vlad.tribnet.com / Issue #167 / Business / Reading article...

Wanted: $3 million to invest in the cultivation of trepang, a sea creature eaten as a delicacy in China. Foreign equity investment negotiable.

With high hopes, a three-day forum on investment in Primorye opens in Vladivostok on May 27. A collective effort between the krai administration and the United Nations, the forum, “Business Cooperation in the Russian Far East through Foreign Investment,” is promoting 80 projects from around Primorye to foreigners for investment and collaboration.

Organizers say they are optimistic the forum will result in everything from a new production line for sorting soy seeds to a nuclear power plant the krai administration hopes will solve Primorye’s energy crisis.

“Essentially, we are providing people a chance to interact, to acquaint themselves with one another, and with the investment possibilities in Primorye,” said Oksana Klimenko, deputy director of the Primorsky Investment and International Trade Promotion Foundation.

The United National Industrial Development Organization and the United Nations Development Program’s Tumen Secretariat in Beijing is providing technical and financial assistance to the foundation and the forum. Ian Davies, of the Secretariat’s Investment Promotion Unit, expects that more than 200 foreign businesses will be represented, with the largest contingent from China, followed by South Korea and Japan, as well as Moscow-based Russian investors.

The results of the forum, however, won’t be measured solely in participation.

“The forum is not the be-all and end-all affair,” Davies said. “It is just the start of building awareness among the international business community, particularly in the North Pacific and Northeast and East Asia over a two- or three-year time frame.”

Organizers and participating enterprises will gauge success on letters of intent, memoranda, joint-venture contracts, and the sale of equipment or materials over a three-year period.

“If 10 percent of participating enterprises ultimately receive some sort of investment or intention of investment, we’ll call it success,” said Klimenko.

A similar international business and investment forum in Rajin, North Korea in 1996 has since brought several hundred million dollars in investment to the region, according to Davies.

Priority in the forum will be given to light industry and consumer products; fish and seafood processing; the renovation of heavy engineering enterprises; and transport and port communications. Also under consideration is mining, business services, recreational and leisure services, commercial buildings and shopping complexes.

In Nakhodka, forum organizers are showcasing the Korea Land Corporation Industrial Complex — an industrial park slated to host a variety of South Korean light industrial enterprises — as well as the port facilities at Vostochny and Nakhodka.

While organizers and politicians alike are confident of success, some participating enterprises are more cautious in their expectations.

“Of course, it’s difficult to expect to find the perfect, interested investor for the project at a forum of this scale,” said Viktor Khoroshilov, financial director at the local brewery Pivoindustriya Primorya.

Khoroshilov’s company is seeking $15 million in foreign investment to increase production volume and the quality of its beer.

“When [a forum’s] intentions are more limited, there is greater expectation for finding an investor,” said Vladislav Ivanitsky, chairman of the board of directors at Spassk-Dalny-based Spassk Cement.

Ivanitsky says he is hoping for investments of more than $10 million to produce synthetic cement bags and heat insulating materials.

“If we weren’t hopeful, we probably wouldn’t be participating,” he said.