May 1998

by Marina Kamayeva

Vologda Oblast is located in northwestern Russia, 550 kilometers southeast of St. Petersburg , and has a population of 1.4 million people. The oblast's capital is the city of Vologda, a major industrial center with a population of 320,000. It is an important rail and river transport hub, connecting Central Russia with the Urals and Siberia. Cherepovets (population 318,000) is the region's other large industrial city. Important natural resources include the region's extensive forests, flux limestone, dolomite, and extensive peat deposits.

Industry
Vologda produces 20 percent of Russia's iron, 18 percent of its steel, 19 percent of its rolled steel, 10 percent of its mineral fertilizers, and 6 percent of its timber and forest products. The region's major industries are metallurgy, chemicals, machine building, metal processing, woodworking, and pulp and paper. Flax processing is the leading light industry: two large flax spinning factories in Vologda and Krasavino, a lace firm, and several other linen mills.

The Severstal Steel Mill in Cherepovets is Russia's largest producer of rolled products, with an annual capacity of 12 million tons of hot- and cold-rolled sheet steel and other products. Vologda machine-building companies include the Vologda Bearing Plant; the Vologda Machine Tool Plant and Severny Kommunar, which manufacture wood-processing equipment; Vologda Machine Building Plant, a producer of dairy equipment; the Vologda Optical & Mechanical Plant, specializing in optics and household electrical equipment; Red Star, a supplier of pumps; and the Vologda Road Machines Plant which produces truck trailers. Most of Vologda's chemical output is produced by two large companies located in Cherepovets: Ammophos, a producer of sulfuric acid and mineral fertilizers; and Azot, which produces ammonia, non-concentrated nitric acid, ammonium sulfate, dimethyl benzene, and nitrous oxide.

Local builders are focused on construction of single family dwellings, which have grown from 3 percent of the total housing stock in 1991 to 14 percent in 1997. Vologda residents have invested $400,000 in housing construction bonds guaranteed by the regional administration over the last three years.

Vologda's total potential timber stock is 1.5 billion cubic meters of mature timber. The main forest products companies are VologdaLesprom, CherepovetsLes, and UstyugLes. Other important agricultural activities are livestock breeding and dairy farming. The primary grain is winter rye. Barley, oats, and spring wheat are also important crops. Dairy farming represents 70 percent of total agricultural production.

Foreign Trade and Investment
Vologda's foreign trade totaled $1.8 billion in 1997, of which exports were worth $1.5 billion. Leading exports include ferrous and non-ferrous metals, mineral fertilizers, forest products, and industrial equipment. Imports amounted to $252.5 million in 1997. The leading imports were machinery and equipment ($102.6 million), metals ($97 million), foodstuffs ($15 million), and chemical products ($11.2 million). According to the regional administration, trade with the other NIS countries is decreasing, while trade with Western countries is growing.

There are 174 companies with foreign capital in the region. In January 1997, total investment in these companies was $5.4 million. Successful foreign investments in Vologda include Avstrofor (Austria), in logging and wood processing; Alko Severo-Zapad (U.S.), a provider of auditing services; Skoda-VMZ (Czech Republic), trolley manufacturing; Volnotrans (Norway), which is rebuilding the Vysotsk Sea Port in the Leningrad Oblast; and Wologda-Krueger (Germany), in baby food production. For more information, visit BISNIS Online, at www.mac.doc.gov/bisnis/country/9804vol2.htm.

Marina Kamayeva works for the U.S. Commercial Service in St. Petersburg.

This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)