Economy

The Republic of Komi today is a Russian region with a developed industry, which is almost completely provided by domestic raw materials, energy and labor. 
The Republic of Komi is a leader in the Northwestern Federal District in terms of major industrial output: oil, gas and coal, nonwovens, wood products (plywood, fiberboards and particle boards), and pulp and paper products (paper and cardboard).

In terms of paper production, the Republic of Komi is ranked # 2, and in terms of cardboard production – ranked # 3.

The Gross Regional Product (GRP) of the Republic of Komi was made in 2014 480,9 bln.

 

The main contributors to the GRP of the Republic are such economic sectors as mining, manufacturing, construction, trade, transport and communications.

The tendency of stable industrial production growth is maintained. Industrial production index in 2015 was 101.6% (mostly due to increase in oil extraction, and coal mining).

Oil production

The Komi oil industry develops steadily. It can be explained by commissioning new oil fields as well as efficient assimilation of the new technologies for increased oil production,including those used in extra-heavy oil production in the Yarega and Usinsk oil fields.

The bulk of production accounted for LUKOIL-Komi, LLC "RN-Severnaya Neft, Nobel Oil Ltd, LLC "Yenisey", and JSC "Komnedra". In the sectoral industrial output structure, the share of the oil industry was about 43%.

According to the forecasts, oil production, including gas condensate, in Komi in 2016 will amount to 15,0 million tons annually, mining in 2015 amounted to 14,9 million tons.

Petroleum refining

The development of oil refining in the in the Republic is due to the presence of an extensive market for petroleum products in the Northern Economic Region. The key element of the oil refining industry is JSC LUKOIL-Ukhta Oil Refinery. The company has a fuel profile and specializes in producing gasoline, diesel fuel, kerosene, fuel oil, bitumen, vacuum gas oil and other products. The production capacity of the existing units for primary distillation is 4 mln tons per annum.

Oil preparation and processing complex with productive capacity of 1,4 mln tons of crude oil per year was introduced by LLC “Yenisey” (located in Usinsk) in 2011.

Gas production and refining

The major industrial stocks of free gas are on the balance of LLC Gazprom processing Krasnodar, which is a part of Gazprom. LLC Gazprom Processing Krasnodar performs extraction and processing of gas. The core of the Komi gas industry is located in Vuktyl District where 91% of free gas is produced.

Sosnogorsk Gas Refinery processing plant is the only company in the Northwestern Federal District that refines natural gas and unstable gas condensate. The annual capacity of Sosnogorsk Gas Refinery is 3 bln m3 of gas and 1.25 mln tons of unstable condensate. The main products include carbon black, motor gasoline, liquefied gas, stable gas condensate, gas stabilization, dry gas and rubber products.

The future development prospects for the gas industry of the Republic are largely due to the implementation of the Yamal Mega Project, which will involve the development of small gas fields and will lead to reassessment of the development prospects for in the areas of the western slopes of the Polar and Pre-Polar Urals.

Coalmining

Currently, 4 coal fields are being developed in the Pechora Coal Basin: Vorkuta Coal Field and Yunyaga Coal Field (coking coal), Vorgashor Coal Field (coking and steam coal), and Inta Coal Field (steam coal). Coal is produced by underground mining at the mines that are the property of JSC Vorkuta Coal (Severnaya, Vorkutinskaya, Komsomolskaya, Zapolarnaya. Vorgashor), as well as JSC Inta Coal Mine. Coal has been also produced by open-cast mining at the quarry “Yunyaga Coal Strip Mine” since 2002. Almost all coal mined in the basin is subject to preparation (enrichment) at coal preparation plants or installations.

In general, 6 mines, 1 coal-strip mine are in operation in the coalmining sector of the Republic. The total production capacity is 17.1 mln tons of coal a year. In 2015, the enterprises in the Pechora Coal Basin produced 14.6 mln tons of coal and 6.0 mln tons of coal concentrate.

The main consumer of coking coal produced by Vorkutaugol Company is the Cherepovets Metallurgical Plant of JSC Severstal which is one of the largest and most profitable steel companies in Russia. Part of the coal is exported.

Consumers of energy coal are timber, pulp and paper and woodworking industries, public utilities of the Northwest region of Russia and the Republic of Komi/

In 2015, the rate of investment in primary production in coalmining in the Republic was RUR 3.8 bln. Mostly, investments were made by JSC Vorkuta Coal under its own investment program.

The key challenges facing the coal industry of the republic include the stabilization of coal production at the level of 14-15 mln tons per year, ensuring a growth of economic efficiency of mining operating and improving the quality of the output products, development of new deposits of coal.

Timber industry

The Republic of Komi is one of the leading Russian forestry regions. The timber industry is second largest in the Republic’s industrial structure. It is represented by logging, woodworking, and pulp and paper companies. The key players in the local timber sector are operations engaged in sawing, production of construction parts and wood-based panels, and plywood production. The pulp and paper sector manufactures paper and sanitary products.

The main timber enterprises in the Republic are: JSC Mondi Syktyvkar, LLC Syktyvkar Tissue Group, Syktyvkar Woodworking Mill Inc., LLC Syktyvkar Plywood Mill, LLC SevLesPil, LLC Fiberboard Mill, JSC Zheshart Plywood Mill, CJSC Leskom, LLC PechoraEnergoResurs, LLC Luzales.

Mondi Syktyvkar is the leading pulp and paper operation in the Republic. Its annual production capacity is 850,000 tons of pulp (pulp cooking) and 990,000 tons of cardboard and paper products. The company specializes in producing office and offset paper and also produces newsprint, linerboard, topliner and Kraft liner products. The share of Mondi Syktyvkar in the Russian market of offset paper is over 40% and in the Russian cardboard market -60%.

The half of the manufactured paper products are exported to global 80 countries. The share of deep processed products is over 95% of the total timber and paper products produced in the Republic.

The basic priorities of woodworking and pulp and paper are reaching the design production capacities for boards, sawing products, and gaining the increased competitiveness of the products in the domestic and international markets by improving the quality and developing the new products. The most promising direction for further developing the sector is the creation of high-efficiency operations for timber deep processing.

Mining complex

The mining complex of the Komi Republic is in its infancy and is characterized by a large spectrum of areas (development of deposits of ferrous, nonferrous, gold, quartz and other nonmetallic minerals, primarily used as raw material for manufacture of building materials).

Explored and prepared for industrial operation form a reliable basis for further development of the mining complex in Komi.

Electricity

The energy system of the Republic of Komi is a single territorial complex, which includes five energy areas located in Vorkuta, INTA, Pechora, Ukhta in the South. Branch of OJSC "System operator of Unified energy system" "Regional dispatch control grid of the Komi Republic" carries out dispatch management of power industry objects on the territory of the Republic of Komi.

The total length of electric networks is: 220 kV transmission line of 1.97 thousand km, 110 kV transmission line is 4.7 thousand km, 35 kV and below, over 19 thousand km outside the country send approximately 10 percent of the electricity generated and from outside the Republic (Kirov region) receives less than 1% of electricity consumption. In 2015, total electricity production amounted to 10150,4 million kWh, heat 18.5 million Gcal.

The power system of the Republic unites the power plants included in the composition of the Komi branch PJSC "T Plus", JSC "Inter Rao Electric Power Plants", JSC "Mondi Syktyvkar" and electric networks branch of JSC "IDGC North-West Komienergo", a branch of OAO "Federal grid company of Unified energy system" - "Main electric networks of North-West" and other subjects

Transport and telecommunications

The transport complex of the Republic is part of the Russian transport and communications system. Russia possesses the basic modes of transport, its transport links in terms of placement and structure as a whole meet intra and external communications.

The transportation network of the Republic consists of 7 airports, 32 helicopter pads, 2,300 km of railway and 4,100 km of public navigable inland waterways, 11,700 km of public highways, of which 7,400 km are hard-surface roads. In the Republic of Komi per 1,000 m2 there are 18.2 km of highways, 4.1 km – of railway.

The Kotlas - Vorkuta railway main line with the total length of 1,700 km makes the backbone of the public railway network in Komi.

The railway main line density in the Republic of Komi is 4.1 km per 1 ths sq. km.

The development of mineral resources in the region, as well as the implementation of quite a number of investment projects are directly related to the prospects of implementing a major infrastructure project, Belkomur Railway Project, aiming at connecting Perm Krai, the Republic of Komi and Archangelsk Oblast by the shortest transportation route and giving a direct access to northern sea ports for manufacturers that operate in those regions.

In the Republic of Komi, telecommunication is represented by almost all of its available modes. The telecommunications market is one of the most rapidly growing economic sectors in Komi. The provision of telecommunications services in the territory of the Republic is made by over 30 operators. The basic telecom operators are the Komi Branch of OJSC Rostelecom and CJSC TransTelecom Company.

The companies operating in the telecom market offer a full range of telecommunication services including high-speed broadband Internet access and digital IP-TV. Digital telephone stations work in all big cities, townships and villages of the Republic of Komi.

Construction

In the Republic of Komi there are 2264 registered organizations that operate in the construction sector.

Out of the total building works and services, almost 2/3 falls on building organizations and about a quarter – on small construction companies.

The high business activity of the Komi construction sector is facilitated by the population’s stable and dynamic housing demand. As a result, the development of low-rise housing construction is one of the construction sector priorities.

Within the Republic of Komi there is a number of enterprises manufacturing laminated veneer lumber, glued wood window units, balcony doors, floorboards and moldings, etc, e.g. Luzales Ltd., Dekostroy Company and Lesozavod # 1 Ltd. manufacturing wooden house structural components in Kazluk Village in Ust-Vymsky District.

In order to develop housing construction activities and improve the population’s living conditions, various state support measures in the field of housing construction and acquisition are being realized in the Republic of Komi, including measures implemented within the framework of relevant federal and regional programmes.

Banking Sector

The banking sector of the Republic of Komi is represented by 1 independent commercial bank,6 commercial branches of out-of-region banks, 68 operational offices, 159 supplementary offices, 13 out-of-the-office cash counters, 10 lending and cash services offices, 2 representation offices, and 2 Mobile ATM units.

The Komi banking sector is characterized by high levels of the asset concentration, the retail deposit market and the capital of credit institutions. The credit institutions’ capital adequacy ratio is within the acceptable level established for all credit institutions.

The banking sector activities are characterized by further growth of the credit institutions’ resources and the aggregate capital as well as by developing systems of payments using bank cards, with international payment systems occupying the leading positions.

The share of retail deposits is the largest one in the liabilities of the Komi banking sector. As for the credit institutions’ asset profile, credit investments account for the largest share.

Small Businesses

According to the results of 2015, there are about 35000 business entities in the Republic of Komi representing small and medium-sized businesses. Among them there are 150 medium-sized, 1056 small enterprises (excluding micro enterprises) and 22383 individual entrepreneur.

There are facilities available in the Republic of Komi to provide consulting, financial and property support to entrepreneurs. There are also opportunities for them to be trained on relevant educational programmes.

To create the favourable environment for carrying out business activities in the Republic of Komi, the necessary legal framework for governing SMEs has been established. There are also operating target programmes on SMEs support and development.

Consumer Market

The major tendencies in this sphere are: formation of business networks, developing of new trade standards and forms, promotion of business networks, increase in sales floor space. During the last two years the priorities of trade development were: food industry; household appliances and electronics; furniture and Household Goods; construction and repair products.

Within retail trade the list of pre-sales and post-sales services, sales-related services, and creating enabling environment services expand.

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