Russian Forestry and Wood Supply Operations Analysis

{ FAR EASTERN FEDERAL DISTRICT Primorsky Krai: Outpost on the Pacific Coast The features of the economic development of Primorsky Krai are dictated by its geography Primorsky Krai is a part of the Far East Federal District of the Russian Federation. Before Russian pioneering explorers appeared there, the lands were uninhabited, however in the mid-19th century Russia started actively strengthening its positions on the north-western Pacific coast. Large-scale forestry enterprises of the Primorksiy Krai Primorsky GOK, OAO Roschinsky KLPH, OAO Amgu, OAO Les Export, ZAO Hardwood, PTS, ZAO Teknowood, STS, ZAO Terneyles, OAO AMUR OBLAST KHABAROVSK KRA KHABAROVSK BIROBIDZNAN JEWISH AO Primsnabcontract, OAO CHINA Ecopan-DV, 000 DomoCenter, ZAO Domokomplekt, 000 Forester-DV, 000 Golden Empire, GK Primorsklesprom, OAO 122 #6 (2015) RUSSIAN FORESTRY AMUR Khanka Lake DPRK Artem Vostok Settlement ORoschino Village Amgu Settlement Dal'norechensk Settlement Terney Lesozavodsk Plastun Settlement Ussuriysk A-370 A-189 Arseniev Partizansk Nakhodka VLADIVOSTOK Dal'negorsk Isle of Sakhalin SEA OF JAPAN The territory's capital is Vladivostok. The city was founded in 1860; today, it is the main base of the Russian Navy's Pacific Fleet, and the largest scientific and educational center of the Far East Region, with the Far East Federal University and Far East Branch of the Russian Academy of Sciences. The distance to Moscow is 9141 km via land routes, and 6417 km as the crow flies. STATISTICS The area of Primorsky Krai is 165,900 km², which is slightly less than 1% of the whole area of Russia (25th on the list of constituent members of the RF), but much larger than Belgium, Holland, Denmark, and Switzerland put together. The north-to-south extent of the region is about 900 km, and the distance between the westernmost and easternmost points of Primorsky Krai is 430 km. The total length of the Territory's borders is about 3000 km, and precisely one half of them are coastal. Primorsky Krai comprises 25 districts, 12 cities, 46 townships, and 617 rural communities. Apart from Vladivostok, the largest cities are Ussuriysk, Nakhodka, Artyom, Arseniev, Spassk-Dalny, Bolshoi Kamen and Partizansk. According to Primorskstat, 1,938,500 people inhabited Primorsky Krai as of the end of 2014, of which 1,059,600 were economically active population aged from15 to 72. Most of the population (77 percent) live in cities. Primorsky Krai is inhabited by more than thirty ethnic groups; according to the latest census, 86% of the population identify themselves as Russians. It should be noted that there is a steady trend towards a reduction in the population in all of the Far East District regions. For instance, the maximum number of residents was recorded in Primorsky Krai in 1989, but since the dissolution of the USSR and to the present day the statistics give a negative forecast for this indicator. According to estimates, Primorsky Krai will have 1.8 million residents at the most by 2031. GEOGRAPHY AND CLIMATE The terrain of Primorsky Krai is determined by two mountain areas, Sikhote- Alin and East Manchurian, separated the Razdolnoye-Khanka Plain. The highest point is Anik Mountain (1933 m above sea level). Primorsky Krai also has several islands, such as Russky, Popov, Reineke, Ricord, Askold, Rimsky-Korsakov Islands, Putyatin Islands, and Petrov Islands. The territory's longest river is the Ussuri; the Russian-Chinese border extends along this river and along the Lake Khanka basin. The climate of the region is temperate, prone to heavy rainfall and humid. It is strongly affected by the hilly terrain. Due to the considerable extent of the region north to south, the temperature in its different parts may differ noticeably. In the northern part, winter frosts may be up to -50 C or lower, while on the eastern coast of the Sea of Japan, the thermometer never drops below -14 C in winter. July is the warmest month in the territory's continental districts, and August, on the coast. Among the inclement climatic properties are rain showers, when up to one third of the annual precipitation rate may fall, and dry hot winds on the Khanka Plain. RESOURCES Scientists and economists note that Primorsky Krai has significant land, water and hydropower, forestry and recreational resources; reserves of valuable minerals are also explored. The total coal reserves in Primorsky Krai are estimated at 2.4 billion tons, with 70% of the deposits fit for development. Non-ferrous and precious metals are represented by tin; 15 deposits of multi-metal ores are known containing lead and zinc, and small quantities of copper, silver, bismuth and rare earth metals. Over 50 gold deposits have been identified in the territory, located mainly in the north and south. About 60% of all gold reserves are in placers in the valleys of the Pogranichnaya, Fadeevka, Malaya Nesterovka, Sobolinaya Pad', and Izyubrinaya rivers. PRIMORSKY KRAI Russia's largest boron deposit is near Dalnegorsk (over 92% of all of its production in Russia). It is expected that its reserves will last for at least the next 50 years. Also, fluor spar is produced in Khorol District of the territory; the deposits' ores also contain rare metals: lithium, beryllium, tantalum, and niobium. In the future the development of rock phosphates may start in the territory, but this valuable fertilizer material is in the mainland slope of the Sea of Japan, which requires the application of special technologies. Almost all districts of the region have construction material reserves, but their extraction is generally open-quarry, which causes great damage to the environment. Six conservation areas are arranged in Primorsky Krai, in particular the Sikhote-Alin state biosphere reserve and the Far East state maritime reserve, as well as nearly twenty national parks and wildlife sanctuaries. TRANSPORT Railway, road, waterway, and air traffic is provided in the region. The southern part is the most developed in terms of transport; the northern districts are poorly provided with all forms of communication. By the beginning of the 20th century, the nation's longest Trans-Siberian Railway was laid there, connecting the Far East to the capital and European part of the Russian Empire. According to official sources, the length of railways in Primorsky Krai is currently 1625 km, of which 970 km are electrified. Primorsky Krai has an important role in the federal concept of transport development in the Russian Federation, as forming six international transport corridors (ITC). Apart from the Trans-Siberian, which provides railway communication from Berlin to Vladivostok and further international transit to Japan, North Korea, China (Shanghai), Taiwan, Western Europe and Middle East, it is also the Northern Sea Route connecting Vladivostok to European ports via the Arctic. The ITC Primorye-1 and Primorye-2 serve the growing needs of trade with Chinese provinces Jilin and Heilungkiang, sea ports of southern China, and countries of the Asia-Pacific Region. The development of the East-West ITC is planned for interaction with ports of the US Pacific Coast; and the name "TransSib Trans-Korean Line" is self-explanatory. 17 border entry points operate in Primorsky Krai: eight maritime, five road, three railway, and one air point. The length of roads in Primorsky Krai is over 11,000 km, of which 9454 km are hard-surfaced. The proximity of Japan and North Korea dictates modest prices of used foreign cars, therefore Primorsky Krai has become the RF leader in car ownership by residents. The transport complex of Primorsky Krai comprises four maritime transport hubs: Vladivostok, East Nakhodka, Khasan (Southern), and Northern. Currently, most of the ports in Primorsky Krai have in fact reached their capacity limit and need updating. The airport at Vladivostok is of international importance. In 2012, when preparing for the APEC summit, it was totally reconstructed; an agreement for its development was signed in 2013 as part of the Petersburg international economic forum. At the end of 2014, the authorities started implementing the regional air traffic development framework. For this purpose, two DHC-6 Twin Otter 400 airplanes were purchased. As the first phase, it is planned to provide flights to Kavalerovo, Plastun, Ternei, Amga, Maksimovka, Ust-Sobolevka, Samarga and other localities; in the second phase of implementation, it is planned to double the number of airplanes. The officials believe that the affordability of the service to residents must promote the development of local airlines. In the next year, by the region governor's decision, the subsidies for this line will be increased 4.5 times, from 80 to 345 million rubles. ECONOMY The features of the region's economy are primarily determined by its geography. The Trans-Siberian Railway ends in the port of Vladivostok; together with the port of Nakhodka it is also the end point of the Northern Sea Route. Primorsky accounts for one third of the entire Russian catch of RUSSIAN #6 (2015) 123 FORESTRY