Russia uses preferential policies to attract Chinese LED companies to set up factories

The reporter recently learned that Gruzdev Alexey, representative of the Russian Federation’s Commercial Representative Office in China, visited and investigated leading LED companies in Shenzhen, Guangzhou, Foshan and other places to seek opportunities for further cooperation between Guangdong companies and the Russian and CIS markets. During the research period, he attended the "Russia and CIS Countries Lighting Market Analysis and Channel Strategy Conference" held in Shenzhen. Grudev said at the conference that Russia hopes that the LED industry can further increase the total trade volume between China and Russia and attract advanced Chinese LED companies to set up factories in Russia. The reporter learned that many Shenzhen enterprises are already gearing up and setting their sights on Russia and the CIS countries. Some companies have increased their research and observation of emerging markets in Russia and the CIS countries.

China is the largest supplier of LED lighting in Russia

"Since 2010, China has been Russia's largest trading partner, and Russia has ranked 9th among China's major trading partners. In recent years, trade between the two countries has developed steadily. Last year, the total trade volume between Russia and China reached US$88.9 billion, with a growth rate of 1.6%. In the first half of this year, the total trade volume increased by 3% year-on-year, reaching 43 billion US dollars," Grudev said in his speech at the conference. At the end of May this year, President Putin and President Xi Jinping met in Shanghai, and the two heads of state signed a joint statement, which opened up a new path for the development of Russia-China economic and trade relations.

Grudev said that the Russian LED industry developed rapidly last year, with a growth rate of 250%, among which LED lighting accounted for 10% of the market share of the Russian lighting industry. Data show that in the lighting market in 2013, the sales volume of Russian LED bulbs was 1 billion, with sales of 40 billion rubles. As the Russian government has introduced a series of measures to promote energy-saving light sources, it is expected that by 2016, the market share of LED lighting in the Russian lighting industry will increase to about 35%.

Grudev said that with Russia joining the WTO and issuing a ban timetable for incandescent lamps, driven by this year's Sochi Winter Olympics and the 2018 World Cup, Russia has a huge demand for LED lighting facilities. Among lighting products, China has always been Russia's largest supplier. Therefore, Russia very much welcomes powerful Guangdong enterprises to participate in LED engineering projects such as public institutions, large industrial and mining enterprises, and sports venue renovations in Russia and CIS countries.

　"China has formed a relatively complete and internationally competitive modern LED industry. I believe that outstanding companies in China's lighting industry will have good opportunities to develop the Russian market and find reliable long-term partners." Grudev said.

Russia uses preferential policies to attract Chinese LED companies to set up factories

"We very much encourage advanced Chinese enterprises to develop in Russia. Many Chinese enterprises invest and develop business in Russia and are worried about investment environment, taxation, legal protection and other issues. The Russian government has done a lot of work in the process of reform and opening up in recent years, and has made great improvements in company registration, investment, banking services, tariffs and other aspects." Grudev said that in order to attract foreign investment, Russia provides a series of preferential policies.

“In my opinion, the preferential policies provided by Russia are more favorable than those currently implemented by China.” Grudev believes that because China started early, many special economic zones and development zones have begun to cancel preferential policies in terms of value-added tax and taxation, and Russia is now actively promoting these preferential policies.

He said that if a company registers and sets up a factory in Russia, on the basis of providing preferential conditions, the government will allocate a certain amount of funds to support it. Different regions have different policies. "For example, land use costs are exempted for at least five years, and the general profit income tax is 20%. In order to encourage Chinese companies to set up factories in Russia, this ratio may be adjusted. In addition, many local government governors have a more positive attitude towards simplifying administrative management, shortening the approval process, and reducing approval procedures."< div>

Shenzhen enterprises target Russia and the CIS

Dr. Li Wenyu of the Guangdong Emerging Industry Strategic Development Research Institute said that last year, China exported LED products to Russia and the CIS countries totaling US$800 million, of which Russia accounted for 75.74%. Chinese LED products account for more than 40% of the Russian market.

Although there are many Chinese LED companies that maintain trade relations with Russia, no company has yet directly invested and set up factories in Russia. Japan and South Korea, Russia's other two important LED product suppliers, have companies directly setting up factories in Russia.

The reporter followed Grujev to visit leading LED companies in Shenzhen and found that many Shenzhen companies are already gearing up and setting their sights on Russia and the CIS countries. Some companies have also begun to increase research and observation of emerging markets in Russia and CIS countries, and have made certain adjustments in exports. Currently, most companies are more cautious about setting up factories directly in Russia.

Liu Jiao, Managing Director of Shenzhen Unilumin Technology Co., Ltd., shared her observations on the Russian LED market. In her opinion, the Russian LED market has three strong demands - commercial office space replacement, road lighting replacement, venue lighting and landscape lighting design, from which Shenzhen companies can find opportunities. "Large-scale replacement of LED T tubes and downlights in factories, underground parking lots, office buildings, etc. has begun. LED street lights will form a replacement trend in the next 2-3 years, and international events such as the Sochi Winter Olympics and the 2018 World Cup will promote the implementation of LED energy-saving and environmentally friendly design and application projects by local governments."

Wen Guotao, general manager of Shenzhen LED leading company Tongpu Technology, told reporters that Shenzhen LED companies are currently actively developing accessible emerging markets, and many are targeting Russia and the CIS countries. Previously, Tongpu Technology's products were mainly exported to Europe, the United States and Japan, but its market share in Southeast Asia was small and its turnover was relatively stable.

　"The European, American and Japanese markets have relatively high requirements for product quality. The Southeast Asian market has higher requirements for cost performance, and the competition with the domestic market is not very different." In Wen Guotao's view, the Russian market's product quality requirements are between Europe, the United States and Southeast Asia, and the market demand is very large. In the past, Russia mainly cooperated with Europe, but in recent years, trade with China has increased. He revealed that the company has increased its efforts to export to the Russian market since the beginning of this year, and has made adjustments to product design and production lines based on Russia's specific conditions such as voltage range and interfaces.

Sui Shirong, director of the Guangdong Provincial Semiconductor Lighting Industry Joint Innovation Center, told reporters that the current way for Chinese LED companies to enter the Russian market is mainly through local dealers and engineering companies. As trade volume continues to expand, Chinese companies will definitely set up factories in Russia due to logistics cost considerations and Russia's policy support for local products.

Grudev reminds LED companies that are interested in setting up factories in Russia to understand international practices or local Russian laws in advance to avoid unnecessary losses.

PREVIOUS：Qianzhao Optoelectronics expansion project is expected to be completed in August NEXT：This city plans to become the "Capital of Technology Innovation and Industry in the Yuanverse", with Micro LED making great efforts

Russia uses preferential policies to attract Chinese LED companies to set up factories

RELATED NEWS

CATEGORIES

PRODUCTS CATEGORIES

LATEST NEWS

CONTACT US