Dobrograd-1 SEZ, a unique business model
The Ministry of Economic Development of the Russian Federation considers special economic zones (SEZs) to be one of the most ambitious projects to attract investment in priority areas of the economy. The interest of the federal subjects’ leadership in industrial sites, in technology innovative and tourism and recreation SEZs in the regions is increasing. Today there are 43 SEZs operating in this country, with 967 registered residents. The increase in applications for creation of special economic zones in the regions has been especially noticeable in the last two years.
The very fact of the presence of a SEZ in the region, along with such development institutions as industrial parks or single-industry towns, adds investment attractiveness of the territory to expert and business communities. The subject of the federation, which received the opportunity to develop a SEZ, immediately moves into a more serious economic weight category by gaining almost maximum set of tools for business growth.
Companies that create jobs for qualified specialists and manufacture significant volumes of sought after products become SEZ residents. Experts argue that the creation of one job with the resident of a special economic zone leads to 3-4 new jobs in the region.
In October 2020, the first industrial production special economic zone was created in the Vladimir region. For a region located 2 hours from Moscow, at the intersection of major transit routes, this became an extremely important factor that had opened up real prospects for economic growth.
It has been less than a year and a half. What has been achieved in the Dobrograd-1 Special Economic Zone during this period of time? In order to assess the scale and pace of transformations taking place on the industrial site, it is worth noting that business analysts are not counting on a lightning-fast effect in the formation of a SEZ. Documentation, organizational and financial issues, design, construction of external and internal infrastructure, establishing sectoral priorities, forming a managing company team, attracting the first investors, start of construction of their enterprises – and the first financial results appear in 5-7 years. The industrial sites of China, which Russian business is called to model, are expected to reach the targeted figures in the 9th year and even later.
Dobrograd-1 Special Economic Zone in the Vladimir region is one of the youngest private SEZs in Russia. Perhaps it is this format that allows our industrial site to make adjustments to the analyst estimates and shatter the established patterns.
In a short period of time, since the beginning of vigorous activity, we have accomplished what would have taken other sites years to complete. Organizational and technical issues have been resolved, a management team has been formed, service structures have been staffed, engineering and transport infrastructures of the SEZ territory have been created.
The construction of additional exit ramps on the M7 federal highway near the industrial site has begun. The project includes major repairs with the surface replacement, the expansion of the embankment, and roadside soil stabilization. It is important for the SEZ residents that these improvements increase the highway traffic capacity and ensure comfortable and safe passage of vehicles, especially heavy-duty transports, to the industrial site. Customs and innovation infrastructures are also being formed. To date, the site is provided with everything that makes it possible for a SEZ resident company to start creating its own enterprise on the territory.
In 2021, five companies had already received the status of resident of the Dobrograd-1 SEZ; the total volume of their investments will exceed 4 billion rubles. In the coming years, the production of medical and lighting products, engineering components and sleep products will be launched. As of the first quarter of this year, two more companies applied for resident status.
In the second half of this year, the production of the first Dobrograd-1 SEZ resident is expected to be launched. This means that the investment cycle, from obtaining the resident status to cutting the symbolic ribbon at the opening of a new enterprise, will be only 8-10 months. This is a unique case in the practice of Russian industrial sites.
The uniqueness of the Dobrograd-1 site also results from the close agglomeration with the town of the same name, which is another exceptional project in itself. The concept of the town is in its name. The town of Dobrograd was founded in 2012 by Vladimir Sedov, a businessman, philanthropist and founder of Askona Life Group, the largest manufacturer of sleep products in Eastern Europe. It is the first town in Russia that is being built using private investments with the active support of the state. The town is being developed in line with the latest urban trends, according to the principle of "green" construction, preserving nature and integrating it into the social sphere. The concept of the creators of this unique project is not to repeat the best known practices, but to offer new ones.
“We conduct benchmarking, study international practices, compare our strategies with relevant business processes. We do it not because we want to copy them. We focus only on the new, on something that no one has tried to implement yet. Sometimes you want to make a foresight, go 30 years forward and see how the town has developed in an amazing way, setting new formats for the quality of life. And next to it, we see a developing industrial site, and it picks up these formats and interacts with them, and we need to see this not just as a business project, but as a community of happy people. It is quite possible. The ideal model for such coexistence is not to disconnect the meanings of the town for life and the industrial site, but to develop them as a single environment. Imagine: a person rides to work on a bicycle, and after his working day is over, he finds himself on a golf course. And he does not compartmentalize these moments of his life. At the same time, he has an understanding that during his working hours he manufactured products not only to earn his wages and make profit for his employer, but he did this also to help the region where he lives and works. He works to increase the region's GDP. The goals that we set for ourselves are not monetary gains, but first of all investments in people. This is a high bar. And it can be achieved by people who have a common vision of the processes, an understanding the philosophy of the project development,” says Vladimir Sedov, founder of the project.
The founders of the long-term development strategy for Dobrograd-town and the special economic zone did not foresee what risks and challenges our country would face. In the face of so many sanctions and restrictions, the topic of import substitution becomes especially relevant. The operational challenge is not only to keep Russian business afloat, but also to fill the niches created by the sanctions imposed on import of goods. The Dobrograd-1 industrial site, which has the support of federal and regional laws, a developed infrastructure, and a unique agglomeration of the town and the economic zone, provides unprecedented opportunities for pharmaceutical enterprises, IT companies, developers of microelectronics and precision equipment, creators of new technologies that have become inaccessible to us. The comfortable and safe town of Dobrograd becomes even more attractive for life and work to the most sought-after specialists who will be able to live with their families in a good place and realize their potential. Besides, a free customs zone regime will allow investors to compete with foreign technologies on equal terms. Here, in the Dobrograd-1 SEZ, new aspects and opportunities are opening up for business.
Conditions for a comfortable life and work with an extensive package of benefits and preferences will bring maximum results in a short period of time. Dobrograd-1 is working quickly and efficiently in the most relevant areas that should protect the Russian economy today in the fields of microelectronics, medical products, and pharmaceuticals.
The entire Dobrograd project is a vivid example of an effective interaction between the state and business. More than 8 billion rubles have been invested in the implementation of the project, 7.5 billion of which are private investments and the rest is public funds.
The town has built and continues to build housing of various formats: apartments, townhouses and single-family homes. The First Clinical Medical Center, the largest in the Central Federal District, is 12 km from the town, and provides a full range of inpatient and outpatient services. This academic year, the first stage of the MIR private educational complex was opened. It is significant that involved parents from all over the region chose the MIR school for their children because it implements modern practices in teaching, educating and developing the students. The Dobrograd resort is fully operational: there are multifunctional outdoor sports grounds and an indoor complex, a modern hotel with a spa complex, a skate park, music festivals and performances of domestic stars. This year it is planned to open a wake park and a golf resort.