Background for investment

Tag der Belarussischen Wirtschaft, Berlin, 28. Oktober 2013
Sergey Novitsky
Stellv. Vorsitzender der Ständigen Kommission des Rates der Republik der
Nationalversammlung für Regionalpolitik und örtliche Selbstverwaltung,
Generaldirektor „Henkel Bautechnik“ GmbH
Сергей Новицкий
Заместитель председателя Постоянной комиссии Совета Республики
Национального собрания РБ по региональной политике и местному
самоуправлению, генеральный директор СООО «Хенкель Баутехник»
День белорусской экономики в Берлине, 28 октября 2013 г.
Investments to Republic of Belarus
Sergey Novitskiy,
Berlin, 28.10.2013
Belarus
Heart of the Europe
32
October 25, 2013
Why Belarus?
Background for investment
•
•
•
•
•
•
•
•
•
•
•
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State programs of investors’ support
State support of local production
Land availability for investment project realization
Growth of GDP during last years
Growth of construction
Stable social situation
Sufficient raw materials
Developed infrastructure
Perfect logistic location
Qualified personnel
Membership in the Eurasian Economic Union and Customs Union
October 25, 2013
Why Belarus?
Background for investment
• State programs of investors’ support
Decree №10 «On creation of additional conditions for investment activity in
the Republic of Belarus» on 06.08.2009
The investor is exempt from the payment of :
•
•
•
•
•
34
fees for the right to lease the land;
land tax or rent for the period of construction and design of the facility;
custom duties and VAT on the import of technological equipment;
state duties for the issuance of permits to engage foreign workers in BY,
special permits for employment in BY;
VAT and income taxes in connection with the donation of capital structures ,
assets under capital construction and other fixed assets for investment
project realization into the investor property.
October 25, 2013
Why Belarus?
Background for investment
• State programs of investors’ support
Decree №6 «On stimulation of entrepreneurial activity in the medium,
small towns, rural areas» on 07.05.2012
Preferential tax for 7 years from the date of state registration of
company:
• Income tax rate – 0%
• Property tax on the value of buildings, car parks rate - 0%
• Exemption from obligatory sale of foreign currency
35
October 25, 2013
Why Belarus?
Background for investment
• Land availability for investment
project realization
- Auction
- Investment project with government
(Decree №10 on 06.08.2009).
- Buying a ready-made building/
construction/manufacture (also
for the 1 base value 130 000 BYR ~ 10 EUR).
36
October 25, 2013
Why Belarus?
Background for investment
• Support of the local production on the state level
37
October 25, 2013
Why Belarus?
Background for investment
• Growth of GDP during last years
38
October 25, 2013
Macro Economics
Real GDP, %
12
11,4
10
10
9,4
10
8,6
8
7
6
4
7,7
5,5
5
4,7
2,1
2
0,2
0
12001
2002
2
Source: IMF
39
October 25, 2013
2003
3
2004
4
2005
5
2006
6
2007
7
2008
8
1,5
2009
9
2010
10
2011
11
2012 2013
12
13
Why Belarus?
Background for investment
• Growth of construction
40
October 25, 2013
Macro Economics
Residential construction
thousand square meters
7 000
6630
6 000
4661
5 000
3786
4 000
3 000
3009 2811
3019
5083
6400*
5711
5480
4088
4487
3502
2 000
1 000
0
1 2001
2002
2
2003
3
2004
4
2005
5
2006
6
2007
7
2008
8
2009
9
2010
10
2011
11
2012
12
2013
13
* - plan
41
October 25, 2013
Macro Economics
Residential construction on 1000 inhabitans
square meters of the total area
Square meters of the total area
800
699
700
578
601
600
533
487
500
392
400
302
301
426
474
350
300
281
200
100
0
12001
42
2
2002
October 25, 2013
3
2003
4
2004
5
2005
6
2006
7
2007
8
2008
9
2009
10
2010
11
2011
12
2012
Why Belarus?
Background for investment
• Stable social situation
43
October 25, 2013
Macro Economics
Private consumption, % vs. previous year
20
18
17,9
15,9
16
14,8
14
13,4
12,7
12
10,8
11,4
8
9,3
9,6
10
7,4
6
5,2
4
2
0
2006
12001
2007
2002
2
Source: IMF
Source: IMF
44
October 25, 2013
2003
3
2008
2004
4
2009
2005
5
2006
6
2010
2007
7
2008
8
0
2,3
2012
2011
2009
9
2010
10
2011
11
2013
2012
12
2013
13
Why Belarus?
Background for investment
• Sufficient raw materials
45
October 25, 2013
Why Belarus?
Background for investment
• Developed infrastructure
46
October 25, 2013
Why Belarus?
Background for investment
• Perfect logistic location
Russian
Federation
Baltic
States
Poland
Belarus
Ukraine
47
October 25, 2013
Why Belarus?
Background for investment
• Qualified personnel
48
October 25, 2013
Why Belarus?
Background for investment
• Membership in the Eurasian Economic Union and Customs Union
BY- RU- KZ (170 mln inhabitans)
• Common Economic Space
• Single Custom Space
• Free Trade Area
49
October 25, 2013
Cons
• High interest rates on loans in BYR
• Large number of administrative procedures
• Total tax rate (% of profit) is high enough
50
October 25, 2013
Doing Business Project
2013:
• Country rating of Belarus – 58 place of 185
• 3rd place among economies narrowing the distance to frontier the most since
2005 (+23,5%)
• 9th place in ranking of countries where starting a business is easiest
Income Category
Population
GNI Per Capita (US$)
51
October 25, 2013
Upper middle
income
Doing Business
2013 Rank
Doing Business
2012 Rank
9 473 000
58
Doing Business
2013 DTF** (%
points)
60
Doing Business
2012 DTF** (%
points)
Improvement in DTF** (%
points)
67,1
64,7
2,4
5 830
Change in Rank
2
Doing Business Project
DB 2013
Rank
DB 2012
Rank
Change in Rank
Starting a Business
9
9
No change
Dealing with Construction Permits
30
42
12
Getting Electricity
171
173
2
3
3
No change
Getting Credit
104
97
-7
Protecting Investors
82
79
-3
Paying Taxes
129
158
29
Trading Across Borders
151
154
3
Enforcing Contracts
13
14
1
Resolving Insolvency
56
42
-14
Topic Rankings
Registering Property
52
October 25, 2013
Henkel in the World
• Sales – 16.5 billions EUR
• 47 000 employees
• More than 300 plants
53
October 25, 2013
Henkel in Belarus
• 2004, Oct – Foundation of Henkel Bautechnik JLLC
• 2005, July – Start of plant construction in Zaslavl (Minsk region)
• 2006, Sept – Pre-term completion of construction. Start of local production of
building mixtures under Ceresit brand
• Planed plant capacity – 60.000 tons of building mixtures/year
1
October 28, 2013
Henkel in Belarus
• 2004, Oct – Foundation of Henkel Bautechnik JLLC
• 2005, July – Start of plant construction in Zaslavl (Minsk region)
• 2006, Sept – Pre-term completion of construction. Start of local production of
building mixtures under Ceresit brand
• Planed plant capacity – 60.000 tons of building mixtures/year
54
October 25, 2013
Investments
• 2005-2006:
Investments to plant construction – 7,0 Mio EUR, including:
- Construction works – 4,0 Mio EUR
- Equipment – 3,0 Mio EUR
• 2008-2010:
Investments to production line extension – 1,5 Mio EUR
55
October 25, 2013
Henkel Business Development in BY
Strong Growing and High-Profitable Business
30.000
30,0%
25.000
25,0%
NES, T€
ROS, %
20.000
20,0%
NES, T€
ROS, %
15.000
15,0%
10.000
10,0%
5.000
5,0%
CAGR 2007-2012 = 27,3%
CAGR 2012-2016 = 13,2%
0
0,0%
2006
2007
2 008
2009
2010
2 011
2012
20 13
2014
2015
2016
Henkel Market Share in ACB business Belarus:
56
2007
2012
2016
2020
10%
32%
36%
41%
October 25, 2013
2017
2018
2 01 9
Henkel Business Development in BY
Production Dynamics
tons
60000
55 290
55 536
2011
6
2012
7
58 232
50 014
50000
40000
36 230
30000
25 436
20000
`
16 375
10000
2 384
0
2006
1
57
October 25, 2013
2007
2
2008
3
2009
4
2010
5
2013
8
Henkel Business Development in BY
Employee Dynamics
pers.
180
160
140
120
100
80
60
40
20
0
1
2005
58
2
2006
October 25, 2013
3
2007
4
2008
5
2009
6
2010
7
2011
8
2012
9
2013
Henkel Business Development in BY
Next plans
• Additional investments in 2013-2014 - 1,5 Mio EUR
59
October 25, 2013
Thank you!