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Status of Productive Industry
Industry
In 2004 it was possible to keep positive dynamics of the basic economic parameters and achieve the highest growth of volumes of industrial production in the last five years. The index of physical volume of industrial production (on full circle of enterprises) has made 109.3% having 5.3 percent points exceeded predicated parameter. Industrial output has made 51,2 billion rbls. It became possible due to growth of industrial production in ferrous metallurgy (108.7%), engineering industry and metal working (139.7%), logging industry (110.8%), woodworking industry (106.0%), pulp and paper industry (111.9%), and electric power industry (120.2%).
In 2004 it has been produced 962 million kWh (26%) of electric power, 596 thousand tons (9%) of iron ore pellets, 848 thousand cubic meters (16%) of merchantable wood, 19 thousand cubic meters (3%) of saw-timbers, 9 thousand tons (11%) of commodity cellulose, 103 thousand tons (14%) of paper, 22 thousand conditional cubic meters (20%) of chipboard, 2,1 million conditional bricks (16%) of wall building materials, 446 thousand cubic meters (11%) of rubble and gravel more than last year.
At the same time, despite of measures undertaken, it was not possible to achieve the level of 2003 in food industry (92.4%), flour-and-cereals and feed mill industries (87.1%), and light industry (93.1%).
Engineering Industry
According to the republican program Basic Trends of State Policy of Industry Development in the Republic of Karelia engineering industry and metal-working branch is on the kist of priorities, therefore, the Government of the Republic of Karelia pays special attention to problems of its development. General cooperation agreements with the largest enterprises of the branch such as Petrozavodskmash, Close Corporation, and OTP, Inc., have been concluded. Challenges of providind orders for the enterprises, retrofit installation, and attraction of investments are met together with proprietors and managerial control of the enterprises.
Industrial outputs in engineering industry and metal working in 2004 has made 3085 million rbls. at the index of physical volume equal to 139.7%.
Petrozavodskmash, Close Corporation, in 2004 has increased volume of manufacture by 36%, including 39.2% in manufacture of paper-making equipment, 55.4% in chemical equipment, 41.4% in casting for sale. Commodity markets are being expanded by the enterprise, problems of allotting shares of gas consumption, increase placing of orders by Karelian enterprises, simplification of procedures of customs registration, etc. are solved cooperation with the Government of the RK.
On results of 2004 OTP, Inc., has 34.4% reduced its industrial output, manufacture of tractors and tree breakers has made 40% to the level of 2003. One of the main reasons of decrease in volume of manufacture is falling market demand. On behalf of the Head of the Republic of Karelia a working group has been created being entrusted to develop a complex of measures for stabilization of manufacture, enterprises have been offered to work out a business-plan of wheel tractor-building development for consideration and possible investment credit granting. The Government of the republic controls the situation developing in Avangard Shipbuilding Facilities, Inc., renders specific assistance to the enterprise in reception of the government defence contractual work. In 2004 volume of manufacture at Avangard Shipbuilding Facilities, Inc., has grown 31%, including doubling of profile production, and 10.1% increase of heat-and-power engineering. Debts on payment of wages to workers have been reduced. At the same time, financial position of the enterprise remains complicated.
Karhakos, Ltd., has been developing and working steadily. After the second turn of the industrial complex has been put into exploitation in 2004 the number of employees has almost doubled, and volumes of manufacture has gown 17%.
Further support will be rendered to the enterprises of the branch to create conditions for producion stabilization, growth of production volumes and modernisation.
Power Industry
In 2004 power engineering specialists of Karelia have achieved the best results in their activity for the last five years. Electrical energy consumption in 2004 has made 8127,5 million kWh and has increased 4.1% in comparison with 2003. Power stations of the republic have generated 4609,3 million kWh of electricity, that is 26.4% more than in 2003, the share of own electric power has in the total amount of consumption increased from 46% in 2003 to 56.6% in 2004. The increase in manufacture of electric power occured due to stable growth of its generation by hydroelectric power stations within a year due to water content increase in the rivers of Karelia.
Financial condition of the branch has improved considerably, on results of the year balance profit of 946 million rbls. has been received, tax transfers in budgets of all levels have grown 48%, about 200 million roubles has been invested in reconstruction and modernization of equipment of generating capacities and network facilities.
The Government of the RK considers a matter of principle to restrain electric power tariffs, taking into account that they considerably influence financial condition of other industries. In 2004 growth of electric power tariffs for the enterprises of the industry has made 6.5%, this year they were only 1.9% increased.
Problem of the branch is consumed electric power payments delay which sum from the beginning of the year has almost 130 million rbls. increased. Due to non-payments Karelenergo, Inc., introduced weekly restrictions to consumers-defaulters up to 15-20 megawatt, and in some cases complete switching-off of objects. The Government of the republic undertook specific measures on decrease in intensity in relations between power engineering specialists and consumers, and also to restoration of electrosupply of objects of housing and communal services.
In 2004 reforming of power complex of Karelenergo, Inc., has been completed. In January of 2005 newly created Karelenergogeneratsia, Karelian energysaling Company, Karelenergo Controlling joint-stock companies were registered. Structural reorganization of the branch will allow to create competitive market of electric power and involve investments into the branch development.
Light Industry
On results of work in 2004 it was not possible to liquidate the backlog in light industry allowed in the beginning of year. The index of physical volume has made 93.1%. Manufacture of knitted products, dresses, jackets of workers has decreased. At the same time the largest enterprises of the branch have increased their volumes of manufacture: 40% by "ANA" Firm, Close corporation, 3% by Vega-Plus. Ltd., which was promoted by implementation of investment projects at these enterprises financed on credits allowed by the republican budget. Establishment UM 220/4 state unitary enterprise worked steadily having achieved 10% growth of volumes of manufacture. Rantempo Shoe Factory, Ltd., achieved 9% increase of volumes of manufacture. The former Severyanka factory, factory of Karelskiye Uzory, Ltd., (former Zaonezhskaya Vyshivka) have restored their manufacture. Sewing manufactures Torsten, Greda, Erny, Petrostil continue gaining popularity in the republic and beyond its bounds.
The primary goal in light industry for 2005 is preservation of existing manufacture, increase in loading capacities, modernization of manufacture and development of producing new kinds of production. It is also necessary to improve statistical stock-taking in the branch, having included small enterprises in it with the purpose of reception of objective and complete information on the state of affairs in light industry.
Printing Industry
Polygraphic enterprises have produced commodity output which total cost has made 82 million roubles. The index of physical volume has made 104.9%. Balanced financial result in the polygraphic industry has exceeded the level of 2003 1.4 times and has made 5,2 million roubles of profit. The leading enterprise of polygraphy of the republic State Unitary Enterprise of the RK "The Republican P.Anohin Printing House Awarded by the Sign of Honour" commodity output has totaled 59 million roubles or 10% more than in 2003. Rates of growth of volumes of manufacture have made 106%. The increase in printed matter is related to commissioning the broadsheet press of supreme class purchased through the budgetary investment credit.
Contribution of small enterprises having made 13.0% (compared to 11.1% in 2003) with volume of production of 10,7 million roubles increased in the volume of polygraphic production manufacture. At the same time due to cost increase at constant volumes a number of regional printing houses are unprofitable; therefore, the Government of the republic carries out measures on reorganization of three regional printing houses by means of joining to P.Anohin Printing House.
In 2004 from budget of the republic allocated 2650 thousand roubles on the state support of book publishing, printing of more than 20 books including 9 books within the framework celebrating the 60th anniversary of the Victory in the Great Patriotic War 1941-1945, 7 books of Karelian writers, books on culture and study of local lore has been financed. In 2004 work on publishing Karelia Encyclopedia proceeded.
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