The industrial complex is the most developed branch of Primorye's economy. It yields almost a third of the gross regional product. It concentrates 30 percent of the basic industrial funds and 27 percent of the region's able-bodied population employed in the economy.
The industrial complex is made up of the fishing and fish processing branches, energy generation and coal mining, tool building and ship repairing, ore mining, logging and wood processing.
Logging and wood processing
Logging and the wood processing industry is one of the oldest branches of Primorye's economy. With the commencement of the mining of a number of mineral resources and the strengthening of the marine orientation of the regional economy, logging lost its priority in the industrial structure. It accounts for 3.4 percent of Primorye's total industrial output. The industry employs some 12,000 workers. More than three fourths of timber products are exported.
The technological structure of the industry is comprised of the logging and wood processing sub-industries whose outputs are at the ratio of 60 to 40. The main logging bases of the region are located in Anuchinsky, Chuguyevsky, and Krasnoarmeisky Counties. The main tree species in demand on both the domestic and international markets are coniferous, larch, birch, and ash trees.
Timber export is virtually 100 percent unprocessed wood (round logs, processed wood chips). The region also manufactures sawed timber, furniture, packing crates, and other products. Low quality wood is processed into wood chips to be exported to Japan.
The cities of Lesozavodsk and Dalnerechensk are the centers of the region's wood processing industry.
Ore mining
The ore mining industry consists of non-ferrous metallurgy, mining chemistry, and coal mining.
The region produces more than 80 percent of Russia's fluorspar , 71 percent of tungsten concentrates, 90 percent of boric products, 80 percent of lead concentrate, 30 percent of its refined lead, and a fifth of Russia's tin.
Resource base for non-ferrous metallurgy are the large deposits of complex ores located in the north counties and a fluorspar deposit in Khorolsky County.
Non-ferrous metallurgy and mining chemistry account for 3.4 percent of the value of the total industrial output in the region. They employ some 12,000 people.
Non-ferrous metallurgy is represented by the 100-year-old joint-stock company Dalpolimetall based in Dalnegorsk which specializes in mining lead and zinc ores, smelting lead, bismuth, and silver and exports over 60 percent of its products. The joint-stock companies Primorsky Ore Concentrating Combine and Lermontovskaya Ore Mining Company are engaged in the mining and processing of tungsten ores. JSC Yaroslavsky Ore Concentrating Combine deals in fluorspar, or fluorite while Stanum Co. ltd., and Vysokogorsky Cooperative Society based in Kavalerovsky County are engaged in the mining and processing of lead ores. A number of companies such as JSC Ore Mining Company Vostok, JSC Primorsky Ore Concentrating Combine, JSC Imkar, and Cooperative Association Okean are mining noble metals.
The Mining chemistry industry is the youngest in Primorye. It is represented by the Dalnegorsk-based JSC Bor which is Russia's only manufacturer of boric products. Bor produces boric and sulfuric acids, calcium borate, and other boric products received from the processing of datolitic ores. The company exports over 50 percent of its products.
Primorye's coal mining industry accounts for 10.6 percent of the total industrial output. The industry employs some 23,000 people.
The resource base for coal mining is formed by a series of separate coal basins and deposits, chiefly in the south of the region, the largest of which are the Bikinskoye and Pavlovskoye deposits. Their commercial reserves are estimated at 700 million and over 500 million metric tons respectively. Primorye coals are used almost exclusively as boiler or furnace fuel.
Machinery building and metal processing
Tool building and metal processing are two of the key branches of Primorye's industrial complex. They produce almost 8 percent of the regional industrial output. The industries concentrate about 20 percent of the basic industrial funds of the region's industry. The main specialization is ship repair and ship building, machinery and device building, and aviation construction.
The repair of marine ships of various types and purposes accounts for 60 percent of the machinery building output. Regional enterprises produce planes and helicopters, navigation devices, manually and remotely operated piping fixtures of various purposes including ones for fuel and aggressive fluids, wood processing machines, and medical and domestic appliances.
Machine and device building enterprises in the region employ qualified personnel, contemporary high precision equipment and are able to produce high quality products. The companies in the industry are working out or implementing a number of promising projects aimed at the manufacture of competitive products demanded both in Russia and abroad, and at the development of the regional infrastructure.
Such projects include the construction of fishing vessels for multi-purpose long-line fisheries, refrigerated transports of 500-tonne capacity, tankers of 600-tonne capacity, production of light transport helicopters of MI-34 type designed for conveyance of passengers and cargoes and for the training of pilots or sport flights. Its can be also be used for rescue and patrol purposes, agricultural works and production of domestic appliances. Machine builders are capable of, and interested in, placement of orders for various types of casting from ferrous and non-ferrous metals.
Electrical Energy Industry
The electrical energy industry takes up a third of Primorye's industrial output structure and is a highly important element of the industrial infrastructure. Power lines (500 to 200 kilowatt) in the more populated southern Far East are united into an energy system that has a unified working mode. However, the Primorye power system works almost exclusively for the needs of the region.
The designed capacity of the regional power stations is 2691,6 Mwt and its output comes to 7.7 billion kilowatt/hour.
The region's largest consumers of electricity are industry (manufacture of construction materials, machine building and ore mining companies) and housing and utility maintenance with 38 and 23 percent of the total consumption respectively.
Food Industry
The food industry is comprised of 13 large branches comprising 350 companies (including small businesses and joint ventures). One hundred and five of them are joint-stock companies reformed from state-owned enterprises. The food industry constitutes 38.4 percent of the region's industrial output, of which 15 percent is accounted for by the processing branch. Food industry disposes of industrial basic funds worth more than 18.6 trillion rubles (31.1 percent of the worth of funds in the region's industry). It employs 52,000 personnel which is 27 percent of the employed in industry.
Companies are improving the assortment of products while employing contemporary technology and new production lines.
In 1998, more than 100 new food products were developed and introduced at the food industry companies. Sometimes, the products included raw materials from the Ussury taiga and the sea. For example, Ussurisky Balsam produced and marketed three new products including balm syrup Herbamarine which is recommended by the Russian Academy of Medical Sciences as a curing and disease preventing additive. The syrup was displayed at international trade shows in South Korea, Germany, France, Thailand, and Japan where it was highly graded.
Production of mineral water Monastirskaya by KMS Slavda and various beers by Pivoindustria Primorya is highly profitable. These products enjoy a high demand and were repeatedly judged to be the best at Russian and international trade shows.
Investment programs have been developed for a steady development of the processing branch, but the lack of funding prevents their implementation.
Primorsky Sakhar is one of the largest sugar maker in Russia and the sole sugar plant located in East Siberia and the Far East. This enterprise of federal importance supplies its product to the West and East Siberia, Kamchatka, Sakhalin, Amurskaya Oblast, and the Far North and has been operating stably for the past three years. At present, the enterprise's capacity is 150,000 metric tons of sugar per year. An upgrade is anticipated that will allow it to double output of sugar made from imported raw supply.
Fishing Industry
The fishing industry occupies a leading position in the structure of the regional industry and exerts a great influence on the economy of not only Primorye and Far East, but on all of Russia. It accounts for 33 percent of the national yields of fish and sea products, 30 percent of Russian output of fish food including canned fish, and 53 percent of fish powder output. The fishing industry constitutes 29 percent of the industrial output in the region and it accounts for three fourths of the regional food output. The sector employs 35,000 people which is 20 percent of the employed in all industry.
At present, more than 130 companies operate on the territory of Primorye, 10 of which are publicly-traded joint-stock companies, over 90 are small, and 12 are joint-ventures with foreign partners.
The bulk of product is made by joint-stock companies (91.7 percent), small companies account for 5 percent of the fish catch and 3.2 percent of fish food production despite their growth in number (71.8 percent of the total).
The fishing sector companies annually harvest over 1.5 million metric tons of fish and sea products, of which fish is 96 percent and sea products are 4 percent.
The most common species is pollack (85 percent of the total catch). Herring accounts for 9 percent, cod 1.4 percent and greenling 1.1 percent, while more than half of sea products is squid (1.8 percent) and crab (1.1 percent).
All companies cumulatively produce about 800,000 metric tons of various fish food per year, the bulk of which is frozen or chilled (64.5 percent of total). Production is rising for processed foods such as mince, frozen fillet, caviar. These account for about 30 percent of the total fish food production. Fish fillet is greatly sought after on the domestic and foreign markets and accounts for 11.2 percent of the total fish product.
More than 110 million units of canned fish are produced every year. These are primarily composed of natural fish (37.8 percent) or of fish in oil (11.8 percent).
Over 400,000 metric tons of fish products per annum is exported. The largest consumers of Primorye fish products are Asian Pacific countries such as Japan (32 percent of the total fish exports), the United States of America (21 percent), and South Korea (10 percent).
The regional fish industry disposes of basic industrial funds worth more than 17 trillion rubles (30.6 percent of all regional funds). The technical condition of the fleet is unsatisfactory; deterioration has reached 60 percent.
Transport
Transport is one of the leading branches of economy in the region. It concentrates about 17 percent of the basic funds and employs over 13 percent of the regional work force. Transport forms almost 16 percent of the total gross regional product.
Of the total services export, the export of transport services from Primorye amounts to 90 percent. This exceeds the export of transport services of Sakhalin and Novosibirsk Oblasts by nine times, of Chita Oblast by 370 times, and Amurskaya Oblast by 870 times. Sea transport accounts for 97 percent of the export of transport services and air transport accounts for 3 percent.
Railway Transport
In the Primorye economy, the railway transport is of a great significance as it is virtually the only long-distance transport that can move cargo from the west of Russia to the east and vice versa. Primorye is a starting point of the Trans-Siberian railway which is becoming a cheap and reliable way for transit cargoes from South East Asia to reach Europe. It is capable of shipping transit cargo to the newly independent states such as Kazakhstan, Tajikistan, Turkmenistan, and is ready to handle cargoes en route to the Near East, Iran, Afghanistan, India, and can also handle the cargo flow from North China, taking some load away from the Trans-Chinese railway.
The principal railway carrier in Primorye is the Vladivostok Branch of the Far Eastern Railway. It accounts for 40 percent of all cargo handling in the region.
Primorye has the highest density of railway tracks in the Far East, and is also above the Russian average. Rail links connect the Trans-Siberian to the regional sea ports such as Vladivostok, Nakhodka, Vostochny, Posiet, and Zarubino.
To ensure internal and transit transportation throughout the region the following projects are either underway or on paper:
- construction of a double width railway between Kraskino in Primorye and Hunchun in northeast China with the tracks width of 1,520 and 1,432 mm.
- extension of mixed tracks to Troitsa Bay.
- upgrade of the Khasan-Kraskino-Ussurisk railway and its links to the ports of Posiet and Zarubino.
- reconstruction of a rail bridge at the Ussurisk-Pogranichny-Suifengheh stretch.
Sea Transport
Primorye vessels operate 80 percent of all the transportation services in the Far East. Sea transport companies annually ship up to 33 percent of all cargo conveyed in Primorye. Sea transport accounts for 60 percent of the cost of the total transport basic funds and for 10 percent of the total basic funds of the regional economy.
Sea transport in the region is represented by various types of vessels. A considerable portion of them are freighted on the international lines.
The largest sea transport companies are Vladivostok's Far Eastern Shipping Company and Nakhodka's Primorsk Shipping Company. Far Eastern Shipping Company is engaged in overseas transportation and coastal shipping to the north of the Far East and the Arctic. Primorsk Shipping Company targets oil transportation on coastal and overseas lines.
The total number of sea transport companies entitled to fulfill the following operations is:
- cargo transportation - 65 companies;
- passenger transportation - seven companies;
- towing of boats and other floating items - 14 companies;
- agent services - 64 companies;
- ship's chandler services - 40 companies;
- surveillance services - 19 companies;
- warehousing - 40 companies;
- loading and unloading - 47 companies;
- services to passengers in the port area - three companies;
- ship piloting - six companies;
- training - one company;
- forwarding services - 73 companies;
- brokerage in all types of freighting for transportation of cargo or passengers - 47 companies.
Ports
Ports play a key role in the functioning of sea transport. The three largest industrial and transport nodes of Primorye are Vladivostok, Nakhodka, and Khasan.
The cargo handling capacity of the Vladivostok node is 6.6 million metric tons per year; Nakhodka node 29 million metric tons per year; and Khasan node about 1.5 million metric tons per year. Of the total workload, exports and imports account for 90.6 percent in the Vladivostok node, 94.6 percent in the Nakhodka node, and 75.3 percent in the Khasan node.
The Vladivostok industrial and transport node includes the commercial and fishing ports, and piers of Primornefteproduct oil company.
Vladivostok's commercial port specializes in timber, general and bulk cargoes and has versatile deep-water piers and a container pier equipped with pier and storage container cranes. The port is able to handle over 4 million metric tons of cargo per year.
Vladivostok Sea Fishing Port is the special purpose fishing port in the Far East basin. It deals with perishables that require a special technology in handling and storage. Lately, the port has also handled ecologically friendly general cargo such as timber and metals.
The Nakhodka industrial and transport node comprises Nakhodka Commercial Sea Port, Nakhodka Oil Port, Nakhodka Sea Fishing Port, and Vostochny Port.
Nakhodka Commercial Sea Port specializes in Magadan and Arctic lines, and export and import operations such as the handling of timber, grain, and general cargo. It can handle over 6 million metric tons of cargo per year.
Nakhodka Oil Port has a narrow specialization and targets the provision of oil to the Russian Far East and oil exports. Its capacity is over 5 million metric tons of oil per year.
Nakhodka Sea Fishing Port apart from fish handles general cargo and timber which constitute about 50 percent of its turnover.
Vostochny Port is the largest general purpose port and disposes of major specialized cargo transfer complexes for the transfer of large tonnage containers, wood chips, coal, and timber. The port is able to handle over 18 million metric tons of cargo per year.
The Khasan industrial and transport node comprises the ports of Posiet and Zarubino with a cumulative capacity of 1.5 million metric tons per year. Posieyt specializes in general and bulk cargo, Zarubino in general cargoes.
On the sea coast of Primorye, there are about 10 more small ports and piers that mainly ship timber and ore mining products.
Air Transport
Air transportation is chiefly carried out via the region's main air port "Vladivostok" which has the license to service international flights.
The region's main air carrier Vladivostok Air has reliable aircraft and highly qualified personnel able to do sophisticated aviation work in an area that is otherwise difficult to access. The company has shown itself as a reliable partner in transportation overseas and is registered internationally.
Located close to sea ports, the Golden Valley air port has great potential for international cargo transit.
Local air flights connect 20 towns in the region.
The total length of airlines flown within the region is 6,385 kilometers. Annually, 43,000 aircraft are serviced , of which more than 25,600 are transit. The trans Siberian route that brings in more than half of revenues from Russian air space user fees starts here. The importance of the route will increase in the years to come.
The international airline market in Primorye is the most promising compared to other Far Eastern regions because of its geographical location. The lifting of restrictions from the region has lead to the annual growth of international air transportation. Since 1991, flights have started to Anchorage and Seattle (USA), Toyama and Niigata (Japan), Harbin and Changchung (China), Seoul and Pusan (South Korea), Pyongyang (North Korea), Bangkok (Thailand), and Singapore. In the future, it is planned to open air flights to Tel-Aviv, Frankfurt, Delhi, Tokyo, Taipei, and several more Chinese cities.
Automotive Transport
General purpose automotive transport annually handles about 7.5 million tons of cargo and over 280 million passengers. Transport and other companies use over 21,000 trucks and 4,000 buses. More than 370,000 vehicles are privately owned.
The length of hard-surface roads is about 10,000 kilometers. The main road connects Vladivostok and Khabarovsk. Of great importance are the roads Ussurisk-Arseniev-Kavalerovo-Dalnegorsk, Dalnegorsk-Ternei, Nakhodka-Lazo-Olga, Dalnerechensk-Novopokrovka-Vostok, Vladivostok-Nakhodka.
The dynamics of the development of Primorye's foreign economic ties allows it to forecast the growth of foreign trade-related transportation by automotive transport through sea ports and land checkpoints.
Communications
Primorye has all contemporary types of communication - postal including DHL, telegraphic and telephone including satellite systems, telex, and facsimile. Available also are electronic mail, Internet, Inmarsat (communication with ships at sea), and data transfer nodes Infotel, Relkom, and Sprint.
The total capacity of automatic telephone stations in the region exceeds 300,000 numbers. Residents of all towns and county centers have the possibility of direct-dial long-distance calls. The amount of telephones per 100 families in urban areas is 37 (over 40 in Vladivostok), in rural areas 21. About 160,000 long-distance calls are made every day in the region.
Electrosvyaz joint-stock company accounts for the bulk of electronic communications. The company has 36 affiliates, Vladivostok's Long-Distance Telephone Station, Vladivostok's City Telephone Station and Vladivostok's telegraph. Cellular communication providers such as Primtelefone and AKOS have begun operating in the region. A number of new telephone companies have started to be active as well.
A digital automatic long-distance telephone station called EWSD and made by Siemens was put into operation in Vladivostok in 1996. In 1997, digital stations made by Siemens were installed in Ussurisk and Nakhodka. The stations offer new types of communication such as video conferences. The cities of Nakhodka, Ussurisk, and Artyom are provided with high quality digital data transfer telephone channels. There are digital communication channels to Moscow. Subscribers can utilize high-speed data transfer networks and high quality long-distance connection.
A fiber-optic communication line has been built between Vladivostok and Ussurisk.
A television network is well-developed in the region. Primorye has stable reception of four national television channels via a satellite. The existing radio transmitting network has about 1 million subscribers.
Farming
Farming is spread throughout the region, but it is chiefly concentrated in the south and southwest. The total land area is 16.5 million hectares including 1.5 million hectares of farmlands and 0.75 million hectares of ploughed fields. Of the total land space 109,000 hectares are irrigated and 183,200 hectares are drained. 56,900 hectares of the irrigated land requires improvement and an upgrade of the irrigation systems, including 21,500 hectares that need an overhaul of the irrigation grid and drainage manifolds. The region is considered scarce of land. There are 0.7 hectares of farmlands per capita including 0.35 of ploughed fields.
The region's temperatures are sufficient to cultivate virtually all crops including those that thrive in warmer climes such as rice, melons and gourds, egg plants, and pepper. Most soils have a heavy mechanical composition.
The largest output of farming produce comes from Artyom (10 percent of the region's gross product), and counties such as Ussurisky (7 percent), Spassky (5.7 percent), Nadezhdinsky (5.3 percent), Chernigovsky (5.2 percent), Mikhailovsky (4.7 percent), Khorolsky (4.4 percent), Khankaisky (4.1 percent).
Of the total output, plant growing accounts for 53.4 percent and stock-raising accounts for 46.6 percent.
The crop structure is as follows: grain crops are up to 35 percent (of this wheat accounts for 21 percent), soy is 20 percent, potato is 11 percent, vegetables are 3 percent, fodder is 31 percent.
Soy growing is one of the farming priorities. Owing to a high protein and fat content soy is considered one of the most valuable crops. There are plans to increase soy production and deep processing.
Primorye is one of the largest rice producers in the country. However, its production has fallen drastically lately because of lack of funds for melioration. There is a realistic possibility to restore the potential of rice farms through reconstruction and repairs of the rice-growing systems.
Soy and rice production is possible not only for the needs of the Far East, but for the Pacific Rim countries as well.
Domestic production completely meets the demand for potato, melons and gourds, honey, and covers 95 percent of the market for eggs, and 35 percent for the milk and meat.
Primorye is considered one of the best honey-making areas in the country. Honey production amounts to 7,000 metric tons per year or more than 30 percent of the Russian Federation's total output. The export of honey and honey-based products is possible.
Animal breeding is developed in the region, mostly the breeding of mink and young Siberian stags for antlers. If the market expands there is a possibility to build up production.
Farming employs over 70,000 including 3,200 individual farmers.
New development trends in the private sector include meat, milk, potatoes, and vegetables.
The Construction Complex
Major construction is an important branch of Primorye's economy. Facilities worth 2.15 billion re-denominated rubles were put in operation in the past year. The market orientation of construction has been increasing and the private sector has been taking a stronger position. Thus, of 1908 construction contractors, 156 have mixed ownership, 1,720 are private, 21 are state-owned, and one is municipal. Private companies have contracts for the largest amount of work which is 45.7 percent, mixed ownership companies do 29.2 percent of construction work, and state-owned companies take up only 1.1 percent.
The Primorye administration policy is working to speed up the investment process. The most important goal is to develop regional investment legislation. The administration is also working to create a specialized market infrastructure, to establish an informational openness, and to increase the region's attractiveness to investors.
The Primorye Duma has passed a law "On Investment Activity in Primorye Region" which grants both Russian and foreign investors considerable concessions on regional taxes with an option of exemptions.
The Russian government issued decree No. 480 of April 15, 1996 to approve a federal targeted program for the social and economic development of the Far East and the Trans Baikal area from 1996-2005. The program was given the status of a presidential decree by order of the President of the Russian Federation, No. 601 of April 23, 1996.
The program comprises 23 sub-programs with a list of investment projects relating to virtually all branches of the economy, which if implemented, will ensure growth of the regional economy.
Primorye administration
Economy and Planning Committee
Chairperson Svetlana Parinova
1998
