Transcript of the beginning of the meeting:

Vladimir Putin: Mr Korolyov, the Lipetsk Region is a national leader according to nearly every economic indicator. Admittedly, local agricultural producers are now facing harvests half the size of the 2009 level. But apart from that, your performance in other sectors has been quite successful.

Industry is growing fast – especially in special economic zones, which is gratifying. Yokogama (a new tyre plant) is nearing completion, and two more industrial facilities are on the way: Yeletsprom (a fodder producer) and a pharmaceuticals plant that will manufacture 60 different types of drugs, including antibiotics and cancer treatments. And I believe that medical equipment manufacturing is also on the rise, is it not?

Oleg Korolyov: Yes it is.

Vladimir Putin: How is the PET-machine plant progressing? I believe you have invested over a billion in its construction, right?

Oleg Korolyov: I can tell you that this fast growth is largely due to the government’s targeted programmes. I must report how we are fulfilling three of your latest instructions. First: sugar industry development. We have signed agreements with VEB and the Agriculture Ministry to build Europe’s largest sugar plant with a capacity of 12,000 metric tons a day or higher. The Lipetsk Region is a major sugar supplier, and once the new plant begins production, we will supply 12% of Russia’s overall sugar consumption. Your second instruction was to give a boost to the pharmaceuticals industry. Starting next year, we will account for 20% of antibiotics on the Russian market.

Vladimir Putin: How much was invested in the sugar plant construction? Seven billion?

Oleg Korolyov: Nearly eleven billion. This year alone, we will commission six plants in accordance with your third instruction – to develop special economic zones. We also have five special zones at a regional level and will soon commission seven more plants in these zones.

We are finally making the breakthrough that you encouraged us to make years ago. Large foreign investors have obviously shown confidence in Russia’s investment climate, and the Lipetsk Region tops Russia’s investment climate ranking. One of these investors is Yokogama, which will begin start-up routines at its tyre plant in April and will produce its first batch in September. Other investors and producers of related goods are bound to follow.

Now I would like to mention your most important instruction. This year, the government will give us nearly three billion roubles to modernise local healthcare. Naturally, the region will match that investment under the co-financing programme. The funding will help us resolve important social problems. I must thank you sincerely on behalf of the whole region.

The fact that Russia first won the bid for the 2014 Winter Olympics and then the 2018 FIFA World Cup as well gave a powerful impetus to all Russian regions. Minister Mutko (Vitaly Mutko is Russia’s Minister of Sport, Tourism and Youth Policy) and I have discussed ways to develop and support Olympic sports through supplying materials and equipment, as well as organisational support. Russian regions are following an effective development algorithm, and the Lipetsk Region is one of them.

Vladimir Putin: I believe construction volumes have grown in Lipetsk, haven’t they?

Oleg Korolyov: I am happy to inform you, Mr Putin, that despite the economic downturn, we increased housing construction to nearly 780,000 sq m in 2010, and we will build even more than that in 2011. Investment has also grown again despite the crisis. We are proud because investment in the region exceeds its consolidated budget by 150%. Investors view Russia, and specifically, the Lipetsk Region, as an attractive, investor friendly place. They have confidence in us.

Vladimir Putin: We have discussed the problems that stemmed from last summer’s drought. What is the situation like in local farming? What are your plans? What do you intend to do to support local agriculture now?

Oleg Korolyov: First of all, while gross grain production was cut in half, its quality improved. Second, the Russian government has faithfully honoured its commitments to support the regions. We have received all we expected. The federal budget provided, upon your instruction, nearly 1.8 billion roubles to the regions hit by the drought. We have matched the federal contribution, and I can assure you that with the support of the Ministry of Agriculture we will be ready for spring sowing.

Vladimir Putin: I would like you to see personally whether or not the money actually reaches the agricultural producers it is intended for and how it is delivered. There is a shortage of fuels and lubricants. We will support our key companies as we always do. But I would like you to focus more on agriculture in your region because this sector was hard hit last summer. 

Oleg Korolyov: The step-by-step preparation plan for spring sowing adopted by the government, and in particular, by the Agriculture Ministry, has been agreed with the regions. The Lipetsk Region made a detailed schedule of deliveries of fertilisers, lubricants, and seeds, as you instructed. The government also provides support to agricultural producers for buying farming equipment.

Vladimir Putin: Do you receive grain from the government intervention fund?

Oleg Korolyov: Yes. I have also requested some support for our major meat producers, and this support has been granted.

Vladimir Putin: Still, your cattle livestock has shrunken slightly…

Oleg Korolyov: We have maintained the grain-fodder balance. But we also requested more grain: 90,000 tons to support our major poultry and pork producers, such as Cherkizovo Group. The request has been granted thanks to your instruction.

Vladimir Putin: Good.