The advantage of OJSC SEZ “Lipetsk” for foreign investors Report of LLC “YOKOHAMA R.P.Z.”

Copyright © 2010, THE YOKOHAMA RUBBER CO., LTD. All rights reserved.

The advantage of OJSC SEZ “Lipetsk” for foreign investors Report of LLC “YOKOHAMA R.P.Z.”

Production of Automobile Tires “Yokohama”

November 6, 2013IX International Investment Conference

“Lipetsk Region: Development through Investment” LLC ’YOKOHAMA R.P.Z.”

General Director 　 Shigeru NAKANO


Fact of the plant “Yokohama”

Company name : LLC YOKOHAMA R.P.Z. [ ООО «ЙОКОХАМА Р.П.З.» ] Shareholders : Yokohama Rubber Co., Ltd. 80 ％、 ITOCHU Corporation 20 ％

Products : Passenger Automobile Tire

Production : ann.1.4 million units (Phase 1)

Land : 29ha (including additional land plot for extension).

Construction : Started in March, 2010

Commercial production : in 2011

Employees : ca. 580 persons (Phase 1)

Investment : ca. 6,5 billion Rubles （ Phase 1 　 / ca. 149 million Euro ）

Market : Russia (Replacement) 80-90% / Export 10-20% (Plan)


Investigation on construction site

• Started to study the investigation on the construction site in Russia at the beginning of 2008

• On investigating, excluded the site at the city of Moscow, Moscow region, the city of St. Petersburg, and Leningrad region as main foreign investors have already built their plants.

• Taking into account that the major tire market exists around the city of Moscow and the western side of Russia and so, taking into account the distance to the market, we started to visit and investigate 21 candidate sites in 6 regions around Moscow area from July, 2008.


Candidate construction sites we visited

Other candidate sites – same as above

One candidate site - Just a field without any infrastructure


Investigation on SEZ

• On investigation on the construction site, we recognized there were 2 SEZs of industrial and production type

• 2 Federal SEZs of industrial and production type are located at– Lipetsk region, Gryazi district– Republic of Tatarstan, Elabuga

• We decided to visit SEZ in Lipetsk region in September, 2009.

– We compared 2 SEZs and got more interest in SEZ in Lipetsk region because of the distance to the market.


First Visit to SEZ “Lipetsk” September, 2008 ）

Glass factory (Russian) Heat exchangers factory (Italian)

Cable Bridge for Electricity

Road

Leveled LandAdministration Building


Study of lead time and our case

　 Study　of　Lead　Time 　　　　　　　　　　　　

　　　　　　　　　　　　　　　　

　 Candidate　Site

　 Lead　Time　(max.)

　

Preparation　for　

Industrial　Land

→Apply　for　

Infrastructure

→

Installation　of　

Infrastructure

→ Apply　for　Permits　

→Start　

Construction

→Complete　Constructio

n

　　　　　　　　　　　　　　　　

I Case　A 　 48　months 　3-6　months 　3-6　months 　 6-12　months

　 6　-　12　months 　 12　months

　　　　　　　　　　　　　　　　

II Case　B 　 42　months 　 Done 　3-6　months 　 6-12　months


　　　　　　　　　　　　　　　　

IIIPrivate　

Technopark

　 36　months 　 Done 　 Done 　 6-12　months


　　　　　　　　　　　　　　　　

IV SEZ 24　months Done Done Done 6　-　12　months 12　months

　　　　　　　　　　　　　　　　　

　 SEZ　Lipetsk

　 34　months 　 Done 　 Done 　 Done 　 15　months　(actual) 　 19　months 　

　　　　　　　　　　　　　　　　　　　　　　　　　　　　Dec.　'08　～　Mar.　'10～　 Sept.　'11 　　　　　　　　　　　　　　　　　　

Our case


Comparison between SEZ “Lipetsk” and other sites

　 SEZ　in　Lipetsk Private　Technopark　A Private　Technopark　B

Infrastructure

◎ △ △Installed　to　the　boundary　

of　the　territory　of　residents

Planned,　but　takes　1　year　to　complete

Planned,　but　takes　1　year　to　complete

Years　to　complete　construction

○ △ △2　years 3　years 3　years

Electricity　access　charge◎ × ×

Not　required 100　million　ruble 83　million　rubleLand　cost　(　if　you　purchase　after　the　construction　)

◎ × ×203　thousand　ruble/20　

ha400　million　ruble/20ha 167　million　ruble/20ha

Import　Duty　on　Equipments

◎ △ △Free Investment　in　Kind Investment　in　Kind

VAT　on　Equipments◎ ○ ○Free Returned　after　sales Returned　after　sales

Import　Duty　and　VAT　on　raw　materials

○ × ×To　be　paid　on　selling　

products　　

Corporate　Tax○ ○ ○

Exempt　ion　for　5　years Exempt　ion　for　5　years Exempt　ion　for　5　years

Labor　Force○ △ △

500,000　people/Lipetsk 120,000　around　the　area 90,000　around　the　area

Distance　to　Moscow△ ○ △

450　km 100　km 300　kmLiving　standard　for　

foreigner○ △ ×

Capital　of　Lipetsk　region Very　small　town Small　town


Conclusion as of today

• To select SEZ “Lipetsk” as our construction site in Russia was the right decision so far because:

1. You can complete construction of your plant shorter than at other sites.

2. You can enjoy the privileges provided to the residents of SEZ

3. You can expect the full support of the governmental organizations

such as Ministry of Economic Development, Administration of

Lipetsk region, OJSC “SEZ”, OJSC SEZ “Lipetsk”,etc.

• The support from these organizations helps us to solve any issues and problems and we really appreciate it a lot.


Visit of Mr. Nagumo, President of Yokohama Rubber Co. （ Nov. 25, 2008 ）

Together with the Governor, Mr. Korolev

At Lipetsk Airport At the site

At the administration building of SEZ LipetskMeeting with Lipetsk Administration members


Ground Breaking Ceremony

Speech First Stone

Ground Break Kagami-Biraki ( Breaking of Sake Barrel )


“BluEarth” – new eco-tire concept by Yokohama

What is “BluEarth”? “BluEarth” is an eco-tire concept and a new product line introduced by Yokohama in 2011. It is a concept of environmentally-friendly, human-friendly and socially-friendly tires. Bluearth tires realize the top fuel-efficient performance by improving the vehicle fuel-savings and have enhanced grip performance on the wet road due to their specific structure and components (nano-blend compound, orange oil, etc.).

What is “BluEarth”?

For environment: Achieving superior fuel saving to reduce CO2 emissions.

For humanity: Solid safety and superior comfort

For society: Lowered external car noise level


Thank you !

The advantage of OJSC SEZ “Lipetsk” for foreign investors Report of LLC “YOKOHAMA R.P.Z.”

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Transcript of The advantage of OJSC SEZ “Lipetsk” for foreign investors Report of LLC “YOKOHAMA R.P.Z.”