Ministry of Industry and Trade expects a lot from the North Caucasus

Yekaterina Tesemnikova, exclusively for Vestnik Kavkaza

The North Caucasus has always been thought to be an agricultural region. Industries haven’t been its strong sides. We can remember only oil production in Maikop and Grozny, hydropower plants on mountain rivers, and production of nitrogen fertilizers. The level of industrial development of the North Caucasus is much lower than in Russia in general. The industrial production index per person is 30-40% in Stavropol Territory and Karachay-Cherkessia; in other regions it is lower.

In early July the Minister of Industry and Trade, Denis Manturov, focused on thge industry of the North Caucasus Federal District. For example, in Dagestan the Federal Ministry counts on KEMZ Concern, the Caspian Plant of Fine Mechanics, and the Elektrosignal Company, which should get government contracts and join corporations; while Nergiz Dagestan will be supported financially by the state and major textile manufacturing will be organized there.

As for industry of the district, the processing industry brings less than 10% of the GRP of the NCFD. According to results of 2013, it showed a higher pace of development than in Russia in general: the index increased more than 10%, in the first quarter of 2014 – more than 7.5%.

Manturov stated at a session of the Governmental Commission for Socio-Economic Development of the NCFD that in the investment structure of the North Caucasus the main source is still the budget, except for Stavropol where 50% of all investments in industry are non-budgetary sources.

The main condition for diversification of industry is thought to be attracting private investments into the consumer goods industry, woodwork industry, and construction materials, according to the minister. At the moment they are less than 1% of all produced goods, but under certain investments they could provide a quick return of capital and involvement of the labor force – it will improve the employment rate.

The segments have guaranteed growing outlet markets due to plans on development of resorts, residential area construction, and a growth in the consumption level. Such projects have been already developed for Ingushetia.

The Ministry thinks it is realistic to start high-tech projects in the NCFD, as their products are demanded in other regions of the District. First of all, it means production of composition materials which are used in construction of transport infrastructure and housing and public utilities, as well as production of bioadditives which are used in the agricultural and food industries.

To fulfil the projects, industrial parks will be established in the NCFD regions. One of project has started to be implemented in Kaspiisk (Dagestan). The program on industrial parks requires 250 million rubles in 2014 for financing loans taken by companies to construct the parks.

As for the trade sphere, the head of the Ministry of Industry and Trade stated that most regions adopted a program of development of commodity distribution network. Budget resources are allocated for building production and logistics centers which are oriented at storage, initial processing and sales of agricultural products.

Monitoring of the commodity network in the regions showed that the majority of federal networks are present in the regions and have plans to increase the number of stores and extend contacts with local producers.

So the Ministry believes that there are preconditions for improvement of the NCFD industrial potential seriously; the regions need only an active position and fulfillment of the decisions made right on time.