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 Chudovo-Cadbury Chocolate Company

The road from St. Petersburg to Moscow.
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An hour away, the city of Novgorod has been creating its own miracles.

Founded in the ninth century, this is the oldest city in Russia and an architectural jewel: Its bells were a symbol of democracy, enlightenment, and prosperity until Moscow's jealous princes sacked the city in 1471. Radishchev called this "might against right" and he mourned the fact Novogord could never be restored to its former glory.

But Novgorod's traditions were never entirely forgotten, and the city is proud to be in the forefront of reform again. Novgorod's progressive governor has created attractive conditions for investors—among them the Cadbury chocolate company.

Sheets of chocolate are cut into bars at Cadbury's new factory in the sleepy suburb of Chudovo. With its state of the art equipment, good working conditions and manicured lawns, the Cadbury plant rises like a mirage.

"We were joking: It's a bit like a spaceship in the desert," Managing Director Peter Knauer tells us.

The 43 year-old Knauer knows how difficult it is to make the transition from a communist economy; he's a former East German military officer. He lives in a trailer next to the factory where, for the past six years, he's supervised its construction and development. It's been a challenge, even with tax breaks and a sympathetic governor.

"The gap between modern manufacturing facilities like ours and the environment is huge," says Knauer. "And, this is a problem that the infrastructure in Russia is lagging well behind the investment coming into Russia. So, companies like ours have to understand that they must invest, not only in their own facilities, but into the infrastructure and the environment."

When Peter Knauer first started hiring, 2,500 people showed up for a handful of jobs

To meet its own standards, Cadbury had to establish environmentally effective waste systems, it had to completely revamp the local fire department, and, together with other foreign companies lured here, it anticipates investing in local schools so that future workers will be better prepared. And since there's basically nothing to do in Chudovo after hours, they plan to build some recreational facilities so skilled workers will want to stay here.

When Peter Knauer first started hiring, 2,500 people showed up for a handful of jobs. Igor Yermolovo, an experienced engineer, was ready to do anything just to get his foot in the door. He started in the stock room and is now in charge of technical development.

"It was my dream to have a job like this," says Yermolovo. " I love this job. I do like machinery, and metal. I can do whatever I want to do here. People in the technical department just love their jobs."

There is an elaborate security system throughout the plant. The man responsible for all this, Alexander Ovchinnikov, says there's a lot of organized crime in the area. It too is anxious to get a foot in the door.

"For foreign investors, it's a problem to defend themselves, their businessesm and their staff sometimes," says Ovchinnikov, "because some big guys, sometimes they try to involve you in some 'business.' And they directly threatened me a few times. They tried to be part of or business."

The threat, Ochinnikov explains, is "I'll hurt you, unless you bring me inside."

Cadbury now has 700 employees, and Director Knauer says Russians are beginning to believe they can make things better.

"The change is in peoples' mentality," he says. "People start to believe in change. They see change happen, and they start to believe that it's not impossible to change Russia into a modern country."

Next: Novgorod-Women's Parliament >>

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