N O V G O R O D R E G I O N

GEOGRAPHICAL LOCATION 1000 kм 500 kм 250 kм St.Petersburg Moscow Veliky Novgorod Territory – 54,500 km 2, population – 657,600 people, Local centre – Veliky Novgorod populated by 216,700 inhabitants

TRANSPORT SYSTEM Veliky Novgorod Moscow St. Petersburg HelsinkiMurmansk Per’m Kirov Kiev Minsk Brest Tallinn, Riga Warsaw Riga Vilnius Minsk Pskov Tver’ Yaroslavl Valdai Borovichi Bologoye Malaya Vishera Vologda Kirishi Chudovo Luga Ostrov Nevel’ Riga Tallinn Warsaw Vilnius Minsk

NATURAL RESOURCES POTENTIAL OF THE REGION ( ) ( ) The number of available industrial sites within a municipality (4) (6) (3) (4) (2) (3) (10) (11) (4) (2) (4) (6) (8) (5) (3) (9) (1)

CONSOLIDATED OBLAST BUDGET REVENUES

THE STRUCTURE OF GROSS REGION PRODUCT IN 2007

INDUSTRIAL MIX IN 2007

CAPITAL INVESTMENT COMPOSITION ( ) Capital investment in will amount to 82 billion ruble.

COMMUNICATION  Chudovo Lyubytino Malaya Vishera Malaya Vishera Moshenskoye Borovich Demyansk Kholm Sol’tsy Volot Batetsky Shimsk Staraya Russa Parfino Okulovka Maryovo Poddorye Khvoivnaya Pestovo Veliky Novgorod Veliky Novgorod Valdai Krestsy St. Petersburg Moscow digital long distance wire connection, Rosnet и Internet ISDN, Rospack, Sprint

CROSS-BORDER INVESTMENT

MAJOR INVESTING COUNTRIES Over 50% of the authorized capital Russia Great Britain Denmark Poland Finland Germany USA Spain France Slovenia Austria The Netherlands Cyprus

COMPANIES WITH FOREIGN CAPITAL PARTICIPATION THE LARGEST COMPANIESINVESTORSMAIN OUTPUT PRODUCTS JSK ‘Acron”CyprusMineral fertilizers LLC “UPM-Kymmene ChudovoFinlandLarge-sized laminated plywood, sliced veneer JSC “Novtruck”GermanyCar bodies, trailers and semi-trailers LLC Joint venture “NBI Transport Service" GermanyFreighting LLC “Madok”AustriaLogging and woodworking LLC “ Dirol Cadbury” Great Britain, Denmark Chewing gum and confectionary OJSC “URSA Chudovo”SpainHeat insulating materials LLC “Amcor Rentsch NovgorodGermanyRigid cigarette packaging LLC “Setnovo”FinlandCarving wood LLC “UPM Kymmene Pestovo”FinlandCarving wood CJSC «Novgorodskii metallurgical plant”CyprusCopper rolled wire and cathode copper Ltd “Pfleiderer”GermanyChipboards Ltd “Amcor Flexibles Novgorod”Great BritainFlexible cigarette packaging “Sibelko” CJSC “Russkaya Gornaya Kompaniya” Belgium Construction of mining and processing complex for sand and gravel aggregate

EXPORT AND IMPORT OF GOODS

INVESTMENT-FRIENDLY REGION  Advantageous location  Investment-friendly environment l statutory tax incentives for investors l established business support patterns l freedom from administrative barriers l comprehensive transport network l ramified telecommunication network

INVESTMENT CLIMATE  Investment Strategy Efficiency l political stability l non-regression of initial terms of investment project implementation l equal rights for investors 1997 – Novgorod was awarded “The Region of the Year” title as a recognition of successful implementation of economic reforms (by decision of American Chamber of Commerce) 1997 – Flag of Honour of the Council of Europe, 2001– Plaque of Honour of the Council of Europe for efficient integration into European Community

REGION RATING  Since 1995 on the region has been amongst top 10 Russian regions with the highest investment appeal  3 rd place (2005) in the key nomination «For Low Investment Risk Over Decade»  Winner in the Key Nomination «For the Lowest Investment Risk» ( , , ); 3 rd place ( ) 8 th place (2006)

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