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VEKA AG plant in Novosibirsk region

VEKA AG plant in Novosibirsk region

2002 – 2004


Building of a new VEKA AG plant in the Novosibirsk region

Within the period of 2002-2004, the project was fully implemented. At this moment, the project work is continued as part of the day-to-day operations of the facility. At this moment, the VEKA factory in the Novosibirsk region is the largest manufacturer of polyvinyl chloride casements along the Asian part of Russia; the facility operates state-of-the-art equipment and produces high quality commodities in full compliance with international standards.

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The facility manufacturing area is 8 200 m2, whereas the overall land area allocated to accommodate future facility development needs equals 10 hectares.

Read about building of the second turn VEKA AG plant.

The overall value of assets invested into the first production line totaled nearly 15 millions euro. The line annual productivity equals 14,000 metric tons. This is the largest investment project financed by a foreign company (100% of German capital), that has been accomplished within the construction sector of the region.

The client

German corporation VEKA AG, a leading European manufacturer of window and door plastic casements, plastic sheets and related products.

In addition to two factories located in Germany, VEKA corporation has 12 factories and 28 offices in other countries scattered along the four continents of the globe, including two facilities in Russia. In 2005, the corporation plans to start up three new extrusion plants in Brazil, Malaysia, and the U.S.

In 2014, the size of the corporation product market exceeded 1 billion euros.

Services provided by IC&M company as part of the project implementation

N Project Phase Services provided
I

Market analysis and review
Phase I implementation period - 20 calendar days

Market research, including the preparation of a goal-oriented plan of activities designed to increase the clients sales volumes and expend the number of customers attracting large industry players working in the region.

II

Selection of a project site for Сonstruction purposes
Phase II implementation period- 2 months

1. Selecting a project site meeting the requirements of terms of reference.
2. Conducting a preliminary legal assessment of title documents and examining the opportunities for completing the procedure of the land transaction.
3. Technical evaluation of the available utilities and their potential to provide the needed capacities

III

Registration of the rental rights for the project site selected by the client; obtaining official permits and approvals needed to start up the project; preparing terms of reference
Phase III implementation period - 5.5 months

1. Topographic mapping of the project site, identification of the site boundaries.
2. Arriving at the agreement with the local land administration as per the project site rental rights registration, signing the protocol of intentions with the regional government and local municipal authorities. Initiating the process by which the local authorities can make a preliminary decision to grant rental rights for the land plot in question.
3. Preparing a Statement on Selection of the Project Site and getting it approved by all relevant regulative, administrative and supervisory agencies (specifically, Federal Sanitary Surveillance Service, Fire Fighting Service, History and Culture Legacy Foundation, Geologic Information Fund, Ministry of Wildlife Protection, Department of Architecture, local telephone communications center, district power supply center, Forestry Committee, Land Resources and Management Committee, and others), ordering and working out necessary expert evaluations and layouts as needed.
4. Obtaining terms of reference for all needed utilities that guarantees the required level of services (power, heat, water and gas supply, sewerage system, communications services).
5. Obtaining terms of reference and official approvals for building of a railway siding.
6. Getting an official authorization to remove utilities and communication lines used by other consumers from the territory of the project site (in this case, a gas pipe line, two water supply lines, a communication line); to this end, terms of reference and other pertinent documentation are obtained from the utilities and communication lines owner.
7. Changing the land category of the project site by way of excluding it from the agricultural land category and subsequent re-classification as belonging to the category of industrial and other special use lands (ordering and conducting land surveys to obtain information about the soils of the project site and produce a geotechnical report; obtaining information on the site land use history; establishing a commission to make a report relating to estimated agricultural production losses due to the project site activities, and having the report approved by the relevant authorities). Submitting a request to and obtaining a positive decision from the administration of the Russian Federation entity based on this documentation, and initiating the issuance of the Governors decree on changing the land category of the project site.
8. Ordering and conducting land surveys to determine physical boundaries of the project site; compiling and submitting all necessary legal and land tenure documentation to the local land management committee in order to have the project site registered in the Federal Integrated Land Register with its subsequent recording in the land inventory file. Initiating the issuance of the final Decree on the project site leasing; preparing and signing of a rental agreement.
9. Registration of the rental rights with the federal judicial authority on registration of real property rights and transactions.

IV

Construction project management
Phase IV implementation period: project design period - 5 months; facility construction period - 14 months

1. Having the clients office officially registered at the address of the clients facility location.
2. Selecting a contractor out of the companies specializing in site engineering and geotechnical surveys. Making a risk assessment, including consultations with the Project Site Expertise and Examination Department, the Novosibirsk Region Department of Industrial Development, as well with local construction organizations and developers as per the quality of the contractor companys job. Signing a contract with the selected company on terms maximally beneficial for the client.
3. Selecting a contractor out of the companies specializing in project site development. Making a risk assessment, including consultations with the Project Site Expertise and Examination Department, the Novosibirsk Region Department of Industrial Development, as well with local construction organizations and developers as per the quality of the contractor companys job. Due diligence procedures are used to evaluate the contractors material and technical resources (including financial situation), business reputation, and the level of experience in industrial site development. Signing a contract with the selected company on terms maximally beneficial for the client.
4. Selecting vendors of construction materials and building contractors to conduct the required construction and installation operations. Making a risk assessment, including consultations with the Project Site Expertise and Examination Department, the Novosibirsk Region Department of Industrial Development, as well with local construction organizations and developers as per the quality of the contractor company? job. Due diligence procedures are used to evaluate the contractors material and technical resources ( including financial situation), business reputation, and the level of experience in the area of industrial building based on the results of on-site visits with the purpose to evaluate the quality of already finished facilities or facilities in process of construction. Signing contracts with the selected companies on terms maximally beneficial for the client.
5. Supervising the ongoing activities of the contracted project site engineering, development and construction companies, that includes:

  • Ensuring the compliance with the contract terms throughout the entire contract period;
  • Monitoring the work progress, analyzing potential problems, submitting timely reports on problems and challenges already encountered;
  • Providing assistance needed to promptly respond to various situations emerging in the process of the project implementation;
  • Providing assistance in dispute resolution, including disputes with administrative and regulatory authorities;
  • Providing an adequate control over the project budget, including the right to suspend, resume or terminate payments, impose sanctions, exercise control over payment settlement with subcontractors, to avoid the slow dawn of the project implementation.

6. Obtaining required permits, approvals and licenses for an access railroad construction, concluding contracts for the access railroad design and building.
7. Obtaining required permits, approvals and licenses for access motoroads construction; concluding contracts for the access motoroads design and building.
8. Obtaining required permits, approvals and licenses for getting an access to communications lines, and gas, water, heat, electricity supply; concluding contracts for new utilities lines design and building. Concluding power purchase agreements on terms maximally beneficial for the client.
9. Organizing and direct participation in the project staff meetings and meetings of the federal acceptance testing committee, providing necessary support and control over the process of putting the new facility in service. It took us two days to obtain the Federal Certificate of Acceptance for the new facility commissioning. At this moment, the facility is fully operated by its owners.

Project results

  • Deadlines for every project phase were met.
  • The new facility was commissioned and certified by the Federal Acceptance Testing Committee within two days.
  • Official document formalization and the process of obtaining necessary permits, licenses and approvals were completed within a very short period, in several cases - in record-breaking time.
  • High quality of construction and interior works was provided. The facility built in the Novosibirsk Region has been recognized by VEKA AG Board of Directors as number one among the company plants, regarding the quality of construction works, it has been decided, that the new facility surpasses the first company plant in Russia (located at the Naro-Fominsk district of the Moscow Region).
  • At the project construction phase, in addition to management and supervision functions, we also made efforts to attract new customers. During the two year period of the project implementation, the clients regional sales volume showed an increase by a factor of two. In addition, sales promotion campaigns were organized, with relevant agreements signed by the client and the regional administration. Also, issues regarding tax incentives, credit interest rate subsidizing, and other problems within the regional administration jurisdiction were dealt with.
  • In the course of the project implementation, IC&M has worked out unique mechanisms and tools based on the adjustment of up-to-date international practices and techniques to the local conditions and needs. Using such mechanisms and tools the company was able to successfully accomplish the project from the site selection phase to putting the newly constructed facility into service.
  • A unique experience gained by the company in terms of developing contacts and contracting local project design, development and construction organizations, now serves IC&M as an effective tool in selecting companies for various types of work based on identified goals and available resources. During the project implementation period more than 50 companies and organizations were contracted or otherwise involved in the process.
  • Effective mechanisms of co-operation with local authorities have been developed, procedures of getting permits, licenses and approvals from various administrative and regulatory agencies have been worked out and optimized. Based on such mechanisms and procedures, any project works and activities in future can be completed by the company within a shorter period.
  • At this moment, under the agreement with VEKA company, IC&M is working on extending the territory of the VEKA plant locating in the Naro-Fominsk district of the Moscow Region, formalizing documentation for a new project site and power supply connections.

Reviews

Joseph Leo Beckhoff General Director OOO VEKA Rus

Joseph Leo Beckhoff General Director OOO VEKA Rus

The first meeting between VEKA representatives and IC&M Company dates back to 2002, when VEKA was conducting research to evaluate the market capacity of the Novosibirsk region. The credit is to be given to IC&M for making comprehensive and detailed market studies available for our review. Based on this review VEKA later made a decision to invest in the Novosibirsk region.

Considering the positive market research experience, we assigned IC&M to undertake all pre-project works and to implement the construction project under an investment contract.

IC&M assistance was especially valuable as concerns the solution of the following questions:

  • Land plot search and registration
  • Transfer of the land plot from one category to another
  • Service line connection such as electric power, water, heat supply etc.
  • Contacts with local and regional authorities up to the Governor
  • Assistance in conducting tenders for participation in plant construction
  • Budget planning
  • Assistance in negotiations
  • Supervision of construction on the site
  • Tracking the deal on final registration of the investment object...

I believe this list is far from being complete, however it gives an idea of the multifaceted range of services provided by IC&M.

Undoubtedly, our progress in Siberia would have been not so impressive if we had started on our own, without support of our consulting agency. In addition, our amicable and trusting relationships make our cooperation quite special.

Summing up, IC&M was and remains an absolute lucky circumstance for VEKA.

Photo of project implementation stages

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IC&M Development Реализованные проекты
IC&M Development Реализованные проекты
IC&M Development Реализованные проекты
IC&M Development Реализованные проекты
IC&M Development Реализованные проекты
IC&M Development Реализованные проекты
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IC&M DEVELOPMENT


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  • 7 Kamenskaya St.,
    Novosibirsk, Russia
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