Welcome to one of the most economically developed regions of Russia!

440px_coat_of_arms_of_chelyabinsk_oblast.svg.pngLOCATION

Chelyabinsk region is a part of the Urals Federal District of the Russian Federation with the regional center in the city of Chelyabinsk 1919 km east of Moscow. The region is in the center of the Eurasian continent, in the southern part of the Ural Mountains, on the border of two continents of Europe and Asia. Some of the towns and cities of the region are located in Europe, and some are in Asia. The southeastern part of Chelyabinsk region is the state border with the Republic of Kazakhstan.

AREA

The region covers an area of 88.5 thousand square km and runs 490 km from the south to the north and 400 km from the west to the east. The region occupies 0.5 % of the total area of Russia, which is comparable to the size of Hungary, Portugal, Austria, and it is more than 2 times larger than Denmark and Switzerland, 3 times larger than Belgium and Holland.

POPULATION

The population of the region is over 3.4 million people, 82% of which live in cities and towns, which makes Chelyabinsk region a highly urban area. The population of Chelyabinsk city alone is over 1 million people.

INFRASTRUCTURE

Chelyabinsk is a largest transport center, connected with all parts of Eurasia by such federal highways as M5, M36, and M51, as well as by South-Ural Railway, which is a branch of the Trans-Siberian Railway. Chelyabinsk has its own international airport.

ECONOMY

In terms of economy, Chelyabinsk region is one of the largest constituent entities of the Russian Federation. It ranks 5th among the Russian regions in terms of industrial production, 7th in terms of foreign investments, 12thin retail turnover, agriculture, housing construction, and 15th in terms of fixed asset investments.

The industrial development of the region relies on metallurgical, machine-building, power, construction, and agro-industrial industries. There are over 90 thousand various enterprises and companies registered in all forms of ownership. The metallurgy is the leading industry in Chelyabinsk region, with more than 60% of regional industrial production.

Much attention is paid to the development of small business in the region. Every third employed person works in the private sector of economy. The share of small businesses in the gross regional product reaches 25%.

Chelyabinsk region is self-sufficient when in terms of agricultural products.

The region is rich of diverse natural resources. There are approximately 300 explored mineral deposits, and the region is a Russian monopolist in extraction and processing of graphite (95%), magnesite (95%), metallurgical dolomite (71%), and talc (70%).

Another advantage of the region is the availability of skilled manpower. 1,674 thousand people are employed in various industries, which is 47.3% of the total population of the region.

The South Urals region has always been distinguished for its high scientific and educational potential. There are 34 higher educational institutions and 40 organizations involved in scientific research and design development.

One of the most important focus areas for Chelyabinsk region government is to create a favorable investment climate and stimulate the investments.

POPULATION’S INCOME

In 2012 the income of Chelyabinsk region population amounted to 796.1 billion rubles. Per capita income amounted to 19,062.5 rubles. The expenses of the population as compared with 2011 increased by 9.9% and amounted to 757.9 billion rubles. The expenses exceeded the income by 38.1 billion rubles. Monthly per capita consumer spending amounted to 14,284.3 rubles.

The share of consumer spending in the structure population’s income amounted to 74.9%, 61% of which were spent on goods and 13% were spent on services. By 2011, the savings deposits and securities had increased by 46%, the expenditure for purchasing real estate – by 27.6%, the purchasing of foreign currency – by 15.7%, obligatory payments – by 13.1%.

In 2012 an average monthly wage amounted to 22,547.3 rubles (113.1% rise as compared with by 2011). The real value of wages (adjusted for inflation) increased by 7.4%.

RADIATION ENVIRONMENT

Radiation environment in Chelyabinsk region is safe for human health. In 2010 the natural background radiation amounted to an average of 12 micro-roentgen per hour, which is safe for human health.

INVESTING ACTIVITIES

The most important focus area among the activities of Chelyabinsk Region Government is to create a favorable investment climate and to stimulate the investment activity. According to Rosstat, by the end of 2012, the volume of investment in fixed assets in Chelyabinsk companies and organizations amounted to 179.7 billion rubles, or 93.3% in the prices compared to the level of 2011.

In 2012, the major investment sources were own company funds, which amounted to 50.7% of total investments in fixed assets, with 11.6% share of bank loan investments, 3.3% of funds borrowed from other companies and organizations, 15.8% of budgetary funds, 0.1% of non-budgetary funds, and 18.5% of other funds.

The largest volume of fixed asset investments was allocated to manufacturing (39%), power production and distribution, gas and water supply (20.1%), and transport and communications (16.7 %).

The major investments are made in machinery and equipment, which amounts to 47.9% of the total investments in fixed assets, as well as construction (excluding residential buildings) (33.0%) and housing (17.3%).

The companies of Chelyabinsk region implement large-scale investment projects of commissioning the production facilities aimed at modernization and development of manufacturing.

In 2012, the second stage of the cold rolling complex “Stan 2000” was commissioned in Magnitogorsk (JSC MMK).

In addition, more than other 200 production facilities were commissioned in Chelyabinsk region in 2012, including the following:

- a plant producing burnt anodes (JSC Energoprom - Chelyabinsk Electrode Plant in Chelyabinsk);

- Escon, an power construction plant (JSC Escon Plant in Yuzhnouralsk);

- a tube bending mill (JSC Pipe Bends in Kopeysk);

- a deposit of copper-pyrite ores in Chebachie (JSC Russian Copper Company in Verkhneuralsk district);

- the second stage of biochemical coke production wastewater purification facility (LLC Mechel-Koks in Chelyabinsk);

- a power center (JSC KombinatMagnezit in Satkinsky district);

- a transport packaging production workshop (LLC Eterna, LLC Interpack in Kopeisk);

- a furniture factory (JSC Mart Mebel in Kopeysk).

Large investment projects scheduled for the end of 2013 include the following:

- a rail and structural steel production complex (JSC Chelyabinsk Metallurgical Plant in Chelyabinsk );

- a plant for the production of special electrical machines (LLC Snezhinskiy Special Electrical Machines Plant in Snezhinsk);

- a complex for the production of oil refinery equipment (LLC Rifing in Miass);

- Mikheyevsky Mining and Processing Combine (JSC Mikheyevsky GOK);

- a gold processing plant in the Bereznyakovskaya deposit (first stage, JSC Etkulzoloto);

- Kunashak poultry, Rodnikovsky pig farm (agricultural holding group of companies “Health Farm”);

- Nagaybak poultry complex (LLC Nagaybak Poultry Complex) etc.

Still, the main economic sector for foreign investment are metallurgical production and fabricated metal products (U.S. $2.21 bln, or 80.2% of the total foreign investments) and power, gas and water production and distribution (U.S. $0.5 bln, or 18.1%).

In 2012, the foreign investment geography was quite diverse and included more than 40 countries. The main investing countries included Switzerland ($1.439.8 mln, or 52.4% of total investments), the Netherlands ($498.5 mln, or 18.1%), France ($153.5 (5,6%), Kazakhstan ($151.4 mln (5.5%), Germany ($121.7 mln, or 4.4%), the Ukraine ($70.8 mln, or 2.6%), Cyprus ($55.0 mln, or 2.0%, and the United Kingdom ($53.0 mln, or 1.9 %).

The region is proud of the following achievements and projects:

1. A completed system of legal acts regulating investment activities and a system of state support for investors.

2. A completed starter office for foreign investors.

3. An undergoing project of the Independent Non-commercial Organization “Investment Promotion Agency of Chelyabinsk region” supporting the investment projects.

4. An undergoing project of “Small Sosnovka” industrial innovation park, which includes the construction of road and other infrastructure facilities (gas, power and water supply and sanitation) sponsored by the regional government.

5. An executed agreement between Chelyabinsk Region Government, Agency for Strategic Initiatives to Promote New Projects and LLC Business Russia concerning the implementation of the Standard for the Executive Authorities of the Russian Federation Constituent Entity in Ensuring a Favorable Investment Climate in the Region (dated 05 April, 2012).

Chelyabinsk region became one of 12 pilot regions to implement the Standard for the Executive Authorities in Ensuring a Favorable Investment Climate in the Region. As of 15 March, 2013, the Expert Group monitoring the implementation of the Standard recognized 14 out of 15 standard requirements as completely implemented and 1 out of 15 requirements as partially implemented, including:

1) foundation of Gubernatorial Council for Improving the Investment Climate, which is aimed at creating the conditions for increasing the investment attractiveness of the region. It is the first time such a administrative body is headed by the Governor;

2) development and public discussion of a draft Chelyabinsk Region Investment Strategy until 2020;

3) approval of the Region’s Investment Declaration establishing the principles of interaction between authorities and investors;

4) operation of “Chelyabinsk Region Investment Portal” website hosting the following interactive maps:

- region’s infrastructure areas with the facilities under construction within the frames of special programs and investment programs of natural monopolies;

- free power capacities (load of supply facilities of 35-110 kV);

- free land plots for new production facilities.

These maps will help the investors in assessing their opportunities and benefits when selecting a place for their future enterprise and planning the development of their business in the coming years;

5) assessment of the effect of the regulatory legal acts on businesses and investment activities.

The measures for developing a favorable investment climate resulted in various expert rakings of the region, such as:

- long-term “BB+” rating in foreign and local currency, a short-term “B” rating in foreign currency, national long-term “AA (rus)” rating, long-term “Positive” forecast rating according to the rating of Fitch Ratings Corporation in November 2012;

- confirmed long-term “BB+” credit rating, “ru AA+” national scale rating, “Stable” forecast rating showing the high level of local credit worthiness, according to the rating of Standard & Poor's Corporation in December 2012;

- 12th place in terms of investment potential, according to “Expert” Magazine;

- positive assessment of All-Russian Public Organization OPORA ROSSIA/BACKBONE OF RUSSIA, the Russian Federation Chamber of Commerce (according to the results of “Golden Mercury” contest), Forbes experts, Eurasian Competitiveness Institute, Conference “Business Success 2012”.

According to the rating of All-Russian Public Organization OPORA ROSSIA/BACKBONE OF RUSSIA, in 2012 Chelyabinsk region took the 2nd place in terms of creating comfort business conditions (after Moscow region).

In December 2012, the report of the Russian Federation Presidential State Council marked Chelyabinsk region to be the one that had achieved the greatest success in solving the issues connected with attracting new investments, improving the level of government openness, and giving rise to virtually no criticism in terms of the level of transport infrastructure development.

See more information on the measures to support investors in the region at http://oblinvest74.ru.