Sergei Sobyanin: Moscow Industry Day to be celebrated on 7 October

Sergei Sobyanin: Moscow Industry Day to be celebrated on 7 October
Photo: Photo by the Mayor and Moscow Government Press Service. Denis Grishkin
The Moscow Government has established Moscow Industry Day as a city holiday in a move to support local manufacturers.

Wika Mera has opened a measuring instrument manufacturing plant at Indigo Park in the village of Nikolo-Khovanskoye.

“Efforts to boost industry in Moscow are beginning to bear fruit,” Sergei Sobyanin said at the opening ceremony. “Measures to support the city’s industry by the Moscow Government have started producing results: new production facilities are opening in the city. The main requirement they have to meet is, first, to create jobs for city residents. This means that new high paying jobs are being created at high-tech production facilities.”

The mayor thanked Wika Mera executives for their investment in new facilities. “Now, these are not just assembly facilities but plants with a high proportion of products made locally – in fact, this is import substitution. We will continue to provide any possible support that we can so you can further develop your business,” Mayor Sobyanin added.

General Director of Wika Mera Oleg Goncharov thanked the city authorities for their assistance in obtaining construction permits and documents authorising the company to put the plant into operation. He added that the company plans to build additional production facilities.

The city has passed a law declaring 7 October Moscow Industry Day. “Industrial development and building new plants in Moscow will now be fully competitive with other regions, which is important given that Moscow is seen as an expensive city,” Mr Sobyanin said. “Before investing, any enterprise will estimate future expenses, so we worked to make expenses justified and acceptable to companies placing their high-tech production in Moscow.”  

New production complex

Germany’s WIKA, a leading global manufacturer of measuring systems, was established in 1946. Its goods are widely used in many industries, including the oil and gas, chemical, petrochemical, food and pharmaceutical sectors, as well as engineering, power generating and shipbuilding industries.

By 1990, WIKA became the world’s largest pressure gauge manufacturer. The company has been operating in Russia for over 20 years, opening its Moscow office in 1995. A service centre with an assembly facility and a quality control laboratory has been operational since 2000.

In 2013-2017, WIKA’s Russian subsidiary Wika Mera built its own production and administrative complex in the village of Nikolo-Khovanskoye. The new facility is located on two hectares with four permanent buildings with a total floor space of 5,100 square metres, including a production facility, a warehouse and an administrative building. It employs 105 people.

The production facility has a machining shop with the latest digital machine tools. Each year, high-capacity production lines manufacture 400,000 industrial industrial pressure gauges, 100,000 bypass level gauges, 20,000 protective cases and flanges, 25,000 membrane separators and 12,000 thermo-couplings and resistance thermometers.

Wika Mera is planning additional production capacity through expanding a scope of manufactured pressure gauges, as well as electronic and combined gauges.

The new plant’s domestic content will exceed 50 percent, with plans to attain 70-80 percent for some categories of tools and systems.

Wika Mera products will be used by Russian industrial companies, research and development institutes, retail chains, and resource supply organisations. The company plans to sell 20 percent of its output in Moscow and the Moscow Region, and the remaining 80 percent will be marketed in other Russian regions. By 2018, Wika Mera expects to take 17 percent of the measuring equipment market in Russia.

A total of 1.05 billion roubles have been invested in the new production and administrative complex. The Moscow Government has also provided comprehensive support and has helped obtain the required development documents and permits, including the land plot development plan, certificate approving the architectural and design planning solution, design document evaluation, the construction and operating permit, and other documents.

The company plans to earn 1.25 billion roubles this year, plus another 1.7 billion in 2018. This will allow Wika Mera to become a major taxpayer among the city’s industrial enterprises.

Supporting Moscow’s enterprises

Once specific objectives are achieved, the company plans to apply for Moscow investment priority project status for creating an industrial complex or centre.

Incentives aimed at supporting investment priority projects include profit, land and property tax benefits, as well as reduced land lease rates. These benefits will reduce the tax liability for companies and investors up to 25 percent.

 

Tax type

Current rate

Reduced rate for priority investment projects

City profit tax

17 percent

12.5 percent

Property tax

2.2 percent of inventory value

Zero percent for immovable property

Land tax

1.5 percent of cadastral value

0.7 percent of calculated tax liability (0.01 percent of cadastral value)

Land lease tax

Up to 1.5 percent of cadastral value

0.01 percent of cadastral value

 

Companies that wish to apply for the status of investment priority project to create an industrial centre must meet the following requirements, as established by law:

—use the land plots efficiently (facilities must use no fewer than 4,000 square metres per hectare);

— use any structure and the land for the stated purposes (for innovation activity and industrial products manufacturing), with non-core facilities (commercial facilities, offices, public catering and consumer service facilities) taking up no more than 20 percent of production premises area;

— invest no less than one billion roubles in production development.

Once the facilities are launched, the company must ensure economic production efficiency, including a minimum revenue of 320.7 million roubles and a minimum payroll budget of 106.9 million roubles annually per hectare. The company must also offer its employees a minimum average salary (57,971 roubles per employee).

Investment priority project status and related incentives allow the city to:

— provide substantial support to new enterprises that play a major role in the city’s economy;

— increase employment and output volume;

— promote efficient use of land occupied by industrial enterprises;

— ensure adequate employee salaries;

— promote production development investment.