Marat Khusnullin: ‘Alabuga was started from Minnikhanov’s words: ‘Here’s a billion rubles’

The operating Turkish plant in Alabuga has not been officially opened yet…

Initially, it was planned not only to sum up the results of the project of the special economic zone in Tatarstan (especially taking into account the closure of 10 ineffective SEZ at the order of Putin all over Russia and the transfer of the remaining ones to the regions) but also to open a new 23^rd plant. Not just a new plant but a new Turkish plant! It was expected that the President of Tatarstan, Moscow Mayor and the former subordinate Khusnullin, together with the then curator of the project of all economic zones of the Russian Federation Mikhail Mishustin, now the head of the FTS of the Russian Federation, would officially open the plant from two plants under the auspices of Turkish holding Sisecam: Trakya Glass Rus JSC and Automotive Glass Alliance Rus JSC (partly owned by the French and Dutch shareholders).

The fact of the opening of Turkish companies almost a few days after the Istanbul terrorist attack 'Putin allowed' and gave the green light for tourist charter flights to Turkey is impressive. Especially that the official opening was long-awaited — the plants already fucntion. So, Trakya Glass Rus, the plant for the production of sheet glass, received the resident status already on 10 September of 2010, and the Automotive Glass Alliance Rus, a nearby plant for the production of automotive glass, officially took its place in Alabuga on 2 August of 2011. Both plants were launched year and a half ago, said the press service of the SEZ, however, until recently, 'in the light of the known events', the official opening did not take place. Officially, the plants were not opened. As the representatives of Turkish holding Sisecam stated on the sidelines: they are waiting for certainty in the relations between Russia and Turkey and will be ready to officially open only during their expected visit to Russia of the Minister of Economy of Turkey. When exactly the visit will take place, no one knows yet.

The production capacity of Trakya Glass Rus, which deals with production of sheet glass, mirrors and coated glass, is 250 thousand tonnes per year

'I have arrived just 9 months ago, I'm a foreigner!'

Meanwhile, the Turkish-Dutch-French production did not stop their work during the Russian-Turkish 'ice age'. Currently, the production capacity of Trakya Glass Rus, which deals with production of sheet glass, mirrors and coated glass, is 250 thousand tonnes per year, the mirror production volume — 4.5 million square metres per year. The future plans of the management are the production of coated glass at volume of 4.5 million square meters per year. The capacity of the Automotive Glass Alliance Rus after reaching the designed capacity will be 6.4 million units per year. The design capacity will increase the share of import substitution in the Russian industry for the production of automotive glass up to 50% (now it is 20%). The level of localization of production reaches 55% for windscreens, 98% — for side windows and 55% — for rear-view mirrors. The Turkish top managers also told the correspondent of Realnoe Vremya that for the production of glass the factories use 80% domestic raw materials (including sand), the equipment at the enterprises is mainly European. The technical director of the company Behçet Husin ('I have arrived just 9 months ago, I'm a foreigner!'), pretty well speaking in Russian, showed us the shops of the glass factory. According to him, the company has already reached the production of 725 tonnes per day. Glass goes not only to the partner of the holding for the production of automobile glass but also to a number of regions of Russia, 'from Tatarstan to Omsk', there has not been supplies abroad yet (except Poland), he told us.

'The total volume of our investments in the Russian economy amounted to $ 1.1 billion'

Apparently, in the light of the fact that 'the ice was broken' and the warming between the two countries may be in the offing, the Turkish workers and investors are willing to continue to work in Russia and invest in the Tatarstan economy. The Director General of the holding Sisecam Ahmet Kırman gave to understand that at the exit from the factory, answering the question of the correspondent of Realnoe Vremya on 'the Turkish issue'.

'Mr. Kırman, over the past year we saw the cooling of political and economic relations between Russia and Turkey and the sudden warming between them. Has the cooling of the last months affected your business, and how do you assess the prospects of 'the Russian-Turkish thaw'? By the way, how did the Republican government treat you: supported you all this time or vice versa, perhaps?..'

'I must admit that our two countries have historically strong, long relationships. It is impossible to speak about only the problems of one country, both countries have suffered, I think, certain economic losses,' sadly said Kırman. 'In our company, we think that all these events are very sad, they have a negative impact on both sides. And we are very glad to know that our countries have begun to restore friendly relations!'

Cheered up Ahmet Kırman in proof of the possibility of the participation of Turkish capital in Russia and Tatarstan Republic told us that his holding company has been carried out production activities not only in Tatarstan but throughout Russia in recent years:

Ahmet Kirman: 'I also want to thank the government of Tatarstan and the Kazan authorities for the fact that in these last difficult months, hard times there was any negative impact on us, negative pressure. On the contrary, they tried to help us!'

'The total volume of our investments in the Russian economy amounted to $ 1.1 billion. This is our investment in Russia! Here we produce not only sheet and automotive glass but also utensils, packing… Of course, all of our products we sell on the Russian market. But, in addition, we export from Russia to America and Europe and even to Turkey some our products manufactured here. I cannot say that this whole situation has a negative impact on us, but we were upset as everyone [our colleagues and partners]. I also want to thank the government of Tatarstan and the Kazan authorities for the fact that in these last difficult months, hard times there was not any negative impact on us, negative pressure. On the contrary, they tried to help us!'

Kırman also expressed confidence that in the medium term the company may expand the production in Alabuga: 'But while we hold a pause, the main thing that it was calm [on the political background]'. At the moment, the holding Sisecam invested $ 300 million in both plants, the expansion of the production will need another $ 150 million. The decision of the Turks on investments will depend, he said, on the current situation, not so much on foreign conflicts as on how the market will develop in Russia: 'There is no factor that would have stopped. However, despite the difficult relations between the two countries, we have not stopped the production and continued investments!'

By the way, Ahmet Kırman said at the press conference at the end of June of this year, according to Bloomberg, that he intends within five years to increase the share of glass recycling in the industry from the current 19% up to 45%. It is not excluded that this can happen including due to the expansion of production in Alabuga.

President of RT: 'We wanted to have in the SEZ 100 residents by that moment, but so far they are only 48…'

The ceremony of the 10 ^th anniversary of the SEZ Alabuga was held at the conference hall of the administrative building, where at a round table sat not only VIP-persons but also almost all residents (in the rank of at least CEOs). The Turks were sat on the right side of Rustam Minnikhanov and other officials. Today in Alabuga there are five residents with Turkish capital, the sixth is preparing to start. Next to Ahmet Kırman from Sisecam there were his colleagues, for example, from the major Alabuga Turkish project 'Kastamonu Integrated Wood Industry' (already $ 450 million investments, and will be 600 million). Given that the official opening of the Turkish plant did not take place, Tatarstan President did not mention the painful question in his solemn speech (but later he commented on the Turkish issue to the correspondent of Realnoe Vremya). However, despite the solemnity of the situation, Minnikhanov couldn't help to note a number of obstacles that Tatarstan had to face:

The ceremony of the 10th anniversary of the SEZ Alabuga was held at the conference hall of the administrative building, where at a round table sat not only VIP-persons but also almost all residents

'Due to international circumstances, unfortunately, we failed to do it,' said the President. 'We wanted to have in the SEZ 100 residents by that moment but so far they are only 48. However, 22 enterprises already operate there! And they produce 66% of the revenues of all special economic zones of the Russian Federation! In the next 10 years we hope for a good result.'

The offer of Sobyanin and 'the secret of Marat Khusnullin'

Sergey Sobyanin, who by that time had already examined the factories of the SEZ, said:

'I know how difficult it is to open at least one production, but there is a whole production city. Brilliant, beautiful project that benefits Russia and Tatarstan,' flattered the Mayor of Moscow to the authorities of Tatarstan. 'I invite your company to participate in our zone in Zelenograd (technogy-innovative zone of Zelenograd is officially established when Alabuga was). There is a cluster at the stage of development, technopolis. The cooperation between Moscow and Tatarstan is very high, we can't be isolated, it is necessary to develop our relations!'

Sergey Sobyanin: 'I know how difficult it is to open at least one production, but there is a whole production city. Brilliant, beautiful project that benefits Russia and Tatarstan'

One of the most curious was 'the toast of Marat Khusnullin', who said he was going to tell everyone the secret how the zone Alabuga appeared:

'Actually, everything was different! Rustam Minnikhanov, piloting a helicopter from Naberezhnye Chelny to Kazan, decided to fly and see what happens in Yelabuga. And he saw how the housing ElAZ was being dismantled! Then he immediately told me that there is a new federal law on the SEZ, it is necessary to study it and to apply to this territory. Then we 'drove' around the world. We visited China, Singapore, Sweden, where such zones were being developed. Went back. And Minnikhanov told me: 'There is no federal money for now, here's a billion, we'll decide what to do then.'

Khusnullin also remembered about the Severstal-auto/Ford Sollers, about how Shirinov since the construction of the SEZ promised to run the plant 'in a year'. Noboby believed, of course! However, taking a promise, the top manager of the company 'slept here on a coach' and fulfilled the promise. Marat Khusnullin and Irek Faizullin (he was a designer of the SEZ) also slept here almost on a coach, arranging in Alabuga headquarters every Sunday.'

Rustam Minnikhanov: 'As for our Turkish partners, we think that Turkish investors have believed in our country — on the example of wonderful major projects that work [in Alabuga]. And I hope that the political crisis that has occurred will be resolved and we will continue to discuss new projects.'

'We work with the Chinese and with the Europeans, but the Turkish investors are distinguished by large projects'

'Rustam Nurgalievich, how do you assess the prospect of the work of the Turkish companies and Turkish investments in the SEZ Alabuga after the cooling of Russian-Turkish relations and then a sudden warming? The Turks did not have a chance to speak at the round table...' we asked Minnikhanov, suddenly having remembered silent Turks.

'As for our Turkish partners, we think that Turkish investors have believed in our country — on the example of wonderful major projects that work [in Alabuga]. And I hope that the political crisis that has occurred will be resolved and we will continue to discuss new projects. We had many plans with our Turkish investors. We work with the Chinese and with the Europeans, but the Turkish investors are distinguished by large projects. Let's hope that this possibility will be,' said RT President.

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