Industry

The proportion of the secondary sector (processing industries) in the RFE economy has decreased during 1990s, it was undergoing structural changes accompanied by more than two-fold drop of production in absolute terms. The percentage of machine-building and metalworking has decreased from 15.5% to 8.4%, while that of the energy and fuel branches has grown from 3.5% to 25.1% and from 3.8% to 11.5% respectively. The share of nonferrous metallurgy went up by 47%, and that of food processing, logging, woodworking and building materials reduced. These structural changes have been caused by the unevenness of the reduction of real production volumes in respective branches.

The fuel and energy complex of the Russian Far East is composed of the fuel industry (oil, gas and coal production), oil processing industry, energy and heat providers. It is the region’s largest industrial complex and generates about 35% of the total industrial output. Recession in the coal industry corresponded to the nationwide decline - production volume fell from 51.6 to 31.6 million tons.

The Trans-Baikal showed a better dynamic of coal production: in Buryatia decline was only 7.2% and in the Chitinskaya Oblast 18.4% growth was registered. Trans-Baikal inclusive, the Russian Far East’s total coal production volume amount about 19% of the national total.

Oil production reached 1.78 million tons in which was an 88% increase on 1990. Natural gas production amounts to 3.4 billion cubic meters.

Other commercially available energy resources are hydropower and nuclear power.

There is great potential for use of non-traditional sources of energy which might fully satisfy local demand. However, they generate only less than 0.1% of total electricity output. The structure of energy production is dependent on the available resources: about 70% is derived from coal, oil, natural gas and hydropower.

The region’s two oil refineries are found in the Khabarovsky Krai (Khabarovsk and Komsomolsk-on-Amur). The bulk of oil is delivered from West Siberia by rail. Oil from Sakhalin comes to Komsomolsk-on-Amur by pipe (some 10%). The depth of oil refining is rather low: 60-65%.

Electric energy is produced by general-use, power plants generating more than 93% of electricity and local plants. There are several joint-stock companies providing and conveying energy and a special division, VostokEnergo, Amurskaya, Dalnevostochnaya and Khabarovskaya energy systems, Yuzhno-Yakutsky energy area and the eastern part of Chitinskaya energy.

Heat energy is produced by heat-and-power stations and boilerhouses. The total length of main heat and steam lines was exceeding 11,000 kilometers and the number of boiler-houses was above 15,000.

Power plants provide about 35% of heat, the rest is produced by boiler-houses. Basic type of fuel for boiler-houses and plants is coal, although some regions (Kamchatka, Primorye, the Khabarovsky Krai) use much fuel oil and diesel oil.

RFE is Russia’s largest fish and seafood producer. Fish processing is developed mainly in the onboard form.

The fishery complex is composed of fish and seafood catchers, processors, specialized facilities and services, fish stock reproduction organizations. Close linkages interconnect different parts of this complex with each other and with other economic sectors. It is serviced by a large number of specialized branches such as shipbuilding, ship repair, ports, transport and reefer fleet, manufacturers of fishing gear, packing materials, etc. Auxiliary services (procurement, sales, communications, construction and others) provide support both to fish producers and specialized services involved.

The forest complex includes forestry, logging, woodworking and pulp-and-paper branches. This complex accounts for 5.4% of industrial production. The pulp-and-paper industry is developed poorly and represented by several mills on Sakhalin, in the Khabarovsky Krai, the Jewish Autonomous and Amurskaya Oblasts.

Traditionally, timber processing in the Russian Far East falls behind the scope and dynamic of logging activities and the bulk of timber is exported in round logs; in the years of economic reform it has dropped two-three times.

Major woodworking centers are Birobidzhan, Blagoveshchensk, Vladivostok, Komsomolsk-on-Amur, Khabarovsk.

The chemical and petrochemical sector includes ore mining and dressing enterprises and facilities manufacturing industrial and household chemical products, varnishes and paints, plastic goods, glass reinforced plastic, etc. It accounts for only 0.8% of the RFE’s total industrial output. Major plants are found in Primorye and the Khabarovsky Krai.

Leading machine-building branches are ship repair, manufacture of electric engineering and other equipment, machine tools, etc. The sector reduced its output 1990-97 due to declining demand, low competitiveness with imported products, high transport tariffs. Its share in the region’s production volume fell from 15.5% to 8.4%.

One of major machine-building centers is Khabarovsk. The machine-building sector of the Khabarovsky Krai accounts for 30% of total industrial output. In other RFE regions, its percentage in gross output is insignificant: Primorye - 6.4%, the Amurskaya Oblast - 3.4%, Sakha - 1.5%, Sakhalin - 1.4%. Machine-building plants manufacture diesel engines, overhead cranes, marine machinery, cast molding equipment, metalcutting machine tools, instrumentation, tools and other products. The proportion of ship repair has considerably grown in the past decade and reached 40% of all machine-building operations. Machinery repair facilities are available in all regions.

The light industry is represented by textile, knitting, footwear, leather making and other facilities deployed mainly in large and mid-size cities. Its percentage in total industrial output has sharply dropped in 1998 which reflects a more deeper recession in this sector in comparison with an overall dynamic of the region’s industry. This reduction is largely explained by low competitiveness of the bulk of produce and re-orientation to imported goods.

The food industry sector accounts for a modest portion of the RFE’s industrial output. The rate of reduction in the food sector exceeded an average one for the region’s industry as a whole. By 2000, this percentage was 20%, with in-kind product volume having grown by 17% in the same year. Due to the insufficiency of local food production and huge competitive pressure of imported products, the Russian Far East was importing great amounts of food stuffs from overseas.