Sergey Morozov: "New IPPA Mechanism Provides Comfortable Conditions for Implementation of Investment Projects During Pandemic"

Ulyanovsk Region and Arkhbum JSC signed the region's first investment protection and promotion agreement (IPPA), which will create 230 new jobs for residents of the region.


The document was signed by Andrey Ivanov (First Deputy Minister of Economic Development of the Russian Federation), Dmitry Vavilin (Minister of Economic Development and Industry of the Ulyanovsk Region) and Irina Galakhova (Director General of Arkhbum JSC).

“Our task is to provide comfortable conditions for implementation of investment projects in the region during the pandemic. The new IPPA mechanism, which was introduced at the federal level in 2020 as part of anti-crisis measures, will serve this purpose. This is an effective tool of state support for investment protection and promotion. In our case, it guarantees that the conditions set for implementation of investors' projects will be safe for six years even if regional or federal laws and regulations change during this period,” - said Sergey Morozov.

The Investment Protection and Promotion Agreement (IPPA) will be applied to the project for production of corrugated cardboard packaging with the capacity of 90 million square meters per year. Investments total more than 1.6 billion rubles. The plant is expected to launch in 2021.

“The new enterprise will improve the potential of Russian packaging market and strengthen the Ulyanovsk region's position in this segment. This involves development of world-class high-tech production facilities in the Russian Federation with integrated process flow automation, transport systems, robots, little waste and few defective articles, and hence high-quality products for the consumer,” - said Sergey Vasin, Director General of Ulyanovsk Region Development Corporation.

According to Alexander Smekalin, Chairman of the Government of Ulyanovsk Region, the IPPA tool secures permanence of federal and regional legislation, which ensures predictability during implementation of the investment project for a long period. In addition, implementation of the investment project will make it possible to compensate part of the investor's expenses on infrastructure thanks to created tax flows.

The Law "On Investment Protection and Promotion Agreements in the Russian Federation" (IPPA), which was signed on 1 April, 2020 by President Vladimir Putin, includes fixed conditions (stabilization clause) for income, property and transport taxes (this part also includes the procedure for VAT reimbursement and due dates for tax payments), land usage and urban planning activities, as well as

compensation for some expenses connected with infrastructure development in the same amount as taxes paid.

As a reference:

Arkhbum JSC is a subsidiary of Arkhangelsk Pulp & Paper Mill, JSC (founded in 1940), which principal shareholder (100%) is Pulp Mill Holding GmbH. The company is one of the leading timber and chemical enterprises of the Russian Federation and Europe. It specializes in production of cardboard, pulp, paper, and notebooks. In July 2020, Vladimir Krupchak (Investment Advisor of Pulp Mill Holding) decided to build a new plant in Ulyanovsk and praised the region's investment potential.