REGIONAL CORNER: PRIMORSKY KRAI, RUSSIA

 

By Svetlana Kuzmichenko

 

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

 

Rich in natural resources, the Krai has reserves of coal (2billion 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. Vladivostokis the eastern terminus of the Trans-Siberian railway. Transit of freight viasea, air, and rail between Pacific Asia, Europe, and the western and northernRussian territories is one of the leading industries in the Krai. The Krai has14 large and small seaports, the most important of which are Vostochny,Nakhodka, Vladivostok, and Zarubino. 

 

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

 

Mining, the third main industry of Primorsky Krai, has beenin deep decline but is now recovering. **YaroslavskyGOK**, which used to produce 80 percent of the country’s feldspar in Soviettimes, is restarting production after several years of idleness. **Bor**, the largest manufacturer of boronin Russia, and **Dalpolimetal**, amanufacturer of zinc concentrate, are increasing production after several yearsof sharp decline.

Two-thirds of the territory is covered by forest. A largepercentage of the Krai’s coniferous and deciduous timber reserves is exportedto Japan and China in sawn logs. Recently, increased export duties for logshave forced local timber companies to pursue value-added timber processing andfocus 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 largestshipbuilding and repair enterprises have experienced major declines in orders.Only the **Nakhodka Ship Building**company is currently successful. Others are diversifying into differentsectors, such as consumer goods production.

 

Foreign Trade and Investment

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

 

The Krai has founded a Foreign Investment Advisory Council toenable foreign companies to meet with local officials to discuss ways to reduceobstacles to foreign business activity. Among the U.S. companies represented oractive 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 withcompanies and organizations from the U.S. West Coast. 

 

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

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*SvetlanaKuzmichenko represents **BISNIS**at theU.S. Commercial Service in Vladivostok.*