe and Krasnodar, and the Days of Krasnodar event, and also a visit by a delegation of Karlsruhe residents under the aegis of the First Acquaintance with Twin Town project.
On 29 and 30 April 2008 Krasnodar Region was visited by the Federal Minister for the Economy and Technology of the FRG, Michael Gloss, on an official visit.
The aim of this business trip was development of cooperation and expansion of trade economic and cultural contacts between Germany and the Kuban.
On 29 April Michael Gloss and the representatives of German business interested in investment projects in the region accompanying him, as well as the Extraordinary and Plenipotentiary Ambassador of the FRG in Russia, Walter Jürgen Schmid and the Deputy Minister for Regional Development of the Russian Federation, Valerii Gaevskii, who travelled from Moscow, took part in a conference titled Krasnodar Region-FGR: potential and prospects for development of trade economic cooperation.
On 30 April the German delegation travelled to Sochi and Krasnaya Polyana. Accompanying the Head of the resort town of Sochi, V.N. Afanasenkov, the guests examined the construction sites of facilities for the 2014 Olympic Games, and the Laura ski resort.
At the conference held in Krasnodar the German investors expressed their readiness to take part in tenders for Olympic contracts, to build infrastructure in Sochi, and to site their own industrial production in Krasnodar Region. In addition participation by a representative German delegation in the Sochi 2008 VII International Investment Forum was agreed.
From 19 to 22 October 2008 Krasnodar Region was visited by a delegation of business and political circles of Baden-Württemberg, led by the Minister for the Economy Ernst Pfister.
Within the framework of the visit a meeting was held with the Deputy Head of the Administration (Governor) of Krasnodar Region Aleksander Ivanov, during which questions were discussed on realisation of joint projects in the fields of the economy, construction and architecture between Krasnodar Region and Baden- Württemberg. The delegates also carried out negotiations in the Mayoralties of Krasnodar and Sochi.
2 Presentation and congress exhibition events
Holding of congress exhibition events plays a significant role in development of bilateral cooperation and, in consequence, in the increase of the investment attractiveness of Krasnodar Region and trade turnover between the Region and Germany.
Presentation activity of Krasnodar Region and Germany was activated in 2002, when a delegation from the Region for the first time took part in the Green Week international agribusiness exhibition in Berlin. Green Week gave the opportunity to managers and specialists in agricultural businesses in Krasnodar Region to enrich their knowledge and experience, to evaluate the latest achievements in the sphere of agriculture, production and processing, to define a strategy for long term development. In 2009 Krasnodar Region took part in the exhibition for the eighth time. The collective stand covered an area of 1000 square metres in the Russian pavilion, whose total area is 5000 square metres.
The main aim of the Region taking part in the exhibition is to attract the attention of foreign investors to Krasnodar Region, and to promote products produced by businesses in Krasnodar Region on foreign markets.
The collective Krasnodar Region display presented 55 businesses and organisations. For tasting at the exhibition a range of 290 brand almost 9 tons of Kuban food products by leading businesses in the food and processing industries, such as Medvedovskii Myasokombinat, Kaloriya, Kropotkinskii Molochnii Kombinat, Konditerskii Kombinat Kuban, and others was delivered. Visitors to the exhibition were able to learn about fifty types of new products. These were 21 types of sausage, 8 cheeses (including the Kuban Plezir presented for the first time, by Kaloriya company and produced using French technology), and 16 types of confectionary. For the first time those who appreciate high quality wines could taste the new Kuban products which won top prizes in 2008: Sauvignon Blanc produced by the Miskhako firm, Merlot, Cabernet and Chardonnay of the line Cru Lermont by the Fanagoriya firm, the Korolevskii Dub by Avrora.
This year the display was visited by the Representative of the Government of the Russian Federation Vladimir Putin, and Minister for Agriculture of the Russian Federation Alexei Gordeev.
An official delegation from the Region (36 people, including 8 heads of municipalities) took part in all the business events of the exhibition.
During the work of the exhibition an agreement was signed on cooperation in the field of investment activity to a value of 1025 million rubles with the Dominant group of companies.
In May 2003 the Krasnodar Region Days in Germany International Economic Forum was held in Hanover, presenting the investment attractiveness of the Kuban. The forum was the first event carried out by Krasnodar Region abroad. The success of this beginning led to the taking of a decision on holding the Krasnodar Region Days in Germany event every year. For three years running the event was held in Hanover, but in May 2006 the guests from the Kuban were introduced to Munich, and in January 2007 Berlin. In Munich Krasnodar Region discovered a new form of international private public partnership. Having signed an agreement with the Administration of the Region, the Federal Ministry for Transport, Innovation and Technology of the Austrian Republic took on itself the expenses of developing a feasibility study for construction of the Abinsk-Kabardinka road and the responsibility of attracting Austrian and German investors to this project. In addition to agreements with the Administration of the Region, dozens of direct contacts and contracts between business structures have taken place.
In preparation and holding of events representatives of the embassy, artistic, trade economic chambers of the Russian Federation and Germany and the Government of Lower Saxony all play an active part.
The third Krasnodar Region Days in Germany international economic forum was remarkable in May 2005, as it was held within the framework of the large Hannover Messe German forum. More than 800 people took part in the work of the Krasnodar Region Days in Germany forum: more than 500 Russians and more than 300 foreign participants.
The display of Krasnodar Region in Hannover Messe and in the German pavilion was visited by more than 20 000 people. They included the President of the Russian Federation Vladimir Putin, the Envoy of the President of the Russian Federation in the Southern Federal District Dmitrii Kozak, the Extraordinary and Plenipotentiary Ambassador of the Russian Federation in the Federal Republic of Germany Vladimir Kotenev, the Minister for Industry and Energy of the Russian Federation Viktor Khristenko, Minister for Transport and Communications of the Russian Federation Igor Levitin, Chairman of the Board of Gazprom Alexei Miller, President of Russian Railways Gennadii Fadeev, Chairman of the Board of Severstal Alexei Mordashov, President of the Chechen Republic Alu Alkhanov, Extraordinary and Plenipotentiary Ambassador of the Federal Republic of Germany in the Russian Federation Hanz Friedrich von Plötz, Minister for the Economy, Labour and Transport of Lower Saxony Walter Hirche, Mayor of Hannover Ingrid Lange, and the Chairman of the Chamber of Commerce and Industry of Lower Saxony R. Wagner.
The delegation from Krasnodar Region, which was led by the Governor Alexander Tkachev, included representatives of 180 major Kuban businesses, heads of specialist departments and heads of municipalities. They took part in all the official events, including the Days of Russian-German Economy, the Russian Industrial Forum, as well as the Second Economic Forum organised by the Government of Lower Saxony.
At the forum 175 investment projects worth a total of €6 billion were presented. The result was 77 signed agreements, protocols and contracts to a total value of €716 million.
From 18 to 21 November 2008 a delegation from Krasnodar Region took part in the work of the XI Euro Finance Week and Congress of countries of Central and Eastern Europe in Frankfurt am Main.
On 19 November in Frankfurt am Main (Germany) the VII Economic Forum of Krasnodar Region in Germany was held. At the forum the Kuban delegation announced its readiness for cooperation with financial institutes of Europe and presented the economic and investment potential of the Region to foreign investors.
Within the framework of the Forum a conference entitled Investment prospects for German business in Krasnodar Region took place, as well as four specialist sections. Forum events were attended by more than 600 representatives of European banking and financial structures.
For participants of the Euro Finance Week in the hall of the Congress Centre and in the Alte Opera of Frankfurt an exhibition was set up of the investment potential of Krasnodar Region, including ten architectural models of the complex development of Sochi, Krasnodar and the Azov City gaming zone.
The 20 person delegation from Krasnodar Region was led by the Deputy Governor of Krasnodar Region TI Evsikova, and it included heads of specialist organs of executive power of Krasnodar Region, the Chairman of the Regional Chamber of Commerce and Industry, and representatives of business.
Numerous business meetings and negotiations were held. Members of the delegation took part in a Congress on Central and Eastern Europe and a business dinner for the Presidium of the Congress.
The main result of the delegation taking part was the signing of four promising agreements. Thus, the GHP company (German House of European Products) announced its readiness to invest €100 million in construction of spa centres in the Region. And three of the largest international consulting and legal companies, ICR Group, PriceWaterhouse Coopers Russia BV, and Salans, confirmed their readiness for cooperation in attracting investment to our region, legal monitoring and preparation of investment projects to international standards.
3 Agreements with administrative and territorial municipalities and structures of FGR
In May 2004 within the framework of the Krasnodar Region Days in Germany international economic forum in Hanover the Governor of Krasnodar Region Alexander Tkachev and the Prime Minister of Lower Saxony Kristian Wolf signed a joint announcement about partnership cooperation between the Administration of Krasnodar Region and the Government of Lower Saxony. This document is aimed at establishing long term partnership relations of the parties, support and expansion of cooperation in the spheres of the economy, agriculture, food industry technology.
4 Foreign trade turnover
According to data from the Southern Customs Department the trade turnover of Krasnodar Region with the Federal Republic of Germany for 2008 totalled $302.2 million. Within this the share of imports was $290.3 million and exports amounted to $11.9 million. The balance of trade was negative (-$278.4 million).
Within imports the main types were machines and mechanisms for harvesting and processing agricultural crops ($67 million), internal combustion engines ($13.4 million), agricultural machinery ($8.3 million), industrial equipment ($26.8 million), dishwashers ($5.6 million), ferrous metal constructions ($5.7 million), tea and coffee extracts, essences and concentrates ($7.2 million).
The main exports were metal processing equipment ($3.8 million) and timber products ($300 000).
Trade turnover between Krasnodar Region and Germany
($million)
|
| 2004 | 2005 | 2006 | 2007 | 2008 |
| Turnover | 122.1 | 122.4 | 140.1 | 153.8 | 302.2 |
| Export | 7.4 | 9.0 | 10.1 | 7.0 | 11.9 |
| Import | 114.7 | 113.4 | 130.5 | 146.8 | 290.3 |
| Balance | -107.3 | -104.4 | -120.4 | -139.8 | -278.4 |
5 Inter-sectoral cooperation
Cooperation is actively developing with businesses in Germany in the sphere of transport and communications. In the field of railway transport a direct SV train has been established on the Berlin-Adler route. There are weekly air flights from Krasnodar to Frankfurt am Main.
In the sphere of automobile transport the Dinskoe ATP company has acquired 10 MAN coaches through a leasing scheme, which were brought into operation to transport participants in the Sochi 2007 International Investment Forum.
The Alcatel and Siemens companies are carrying out supply of telecommunications equipment for communications operators in Krasnodar Region.
In the sphere of fuel and energy in the Region German companies are carrying out supply of energy equipment and generator equipment (Schneider Electric and Jenbacher). The state company Centre for Energy Supply and New Technologies is carrying out cooperation with German partners (Wolf and dena companies) in introducing new technology and equipment for use of renewable energy sources and energy saving.
PRO2 GmbH and Wissmann GmbH are carrying out deliveries of gas using equipment to businesses in the Region. FAS Flüssiggas-Anlagen GmbH is working with the state company Kubangasifikatsiya on the question of developing the petrol station network in the Region.
In the field of construction businesses and organisations in Krasnodar Region are successfully cooperating with leading companies in Germany on questions of introducing technology and acquisition of equipment.
The activity of the German Knauf company in the Region is one of the examples of effective business in the sphere of production of construction materials. Over the period 2003 to 2008 six agreements were concluded about construction to a value of more than 2.5 billion rubles between the Administration of Krasnodar Region and the Knauf group of companies. Up to 60% of production is delivered to almost all regions in the Russian Federation and CIS countries. Also agreements were agreed and construction is in progress with a range of other major businesses in Germany: Hess, Hans Lingl, and Humboldt Wedag GmbH.
In the field of housing and utilities maintenance agreements are being realised in the following areas: establishment of variable frequency drives and introduction of energy saving technology in pumping systems for water supply, water drainage and heating supply with the Siemens company; reconstruction of boilers and heat supply systems with the aim of moving to gas fuel with the Zepter company; setting up a system for processing domestic waste in Krasnodar Region with the Patsar Pak company; introduction of technology and equipment for sewage processing with the Hager Elsaesser Vostok company.
Cooperation by the Department for Town Planning and Architecture of Krasnodar Region with the Kruse company has made it possible to draw up basic principles of reconstruction of panel houses of first mass series.
Cooperation with the German company Linder has made it possible at the stage of adoption of project decisions to change to more effective technologies in the sphere of restoring the interiors of public buildings (Adler airport, Krasnodar Drama Theatre, etc).
In addition, negotiations have been held and agreements concluded on cooperation in the sphere of exchange of experience on architectural project design and fitting, facilities of various types, supply of architectural construction complex of the Region with modern and good quality construction materials and equipment, which are not produced domestically, with representatives of German companies: the architectural office nps Tshoban voss Berlin (architectural project design), the Maltzahn Carpes company (modern and good quality construction materials and equipment), the Architects and Engineers company (architectural project design).
The department within the framework of cooperation with Germany is carrying out participation in realisation of an investment project to construct the Nemetskaya Derevnya and Ekaterina Velikaya housing estates in the town of Krasnodar.
The Roads Department of Krasnodar Region is carrying out a range of projects jointly with German partners:
- reconstruction of asphalt and concrete factories in Krasnodar Region;
- providing technological support in requipping existing factories, and carrying out training seminars for personnel (GP Günter Papenburg AG Betriebsteil teltomat Asphaltmischanlagen, Ammann Asphalt GmbH, Benninghoven GmbH & Co KG);
- introduction of leading technology in construction of road surfaces jointly (Joseph Vögele AG, Benninghoven GmbH & Co KG, Dynapac GmbH);
- introduction of technology for cold milling (Wirtgen GmbH).
Cooperation is being actively developed between Krasnodar Region with Germany in the industrial sphere.
The Solnechnii Veter firm exports to Germany bars of silicon, solar quality silicon sheets solar batteries, solar modules, and photo-energy systems. Since 2000 the firm has annually expanded the volume of deliveries of photo-energy products to the world market, increasing it by more than ten times. The largest producer of solar batteries for space equipment in Russia, Saturn, uses the latest German equipment in its production processes.
The NPO Promavtomatika company is a dynamically developing business specialising in production of pressure regulating equipment and technical means of automation. The company works very closely with the German concern Siemens on use of electronic components of the company in its products.
The machine tool industry of the Kuban is linked to Germany by long established relations. The first joint Russian-German business set up in the USSR is situated in the Kuban - the state business Sedin-Schiess. The business produces and supplies large turning and boring machines with digital control programmes. The main partners in export are machine engineering firms in Germany.
In the next few years it is planned to expand in the Region production of CLAAS combine harvesters with annual targets of 800 to 1000 units. In 2007 the business produced more than 300 combine harvesters.
At the current time businesses in the machine engineering and metal processing sphere in Krasnodar Region is cooperating actively with businesses in Germany on questions of supply of equipment, parts, and introduction of modern technologies.
In the field of chemical the question of signing a protocol of intention is being developed between the Department of Industry of Krasnodar Region, the Asiral company in Germany and the NPP Floreal on realisation in Krasnodar Region of an investment project to construct a factory to produce a perfume and cosmetics in mini-packages.
The Federal Republic of Germany is a world leader in production of equipment for the timber processing and furniture industries. Businesses in Krasnodar Region purchase equipment from the Altendorf, Siempelkamp, Homag Gus, and Weinieg Gruppe companies.
A range of businesses in Krasnodar Region deliver their products to the German market. These include Belora, Nona (Belorechenskii District), and Yug (Mostovskoi District). Businesses in the Region deliver lumber and veneer to Germany.
German companies with significant experience of work on the European market are working with Kuban producers in the field of providing consulting services. Cooperation has been established with the following organisations: MASA International Group, Europa Holding Ost-Konzept GmbH Co. KG.
In accordance with agreements concluded between Krasnodar Region and Northern Rhine-Westphalia, on the basis of the College of Humanities and Technology No 10, a centre for training and retraining of specialists for work on German timber processing equipment has been set.
In the field of the financial and stock markets cooperation is being carried out with representatives of German banking organisations, insurance companies, professional participants on the stock market, and investment and consulting companies in the following areas:
- establishing direct trusted relations between credit and insurance organisations in the Region and Germany which would make it possible to effectively use financial resources of both parties to realise investment and other projects;
- development of the market of services of insurance of financial risk in carrying out international financial and other deals.
The question is being examined of opening a branch of PriceWaterHouseCoopers in Krasnodar, which will make it possible to simplify the process for Regional organisations of gaining insurance cover for realisation of investment projects using German financial resources (at the stage of concluding agreements).
At the current time in Krasnodar Region a range of bank and insurance companies with German capital are carrying out operations: Petrokommerts, Tsentr-Invest, Promsvyazbank, Rosno, Solidarnost dlya zhisni, Standart-Reserv, Rossiya. In their turn in Frankfurt am Main a branch of one of the largest regional banks, Kraiinvestbank, is in operation.
6 German businesses in Krasnodar Region
The active external economic activity of the region has activated the process of flow of foreign capital into the Kuban. In Krasnodar Region there are 29 businesses with German capital registered.
The largest businesses with German investment effectively carrying out their operations are:
- Knauf Gips Psebai, the largest stockholder of which is the German company Knauf. Up to 60% of production is delivered to almost all regions of the Russian Federation and CIS countries.
- CLAAS, a business producing agricultural equipment. The volume of total investments in the project is estimated at €20 million.
- Okerlund and Rauzing Kuban with 100% foreign participation by the firm Okerlund and Rauzing Kuban Holding GmbH. The business is situated in the town of Timashevsk and produces packaging materials and boxing intended for production and technical purposes.
- Tetra Pak-Kuban with the German firm Tetra Laval Holding GmbH as shareholder. The foreign participant owns shares to a value of 54.8 million rubles. The business provides intermediary services for purchase and sale of products intended for industrial and technical purposes.
Led by the Administration of Krasnodar Region a Consulting Council on Foreign Investment has been set up and is in operation. The main aims and tasks of the Consulting Council are: development and strengthening of a favourable investment climate in Krasnodar Region; increasing flow of foreign investment into the region; informing potential foreign investors of the favourable investment climate of Krasnodar Region, drawing up information used by companies with foreign investment carrying out their operations in Krasnodar Region; operational and effective examination and development jointly with the Administration of Krasnodar Region of decisions on important questions arising during operations of businesses with foreign investment in Krasnodar Region.
Members of the Council include representatives of the Administration of Krasnodar Region, managers and directors of business with foreign investment already in operation in Krasnodar Region, and in particular managers of two businesses with German capital: Knauf Marketing-Krasnodar and CLAAS.
7 Humanitarian cooperation
An essential part of cooperation between Krasnodar Region and the Federal Republic of Germany is development of cultural links.
In this field the experience of the State Academic Kuban Cossack Choir is an indicator. In 2003 and 2004 the Cossack Choir performed at a concert in Hanover within the framework of the Krasnodar Region Days in Germany international economic forum. In 2006 a performance by the Cossack Choir was given in Munich. Also in 2004 the Choir toured towns in Germany.
Groups from the regional children's experimental school of folk art took part in the Friendship of Nations folk festival in Hamburg.
The State Concert Russian National Orchestra Virtuosi Kubani of the Krasnodar Philharmonic performed in 2006 in Karlsruhe within the framework of a cultural exchange between the twin towns of Krasnodar and Karlsruhe.
8 Twin town contacts
An indicator of strong external economic links between Krasnodar Region and the Federal Republic of Germany is participation by both parties in the twin town movement. Close links have been laid on the basis of cooperation between the towns of Krasnodar and Karlsruhe, and between Gelendzhik and Hildesheim.
Thus over the last year Krasnodar Region and Karlsruhe carried out 19 joint projects, among which was delivery to medical establishments in Krasnodar of humanitarian aid to a value of €30 000, organisation of placements for teachers, doctors and students in Karlsruhe, signing of an agreement on cooperation between the Kuban State Technological University and the University of Technology and Economy of Karlsruhe.
The results of cooperation between Gelendzhik and Hildesheim over the last year were student exchanges and exchanges of teaching personnel, placements for Gelendzhik doctors in medical establishments in Hildesheim and participation by performing groups from schools in Gelendzhik in competitions and exhibitions in Germany.
9 Other information
Partnership contacts between Krasnodar Region and Germany expand with every year, which in no small way makes it possible for regions to carry out image building events both in the Region and outside.
In many ways interest in the Region is based on such an important factor as Sochi winning the right to host the 2014 Winter Olympic Games. The promotion of the Sochi 2014 brand has been one of the tasks faced by the advertising companies of all the Region's image building events (including those held in Germany). It should be noted that many German businessmen and politicians expressed their support for Sochi as a candidate to host the Winter Olympics.
