What investors say about investing in Tatarstan
Interview
Q&A: Rustam Minnikhanov
Tatarstan: supporting innovative start-ups
Capital markets
Tatarstan in the capital markets
Tatarstan is the most progressive Russian region after Moscow and St Petersburg in attracting foreign portfolio investors, with a successful record in attracting loan financing, Eurobond financing, and equity investment. And the republic is only going to become a bigger presence on the international capital markets as a new raft of IPOs is prepared, with a potential deal volume of over $4 billion.
Banking
Tatar banks expand with help of western capital
Tatarstan has an unusually strong banking sector among Russian regions. This makes it an attractive market for banks from Moscow and abroad, who have been opening branches throughout the region. But local banks are actually growing faster than the new arrivals, and are now expanding into other regions of Russia.
Consumer
Tatarstan’s consumer boom
In the centre of Kazan, Mintimer Shaimiev, president of Tatarstan, officially opens the $70 million new Park House shopping mall, set up by Austrian investors Meinl European Land. He tours the mall with a large retinue of advisers and journalists. Some of the shoppers watch and wave. Others simply concentrate on the main business at hand: shopping.
Petrochemicals
Taking Tatarstan’s petrochemical resources into the future
At the centre of the economic policy of the government of Tatarstan is the intention to get the maximum possible value from the Republic’s remaining oil reserves, which means developing and building the most advanced petrochemical refining facilities within Tatarstan itself. The Republic is now supporting several such projects worth over $7 billion in investment.
Special economic centre
Tatarstan’s new Special Economic Zone Alabuga
As part of its policy initiative to encourage economic innovation and diversification away from oil and gas, the federal government is setting up several Special Economic Zones (SEZ) around Russia, companies in which will enjoy special tax privileges. One such zone is being set up in Tatarstan, near the historic city of Elabuga.
Culture
Tatarstan’s thousands of years of culture
Tatarstan has a rich history of civilization going back over a millennium. The earliest known state in the region was set up by the Volga Bulgars, who established a successful trade network stretching from the Baltics to the Middle East.
Sports
Kazan: home to some of the best sports facilities in Russia
You might not immediately associate Kazan with skiing. Even for many residents of the city, skiing was an exotic pursuit that happened far away, in the Caucasus, or the Alps.
Tatarstan is the most prosperous Russian region after Moscow and St Petersburg, and the most progressive in seeking out western investment and making it welcome.
The region is a unique centre of culture. Kazan celebrated its 1,000th birthday two years ago, and is an inspiring historical example of Muslim and Christian populations living in harmony and prosperity. The Republic’s fusion of eastern and western cultures has inspired some of Russia’s finest artists and thinkers, many of whom came from Tatarstan or lived here: Lev Tolstoy and Vladimir Lenin both studied at the Kazan State University; the poets Boris Pasternak and Marina Tsvetayeva lived here; the painter Ivan Shishkin grew up here; the opera singer Feodor Shaliapin was born here and the two great ballet dancers – Rudolph Nuriyev and Irek Mukhamedov – are native Tatars.
And it is also an industrial centre. Some of the biggest and most successful companies in Russia are based here, such as Tatneft, the sixth-largest Russian oil company; Nizhnekamskneftekhim, the largest Russian petrochemical company; Kamaz, one of the biggest Russian automobile manufacturers and the biggest manufacturer of trucks; another large car manufacturer Severstal-Avto; Krasni Vostok, which has the second-biggest brewery in Europe; and Ak Bars Bank, which is the tenth biggest bank in Russia.
These companies are already active users of the international debt market, and are now looking for equity partners, either by IPOs, or by taking on strategic investors. Around $4 billion in IPO deals could come from the Republic in the next two years, as well as another $4 billion in debt financing.
The region is uniquely active in the extent to which it seeks out foreign investment and makes it welcome. Umberto della Sala, chief executive officer of Foster Wheeler company, which is overseeing a $5 billion petrochemical project in the region, says: "The government of the region travels a lot to promote the region and attract investment. They understand the rules of the game."
You can see that from the busy schedule of the president and prime minister. In March, for example, the president led a top delegation to Germany for a trade conference there. The region recently signed trade deals with such leading German firms as Siemens.
In the same month, the delegation of the Republic attended the MIPIM international real estate fair in Cannes. In January, the prime minister met with everyone from Rupert Murdoch to President Calderón of Mexico at the World Economic Forum in Davos. In October, a delegation led by the president travelled to London to present the region’s investment case.
And of course, Kazan is home to the EBRD’s annual meeting in May, the first time the meeting has been held outside Moscow or St Petersburg. President Shaimiev says: "Holding the assembly of the EBRD Governors’ Meeting in Kazan is advantageous for the image of the Republic. We expect approximately 2,500 people from more than 60 countries, representatives of banks, business structures, and companies to come to Kazan. There will be an opportunity to present Tatarstan to all participants of the forum. For sure, we will take advantage of this chance".
What are the strongest reasons to invest in Tatarstan? It has natural resources of course – 1 billion tons of proven oil reserves. It also has one of the best petrochemical sectors in the world. But it has a booming consumer sector too, with a population of almost 4 million, and incomes up 20% last year.