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State of the Material Production Branches
Industry
In 2003 it was possible to keep positive changes of the basic economic parameters, however the rate of growth of industrial production was slowed down. On the republic the index of physical volume of industrial production has made 100.8%, and 103.3% on large and medium enterprises.Delay of rates of economic growth is related to a number of adverse factors.
In the first quarter of 2003 due to extraordinary severe winter, and also as a result of outstripping increase of prices and tariffs for services of natural monopolies physical volumes of industrial production have essentially decreased (13% on the average).
There was a reduction of physical volumes of manufacture in electric power industry, basically, due to decrease of manufacture of the electric power by hydroelectric power stations because of low water content of the rivers, and decrease of the level of water basins. Reduction of quotas provided for the republic for catching bioresources has resulted in decrease of manufacture in the fishing industry that has had its effect on results of work of the food-processing industry as a whole.
However, due to the measures undertaken and joint efforts of the Government, institutions of local government, and enterprises of the republic, it was possible to suspend development of negative tendencies, and to provide a monthly average gain of industrial production at the level of 3% since April 2003.
Growth of manufacture in woodworking industry, black and nonferrous metallurgy, manufacture of building materials has allowed to overcome the backlog allowed by the end of the year and on results of the year to provide growth of the basic parameters. The volume of industrial output has made 38 billion roubles and has increased 15% in established prices in comparison with the previous year.
With the purpose to increase the production efficiency and growth of tax collections, in 2003 General agreements on cooperation between the Government of the RK and Pitkaranta Pulp Mill Open Society, Zapkarelles Joint-Stock Company, Onega Tractor Plant Open Society, Petrozavodskmash Joint-Stock Company, Kondopoga Open Society and Segezhsky Pulp and Paper Mill Open Society were prepared and signed. In 2004 preparation and conclusion of General agreements with the proprietor of Nadvoitsky aluminium factory SUAL-HOLDING Open Society and Karelsky Okatysh (Karelian Iron-Ore Pellets) Open Society will be continued.
In the republic a number of large investment projects is under realisation, that further will allow to provide essential growth of industrial production.
Engineering Industry
The index of physical volume of industrial production in engineering industry and metal working in 2003 has made 106.7%. On the background of three-year decrease of volumes of manufacture (within 2000-2002 years) growth has been noted on Onego Tractor Plant Open Society, Stankozavod-DeKo Open Company, Repair and Engineering Works Joint-Stock Company, Petroset Open Company, Avangard Ship-building factory Open Society.
The volume of release of the commodity output by the Onega Tractor Plant in 2003 has made 517 million roubles, or 21% more than in the previous year. It has been produced 662 tractors and wood machines that corresponds to the level of 2002. At the same time it is necessary to note, that these are more powerful and more productive tractors TLT-100 with 120 h.p. engines, instead of TLT-55 which engine capacity was 95 h.p.
To improve the situation on commodity markets Onego Tractor Plant Open Society accomplishes active marketing and advertising, participates in the international specialized exhibitions, works on attraction of investments. Since April 2003 the enterprise cooperates with German firm of HSM with which the Contract on Cooperation is signed. Within the framework of the Contract joint development of manufacture of wheel machines, competitive in the markets of CIS and the East Europe is provided. The first pre-production model made in Germany and called OTZ-HSM 904 F was presented to the Russian lumberers at the exhibition in the beginning of December 2003 in Vologda.
Business contacts to the Republic of Byelorussia on mutually advantageous delivery of tractors and engines proceed.
The tendency of significant growth of volumes of production of the basic manufacture of Avangard Ship-building factory Open Society together with its affiliated company (172 %) was planned, and densities of ship repair and shipbuilding in volumes of the basic manufacture has grown from 25% up to 52%.
The Government of the Republic of Karelia constantly works on stabilization of manufacture, searches for shipbuilding orders, and attracts of possible investors. As a result it was possible to solve a number of serious problems and to provide the further placing of orders for repair of the ships and vessels of the Navy of the Russian Federation on floor spaces of the enterprise on account of the state defensive order for 2003-2004.
In the past year at the expense of the Ministry of Defence of the Russian Federation performance of the state order for dock repair of the base trawler included in the Kola flotilla of the Northern Fleet, for the sum 12 million roubles has been completed.
Now the factory executes the contract from Remik Joint-Stock Company (Moscow) on construction of a diving vessel within the framework of the program of modernization of Zeyskaya Hydroelectric Power Station, volume of the order is more than 10 million roubles.
By the order of the Government of the Russian Federation from January 9, 2004 Avangard Ship-building factory Open Society is included in the list of strategic enterprises and organizations of Russia.
On results of 2003 the volume of manufacture of AEK Open Company has made 58 million roubles, that is twice as much as the level of the previous year. In 2004 Karhakos Open Company together with the branch of AEK Open Company and RKC Group Finnish company will continue realization of the project on expansion of manufacture and release of new production. Second-order commissioning of the complex will allow to increase the number of working at the enterprise up to the thousand employees and to start executing orders of the French concern of Renault and Japanese concern of Komatsu, and to increase the volume of production 64% in 2004 in comparison with 2003.
In 2003 the situation on one of the leading enterprises of the branch Petrozavodskmash Joint-Stock Company has worsened, the volume of manufacture has made 641 million roubles, or 89% compared to the previous year. The principal causes that have influenced reduction of volumes of manufacture in 2003 at this enterprise is postponing terms of orders or customers', also foreign, refusals to finance large projects which total sum makes 477 million roubles. The lack of the turnover means which have arisen owing to non-returns of the VAT for export operations has also had its effect on results of the work of the enterprise. Thus, volumes of manufacture of the chemical equipment and spare parts for it were 46% reduced. The volume of manufacture of paper making equipment due to sufficient number of orders has increased and has made 271 million roubles, or 101% to the level of 2002.
The Government of the Republic of Karelia is going henceforth to support administration at their mutual aspiration to stabilization and subsequent growth of the volumes of manufacture.
Power Industry
Taking into account, that the power industry occupies a significant place in the total amount of industrial production the Government paid special attention to the work of this vital branch.
The current consumption in 2003 in comparison with 2002 has increased 3.5% and has made 7 805.6 million K.W.H.
The volume of manufacture of the electric power in 2003 has made 3 650 million K.W.H., or 96.9% to the level of 2002. Reduction of electric power manufacture is a consequence of the low water-security and decrease of levels of water basins of seasonal and long-term regulation to minimal which occurred in the first six months of 2003.
Since the 3rd quarter inflow of water has increased almost in all water basins, and in the 4th quarter of 2003 in comparison with the appropriate period of 2002 the volume of manufacture of the electric power has increased 29.3%. However, on results of the year it was not possible to cover the backlog allowed in the beginning of the year.
Within 2003 tension in the sphere of electrosupply of the consumers, related to non-payments for the consumed electric power was kept. The debts of consumers for power resources in 2003 has increased almost 100 million roubles.
Due to non-payments, Karelenergo Open Society introduced restrictions to defaulters up to 15-20 megawatt weekly, and in some cases also switched them off of objects which had a negative effect on financial and economic parameters of work of the enterprises. Under these conditions the Government of the republic concerted on decrease of intensity in relations of power engineering specialists and energy consumers: on payment of the delayed debts and maintenance of the current payments, and also on restoration of electrosupply of vital objects of housing and communal services.
According to the Agreement on reforming the power complex of Karelenergo Open Society, signed by the Government of the RK, Russian Open Society UES of Russia and Karelenergo Open Society, reforming the power complex of Karelenergo Open Society proceeded within one year. Now the preparatory stage is almost completed. Within the period from March till April of 2004 realization of extraordinary assembly of shareholders of Karelenergo Open Society is planned where the problem on formation of the joint-stock company according to kinds of activity will be considered. Creation of joint-stock companies Karelenergogeneratsiya, Karelian Energy Supply Company, Managing Company Karelenergo, Karelian Main Networks is planned. The Government of the RK concerts on protection of interests of both population, and managing subjects of the republic.
In 2003 power engineering specialists of Karelia have received more than 400 million roubles of the profit that is related to increase of heat and electric power tariffs.
To construct and modernize power objects about 340 million roubles has been allocated. A high-voltage line 110 kilovolt Matkonezhskaya hydroelectric power station NAZOpen Society is constructed, construction of the power transmission line on the Island of Valaam was carried out, sewage disposal plant on Petrozavodsk thermal power station was commissioned, repair of hydrounits on Palakagorsky and Krivoporozhsky hydroelectric power stations is completed, reconstruction of Kondopozhsky hydroelectric power station proceeded. At the expense of the republican budget and unappropriated sources construction of the power transmission line in the settlement of Verhniye Vazhiny has been completed.
Light Industry
In 2003 the index of physical volume of manufacture in light industry has made 102%, production which total cost is 80 million roubles was made. Manufacture of jackets has grown 21.2%, trousers manufacture has grown 33%. Manufacture of bed-clothes and dresses has decreased. Release of footwear was reduced 11%, release of knitted garment has decreased twice.
Not all production made in the branch has found its customer. Only 78% of issued production was shipped. It is the lowest parameter among industries of the republic.
In 2003 Vega Plus Open Company (23% of growth to the level of 2002), ANA Firm Joint-Stock Company (35%) that have passed selection in the competition of investment projects to obtain financing from the republican budget have considerably increased volumes of manufacture. Realization of the given projects has allowed them to update the out-of-date equipment in 2003, to create additional workplaces. In 2003 ANA Firm Joint-Stock Company has increased hired 35 employees more, who live in settlements of Rautalahti and Harlu. On a gratuitous basis the enterprise constantly trains senior students who want ot become seamstresses. The special production of the enterprise is certified. During the past three years ANA Firm Joint-Stock Company won the competitions held by the Ministry of Internal Affairsof the RK on placement of order for tailoring regimentals and ammunition for his divisions, in 2003 the sum of this order has made 4,5 million roubles.
Deterioration of parameters of work of some enterprises of light industry are explained by various factors. In 2003 the circuit of work of enterprises has changed: in 2002 they bought the raw material for manufacture themselves, although in 2003 the most part of production began to be made of goods made on commission which cost was not taken into account in the volume of commodity output release; thus, the parameter of the added cost has not changed. Another reason of decrease of volumes of manufacture was problems of selling production because inefficient work of marketing services which resulted in the rigid competition in the market.
In 2003 Severyanka Joint-Stock Company and National Folk Enterprise Zaonezhskaya Vyshivka (Zaonezhskaya embroidery) Joint-Stock Company an have actually quit their industrial activity.
One of the main problems of the enterprises is high deterioration of the fixed capital. With morally and physically out-of-date equipment it is impossible to produce competitive production. To modernize the manufacture significant means which even rather safe companies of the branch do not have are necessary. Lack of a system of the demand exploration, difficulty in establishing economic relations, lack of skill to advance the goods in the market, restraint of demand of the home market for the production made have led to the fact that almost all large enterprises of the branch work using goods made on commission, performing orders of large Russian firms and foreign customers.
Printing Industry
The enterprises of the polygraphic industry worked stably in 2003. The index of physical volume of the industrial production on the branch has made 104.3%. Manufacture of school writing-books has increased 7.6%, and books - 12.5%.
To maintain further growth of the manufacture, investment projects providing modernisation of the P.F.Anokhin Republican Printing House and Kondopoga City Printing House State Unitary Enterprises were developed in the branch. On modernisation of P.F.Anokhin Republican Printing House an investment credit to the amount 48 million roubles for the period of 5 years was allocated from the republican budget. The full-color printed machine has been purchased. The equipment of such high class will be presented in Russia for the first time.
Within the framework of the state support of book publishing more than 1,3 million roubles was allocated from the republican budget, publishing of 20 book items was funded, and work on preparation for the publication of the Karelian encyclopedia is continued.
During preparation for celebrating the 300th anniversary of Petrozavodsk 14 kinds of anniversary production has been issued.
For today in Karelia radio and telechannels works 150 various mass media, from them 65 newspapers. The total circulation of one release of newspapers in Karelia makes 360 thousand copies, including republican mass media - 190 thousand, regional - 41 thousand.
In the republic 7 TV channels and 14 radio stations are put on the air and broadcasted through cable networks. Electronic mass media cover almost the entire territory of the republic, the opportunity of receiving TV channels is possessed by about 92% of the citizens of the republic. Within 2003 re-registration of regional newspapers in the Ministry of Press of Russia was almost completed.
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