Investments Aid ‘Boom Time’ in St. Petersburg Region

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Mar. 12 – Foreign investments into the St. Petersburg region have grown almost 30 percent in 2009 compared to 2008 and have so far totaled US$1.3 billion.

These indicators have allowed the region to remain one of leaders on rates of increase in foreign investments in Russia. The main investors are United States (45.4 percent of all foreign investment), Netherlands (18.2 percent), Finland (11.1 percent) and Austria (8.1 percent).

Despite the crisis, the volume of investments into fixed capital in 2009 in Leningrad region has generated 193.25 billion roubles, showing a gain of 7.1 percent from the previous year.

According to statistical data from January 2010, growth of investments into the region has helped pick up the economy. Mastered investments into fixed capital amount up to a sum of 2.5 billion roubles, 2.3 times more than in January of the previous year.

The St. Petersburg region remains attractive both for foreign and Russian investors. Foreign investments have reaffirmed the transit importance of the region, affinity to St. Petersburg and the European Union, an exit to Baltic Sea and developed transport infrastructure.

According to the press secretary of the economic development and investment committee for the region, Alexander Butenin, the regional authority has planned to further develop the transport system and to construct a Moscow-St.Petersburg and St.Petersburg-Helsinki high-speed highways. Building and the subsequent operation of a versatile loading complex “South 2” in Ust-Lug sea trading port also has great value for regional infrastructure development.

Speaking to local media Butenin commented “the St. Petersburg region possesses scientific and technical potential, has natural resources, highly skilled engineering cadre, big innovative potential in the form of at least thirty research organizations, academic institutes and scientific centers, more than three hundred small enterprises in the scientific and technical field, five universities and a significant amount of innovatively active enterprises of industrial sphere”.

Within the last year a number of new projects have been realized in the region such as the wood processing complex in the Chudtsy town (US$107 million) by Russian JSC Severo-Zapadniy Holding and a manufacturing factory for porous concrete in Volosovsky area (US$53 million) by Danish H+H International. By the end of 2009 a factory for wood fuel granules (pellets) produced in Podporozhe started operation (300 million rubles). The investor, Severo-Zapadniy Holding also plans to develop factory capacities for deep processing of wood to more than US$136 million. In February 2009, General Motors began industrial assemblage of cars in Shusharah. The ongoing construction of the North European gas pipeline, in particular Grjazovets to Vyborg section, which joins a part of the Northern Stream pipeline, should positively affect a transport infrastructure of region (Gazprom).

There are also some future investment projects in region. EuroChem, Russian manufacturer of mineral fertilizers continues to realize the project cost of 1.5 billion rubles on replacement of the worn out equipment in manufacturing plants for extracting phosphoric acids. The project is due for completion in 2011.

The Russian branch of Finnish company Fazer plans to increase the manufacture of bakery products for their chain The Bread House – Fazer in the Vsevolozhsk area. The volume of investments into this project is estimated at US$136 million with the factory due to start production by the second half of 2012.

A distillery factory is also being planned in Lomonosovsky area of the region. The volume of investments into the project exceeds US$50 million with the factory due to operate from 2012.