ELVAN-VOSTOK is the project of the first Russian transnational mini-cluster for developmen
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and sales of lighting products
receive products with the stamp "Made in Russia"

Производство Владивосток Elvan


ELVAN-VOSTOK:

LIGHTING EQUIPMENT AND ENERGY SAVING TECHNOLOGY MINI-CLUSTER PROJECT

Nadezhdinskaya Advanced Special Economic Zone (ASEZ), Primorsky Region, Russia

Promoter and developer of the project — Group of Companies ELVAN, Moscow

ELVAN-VOSTOK:

Project stages

Stage 1. 2018 Construction and commissioning of the 1st stage of B-class manufacturing and warehousing complex with an area of 1500 m2, with built-in administrative premises. Moving the manufacture (started up by Terra, LLC in 2016) from Vladivostok Free Port.

Stage 2. 2019 Construction and commissioning of the 2nd stage of the A and B class manufacturing and warehousing complex with an area of 5000 m2, which will include administrative premises and a residential block with social welfare facilities. Manufacturing capacity expansion and lighting equipment mini-cluster expansion.

Stage 3. 2020 Construction and commissioning of A-class two-storey warehouse logistics complex — 10 000 m2, with administrative premises.

Притягивает лиды

ELVAN-VOSTOK

SUMMARY OF EVLAN-VOSTOK PROJECT

elvanf.jpg

ELVAN-VOSTOK is the project to establish an international manufacturing and logistics site specializing in manufacturing, warehousing and delivering energy-efficient lighting equipment, with an area of 2.5 ha within the boundaries of Nadezhdinskaya ASEZ (Primorsky Region).

The project is under implementation.

Assembling facilities have been started up on the territory of Vladivostok Free Port, where the business model is being developed. The manufacture will be moved to ELVAN-VOSTOK mini-cluster.

Negotiations have been held and a number of direct supply contracts with several Russian and foreign lighting equipment buyers have been signed.

Negotiations with Asian partners on the production line placement at the ELVAN-VOSTOK transnational mini-cluster are being held.

Project stages:

Stage 1. 2018 Construction and commissioning of the 1st stage of B-class manufacturing and warehousing complex with an area of 1500 m2, with built-in administrative premises. Moving the manufacture (started up by Terra, LLC in 2016) from Vladivostok Free Port.

Stage 2. 2019 Construction and commissioning of the 2nd stage of the A and B class manufacturing and warehousing complex with an area of 5000 m2, which will include administrative premises and a residential block with social welfare facilities. Manufacturing capacity expansion and lighting equipment mini-cluster expansion.

Stage 3. 2020 Construction and commissioning of A-class two-storey warehouse logistics complex — 10 000 m2, with administrative premises.

Total investment costs of the project are $13.36 million. Of this amount, the company's own capital is $6.68 million. The remaining amount of the project costs will be financed at the expense of bank loans.

Investing is carried out on a staged and annual basis during the first three years of construction.

The main financial indicators of the project:

FCFF

14%

PI

1.16

IRR

37.02 %

NPV

$15.5 million

Payback Period

5 years

As part of the project, SPV LED-story, LLC has been established. Currently, 100% of it belongs to the only participant — the promoter of the project.

We propose to potential partners to consider three main options of collaboration: to acquire a share in company's capital (as a financial or strategic investor), to provide a loan for the project (to credit the project) or to become a partner in the manufacturing programme.

Financial investors are offered from 49 to 74% of the share in LED-story, LLC authorized capital, which is subject to negotiations and depends on the project financing transaction structure.

Lighting products

light - energy of the future

Total investment costs of the project are $13.36 million

Of this amount, the company's own capital is $6.68 million. The remaining amount of the project costs will be financed at the expense of bank loans.

Investing is carried out on a staged and annual basis during the first three years of construction.

The main financial indicators of the project:

FCFF

14%

PI

1.16

IRR

37.02 %

NPV

$15.5 million

Payback Period

5 years

As part of the project, SPV LED-story, LLC has been established. Currently, 100% of it belongs to the only participant — the promoter of the project.

We propose to potential partners to consider three main options of collaboration: to acquire a share in company's capital (as a financial or strategic investor), to provide a loan for the project (to credit the project) or to become a partner in the manufacturing programme.

Financial investors are offered from 49 to 74% of the share in LED-story, LLC authorized capital, which is subject to negotiations and depends on the project financing transaction structure.

Блок с преимуществами (с женщиной)

PROJECT PROMOTER PROFILE

The promoter and developer of the project is Group of Companies ELVAN headquartered in Moscow.
Panel LED ARM
Panel LED ARM
LED lamp invoice
LED lamp invoice

For more than 16 years, Group of Companies ELVAN has been engaging in supply of lighting products to Russia and contractual assembling (OEM manufacture) in China.

The commercial service of the company has a wholesale department, which sells products through its own distribution network in Russia and the countries of the Customs Union, and a retail chain consisting of 20 own stores located in Moscow and Vladivostok.

Over the years, Group of Companies ELVAN has formed a wide range of proven suppliers of finished products, components and spare parts.


Demand of the state for supply of products in large quantities, with stable, guaranteed quality led to the need to organize own manufacture in Russia. The Far East has been chosen because of tax preferences, possibility of cooperation with Asian partners, and most importantly due to a high level of administrative support and a short time needed to launch the project. In 2016, the assembling facilities were started up in Vladivostok by Terra, LLC, as a pilot project and the first stage of ELVAN-VOSTOK project.

Within this stage, we offer Russian customers a contractual assembly according to Russian standards with the label "Made in Russia", which allows them to participate in projects to supply products for government needs.


The uniqueness of the project is in its openness and cooperation both with Asian partners and with Russian customers. Terra fulfils not only orders of ELVAN Moscow trading house, but also provides contractual manufacture for other customers.

Proven technologies and supply logistics will be moved to the premises of the 1st stage of ELVAN-VOSTOK project, located in Nadezhdinskaya ASEZ.

Terra offers its customers a full range of lighting equipment manufacture services and products delivery to warehouses of end-buyers. Our customers have a number of competitive advantages, because they:
- save on currency exchange — we make all contract payments in roubles, under the Russian legislation;
- do not incur expenditures and have no problems associated with foreign trade activities, customs clearance and products quality control in China;
- have opportunity to return products;
- receive products with the stamp "Made in Russia", enabling them to participate in products supply for the state needs and needs of the state-owned corporations, according to 44th and 223rd Federal Laws of the Russian Federation.


Proximity of Chinese partners and flexibility of production lines gives us an opportunity to quickly change the product range and manufacture innovative products in any customized batch quantities, deliver them directly to the consumer, bypassing wholesale warehouses

.

CONCEPT OF ELVAN-VOSTOK PROJECT

ELVAN-VOSTOK is the project of the first Russian transnational mini-cluster for development, manufacture and logistics of lighting equipment.

The project infrastructure complex will be located on an area of 16,500 m2 and will include manufacture, storage and trade areas, as well as an exhibition centre and an Internet trading centre www.elvan-vostok.ru.

ELVAN-VOSTOK project — is a growth area of a full-scale transnational cluster of energy-saving technology in the Far East of Russia. It is a bridge that joints manufacturers of components and manufacturers of finished products from the countries of the Asia-Pacific region with Russian domestic market, primarily with the market of government procurement and supplies for large state corporations.

State-owned companies have been lately demanding that the supplied products should be produced in Russia, according to Russian standards, and long enough, at least for the period of concluded energy service contracts. As practice shows, foreign manufacturers can not guarantee meeting these requirements.

Business model of ELVAN-VOSTOK project implies international cooperation. This is an access to the Russian market of lighting and energy-saving equipment enterprises, and its support point in Russia.

In the mini-cluster, we join Asian industrial potential and Russian engineering personnel together on a single site. Using proximity, mobility and flexibility of manufacturing facilities, we give our partners an opportunity to place their assembling facilities on our site. This is, in fact, their remote workshop located in an ASEZ with a zero income tax rate and preferential conditions for foreign labour.

Potential residents (Tenants) of a mini-cluster are companies from all over the world, primarily from the countries of the Asia-Pacific region and Russia, which meet the requirements developed by the expert council of the mini-cluster. The composition of the expert council is approved by the board of directors of the mini-cluster.

The main development principle of ELVAN-VOSTOK mini-cluster is organization of a comfortable environment for its tenants and residents, and namely, concentration on the mini-cluster site of all necessary infrastructure and public services, such as a technical support centre, prototyping and 3D modelling centre, training centre, engineering bureau, marketing and trading platform groups.

Promotion of residents’ products in the Russian market will be the most important activity for which purpose the marketing agency will be created.

Synergetic effect being achieved through the interaction between Russian and foreign specialists, our marketing support and lobbying of interests of residents at the highest federal level will lead to a cumulative effect that will bring the products of residents to the Russian market.

President of Group of Companies ELVAN

Prokopenko Alexander Lvovich
THE BUSINESS PROGRAM OF THE II INTERNATIONAL ECONOMIC FORUM
Discovering far East: opportunities for investors

ELVAN-VOSTOK: LIGHTING EQUIPMENT AND ENERGY SAVING TECHNOLOGY

MINI-CLUSTER PROJECT
LOCATION AND DESCRIPTION OF THE SITE FOR CONSTRUCTION OF THE COMPLEX

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Primorsky region investment potential is ensured by is geographical position and well-developed transport infrastructure integrated into global logistic corridors. The region is rightly considered Russia’s eastern gateway. High industrial, sci-tech and educational potential of the region, as well as its proximity to Asia-Pacific markets, provides condition for developing competitive export-oriented economy.

The Primorsky Region’s population is about 2 million. The administrative centre is Vladivostok. Time zone: UTC+10 (MSK+7).

ELVAN-VOSTOK mini-cluster is an international manufacturing and logistics site that will be located on an area of 2.5 ha within the boundaries of Nadezhdinskaya ASEZ. The site has access roads along its two opposite borders, which makes it possible to organize traffic without intersecting flows.

Nadezhdinskaya ASEZ is located on the territory of Novy Village, Nadezhdinsky District of Primorsky Region, on 807 ha of flat terrain.

Zoning: 434 hectares — industrial enterprises, 140 hectares — transport and logistics enterprises, 32 hectares — administrative and economic infrastructure.

Energy infrastructure: power supply 61 MW, gas supply 20.3 m3/h.

Communal infrastructure: water supply and disposal — 10 000 m3/day each.

The construction site of ELVAN-VOSTOK mini-cluster is fully provided with all necessary infrastructure and connected to power, water and gas supply systems.

ELVAN-VOSTOK mini-cluster has a unique geographical location in the immediate vicinity to M60 federal highway connecting Vladivostok and Khabarovsk, 32 km from Vladivostok Free Port and 27 km from Vladivostok International Airport, close to major transport hubs: international transport corridor "Primorye-1", which goes to China, border crossings to the PRC and North Korea, Trans-Siberian Railway.

Also, the favourable location causes the presence of the developed engineering and social infrastructure, allows relying on the development of a number of priority areas, such as energy-saving technology and LED lighting.

The region is provided with highly qualified personnel in the field of electronics, construction and mechanical engineering.

 3.jpg  interlight-MOS-pb-light-and-building_RGB-300x161.jpg

MARKETING, MARKET ANALYSIS, SALES

Despite the current economic crisis, the LED lighting market in Russia is growing by more than 30% per year1.

Capacity of the lighting market in Russia in 2015 amounted to 81,431 million roubles or 795.5 million items, including:

-  lamps — 747 million pieces amounting to 34 036 million roubles;

-  lighting devices — 48 million pieces amounting to 47,395 million roubles.

In money measure of the total lighting market capacity in 2015, production amounted to 22,439 million roubles, imports — 64,739 million roubles and exports — 5,747 million roubles.

Since 2011, imports growth is 70% in value terms.

Lamp Market.

In 2015, the capacity of the lamp market was 747.4 million pieces amounting to 34,035 million roubles, 110 million pieces of which were LED lamps, amounting to 19,231 million roubles. From 2011 to 2015, the market of lamps increased by 63% in terms of value. In quantitative terms, the growth in market capacity was ensured by the growth of the LED lamp market, which grew up by 10 times. At the same time, the markets of other lamp types fell from 1% to 55%. For the same period, the LED lamp market capacity rose by 440%.

Market of lighting devices

In 2015, capacity of the market of lighting devices made up 48.5 million pieces for a total amount of 47,395 million roubles. From 2011 to 2015, capacity of the market grew by 74% in quantitative terms and by 36% in value terms.   The growth was caused by increase of LED lighting device market.

In 2015, capacity of the LED lighting device market was 25.8 million pieces, amounting to 25,325 million roubles. From 2011 to 2015, capacity of the market of LED lighting devices increased by 12.5 times in quantitative terms and by 1.8 times in value terms.

The forecast increase in the share of LED lighting devices is from 15.7% in 2012 up to 75% in 2010.

Market structure of lighting devices by consumption segments in 2015, in quantitative terms:

- Office and trade lighting -  47.9%;

- Road lighting -   1.4%;

- Industrial lighting-   21.9%;

- Other segments -  28.8%.

Group of Companies ELVAN sells its products throughout Russia and the CIS territory through a network of distributors. Supplies for government needs have been expanding in recent years.

In the sales structure, the main share is occupied by LED products — 52%, 20% — lamps and about 20% — decorative light.

STRUCTURE OF CAPITAL COSTS AND ARTICLES OF OPERATING PROFIT — SOURCES OF RETURN ON INVESTMENT

The project total investment costs are $13.36 million.

These funds will be invested in construction of the manufacturing and warehousing complex located on an area of 16,500 m2: design, construction, purchase and adjustment of equipment.

Of this amount, the company's own capital is $6.68 million. The remaining amount of the project costs will be financed at the expense of bank loans.

Project Capital Costs1:

ACCOUNT COST

Amount, USD

Construction of the first stage

1,183,245

Construction of the second stage

3,944,150

Construction of the third stage

5,074,000

Boiler house construction

111,086

Territory improvement

499,946

Project works

843,562

Purchase and installation of a gas boiler house

25,476

Purchase of equipment for production

295,000

Purchase of equipment for the full production cycle

757,157

Purchase of equipment for warehouse and office

429,913

Introduction "Free Customs Zone" regime

200,000

TOTAL:

13,363,535

1 Cost of capital expenditures for creation of infrastructure facilities and purchase of equipment are determined on the basis of data provided by contractors.

Return on investment is effected on account of operating profit.

Operating profit in the ELVAN-VOSTOK project is formed after the stage-by-stage commissioning of manufacturing, storage and other facilities, out of:

1.    Manufacture and sales of lighting products;

2.    Rental payments for lease of manufacturing and storage facilities;

3.    Services of the management company;

4.    Rental payments for lease of technologies and equipment of common usage

5.    Services of foreign economic activity;

6.    Marketing and promotion of products of residents;

7.    Storage and delivery of lighting equipment throughout Russia and the CIS.

The main advantages of Nadezhdinskaya ASEZ:

1.     Exemption from property tax and land tax;

2.     Profit tax is from 0% to 5% during the first 5 years (Russia: 20%)

3.     Social fees are 7.6% during the first 10 years (Russia: 30%)

4.     Preferential rates for rental payments

5.     Special procedure for land use

6.     Special public services

7.     Preferential conditions of connection to different infrastructure facilities

8.     Foreign personnel can be employed under more favourable terms

9.     Government control measures only through the Far East Development Corporation;

10. Duty-free and tax-free import, storage and consumption (usage) of foreign products in ASEZ, re-exportation of goods;

11. Usage of the free customs area is allowed;

Refund of value-added tax on exportation within 10 days.
DEAL STRUCTURE. OFFER TO A PARTNER. INVESTMENT SCHEDULE

We offer partners to join the project at the design and construction stage as co-investors and production partners or at the construction stage as creditors.

Financial investors are offered from 49 to 74% of the share in LED-story, LLC authorized capital, which is subject to negotiations and depends on the project financing transaction structure.

As part of the project, LED-story, LLC has been established. Currently, 100% of it belongs to the only participant — the promoter of the project.

Investing is carried out on a staged and annual basis during the first three years of construction.

Financing is carried out on a staged basis according to the Investment Schedule.

grafik.jpg


YEAR

2018

2019

2020

Total:

INVESTMENTS  (in USD)


















 









13,363,535

Design works

843,562



Boiler house construction

111,086



Construction of the first stage

1,183,245



Purchase and installation of a gas boiler house

25,476



Purchase of equipment for production

295,000



Introduction of "Free Customs Zone" regime

200,000



Construction of the second stage


3,944,150


Purchase of equipment for the full production cycle


757,157


Purchase of equipment for warehouse and office


429,913


Construction of the third stage



5,074,000

Territory improvement



499,946

 For the period:   2,658,369 5 131 220   5,573,946

Investments with accrual character

2,658,369

7,789,589

13,363,535

Eastern economic forum

Trutnev, the Grand OPENING of the EASTERN ECONOMIC FORUM

Over the past three years the WEF has become the largest international platform for discussion of strategy of development of political, economic and cultural ties between Russia and the Asia-Pacific region. At the upcoming forum we are ready to present the first results of the work done. We want to tell our guests that the policy which is now carried out on behalf of the President of the Russian Federation in the far East is now bearing fruit

Yuri Petrovich Trutnev
Deputy Chairman of the government
Plenipotentiary
President far Eastern Federal district

Light engineering

the area of science and technology, the subject of which is a study of the principles and development of methods for the generation, spatial redistribution and the measurement of characteristics of optical radiation and converting its energy into other forms of energy and use for various purposes. Lighting also involves design and technological development of radiation sources and systems management, lighting, irradiation and lighting devices and installations, regulation, design, installation and operation of lighting installations
Вступление к каталогу

The main financial indicators of the project

14%
FCFF
1.16
PI
37.02 %
IRR
$15.5 million
NPV

FINANCIAL FORECAST AND EVALUATION OF PROJECT EFFECTIVENESS

Basic scenario for pro forma cash flow statement
2018
Базовый сценарий для отчета о движении денежных средств
Investments, million USD: 2 658 Revenue: 0 Revenue with accrual character: 0 Free Cash Flow to the Firm (FCFF): - 2 658 FCFF with cumulative total return: - 2 658
2019
Базовый сценарий для отчета о движении денежных средств
Investments, million USD: 5,131 Revenue: 497 Revenue with accrual character: 497 Free Cash Flow to the Firm (FCFF): - 4 634 FCFF with cumulative total return: - 7 292
2020
Базовый сценарий для отчета о движении денежных средств
Investments, million USD: 5,575 Revenue: 1,989 Revenue with accrual character: 2,486 Free Cash Flow to the Firm (FCFF): - 3,586 FCFF with cumulative total return: -10 878
2021
Базовый сценарий для отчета о движении денежных средств
Investments, million USD: 0 Revenue: 3982 Revenue with accrual character: 6 468 Free Cash Flow to the Firm (FCFF): 3982 FCFF with cumulative total return: - 6 896
2022
Базовый сценарий для отчета о движении денежных средств
Investments, million USD: 0 Revenue: 6896 Revenue with accrual character: 13 364 Free Cash Flow to the Firm (FCFF): 6 896 FCFF with cumulative total return: 0

Basic scenario for pro forma cash flow statement:



2018

2019

2020

2021

2022

Investments, million USD:

2,658

5,131

5,575

0

0

Revenue:

0

497

1,989

3,982

6,896

Revenue with accrual character:

0

497

2,486

6,468

13

364

Free Cash Flow to the Firm (FCFF)

-2,658

-4,634

-3,586

3,982

6,896

FCFF with cumulative total return:

-2, 658

-7, 292

  -10, 878

-6, 896

0



grafik2.jpg

The project pays off in 5 years in the base model.

FCFF

14%

PI

1.16

IRR

37.02 %

NPV

$15,5 million

Payback Period

5 years

The project has a significant operating income reserve, which is formed through production of new, innovative lighting equipment.

Competence in the field of marketing and the professional team of the ELVAN trading house (Moscow) will ensure a guaranteed sale of these products in Russia and the CIS.

Question-answer

Answers to significant questions
LED. Определение. Принцип работы
Светодиод или светоизлучающий диод (СИД, LED, светодиодные английский. Светоизлучающий диод) – полупроводниковый прибор с электронно-дырочным переходом или контактом металл-полупроводник, создающий оптическое излучение при пропускании через нее электрического тока. Излучаемый свет лежит в узком диапазоне спектра, его спектральные характеристики зависят в том числе от химического состава использованных в полупроводниках. Он принципиально отличается от традиционных источников света, таких как лампы накаливания, люминесцентные лампы, газоразрядные лампы высокого и низкого давления. Генерация света (Рис. 1) при сахарном диабете происходит за счет энергии, выделяемой при рекомбинации носителей тока - электронов и дырок - на границе на границе полупроводниковых материалов с разным характером проводимости. Характер проводимости определяется не только самим материалом, но и примесями (допинговыми веществами), вносимыми в основной материал в строго дозированных количествах. Материал, который в результате легирования
Промышленные кластеры на Дальнем Востоке
Развитые страны Азиатско-Тихоокеанского региона вышли за пределы территориальных границ своих стран в поисках эффективности, ресурсов и рынков. Одни страны региона экспортируют товары для экспортных отраслей, другие-становятся донорами прямых инвестиций. Новые условия инвестиционной деятельности позволяют Дальнему Востоку конкурировать за экспорт продукции обрабатывающей промышленности из Азиатско-Тихоокеанского региона. Макрорегион готов предложить более дешевые производственные площадки, квалифицированную рабочую силу и доступ к природным ресурсам. На Дальнем Востоке уже есть успешные примеры формирования промышленных кластеров с участием иностранного капитала.
В развитии новых отраслей России заинтересован Дальний Восток.
Как обеспечить строительство производственно-сбытовых цепочек для промышленных проектов в регионе?
Можно ли создать трансграничные кластеры: как осуществлять секторальное взаимодействие между предприятиями стран Тихоокеанского региона и Дальнего Востока?
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Создание группы компаний?
С 1995 года возглавляет группу компаний "ЭЛВАН". "ЭЛВАН" - производитель и поставщик световой продукции на российский рынок.
В настоящее время в Приморье стартует проект "ЭЛВАН-ВОСТОК" - проект создания мини-кластера освещения, международные производственные площадки расположены на площади 16,5 тыс. м2, состоящих из промышленных, складских и коммерческих площадей, в том числе выставочного центра и электронной коммерции из единого логистического узла, специализирующегося на хранении и поставке осветительного оборудования в любых количествах.
Цель проекта" ЭЛВАН-ВОСТОК " – создание на Дальнем Востоке зоны международного промышленного сотрудничества малых предприятий, а также привлечение активных предпринимателей из Центральной России.
main office
56 Profsoyuznaya street, Moscow, 117393, Russia