Russia encourages Chinese companies to set up LED factories in Russia

Gruzdev Alexey, the representative of Trade Representation of the Russian Federation in the People’s Republic of China, said in Russian and the CIS countries’ Lighting Market Analysis and Channel Strategy Conference that “In lighting products, China has always been the largest supplier of Russia.” Along with Russian accession to WTO, prohibition of sale incandescent bulb, Winter Olympics in Sochi this year and World Cup in 2018, Russia has great demand on LED lighting. Russia welcomes the strength Chinese enterprises to participate the LED renovation projects for public institutions of Russia and CIS countries, large industrial and mining enterprises, sports stadiums and others.

According to Gruzdev Alexey’s introduction, Russian LED industry was developed rapidly last year, the growth rate is 250%, and LED lighting accounted for 10% of market share. Data shows that the Russian LED bulb sales in 2013 are 1 billion units, with total sales of 40 billion rubles (about 1.11 billion US dollars). As the Russian government introduced a series of measures to promote energy-saving light sources, it is expected that Russia LED lighting market share will increase to 35% of whole lighting industry in 2016.

Last year, Chinese LED products export to Russia and CIS countries is $ 800 million, which Russia accounted for 75.74%. China LED products accounted for more than 40% of Russian market.

“We strongly encourage Chinese advanced enterprises to invest in Russia, there many Chinese enterprises may worry about the problem of investment environment, tax, legal protection and other issues, the Russian government has done a lot of work in the past few years, and have improved greatly in company registration, investment, banking services, tariffs and other aspects.” Gruzdev Alexey said.

“In my opinion, the preferential policies offered in Russia are more favorable than Chinese implementing policies.” Gruzdev Alexey believes that since China began LED very early, so the preferential policies have been canceled in a lot of economic zones, while Russia is now actively promoting these policies.

He said that if set up factories and registered enterprises in Russia, besides providing favorable conditions, the Government will allocate some financial support, and different regions have different policies. “For example, including at least five years of free land usage, general profit tax is 20%, in order to encourage Chinese companies to set up factories in Russia, this ratio may be adjusted. Additionally, the local government is also with positive attitude on simplifying administration, shortening the approval process, reducing approval procedures, etc.”