The region of Krasnodar, colloquially named "the Kuban", derives its name from its capital city, Krasnodar. The region is growing in value as the Russian economy forges ahead. Its economic base has been founded on agriculture and transport and remains the "breadbasket" of the nation and is a southern gateway to the world, based on its ice-free ports. Favorable political and investment climates have attracted many multinational companies to the region, including Cargill, Petrak, Conagra, Monsanto, Tetra-Park, Danone, Coca-Cola, Phillip Morris, Knauff.

Krasnodar area has a regional population of 5 million and 5 million visiting tourists annually. Its 1 200 km coast provides a wide range of investment opportunities, along with its 8 international sea-ports, 6 airports and 1600 entertainment locations and hotels.

The regional administration has a policy of actively supporting investment to the region in order to fully develop its economic potential. In order to create a favorable investment climate, the Krasnodar regional legislature enacted a law "on support of investment activity", which creates tax incentives to Russian and foreign investors in the region.

Today, the region is becoming a premier European venue for exciting real estate investment in office buildings, ports and industrial units, sports and leisure resort complexes, residential construction and hotels.

Political climate
The Krasnodar region is one of a number of sufficiently conservative regions of the Russian Federation that have helped define national ideas and values during 1990s, and it looks set to continue to do so during 21st century.

Economy
According to national economic indexes, the Krasnodar region holds a strong position. Its per capita output is well above national average. It is one of the top ten regions of the Russian Federation in terms of net contributors to the federal budget and has one of the highest records for tax collections of all Russian regions. With the highest quality soils and blessed by a favorable climate, the Krasnodar region has always been the principal "breadbasket" of the Russian Federation. It has 3% of all ploughed lands in Russia. It also has Russia's only specialized agricultural university. The region produces approximately 6% of meat and diary products, 15% of all Russian grain, 30% of fruit production, 60% of oilseed production, 80 % of rice production and 97 % of wine production. Given the strength of the prime agricultural sector of the Krasnodar regional economy, over 43% of the food processing industry of the Russian Federation is located in the region, linked to the primary producers.
The Krasnodar area with its subtropical microclimate contains the only concentrated resort sector in the Russian Federation. Stretching in particular along the Black Sea coast from Sochi to Anapa and beyond, the resort facilities are concentrated along some 400 km of picturesque coastline with a mountain backdrop of the West Caucasus chain.
Also Krasnodar area is the prime sea gateway to the Russia. Overall, the region provides some 40% of all Russian port cargo handling capacity. There are 8 commercial seaports along the Black and Azov Sea coasts. Together, these ports handle 68.6 million tons of cargo, both liquid and dry.
The transportation system of the region also includes 5 airports, a developed railway and highway infrastructure and pipelines. Krasnodar airport has an international customs department, which expeditiously handles both incoming and outcoming international flights. Regional airlines also serve Greece, Turkey, Cyprus and Israel on regular basis.

Investment opportunities
Today Krasnodar area is rated second in Russia by the volume of actual foreign investments attracted. In terms of investment potential, it is firmly placed into the top ten Russian regions; by investment risk it ranks seventh place. The investment environment is being improved step-by-step by the regional government. In March 1999 the regional government produced the Law on State Induced Investments in Krasnodar Region, which aimed at attracting investments on the basis of a regime of most favorable treatment of investors through local tax concessions, preferential terms for land tenure/ownership, preferential transfer of regional property to the investment object, providing state expertise and assistance, issuance of development bonds to finance priority investment projects, and issuance of regional state guarantees on the investment, together with a formalized structure to implement the law in practice.

Business opportunities by sector:

Agriculture Prime areas of interest to international companies are contract growers, as well as the demand for new farm machinery.

Food processing

The opportunities are in all branches of the industry: dairy produce, meat and poultry, fish, confectionary and biscuits, wheat and grain products, vegetable oils, juices, brewing, canning, freezing, packaging. Companies such as Tetra-Pak have had a presence in the region, including manufacturing site, for over a decade.

Oil and Gas Refining and Transportation

The region is one of the original sources of oil and gas and these represent serious opportunities for international business. The Caspian Pipeline Consortia (CPC) has completed the construction of a pipeline from the Caspian Sea to Novorossiisk. Work has started on the Blue Stream gas pipeline project to Turkey. Major logistics projects have been won by international companies operating through regional operating companies. International construction companies such as Boyuges and others are also active in the region. Further major infrastructure projects related to oil and gas transportation are at various stages of readiness and are likely to come to fruition over the next five years.

Manufacturing

The region is a base for small and medium-size manufacturing industries. There are a number of interesting opportunities in subcontract work and production under license for international companies that are being developed more easily, particularly encouraged by the proximity of the ports.
Subcontract manufacturing. A number of plants manufacture items such as irrigation equipment and plumps, compressors, refrigeration unit, gears/reducers, specialist vehicles ( such as ambulances), aluminum window frames, farm machinery, and so forth.
Subcontract textile work. There are a number of regional companies manufacturing clothing, fabrics, woolens, and other textiles. A number of smaller production units. Together with medium-size companies in this sector, have subcontracted work from international companies and this trend is likely to increase.

Construction and building materials

The region is well endowed with high quality building materials such as sands, limestones and marbles. The foothills of the Caucasus overlooking the port of Novorossiisk are home to a major grouping of cement plants that have direct conveyors to the port for product export. This cement was used to build the Aswan Dam on the Nile.

Forest products

Given the rational forest conservation policy of the regional government, there are interesting business opportunities for international companies prepared to partner with local companies to add value to primary timber felling and preparing. Larger-scale forestry concessions are available and are accompanied by strict requirements on re-planting and the development and maintenance of logging roads.

Infrastructure

Telecommunications. The regional telecommunications systems have been developing over the past decade, particularly in urban areas. Regional cities have extensive cellular phone functionality with number of competing networks on the GMS-900 cycles. There are a number of regional Internet service providers (ISPs); Internet usage is rapidly gaining ground, primarily through widespread use of workplace personal computers. Plans are being laid for the fast implementation of e-commerce and specific business-to-business (B2B) exchange developments. These represents opportunities for specialist new technology companies.

Energy. Apart from natural gas, the region is energy deficient, consuming significantly more power than it generates.
Transport. The combination of increased demand for exports, the development of the tourist industry and growth in the agricultural/food sector are all placing increasing demands on the transport infrastructure. There are substantial opportunities for international transport businesses to work within the transport infrastructure of Russia's "southern getaway" as access routs into the population heartlands of the nation.

Ports and shipping. The sectors offer a variety of opportunities for international companies. Particular opportunities fall into areas of port/terminal developments and shipping and freight forwarding.

Tourism

This broad sector is starting to be recognized as a sector of opportunity for international business. Attracting a high percentage of Russia's emerging middle class with a propensity to spend on vacations, a number of Greek and Turkish companies have invested in hotel and other vacation developments along the Black Sea coast. Other investors have been large national organizations such as Gazprom, which has developed four-star hotels and aqua parks along the coast. The pick-up in tourism is extending to the Azov Sea coast also, particularly the beach resorts near Yeisk.