Market area of business opportunities in Russia: Krasnodar region

When it comes to Russia, Moscow and St. Petersburg seems to be places, which rank first on the priority list. Yet Russia is much bigger. It boasts many other areas which can be similarly attractive and promising for doing business. One of such areas is Krasnodar region.

The city of Krasnodar is located about 1,200 km south of Moscow in what is known as Kuban region, that is only a 2 hours flight from the Russian capital, with one of 12 airlines offering their service to get you to the place. And you may find yourself in a region which is ranked 1A on the investment potential list, occupying the 6^th place among Russian regions in terms of investment volumes and the 3th place in terms of number of inhabitants and which is in the top 15 in the list of the wealthiest   Russian regions.  Industries there are fast growing with a view to make the area one of the leaders in the country.

Since Kuban boasts fertile lands, number one industry is the agriculture sector. Krasnodar region is one of the leading regions of Russia in terms of production and processing of agricultural products and food supplies to the industrial centers of the country. Krasnodar region ranks 1st in Russia in terms of gross agricultural output. The region annually exports about 150 kinds of agricultural products to as many as 135 countries. In 2018 alone, the region’s exports of such products amounted to 2 billion euros (8.5 % of the national volume). Krasnodar region was the first in the country to make a full digital certification of fields. In 2013, the country’s first Single satellite monitoring center for agricultural land was opened in Krasnodar as part of the development of the concept of precision agriculture, which envisages optimizing returns om inputs while preserving resources.

In the food industry of Kuban region there are more than 2200 enterprises, of which 300 belong to the foreign or joint- stock companies. The industry produces more than 2,500 types of food, of which more than 40 percent are promising developments that meet European quality standards. The structure of food stuff produced in the region is dominated by the following industries: oil and fat, dairy, meat, sugar, fruit and vegetable and canning.

Nestle, Danon, Philip Morris International, PepsiCo, Tetra Pak, Bonduelle among others have built up their processing plants there and the main trend of recent years is the increased number of large investment projects worth more than 15 million euros. While in 2015 the number of 60 of such investment agreements were implemented, in the past – already 80.

Foreign investors have brought with them advanced technologies, experience, have created competitive working conditions, and this boosts the development of domestic business. The companies of the region are interested in further development of technologies, improvement of quality of the production therefore are open to cooperation and would appreciate business with Finnish companies which are able to offer their cutting edge expertise, especially in the field of storage and processing agriculture produce, improving energy saving technologies, software development.

Hence comes the idea of creating a transportation and logistics hub in the region. This major project will not only help optimize the operation of our large transport system, but will also give a powerful boost to the entire economy of Kuban as well as development of a tourist cluster offering premiere beach resorts as well as some of Europe’s tallest mountains in its Caucasian south. Well-known city of Sochi, which host the Winter Olympic Games in 2014, is located in Krasnodar region as well.

Seppo Hoffrén Consultancy can assist Finnish companies in finding business opportunities in this promising region, as well as visiting exhibitions, which are held frequently. The nearest -Russia’s largest international agricultural trade show Yug Agro, which visitor base covers representatives of agro-holdings, agricultural companies, farming enterprises, suppliers of agricultural machinery and spare parts, agrochemicals and planting materials producers, and agricultural machinery maintenance companies from 71 regions of Russia and 48 other countries worldwide, will take place 19-22 November.