In case the Chinese company Lifan does not build its first car factory in Russia by the end of this year, it will cease to be a resident of the Lipetsk Special Economic Zone located in the Lipetsk region of the Russian Federation, Izvestia newspaper reports on Tuesday.
Three years ago, Lifan reached an agreement with the SEZ’s administration. The Chinese company received the status of a resident of the zone in exchange for an obligation to build an automobile factory that would produce 60,000 cars per year. The estimated amount of capital investment was supposed to be $300 million.
Nevertheless, Lifan was in no haste to invest, whereas the SEZ’s administration bore expenses. In particular, utility systems were laid. The Chinese company told Izvestia that it was the deterioration in the automotive market to blame.
As a result, the administration of the Lipetsk Special Economic Zone has set a deadline for building the plant on the site, and in case of failure to fulfill the deadline, the site will be handed over to another resident.