Auto cluster in Russia's Kaluga region increases capacity

Economic Journal GDP pointed out the Kaluga region as a leader of economic development. The journal also wrote that it was the most successful region in attracting investment. Regional authorities, headed by Anatoly Artamonov, created favorable conditions for investors. The industrial production growth in 2010 exceeded 43 percent with the national rate of 9 percent.

Such giants of world auto industry as Volvo, PSA Peugeot Citroen and Volkswagen, electronics maker Samsung and pet food producer Nestle have launched their own production in the last few years in the region. In addition, Canadian Magna and the French L'Oreal have built their factories in the region.

Domestic investors produce agricultural machinery and construction materials. A steel plant is being built. Foreign investors bring more than one billion dollars a year in the economic development of the region.

It should be noted that out of the 25 industrial parks that have emerged in the country in the past decade, nine are situated in the Kaluga region. Investors received an opportunity to quickly and without red tape organize the construction of factories and production. The territory of the region possesses  developed infrastructure and communications.

For the development of the economic sector, there were relevant executive structures established in the region under the supervision of Governor Anatoly Artamonov. They are: "Kaluga Region Development Corporation," "Regional Development Agency" and company "Industrial Logistics". The objective of the "Kaluga Region Development Corporation" is the creation of infrastructure of industrial parks. The latter are responsible for maintenance and support of investors. Transportation logistics and its affordability are the responsibility of a third company.

There were about 16,000 new jobs created in the region over the past six years. At the moment, the number of jobs exceeds the number of the unemployed. To maintain and develop economy, there are several social programs in the region to attract and retain professionals.

The auto cluster is developing in the Kaluga region at an especially fast pace. In mid-October, an international forum was held in Kaluga for the development of the automotive and automotive supplies industry in Russia "AvtoEvolution  2012." The forum demonstrated a favorable investment climate created by the regional administration. It was held with the official support of the Ministry of Industry and Trade of the Russian Federation.

"AvtoEvolution" is a series of annual events, a platform to share experiences, find new contacts and ideas for business development. Representatives of more than 20 companies in the auto industry took part in the discussion of the prospects of development.

The event touched upon the potential and economic development conditions of the automotive business in the country, the strategy of the automotive industry, peculiarities of the process of localization of production, the problem of collection of car recycling tax, new conditions and benefits for businesses, and much more. The practical part of the forum included visits to a number of Kaluga auto enterprises in industrial parks "Grabtsevo," "Kaluga-Yug," "Rosva," as well as specialized training center.

According to the Department of the Automotive Industry and Agricultural Machinery Industry of the Ministry for Trade of the Russian Federation, car sales rose by 39 and production - by 42 percent in 2011 as compared to 2010. During the current year, the market has grown by 13.7 percent, while production - by 42.

The head of the region, Anatoly Artamonov, said that during six months of 2012, the conveyors of local automobile factories have produced over 130 thousand cars - about 12 percent of all cars manufactured in the country during this period. "The Kaluga auto cluster becomes a more noticeable phenomenon in the Russian market. The region has been showing a clear tendency to increase the production of the vehicles and spare parts, as well as the localization of production," said Artamonov.

The organization of staffing and the development of logistics infrastructure is no less important for success in the regional auto industry, he said. Currently, Kaluga automotive companies employ more than 12 thousand people. The average salary in the industry is 23,157 rubles ($800). There is a training center for personnel of the automotive industry.

In addition, in the Kaluga region, there are such educational institutions as the Obninsk Institute of Atomic Energy of the National Research University MIFI, a branch of the Bryansk State Technical University and a branch of the Moscow State Technical University named after Bauman.

The Kaluga auto cluster in numbers is 620,000 vehicles since the beginning of 2007, 17 models produced in the region, three automotive plants, more than 20 suppliers of automotive components. April of 2012 saw the ceremony of laying the first stone in the construction of a plant for the production of Volvo excavators. The plant is to be launched in 2013. The plant will be producing approximately 2,000 vehicles a year - six models of excavators. The project involves more than 350 million Swedish kronas of investment.

During the forum, Kaluga Region Governor Anatoly Artamonov outlined several significant events in the automotive industry for the region. They include the signing of the agreement to build an engine plant in the region, the creation of educational centers that train highly qualified professionals in the new economy, and release of the Volkswagen 500,000th car.

Just a month later, on 21 November, Anatoly Artamonov attended the ceremony devoted to the production of the 500,000^th vehicle at Volkswagen Group Rus.

The hero of the day was a Volkswagen Polo sedan, made in the official colors of the Olympic and Paralympic Winter Games 2014 in Sochi. The car was handed over as a gift to the city sports center "Leader". The center deals with the physical rehabilitation and social integration of people with disabilities.

The production of half a million cars in Russia - is an important indicator of economic success and social interaction of the group with Russia. "It has been only three years since the launch of the full-cycle plant in Kaluga. During this time we have increased the production capacity, and currently more than a half of cars that the company sells in Russia are made in Russia," said Marcus Osegowitsch, the General Director of Volkswagen Group Rus. - "We highly appreciate the support of the administration of the Kaluga region, and we are happy to give the anniversary Polo sedan for sporting initiatives of the city."

"Half a million vehicles in five years is a great result for a local production in Russia. This success became possible owing to employees of our factory - about 6,000 people. In addition, the Kaluga plant of Volkswagen Group Rus has a special responsibility. It goes about the execution of plans and objectives relating to the conclusion of the agreement on industrial assembly. We are confident that the next anniversary car will not be too long to wait for, said Dr. Josef Baumert, the director of Volkswagen Group Rus in Kaluga.

The company constantly increases its production capacity. In the near future, it plans to build a plant for the production of gasoline engines. The first products of the company will be released in 2015.

Speaking about the prospects of the automotive region, Anatoly Artamonov said that a priority would be paid to creating new high-tech enterprises. "We need to continually develop and grow and introduce advanced technologies to be ahead of technological progress," said the governor. This should contribute to further development of investment and human resources of the region and improve the living standards of the population.

Ekaterina Polyanskaya

Pravda.Ru

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