12 August ‘21

MMK Industrial Park turns five years old

The industrial park was created by Magnitogorsk Iron and Steel Works (MMK) on August 12, 2016 on the vacant areas of the plant’s production site. Today, among its founders, alongside the plant, is the Magnitogorsk Hardware and Calibration Plant MMK-METIZ. In 2017, MMK Industrial Park received accreditation fr om the Russian Ministry of Industry and Trade, which gave it the right to receive state support.

As MMK CEO Pavel Shilyaev noted, for MMK, the industrial park is not primarily a means for profit, but rather an effective tool for supporting and developing medium and small businesses, and a competent solution to the region’s problems, which in turn increases the investment appeal of the whole of Magnitogorsk.

For potential investors and current residents, the MMK Industrial Park (one of three investment parks in the Chelyabinsk region) boasts a whole range of advantages. According to Vladimir Dremov, Director of MMK Industrial Park, the Park’s residents enjoy the highest level of support that is possible under federal and regional legislation. For them, the rates of property tax, land tax and transport tax have been adjusted, and the income tax rate has been reduced by 3.5%, which makes MMK Industrial Park even more attractive to investors. There is a favourable rental rate, which is about half the average rental rate in Magnitogorsk. The tenants are also supported by MMK, which provides co-financing of resident projects for the creation of new, or the expansion of existing, production facilities on a competitive basis.

MMK Industrial Park is a business-ready asset complex with an area of 65 hectares. With a comprehensive engineering infrastructure and a developed rail network, it boasts all the necessary conditions for the quick launch of virtually any new production process. The site is equipped with all necessary energy facilities: electricity, industrial water, fire-extinguishing water, natural gas, and household and industrial sewage. A project is underway to lay an oxygen pipeline. The site has a developed railway network with direct access to both the MMK internal railway park and the South Ural Railway. MMK Industrial Park is the only site of its kind in Magnitogorsk, and there are only a few similar sites across Russia.

At present, MMK Industrial Park is already more than half full, with 36 resident companies, among which there are large anchor tenants occupying areas of 20,000 square metres each.

Over 5 years, more than 1,000 jobs have been created at the site. Residents have invested more than RUB 750 million in their own production, which indicates a high level of trust in MMK’s management and confidence in the prospects for further growth.

The park has developed dramatically over its first five years of operation, fr om being a site of below average attractiveness to investors, to one of the industry leaders. Based on 2020's results, MMK Industrial Park is now one of the top investment sites in the country.

According to Vladimir Dremov, a number of proposals are being considered for the creation of metal service centres at MMK Industrial Park, wh ere it is suggested that MMK metal will be used to prepare kits to be sent to machine-building plants throughout Russia. Currently, all major metal consumers are trying to be in closer proximity to manufacturers, in order to reduce logistics costs. In the near future, a large manufacturer of unformed refractories will locate to the site, as well as a subsidiary of one of the largest machine-building conglomerates in Russia. Existing residents are also expanding their businesses. For instance, the metallurgical de-oxidiser plant, which began production of de-oxidisers for steel at the site two years ago, is now producing briquetted ferroalloys.

MMK Industrial Park continues to actively develop its infrastructure. There are plans to complete the reconstruction of the railway acceptance park bearing the designatory letter "G" by the end of this year. The implementation of this project, estimated at RUB 53 million, will allow resident companies to supply cars directly to the South Ural Railway network without unnecessary mileage through the entire plant. Ten years ago, park "G" was mothballed, and the tracks became overgrown with forestry. Now, the 450-metre-long tracks have been cleared of trees and shrubs; the station building, wh ere dispatchers and transceivers will work, has been restored; and the introduction of a system for automatic recognition and container hanging, with integration into the MMK corporate system, is planned. In addition, the modernisation of railway tracks, the total length of which exceeds 15 km, continues at MMK Industrial Park.

The reconstruction of MMK Industrial Park’s almost 100-kilometre-long central track will also continue. The Park’s medical centre, which was renovated and equipped this year, should soon gain certification. At the 120 square metre facility, employees of resident companies will be able to undergo pre-departure medical examinations, get vaccinated and receive a number of physiotherapy services.

MMK is confident that the industrial park is only the very beginning of a long path towards developing the attractiveness of Magnitogorsk in the eyes of investors. And MMK once again confirms its social orientation - with its support, new production facilities are opened and new jobs are created. This, in turn, means salaries and tax payments to budgets of all levels.

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