Information provided courtesy of Daniel M. Satinsky, President of B.E.A. Associates, Inc. To receive a copy of entire Yaroslavl Business Directory, including investments projects, contact Mr. Satinsky at Tel.: (617) 524-8852, Fax: (617) 524-7515 or by e-mail Satinsky@ix.netcom.com.

The Yaroslavl Oblast (Region), located in the heart of central Russia not far from Moscow, is a region waiting to be discovered. As early as June 1995, a U.S. Embassy report stated that "Yaroslavl may be one of European Russia's more promising industrial and tourism centers in the long run." In a comprehensive survey of all 89 Russian administrative regions published by the Russian magazine Expert in December 1996, Yaroslavl ranked among the top 17 regions for investment climate. Yaroslavl ranked high in this survey because of its favorable location, established industrial base and demonstrated political stability.

The Heartland of European Russia

The Yaroslavl Oblast is close enough to Moscow to be accessible, but far enough away to have its own identity. The Oblast is located on the Volga River, northeast of Moscow. The city of Yaroslavl is about 150 miles from Moscow and 450 miles from St. Petersburg. It has a total territory of 36,400 square miles (slightly smaller than Holland) with a population of about 1.5 million. Sixty percent of the population lives in the two biggest cities: the capital Yaroslavl (650,000) and Rybinsk (250,000). Other important cities are Rostov the Great (also referred to as Rostov), Uglich, Pereslavl-Zalesski (also referred to as Pereslavl) and Tutaev.

Yaroslavl is one of the major transportation depots of European Russia. It lies on the main railway lines which connect Moscow with the cities of the Russian North and East. It is intersected by both the Trans-Siberian train lines and those of the Northern Railroad. The city also lies on the Moscow to Archangel highway, allowing reasonably quick and convenient truck and auto connections.

The cities of Yaroslavl, Rybinsk, Tutaev and Uglich all have both passenger and freight terminals for river traffic. Cargo can pass through the Baltic Sea by river and canal to the Rybinsk inland sea and then via the Volga to Yaroslavl, although this is a cumbersome process requiring the use of several different sizes of ships or barges. By using the Volga-Don River Canal System cargo can travel south to the Black Sea and to the Mediterranean. The Volga is ice-free and available for river transport from approximately May to November.

Yaroslavl is not currently served by regular, scheduled air transport. There are two military airfields that could be developed into commercial airports. The Yaroslavl Regional Administration has stated that they want to develop an airport, but planning is not very far advanced. Some small scale commercial flights to Sochi have begun from one of these airports, but service is very limited.

Established Industrial Center

In the late 19th and early 20th century, foreign investors from England, the U.S., Switzerland and Germany were all active in the industrialization of the region. During the Soviet period, industrialization was intensified and large scale industry was developed as part of the integrated and highly specialized industrial complexes favored in the centrally planned economy. The Yaroslavl Tire Factory was the first tire factory in Russia and the world's first synthetic rubber factory. The Kholodmash Factory produced practically all the mid-sized refrigeration compressors in the Soviet Union. The Yaroslavl Electric Machine-Building Works was the sole manufacturer of three phase induction motors with a motor shaft axis of 160 mm. The oil refinery, Yaroslavneftiorgsintez was designated to supply refined oil products to the Northern Regions.

With the demise of the Soviet Union, Yaroslavl industry began a difficult period of readjustment. Official statistics state that overall between 1991 and 1996, industrial production in Russia declined 55%, but industrial production in Yaroslavl declined 67%. However, according to regional officials, in 1997, there was only a 1% drop in production.

The industrial character and potential of the area becomes clearer through a review of some its main industrial enterprises listed below and through a review of some of the ongoing investment projects as provided by the Regional Administration in a later section of this Directory.

Center of Engine and Tire Production

Yaroslavl Engine Works manufacturers automobile engines and spare parts. In 1994, it was the largest employer in Yaroslavl with over 30,000 employees. Rybinsk Motors, formerly a closed plant manufacturing aircraft engines for the Russian military, was the subject of a prolonged controversy over a proposed joint venture with General Electric to produce gas turbines. It is one of the major employers in Rybinsk, with some 11,000 employees in 1994. Tutaev Motor Factory is located in the small town of Tutaev and employed 11,000 workers in 1995 producing diesel engines for automobiles and tractors. Yaroslavl Tire Factory, the world's first synthetic rubber factory, currently produces tires for a wide range of automobiles, trucks and construction vehicles. Employment in 1996 was 8,600 workers. Yaroslavl Carbon Black Factory is an open joint stock company producing carbon black used primarily for the production of tires. The plant employs about 800 workers and currently exports about 45% of its production to Europe. Yaroslav-rezinoteknika (Yaroslavl Rubber Company), a privatized plant which was featured in a Wall Street Journal article in 1995 for its innovative young management. It produces a wide range of small parts for cars, trucks, tractors and other durables. Employment in 1995 was 4,300 workers.

Oil Refining

The oil refinery Yaroslavneftiorgsintez is one of two major oil refineries owned by the Russian oil company, Slavneft. The refinery processes oil pumped by pipeline from Western Siberia and supplies oil products for the Russian North and Central Regions. The refinery is currently undergoing a $200 million modernization. The U.S. engineering firm Stone & Webster is participating in this project.

Chemicals

Joint stock company Lakokraska is a broad profile chemical complex, producing primarily paint products. It is one of the largest such complexes in Europe. Currently Lakokraska produces alky, carbamide, melamine, phenolphor-maldehyde and epoxy resins, enamels and primers on condensation and polymerization resins, water-dispersible and powder paints, lead oxides, lead chrome and iron oxide pigments. The company has made a substantial effort to convert financial statements to Western accounting standards, modernize its management structure and develop a staged program for upgrading its production facilities.

River Transport

Yaroslavl Port was privatized in 1994 with managers and workers holding 51% of the stock and the Shipbuilding Plant holding 10%. It has the potential to act as a hub between rail, road and water transport throughout Northwestern Russia. In 1995 it was operating at about 50% capacity and needs advanced container handling facilities to develop its potential. Yaroslavl Shipbuilding Plant is a medium-sized shipyard by Russian standards, producing fishing trawlers and several other classes of light ocean-going vessels. Previously, the company depended very heavily on military orders, but began diversifying into fishing vessels in 1963. It is one of the few Russian shipbuilding companies to be privatized. It has an advanced, well-maintained plant and skilled workforce, but has suffered from the decline in Russian government purchases over the past several years. In 1996, it introduced a new high speed sea-going boat designed to be used by the Russian State Customs Service in coastal waters.

Industrial Machinery

Yaroslavl electric machine-building works, Eldin, is a major manufacturer of three phase electric motors. With the collapse of the Soviet Union, the plant has broadened its production line from a single size motor to offer a full range of three phase induction motors. Currently it produces 350,000 pieces per year and employs 2700 workers. Kholodmash (Refrigeration Compressors) has been a manufacturer of refrigeration compressors for institutional and corporate users for over 40 years. During the Soviet period, Kholodmash was the principal manufacturer of mid-size refrigeration equipment in the entire Soviet Union. As such they have an installed equipment base of over one million refrigeration compressors.

Consumer Goods and Light Industry

The watch factory Chaika is located in the small city of Uglich. Chaika was one of the leading manufacturers of watches in the Soviet Union and remains one of the leading producers in the Russian market. The plant currently employs some 6000 workers. The Yaroslavl beer company, Yarpivo is a strong regional beer producer. It was recently acquired by the Baltic Beverages Holding Co., one of the main holding companies of the Russian beer industry. The textile factory Krasnie Perekop is the largest of the substantial number of local mills and flax processing plants. It produces cotton yarn and technical fabrics.

Wood Products

Located in the Russian forest zone, Yaroslavl has many relatively small-sized timber and wood processing plants located throughout its forested areas.

Small Business

Like in other regions, the last period has seen a remarkable growth in small business in areas of wholesale and retail trade. These small businesses have developed apart from the large industrial enterprises and provide a new pool of entrepreneurial talent and potential local investment capital.

Stable Political Climate

Yaroslavl has a stable pro-reform political climate. It has none of the intense conflict between pro and anti-reform political figures that has characterized other regions of Russia. The political establishment is consolidated around the existing leadership at both the regional and local levels. Like everywhere in Russia, there is cynicism and disillusionment among the local population, particularly regarding non-payment of wages. However, these sentiments do not have an organized political form. As a result, the political leaders have an opportunity to try to solve local problems in a relatively de-politicized environment. They are actively trying to support local industry and to revitalize the regional economy.

The Governor of the Yaroslavl Oblast, Anatoly Lisitsyn, is a 50 year old former mayor of the city of Rybinsk. Originally appointed to the position by President Yeltsin in the early years of the reform period, Mr. Lisitsyn won election to this office on December 17, 1995. In this same election, the previously appointed Mayor of Yaroslavl, Mr. Victor Volanchunas also won election to his post. In February of 1996, the 50 member Regional Duma was elected. In the Duma, the largest factions are those representing large enterprises and local government officials. Quite apart from these factions, eight delegates are members of the Communist Party. The Yaroslavl Region has consistently been an area of strong electoral support for President Yeltsin.

The Regional Administration has shown initiative in trying to locally finance key policy objectives. Yaroslavl was one of the first regions in Russia to issue U.S. style bond issues to finance development projects. Two such series have been issued. The first for 30 billion rubles was for social infrastructure, schools, hospitals, etc. Interest payments were made on time and complete repayment was made in accord with the terms of the bond issue. A second series was in the sum of 100 billion rubles and was slated for financing of environmental technology at local enterprises, including the giant Lakokraska chemical/paint complex. These bonds were issued with the assistance of the Renova-Invest Company, a local Yaroslavl company.

A major priority of the Regional Administration has been to try to assist the key local enterprises. In 1995, together with Yegor Gaidar's economic institute, the Administration developed a package of the most promising investment projects in the Region which have been promoted to investors.

The Yaroslavl Region has also been an active regional center for the "Conversion" project to re-train demobilized military officers. Originally funded by the German government to assist with the Russian military withdrawal from Germany, the program has been continued with Russian government budget support to assist with the reform of the Russian military. The very successful Yaroslavl program is administered by the International University of Business and New Technology.

Foreign Cultural and Business Contacts

Yaroslavl has been very active in promoting contacts with foreigners. There are functioning British and German Houses of Friendship developed through sister city programs. The U.S. Sister City is Burlington, Vermont. Yaroslavl was an active participant in the Commerce Department, "Business for Russia" program, sending large delegations to Vermont and Ohio. The participants in this program are now key members of the small business community.

In June 1996, the Soros Open Society Institute opened one their first two University Internet Centers in Yaroslavl. One of the activities of this Center is to connect all the local schools, Institutes and Universities to the Internet. This allows for broad Internet access for non-commercial organizations in Yaroslavl.

Many of the major enterprises have modernization and investment projects which have met various degrees of success with foreign investors. One of the largest ongoing projects is the modernization of the Slavneft refinery.

The most substantial on-the-ground economic activity by foreigners to date has been by German companies. The Central Russia Regional Venture Fund of the European Bank for Reconstruction and Development, managed by Deutsche Handlesbank, opened an office in Yaroslavl in the summer of 1997. One of the largest new investment projects has been the construction and operation of a book warehouse and distribution center by the German firm Bertelsmann.

The "Phoenix" joint venture with a French firm is supposed to become a major producer of pre-fabricated housing as it becomes operational.

There has also been some U.S. business involvement in the area, including cooperation between General Electric and Rybinsk Motors, participation by Stone & Webster in the reconstruction of the oil refinery, the establishment of an affiliate of Kodak in Pereslavl and another Pereslavl venture, "JV Radoslav", a modular housing company.

Tourism and History

Yaroslavl has significant potential for tourism, deriving from its rich history and from the natural beauty of the region. Many important architectural monuments from the 16th and 17th centuries have been preserved and the city of Yaroslavl has several very fine museums.

Cradle of Russian Culture

The city of Yaroslavl was founded in 1010 by one of the princes of Kievian Rus, Yaroslav the Wise. Legend has it that he slew a she-bear on the site of the future city and the bear has become the symbol of Yaroslavl. With the destruction of Kievian Rus in the Mongol invasions of the 13th century, the center of Russian civilization and history shifted to the north. Cities like Suzdal, Vladimir and the cities of the Yaroslavl Region, Yaroslavl, Rostov the Great and Pereslavl-Zalesski became centers of Russian culture under Mongol suzerainty. At this time, Moscow was a small, relatively unimportant city which grew to dominance as the administrative center for the Mongol occupation. Over time, Moscow united the Russian lands under its control and overthrew the Mongol rule. The ancient towns surrounding Moscow, including those in the Yaroslavl Region, have come to be known as the Golden Ring of Russia.

The cities of the Yaroslavl Region are associated with many key events in Russian history. In the thirteenth century, Pereslavl-Zalesski was the gathering point for the forces of Alexander Nevsky who repelled the invasion of the Teutonic Knights. The site is marked by a bust of Nevsky and an ensemble of ancient Russian churches.

The city of Uglich was the site where, in 1591, the last son of Ivan IV, Dmitri, died under mysterious circumstances. An ensemble of churches and buildings from that era remain on the banks of the Volga in Uglich. His death touched off a dynastic crisis, ending in a Polish occupation of Moscow. The Russian forces to expel the Poles gathered in Yaroslavl. The city assumed the brief status of Capital of Russia during the Polish occupation, making it the only Russian city other than Moscow and St. Petersburg to have this status.

During the 16th and 17th centuries, Yaroslavl became Russia's most important trading center and was the second largest city after Moscow. Trade went north to Europe along the Volga to Archangelsk and down the Volga to Persia and the Middle East. The prosperity of the city, particularly in the 17th century, was reflected in the development of the distinctive Yaroslavl artistic style and in the magnificent churches of Yaroslavl.

At the end of the 17th century, young Peter the Great developed the prototype of the future Russian Navy through exercises with a model fleet on Lake Plesheevo, near Pereslavl-Zalesski. Artifacts from this period, including one of Peter's boats, are preserved in a museum near the lake.

Yaroslavl was the site of the first professional public theater in Russia. The Volkov Theater was founded in 1750 and continues in operation today.

Local jazz and rock organizations are also active. The jazz society sponsors a biannual jazz festival, "Jazz on the Volga", which will occur in spring of 1999.

Tourist Attractions

The city of Yaroslavl contains more than 20 churches dating from the 17th century, including the Church of Archangel Michael, the Church of the Epiphany, the Church of Elijah the Prophet and the Church of Nicola Rublenny. Of special note is the Church of St. John the Baptist, built from 1671-1687 and famous for its unique construction with 15 domes and notable interior frescoes. Also of note are historically important church ensembles in Uglich and Pereslavl-Zalesski.

The City of Rostov the Great has preserved its entire fortified historical center, the Kremlin (Fortress). The towers and cathedrals of the Rostov Kremlin, located on the banks of Lake Nero, give a true feel of Medieval Russia.

The Spassky Monastery is also very well preserved in the center of Yaroslavl. The original Monastery dates from the late 12th to the early 13th century. The oldest surviving building is the Spaso-Preobrazhensky Cathedral dating from 1516. The compound includes several other important historical sites, including the library where the famous Russian epic, "The Lay of Igor's Host" was discovered.

Across the Volga from the city of Yaroslavl is the historic Tolga Nunnery, which dates from the time of the Mongol invasion, and is now undergoing restoration as a working Nunnery.

Museums

The Spassky Monastery complex contains a fine Historical Museum with a unique collection of icons of the 16th and 17th centuries, arts and crafts and historic manuscripts.

The Yaroslavl Fine Arts Museum is located on a beautiful spot on the banks of the Volga and has a very good collection of Russian artists, including works by Aivazovsky, Savrasov, Perov, Shishkin and Repin.

The Museum "Music and Time" is the first private museum in Russia and displays an unusual collection of golden icons, antique musical instruments, furniture and clocks.

The Region also contains other interesting museums, including the Yaroslavl City History Museum, the House Museum of Sobinov in Yaroslavl, the Literary Memorabilia Museum Compound at Karabikha of the famous Russian satirist, Nekrasov, and the Folklore Museum in Rostov the Great.

Hockey

Yaroslavl is one of the hotbeds of Russian hockey. The Yaroslavl "Torpedo" team was the Russian National Champion in 1996-97 and participates in the European Hockey League. The World Hockey Championship is scheduled to be played in Yaroslavl in the year 2000.

Natural Attractions

The Yaroslavl Region is a place of great natural beauty. It is relatively sparsely populated and contains large forests and fields. In addition, it has many ponds, an immense artificial inland sea in Rybinsk and the beautiful Volga River. The Region has a tremendous potential for hiking, cross country skiing, fishing, hunting or simply relaxing in a forest environment.

Tourist Facilities

There are several hotels in Yaroslavl that offer reasonable physical accommodations at prices substantially below Moscow price levels. These include the former Intourist Hotels in Yaroslavl, the Jubilee, the Volga and the Kotorosl'; other former Intourist hotels in the smaller cities; and the private hotel in Yaroslavl, "Yuta." Accommodations are also available in the former Communist Party hotel, "Friendship" and at the Yaroslavl-Kassel-System, the "German-Russian House of Friendship."

Restaurants

The city of Yaroslavl has a number of quality restaurants. These better quality restaurants are a hidden potential strength of the City. Among these restaurants are the Metechi, Volga and Lira on the banks of the Volga and the Zolotoi Medved ("Golden Bear"), Priboi and Yevgeni in the center of the City. As with hotels, the prices of Yaroslavl restaurants are substantially lower than in Moscow.

Greeting from the Governor of the Yaroslavl Oblast,

Anatoly Lisitsyn

"Today an active regional investment policy will guarantee economic stability and development of the Oblasts and for Russia as a whole.

Thus, the Yaroslavl Oblast administration actively promotes investment projects and searches for private investors for local enterprises.

There is available a list of investment projects and some proposals for cooperation with Yaroslavl enterprises. This is the result of teamwork between the Oblast Administration, general managers of enterprises and specialists responsible for designing of investment projects.

We will be happy to provide you with further information and assistance and to arrange any necessary contacts. For this purpose a special department, the Office of Investment and External Economic Activities, has been established in the Oblast administration. Contact Irina V. Abrosimova, Head of Department at Tel: (0852) 22 36 15, Fax: (0852) 32 78 35 or by e-mail: abro@adm.yar.ru."

Last Updated: June 10 1999. Copyright Russian-American Chamber of Commerce® 1995-1999. All rights reserved.