The Moscow Department of Investment and Industrial Policy and the Moscow City Investment Agency present you the next digest of the main investment events in the Russian capital.
The Moscow Government has signed the fifth ten-year offset contract: it obliges the investor to production of 20 drugs the city within two years.
“This is the fifth offset contract awarded in the capital, and the third one in pharma, two other offset contracts were awarded to manufacturers of medical devices and baby food. The total current amount of private investments in the five offset contracts signed by Moscow is RUB 12.9 bn. The capital now is planning to sign offset contracts in such industries as IT equipment, transport machine building, equipment for housing and utility services,” Deputy Mayor of Moscow on Economic Policy and Land and Property Relations Vladimir Efimov said.
“The supplier of the fifth offset was chosen upon an open tender, for which one bid was submitted - from the Moscow Endocrine Plant. The Commission reviewed the offer and concluded that it met all the terms of the bidding documents. The company will set up production of anti-glaucoma, antibacterial, analgesic drugs as well as antidepressants and neuroleptics. The planned investments will amount to RUB 1 bn. Moscow guarantees in its turn to the investor the purchase of drugs produced at the plant for RUB 1.1 bn over 8 years,” Head of the Moscow Department of Investment and Industrial Policy Alexander Prokhorov explained.
Moscow signed 74 life cycle contracts (LCC) of total RUB 74 bn within one year. Two contracts were signed for the supply of electric buses as part of the urban transport renewal program, their total value exceeded RUB 17 bn. The subject of the other 72 contracts was the supply of medical equipment for Moscow medical preventive institutions including angiographs, equipment for MRI and CT scanning, ultrasound machines, X-ray and endoscopic equipment as well as digital mammographic systems. The total amount of these LCCs exceeded RUB 57 bn.
As Deputy Mayor of Moscow on Economic Policy and Property and Land Relations Vladimir Efimov said, today life cycle contracts accounted for more than half of all public-private partnership projects in the capital - their total value in six years was RUB 542.4 bn.
“In 2021, the capital will continue the LCC practice. Thus, it is planned to conclude new contracts for the supply of modern equipment for the needs of Moscow medical institutions,” CEO of the Moscow City Investment Agency Svetlana Ganeeva explained.
The Financial Times analytical division - fDi Intelligence - has included Moscow in the top 25 of the Global Cities of the Future, the ranking of the most attractive cities for foreign investors. This year, the ranking compilers used data on 129 cities in such areas as economic potential, labor, cost-effectiveness, infrastructure, business-friendly environment.
“Moscow took 22nd place in the overall ranking and strengthened once again its position as one of the largest and most attractive agglomerations for foreigners to invest in. As the survey results show, we successfully compete with the world's leading megacities in many criteria,” Head of the Moscow Department of Investment and Industrial Policy Alexander Prokhorov said.
Besides the main list, fDi published additional rankings. Moscow was ranked among the top 10 cities by a number of indicators including favorable business climate, developed infrastructure, and comfortable level of costs for doing business.
The Golden Site annual Internet project contest has awarded the Moscow Investment Portal with a special award in the Website for Business and Investment Support nomination. The Moscow Investment Portal makes it easy to find information on running investment projects, industry support measures, city property sale and rent auctions, tax regimes and benefits. Users have access to 30 digital services that facilitate entrepreneurial activities in the city and implementation of investment projects.
“When developing the new functionality, we rely on investors opinions and take into account their wishes. The website has a direct line for prompt communication between business and the city government. 9,600+ requests from entrepreneurs were received through the direct line, 2,900 of them in 2020. Another service was launched in November, it allows businesses to send questions and proposals for investment activities in the capital in a on stop shop mode and to receive answers as soon as possible in their account profiles. Many investors note that interaction with the city has never been so open and prompt,” Head of the Moscow Department of Investment and Industrial Policy Alexander Prokhorov said.
Office units in the administrative and business center located on the Alabushevo site of the Technopolis Moscow SEZ in Zelenograd were rented by 13 companies in 2020.
The new tenants of the special economic zone include manufacturers of automotive electronics, air and water disinfection systems, refrigeration equipment, medical products and integrated chips. Engineering companies, a web-studio and a developer of safety systems chose the sites in Zelenograd as well.
“The Zelenograd site of the special economic zone is actively developing: more than a year ago entrepreneurs could locate here only through the construction of their own plant. Currently, Alabushevo offers other options: rent of both production and office spaces. At the end of 2020, companies rented 3,400 square meters of office space, with four of them have the resident status and will build their own plants in Alabushevo in the coming years. About 300 people are now working in the rented units,” Head of the Moscow Department of Investment and Industrial Policy Alexander Prokhorov said.
In 2020, the Moscow non-resource non-energy exports increased by 31% and amounted to USD 39.86 bn. The list of the largest importers included Kazakhstan, USA, Belarus, China, Germany and Japan. Medical and pharmaceutical exports showed good dynamics: shipments in this segment increased by 39% compared to 2019.
The Moscow share in the Russia's total non-resource non-energy exports rose by 5% last year up to 24.7%. The capital's products were supplied to 183 countries of the world. Moscow's main export partners are Kazakhstan (USD 2.65 bn), the United States (USD 2.48 bn), Belarus (USD 2.4 bn) and China (USD 2.27 bn). The other key importer were Germany (export volume increased by 11.1% up to USD 1.23 bn), Hong Kong (supplies increased almost threefold up to USD 1.22 bn) and Japan (exports grew by 12.9% up to USD 1.12 bn).
“The volume of the Moscow non-resource non-energy exports has been growing steadily in recent years. In 2019, the figure was USD 30.42 bn, a 25.1% increase over 2018. The structure of non-resource non-energy exports showed the following results at the end of 2020: the Moscow industrial exports increased by 30.9% up to USD 36.05 bn, and the export of agricultural products - by 31.8% up to USD 3.8 bn,” Deputy Mayor of Moscow on Economic Policy and Property and Land Relations Vladimir Efimov said.
The main export commodities were mechanical equipment, machinery and computers, automotive equipment, chemical products, and various communication equipment.
In 11 months of 2020, the volume of the Moscow confectionery exports exceeded USD166 m (or almost 70,000 tons of finished products): sweets were sold in 61 countries.
“The most demanded confectionery product was chocolate with USD 80.45 m in exports, a 7% increase over 2019. The second place was taken by the flour confectionery, which was sent abroad for USD 61.45 m, the increase in exports amounted to 17%. The third place was occupied by sugary confectionery products including fruit marshmallows, jelly sweets and lollipops. They were sold for USD 24.12 m, a 9% increase over 2019. Moscow sweets are being supplied to 61countries,” Deputy Moscow Mayor for Economic Policy and Land and Property Relations Vladimir Efimov said.
Belarus, Kazakhstan, Mongolia, Azerbaijan, Germany and the USA were the key trade partners for Moscow companies. These countries account for 65% of the Moscow confectionery exports.
The Mosprom Center has developed a customized comprehensive export development program for companies in the Technopolis Moscow SEZ. The program will make it possible to expand the geography of supplies and to establish contacts with foreign partners.
“About a quarter of the Technopolis Moscow Special Economic Zone residents export their products to 25+ countries of the world. Electronics, training and inspection equipment, composites, optical solutions and other goods are supplied abroad. The specialized program will help enterprises to expand their supply geography and to establish contacts with new potential importers including through business missions and group stands at foreign trade fairs. The Center experts will also prepare analytical reviews of potentially interesting foreign markets for the residents, which will include both a detailed analysis of a particular country and an analysis of the prospects in specific industries,” Deputy Moscow Mayor for Economic Policy and Land and Property Relations Vladimir Efimov said.
Entrepreneurs will be able to rent from city 129+ non-residential units on preferential terms All of them are now presented at city auctions, in which only representatives of small and medium-sized businesses can take part.
The space of the units is from 9.9 to 437.5 sq. m. The price of annual rent starts from one RUB 1,000 per square meter for sub-basement units and from RUB 4,750 - for the basement, ground floor and above. Units can be rented for a period of up to 10 years.
Most of the units at a discounted rate are in South Moscow - 29 premises. 17 units are for rent in North Moscow, 15 - in South-West, 13 - in North-East and East, 12 units are presented in the center and in South-East Moscow, 10 - in North-West, 7 - in Zelenograd and 3 - in West Moscow.
The auction winner will be able to rent two 19th-century units of total 106.4 square meters for a period of five years. The premises are located in the center of Moscow next to the Kuznetsky Most metro station at the crossing of active pedestrian and transport flows and are suitable for opening a co-working facility or a shop.
The units are located at Pushichnaya Street 7/5, building 4a. The initial annual rent rate is RUB 2.7 m. Applications can be submitted by March 4, 2021.