|                                                                                                                                                             |  | SAMARA: A KEY RUSSIAN REGION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | March 1998by Padraic J. SweeneyVisitors to Samara often tend to think of it as "St. Louis-on-the-Volga," which is quite fitting,
since Samara and St. Louis are linked by a sister-city relationship.  Why do business in Samara? 
For many of the same reasons you'd do business in St. Louis.  Samara is a major manufacturing
center with a diversified economy, known for its breweries, blessed with an industrious population
and a great river linking it to the rest of the country and the world.  Samara is a place to prosper,
as many American companies are beginning to discover.Samara is already one of the most prosperous of the Russian Federation's 89 regions, with a
diversified economy, favorable geographic location, and forward-looking business and political
leadership.  A number of U.S. companies have already made important investments in Samara,
and others are likely to follow.  Pepsico operates a new multimillion dollar bottling plant in the
city of Samara, the regional capital.  Samara was very receptive to Pepsi, reports  Michael Nash,
who pioneered the plant's marketing efforts in Samara and elsewhere in the Volga basin: "We
received a lot of support from the local administration.  When we had an issue with a local
[government] committee, they came in and helped."Corning is now producing fiber optic cable for sale in Russia and other NIS countries through
Samara Optical Cable Company, a joint venture with a local manufacturer.  The joint venture's
managers, who are among Russia's top engineers in their field, say that Corning beat out stiff
international competition to set up their cable business because "Corning was faster" and "started
earlier."  This willingness to take the initiative was met on the Russian side, according to Anvar
K. Bulkhin, General Director of Samara Cable Company, Corning's joint venture partner.  "We
can now make decisions quickly and dynamically," in Russia, Bulkhin says.Diversified Regional Economy
A diversified local economy is one key to the region's strength.  The Samara Oblast is a leading
center of petroleum refining, automobile manufacturing, and the aerospace industry.  Services,
especially transportation, are an important part of the region's economy as well.  The Russian oil
company Yuksi (recently created by the merger of Yukos and Sibneft) has a major presence in
the oblast, with subsidiaries in exploration and production, refining, and product distribution. 
Togliatti-based AvtoVAZ, Russia's largest automaker, is one of the oblast's major manufacturers
and employers  (see BISNIS Bulletin, December 1997/January 1998, Page 11).  Leading Samara
aerospace firms include Progress, Aviacor, and Motorstroitel, which manufacture spacecraft,
passenger airliners, and aircraft engines, respectively.  Other local firms produce machine tools,
drill bits, bearings, food-processing equipment, and chemicals.A number of important transportation service companies are also based in Samara.  Among the
most prominent is Volgotanker, one of Russia's leading shipping companies.  Samara Airlines
operates scheduled service from Samara International Airport to Vienna, Tel Aviv, and
Larnaka.  Lufthansa Cargo and DHL are negotiating with the airport administration to finance
modernization of its facilities.Samara is well located for both domestic and international transport.  Frequent air-cargo and
passenger services link Samara with Moscow and other Russian and NIS cities, as well as with
destinations in Western Europe and the Middle East, from the Samara International Airport.  In
addition to Samara Airlines, Lufthansa provides regular connections to Frankfurt.  Major rail
lines and highways pass through the region, tying Samara's major industrial cities with markets
and ports throughout the NIS and beyond.  The region's principal waterway is the Volga River,
and there are commercial ports at Samara, Togliatti, and Syzran.Support for Reform
Support for reform by the local government and the population is an important element of
Samara's economic progress.  Governor Konstantin Titov has pushed a variety of measures to
increase the flexibility of the regional administration in dealing with economic issues, including
basic land reform in the oblast's agriculture sector.  As a result, Titov is generally considered to
have strong support from the local business community.  The municipal governments in Samara
and Togliatti also encourage foreign companies to do business in their cities.  Under the
leadership of Mayor Sergei Zhilkin, Togliatti's InterVolga Business Conference has become one of the
most important international trade events in the entire Middle Volga area of Russia.To support U.S. exporters and investors, the U.S. and Foreign Commercial Service of the Department of
Commerce plans to open an American Business Center (ABC) in Samara.  The Samara ABC will provide a
broad range of business development and facilitation services to U.S. companies.  BISNIS plans to place a
representative in Samara to provide market information and trade leads to American businesses.  Samara has also
been selected for special emphasis by the U.S. and Russian governments' "Program for Revitalizing Agriculture
through Regional Investment" (PRARI), which was launched in 1997 to promote agribusiness investment in
promising Russian regions.  For more information on the Samara Oblast, visit BISNIS Online at
www.mac.doc.gov/bisnis/country/regions.html# VolgaUrals.Padraic J. Sweeney, Managing Editor of BISNIS Bulletin, covers the Volga Basin for BISNIS.This report is provided courtesy of the Business Information Service for the Newly Independent States
(BISNIS)