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Crimea risks losing 35% of export market on EU sanctions

July 02, 2014, 13:24 UTC+3 MOSCOW
However, the region's Ministry of Economic Development hopes exports can be reoriented to the Middle East, China, India, Turkey, Azerbaijan and other countries, “where Crimean goods are in demand”
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At a production plant in Crimea (archive)

At a production plant in Crimea (archive)

© ITAR-TASS/Anatoly Morkovkin

MOSCOW, July 02. /ITAR-TASS/. European Union’s ban on imports from Crimea will have an adverse effect on the republic’s economy, as the share of exports to the EU exceeds 35% for some companies. The region’s Ministry of Industrial Policy reported this to ITAR-TASS.

“Manufacturers will have to seek new markets, which will take some time, so the companies in the ministry’s area of responsibility will suffer from the ban on Crimean imports,” said the acting minister, Andrei Skrynnik.

The ministry reports that in the first quarter of 2014, Crimean exports to the EU dropped 20.2% year-on-year; supplies to the EU accounted for 15.1% of Crimea’s total export. According to the republic’s Ministry of Economic Development and Trade, in the first quarter Crimea exported $57.2 million worth of goods. Industrial companies’ share was 81.2% ($46.5 million); chemicals made up almost a half of that amount.

The ministry hopes exports can be reoriented to the Middle East, China, India, Turkey, Azerbaijan and other countries, “where Crimean goods are in demand”.

Chemical producers Krymsoda and Krymsky Titan of the diversified company Group DF owned by Ukrainian businessman Dmitry Firtash, Himtex and Perekopsky Bromin Plant are among the key donors of the peninsula’s economy. The chief mechanical engineering exporters of Crimea were the Kerch Railway Switches Plant and Simferopolselmash, reported the economics ministry.

Means of transport accounted for 6% of the total export, in particular those produced under contracts with the Zaliv plant specializing in building and repair of ships for rig servicing. The plant’s main orders were previously submitted by Norway.

June 25, the Council of the EU prohibited EU countries from importing goods produced in Crimea. The ministers also banned European companies’ insurance services for cargo transportation from Crimea, with an exception made for goods with Ukrainian certification.

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