Crisis may break renowned Russia porcelain plant

Mon Mar 2, 2009 1:57pm EST
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By Conor Sweeney

DULEVO, Russia (Reuters) - A Tsarist-era porcelain factory that survived the Russian revolution and the end of the Soviet Union is on the verge of collapse, its plight typical of hundreds of outmoded industrial plants across this vast country.

Founded in 1832, the Dulevo Porcelain pottery once supplied the Russian court. In the 20th century, it produced special communist revolutionary pieces for the Bolshevik elite and their allies overseas.

Its antiquated and inefficient facilities, the result of years of under-investment, mean Dulevo, 115 km (73 miles) from Moscow, struggled to compete with cheap Asian imports even before the global downturn reached Russia late last year.

Throughout the country, more than 2 million people have lost their jobs since start of the crisis. Millions have had their salaries cut, prices are rising by 13 percent a year, the rouble has been heavily devalued and living standards are falling.

Dulevo's general director Natalya Zacharova says the rising price of natural gas for the kilns at the plant, which employs 2,000 people, and more costly raw materials mean it is teetering on the brink.

"In 2008, practically all our costs went up and the prices they are charging us continue to go up," she said in an interview. "This has already started to eat into our stability ... it has taken us to the edge of bankruptcy."

Many other aging plants in Russia have been starved of investment despite a 10-year boom fueled by petrodollars that came to an abrupt end last year.


<p>A woman works on a clay figure that is to be used to cast porcelain sculptures in the Dulevo Porcelain factory in the town of Dulevo, 115 km (73 miles) from Moscow, February 20, 2009. REUTERS/Thomas Peter</p>