14 June 2016

    Minister for the Development of the Russian Far East Alexander Galushka held a working meeting with Chairman of the Japan–Russia Business Cooperation Committee of the Japan Business Federation and Chairman of the Board of Marubeni Corporation Teruo Asada. As part of the negotiations, the parties identified the regional economic areas of interest to Japan and prospects for cooperation between the two countries in the Far East.

    Alexander Galushka outlined the ministry’s role in establishing cooperation between local business and foreign investors. “The Russian government is carrying out a focused policy to establish the most favourable conditions for doing business in the Far East. The measures undertaken by the government involve reducing risks and increasing the return on investment,” Alexander Galushka said. “Our ministry is working to eliminate problems for investors and create comfortable and favourable conditions for them so that business is successful in the Far East. In addition, investment costs for doing business have become among the most economically advantageous in the world following the changes in the exchange rate of the national currency – the Russian rouble. In particular, this concerns the cost of electricity and other aspects. We are very happy that the first Japanese companies have already taken advantage of the new investment conditions and are launching their own projects. These first positive success stories are much more important than lots of talk about future cooperation. We appreciate them and want to have as many such examples as possible.”

    Masao Tabuchi, Chairman of the Subcommittee for the Far East of the Japan–Russia Business Cooperation Committee, noted that the approach taken by the Ministry for the Development of the Russian Far East focuses on attracting business to the region. This approach makes it easier to assess the investment appeal of projects. “We are very pleased and it is crucial to us that you immediately presented such economic indicators as IRR during the meeting and relayed other key economic indicators,” Masao Tabuchi stressed. “These figures and this approach will enable us to consider your proposals in more specific terms and adopt a decision.”

    Fundamental areas for cooperation were outlined as part of the meeting. The Japanese investors view such areas as agriculture, the development of ports and port infrastructure, transport logistics and medicine.

    Akira Shimizu, Chairman of the Planning and Coordination Subcommittee of the Committee on Europe of the Japan Business Federation, announced that a large number of medical institutions in Russia’s Far East are planning to utilize modern methods for treating chronic diseases developed by Japan’s Hitachi.

    Another participant in the meeting, Yoshiro Tanaka, an advisor to Mayekawa MFG, a major Japanese manufacturer of cooling and refrigeration equipment, expressed interest in establishing modern cooling equipment infrastructure in Kamchatka, Sakhalin and Primorye to help maintain the quality of seafood caught in these regions. He also announced that Japan is prepared to take part in the modernization of the Russian refrigerated cargo fleet in the Far East.

    Other promising areas cited by the officials include investment in the transportation of liquefied gas via the Northern Sea Route and the development and equipping of Far East port terminals for exports of Yakutia coal.

    Alexander Galushka also proposed that Japanese companies take part in establishing and developing the Primorye-1 and Primorye-2 international transport corridors, which are reportedly capable of carrying more than 45 million tonnes of cargo per year. “We are interested in involving our Japanese partners in these projects at an early stage. Experts estimate that investments in the infrastructure of international transport corridors provide at least 10 percent annually,” Alexander Galushka said in his address to representatives of Japanese business circles. “With the help of experts, we are in the final stages of establishing models for the Northern Sea Route and would also like for our Japanese partners to see the prospects for their business involvement in these projects. We invite you to think about this.”

    In conclusion, Alexander Galushka announced that the Ministry for the Development of the Russian Far East is prepared to provide assistance in establishing B2B contacts with representatives of Russian organizations and companies that are interested in cooperation with their Japanese counterparts.

    Several investment projects are currently being implemented in the Far East jointly with Japanese companies: the establishment of a specialized transshipment complex as part of the Free Port of Vladivostok (total investment of approximately USD 1 billion), the launch of a timber processing plant in Primorye by Sumitomo (investment of approximately RUB 4 billion), the construction of a year-round greenhouse to grow vegetables and greenery in the priority development area of the Kangalassy Industrial Park and a greenhouse complex by the Japanese-Russian company JGC Evergreen, an investor in the Khabarovsk Advances Special Economic Zone.