Doing.business.in.st.petersburg.2012

Doing business in St. Petersburg
2 Enterprise Europe Network - Russia, Module A Regional Center – St. Petersburg | www.doingbusiness.ru

Enterprise Europe Network - Russia, Module A Regional Center – St. Petersburg | www.doingbusiness.ru 3

Doing business
in St. Petersburg
Guide for exporters, investors and start-ups
Current publication was developed by and under supervision of the Enterprise Europe Network -
Russia, Gate2Rubin Consortium, Module A Regional Center – St. Petersburg operated by St.
Petersburg Foundation for SME Development with the assistance of the relevant legal, human
resources, certification, research and real estate firms.

© 2012 The Enterprise Europe Network - Russia, Gate2Rubin Consortium, Module A Regional
Center – St. Petersburg operated by St. Petersburg Foundation for SME Development. All rights
reserved. International copyright.
Any use of materials of this publication is possible only after written agreement of St. Petersburg
Foundation for SME Development and relevant contributing firms.


Table of contents
Welcome to St. Petersburg ............................................................................................... 7
1. The city ...................................................................................................................... 8
1.1. Geography ............................................................................................................................. 8
1.2. Public holidays and business hours ....................................................................................... 9
1.3. Population ............................................................................................................................. 9
1.4. Political system .................................................................................................................... 10
1.5. Economy .............................................................................................................................. 13
1.6. Foreign trade ....................................................................................................................... 15
1.7. Foreign investments ............................................................................................................ 17
2. Key business sectors................................................................................................. 19
2.1. Overview of St. Petersburg’s industry ................................................................................. 19
2.2. Automotive industry ........................................................................................................... 22
2.3. Food and beverage production ........................................................................................... 25
2.4. Information and communication technology (ICT) ............................................................. 30
2.5. Pharmaceutical industry...................................................................................................... 37
2.6. Shipbuilding industry ........................................................................................................... 42
2.7. Transport and logistics ........................................................................................................ 46
3. Business solutions .................................................................................................... 55
3.1. Headquarters....................................................................................................................... 56
3.2. Research & Development.................................................................................................... 58
3.3. Production сenter................................................................................................................ 61
3.4. Distribution сenter .............................................................................................................. 68
3.5. Test market ......................................................................................................................... 70
4. Doing business ......................................................................................................... 72
4.1. Establishing a legal presence............................................................................................... 72
4.2. Foreign investments ............................................................................................................ 80
4.3. Taxation ............................................................................................................................... 85
4.4. Contracts ............................................................................................................................. 92
4.5. Employment ........................................................................................................................ 95
4.6. Product conformity assurance in Russia ........................................................................... 102
4.7. Intellectual property rights and franchising ...................................................................... 108
4.8. Special economic zones (“SEZ”) in St. Petersburg............................................................. 114
4.9. Public private partnerships and infrastructure development........................................... 116
4.10. Obtaining rights to state-owned land in St. Petersburg .................................................... 120
4.11. Buyout of land plots in St. Petersburg............................................................................... 129
4.12. Regulatory issues. Antimonopoly compliance .................................................................. 133
5. Costs of doing business ...........................................................................................142
5.1. Costs of starting a company .............................................................................................. 142
5.2. Human resources .............................................................................................................. 144
5.3. Office, retail and warehouse market ................................................................................ 148
5.4. Communication ................................................................................................................. 154
5.5. Utilities .............................................................................................................................. 155


6. SME support ...........................................................................................................157
6.1. Overview ........................................................................................................................... 157
6.2. Definition of SME – EU vs. Russia ...................................................................................... 157
6.3. Statistics ............................................................................................................................ 158
6.4. SME support and development programs ........................................................................ 160
7. Contacts of the business support infrastructure .......................................................164
7.1. Overview of the business support infrastructure in St. Petersburg ................................. 164
7.2. Authorities ......................................................................................................................... 164
7.3. Investment support ........................................................................................................... 166
7.4. SME business cooperation support ................................................................................... 167
7.5. SME support ...................................................................................................................... 168
7.6. Financial support ............................................................................................................... 170
7.7. Techno parks and business incubators ............................................................................. 172
7.8. Educational programs and internships ............................................................................. 174
7.9. Chambers of commerce and industry ............................................................................... 175
7.10. Business associations ........................................................................................................ 175
7.11. Audit, tax and consulting firms ......................................................................................... 176
7.12. Banks ................................................................................................................................. 177
7.13. Certification and testing .................................................................................................... 177
7.14. Exhibitions ......................................................................................................................... 178
7.15. Law firms ........................................................................................................................... 178
7.16. Real estate ......................................................................................................................... 179
7.17. Recruitment....................................................................................................................... 179
7.18. Transport and logistics ...................................................................................................... 180
8. Authors and contributors ........................................................................................182


Welcome to St. Petersburg
I would like to welcome you to St. Petersburg - the city of
enormous business opportunities and development potential. It
is the second largest economic, transport, academic, cultural,
and tourism center in Russia as well as a growing economy with
a thriving private sector and an attractive business
environment.
Whether you want to start your business or invest in Russia, St.
Petersburg is the best place to do it. Favorable economic and
geographical location in the European part of Russia,
developed infrastructure, extensive scientific, research and
educational potential, highly skilled workforce as well as broad
market and competitive operating costs facilitate the
development of efficient, safe and stable business.
St. Petersburg is an attractive location for business and trade
which has an established and effectively operating system
aimed at supporting investment activity in the city. The
Government of St. Petersburg takes every measure to make St.
Petersburg a business-friendly environment by reducing
administrative barriers and simplifying the procedures required for business and investment
activities, including issuance of building permits and registration of property rights.
During the recent years many international companies have already implemented investment
projects in St. Petersburg, including such leading companies as Coca-Cola, Pepsi, Gillett, Wrigley,
British American Tobacco, Bosch Siemens, General Motors, Hyundai and many others. All of them
considered St. Petersburg an ideal location for their business needs, whether it is an R&D center,
test market, production center or distribution hub. Foreign businesses can benefit from government
investment incentives aimed at boosting the local economy.
This publication was developed by Enterprise Europe Network (EEN) - St. Petersburg in
collaboration of professional legal, human resources, certification, research and real estate firms
with the aim of providing start-ups, potential exporters and investors with the relevant information
on starting and running business in St. Petersburg.
The EEN branch in St. Petersburg focuses on providing business support to Russian companies and
provides free services to foreign companies to foster small business cooperation. In 2011 Enterprise
Europe Network (EEN) - St. Petersburg processed about 200 foreign requests and provided
information on about 1,000 potential partners from St. Petersburg.
Exporters, investors and businesses are also encouraged to use a special online tool – portal “Doing
business in St. Petersburg” (www.doingbusiness.ru) which contains extensive interactive
information in English on advantages and key issues of pursuing business in St. Petersburg as well as
a regularly updated database of cooperation profiles and export products from St. Petersburg.
Deputy chairman
Committee for Economic Development,
Industrial Policy and Trade Kirill Soloveychik
Government of St. Petersburg


1. The city
1.1. Geography

Coordinates: Latitude: 59° 57' North
Longitude: 30° 19' East
Area: 1,439 sq.km.
Climate: Maritime, with warm damp summers and moderately cold long winters
Average temperature: July: + 25 C
January: - 2 C
Time: MSK ( UTC+4)
Dialing codes: International country code: + 7 (Russia)
Area code: 812


1.2. Public holidays and business hours
Official holidays:  January 1-5 - New Year holidays
 January 7 – Russian Orthodox Christmas
 February 23 - Armed Forces Day
 March 8 - Women’s Day
 May 1 - International Labor Day
 May 9 - Victory Day
 June 12 - Day of Russia
 November 4 - National Unity Day
Business hours:  Offices: Mondays through Fridays - 9.00-18.00 (9 a.m. till 6 p.m.),
lunch break – 13.00-14.00 (1 p.m. till 2 p.m.)
 Banks: Mondays through Fridays - 9.00-18.00 (9 a.m. till 6 p.m.)
 Stores: Mondays through Saturdays - 10.00-19.00 (10 a.m. till 7
p.m.), most stores are also open on Sundays
 Restaurants: Mondays through Sundays – 12.00-23.00 (12 p.m. till 11
p.m.), many restaurants and cafes are open 24 hours

1.3. Population
Population 4,868,500 people
(2011):
Labor force (2010): 2,660,500 people
Unemployment rate 0.6%
(2010):
Population density 3,288.3 per sq. km.
(2010):
Gender ratio male: 44.8%
(2011): female: 55.2%
Population age Male and female (0-15) Male (16-59); Male
composition: female (16-54) (60 and above);
(2010): female
(55 and above)
12.9% 61.6% 25.5%
Median age Total: 41.3 years
Male: 38.2 years
(2010):
Female: 43.9 years
Birth rate 12.1
(per 1,000 people, 2010):
Death rate 14.2
(per 1,000 people, 2010):
Ethnic groups Russian (84.7%), Ukrainian (1.9%), Belarus (1.17%), unspecified (7.89%)
(2002 Census):
Official language: Russian


1.4. Political system
City day: May 27. The city was founded on May 27, 1703
City name:  Conventional long form: Saint-Petersburg
 Conventional short form: St. Petersburg
 Local long form: Sankt-Peterburg | Санкт-Петербург
 Local short form: С.-Петербург | Петербург
 Former names: St. -Petersburg (1703-1914), Petrograd (1914-
1924), Leningrad (1924-1991), St.-Petersburg (1991 till present)

Administrative division: While the city is divided into 18 districts (rayons), each district is
divided into municipal formations. At the moment there are 111
municipal formations (munitsipalnye obrazovaniya).

1. Admiralteysky District 10. Kurortny District
2. Vasileostrovsky District 11. Moskovsky District
3. Vyborgsky District 12. Nevsky District
4. Kalininsky District 13. Petrogradsky District
5. Kirovsky District 14. Petrodvortsovy District
6. Kolpinsky District 15. Primorsky District
7. Krasnogvardeysky District 16. Pavlovsky and Pushkinsky
Districts
8. Krasnoselsky District 17. Frunzensky District
9. Kronshtadsky District 18. Central District


Political system:

Source: Business Support Structure in St. Petersburg

Executive branch: The City Administration (www.gov.spb.ru) is the superior executive body
of St. Petersburg headed by the Governor. The St. Petersburg
Administration is formed of the Governor, the Government, the
Governor's Chancellery, the city committees and the subordinate
administrative-territorial departments of the Administration.
Legislative branch: The Legislative Assembly of St. Petersburg (www.assembly.spb.ru) is
the standing effective supreme and sole legislative (representative) body
of the state authority in St. Petersburg.
Judicial branch: Charter Court of St. Petersburg (www.spbustavsud.ru), Judges of the
Peace of St. Petersburg, City Court of St. Petersburg
(www.gs.courts.spb.ru), Arbitration court of St. Petersburg and
Leningrad region (www.spb.arbitr.ru) and Leningrad Military Circuit
Tribunal (www.lvo.courts.spb.ru).
Suffrage: 18 years of age; universal


Symbols
of St. Petersburg:

Coat of arms Flag
Diplomatic 55 consular offices, including 34 consulates, 1 embassy office, 3 honorary
representations: consuls general, and 19 honorary consuls are accredited in St.
Petersburg.


1.5. Economy
GRP of
St. Petersburg 1,901.9
(billion roubles): 1,642.1
1,431.8 1,473.3

1,119.7
825.1
666.4

2005 2006 2007 2008 2009 2010 2011
(estimate) (forecast)

Source: Committee for Economic Development, Industrial Policy and Trade

GRP per capita
in St. Petersburg
(roubles): 389,595
341,683
310,567 320,914
245,023
180,315
145,174

2005 2006 2007 2008 2009 2010 2011
(estimate)

Source: Federal State Statistics Service; Committee for Economic Development, Industrial
Policy and Trade

GRP sectoral
composition Industrial production
(2010):
Other
19% 24%
Real estate
7%

Transport and
21%
10% communications
Construction
18%

Wholesale and retail trade



City budget
(billion roubles): 399.5
339.1 315.6 347
358.6 404
278.1 355.8
322.2
259.3
179.9
120.3 186.2
129.9

2005 2006 2007 2008 2009 2010 2011
Revenues Expenditures


City debt Total: 6,614.2 million roubles, including
(01.01.2011): Internal: 6,614.2 roubles
External: 0 roubles
Credit ratings : Long-term credit international scale ratings in foreign currency:
 Standard&Poor’s – BBВ (December 2009), forecast – stable
 Moody’s Investors Service – Baa1 (May 2011), forecast – stable
 FitchRatings – BBВ (September 2011), forecast – positive
Long-term credit national scale ratings:
 Moody's Interfax – Aaa.ru (July 2005)
 FitchRatings – AAA(rus) (September 2011), forecast – stable
Leading industries: Machinery, vehicle and equipment manufacturing, electronic and optical
equipment, food, including beverages and tobacco; metallurgy and
metalworking; chemical production.

Priority sectors/clusters: Automotive, pharmaceutical, shipbuilding, power plant engineering,
information technology, radiology, electronic engineering.


1.6. Foreign trade
Foreign trade turnover
(million USD): 25,734
23,643 24,524
20,685
17,786 17,839
14,177
12,658 13,437
11,817
10,116

4,914

2005 2006 2007 2008 2009 2010
Export Import

Source: Territorial branch of the Federal State Statistic Service (Petrostat)

Main trade partners
(2010): Czech Republic 2.1%
France 2.3%
South Korea 2.4%
Brazil 2.4%
UK 2.5%
Japan 3.1%
Turkey 3.4%
USA 3.7%
CIS 4.2%
Italy 4.3%
Finland 4.7%
Netherlands 8.6%
Germany 9.1%
China 17.5%


Currency (code): Russian rouble (RUB)

Exchange rates: RUB per EUR – 41.66 (November 2011), 40.3 (2010), 43.4 (2009), 41.40
(2008), 35.90 (2007), 34.70 (2006)
RUB per USD – 30.29 (November 2011), 30.48 (2010), 30.24 (2009), 29.38
(2008), 24.55 (2007), 26.33 (2006)
Source: Bank of Russia, Ministry of Finance of the Russian Federation

Fiscal period: calendar year


1.6.1. Export
Export volume (2010): 11,817 million USD (12.1% decline in comparison with 2009)
Largest exporters JSC Gazprom Neft, JSC Admiralty Shipyards, LLC Novatek Severo-Zapad,
(2010): CJSC PNT-GSM, Vneshtorgbank
Export structure (2010):
3% 4% Food products,
agricultural raw materials
Mineral products

15% Chemical products,
natural rubber
Leather and fur products
8%
0,2% Timber, pulp and paper
products
65% Textile goods and
3%
footwear
Metal and metal products
0,4%
2%
Machinery, equipment,
vehicles
Other


1.6.2. Import
Import volume (2010): 24,524 million USD (37.8% increase in comparison with 2009)
Largest importers LLC Nissan Manufacturing Rus, LLC General Motors Auto , LLC Petro,
(2010): Northwestern branch of JSC MegaFon, branch of CJSC Russian Fish
Company
Import structure (2010):
7% Machinery, equipment,
vehicles
Metals and metal products

Mineral products

Timber, pulp and paper
36% products
27%
Chemical products, natural
rubber
Textiles, textile goods,
footwear
0.4% Leather and fur products
7%
12% Food products, agricultural
7%
raw materials
1% Other
3%



1.7. Foreign investments
Volume of foreign
6,284
investments 5,928
(million USD): 5,525
5,255 5,231

1,160 1,417
1,171 881 985
706 696

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Structure of foreign 4
investments (0.1%)
538
(million USD, 2010):
(10.3%) Foreign direct
investment (FDI)

Foreign portfolio
investment (FPI)

4,689
(89.6%) Other foreign
investment


Foreign investments by Construction
sector of the economy (71)
(million USD, 2010):

Wholesale and Motor vehicles
and equipment
retail trade
(766)
(181) Manufacturing
(4,764)
Food, including
beverages and
Other (35) tobacco
(550)

Real estate
(181)



Major countries
(million USD, 2010): France

Belarus

18% South Korea
2.5%
Belgium
2.9% 34.3%
Kazakhstan
3.8%
Cyprus
4.1%
Sweden
4.4%
11.6%
8.4% Switzerland
10.2%
Germany

Other



2. Key business sectors
2.1. Overview of St. Petersburg’s industry
2.1.1. Structure and main indicators
St. Petersburg’s industrial complex represents the basis of the regional economic growth,
accounting for the major source of budget.
In the conditions of the global financial crisis, St. Petersburg’s industrial sectors showcased sufficient
resilience and fast recovery following the recession. Initially sharp decline in economic growth was
relatively quickly followed by renewed economic growth.
Today, St. Petersburg’s industry, which employs approximately the fifth of the working population,
accounts for 27% of the gross regional product and 36% of the total amount of tax revenues.
Efficient operation of the industrial complex significantly affects the development of other sectors
of the economy, including transportation, construction, communication, trade and provides real
opportunities for the solution of socio-economic goals of the city.
Industrial complex of the city is represented by almost all industries. 700 large and medium
enterprises, a number of which represent the leading industrial enterprises of the Russian
Federation, constitute the basis of the city’s industrial complex. More than 18 thousand small
enterprises, including microenterprises, also contribute to the development of the local economy.
Large and medium enterprises, 2010
Manufacturing (total) 675
Electronic equipment, electronic and optical equipment 148
Machinery and equipment 91
Food, including beverages and tobacco 86
Metallurgy and metal products 66
Pulp and paper, publishing and polygraphic products 62
Motor vehicles and equipment 48
Non-metallic mineral products 47
Chemical products 39
Rubber and plastics 20
Textiles and clothing 19
Timber processing and timber products 14
Leather, leather and footwear products 7
Petroleum coke and petroleum products 3
Other 25
Electricity, gas and water production and distribution 50
Mineral resources extraction 2

Source: Committee for Economic Development, Industrial Policy and Trade, 2011

In 2010 the volume of industrial production increased by 8.9%. This fact is attributed to the
significant increase in the volumes of production of motor vehicles and equipment (2.4 times
increase), metallurgy and metal products (26% increase), chemical products (24% increase).


In 2010 the industry shipments of St. Petersburg’s enterprises constituted 1,461 billion roubles which
represents 124% to the level of 2009. Manufacturing enterprises determine operation of the local
industry. Such enterprises account for more than 90% of the total volume of industrial products
produced in St. Petersburg (1,343 billion roubles). Machinery (144%), metallurgy and metal products
(124%) and chemical products (126%) manufacturing enterprises contributed the most to the
growth of production volumes in 2010.
Structure of the volume of industry shipments, 2010

Mineral resources
extraction
0.4%

Manufacturing
91.9%

Electricity, gas and
water production
and distribution
7.7%

2.1.2. Profitability
In 2010 industrial complex accounted for 251 billion roubles in profit, including 228 billion roubles
from manufacturing industries. While the share of profitable enterprises within the total number of
manufacturing enterprises constituted 80% (77% in 2009), the volume of profit in the industrial
complex increased by 37% in comparison with 2009. The most significant growth in profit in
comparison with the previous year is reported in the production of motor vehicles and equipment
(1.7 times) as well as metallurgy and metal products (1.6 times). In 2010 a high level of profitability
remained in the production of food, beverages and tobacco (26%), chemical products (22%),
machinery and equipment (17%).
Profitability of manufacturing enterprises, 2010

Russian Federation 14.3%
St. Petersburg 16.7%


2.1.3. Budget receipts
Industrial complex accounts for major budget revenues in comparison with other sectors of the city’s
economy. In 2010 the tax revenues from industrial enterprises constituted 125 billion roubles (more
than 36% of the total amount), including 116 billion roubles received from manufacturing


enterprises. Food production, including beverages and tobacco, motor vehicle and other types of
equipment production accounted for more than 85% of all budget receipts from the manufacturing
sector.
Structure of receipts into the budget of the Russian Federation from St. Petersburg's
manufacturing enterprises, 2010

2% 5%
2%

7%
Food, including beverages
Tobacco
8% 28% Chemical production
Electronic and optical equipment
Machinery and equipment
8%
Metallurgy and metal products
Motor vehicles and equipment

37% Non-metallic mineral products
3%
Other



2.2. Automotive industry
2.2.1. General overview
Automotive industry and automotive parts manufacturing play an important role in St. Petersburg’s
transport machinery complex. The city locates production facilities of the world’s leading car
manufacturers, including Nissan, Toyota, General Motors, Hyundai and Scania.
Leading car manufacturing plants in St. Petersburg, 2011
Brand name Opening Production Volume of Employees Model range
volume, investment
th.units/year
Toyota 2007 50 133 mln USD 600 Toyota Camry
General Motors 2008 60 303 mln USD 1,300 Chevrolet Cruze,
Chevrolet Captiva,
Opel Astra, Opel
Antara
Nissan 2009 50 200 mln USD 1,500 Teana, X-trail,
Murano
Hyundai 2010 150 650 mln USD 2,400 Solaris

Scania 2010 6,5 10 mln Euro 600 all types of trucks


2.2.2. Industry in numbers
Development of automotive clusters is one of the prerequisites of successful development of
automotive industry. St. Petersburg has one of the fastest-growing and promising automotive
clusters, which makes the city a leading center of Russian car manufacturing industry.
During the first stage of cluster development from 2005 to 2010 Nissan, Toyota, General Motors,
Hyundai, Scania built their car assembling facilities in the city. With the total area of allocated land
lots of 686.3 hectares and more than 6 thousand workplaces created, the volume of investment into
the construction of new car manufacturing facilities constituted 1.3 billion dollars. The total volume
of budget spendings directed towards the implementation of investment projects constituted 6.6
billion roubles.
Volume of car manufacturing in St. Petersburg, thousand units, 2011

2011F 225
2010 69.4
2009 19.9
2008 47.5



2.2.3. Companies
Light motor vehicles
General Motors
General Motors opened its automobile factory in St. Petersburg in 2008.
Global car making giant became the second foreign carmaker to open a
factory in St. Petersburg. Investment in the project totalled 300 million
dollars with up to 1,700 jobs created, followed by the opening of a second
production line in 2010.

Hyundai Motor Company
Hyundai officially launched its full-cycle manufacturing plant in St.
Petersburg in 2010. St. Petersburg’s plant is Hyundai’s sixth production
facility outside its home market of South Korea. The facility is expected to
roll out 105,000 vehicles in its first year of operation with the rise to
150,000 in 2012. Hyundai plans to create 5,300 jobs by 2012 in St.
Petersburg together with eleven parts suppliers from Korea.

Nissan
Nissan Manufacturing Rus was established in St. Petersburg in 2009. The
plant currently represents approximately a 150 million euro investment
with the total volume of 28,500 units since the start of production. The
plant currently employs 2,000 employees.

Toyota Motor Corporation
Toyota became the first Japanese carmaker to start production in Russia
with its car assembly plant opened in St. Petersburg in 2007. The plant,
with an annual output capacity of about 50,000 vehicles, initially built
20,000 Camry sedans per year while gradually expanding its production
since then.
Trucks
Scania
Scania opened its industrial facility for assembling and bodyworking
trucks for the Russian market in St. Petersburg in late 2010. This Russian
facility is Scania’s sixth delivery center. From the new Delivery Center in
St. Petersburg, Scania supplies complete trucks that are adapted to the
requirements and operating conditions that apply in Russia. St.
Petersburg’s facility has a technical assembly capacity of about 5,000
truck chassis and 1,500 superstructures per year. It employs about 70
employees.

Yarovit Motors
Yarovit is a Russian manufacturer of cargo trucks, dump trucks, bolster
trucks and concrete mixers. Yarovit’s manufacturing facility was set up in
St. Petersburg in 2003. In 2012 ë-Auto, a joint venture of Yarovit and the
Onexim investment group, will start the production of a hybrid electric car
yo-mobile.


Components suppliers
Magna International
A global automotive supplier currently operates five production sites in
Russia, three of which are located in the St. Petersburg region since 2010.
The Cosym stamping and assembly plant in Shushary has 170 employees
and produces body, chassis and energy-management systems for OEM
customers such as Hyundai, General Motors, Nissan and Volkswagen. The
Cosym assembly and sequencing plant in Kamenka is a Hyundai-
dedicated production site that employs 50 employees. Magna announced
the opening of a Magna Exteriors and Interiors facility in Kolpino which
has approximately 25 employees producing exterior and interior
components for OEM customers, including Ford and Nissan.

2.2.4. Supporting institutions
2.2.4.1. Associations
 St. Petersburg Association of Manufactures of Automotive Components (SPbAPAC)
St. Petersburg Association of Manufactures of Automotive Components is the largest
professional association of automotive components manufacturers in Russia which functions on
the principle of a cluster. At present the association unties more than 60 enterprises which
manufacture over 1,500 products. Active participation in regional, interregional and
international exhibitions and conferences as well as support of the Government of St.
Petersburg and the Union of Industrialists and Entrepreneurs makes the association one of the
key players at automotive and automotive components market of the Russian Federation.


2.3. Food and beverage production
Food complex in St. Petersburg is represented by 11 major industries, which include more than 80
large and medium as well as 180 small enterprises. Brewing and tobacco manufacturing are the two
most developed sectors of the local food industry.
High investment activity of St. Petersburg’s enterprises is one of the major factors accounting for
the successful development of food industry in the city. Increased automation and production
improvements allowed companies to significantly diversify the assortment of produced food
products and improve their consumer appeal. Continuous renewal of assortment is one of the
characteristics of the food industry in St. Petersburg. St. Petersburg’s enterprises develop at least
100 new sorts of various bakery and pastry products, including bread and rolls, dried bread and
biscuits, pies and cookies. Assortment of the produced bakery products totals more than 400 items
which makes it the most diversified assortment present in Russia.

In 2010 the volume of food industry shipments, including beverage and tobacco, constituted 14.6%
of the total manufacturing industry in St. Petersburg. The shares of tobacco and confectionery
production industries in St. Petersburg represent more than 50% in the total Northwestern Federal
District output volume.
Structure of industry shipments, 2010 Investment in fixed assets by industry, 2010

21%

77% 15%
49% 11%

8%

7%
12%

Other manufacturing industries Electric power, gas and water production
Motor vehicle and equipment manufacturing
Food manufacturing, including beverages and tobacco Food manufacturing, including beverages and tobacco
Metallurgy and metal product manufacturing
Electric power, gas and water production
Other industries


As of 2010, the food and beverage industry employs more than 11% of the total number of employees
occupied in the St. Petersburg industrial complex and pays higher wages than any other industry in St.
Petersburg (35.4 thousand roubles).


As of 2010, food industry, including beverage and tobacco, is the most profitable industrial sector in
St. Petersburg (26%), followed by chemical (22%) and machinery and equipment production (17%).
These industries account for more than 85% of all revenue receipts from the local manufacturing
sector. More than 10% of all investment into industrial sector accounts for the production food,
beverages and tobacco.1

2.3.3. Companies
Bakery
Hlebny Dom
JSC Hlebny Dom has operating at the Russian market for more than 70
years and is one of the largest baking enterprises in Russia. The company
became a part of the Fazer Group in 1997. It is represented by 4
production sites in St. Petersburg as well as one in Moscow. Hlebny Dom
produces bakery and confectionery products, long term storage foods as
well as frozen and flaky dough products.

Karavay
JSC Karavay was established in St. Petersburg more than 80 years ago.
Today, it is a modern fully-equipped bakery which produces more than
170 items of fancy and bakery products. Karavay is one of the leaders of
baking industry in St. Petersburg. It currently possesses 4 baking plants.
Beverage production
Carlsberg Group
Baltic Beverages Holding, a leader at the Russian beer market which
manages Baltika, became a part of the Carlsberg Group in 2008. Carlsberg
currently owns 89.01% of Baltika stock. Today, Baltika Brewery, founded
in 1990, is the largest brewery in Eastern Europe and the second-largest
brewery in Europe after Heineken Brewery.

Coca-Cola Company
Coca-Cola’s plant, opened in St. Petersburg in 1995, produces Coca-Cola
products for more than 13 million customers in St. Petersburg and
Northwestern Russia. It employs more than 1,000 people, while creating
up to 200 additional seasonal workplaces during the peak seasons.

Heineken
Heineken has been operating in Russia since 2002 when it acquired the
Bravo plant in St. Petersburg. St. Petersburg’s Heineken brewery also
produces and distributes Budweiser beer, having signed a licensing
agreement with Bud’s brand owner Anheuser-Busch.

Pepsi Bottling Group, Inc. (PBG)
PepsiCo drinks are produced by Pepsi Bottling Group at its four plants in
Russia. One of the top global FMCG companies in Russia opened its St.
Petersburg’s plant in 1992. PBG produces and distributes all PepsiCo
products, including carbonated soft drinks, water, snacks, juices, teas.

1
Committee for Economic Development, Industrial Policy and Trade


Russian Standard Company
A leading Russian premium vodka producer opened its distillery in St.
Petersburg in 2006. Total investments into the facility amounted to 60
million dollars. The distillery produces 3.6 million dekaliters of vodka
annually. A 30,000 square meter facility handles the production of the
company's entire vodka portfolio, including Russian Standard Original,
Russian Standard Platinum and Imperia.
Candy
Chupa Chups S.A.
The Spanish candy maker launched its St. Petersburg’s production facility
in 1991. Neva Chupa Chups produces Chupa Chups caramel lollipop
candies of various flavors and colors not only for the Russian market but
also for export to CIS countries. St. Petersburg’s factory has the capacity
of making up to 200 million 200-gram rolls per year.

Confectionery factory named after N.K. Krupskaya
The history of the Confectionery factory began in 1938. In 2006 the
factory was acquired by the Norwegian Concern Orkla which is one of the
leading suppliers of branded consumer goods to Nordic food retailers as
well as Central and Eastern Europe and Russia. Today, the factory is a
modern industrial complex with capacity to produce more than 20
thousand tons of confectionery products per year. It produces more than
130 confectionery products, including chocolate of different sorts,
diabetic products, chocolate semi-finished products for food industry.
Chewing gum
Wm. Wrigley Jr. Company
The world’s largest maker of chewing gum has been operating a 70 million
dollar plant in St. Petersburg since 1999. Wrigley is planning to expand its
St. Petersburg plant with an investment of 100 million dollars. The
company also announced that it might build a second factory in Russia
and acquire local producers to tap its growth at the Russian market.
Dairy
Petmol dairy plant, Unimilk
St. Petersburg dairy plant Petmol launched the production of dairy
products in 1934. In 2003 LLC Unimilk became the main shareholder of
the company. Today, Unimilk is one of the leading manufacturers of dairy
products in Russia and CIS. Established in 2002, the company employs
more than 14 thousand people and unites 28 enterprises in Russia,
Ukraine and Belarus specialized in the production of dairy products and
baby food.
Baltic Milk, Wimm-Bill-Dann
Baltic Milk Dairy Factory was launched in 1987. The factory became a part
of the Wimm-Bill-Dann production and trade group in 2000. Will-Bill-
Dann is the leader at the Russian market of dairy products and baby food
as well as one of the leading producers at the soft drinks market in Russia
and CIS. The company operates more than 35 processing plants in Russia,
Ukraine and Central Asia and employs more than 18 thousand people.


Tobacco
British American Tobacco (BAT)
BAT’s plant in St. Petersburg operates 13 production lines producing five
premium brands. It provides about 25% of BAT’s production volume in
Russia. The company completed the construction of new production
facilities at its plant in St. Petersburg in 2007 with the total investment of
110 million dollars, thus increasing St. Petersburg plant’s production
capacity to 40 billion cigarettes a year.

Japan Tobacco International (JTI) Petro
JTI Petro's cigarette making facility in St. Petersburg is the company’s
biggest worldwide plant with the total of 400 million dollars invested. The
brand portfolio includes over 30 brand names, both international and
local. It supplies the firm's Russian and Ukrainian plants with main
tobacco components used for cigarette production.

Philip Morris International (PMI)
Philip Morris Inc. officially opened its third Russian cigarette factory in St.
Petersburg in 2000. The total investment of 335 million dollars made this
project the company’s largest cigarette plant in Europe. The plant, which
employs 750 workers and operates 15 conveyer belts, produces the
Marlboro, Parliament, Virginia Slims, L&M, Chesterfield and Bond Street
brands. In 2002 the company began construction of a new processing line
and a warehouse with the total investment estimated at 240 million
dollars.

2.3.4.1. Universities
 St. Petersburg Institute of Management and Food Technology
St. Petersburg Institute of Management and Food Technology is an institute of continuing
professional education and professional development, international information, scientific
research, analysis, exchange of experience, which has been operating for more than 43 years.
Every year more than 3 thousand specialists from bread and baking pasta, yeast, brewery and
other food industry enterprises undergo training, career and professional development at the
Institute.
 St. Petersburg State University of Refrigeration and Food Engineering
With more than 6 thousand students enrolled, St. Petersburg State University of Refrigeration
and Food Engineering is the leading higher educational institution in refrigeration engineering
and food processing in Northwest Russia. The University has educated more than 25 thousand
engineers who continue to actively contribute to the development of refrigerating and cryogenic
engineering, technology and equipment for food processing. The University is actively involved
in research, scientific and innovative activities. Technopark has been operating on the basis of
the University since 2000. It unites the University engineering departments as well as business
structures and small innovative enterprises. During the period of 5 years Technopark carried out
more than 300 projects, which have been implemented at the largest food enterprises across
Russia.
2.3.4.2. Research Institutions
 All-Russia Scientific and Research Institute of Fats
All-Russia Scientific and Research Institute of Fats is the largest scientific and research center in
Russia specialized in oil and fact industry. The institute carries out fundamental and applied


scientific research and introduces the best research practices aimed at technological, economic
and social development of agro-industrial complex. The institute carries out research of
vegetable oil production and processing, vegetable food protein as well as margarine and
mayonnaise production, etc.
 State Scientific Research Institute of Baking Industry, St. Petersburg branch
State Scientific Research Institute of Baking Industry is the leading scientific center of bread and
baking pasta industry in the Russian Federation and CIS. St. Petersburg branch specializes in the
field of developing new technologies for baking. The priority research areas are the
development and improvement of biotechnological processes and assortment of rye, rye and
wheat bread as well as pastry.
2.3.4.3. Professional associations
 St. Petersburg Union of Food Enterprises
The Union is a non-profit organization established in 2005 by baking, meat processing, dairy, oil
and fat, confectionery, alcohol and other food industry enterprises. The organization aims to
coordinate business activities of its members and actively participate in the effective state
regulation in the sphere of food industry.


2.4. Information and communication technology (ICT)
Information and communication technology (ICT) sector is one of the most rapidly growing sectors
of the Russian economy. 60% of all Russian IT companies are based in St. Petersburg, including 49
centers of leading international and Russian ICT companies. The development ICT cluster is a
priority policy implemented by the Government of St. Petersburg. Availability of a developed IT
infrastructure, including a technopark, business incubator, modern research and scientific
institutions, as well as highly qualified IT-personnel facilitate the development of St. Petersburg as a
Russian leader in information and communication technology.

Today, ICT cluster is one of the youngest and most competitive sectors of innovation policy
implemented in St. Petersburg. The cluster represents not only an independent sector but also a
trigger facilitating effective development of other sectors of the regional economy. As of 2009, the
sector’s annual turnover constituted not less than 3.5 billion dollars. The amount of people
employed only in software development constitutes more than 36 thousand employees with almost
100% of them possessing higher education degrees.
Most of the companies and institutions comprising ICT cluster have the highest competitiveness
rating, including Reksoft, Exigen Services, PROMT, Speech Technology Center, Spb Software,
SPEEREO, Solvo and others.2
Russian cities by number of head offices and remote development centers of IT companies, 2010
Ranking City Number of offices
1 Moscow 67
2 St. Petersburg 49
3 Moscow region 10
4-5 Novosibirsk 8
4-5 Voronezh 7
6 Rostov-on-Don 7
7 Tomsk 6
8-9 Yekaterunburg 5
8-9 Veliky Novgorod 4
8-9 Kazan 4
10-12 Nizhniy Novgorod 3
th
Source: Russian software developing industry and software exports, 7 annual review, Russian Software Developers
Association (RUSSOFT), 2010

2
Russian Software Developers Association (RUSSOFT)


2.4.3. Companies
Suppliers of software development services
Astrosoft
Astrosoft is a premium level IT-services supplier with more than 10-year
expertise in implementing projects all over Europe. The company is
headquartered in St. Petersburg and provides a wide range of services in
software development and integration, consulting and training. The key
service areas include business applications development, business
solutions development, business in Russia for start-up solutions,
embedded systems development, legacy system re-architecture.

Arcadia
Arcadia is an innovative offshore software development based in St.
Petersburg. The company provides a wide range of software development
outsourcing services to customers worldwide. Today, Arcadia unites team
of more than 170 software professionals with over 18 years of experience in
custom development of business applications.

AT Software
AT Software is a leading software and hardware development company in
Russia/CIS with customers in Europe, USA and Russia. AT Software was
formed in 2008 as the result of merger of two leading Russian software
development companies - Lanit-Tercom (St. Petersburg) and Artezio
(Moscow). Today, its primary areas of expertise include
telecommunications, industrial electronics, healthcare, banking and
finance as well as education. The company offers a wide range of services,
including software and/or hardware development outsourcing/offshoring
(ODC), managed product development, enterprise services (custom
applications development, audit, testing, customization, re-engineering,
integration), IT consulting and research, IT staffing and out-staffing.

DataArt
DataArt is a custom software development company that provides
advanced solutions for financial services, healthcare, hospitality and other
industries. Founded in 1997, DataArt’s services include application
development, quality assurance, team completion, reengineering and
R&D. The company has been consistently named one of the top or fastest
growing IT outsourcing providers worldwide by BusinessWeek.
Headquartered in New York, DataArt runs R&D centers in Russia, including
the center in St. Petersburg, Ukraine and maintains offices in London, UK.

DevExperts
DevExperts is a provider of professional software systems for on-line
brokerage, exchange, and financial activities mostly on stock, options, and
Forex markets. The company is specialized in the development,
implementation, and support of financial systems intended to handle
complex business activities, including a full set of advanced tools to meet
both a trader's and a broker's requirements. DevExperts is based in St.
Petersburg and provides its services operating in the US, Great Britain,
Russia, Japan as well as other countries.


Digital Design
Headquartered in St. Petersburg, Digital Design is an IT consultancy which
offers a full range of IT services to clients in Russia and all over the world.
The company’s services include customs software development, corporate
portals, software plus services enabling, application maintenance and
legacy migration, enterprise application integration, data warehousing and
analysis, nearshore development center, rail fleet management system.
Founded in 1992, the company has become one of the largest IT services
providers in Russia.

Exigen Services
Exigen Services is an Inc. 5,000 global IT company that provides
application outsourcing services. The company has been delivering its
services to clients operating in the field of financial services (banking,
brokerage and insurance markets), media and entertainment, healthcare,
and industries for 17 years. Today, it employs more than 1,700 highly
skilled developers and application outsourcing experts within its global
delivery network. Headquartered in San Francisco, USA, the company has
one of the largest development centers in St. Petersburg.

Reksoft
Reksoft is a nearshore software engineering services provider established
in 1991. The company is headquartered in St. Petersburg and has delivery
offices across Europe. Reksoft specializes in supplying software
development services, products and solutions to enterprises, ISVs, and
system integrators operating in a variety of industries. Reksoft’s major
services include software product engineering, enterprise application
services, including consulting, custom application development, enterprise
application integration, application management, migration and
customization, as well as dedicated centers.
Software product developers
Doctor Web
Doctor Web is a developer of highest-grade anti-virus protection Dr.Web®.
The company is headquartered in Moscow with the Department of AV-
Research and Development located in St. Petersburg. Doctor Web unites
the team of more than 230 specialists with over half of them engaged in
R&D. Dr. Web’s security products are distributed through its network of
partners.

Eureca
Eureca has been operating at the Russian market since 1990. Today, the
company offers a variety of services, including development of complex
information systems, development and supply of integrated network
solutions, development, production and supply of high-efficient servers
and working stations, organization of automated data entry, storage,
access and search systems and many others. The company has offices in
St. Petersburg, Moscow and Kursk as well as a training center in St.
Petersburg.


PROMPT
PROMT is a leading Russian developer of linguistic IT solutions for business
and private users. The company has been successfully operating at the
market of innovative linguistic technologies for 20 years and, today, offers
translation systems for twelve languages. PROMT has 4 worldwide offices,
including the corporate office in St. Petersburg, and provides its services to
more than 10 thousand client companies all over the world.

SPB Software
SPB Software Inc. is a global company which develops mobile solutions for
OEM mobile device manufacturers and mobile carriers as well as
smartphone and tablet end users. With dozens of industrial awards and
millions of customers worldwide, SPB provides a unique line of popular
consumer products, ranging from mobile games to usability and
productivity applications, business, communication, and multimedia
software for mobile phones. Founded in St. Petersburg in 1999, the
company retains its development headquarters in the city and has offices
in USA, Brazil, Taiwan, and Thailand.

Speech Technology Center
Speech Technology Center is a leading provider of cutting-edge voice-
based solutions in speech recording, processing and analysis. Founded in
1990, Speech Technology Center has over 20 years of experience in speech
technology development. STC provides competitive solutions across a
range of fast-growing technology sectors, including multi-channel and
hand-held digital recording, noise cancellation, speech enhancement and
biometric authentication and identification. STC is also a leading developer
of speech recognition and synthesis engines for the Russian language.

Speereo
Speereo Software UK Ltd. was founded in 1998 and has a head office in
London, UK as well as a R&D center in St. Petersburg. The company
specializes in the development of its own proprietary speech recognition
system as well as mobile and PC solutions based on Speereo Speech
Recognition (SSE) Technology.

Software development centers of international companies
Alcatel-Lucent
Alcatel has been operating its R&D center in St. Petersburg since 2005. Its
main objectives lie in the development and integration of innovative
telecommunications software systems, and adaptation of existing
company’s products to the specific requirements of the regional market.
The center covers three fields of applications, including fixed, mobile and
enterprise networks, and employs 150 specialists trained at the specialist
R&D centers in Europe and the US.


EMC
Opened in 2007, EMC R&D center in St. Petersburg is an important part of
the global EMC R&D investment program. The center focuses on rendering
support and continuous development of a wide range of world’s leading
software products. St. Petersburg’s center currently employs more than
170 program engineers specialized in data management and data storage
systems.

HP Labs
HP Labs Russia is the newest member of the international HP Labs
community, and the third new research lab created by the company in the
last five years. Opened in St. Petersburg in 2007, it focuses on information
management and development of new technologies linked to the
explosion of information access brought about by the World Wide Web.
The only Russian HP research lab delivers breakthrough technologies and
technology advancements that provide a competitive advantage for HP
and create business opportunities that go beyond HP's current strategies.

Intel
Opened in St. Petersburg in 2004, the Intel R&D center currently employs
more than 100 specialists. The center focuses on conducting research and
development of innovative software solutions for Internet-related
technologies, including Dynamic Runtime Layer (DRL), communication
technologies that enhance wireless communication, grid computing to
optimize programming environment. St. Petersburg center works in close
collaboration with the city universities with the aim of creating a solid
academic foundation for information.

Oracle Development
Following the Sun Microsystems’ acquisition by Oracle in 2009, the Sun
Microsystems’ center of high technologies in St. Petersburg has been
functioning as Oracle Development LLC.
System integrators
BCC Group
Founded in 1994, today, BCC Group is one of the leading companies
providing IT-services and systems integration at the Russian market. The
company’s major activities include enterprise management and business
consulting, IT-consulting, software integration and installation services,
telecom solutions for mobile and fixed communication networks, IT and
telecom solutions for production and manufacturing and others. The
company has 5 offices in Russia, including the office in St. Petersburg.

Nienschanz
Nienschanz is one of the largest IT-oriented holdings in Russia and an
experienced solution provider. CJSC Nienschanz was founded in St.
Petersburg in 1991 and since then has developed into a multi-profile group
of companies. The major services include system integration, IT-
consulting, fabrication, integrated supplies and service maintenance of
computer facilities and peripheral units, integrated supplies of copying-
and-duplicating machines, manufacture, integrated supplies, distribution
and service maintenance of office furniture.


SOLVO
SOLVO Ltd. is a St. Petersburg based leading vendor of high-end logistics
automation and control systems. The company provides solutions for
automating the entire complex of business and technology processes
within warehouses and container terminals. SOLVO offers its customers a
wide range of services, including project customization, training and
consulting, system implementation and deployment assistance, and
technical support.

2.4.4.1. Universities
 St. Petersburg State Electrotechnical University
St. Petersburg State Electrotechnical University is one of the world’s largest education and
research centers specializing in radio engineering, electrical engineering, electronics and
computer science. The University has a staff of more than 1,000 highly-qualified specialists and
scientists, including the Nobel Prize Winner in physics Zhores Alferov. Electrotechnical
University is alma mater for over 70 thousand students and over 3 thousand international
students.
 St. Petersburg State Polytechnical University
St. Petersburg State Polytechnical University was founded in 1899. It has recently become the
National research University, thus recognized as a leading Russian and international center in
the field of higher engineering and economics. The University attracts students form 96
countries of the world and provides education programs in the field of engineering, physics,
economics, humanities and IT. Today, the University has 20 departments and institutes and 120
R&D labs and offers more than 150 concentrations.
 St. Petersburg State University
Founded in 1724, St. Petersburg State University is the oldest institution of higher education in
Russia. The University’s Department of Mathematics and Mechanics together with its
comprising scientific institutions is one of the largest mathematical centers in the world. The
Department offers 23 concentrations and also includes the Research Institute of Mathematics
and Mechanics, a computer center and astronomy observatory.
 St. Petersburg State University of Information Technologies, Mechanics and Optics
The National Research University of Information Technologies, Mechanics and Optics is one of
the oldest higher education institutions in Russia. The school has been training specialists in
cutting-edge technologies directed to science and technical development for more than 100
years. Today, the University has 10 departments offering 49 concentrations and enrolls more
than 9,000 full-time students.
2.4.4.2. Research Institutions
 St. Petersburg Institute for Informatics and Automation, Russian Academy of Sciences
(RAS)
St. Petersburg Institute for Informatics and Automation of the Russian Academy of Sciences was
founded in 1978 and has since then grown into a large scientific research organization which
gave rise to a new Center of Ecological Security of the St. Petersburg Scientific Research Center
of RAS. Today, the Institute is engaged in fundamental research of informatization of society
and information security, information and computer systems and networks, theoretical basics of
development of soft- and hardware complexes for information real-time processing, IT for
intelligent systems of research automation, control, manufacturing and other fields.


 St. Petersburg Department of Steklov Institute of Mathematics, Russian Academy of
Sciences (RAS)
The Institute was established in 1940 as a department of the Steklov Institute located in
Moscow. Today, it is an independent research institute specializing in fundamental research on
theoretical mathematics and mathematical models of theoretical physics, including
mathematical logic and theory of algorithms, theory of numbers, geometry and topology,
mathematical analysis, theory of probability, mathematical statistics and many other.
2.4.4.3. Associations
 RUSSOFT
RUSSOFT is a multinational association of software companies from Russia and Belarus. The
association was founded in 1999 and is headquartered in St. Petersburg. Today, RUSSOFT
unites more than 70 companies which employ more than 20 thousand highly-qualified
programmers and software engineers. The association was created to represent Russian
software development companies at the global market, enhance marketing and PR activities of
its members, and lobby their interests in their countries' governments. RUSSOFT is a part of the
Russian Information and Computer Industry Association (APKIT) where it plays a role of
Software Development and Export Committee.
 SPb CIO Club
St. Petersburg CIO Club is a professional community uniting IT directors of leading companies of
the Northwestern region of the Russian Federation. The organization’s major objectives lie in
providing support and strengthening the development of professional community of IT
directors. Established in 2004, the Club is at present the largest professional IT community in
Russia.


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