Latvia - Industry

Latvia's industrial base has centered mainly on heavy industries such as chemicals and petrochemicals, metal working, and machine building. Major manufactured items include railway carriages, buses, mopeds, washing machines, radios, electronics, and telephone systems. Since 1995, output of buses has fallen, but there has been an increase in the production of transport vehicles and passenger rail cars. Base chemical production has also declined slightly, as demand for household detergents and fibers has fallen. Other important industries include paper, petrochemicals, mechanical engineering, and communications. Prior to 1998, the food processing sector provided the largest portion of the country's manufacturing output. Following the 1998 economic crisis in Russia, that sector declined, as Latvia depended upon Russia for exports. As of 2002, however, food processing showed potential for growth. In 2001, industry accounted for 26% of GDP, and employed around 25% of the work force. Although some 50 enterprises are excluded from privatization (including ports, the railway company, and the postal service), only a few large state enterprises had not been privatized as of 2002, including the Latvian Shipping Company (Lasco), and the electricity utility company (Latvenergo). Ninety-eight percent of former state-owned enterprises had been sold as of 2002.