In Soviet times, the city of Ulyanovsk drew visitors from all over the country. Located on the Volga River, between Tatarstan and Samara Oblast, it is the birthplace of Vladimir Lenin – and bears his family name, Ulyanov – as well as Alexander Kerensky, another crucial figure of the Russian Revolution.

Yet, with the collapse of the Soviet Union, revolutionists lost their allure and so did Ulyanovsk. The city’s economy hit rock bottom in the 1990s and although it began gradually rebounding in the next decade, its population shrank by more than 20,000 people between 2002 and 2010 (Ulyanovsk currently has 614,000 residents).

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Logistics hub

Going against this exodus trend is AAR RUS, an aviation and logistics company. AAR RUS is currently in the process of bringing to Ulyanovsk a large maintenance, repair and overhaul centre creating 600 jobs.

“The Moscow region, with its large airports, Sheremetyevo and Domodedovo would be a natural choice for us. But Ulyanovsk [located 857 kilometres east of the capital] is just an hour away by plane from Moscow and we believe that in the future it can become a logistics hub not only for aviation, but also for rail, river and road transportation,” says Mukharbek Aushev, AAR RUS’s general manager and owner.

What made Ulyanovsk stand out as a location for AAR RUS’s new venture, says Mr Aushev, is the city's special economic zone (SEZ). Sitting on a 227-hectare plot of land, the zone gives investors access to utilities such as gas, water and electricity, but also to a cargo airport located close to its border. The zone also has access to the federal highway and railroad, and is located 17 kilometres from a cargo river port. Additionally, investors in Ulyanovsk SEZ can take advantage of its free customs regime and tax holidays of up to 15 years.

Special status

Ulyanovsk’s special status as a port zone also helps it stand out to aviation companies such as AAR RUS, says Denis Baryshnikov, head of Ulyanovsk SEZ. “We are the only zone in Russia with this status. While in other zones you have to produce goods to become a tenant, in ours you do not have to, so you can use your facility for aircraft maintenance or warehousing,” he says.

“And unlike many other zones in Russia, we [exist beyond the planning stage]. We are planning to finish all of the general construction by the end of the year, we are functioning and we are really there to provide help for investors.” 

Other aviation companies in the process of moving to the zone include Volga-Dnepr Group, Avia Solutions Group, Rostec and Promtech Ulyanovsk. With a few more, the odds are that revolutionists will no longer be Ulyanovsk’s main product.

The cost of this report was underwritten by Ulyanovsk SEZ (www.ulsez.ru). Reporting and editing were carried out independently by fDi Magazine.

This article was amended on June 22, with changes made to the company name, function and Mukharbek Aushev's job title.