REGIONAL CORNER: PRIMORSKY KRAI, RUSSIA

 

By Svetlana Kuzmichenko

 

Located seven time zones east of Moscow, Primorsky Krai borders on China in the west, North Korea in the south, and Japan in the east across the Sea of Japan. It occupies 165,000 square kilometers and has a population of about 2.3 million people. The major cities of Primorsky Krai are Vladivostok, the capital, with a population of over 700,000, Nakhodka (162,000 people), and Ussuriisk (159,000).

 

Rich in natural resources, the Krai has reserves of coal (2 billion tons), timber (1.7 billion cubic meters), boron, tungsten, fluoride, lead, zinc, gold, copper, nonferrous metals, and fish.

 

Major Industries

Primorsky Krai is an active transportation area. Vladivostok is the eastern terminus of the Trans-Siberian railway. Transit of freight via sea, air, and rail between Pacific Asia, Europe, and the western and northern Russian territories is one of the leading industries in the Krai. The Krai has 14 large and small seaports, the most important of which are Vostochny, Nakhodka, Vladivostok, and Zarubino.

 

Fishing and fish-processing is one of the most important industries in Primorsky Krai, providing one-third of its budget income. Focused on deep-sea fishing, the Krai’s fishing fleets catch two-thirds of all fish in the Russian Far East and one-third of all fish in Russia. The most harvested species are pollock, cod, salmon, halibut, herring, crab, and plaice.

 

Mining, the third main industry of Primorsky Krai, has been in deep decline but is now recovering. Yaroslavsky GOK, which used to produce 80 percent of the country’s feldspar in Soviet times, is restarting production after several years of idleness. Bor, the largest manufacturer of boron in Russia, and Dalpolimetal, a manufacturer of zinc concentrate, are increasing production after several years of sharp decline.

Two-thirds of the territory is covered by forest. A large percentage of the Krai’s coniferous and deciduous timber reserves is exported to Japan and China in sawn logs. Recently, increased export duties for logs have forced local timber companies to pursue value-added timber processing and focus on the export of processed timber products.

 

The worst situation is in the local shipbuilding industry, which used to be one of the leading industries in the region. The largest shipbuilding and repair enterprises have experienced major declines in orders. Only the Nakhodka Ship Building company is currently successful. Others are diversifying into different sectors, such as consumer goods production.

 

Foreign Trade and Investment

According to the Krai Administration, total foreign investment in 1997 was $260 million. Leading investors are the United States, South Korea, Japan, Singapore, Switzerland, and Austria. Several hundred companies with foreign investment from 20 countries are reportedly active in Primorsky Krai. Most companies are involved in trade and services.

 

The Krai has founded a Foreign Investment Advisory Council to enable foreign companies to meet with local officials to discuss ways to reduce obstacles to foreign business activity. Among the U.S. companies represented or active in the Krai are Coca-Cola, which has a factory in the region, Caterpillar, CH2M Hill, IBM, Mars, West Coast Paper Company, PriceWaterhouseCoopers, and Wrigley. The Krai has already developed strong business relationships with companies and organizations from the U.S. West Coast.

 

For a complete profile of Primorsky Krai, visit BISNIS Online at www.mac.doc.gov/bisnis/country/regions.html#FarEast.

 

Svetlana Kuzmichenko represents BISNIS at the U.S. Commercial Service in Vladivostok.