Tver oblast, with 1.6 million inhabitants, is the largest region in Central Russia, covering 84,100 sq. kms. Although its moderate continental climate and landscape are typical for Central Russia, Tver oblast does have unique characteristics. It is very rich with forests and water: over 800 rivers cross the oblast, including the beginning of the Volga River, and 1,769 lakes attract tourists and fishermen. It is the natural source of fresh water for Central Russia and Moscow.
Tver is an important transportation hub because of its location between the two largest metropolitan areas in Russia—Moscow and St. Petersburg. The road linking the cities has traditionally been well maintained and is heavily used for cargo transportation. The Moscow‑Riga highway connects Tver with the Baltic States and Finland. Tverskoy Port, the largest port on the upper Volga, is equipped with cargo decks and is fitted to serve river‑sea ships. Tver also has an international airport.
Investment Climate
The Tver Oblast Government is actively seeking to attract foreign investors. The Governor’s Office for External Economy and Investments has published Invest‑100 International Investment Magazine, which discusses investment opportunities in the oblast, publishes interviews with Tver businesspeople, and highlights local legislation. The Office for External Economy and Investments is in the process of organizing an international forum of technology brokers, “Investment and Technologies/Tver‑99,” to bring together representatives of local and foreign companies, potential investors, and government officials. FES International, Inc. (Glendora, CA) is helping the Tver Government organize the event.
The regional law on “Tax Privileges to Investors in Tver Oblast” supports foreign investors by reducing the profits tax for companies investing in renovation, modernization, or creation of production facilities, and for leasing companies.
By 1998, 37 companies with foreign investment were registered in the oblast. These joint ventures were mostly with European companies, including some from Bulgaria and Italy. German companies are active in selling technologies for producing construction materials and equipment to Tver companies. German construction firm Tver‑Osnabryuk, which united 20 entrepreneurs that collectively invested over 1 million DM, built the three-star Osnabryuk hotel. Canadian companies are also investing in construction of private homes and assembly of construction materials in the oblast.
Promising Industry Sectors
Machine-building, agribusiness, wood-processing, construction, and tourism are considered the most promising sectors for investment in the oblast.
Machine-building: Into the 1990s, machinery and metal processing enterprises in Tver oblast were among Russia’s leading manufacturers of passenger train cars, excavators, tower cranes, fire‑prevention equipment, steel frames, and more. Mainly due to Russia’s general economic situation, output has fallen in recent years. Companies must search for new products, customers, and equipment to stay afloat. As larger plants would need prohibitive amounts of new investment for overhaul, smaller companies that are forming out the facilities of a large plant are the best candidates for investment.
Agribusiness: Agribusiness is mainly concentrated in two sectors: flax breeding and dairy and meat processing. Tver oblast used to produce up to 40 percent of all flax in Russia. Despite the 35 textile plants in the oblast, not all flax is processed locally, and the majority of the local mills work with resources purchased elsewhere. Major mills produce cotton, wool and silk fabrics, and man‑made leather. All of these mills need modern technologies.
Wood Processing: The timber and wood processing industry holds great potential for regional industrial development. Forest covers 53 percent of the oblast (5.1 million hectares). Currently, only 30 percent of the viable woodcutting area is utilized. Tver has 27 large forestry farms, 23 saw mills, and some 400 companies producing veneer, paper, cardboard, and furniture. Most local wood is exported as timber, lumber, and veneer. The opportunities for foreign investment in this sector are concentrated in pre‑export wood processing and supply of various wood-processing equipment.
The local industry overall is limited to the lower value‑added end of the production cycle, with exports of timber prevailing and weakly established processing of recycled paper products. However, Tver’s Kamenskoe company processes recycled paper into corrugated cardboard, and produces cellulose and manufacturers paper, polygraph goods, and packaging materials. The company seeks investment to expand production of cardboard and refurbish equipment.
Construction: Major construction materials plants are currently experiencing difficulties because old technologies produce outdated, noncompetitive products. Significant investments would be needed to overhaul large production facilities, but smaller firms are appearing and successfully competing by implementing new technologies. Also, strong potential exists to build private housing and hotels.
For additional information on Tver and other central Russian regions, visit BISNIS Online at www.bisnis.doc.gov/bisnis/country/Central.htm.
Olga Ananina is a BISNIS representative in Moscow.