Stavropol region The formation of the pharmaceutical cluster

Stavropol region The formation of the pharmaceutical cluster in the territory of Stavropol region Minister of Stavropol region for Economic Development Y. V. Yagudaev http: //www. stavinvest. ru

Stavropol region Situated southward of Russia § Population: 2, 705 million people § GRP per head in 2010 year: 123 thousand rubles Scientific strength § Long-term credit rating of Stavropol region according to Standard and Poor` s has «B + » level and rating according to a national scale has «ru. A +» level. The forecast – "Stable" (as of August, 24, 2010) SEI HPE «Stavropol State University» (biomedical and chemical faculty) – is a leading scientific and educational center of the Northern Caucasus, a member of the Association of classical universities and holds 14 th position among 90 classical universities of Russia SEI HPE «Pyatigorsk State Pharmaceutical Academy» is a unique pharmaceutical academy in the region, a recognized leader of pharmaceutical education in Russia, listed in “UNESCO Higher Education Institutions Registry” SEI HPE «Stavropol State Medical Academy» - is in the top decile of leading higher education medical institutions of the Russian Federation and the largest educational-scientific and methodical center in the field of medicine in the Northern Caucasus «Stavropol Research Antiplague Institute» is included in the unified federal centralized system of antiplague establishments carrying out sanitary-and-epidemiologic supervision for plague, and other infectious quarantinable diseases. It develops, improves and fulfils scientifically-grounded preventive measures, diagnostics and struggle against these diseases 2

Components of pharmaceutical cluster State support Cluster infrastructure Science Small and medium enterprises (SME) Management company Industry Scientific institutions Investment trends Industrial infrastructure Investment in the operational enterprises Formation of the newly built factories in the industrial park 3

Investments in the operational enterprises ü «Escom» JS SPC- is the largest producer of infusion solutions in Russia, produces more than 30 names of various infusion solutions; ü «Biokom» JSC- produces firm medical products (generics) on a full work cycle and complies with international quality standard GMP; ü « Pulse + » JS SPC produces medical supplies; ü «St-Mediafarm» JSC – produces more than 70 kinds of products. More than 40 kinds of medicinal herbs are constantly shipped to all territories of Russia. Assortment of production consists of packed and filter - sachet medicinal herbs, teas; ü «Allergen» Branch of FSUE SPC «Microgene» - is the top pharmaceutical enterprise which has the leading position due to its assortment variety of medical drugs, number of employees and sales market geography; ü «Stavropol Biofactory» FSUE - is one of the main domestic producers of immune biological veterinary preparations. Assortment includes more than 45 brands. 4

Industrial engineering of a new generation of pharmaceutical drugs based on the technology of liposomal nanocontainers construction The key point of the project: industrial engineering of a new generation of pharmaceutical drugs based on the technology of liposomal nanocontainers construction (health-related nano biotechnologies) Project cost : 3 510, 5 million rubles Project Initiator : «Eskom» JS SPC Project Location : Stavropol Commissioning date : 2013 Number of working places : 385 Financial resources : - Loan capital– 2 973, 3 million rubles -own funds– 537, 2 million rubles Yearly Tax proceeds : 270 million rubles 5

The increase of infusion solutions output and expansion of product diversification The key point of the project: line extension of ampoule pharmaceutical drugs thanks to the implementation of the new perspective kinds of medicine and the increase of production capacity, reconstruction and technical modernization of the 1 st section for infusion solutions manufacturing in blisters Project cost : 450, 0 млн. рублей Project Initiator : «Eskom» JS SPC Project Location : Stavropol Commissioning date : 2013 Number of working places : 129 Financial resources : - Loan capital– 150, 0 million rubles; -own funds– 300, 0 million rubles 6

Construction of a plant processing Jerusalem potato and producing inulin, pectin and other products for medical and food use The key point of the project : launch of the first Russian production of inulin and pectin on a commercial scale, based on nanotechnology Project cost : 1 606, 0 million rubles Project Initiator : Agro-industrial company «Georgievskaya» LLC Project Location : Georgievsk, the territory of regional industrial park Number of working places : 315 Financial resources : - Own funds- 325, 0 million rubles - Loan capital– 1 200, 6 million rubles Yearly Tax proceeds: - federal budget– 847, 2 million rubles - Regional budget– 216, 0 million rubles 7

Formation of the newly built factories in the industrial park • Stavropol industrial park • Technological park «PHARMACEUTICS» (within the territory of the industrial park) • Venture fund • Seed fund (early stage investment fund) • SME support structure: – – Guaranty fund Mortgage fund Innovations and technology business center Microfinance fund 8

State support • • ü ü • • • Reduced production costs due to the centralized rendering of infrastructure; tax and other preferences for residents of the industrial park : 4, 5 % reduction of income tax assets tax exemption; land fee is not higher than 0, 02 % from cadastral value (but not more than 5 thousand rubles /1 ha per year); land tax exemption. access to the main transport highways. land plots buy-out on favourable terms; administration of investment projects in the «single window» mode. credit interest rate subsidies for realization of fast-payback capital investment projects (at the rate of 3/4 refinancing rate of the Central Bank of the Russian Federation); credit interest rate subsidies for working capital financing (at the rate of 2/3 refinancing rate of the Central Bank of the Russian Federation); state guarantees of Stavropol region; Microfinance , Venture, Guaranty and Mortgage funds; grant support for entrepreneurs-beginners; up to 80% of actual expenses subsidies for the project; the expenses on payment of interest and leasing contracts subsidies; business incubator. 9

The model of investments in the formation of pharmaceutical cluster State support 20% - 100 mln roub Stavropol region government Industrial park 80% - 400 mln. rubles. 270 mln rubles State support Production Co-investor 730 mln. rubles Ministry of Health and Social development, Ministry of Industry and Trade of the Russian Federation Technopark «Pharmaceutics» 200 mln rubles. 25% - 100 mln. rubles Co-investor 50% - 200 mln rubles Venture fund 25% - 100 mln. rubles The overall project cost– 2100 mln. rubles. , correspondingly: - Investments of Ministries of Health and Social development; of Industry and Trade of the Russian Federation– 1230 -Investments of Stavropol region government – 470 mln. rubles - Investments of co-investor– 400 mln. rubles Possible co-investors: regional enterprises, Russian Venture Company, Russian bank for development, commercial banks and investment companies ( regarding venture fund) 10

Venture fund of Stavropol region Ministry or economic development of the Russian Federation Non-commercial organization “Stavropol regional fund of the promotion of venture investments development in the subjects of small and medium enterprises in the scientific and technologic sphere” Preparation of projects for funding Stavropol region government Management company Fund Supervisory board Closed-end fund 1 300 mln. rubles SC «ROSNANOTECH» , VTB bank and other co-investors 11

Contacts: Ministry of Stavropol region for Economic Development Official address: 1 Lenina Sq. , Stavropol , 355000, Stavropolsky Kray, Russia. Postal address: 1 Lenina Sq. , Stavropol , 355000, Stavropolsky Kray, Russia. Tel/fax: (8652) 26 -86 -13, 35 -06 -38 E-mail: invest@stavinvest. ru http: //www. stavinvest. ru 12