Industry

INDUSTRY

The biggest production associations in Tatarstan are KAMAZ Joint Stock Company (the city of Naberezhnye Chelny); Aircraft, Aircraft Engines and Helicopter Production Associations (the city of Kazan); NIZHNEKAMSKNEFTEKHIM Production Association; NIZHNEKAMSKSHINA Production Association (the city of Nizhnekamsk); ORGSINTEZ Production Association (Kazan); TATNEFT Production Association (the city of Almetyevsk); Shipbuilding yard (the city of Zelenodolsk), KAZANCOMPRESSORMASH Production Association, MELITA Production Association, TATMEBEL Production Association, Chistopol Watch Factory.

The industrial profile of the Republic is formed by mechanical engineering (56.1%), chemical and petrochemical industries (13.7%), oil extraction (4.3%), electric energy production (2.7%), food industry (2.7%), light industry (6.4%), construction materials producing industry (5.1%) timber and wood processing industry (3.2%).

Major types and volumes of production in 1995 were as follows:

Electric Power		22,7 billion kW/h
Oil			26 million ton
Mazut			2,6 million ton
Fuel oil		0.85 million ton
Gasoline
for chemical industry	1 million ton
Bradenhead gas		848 million cu.m
Polyethylene		
Synthetic rubber
Motion-picture film	96 million running m
Magnetic tape		300 million running m
Tyres
Mineral fertilisers	14,500 ton 
Trucks			207, 000 units
Cars			8,640 units

Enterprises of Tatarstan manufacture aircrafts, helicopters, aircraft engines, vessels, computing devices, radio equipment, optico-mechanical, heat-measuring and other instruments, special types of fuel, technical carbon, compressors and vacuum equipment, electronic, auto garage and lifting transportation equipment, gas stoves, typing devices, sanitary technical equipment, medical instruments and equipment, articles from heat resistant glass, thermoplastic tubes, consumer chemicals, inorganic acids, alkali and reagents, varnish-and-paint materials, medications, china-ware, leather, felt and rubber shoes, fur articles, plywood, furniture detergents and soap, compact cassettes, linen and cotton fabric, knitted, hosiery and clothing products, tobacco products, basic foodstuffs.

At the same time, the Republic lacks or manufactures insufficient quantity of such products as coal, natural gas, metals and rolled stock, buses, trams, trolley buses, railway carriages, tractors, grain combine-harvesters, technological equipment, potassium fertilisers, man-made fibre and threads, wool and silk fabrics, paper, wall paper, cement, window glass, carpets, TV sets, consumer's radio equipment, washing and sewing machines, motorcycles and bicycles, sunflower oil, margarine.

A significant aspect of Tatarstan's autonomy is sovereignty over its oil resources. The Tatarstan government has kept a controlling share in Tatarstan's oil company "Tatneft," a joint-stock company in which the federal government has no share at all. This contrasts with other Russian regions where local governments have little control over oil resources.

Approximately 2.6 billion tons of crude oil have been extracted in Tatarstan since I944. Proven reserves are about 25 million tons/year for thirty years. Each ton of crude oil yields an average of 40 cubic meters of natural gas. In 1994, Tatarstan received the largest Ex-Im Bank credit - $270 minion - to rehabilitate old oil wells.

Tatarstan is also the site of the former Soviet Union's largest estimated reserves of bituminous or heavy oil. This has to be in effect melted during drilling; so far the cost has proven prohibitive.

But if new technology were to become available, the potential is enormous. The largest petro-chemical plant in Europe is located in Nizhnekamsk. As percentage of total production in the former Soviet Union, Tatarstan produces butyl rubber (75%), Isoprene rubber (40%), cinematographic film (45%), polyethylene (25%) tires (17%) and recording tape (23%).

Tatneft has three joint ventures with Western companies, aiming to transfer advanced technology and institute environmental controls. The largest is with the French company Total. The other two are with Global Natural Resources in Houston and Germany's Mineraloil. Tatarstan has phased-in these joint ventures in a controlled fashion. The government is currently allowing these ventures to gain strength and there are no active efforts to conclude further ones in production at this point. There is, however, a significant effort to attract foreign investors for a planned expansion of the oil refining sector. Through the Soviet period, Tatarstan oil was refined in neighboring Bashkortostan or sent as far away as Ukraine. There is now a small reining capacity at Nizhnekamsk. The price tag for the oil refining sector expansion is estimated at %1.2 billion with bidding currently underway.

Taking concrete steps for Tatneft to get into the higher value-added business of refining the Tatarstan leadership signed in mid-1995 an intergovernmental agreement with Ukraine to establish the International financial-industrial company "Ukrtatnatta", involving the only refinery in the CIS able to process high-sulfur oil.

8% of all freight in the former Soviet Union is hauled on KamAZ heavy trucks. Opened in 1976, the KamAZ plant is located In Naberezhnye Chelny, a city on the Kama River. KamAZ was the first joint-stock company in Russia, formed in June I990 with the following shares at the time: 11% Republic of Tatarstan, 45.5% legal entities in Tatarstan and the CIS, 3.5% workers and 2% foreign investors. In April 1993, a major fire destroyed the entire engine-building sector of the factory. KamAZ entered a three-way partnership with U.S.-based Cummins Engine Company and the EBRD to build a cleaner engine at a cost of $300-500 million. The financial partner is Wall Street's Kohlberg Kravis Roberts (KKR). They seek to attract several billion dollars of investment. Rockwell International is working to support the KamAZ truck manufacturing plant as it recovers its production capacity after the disastrous fire. Rockwell and KamAZ are seeking further opportunities for component supply. product assembly, technology transfer and local manufacture of axles at KamAZ.