By Yelena Zheberlyaeva
Perm oblast (region) is located in the Ural mountains, the traditional border between Europe and Asia. It is situated on the Kama river, one of the largest navigable rivers in Russia. The Kama provides access from Perm to five seas—the Azov, the White, the Baltic, the Caspian, and the Black—through a network of channels. The oblast has a population of over 3 million—its largest cities are Perm (1.08 million people), Bereznyaky (201,800), and Solikamsk (109,000). Located 1,100 kms from Moscow, it takes an hour and a half to travel between the city of Perm and the capital.
Leading Industry Sectors
The oblast’s Soviet-era industrial development has only recently been diversified. Perm manufactures 30 percent of Russia’s mineral fertilizers, 20 percent of pulp and paper, and most of its telephones. Perm oblast is considered to be the leader in Russia in chemicals, particularly oil industry- related chemicals; machine building; mining; and oil and gas extraction. Bereznyaky Titan-Manganese Plant is one of the largest of its type in the world and the only plant in Russia that manufactures magnesium alloys.
Former defense enterprises have been privatized and are restructuring their facilities to manufacture competitive consumer products. For example, Motovilikhinskiye Zavody manufactures consumer goods, agricultural equipment, and machines and machine-building equipment for local enterprises and oil and gas sector.
Food processing enterprises are developing rapidly after the 1998 financial crisis, which proved an impetus for local manufacturing of food and light industry. The majority of the population consider imported food products prohibitively expensive due to the ruble devaluation. Currently, many enterprises are seeking investors to upgrade their technologyand equipment to be competitive in the local market.
Foreign Investment andTrade
Over 300 foreign enterprises are registered in Perm oblast and foreign investment is $276.9 million. Over 50 percent of foreign companies are manufacturers, 30 percent are trading companies, and 10 percent are involved in the tourism, automobile, and transportation sectors.
In 1998, the foreign trade turnover for Perm oblast totaled $1.5 million with $1.2 million in exports and $302 million in imports. The major imports to Perm in the first quarter 1999 were machine-building equipment, chemicals, and foodstuffs—70 percent of all imports come from Europe. Perm’s major exports include methanol, cement, petroleum products, mineral fertilizers, and potassium salts.
A number of joint ventures are operating successfully in Perm oblast. Sun Group (u.k.) formed a joint venture with a local brewing company, which is now one of the top brewing companies in Russia. Nestle (Switzerland) has invested equipment and technology in Kamskaya confectionery, making the factory competitive not only in Perm, but all over Russia.
Another example of successful development is the Perm Motor Plant, a former military enterprise, which has a joint venture with Pratt & Whitney (U.S.) to upgrade engines for ps-90a model aircraft. Pratt & Whitney invested $3 million in the venture in 1998–99 to upgrade manufacturing facilities and make the plant competitive on the world market. It was scheduled to invest $5 million by the end of 1999.
For more information on the Urals, including Perm oblast, and a contact list for the oblast, visit BISNIS Online at www.bisnis.doc.gov/bisnis/country/regions.html#Urals.
Yelena Zheberlyaeva is the BISNIS representative in Yekaterinburg.