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Food-Processing Sector

Despite the setbacks of the war, the food-processing sector of Karabakh's economy is recovering and has great potential for further development. The following are the major sub-sectors:

  • Wine Processing
  • Wheat Milling and processing
  • Meat processing
  • Milk processing
  • Fruit and vegetable canning

Wine Processing
There are many wine distilleries throughout Nagorno-Karabakh. A number of these have recently been privatized and are expanding. One plant in the Askeran region, for instance, produces a wide variety of grape wines, mulberry vodkas and brandies from local material. The output is exported to Armenia, Newly Independent States and a host of other countries. This company's current processing capacity is:

  • mulberry processing 1,000 metric tons
  • grape processing 1,500 metric tons
  • wheat processing 500 metric tons

Wheat Milling and Processing
Between the years 1996 and 1997, a new mill was built in an area called Hasanabad. This mill has a capacity of processing 20,000 tons of wheat and produces different types of flour and bran. Currently, it is operates within 30% of its capacity. As a consequence of the mills operating below its capacity, farmers export their wheat to Armenia and import flour, at a cost of 100-120 million drams ($172,400-$207,000).

Meat Processing
Overall, the meat processing industry in Nagorno-Karabakh is underdeveloped. For the most part, the Republic exports fresh meats and usually imports sausages and other processed meats (approximately 103 tons/year). If the imported processed meats were being produced locally, state revenues would increase by almost $30,000 in the form of value-added taxes alone.

Milk Processing
The food-processing sector has sharply declined in the NKR. In the 1980s, 40,000 tons of milk was produced annually, of which 35,000 tons (87%) were processed. In 2002, only 7.5% of the produced milk was processed into dairy products. Due to a lack of collection and primary processing facilities in the villages, much of the output is spoiled and never reaches the cities. In 2002, the urban population consumed only 2,116 tons of milk.

Fruit and Vegetable Canning
In 2002, two new canneries were built — one in Stepanakert, the other in the village of Berkadzor. Using local fruits, the canneries produce jams, preserves, pickled vegetables, natural and concentrated juices. The production facilities are equipped with modern machinery, which enables the management to widen the variety of produced items and increase output. A considerable portion of vegetables is imported from Armenia due to the limited local production, at a great cost in transportation.

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