General information
The Lipetsk Region was established on January 06, 1954.
Geography
The Lipetsk Region is situated in Central Russia, 500 km to the south from Moscow, at the crossings of key highways. It borders with the Voronezh, Kursk, Oryol, Tula, Ryazan and Tambov Regions.
The total area of the region is 24,000 sq km. It stretches 200 km from north to south and 150 km from west to east. The total border length is 900 km.
The climate is moderately continental with mild winters and warm summers.
The population is 1,163,300 people (as of January 01, 2013).
According to the local regulations, the Lipetsk Region is divided into 315 municipalities: 2 urban districts, 18 municipal districts, 6 cities and 289 settlements.
Lipetsk is an administrative, industrial, cultural and resort center of the region.
Yelets is a well-developed industrial city with a long and heroic history and great religious and cultural traditions.
Gryazi is a large railroad hub connecting markets of central and remote regions of Russia and CIS countries.
Zadonsk is a Christian center of the Black Earth Region, inseparably associated with Saint Tikhon of Zadonsk.
Land and mineral resources
The predominant soil is black earth.
Limestone, dolomite, clay, and cement raw material are mined in 300 mineral deposits. The Lipetsk Region is ranked No. 1 in terms of carbonate deposits. The region is rich in peat reserves. Lipetsk is also famous for its mineral springs and therapeutic muds discovered in 1871.
Standards of living
As of 2012, Lipetsk Region was the fifteenth in Russia by standards of living, and moved from the 23rd to 19th position in terms of wages.
In 2012, only 8.4% of population lived below the poverty level (10.9% in average in Russia). According to this indicator, Lipetsk Region is the fourth in the Central Federal District and the ninth in Russia.
The growth in real personal income in Lipetsk Region is higher than the average in Russia (since 2000, the real disposable income has increased 2.9 times against 2.6 on the Russian average). In 2013, real personal income grew by 3.1%.
In 2013, the average per capita income of the population grew by 10.3% (RUB 21,805) and pensions – by 9.5% (RUB 9,403.5).
The average wage grew from January till November by 12.3% year-on-year (RUB 20,955.00). The highest growth rates were registered in the educational (by 128.9%) health (by117.7%) and agricultural (by 114.1%) sectors.
Growth in real wages amounted to 104.1%.
According to Decree No. 597 of the Russian President dated May 07, 2012, measures have been taken to increase wages of social workers.
As compared to 2014, average wages grew 1.8 times for the academic staff of pre-school educational institutions (RUB 19,003) and healthcare staff (RUB 11,986), 1.5 times for social workers (RUB 11,253), 1.3 times for doctors (RUB 30,376), paramedical personnel and medical attendants (RUB 15,933 and RUB 10,306 accordingly), and culture professionals (RUB 13,092), 1.2 times for general education teaching staff (RUB 22,295), teachers and vocational instructors (RUB 17,063).
In 2013, total individual income exceeded expenses by RUB 27.7 million (against RUB 22 million in 2012). The daily living needs took two thirds (74.5%) of personal income (against 73.4% in 2012).
The consumption increase also resulted in the reduction of savings (deposits and securities) from 5.2% down to 4%.
Export and import
The Lipetsk Region is an active importer and exporter.
The region is the 3rd in Central Russia and the 22nd in Russia by export volumes (the 7th and 20th by import volume accordingly).
Export and import operations account for 78% and 22% of the external turnover respectively. Ferrous metals are the core export commodity, reaching 95% of the total export.
Major import items are machinery and equipment (39%), food products and raw materials (21%).
The region has strong commercial relations with 80 countries, mostly with Italy, Germany, Turkey, Ukraine and Denmark.
About 219 Lipetsk companies are involved in export and import operations.
Industries
Industrial production accounts for 36% of the gross regional product (GRP), with 22% of all the employed working in the industrial sector.
The industrial sector generates up to 45% of total regional taxes.
It is represented by over 2,000 companies, including international maors, such as NLMK, Indesit International, Bekaert Lipetsk, Yokohama R.P.Z., ALU-PRO, LANXESS Lipetsk, ROPA Rus, etc.
The Lipetsk Region produces 24% of cast iron, 18.6% of the ferrous metals, 17.3% of steel, 40% of washing machines, 35% of refrigerators, 73% of juices and canned fruit for children, 14% of sugar, 30% of caramel and 7% of mineral water in Russia. The industrial production index in 2013 grew by 0.1% year-on-year. The production output accounted for RUB 416.8 billion or 170% against 2000 (158% on the average in Russia).
The economic growth is mainly driven by processing industries. The output of processing industries per capita exceeded the Russian average almost 2 times, accounting for RUB 331,000 per person (2nd in the Central Federal District and 4th in Russia).
In 2013, the ferrous industry accounted for 56% of the total industrial production (declined by 2.4% against 2012).
In 2013, innovative products increased by 10.1% year-on-year (or by 6.4 times against 2005) and totaled RUB 45 billion.
Innovative products accounted for 9.7% in the total amount of goods sold and services rendered (11.4% in the industrial sector), which is 2.4 times higher as compared to 2005.
The food production output amounted to RUB 88.6 billion or 107.8% against 2012. In 2013, food products accounted for 21.3% of the total production, having increased by 1.5% year-on-year. In 2013, the food and beverages production index increased by 3.5% year-on-year (2.1% on the average in Russia).
Lipetsk remains the No. 1 region in the Central Russia by production of confectionery, sugar and pasta per capita, No. 3 by production of meat, poultry and dairy products, and No. 2 by bakery production.
The food industry is represented by 369 small and large enterprises in 15 related sectors with about 19,000 employees.
Lipetsk Region has established commercial relations with 37 Russian regions and 27 countries, including Abkhazia, Armenia, Latvia, Moldavia, Mongolia, Ukraine, Canada, UAE, Germany, etc.
In 2013, the export of food and agricultural raw materials totaled RUB 2 billion (107% year-on-year). The key exporters are Roshen Confectionery, LipetskKhlebMakaronProm (pasta, wheat flour and bakery), Progress (juices, canned meat, cereals and water), Lebedyansky (juices and nectars), Lipetsk Cold Storage Facility (ice cream), Liboil (rapeseed oil), Gryazi Sugar Plant and Lebedyan Sugar Plant (pelletized pulp).
Lipetsk food and processing companies participate actively in the Green Week international exhibition for the food, agricultural and horticultural industries held in Berlin, thus developing new win-win relations with agricultural producers and customers, attracting new investments, and extending strategic partnership in the agricultural business.
The Lipetsk Cluster Development Center established in 2013 in the Lipetsk Region in order to improve environment for the development of innovative industrial clusters, launched strategic projects to 'clusterize' the Lipetsk economy till 2020 and programs for the development of two industrial clusters focused on the production of home appliances, and composite materials and associated goods.
Industries
In 2013, business and community investments totaled RUB 101 billion (103.5% as compared to 2011), which is equal to two consolidated budgets of the Lipetsk Region.
The direct foreign investments amounted to USD 90 million, which is 4 times higher than in 2012.
A share of investments in the GRP exceeds the Russian average (about 20%) and reaches 30%. The Lipetsk Region has an integrated and diversified three-level system for the establishment and development of economic growth drivers, providing the investors with the best solutions for business development (federal and regional special economic zones, and industrial parks).
The first level is the Lipetsk Special Economic Zone. It offers access to all essential infrastructure; its residents are 29 companies with the total investments of RUB 100 billion and the total output of RUB 20.8 billion (including RUB 7 billion in 2013, up 46% year-on-year).
As of the end of 2013, the Lipetsk Industrial SEZ had 10 operating companies – Fenzi, Grazhdanskie Pripasy, LZSK Okonnye Sistemy, Yokohama R.P.Z., Bekaert Lipetsk (Belgium), SEST LUVE (Italy), Chagoda Glassworks, ALU-PRO and PK RATIONAL. In 2013, LANXESS Lipetsk launched the first production stage of car tire components and tools.
The Lipetsk regional administration continues the development of regional special economic zones. There are currently 10 regional special economic zones (RSEZ) with 37 residents.
Their core activities include the production of food, medicine, steel products and non-metallic mineral products.
In 2013, two Agricultural Regional Special Economic Zones were registered in the Lipetsk Region – Izmalkovo RSEZ in the Izmalkovo District and Khlevnoe RSEZ in the Khlevnoe District. They are expected to attract 20 residents offering 1,500 new jobs in 2013–2020 and over RUB 7 billion in investments.
Investors finance the construction of car and machinery plants (Krasnoe District) and a general aviation multipurpose center focused on the aircraft production, maintenance of foreign and Russian aircraft, development of the infrastructure for small aviation conventions, pilot training and certification, and sport and leisure services (Usman District).
The Lipetsk Region creates favorable environment for investment processes and lowering risks by providing investors with the following incentives – reduced or zero taxes, subsidies, sovereign guarantees, provision of collaterals and engineering infrastructure.
Tax incentives granted in 2013 under the Lipetsk Regional Law on Investments in the Lipetsk Region exceeded RUB 10 million. As of 2013, the total taxes were estimated to increase by RUB 12 million. The projects attracted RUB 2.8 billion in investments and created 321 jobs since their start.
According to the Lipetsk Regional Law on the Mortgage Fund of the Lipetsk Region, investment projects were collaterized with assets of the mortgage fund totaling RUB 1,572.4 million. The projects attracted RUB 4 billion in investments and created 947 jobs since their start.
According to Lipetsk Region Law on the Regional Budget, in 2013 the local authorities granted sovereign guarantees worth RUB 460 million, which is 2.3 times higher as compared to 2012. Industrial parks are another format of investment platforms (apart from special economic zones).
The Kuznechnaya Sloboda Industrial Park was the first of them. It is located in the premises of Stroymash (Lebedyan), which has already hosted several companies, including those from Italy. Its residents focus on the production of components for machines, domestic appliances, cars and construction machinery.
According to the investment rating by Expert RA Rating Agency, the Lipetsk Region was No. 3 by the lowest investment risks in 2012-2013. In 2013, Lipetsk Region received BB long-term and B short-term credit ratings from Fitch Ratings. The agency has also affirmed the region's national long-term rating at 'AA(rus)' with a stable outlook. In 2013, the Lipetsk Region was the 17th by investment appeal among all Russian regions according to the Russian Regional Development Ministry.