‘Chelyabinsk Region’s real sector is going through hard times at the moment. This January, the local enterprises’ production output has dropped by 22.5% compared with December 2008. Companies find themselves increasingly incapable of paying one another for goods and services,’ Governor of Chelyabinsk Region Petr Sumin declared during his annual address to the Legislative Assembly and the region’s dwellers.

Sumin feels that the companies might operate stably again and restore their production and sales outputs if they focus on making Chelyabinsk Region more appealing to investors through innovation, modernization, and making their produce more competitive.

‘As for investments, they went up by 112.4% last year, reaching 178.4 billion RUR. Just like in the previous years, the lion’s share of these investments came from the companies’ own funds. This is going to serve as a stabilizing factor this year. At the same time, the amount of foreign investment went up as well in 2008 and came to $3.167bn. What is more, 400 billion RUR worth of additional investment agreements (105 of them altogether) has been signed at the South Ural Economic Forum,’ the Governor explained.

In the meantime, the share of innovational products in the region’s product range is still larger than the country’s average (the figures come to 9% and 5%, respectively). Petr Sumin suggested that, this year, the figure should go up by 1.5% to 2% at least. To facilitate the process, a special 240-million-ruble innovation support fund, three technological parks, and four business incubators have been set up.

‘Our defense and machine-building enterprises are given an opportunity to enter the market niches left vacant by the foreign manufacturers. For one, Chelyabinsk Region has applied to the Russian Government for a three- to five-year defense contract. Another way out is the territorial order. This year, we’ll be supplying metal goods, cement, and coal to customers under this,’ Sumin said.