Economists Defined New Export Strategy for the Sverdlovsk Oblast

28.04.2009 — News

THE SVERDLOVSK OBLAST.

Scientists from the Urals State University determined commodity groups that are extremely profitable to export from the Sverdlovsk Oblast. Production of such goods will help the region overcome the crisis and gain a better foothold in the foreign markets.

The research was based on two key factors - export profitability and production facilities upgrade costs. All the goods were broken down into four groups: "Bird in Hand" - low-attractive in terms of export, easy to produce; "Two in the Bush" - difficult to produce, attractive to export; "Kiwis" - non-attractive, difficult to produce; "Hens that Lay Golden Eggs" - most attractive for exporters.

The "Hens that Lay Golden Eggs" cluster lists metal-working, wood-working, machine-building, chemical industry, electrical engineering, construction materials, instrument-making, light industry, and food production. The researchers believe that in terms of profitability the most attractive are special-use textiles, paper, cardboard; agricultural, horticultural and silvicultural machinery.

From the product range perspective, machine building has taken the lead among the high-potential export goods. Float glass and polished glass in sheets look promising among construction materials. In light industry, cheaper labour is the Sverdlovsk Oblast's competitive edge over the EU countries. An unexpected find was the high export potential of food, milk included.

The best-suited locations for production facilities are Ekaterinburg and Nizhniy Tagil. Two biggest cities of the Sverdlovsk Oblast have the most developed infrastructure and enjoy proximity of the potentially required resources.

Sergey Kadochnikov, Dean of the Faculty of Economics at the Urals State University, told RusBusinessNews that external market conditions will promote search for new export goods. According to customs statistics, in 2007 80% of the Sverdlovsk Oblast exports were comprised by half-finished carbon steel products, radioactive elements, titanium and titanium goods, coarse aluminium, flat-rolled products and pipes.