Founded: 1937

Governor: Vladimir Fyodorovich Chub (re-elected September 23, 2001)

Federation Council Representatives: Yevgeny Viktorovich Bushmin (executive, term expires June 2010); Alexander Ivanovich Kazakov (legislative, term expires March 2008)

Duma deputies: Valery Vladimirovich Dyatlenko (Volgodonsky district)(United Russia); Vladimir Dmitryevich Grebenyuk (Taganrogsky district)(United Russia); Vladimir Dmitryevich Katalnikov (Shakhtinsky district)(United Russia); Fyodor Mikhailovich Shvalev (Belokalitvinsky district)(United Russia);
Zoya Mikhailovna Stepanova (Proletarsky district)(United Russia); Mikhail Vasilievich Yemelyanov (Rostov district)(United Russia)

Population: 4,406,700 (2002 census)

Capital: Rostov-on-Don (population 1,070,200), 1,226 km from Moscow

Other major cities: Taganrog (282,300), Shakhty (220,400), Novocherkassk (170,900), Volgodonsk (166,500), Bataisk (107,300), Novoshakhtinsk (101,200)

Federal district: Southern

Economic region: North Caucasus

Time zone: Moscow, GMT +3, EST +8

Geography: Rostov Region is located in the southern part of European Russia with a coastline on Taganrog Bay in the Sea of Azov. It borders Ukraine, Stavropol and Krasnodar territories and the Voronezh and Volgograd Regions.  It connects central Russia with the North Caucasus and has an outlet to the Black Sea.  The Don river flows through the territory.

Urban population: 68%, Rural population: 32%

Ethnic make-up: more than 26 nationalities, including Russians, Ukrainians, Armenians, Belarussians, Germans, and Koreans

CLICK HERE FOR ROSTOV REAL ESTATE SNAPSHOT 

Economy: Rostov is one of Russia's major economic producers.  The region produces 100% of the mainline electric locomotives and steam boilers and three-quarters of the combine harvesters manufactured in the country, and is a Russian leader in the areas of heavy helicopter engineering and production of ship navigation systems. In addition, the region produces 16.5% of all ferrous metals in Russia. The region has been the country's second-largest agricultural producer for many years, focusing on grains and sunflowers.

In 2006 the administration signed a deal with state-controlled arms exporter Rosoboronexport, committing both to co-operation in exporting items produced at regional defence enterprises in 2007-2008. The previous two-year agreement boosted production 20%. The programme is designed to spur the production of military and dual-purpose items under export contracts, stabilise the financial and economic situation at defense enterprises, and increase the share of innovation projects in export supplies.

Retail Giant Tax Break: Rostov administration press service confirmed IKEA has obtained tax privileges in the region, with IKEA actively cooperating with local wood processing companies, such as the Volgodonsk Wallboard Plant. A new IKEA and MEGA family mall is being built in the Aksaiskaya District of the region. Per Kaufmann, IKEA Russia director general, and Vladimir Chub, the region’s governor, announced at their February 07 meeting that more than Rbs3 bln ($113.3 mln), mostly from the Swedish company’s owner equity, would be invested in the MEGA Rostov project. Chub cited a special law on national and foreign investor support in providing the tax breaks.

Gazprom: Rostov governor Vladimir Chub announced he discussed the routing of an offshoot from the North Caucasus pipeline to Rostov with Gazprom CEO Alexei Miller to ensure a more rliable gas supply to Kuibyshev District in Rostov. In 2002 Gazprom & Rostov Region signed a 5 year co-operation agreement under which Gazprom supplied 6.9 bln cu m of gas to the region in 2006 and will deliver about the same amount in 2007. Regional gas consumers’ debt decreased by Rbs311.9 mln ($11.8 mln) to Rbs362.46 mln ($13.7 mln) as of January 1, 2007.

Gazprom spent over Rbs256 mln ($10 mln) on gas supply to Rostov Region 2003-2005, more than Rbs527 ($19.9 mln) in 2006, and will invest Rbs530 mln ($20 mln) in 2007.

Gazprom is also entering the retail market of petrochemicals and liquefied petroleum gas (LPG) in Rostov with plans to re-brand a network of petrol stations and to introduce a single management standard there, reported Gazenergoset, a domestic LPG operator. Gazprom’s petrol stations will offer quality fuel and a European service standards. The first station under Gazprom’s brand will be managed by Gazenergoset’s subsidiary, South Oil and Gas Company. Re-branding of all the 25 stations in the Rostov Region and the Krasnodar Territory will be completed by summer 07.

Regional Rating – Moody’s: In December 2006 Moody’s Interfax Rating Agency has assigned a national Aa2.ru credit rating to the Rostov Region. In reporting the rating, Moody’s cited low debt levels, good budget execution, and positive budget balance.
Bank Ratings: The National Rating Agency has awarded a short-term solvency rating to Bank Petro-commerce at SA1 (very high solvency) and long-term rating LA2 (high solvency). The agency has also confirmed its individual reliability rating at AAA (maximum reliability), the bank’s press service said. Moody’s also assigned a Ba2.ru long-term national credit rating to the Donskoy Narodny Bank (DNB) which has a network of over 40 offices in the Rostov Region and a historically low level of loss on loans, a result of the bank’s effective solution of its debt problems.

Korea/Automotive/Shipbuilding: Rostov on Don enjoys trade with South Korea to the tune of some$338.5 mln, the regions’ biggest single investor, after Ukraine and Turkey. Taganrog-based TaGAZ assembles Hyundai Accent and Sonata cars, and last year’s output totaled 36,500 units. South Korea’s Hyundai Motors also signed a contract for delivery of components to a new company, the Rostov Lorry Plant in Taganrog, which has already assembled a test batch of Hyundai Aero Town and Country buses. Rostov Deputy Governor Deryabkin commented that a shipbuilding joint project with Samsung Heavy Industries was also likely to be established in 2007.

Mineral Licensing: Rostov on Don’s Audit Chamber concluded an investigation on compliance of mineral licenses that those issued between 1993-96 were done so without the knowledge of the relevant federal authorities but by a coordinating council acting under the aegis of the Rostov regional administration that acted without federal authority and predominantly consisted of employees from state-controlled geological company Yuzhgeologia.

Alexander Nazarov, an auditor with the Russian Audit Chamber, said Donugol, a Rostov coal mining company that obtained three production licences for the Sherlovskaya-Naklonnaya, Kadamovskaya and Obukhovskaya-1 mines in the Rostov Region; though never having launched operations, should be shorn of its licenses. Under the licence agreements, Donugol should have been producing 600,000, 750,000 and 2 mln metric tons of coal respectively at these mines, a source in the auditor’s office told FC Novosti. Mr Nazarov said this was a gross violation of license agreements. The law on mineral resources envisages revocation of licenses under such circumstances.

Telecomms: S&P’s upgraded Southern Telecommunications Company Russia (the leading fixed-line communicator in the Southern Federal District) from CCC+ to B-/Stable after the company improved its financial performance. UTK’s local rating was increased from ruBB to ruBBB.

Agri-Business: The Head of the Regional Investment Agency, Vadim Vikulov, announced in October 2006 that an $80 – 120 million bioethanol plant would be developed in Rostov, to take advantage of the large agri-business resources existing in the region.

Customs Receipts in Rostov have been increasing steadily, though accurate figures can be hard to come by. For example, in January 2006 the administration’s pres office estimated that over $400 million would be collected in 2006. The value of declared goods in Rostov in 2006 rose by almost 33% y-o-y to $3.839 bln, $962 million over 2005, shipping a total weight of 11.4 mln metric tons.  The Regional treasury received Rbs11.3 bln  ($429.82 mln) through customs receipts and taxes.
Southern Federal District Customs collected and transferred more than Rbs19 bln ($726.58 mln) in customs duties and other payments to the federal budget in January 2007, according to the press service of the Russian Federal Tax Service’s department for Rostov.

Produced goods for export yielded the largest tax revenues of Rbs14.853 bln ($568 mln). Import duty was Rbs1.527 bln ($58.4 mln), and value added tax (VAT) collected in January 2007 accounted for Rbs3.093 bln ($118.28 mln). Exports tax revenues to the federal budget amounted to nearly Rbs15 bln ($573.6 mln, or 75% of the total) and imports to more than Rbs4.5 bln ($172.08 mln, or 23%). The remainder came from customs duties, confiscated items, fines and other payments worth Rbs319.2 mln ($12.21 mln, or 2%). A spokesman for the press service said the district’s customs bodies had exceeded the ceiling set by the Federal Tax Service by Rbs82 mln ($3.14 mln).
 

Official website: http://www.donland.ru

Video: Rostov Investment Promotion Agency (YouTube) 

Related Articles: 

Interview with Sergei Kurdyumov, Rostov regional deputy minister of economy, trade and foreign economic relations (RIA Novosti, June 11th 2007)

Taking Off, By Ivor Crotty, Russia Profile, Feb 28th 2007 

A Plot of One’s Own, By Vasily Uzun, Special to Russia Profile, Oct 31st 2006 

Russia’s Loyal Defenders, By Paul Abelsky, Russia Profile, August 15th 2006 

Deploying Capital Efficiently and Fairly a Key to Further Success, Roland Nash of Renaissance Capital, www.businessneweurope.eu

Contact Information
Governor
Vladimir Fyodorovitch Chub
112 Ulitsa Sotsialisticheskaya
Rostov-on-Don 344050
Tel.: +7 (8632) 44 18 10
Fax: +7 (8632) 44 15 59
Email: rra@donpac.ru

Press service contact
Kirill Albertovich Zhitenev
Tel.: +7 (8632) 40 55 21
Fax: +7 (8632) 40 56 59
Email: pressa_rra@donpac.ru

Representative to the Government of the Russian Federation
Viktor Petrovich Vodolatsky
26 Bolshoy Ovchinnikovsky pereulok, building 4
Tel.: +7 (095) 953 90 01
Fax: +7 (095) 953 89 80
Email: info@rostovregion.ru

Chairman of Legislative Assembly
Alexander Vasilievich Popov
Tel/Fax: +7 (8632) 65 04 26