Titanium Valley

Titanium Valley is a planned special economic zone in Sverdlovsk Oblast in the Urals Federal District of Russia, which will focus on creating titanium products for the aircraft, automotive, shipbuilding and medical industries. It will be created around the world's largest titanium producer, VSMPO-Avisma.^[1] The Russian government plans to invest at least 40 billion rubles ($1.29 billion) for the project.^[2]

The purpose of the special economic zone, to be located in the city of Verkhnyaya Salda, is to give enterprises the opportunity to develop and produce value added products in the region and bring international partners to the zone.^[2] A total of 20 companies will participate in the project, and it is expected to create 20,000 jobs in the city.^[1] The participating companies include VSMPO-Avisma, Arvi, SR Systematics, MAG, and United Aircraft Corporation. Companies operating in the zone will enjoy preferential tax treatment,^[3] and Governor of Sverdlovsk Oblast Aleksandr Misharin has stated that he expects the incentives to enable the companies to produce globally competitive products and create new jobs.^[4]

While visiting the region, Prime Minister Vladimir Putin said on 13 November 2010 that a decree for creating the special economic zone will be signed in two weeks.^[2] Titanium maker VSMPO-Avisma has already spent $700 million in preparation, and Russia's leading pipe producer ChelPipe has also already spent over $630 million into modernizing its facilities.^[5] Foreign companies considering to create production facilities in the zone include Rolls-Royce Group and Goodrich Corporation.^[1]

The "Titanium Valley" project is part of Russia's ongoing effort to modernise and diversify its economy, one of the main programs of Dmitry Medvedev's presidency.^[2]

Titanium Valley is a special economic zone of industrial type, located in Sverdlovsk region. Priority directions of the SEZ are: titanium metal products, machinery for all industries (production of means of production, manufacture of components), construction materials, and chemical industry. The special economic zone is located in Verkhnyaya Salda - 40 km away from Nizhni Tagil and 180 km away from Ekaterinburg. One of the largest producers of the semi – processed materials from titanium alloys, designed for the airspace - “VSMPO – AVISMA” is located nearby. That is what defined a choice of the name for the special economic zone.

Area: 584, 4 Hectares

One of the main advantages of the SEZ “Titanium Valley” is highly qualified personnel. Ural region is specialized in metallurgy and mechanical engineering. As a consequence, there are dynasties of engineers and technicians, which gives a lot of skilled and qualified stuff to the region. Chronology: On 14 May 2012, managing company "Titanium Valley" has received the resolution № RU 66-1/2012, from the Ministry of Construction and Architecture of Sverdlovsk region. The resolution has marked the beginning of the 1st phase of the 1st stage of “Titanium Valley" construction. Shortly before that, building machinery was delivered to the site of SEZ in order to start preparation works. On 22 May 2012, construction of roads and 2000 square meters site for construction period has been completed. The site is designated for the storage of machinery and materials which are delivered to the SEZ for construction of engineering and road infrastructure. In addition, site of the SEZ has been equipped with a slip road that can be used for both light and heavy traffic. On 24 July 2012, communication tower and temporary power station were set on the territory of the SEZ. As it was planned, site of “Titanium Valley” is going to be provided with electricity from its own power station, excluding usage of networks and resources of Verkhnaya Salda. The project "Innovative titanium cluster", presented by OAO "Special Economic Zone" Titanium Valley", is included in the federal list of pilot programs for the development of innovative regional clusters. On 21 July 2012, a fundamental agreement № C–219-ОС/Д25 was signed, delegating managing functions of the special economic zone near Verkchnyaya Salda, from the Ministry of Economic Development of the Russian Federation to the OAO «SEZ «Titanium Valley». Signing of the agreement became a result of law amendments introduction to the Russian legislation. Amendments to the legislation of special economic zones, which assumed delegation of the managing functions to the managing companies of the SEZs, were enforced on 1 January 2012.

SEZ specialization: The name "Titanium Valley" does not restrict activities of industrial enterprises on the territory of SEZ. The percentage, associated with the production of titanium will not be dominant in SEZ. Priority directions of SEZ are titanium metal products, machinery engineering (production of means of production, manufacture of components), construction materials, chemical industry. In addition, we plan to implement several strategic policies for SEZ, related to the development of titanium raw materials production.

RESIDENTS:

As of 14 February there are two companies registered in the SEZ “Titanium Valley”: OOO “VSMPO – New Technology” and OOO “Sinersis” Business - projects of two new residents were approved on the 20 July 2012. The new residents are: OOO «Ural Optical Plant» and OOO «Stroydizel-Composite». «Filling the 1st phase of the 1st stage of construction is nearly completed» - commented General Director of the OAO «SEZ «Titanium Valley» Artemiy Kyzlasov. - «From the 72 hectares only 10 are vacant at the moment». Special Economic Zone “Titanium Valley” as a service business centre: Special Economic Zone (SEZ) is a geographical territory with a special taxation, customs and other legislation specifically orientated towards the free – market economy. SEZ offers a unique opportunity for manufacturers to place production factories on the territory of the SEZ Titanium Valley. Companies which invest in the SEZ receive completed production sites with all the infrastructure and communications needed as well as various preferences, relieves and incentives.

The following services will be located on the territory of the SEZ: • Twenty – four – hour call – centre; • trade facilitation "The single-window system", which allows submitting regulatory documents at a single location and/or single entity; • SEZ administration; • branches of all the governmental bodies required by residents

Other than that, Federal law about SEZ’s, guarantees protection for residents from any unfavorable changes in tax and customs laws of Russian Federation. Customs relieves:

Customs duties and taxes on foreign goods, which are placed and used within the SEZ and placed under the customs regime of free customs zone, are annihilated. It is planned that foreign experts, invited by the residents to work at the enterprises of the SEZ "Titanium Valley", will be provided with housing and all the necessary social infrastructure to transport the family to Russia for the time of the contract. Transport infrastructure:

1. Route P – 353, connecting SEZ with Nizhni Tagil, Yekaterinburg and with the whole Russian transport network. 2. Railway Nizhni Tagil – Alapaevsk, sorting station “Smichka” 3. Experimental aviation aerodrome Salka 4. International airport Kolstsovo is 186 km away

Rent of space:

The concept of the project proposes construction of administrative and office facilities, which would be rented by SEZ “Titanium Valley” residents. Business centre will include educational centre, business park, business – incubator, sightseeing platform, show – rooms, halls for guests reception and conference – halls.

References