Governor Alexey Ostrovskiy held a business meeting with representatives of German business community

Governor Alexey Ostrovskiy presented the investment potential of Smolensk region to representatives of the German business community. The business meeting with the participation of Rüdiger Von Fritsch, Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to the Russian Federation, and Matthias Schepp, Chairman of the Board of the Russian-German Chamber of Commerce, was held at the Residence of the German Ambassador to the Russian Federation in Moscow.

The head of the diplomatic mission thanked Alexey Ostrovskiy for the readiness to participate in the project “Dialogue with the Governor”, ​​which could result in new joint investment projects. “Smolensk is right on the way from Moscow to Berlin, so we should take an advantage of this. I am very glad to have you here today,” said Rüdiger von Fritsch.

In his turn, Alexey Ostrovskiy thanked the Russian-German Chamber of Commerce for the invitation and organizing such an event, as well as the German Embassy for hosting it. “We will be happy to tell you about the successful experience of the German business in Smolensk region, present the economic and investment potential of our region, as well as the prospects for cooperation mutually beneficial for Smolensk region and German business. I fully agree with you that the geographical position of our region is unique. This gives a brilliant opportunity to localize production sites of German companies to work both for the domestic Russian market and for the external markets of the European Union,” the Governor said.

Also, Alexey Ostrovskiy reminded the audience of other indisputable advantages of Smolensk region. In particular, the region has been and remains the most important logistics, transport and communication hub, through which about 75% of the cargos coming from Western Europe to Russia pass. In 2020–2021, it is planned to start construction of the China-Europe route “Silk Road”, thanks to which virtually all transport arteries will run through Smolensk region. Electricity production in Smolensk region is 4 times higher than its consumption, while the cost is on average 4 times lower than in European countries, and gas is more than 11 times cheaper. There is modern infrastructure created in the region to localize the production of industrial companies — two industrial parks Phoenix and Safonovo, as well as the territory of advanced socio-economic development Dorogobuzh, the first one in Central Russia.

Then, there was a “round table” discussion, bringing together more than 20 representatives of German companies, developing their business in Russia and interested in cooperation with Smolensk region.

Addressing the management of the German companies, Alexey Ostrovskiy pointed out: “Smolensk region and I, as its Head, already have successful experience of cooperation with German business. It is nice that the German side has expressed its satisfaction with the joint work with the Administration of the region. A number of German companies have come to Smolensk region while I have been the Governor, invested serious funds and been working effectively. As a vivid example, I would mention Renus Logistics, the largest logistics operator in the entire European Union. a significant amount of goods that are imported into the Russian Federation goes through the terminal it has built on the border of Russia with Belarus on the Moscow-Minsk highway near Krasnaya Gorka. Also, with me as the Governor, the German company Fresenius has built a dialysis center in Smolensk and will further develop the network of similar medical institutions in other places. Just last year, we reached an agreement with Mr. Stefan Durr, the owner of the agricultural holding “Ekoniva”, on his investing funds in the construction of dairy farms in our region starting this year. So, we are determined to develop cooperation with German business.”

Smolensk is located on the way from Moscow to Berlin and, thus, offers opportunities for doing business not only within Russia, but also beyond its borders. What is encouraging in German-Russian relations is that there are many good “bridges” working in the fields of culture, science, public relations, and especially in trade.

During the meeting, the Governor presented the economic and investment potential of the region, focusing on the fact that in recent years Smolensk’s foreign trade relations with Germany have been developing actively. Currently, Germany is a priority partner-state for Smolensk region in terms of the trade development, as it takes a leading position in the foreign trade turnover of our region. For ten months of 2018, the trade turnover with Germany increased by 40% in comparison to the same period of the previous year and amounted to $ 136 million, the export increased by 113%, exceeding $ 30 million.

Alexey Ostrovskiy also stressed that the Foreign Trade Chamber has been entrusted with the task of promoting the development of bilateral economic relations between Russia and Germany. The members of the Foreign Trade Chamber are companies from all sectors of the German and Russian economy. In this regard, Smolensk region and the Chamber should become strategic partners, since creating favorable conditions for German business is a key priority for the Administration of Smolensk region.

The Head of the region paid special attention to the preferences in regional tax and investment legislation.

The meeting participants also shared their views on bilateral cooperation in various sectors of the economy and discussed the most promising areas of investment. A number of potential business partners from Germany expressed particular interest in Smolensk region.

“For the development of the economic potential of Smolensk region, such formats of interaction with Western European business are a special issue for the regional administration. Today we have had a very productive meeting with Mr. Ambassador of Germany in the Russian Federation, with the chairman of the German Chamber of Commerce, as well as with representatives of German business community on possible options for interaction and cooperation,” commented Alexey Ostrovskiy. “I am sure that having German companies in the region will become an additional stimulus for the development of our economy, will strengthen the regional budget through new taxes, which, in its turn, will contribute even more to the fulfillment of social obligations to the Smolensk region residents.”