05 May 2016

    Primorye Region Deputy Governor Sergei Sidorenko and JFE Engineering CEO Hisanori Kanou recently held negotiations that resulted in announcement of cooperation plans and foreign investment, the Vesti.ru news portal reports.

    Japan’s JFE Engineering intends to invest approximately RUB 1 billion in greenhouse production in the Primorye Region.

    Growing large amounts of vegetables is a priority area of government support for investment projects in the Primorye Region and for this reason the project will be 25% financed from the Russian federal budget.

    Another essential requirement for co-financing by Russia is the size of the modern winter greenhouses, which must be at least three hectares. The Japanese company is planning to build more than five hectares of greenhouses.

    In addition to the requirements for production volume, there are also infrastructural and environmental standards that must be observed, Mr. Sidorenko said: “The greenhouses must be automated, environmentally friendly and economical in terms of heat consumption. One of the problematic factors in developing vegetable production on protected ground in the Primorye Region is the lack of gas since all Primorye greenhouse facilities currently operate on heat from thermal power plants. But gas will be supplied on Primorye territory, first in Ussuriysk and Artem, starting at the end of 2017. Thus, the economics of the greenhouse vegetable production projects will see a change for the better.”

    JFE Engineering CEO Mr. Kanou noted that the greenhouses in Primorye would be his company’s first international project. The corporation has greenhouses in the city of Tomakomai on Hokkaido Island, which the Japanese investor says is very similar to Vladivostok in terms of climatic conditions and landscape. “Thus, we could successfully apply the best practices that we have managed to achieve while working in Tomakomai in Primorye as well.”

    Mr. Kanou also spoke positively about the infrastructure of Primorye and said that it will facilitate the development of different kinds of businesses: “It’s only a two-hour flight to Vladivostok from the Tokyo airport, which is much less than some flights within Japan. This also offers great opportunities for economic exchanges between Primorye and Japan.”

    The JFE Engineering CEO said that a detailed business plan would be drafted by the end of the summer and an agreement on cooperation may be signed with the Russian Federation in early September. In turn, Mr. Sidorenko expressed the hope that the document would signed as part of the Eastern Economic Forum, which is to take place in Vladivostok on September, 2–3: “Signing our agreement at the Forum would obviously be a landmark event. I really hope that it will be a thoroughly researched project with specific deadlines.”