12 february 2011

Prime Minister Vladimir Putin holds a working meeting with Alexei Orlov, head of the Republic of Kalmykia

At the meeting, Mr Orlov told the prime minister about his republic’s new investment projects in livestock farming and in the fuel and energy sector. Mr Putin pointed out that wages in Kalmykia are below the national average and stressed the need to use investments to create new, well-paid jobs.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Orlov, we’ll review the results of last year and discuss plans for the year ahead shortly. First, though, I’d like to talk about projects that you deem essential to your republic’s immediate future. You’ve got energy giants -- such as Lukoil, the Caspian Oil & Gas Company, and Falcon Capital – operating in your republic; a whole series of projects is currently being implemented in agriculture; and there are good projects in the tourism industry, too. How are their prospects?

Alexei Orlov: Mr Putin, we’ve done some serious work in agriculture, something I briefed you on earlier. Let me show you something. (Showing documents) Look, this is the main project we’re launching.

Vladimir Putin: Your livestock numbers have increased. …

Alexei Orlov: Yes.

Vladimir Putin: But your pig numbers have declined…

Alexei Orlov: Due to circumstances beyond our control. As you know, we suffered from swine flu outbreaks last year and the year before, so we had to slaughter some of our pigs to prevent the epidemic from spreading further. The 2008 economic crisis, which continued into 2009 and 2010, was another factor aggravating the situation. But I’m sure we’ll be able to repair that damage, and we’re already well on our way.

Getting back to Kalmykia’s number one project, it’s about the republic’s celebrated “marble” meat. We set up an agricultural holding group last December (to boost the production of such meat).

Your previous visit to Kalmykia in 2005 jumpstarted a national programme for the advancement of the agro-industrial complex, and meat production in particular. We’ve come a long way since then, and are now approaching the implementation stage. 

Our livestock – and I’m referring here specifically to pedigree, beef cattle – grows with every passing year. The growth rate is quite high – 5.2%, as of 2010. Of the 457,000 head of cattle, 395,000 belong to a native Kalmyk breed.

So we began by setting up that company, Kalmykia Marble Meat. We allotted it about 10,000 hectares of land here (pointing on the map), by the irrigation canal Volga Chograi, to facilitate irrigation for fodder supply facilities.  

By the year’s end, we plan to build two feeding facilities for 10,000 head of pedigree cattle, with the ultimate target capacity being 25,000 head of our very own livestock.

We’ve launched a few such facilities already. Now they’re up and running. (Showing documentation) I cut the ribbon for this one last December and for the other in January. The latter is a bit smaller, holding up to 5,000 head of cattle. This is a prototype of feeding facilities to be built in Kalmykia in the future.

We’re aware that livestock grazing puts an increasingly heavy load on the land, so we try to focus our efforts on the modernisation and intensification of meat production, which involves the use of feeding facilities.  Having an ample feed base is one of the main prerequisites.

Kalmykia has what it takes to create this, so the project is realistic.

As a matter of fact, we’re recreating what we had before, but on a wholly new platform; we’re creating a green conveyor belt, so to speak.

Vladimir Putin: How are you getting along with the Agriculture Ministry and other federal agencies? Is the government proving meaningful support for you?

Alexei Orlov: Yes, we’re getting along. We’ve already met more than once with the agriculture minister, and we have some of our specialists working at this federal ministry. Mutual understanding isn’t an issue. But we do have problems with funding. These all get resolved sooner or later, though.

Vladimir Putin: How much money have you received to support farms affected by natural disasters?

Alexei Orlov: A total of 325 million roubles.

Vladimir Putin: Has all that money found its way to the farmers in need?

Alexei Orlov: Yes, all of it.

But let me explain something, Mr Putin. The thing is, I studied the situation in detail a short while ago, and we decided to deal with this problem as thoroughly as possible. We intend to focus our support on the hardest hit farmers, those who have made a meaningful contribution to the development of the agricultural sector, which the republic’s economy really needs and which it could benefit from.

Vladimir Putin: Now let’s get back to investment programmes and projects in other sectors, especially manufacturing and the fuel and energy complex…

Alexei Orlov: We see the fuel and energy sector as the second mainstay of Kalmykia’s socioeconomic development, both in the short term and the long term.

Earlier in our conversation, you mentioned several energy giants that run oil and gas operations in Kalmykia. Lukoil is one of them.

We expect about 124 billion roubles in overall investment.

Lukoil is currently working on a large-scale project to bring oil and gas supplies to Kalmykia through a pipeline that will stretch as far as Budyonnovsk. Headquarters and coastal facilities for this project will be built on our soil and using our workforce. 

At public hearings last December, an agreement was reached with Lukoil’s top management on the company’s social responsibility and on the supply of] 1 billion cubic metres of natural gas for the republic’s needs.

We’re planning to build a nitrogenous fertilizer factory as well.

The Caspian Oil & Gas Company also works in this field as well. Its investments will amount to about 1 billion roubles in 2011 alone, and reach 8 billion overall.

Another interesting project underway has to do with alternative energy sources. We’re building windfarms in collaboration with Falcon Capital. This company has already invested some 200 million euros in the project. Eleven windfarms are to be added before the year’s end to the two already in operation. And the entire grid is to reach a capacity of 300 megawatts.

Vladimir Putin: Well, obviously, you need to create jobs in various sectors so that wages will grow. At the moment, the average pay in Kalmykia is lower than the national average, right?

Alexei Orlov: That’s true, unfortunately. But we’re moving forward, and are hopeful that these projects will help improve the situation.

Vladimir Putin: Bringing in new investment projects and creating new, well-paid jobs – that’s the way to go about it.