The document was endorsed by the Vologda Region Governor Oleg Kuvshinnikov and the director for interaction with state authorities of X5 Retail Group Stanislav Naumov. This is one of the leading Russian grocery retail companies, which manages the stores of several retail chains, including such well-known brands as Pyaterochka, Perekrestok, Karusel and others.
“The Vologda region has an advantageous geographical location: we are situated at the crossing of motor-, rail- and waterways, and within a radius of 700 kilometers from our region, there are about 50 million people - this is a huge distribution market. Hence, it is absolutely justified to create a logistics center here. For our part, we are ready to support the project, giving you regional investment incentives,” Oleg Kuvshinnikov noted.
Currently, the Vologda Region Development Corporation has selected several potential sites for the logistics park. Among the priority ones there is Rybkino near Vologda. The territory is already equipped with the necessary engineering infrastructure.
“We confirm our interest and intention to build in the Vologda region a modern high-tech distribution center. At first, we were considering the year 2021, but now we decided to bring the launch date closer to 2020. Our task by this time is to ensure that the new distribution center serves 300 retail stores located at a distance of up to 500 kilometers,” Stanislav Naumov emphasized.
In addition, during the negotiations, the parties discussed the issue of increasing the share of Vologda products on the retail chains’ shelves. In the Vologda region, X5 Retail Group is represented by 128 supermarkets at walking distance. Over the past two years, investment in the reconstruction and opening of retail outlets is about 1 billion rubles, so that over 1,400 new jobs were created in the region.
“The more supply of local products we will increase, the more popularity we will have among the Vologda citizens. We respect the competition, that’s why we welcome the development of your regional trading networks. We see you as our strategic partner and are grateful for such an attentive attitude. We will try to correspond and justify this trust,” Stanislav Naumov assured.
In order to support the Vologda manufacturers, Buy Vologda Products Program is implemented in Pyaterochka trading network since 2014. Within the framework of the program over 380 products of local commodity producers are delivered to the counters. Today the parties came to the arrangement that this list will be reconsidered and significantly expanded.
“We are successfully implementing Licensed Warehouse Project to supply products to our social institutions at the regional and municipal levels. That’s why the logistics center that you plan to open is a new window of opportunities. We can synchronize these two projects to get a synergistic effect. In this issue, the Vologda region can become a pilot territory for the further dissemination of this best practice in other regions of operation,” Governor suggested.
The negotiators agreed that the new distribution center will significantly decrease transportation costs by reducing the logistics leg, increase the volume and sales markets of the Vologda region production, as well as provide opportunities for the creation and development of related small businesses.