Albania - Industry

Mining, metallurgy, food processing, textiles, lumber, and cement were among the leading industries in Albania under the communist regime, when heavy industry was a priority and some factories were capable of exporting. Until 1961, most equipment was supplied by the Soviet Union and then by China until 1978. After 1989, the sector declined due to the lack of new technology and financing and the dilapidated condition of the factories. In the 1990s, plants and equipment were destroyed and sold for scrap, or fell into disuse, unable to compete with cheaper imports that came with trade liberalization. A revival of chromium, steel, and cement industries came with the increase of foreign investments in 2000. Some new equipment was purchased in the West for a cigarette-making plant in Durrës and for a manufacture of underwear in Korçë. Construction, especially in housing, was the main factor for investment growth.

Mining is a large (but shrinking) sector of the economy, given the rich deposits of bauxite, chromium, nickel, iron, copper ores, and petroleum. The export of raw materials is crucial for foreign exchange earnings. In the 1980s, Albania ranked third worldwide in chromium ore production. Output plunged 3 times to 157,000 tons in 1997, because of the weakening of domestic demand in addition to the closing down of loss-making industries, the lack of capital, high costs, problems with the electricity supply, and the economic chaos of 1997. Albania's output of copper was reduced from 1 million tons per year in the late 1980s to 25,000 tons in 1997. Iron-nickel mining collapsed in the early 1990s with the closing down of the steel works of Elbasan, its main client, but was revived in 2000 due to Turkish involvement at the plant. Coal and petroleum output and petroleum refineries production have also declined in the 1990s due to their inadequate technology.

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