NIZHNY NOVGOROD REGIONAL GOVERNMENT

Investment proposals

June, 2006

Investment projects to implement in Nizhny Novgorod region

  1. Investment projects in high tech and innovation sphere
    1.1. Project "Open Technopark"
    1.2. Project “Nizhny Novgorod Regional Park of Technology Promotion”
  2. Project “Development of inerregional intermodal transport and logistics center’
  3. Project of establishing the center of hugh medical technologies “Nizhny Novgorod Oncology Research Center”
  4. Investnment projects in the Nizhny Novgorod region power complex
    4.1. Construction of heat and power stations
    4.2. Modernization of heat and power stations
    4.3. Construction of a small power station on the basis of the renewable energy
  5. Investment projects in the sphere of car components production
  6. Investment projects in other spheres
    6.1. Project “Organization of block plexiglas poduction”
    6.2. Project “Production of polypropylene pipes and shaped products”
    6.3. Project “Construction of a multi-product brickworks”
    6.4. Project "Creation of used tire recycling facilities"
  7. Contact information

Proposal on Participation in the Project Implementation

«Open Technopark» on the Basis of the Russian Federal Nuclear Center – All-Russian Research Institute of Experimental Physics and “Nizhny Novgorod Regional Park of Technology Promotion”

IT and high tech companies are invited herein to participate as residents of technology parks

The project aims at:

Explanatory Note: On Development of the Education, Research and Innovation Complex and IT sphere in Nizhny Novgorod region

1.1. Educational complex

Nizhny Novgorod region is one of the top-ranked research centers of the Russian Federation with a developed system of professional education.

The first university school of radiophysics in the USSR was opened in 1946 in Nizhny Novgorod region, and in 1963 there was established the first school of computational mathematics and cybernetics in the country.

Nowadays there are 26 institutes and universities in the region, one of them was granted an Honour Diploma from the Intel corporation “for an outstanding contribution in training of highly qualified IT-professionals”.

At present higher educational institutions offer more that 170 different courses and professions, 37% of them are technical.

1.2. Research center

Nizhny Novgorod region ranks third among other regions of the Russian Federation by the number of workers working in research and innovation spheres.

According to the statistics 94 enterprises and organizations of Nizhny Novgorod region conduct scientific research, among them are institutes of the Russian Academy of Sciences, The Federal Nuclear Center in Sarov and more than 300 small science-intensive businesses.

The unique scientific, technical and industrial potential of the region allows carrying out invention, design and production of the high-end technology of the aircraft- and shipbuilding, military motor-car machinery, nuclear-power engineering and radio electronics.

The high concentration of research organizations of the fundamental, applied and higher institutional science combined with the developed industrial center guarantee Nizhny Novgorod region to be one of the leader in innovative sphere.

1.3.«Intel» in Nizhny Novgorod

The Eastern European central office of the “Intel” corporation is situated in Nizhny Novgorod. In the period of 2000 to 2005 the number of specialists working in Nizhny Novgorod office has grown from 120 up to almost 600 people The growth rate amounts to 20% a year.

“Intel” plans to increase the staff and to expand its working area and it has already become the first resident in “Public Technopark” in Sarov, and is considering to participate as a resident in “Nizhny Novgorod Regional Park of Technology Promotion”.

Mr. Molinary, the co-president of the “Intel” laboratory in Nizhny Novgorod syas: «..a developed scientific community, good universities and an outstanding professional ethics…”, “…I can recommend Nizhny Novgorod as a good place to work for any high-tech company”.

1.4. IT-companies in Nizhny Novgorod

Nizhny Novgorod region exports 30% of production of the IT sector while the average RF indicator is 9.8% - Nizhny Novgorod region ranks fourth in Russia in software exports .

These numbers are the result of foreign companies as well as local companies. For example, the innovations of the regional company “Mera” are used in more than 50 countries around the world, and among the clients and partners of the “Telma” company there are Motorola, Microsoft, etc.

1.5. Nizhny Novgorod IT-technopark

The first IT-park “Orbita” is already at work in Nizhny Novgorod region. It is the first sectoral cluster of enterprises producing software for communication systems, IP-telephony, digital signal processing, satellite and cellular communication system.

1.6. Regional Development Priorities

Research and education complex and New economies; Information technologies – are one of the main priorities according to the “Development Strategy of Nizhny Novgorod Region up to 2020”.

To achieve this goal it is necessary, first of all, to develop an educational complex as a business structure taking part in international information exchange and to raise competitive capacity of higher educational institutions of Nizhny Novgorod in the international market of educational services.

Secondly, it is important to raise the level of commercialization of scientific innovations due to the improvement of the scientific inventions’ implementation infrastructure.

Aiming at these objectives a network of technoparks is being created in the region.

2. «Open Technopark»

The project of creating “Open Technopark” was initiated by the Russian Federal Nuclear Center which developed in cooperation with AFK “Systema” the innovation development program approved in 2004 by the Government of Nizhny Novgorod region, the Department of the Plenipotentiary Representative of the President in the Volga Federal Okrug, The Federal Agency of Atomic Power.

The «Open Technopark” is situated near the close administrative territory of Sarov (CAT Sarov), where The Russian Federal Nuclear Center-All-Russian Research Institute of Experimental Physics is located. (RFNC)

The total area for research and industrial buildings is approximately 50 hectares.

Strategic objectives

The mission of the «Open Technopark» is to ensure the work of the “support points of growth” of the regional innovative infrastructure in research sphere.

This will allow creating modern innovative environment for an effective formation, development, support and training of small and medium innovation enterprises for their independent work, commercial use of scientific knowledge, inventions and high technologies, as well as introducing the scientific production in the market.

There are many actions taken already to develop a “Open Technopark”, in particular:

There are the following main stages for further development of the project:

There are the following target performance criteria of the “Open Technopark” defined:

The main development lines of the “Open Technopark”, Sarov

3. «Nizhny Novgorod Regional Park of Technology Promotion»

The project provides for creating a park of technology promotion (technology park) on the territory of Nizhny Novgorod based on the principles of the integrated development of the area as a system of unified management, including;

The area for the technology park: 50 hectares in Kuznechiha II, a district of Nizhny Novgorod.

The competitive advantages of the land plot:

The structure of the project:

The total investment cost - 10-11 billion rubles..

The co-investors are «RosEvroDevelopment”Ltd. and “Tecom” Ltd.

The main activity lines of the Technopark:

The implementation of the project can be effected in two stages taking into account the scheduled development of the manufacturing, engineering, social and housing infrastructure: I stage – 2006-2008, II – 2009-2010.

The main development lines:

The first potential resident of the Technopark is Intel.


Proposal on Participation in the Project «Development of an Interregional Intermodal Transport and Logistics Center»

The project involves design and construction of an intermodal terminal and center for cargo handling equipped with modern systems for management of and control over transport, logistic and terminal operations, for cargo handling and for redistribution of transit cargos of the Far East region

The stakeholders may act as co-founders (it may be effected through informational and management technology transfer)

1. Background

An intermodal center of transport and logistics is a dispatching complex that provides for the coordination of traffic and interaction of motor and railway transport and offers various services, such as loading and unloading, transshipment, short-term and long-term storage of cargos, cargo handling, customs clearance, dispatch and reconsigning of cargos, delivery of cargos to the clients based on the “door-to-door” and “just-in-time” principles as well as a wide range of services, such as – but not limited to – commercial, technical, banking, informational, consulting, analytical and other logistic services.

The reasons for developing an intermodal transport and logistic center are as follows:

  1. Nizhny Novgorod is the best placed in Russia from the point of view of access to the largest market of consumers (43 million people live within 500 kilometers, this rate is higher than the one of Moscow and Saint Petersburg). International traffic lines “North-South” and the Pan-European traffic line #2 cross here. The advantages of the geographic location of the region combined with the modern and developed infrastructure will allow redistributing the freight traffic that now goes through Moscow, the All-Russian centre of transport and logistics.
  2. If the freight traffic goes outside the city of Nizhny Novgorod this will improve the logistic scheme, the quality and effectiveness of freight handling and reduce costs of freight carriers. If the transport traffic is redistributed it will also improve the environment inside the city.
  3. Growth of freight flow. According to the estimates of JSC “Russia Railway” the average annual rate of growth of freight handling in Nizhny Novgorod junction is 11.1%, the aggregate freight handling growth rate will make 70% in 2010 (i.e. 170% of the freight handling index in 2005). The forecasted average annual rate of growth container cargo traffic in the RF is 20% to 40% a year. The aggregate rate of growth of container cargo traffic in the RF will reach 191% in 2010 (i.e.291% of the container cargo traffic index in 2005)

2. Reasons for the Location of the Center

There is a land plot of 50 hectares at 2 km from the city of Nizhny Novgorod (the property of JSC “Russian Railway”, there is a cargo terminal located there at the moment), which is being considered as a site for the logistic complex. The land plot is ay 1.5 km from the federal roadway M7 “Volga” which is a southern Nizhny Novgorod bypass road.

3. Facilities and Equipment of the Center.

Warehouses and offices of the Center will be equipped with (sprinkler and powder) fire-alarm systems, a burglar alarm system, a video surveillance system and fiber-optic lines.

There will be an automated control system, “Intermodal Center of Logistics” with a system for container traffic management (DISKON), a system to secure and guarantee timely deliveries (Cargo Express), an automated system for systematic cargo registration, cargo displacement control, analysis and regulation of the car fleet (DISPARK), a system of registration, control and management of terminal operations and a system of digital operative communication. This will enhance and improve the center’s performance.

The effective cargo handling will be ensured by the following components:

Unit 1:

  1. 1. Warehouse for short-term storage of cargos (B class) of 20,000 sq.m.
    Features:
    Ceiling of 10 meters and higher, a multi-level racks. Leveled floor with anti-dust cover
    Offices in warehouses
    Checkpoints
    X-ray equipment for cargo screening
    Regulated temperature conditions, thermal platens on the gates
    Dock-type automated gates with height-adjustable hydraulic ramp
    Central air conditioning or forced ventilation
    Packing, repacking and marking facilities, shipping documents processing
    Freezers of total capacity of 50 cubic meters
    Handling, transportation and packing equipment (5 Toyota loaders)
  2. Container yard in the customs zone, 15,000 sq.m. with a reach-stacker

Unit 2:

  1. Container terminal of 300 sq.m., equipped with 2 davits
  2. Heavy cargo yard of 6,000 sq. m., equipped with 2 frame cranes
  3. Package freight warehouse (A class) of 10,000 sq. m.
    Features:
    Ceiling of 10 meters and higher, a multi-level racks. Leveled floor with anti-dust cover
    Regulated temperature conditions, thermal platens on the gates
    Dock-type automated gates with height-adjustable hydraulic ramp
    Central air conditioning or forced ventilation
    Offices in warehouses
    Packing, repacking and marking facilities, shipping documents processing
    Freezers of total capacity of 50 cubic meters
    Handling, transportation and packing equipment (5 Toyota loaders)
  4. Container yard of 15,000 sq.m., equipped with a reach-stacker
  5. Container yard for storage of empty containers of 10,000 sq. m., equipped with a reach-stacker
  6. Heightened track: 2 tracks of 450 m., equipped with a frame crane
  7. Railway track (total track miles) of about 17,000 m., equipped with car scales
  8. Motor-truck yard of 6,000 sq. m. (for 100 automobiles), equipped with 3 motor-truck scales

Unit 3:

  1. Customs office
  2. Administration building of 3,000 sq. m.
  3. Hotel (3* as per the European classification, for 200 berths)

4. Provisional Estimate.

The cost of developing the infrastructure of an intermodal center of transport and logistics at the land plot near the settlement of Doskino is 928.9 m. rubles. The price does not include design, engineering services, development of communication facilities, reconstruction of motorways, construction of a hotel and a customs checkpoint.


Proposal of the Fund “NIZHNY NOVOGOROD ONCOLOGICAL RESEARCH CENTER”

on Participation in the Project of Establishing the Center of High Medical Technologies “Nizhny Novgorod Oncology Research Center” (NORC)

on Terms of Joining the Share Capital and/or Conducting Joint Research Work

1. Background

In Nizhny Novgorod region there has been created a unique research potential, in particular the Institute of Applied Physics of the Russian Academy of Sciences (IAP RAS), the Nizhny Novgorod State University (NNSU), the Nizhny Novgorod State Medical Academy (NSMA), the Russian Federal Nuclear Center - All-Russian Research Institute of Experimental Physics (RFNC) and other scientific, research and medical organizations. The latest research works in the sphere of early diagnostics and combined therapy of cancer and other diseases are available in the region. These innovations are already applied in the Russian public health system and are being commercialized abroad. Some of them are really unique and exist in Russia only.

The current situation in the region can be characterized as follows:

The investment attractiveness of the project is made up of the following components:

On March 22nd, 2006 the Investment Council under the Governer of Nizhny Novgorod region made the following decision № 9-2-12 «…to consider advisable the implementation of the investment project “Establishing of the Center of High Medical Technologies: Nizhny Novgorod Oncology Research Center (NORC)”.

2. Proposal: On Participation in the Project of Establishing the Center of High Medical Technologies “Nizhny Novgorod Oncology Research Center”

The proposal focuses on participation in the project starting from the stage of drafting project documentation on the terms of contributing to the authorized capital of the JSC (close-type) “NORC” (with further establishment of the limited liability company “NORC” in cooperation with Nizhny Novgorod region) and cofinancing. It is planned to submit an application to the Investment Fund of the Russian Federation and to require the due financing from the RF budgetary funds.

The Japanese party is interested in getting and enjoying priority rights to procure the equipment of all the facilities of the NORC, including: oncological clinical complex, medical center of hadron therapy, biomedical technopark, scientific and educational unit, business infrastructure center.

Negotiations shall be conducted in order to discuss in detail all the terms and conditions of participation of the stakeholder in the NORC project.

3. Propoasal: On Participation in the Innovative Components of the NORC Project:

2.1. Team research work on inventing a laser ion emitter for hadron therapy.

The Institue of Applied Physics of the Russian Academy of Sciences has invented unique laser emitters with the peak capacity of over 100 terawatts, which are interesting as possible laser emitters of inos for hadron therapy purposes.

The initiators and participants of the NORC project are ready to advance and enhance this research in Nizhny Novgorod region on the basis of the technologies available in cooperation with the interested Japanese party under the NORC project, including creating a prototype, starting the production and equipping the hadron therapy centers in Japan, Russia and other countries with the emitters.

The potential partner in Japan is the JAERI (Japanese Atomic Energy Agency).

To offer the Japanese party to consider the possibility of investing funds in the joint research work.

2.2. Joint research work of the fundamental processes of neurodynamics in cellular and molecular therapy development.

On the basis of the Nizhny Novgorod State University and the Institute of Applied Physics of the Russian Academy of Sciences there has been set the Russian-Japanese Laborotary - “Neuroimitating Information Systems and Neurodynamics” for conducting research and work on:

The partner in Japan - The Institute of Cerebrum of «Riken» Coproration, the President - Shun-Ichi Amari.

The Japanese party is ready and willing to finance the joint research of the neurodynamics processes. Thus there may be a suggestion made to invest in developing the base for the joint work and, in particular, in the project of biomedical technopark of the NORC, which will promote and ensure the organization of joint venturing and manufacturing and the transfer of innovations to Japan.

2.3. Joint Development of the Optic Coherent Tomography and Microscopy Method, Joint Venturing and Manufacturing.

The Institute of Applied Physics of the Russian Academy of Sciences has invented a unique method of the optic coherent tomography (OCT) and the corresponding devices. This equipement has been successfully commercialized n the USA.

To offer the Japanese party to consider the possibility of financing joint development of the OCT method and its commercializing on the basis of the biomedical technopark NORC with the following procurement of the equipment to Japan, Russia and other countries.

The potential partners in Japan are large corporations specializing in design and production of high tech medical equipment (Olympus, Pentax and others.).


Proposal: Joint Participation in the Projects on Construction of Heat and Power Stations with the Total Capacity of 1.2 megawatts

Proposal: Participation in the Projects on Updating and Reconstruction of Heat and Energy Stations of JSC “Nizhny Novgorod Generating Company”Investments required – $62m.

1. Explanatory Note: On Developing the Power Complex in Nizhny Novgorod Region

The Nizhny Novgorod regional generating complex is built by 5 power stations of JSC “Nizhny Novgorod Generating Company” with the total capacity of 2.5m kilowatts. There is a deficit of power supply in the region. The total output of the heat power plants makes 8 billion kilowatt-hours and it cover around 40% of the energy consumed in the region, which is 21 billion kilowatt-hours. The lacking electric power is bought from and supplied by the JSC “Russian United Energy Systems” – the suppliers of the Federal Wholesale Market of Electric Power.

The major consumers of electric power are industrial enterprises (65%). The largest consumers are companies of mechanical engineering and metal processing industries, ferrous metallurgy, petrochemical and food industries. The residents of the region take 14% of the total supply, agricultural companies – 2%, transport – 5%.

2. Proposal: Joint Participation in the Projects on Construction of Heat and Power Stations

  1. Construction of a combined heat-and-power plant operated by natural gas (total capacity of 100 to 150 megawatts) in Bor raion and development and implementation of the natural gas consumption optimization plan
  2. Construction of mini-combined heat-and-power plants in Nizhny Novgorod region (total capacity of 100 to 150 megawatts) with gas turbine and gas-piston units, using the technology of organic fuel (divot, woodworking wastes, etc) gasification
  3. Construction of a combined cycle heat and power plant in Nizhny Novgorod (at the site of former nuclear heating station) with the electric power capacity of 900 megawatts and heating power capacity of 1050 megawatts.

Possible ways to participate in the above mentioned projects:

3. Proposal: Participation in the Projects to Update and Reconstruct Energy Stations of JSC “Nizhny Novgorod Generating Company”

  1. Igumnovo Heat Power Station Reconstruction of the station and installation in the buildings of incomplete construction of:
    3 combined cycle gas turbines of 45 megawatts;
    3 double-pressure destructors;
    2 steam turbines with extraction of steam for manufacturing process
    Capital investments (with account of VAT) – 3,430 m. rubles
    Net discounted profit after 15 years – 813 m. rubles
    Discounted payback period – 9.3 years
  2. Novogorkovskaya Heat Power Station
    Reconstruction of a second-priority heat power station with further de-commissioning of a first-priority heat power station
    Capital investments (with account of VAT) – 355 m. rubles
    Net discounted profit after 15 years – 192 m. rubles
    Discounted payback period – 8.7 years
  3. Sormovo Heat Power Station
    Installation of 2 water boilers (capacity 116.3 megawatts); reconstruction of steam turbo units 1 and 2.
    Capital investments (with account of VAT) – 550 m. rubles
    Net discounted profit after 15 years – 500 m. rubles
    Discounted payback period – 5.3 years

Terms and conditions of participation in the projects shall be further stipulated with the controlling stockholder of JSC “Nizhny Novgorod Generating Company”, the JSC “Russian United Energy Systems”

Investment project: Construction of a pilot small heat power plant on the basis of renewable energy sources of Nizhny Novgorod region.

Place of project implementation: Nizhny Novgorod region, Bor Raion.

Main activities and a brief project description:

Purpose: construction of a pilot small heat power plant on the basis of renewable energy sources of Nizhny Novgorod region followed by creation of similar plants in northern raions of Nizhny Novgorod region.

Goal:

Total cost of the project:

According to the data provided by the equipment manufacturer, if the average investment cost of 1 kW of electric power provided by a small heat power plant on the basis of a turnkey cogeneration plant is about 1000 USD, total investment cost of a 200 kW small heat power plant shall not exceed 6 million RUR. The payback period of investment in the construction of a small heat power plant does not exceed 3 years from the start-up time.

Background for project implementation:

The concept of social and economic development of northern raions of Nizhny Novgorod region until the year 2015 provides for the improvement of fuel balance structure and heat supply system by means of transitioning from imported to local fuel as well as for revival of peat extraction industry.

There is a lack of energy resources in Nizhny Novgorod region. The use of peat as a source of electric and heating energy seems to be appropriate taking into account the price of fuel, its calorific efficiency, availability of local energy resources and price forecasts for gas, coal and black oil.

Based on the abovementioned information it is proposed to develop an investment project of construction of a pilot small heat power plant on the basis of Bor Peat Company for the following reasons:

Designation of future products (services) and their output:

Heat and energy supply from a 200 kW small heat power plant.

Project efficiency indicators:

The table below gives approximate characteristics of a stationary small heat power plant on the basis of a gas generator, a gas piston engine and a turbogenerator.

Item # Indicators Units Quantity
1. Plant output kWh 200
2. Heat rate kWh 300
3. Fuel consumption (peat) Kg/kWh 0,755
4. Cost of fuel RUR/kg 0,6
5. Cost of electrical energy RUR/kWh 0,5
6. Cost of thermal energy RUR / kWh 0

According to the data provided by the equipment manufacturer, if the average investment cost of 1 kW of electric power provided by a small heat power plant on the basis of a turnkey cogeneration plant is about 1000 USD, total investment cost of a 200 kW small heat power plant shall not exceed 6 million RUR. The payback period of investment in the construction of a small heat power plant does not exceed 3 years from the start-up time.

Possible funding sources:

The following funding sources can be used: a commercial or a banking credit, financial leasing, participation of investment partners (share capital creation). There is no owned capital.

Owned resources:

It is suggested to develop this investment project on the basis of “Bor Peat Company” JSC.


Proposal on participating in investment projects together with companies of Nizhny Novgorod region:

Agat Group:
Modernization of car component production

Pustyn Closed JSC:
Extension of car component production facilities for existing and new-founded automakers in Russia

Sotex Closed JSC:
Creation of facilities for car seat production from integral foam

TechnoPlast Closed JSC:
Creation of a joint venture for bumper production

Teploobmennik JSC:
Creation of new facilities of aluminum car heat exchangers using special technologies

Lyskovo Electrical Plant OJSC (AUTOCOM industrial group):
Development of alternative power engineering and implementation of component production for wind-driven power plants

Proposals of investment project implementation for creating facilities for car component production

1.A brief overview of automotive industry of Nizhny Novgorod region.

The history of automotive industry starts back in 1929, when the Soviet government took a decision to create an automobile plant in Nizhny Novgorod. This important decision defined the role of this region as the place where the most important branches of industry were motor-car construction, engine construction and car assembly, a branch of industry formed by assembly facilities and car component manufacturers which were created later on.

Today "GAZ" occupies a special place in Russian automotive industry. It is the only company in the country that produces such a wide range of trucks and passenger vehicles, special equipment and spare parts.

In 2005 on the basis of GAZ plant, a large group was formed which included four bus plants (Pavlovo Bus Plant, Likino Bus Plant, Golitsyno Bus Plant, Kurgan Bus Plant), Kanash Auto Unit Plant, Saransk Dump Truck Plant, Yaroslavl Fuel Equipment Plant. As a result of such consolidation of assets the company’s capitalization increased and the structure of GAZ became compliant with the international automotive corporation standards. GAZ gained access to markets of capitals and gave an impetus to the integration of Russian automotive industry into the global automotive industry.

Share of GAZ JSC in production of vehicles in Russia is as follows: passenger cars - 6,5 %, trucks - 55,6%, buses - 47,9%. Its annual output is more than 230 thousand vehicles, 52,4% of them are trucks, 17,2% - buses, 30,3% - passenger cars. The annual turnover of GAZ JSC is approximately $2 billion.

Among the enterprises of Nizhny Novgorod region belonging to GAZ Group are Arzamas Machinery Plant OJSC, Zavolzhie Caterpillar Tractor Plant OJSC and Pavlovo Bus OJSC.

Zavolzhie Engine Plant JSC, part of Severstal Company, is also of a great importance for the region. They supply their products to many members of GAZ Group and to Ulianovsk Automobile Plant.

The range of automotive products is extended by assembly facilities which use chassis of GAZ and other Russian automobile plants.

KOMMASH JSC. Main products of the company are as follows: suction machines, disposal trucks, sprinklers, sand-spreading cars, street-cleaning cars and sanitation trucks.

Samatlor Industrial Group (SEMAR Closed JSC) – production of buses and special purpose vehicles on the chassis of GAZ and bus assembly (MAZ-103) in cooperation with MAZ Company (Belarus).

Special Vehicle Plant JSC and Chaika-Service located on its working area produce special purpose vehicle on "GAZ" chassis.

Among essential partners of automakers are car component manufacturers. One of the largest companies producing fixing elements in Krasnaya Etna Plant JSC. Among the suppliers of many Russian automobile plants are such companies as: Agat Group, Lyskovo Electrical Plant OJSC, Pustyn Closed JSC, Sotex Closed JSC, TechnoPlast Closed JSC, Teploobmennik JSC etc. All of them, depending on their specialization, ensure the continuous process of automobile production in Nizhny Novgorod and the region.

An increase in the number of newly created automotive companies in Russia which manufacture vehicles under the world leading trademarks makes them prospective consumers of car components produced by enterprises in Nizhny Novgorod. Thus, the following companies can be regarded as prospective consumers of car components: Nissan Motors, Toyota Motors, Ford Motors, DeimlerChrysler, Fiat, GM, Volkswagen, Hyundai, KIA, Great Wall, Chery etc.

2. Agat Group, Agat Plant JSC: Modernization of car component production

Agat Group has developed a project of car component production modernization at Agat Plant JSC, Car Hydraulics Department.

The main purpose of the project is provision of domestic and foreign automakers (having production facilities in Russia) with high-quality and high-tech brake hydraulic systems.

The project was fully worked over by technical, production, commercial and economic services of Agat Group.

The Japanese party can participate in modernization of car component production.

It is suggested to give preference in the short run to domestic car manufacturers together with development of production of components for foreign cars which should be followed by full transition to production of these very artiсles.

3.Pustyn Closed JSC: Extension of car component production facilities for existing and new-founded automakers in Russia

Consideration of variants of location of car component production for existing and new-founded automotive plants situated in Russia and for supplying foreign companies with components.

The company is open for domestic and foreign customers as well as for prospective investors.

4.Sotex Closed JSC: Creation of facilities for production of car seats and other articles from integral foam

Creation of a joint venture in cooperation with Nissan or Toyota for production of car seats and other articles from integral foam (head restraints, elbow rests, steering wheels etc) for Nissan and Renault cars (and, in future, Toyota cars) to be manufactured in Russia.

Sotex Closed JSC shall provide premises, equipment and manpower. Nissan shall supply technical documentation, technologies and staff training.

5. TechnoPlast Closed JSC: Creation of a joint venture for bumper production

Creation of a joint venture in cooperation with Nissan or Toyota for production of bumpers for the complete range of car models to be manufactured by those companies in Russia as well as for Renault cars.

6.Teploobmennik JSC: Creation of new facilities of aluminum car heat exchangers using special technologies

The company needs a Western partner to participate in plant construction, and creation of facilities aluminum car heat exchangers using special technologies.

7. Lyskovo Electrical Plant OJSC (AUTOCOM industrial group): Development of alternative power engineering and implementation of component production for wind-driven power plants

Suggest to the Japanese party considering provision of assistance in developing alternative energy in Russia, and in setting up production of aero generator components. The pant has capacities to prepare for the production of advanced high-technology constructions. The company needs help of a design company to carry out analysis of existing wind-driven power plants projects of foreign companies and design of a high-reliability and competitive wind turbine.

8. Proposals of investment project implementation for creation of car component production facilities

Interest of the Japanese party:

1. Creation in Nizhny Novgorod region new facilities for production of car components will promote product localization for the future Toyota and Nissan automotive plants (Leningradskaya Oblast) and for existing Renault plant in Moscow. Nissan and Renault are partners.

2. Taking into account the global trend of unification and the use of common platforms for creation of new car models, output quality and principles of production organization other existing and newly created facilities of foreign companies on Russia as well as local car manufacturers can be considered as prospective customers. The following companies should be regarded as principal consumers of such products: Ford Motors, DeimlerChrysler, Fiat, GM, Volkswagen, enterprises of GAZ group, AutoVAZ, UAZ etc.

At present a number of companies such as Weigel GmbH/Co.KG (car component suppliers for Volkswagen), John Deere (agricultural equipment manufacturer) are looking for partners in order to create facilities for car component production in Nizhny Novgorod region. Hence, it is necessary to consider the question of creation of facilities for car component production in cooperation with Nizhny Novgorod, Japanese and all abovementioned enterprises.

Proposal to the Japanese party:

Consider at the initial stage the options assembly facilities location in Nizhny Novgorod region and, in future, complete cycle plants for the production of:

  1. assemblies and units used in transmissions - gear boxes (mechanical or automatic transmissions and variators), input drives, constant velocity joints and drive axle gear boxes.
  2. internal combustion engines for different types of vehicles. Special attention should be paid to diesel engines intended for light-duty and medium-duty commercial vehicles, minibuses, midibuses and large buses as well as to petrol engines for motorcars produced or planned for production by foreign manufactures in Russia («Toyota», «Nissan»).
  3. car body panels for existing and future assembly facilities.
  4. teering systems (steering boxes, hydraulic boosters, electric boosters, track rods etc)
  5. car suspension elements (shock absorbers, springs, levers, stabilizers etc)
  6. brake system elements (brake blocks, supports, brake plates, pipelines, brake master cylinders, wheel cylinders, pressure regulators, control units of antiblock brake system, acceleration spin control etc)
  7. elements of electric equipment necessary for active and passive car safety, control blocks and elements providing comfort (antiblock brake systems, acceleration spin control systems, yaw control systems, airbags, control units of internal combustion engines, climate control systems etc)

Investment projects in other spheres

Organization of block plexiglas production

Construction of plant for production of polypropylene pipes and shaped products

Development of “Pridorozhnoye” clay loam deposit and construction of a multi-product brickworks

Creation of used tire recycling facilities

Investment project:
Organization of block plexiglas production with the capacity of 360 tons per year

Place of project implementation: Dzerzhinsk, Nizhny Novgorod region.

Main activities and a brief project description:

This project is intended for manufacturing of unique equipment for block plexiglas production using entirely new technologies. The capacity of the installation is 360 tons per year.

The possible dimensions of plexiglas may vary from 3 mm to 120 mm. That is why it has a wide field of application: it can be used in everyday life, architecture, mechanical engineering, aircraft industry.

It is proposed to rent manufacturing facilities with existing engineering infrastructure at the construction site (water supply, heating, energy supply, sewage, ventilation etc).

Total cost of the project:

Full investment cost of the project will amount to 90 million RUR without VAT, where 75 million RUR is the cost of manufacturing of a 3-module installation and 15 million RUR is the cost of construction, assembly and commissioning work.

Background for project implementation:

One cannot overestimate the importance of block plexiglas. Only block method can be used to receive a plastic material with optimum physical, chemical and optical characteristics like atmosphere resistance, UV-resistance, durability, high chemical stability etc. The particular advantages of block method of plexiglas production become apparent when articles of various thickness, colour and specific properties are produced. Such articles may include products with an increased radiation and X-ray resistance, those with a possibility of use in tropical climate and an increased heat-resistance (up to 180°С), non-combustible articles and multi-layer (including bullet-proof) plastic materials.

Designation of future products and their output:

Designation TU, GOST Technical characteristics and basic properties Field of application
Technical plexiglas (Non) plasticized metylmethacrilate polymer obtained by block polymerization. Supplied clear transparent and tinted transparent. Thickness: 1.0- 24.0mm. Size: 1150 х 1250; 2000 х 3000 mm 1. Melting point, ºС, depending on thickness: 1-6mm - not lower than 92 - 110 7-24mm – not lower than 92 - 112 2. Impact resistance, kJ/m2, depending on thickness: 2.5-4mm 8,8 8,8 5-24mm 13 15 Mechanical engineering, motor-car construction, advertising, household
Sheet aviation plexiglas, СО120А, (Non) plasticized metylmetacrilate polymer obtained by block polymerization. Thickness: 0.8-30.0mm. Size: 1150 х 1250, 1400 х 1600 mm 1. Tearing strength: not less than 77.5 MPa 2. Elongation at fracture: not less than 3.5% For glazing of airplanes, helicopters and boats; as constructional material for machines, instrument-making industry and other branches of industry

Despite the fact that the control over the balance between plexiglas production and consumption has been lost since about 1990, it is still possible to have an approximate estimation of the situation. Within the framework of the pre-existing system of centralized applications and fund distribution by 1990 there were 65 applicants with a total requirement of 60 thousand tons of plexiglas per year. Analysis of the required plexiglas range showed that at least 40 thousand tons per year can be considered to be extruded polymetylmethacrylate. The share of block plexiglas amounted to 20 tons per month. The decline in plexiglas production that was witnessed during the past 15 years of its industrial production surely had an impact on its former consumers. If we consider plexiglas production to decline by 70%, then the plexiglas demand will amount to 12000 tons per year. This leads to the conclusion that the real size of the block plexiglas market can amount to at least to 3000 tons per year.

The abovementioned guideline - 3000 tons of block plexiglas per year - is the minimum quantity that can really be produced on the local market in the nearest future. At the same time key specialists think that in the middle-term outlook the market in Russia and adjacent regions can supply up to 20 tons of block plexiglas per year, but only if the supplied products are competitive enough in terms of prices and quality in comparison with similar products manufactured abroad. This is the purpose of the new block plexiglas production method that we developed.

Project efficiency indicators:

Item # Indicator Designation Units Value
1 Sum of investments (VAT included) K RUR 106 200
2 Settlement period years 7
3 Discount rate R % 18
4 Net present value NPV K RUR 3 668
5 Internal rate f return IRR % 19
6 Payback period PB years 3,5
7 Discount payback period DPB years 6,5

Possible funding sources:

The following funding sources can be used: a commercial or a banking credit, financial leasing, participation of investment partners (share capital creation). There is no owned capital in place.

Reference documents:

Description of plexiglas manufacturing method.

Technical description of the product.

Investment project:
Construction of plant for production of polypropylene pipes and shaped products

Place of project implementation: Dzerzhinsk, Nizhny Novgorod region.

Main activities and a brief project description:

Construction of a plant for producing polypropylene pipes and shaped products.

Total cost of the project: 665 million RUR or 20 million Euro.

Period of project implementation: 1 year.

Background for project implementation:

Russia has one of the longest pipelines in the world, the second after the USA. At present time Nizhny Novgorod region is running about 1 million km of external pipelines within the housing and utilities infrastructure and about 3 million km of housing pipelines. There are also industrial pipelines and internal pipelines of non-residential facilities the total length of which is also significant.

Operating characteristics of polymer pipes are equal to those of metal pipes but at the same time the service life of polymer pipes is 6 times longer and their installation is 3 times less expensive.

The polymer pipe production is not yet developed, so, as a result, shortage is compensated by a considerable import of products from Germany, Italy, the Czech Republic, Turkey and Poland.

Prices for imported products are at least 1,5 times higher than the price of the products that will be manufactured under this project.

This project offers an idea of creation of a polymer pipe production in Nizhegordskaya Oblast that is able to meet competition and respond to dynamic needs of this region and, in the future, to the needs of other regions of Volga Federal District.

Designation of future products and their output:

Sewer pipes with flared ends for internal pipelines, Ø 40, 50 and 110 mm, 387 tons per month.

Shaped products for sewer pipelines (couplings, taps, T-joints etc), 157 tons per month.

Pressure pipes PN 10 for cold water supply, 74 tons per month.

Pressure pipes PN 16 for hot water supply, 101 tons per month. Pressure pipes PN 20 for heating, 295,5 tons per month.

Shaped products for pressure pipelines (couplings, angles, T-joints etc), 341 tons per month.

Possible funding sources:

The following funding sources can be used: a commercial or a banking credit, financial leasing, participation of investment partners (share capital creation). There is no owned capital.

Reference documents:

Technical projects of extrusion lines for production of sewer and pressure polypropylene pipes.

Technical projects of press molds for shaped products production by means of die casting.

Technical projects of injection-molding machines (automatic molding machines).

Technical projects of peripheral equipment and networks for the provision of main manufacturing equipment with raw materials, energy and energy carriers.

Investment project:
development of “Pridorozhnoye” clay loam deposit and construction of a multi-product brickworks

Place of project implementation:

village of Kishkino, Bolshemurashkinsky Raion of Nizhny Novgorod region.

Main activities and a brief project description:

Total cost of the project:

about 320 million RUR.

Period of project implementation:

2 years.

Background for project implementation:

Designation of future products and their output:

Project efficiency indicators (including budgetary, social etc):

Possible funding sources:

the project needs a strategical investor. The land used for project implementation will serve as a contribution to the capital stock.

Investment project:
Creation of used tire recycling facilities

Place of project implementation:

Nizhny Novgorod

Main activities and a brief project description:

The purpose of this project is creation of used tire recycling facilities. The final products of used tire recycling are: fine rubber powder (65% of the feed stock), metal scraps of tire yarn and base rings (25%), and textile waste of tire yarn (10%). The abovementioned products are in their turn raw materials for rubber technical and chemical industry.

In accordance with this project a new factory is created with the production premises of 900 m2 and warehouses of 720m2, and annual production volume of 6000 tons (calculated on the basis of the amount of initial raw material and three-shift work). The said capacity allows for recycling about 40% of the annual quantity of used tires in Nizhny Novgorod.

Total cost of the project:

36.3 million RUR, including internal funds at the amount of 3 million RUR.

Period of project implementation:

6-7 months (to be precised in the project).

Background for project implementation:

The dynamics of car fleet growth in all developed countries leads to continuous accumulation of used tires. Scrap tires out of use are a source of pollution of the environment for the following reasons:

At the same time used tires contain valuable raw materials such as caoutchouc, metals and textile tire yarn.

The problem of used tire recycling has a great environmental and economic significance for all the developed countries of the world. As the natural oil stock is irreplaceable, it is necessary to provide the maximum efficiency of the use of secondary resources.

Designation of future products (services) and their output:

The car fleet in Nizhny Novgorod alone by January 1, 2006, consisted of about 300 000 vehicles, including 210000, which, in accordance with norms, equals to 3780 tons of used tires per year. There are about 90000 trucks and passenger vehicles which give in their turn 10800 tons of used tires per year. The total quantity of recycled tires in 2006 can be estimated as 14500 – 15000 pieces.

The proposed project allows for recycling about 40% of the annual quantity of tires in Nizhny Novgorod.

Output of future products:

It is also planned to create a plant for general rubber goods production from recycled products.

Project efficiency indicators:

Possible funding sources:

Reference documents:

Business plan of used tire recycling facilities.


Contact Information

Ministry of Investment Policy of the Nizhny Novgorod Region

Minister: Dmitry V. Svatkovsky

Phone: +7 8312 11 82 16
E-mail: official@invest.kreml.nnov.ru

Deputy minister: Sergey L. Zimin

Phone: +7 8312 11 83 57
E-mail: inter@invest.kreml.nnov.ru

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