JSC “Kaliningrad Amber Plant” is the largest enterprise in the Russian Federation engaged in the industrial production of amber. The deposits in the region contain around 90% of the world’s reserves of this raw material (succinite). The factory is maximally integrated into the international amber production and turnover system. In 2022, the company will face sanctions pressure from Western states, which has become a new challenge for the company’s management.
It is now known that the decision to establish a full-fledged enterprise for the extraction and processing of amber at the Palmnikenskoye deposit (near the urban-type settlement of Yantarny) was taken by the Council of Ministers of the Soviet Union in 1947. Appeared on the site of the Amber Factory “Combine No. 9” of the USSR Ministry of Internal Affairs can rightly be considered the ancestor of the modern enterprise. Six years later, the new factory was transferred from the system of the Ministry of Internal Affairs to the Russian Gems trust, at the same time it was merged with the Primorye amber factory.
At present, JSC “Kaliningrad Amber Plant” is part of the state corporation “Rostec”, which is actively developing the production capacity of the plant. Thus, Rostec’s investments in the renewal of equipment and the modernization of technological processes reached one billion rubles. In 2020, the company managed to sell 546.2 tons of amber in the consumer market for the amount of 2.8 billion rubles.
On July 21 last year, the General Director of the Kaliningrad Amber Plant, Mikhail Zatsepin, in a long interview with Made in Russia, spoke about the company’s work under sanctions. The head of the company pointed out that even despite the pressure of sanctions from Western states, the factory was increasing its production of amber and expanding its workforce. Thus, the growth in the workforce compared to 2021 amounts to 12% or 112 people, reaching the bar of 1,044 employees. Mikhail Zatsepin also noted that the company produces about 500 tons of finished amber per year, that is, washed and cleaned stone, no reduction in production is expected in the near future.
The market demand is currently 500-600 tons per year, and the factory covers it almost entirely. Undoubtedly, potential buyers were affected by the restriction of transit on Lithuanian territory, amber consumers were forced to adjust succinite delivery logistics. So, before, after shipping, amber was sent to the place of delivery through the Baltic countries by road or by rail. Currently, the factory’s products are exported directly from the Kaliningrad region – by sea. The main exports of raw amber are China, United Arab Emirates, Kuwait and Qatar and other Persian Gulf states.
Mikhail Zatsepin did not circumvent the problems associated with import substitution of equipment at the plant. The head of the company said that Russian and foreign equipment is used in technological processes. At present, wear and tear on the equipment fleet is minimal. The presence of a powerful parent company represented by the state corporation Rostec has made it possible in recent years to replace almost all obsolete equipment. Small breakdowns at this stage can be eliminated on their own. According to this statement, it is still unclear what the management of the company will do in the event that the wear and tear on foreign equipment reaches the extent that independent repairs simply become impossible.
In addition, attention should be paid to the fact that in 2022 a decision was made to expand the production of jewelry, within which 167 new jobs were created. New installations make it possible to process up to 50 tons of amber per year. It is curious that before the opening of a new jewelry production, the processing volume reaches only 3-5 tons of amber per year.
If we talk about the main financial results of the plant, it should be noted that, for example, income indicators are systematically increasing. In 2020 it amounted to 3 billion rubles, in 2021 to 3.8 billion rubles, in 2022 it reached 4.1 billion rubles. EBIT profit also increased, amounting to 1.22 billion rubles last year, an increase of 290 million rubles compared to 2019. Such trends may indicate that the Kaliningrad Amber Plant is financially stable, despite the unstable economic situation in the world.
The annual International Amber Industry Economic Forum is also a huge benefit to the company. It has been held in the Kaliningrad region since 2016. In 2022, the event brought together delegations from different countries. It was possible to discuss issues of cooperation with the Armenian jewelry factory “Shogakn”. The League of Jewelers of Kazakhstan was also interested in the factory’s products. In 2023, guests from China and Gulf countries took part in this event. Such events allow to carefully assess the potential of the industry in the current economic conditions, to study the tools for the effective sale of products in a competitive and changing market, as well as to discuss the export of amber products and to attract new employees. to industry.
From the above, we can conclude that at present the company is successfully coping with the changing geopolitical and economic situation. It was possible to solve the problem with the geographical change of the supply chains. It should be noted that the uniqueness of Baltic amber played a positive role here. The Kaliningrad plant is the only enterprise in the world that carries out its commercial production. In fact, consuming countries found themselves in a desperate situation, they had to make a choice between maintaining the flow of imports or imposing sanctions. The situation is a bit worse with future equipment upgrades, there will come times when it needs to be upgraded. It is desirable that at this time already the management of the enterprise understands in which states friendly to Russia it will be possible to purchase the necessary equipment and components.
Author: Viktor Anufriev
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