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Economic development of the Republic of Karelia in 2002

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State of the Material Production Branches

In industrial sphere in 2002 in the republic, as well as on the Russian Federation as a whole, delay of rates of growth of industrial production has proceeded.

As a whole on the industry growth of industrial outputs has made 102.2% at predicted 102%. It is a little lower, than on the average on Russia (103.7%), however Karelia had higher rates of growth at the first stage of the epicritic period and has faster exhausted the potential connected to devaluation of rouble.

Growth of industrial outputs was achieved in ferrous metallurgy (106.9%), wood-processing industry (102%), building materials industry (102.8%), food-processing industry (135.4%), including fish industry (158.4%).

Volumes of industrial production in branches at the same time have decreased: electric power industry (92.8%), engineering industry and metal working (96.4%), logging industry (94.2%), light industry (93.9%) and flour-and-cereals industry (558%).

Engineering Industry

In 2002 in the given industry of the Republic of Karelia there were essential changes. If on results of the first quarter of 2002 the index of physical volume of industrial production made 66.9%, if the first half-year 81.9%, then in 2002 it was 96.4%. Thus, the volume of industrial production has made 2038.6 million roubles.

A basis of republican mechanical engineering make such large enterprises, as Open Society "OTP" and Joint-Stock Company "Petrozavodskmash" which render determining influence on the state of affairs in the branch.

As a result of replacement of administration of Open Society "OTP" and the measures undertaken on expansion of the commodity market of production, organization of the dealer network and development of more effective schemes of sales, the factory has managed to liquidate the backlog allowed in the first half-year and to achieve the parameter of 662 tractors or 101.2% on sales of equipment in 2002 compared to 2001.

Joint-Stock Company "Petrozavodskmash" in 2002 has increased manufacture of chemical equipment and spare parts to it (by 2.1 times in established prices to the level of 2001). At the same time decrease of volumes of manufacture of paper-making equipment by 12.5% and moulding for sale by 27% rendered negative influence on both parameters of work of the enterprise, and has had an effect on results on branch as a whole. Manufacture of wood-processing machine tools in Open Company "Stankozavod-DeKO" has 33.3% increase.

It is necessary to note successfully developing enterprises, such as Open Company "Karhakos" and its branch of Open Company "АЕК". Due to introduction in operation of new industrial shops where automobile electroposting is assembled, output in 2002 has doubled in comparison with 2001 that has made 33.5 million roubles. Number of workers has grown from 177 employees in 2001 up to 305 employees in 2002.

Now Open Company "Karhakos" together with the Finnish partners study plans of accommodation of the second-order of manufacture including for release of electronics in the town of Kostomuksha with construction of floor spaces of 5500 sq.m. and creation of up to 400 new workplaces.

Situation at the Open Society "SSZ" Avangurd" remains difficult, since there decrease of 9% volumes of manufacture was allowed. Despite of measures undertaken, it was not possible to improve financial condition of the enterprise.

The volume of manufacture of the Open Society "Byelomorsky metalcutting factory" was kept at the level of 2001.

Power Industry

In 2002 the current consumption in the republic has increased in comparison with 2001 by 1.1 percents and has made 7540 million K.W.H. Because of low water content of the rivers of Karelia, own stations have produced only 3760.7 million K.W.H., that makes 88.1 percents to the level of 2001, and, thus, provision of the republic with the electric power of its own manufacture makes only 49.9 percents. Within one year intense conditions in the sphere of electrosupply of the consumers, connected with non-payments for the consumed electric power was kept.

The debts of consumers for the electric power within one year was not reduced but even has a little increased and as of 01.01.2003 makes 768.25 million roubles.

Due to non-payments, Open Society "Karelenergo" weekly enters restrictions to consumers - up to 15-20 defaulters, and in some cases practises full switching-off of objects, that negatively influences financial and economic parameters of work of the enterprises. Under these conditions the Government of the Republic of Karelia has undertaken concrete measures on decrease of intensity in mutual relations of power engineering specialists and of consumers of energy: on payment of the delayed debts and maintenance of the current payments, and also restoration of electrosupply of vital objects of housing and communal services.

In 2002 preparation for reforming the Karelian power company Open Society "Karelenergo" was carried out. The tripartite Agreement between the Government of the Republic of Karelia, Russian Open Society "UES of Russia" and Open Society "Karelenergo" about reforming the power complex of Open Society "Karelenergo" according to which stages of reforming of Open Society "Karelenergo" are determined and the obligation of the parties on prevention of negative consequences for the republic connected with branch reforming is made.

Light Industry

In 2002 the light industry enterprises' production was worth 172,3 million roubles, or 2,7 times more in established prices than in 2001. At the same time, according to statistics, the index of physical volume of industrial production has made 93.9%.

The Open Company "Vega Plus" has considerably strengthened its position in the market, the gain of volumes of manufacture has made 46%, basically due to growth of release of jackets by 38.6 %, trousers by 12.5 %, and overalls 2.3 times, number of employees has increased by 70 person, the branch in Lahdenpohja for 50 workplaces was open.

Joint-Stock Company "Ontex" has 25.2% output increase due to growth of manufacture of knitted clothing and garments, Joint-Stock Company "Rantempo" - by 17.7%. As a whole in the republic manufacture of footwear in natural expression has grown 900 pairs, or 14.1%, manufacture of knitted items - 1.2 thousand pieces, or 5.4%. At the same time there was a decrease of manufacture of some kinds of garments: bed-clothes, men's shirts, dresses, workers' overalls and of some other.

Many enterprises insufficiently effectively use their fixed capital which the significant part does not meet modern requirements.

A number of large enterprises of light industry search for the way out for the created position and develop investment projects and business-plans of the further development.

In 2002 two enterprises of light industry: Open Company "Vega Plus" and Joint-Stock Company firm "ANA" have passed selection in competition of investment projects and have received budgetary credits from the republican budget. Realization of projects will allow to considerably increase volumes of manufacture, to update the out-of-date equipment, to create addition workplaces, which it is very important at deficiency of workplaces for women. Due to the limited demand of home market for the made production, many enterprises of light industry of the Republic of Karelia (Joint-Stock Company firm "ANA", Open Society "Rantempo", Open Company "Vega Plus", etc.) for a long time carry out orders of foreign firms for tailoring footwear and garments of customers' materials and accessories working in the mode of raw material processing under the customs control. Densities of such orders in total amount of manufacture is significant, and their performance allows to keep workplaces to provide employment of the population and receive taxes for the budgetary system.

At the same time it is necessary to note, that heads of some enterprises extremely slowly adapt for work under the market conditions. For example, inability to pay off the duties has resulted in the fact that since August 1, 2002, Joint-Stock Company "Severyanka" has stopped its industrial activity. Simultaneously, since August 1, 2002, the new enterprise Open Company "Severyanka factory" has started to work, that has allowed to keep manufacture and most of the employees.

Printing Industry

The enterprises of the polygraphic industry in 2002 worked stably.

The volume of the commodity output made by the state enterprises in 2002 in the comparable prices has made 107.5% to the level of 2001. Manufacture of writing-books on has 9% growth, 13% of books, and 11% of newspapers. Basically the polygraphic enterprises according to results of work for 2002 are profitable, pay taxes to the budget and unappropriated funds in due time, the average wages have 22% increase.

Within the framework of the state support of book publishing in the Republic of Karelia from the republican budget it was allocated more than 1,5 million roubles, including for the further financing of the Karelian encyclopedia. It has been issued ten book items, which are mostly written by local authors.

In the Republic of Karelia more than 150 printed mass media items are registered, although only about 50 newspapers are issued. The total circulation of one release of newspapers in Karelia makes 363 thousand copies. Electronic mass media cover with their broadcasting almost the entire republic, the opportunity of receiving TV channels is possessed by about 704 thousand inhabitants.

In each district (city) of the republic the newspaper is issued being supported from the republican budget for partial indemnification of charges of the editorial boards related to purchase of newprint, polygraphic charges and delivery. According to the Law of the Republic of Karelia "On the republican budget for 2002" 1800 thousand roubles from the republican budget is allocated for state support of regional newspapers.

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Created: April 22, 2003. Last updated: April 22, 2003.
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