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Newly Private Caviar Cannery Packing Profits

September 26, 1992

Undated (AP) _ By ALAN COOPERMAN Associated Press Writer

SAKHALIN ISLAND, Russia (AP) - Sitting at a precision scale, wearing a white lab coat, Irina Furdui looks like a scientist. Actually, her job is to spoon exactly 140 grams of sticky red caviar into each tin produced by the Korsakov Fish Co.

Spooning caviar is tedious work, but Furdui does it with speed and accuracy, perhaps because she is not just an employee but also a stockholder in the cannery, which for decades was owned by the state.

″Lost caviar is lost profit,″ a supervisor says gravely, patting the worker’s shoulder. The slogan has the hollow ring of Soviet propaganda from bygone days, of five-year plans and Heroes of Socialist Labor.

But there is a difference: since the cannery changed from a state-run company to an employee-owned business two months ago, production has jumped 10 percent at the plant on this fishing island just 100 miles north of Japan.

More than 3,000 miles to the west, in Moscow, President Boris Yeltsin hopes to see that kind of success repeated across the country when his privatization program begins Thursday.

″Before, this was nobody’s,″ fish scaler Anna Yaskina said, waving a wet hand to indicate the entire plant. ″Now I feel I have a part of it.″

That feeling of ownership is exactly what Yeltsin wants to spread among his countrymen by selling off thousands of state-owned factories, stores and other businesses.

Under his plan, each citizen will receive a voucher for 10,000 rubles - about twice the average monthly wage - that can be sold or invested in newly privatized enterprises.

The Korsakov cannery went private just weeks before Yeltsin unveiled his program on Aug. 19. It formerly belonged to a collective fishing farm.

The cement floors and white tile walls, constantly hosed down, glisten in the sunlight from doors and windows facing the bay where scores of trawlers unload their catch.

Most of the cannery, last renovated in 1962, is in poor repair. But the room where the salmon roe are washed, salted and packed into green-and-red cans is immaculate. So is a section where a small joint venture with a Japanese food company produces fish cakes, dumplings and seaweed noodles for export.

The cannery employs 500 people, which is ″small enough that everyone knows each other and feels some responsibility″ for profits, said its director, Victor Kudryavtsev.

″Large factories will have a much tougher time,″ he predicted. ″The main thing we have gained is a new attitude. ... It’s not just issuing stock, it’s not just promising dividends; it’s propagandizing the whole idea of ownership. I don’t know whether really big enterprises can do that.″

Since going private, the cannery’s output has risen to about 130,000 cans of pink salmon, caviar and other fish products a day, he said.

Instead of 30 employees late each day, the average is now only two or three. Theft and alcohol abuse also appear to have dropped, said Kudryavtsev, who was elected by the workers to replace a former executive with a drinking problem.

The lanky 35-year-old appears more comfortable in the plant or on the pier than drinking tea in his spartan office. But he spends a lot of his time dealing with bankers and middlemen, adjusting prices weekly - sometimes daily - to match the spiraling cost of supplies like salt, cans and fish.

Inflation has propelled the price of a can of pink salmon up more than 1,000 percent, from 2.38 rubles a year ago to 24 rubles. Red caviar has jumped from 20 rubles to more than 150.

Demand is still high, however, and Kudryavtsev predicts year-end profit of about 35 million rubles - $140,000 - on sales of 300 million rubles. Up to a third of the profit will be distributed as dividends to the worker- shareholders, he said. That would average more than 20,000 rubles a worker.

Laws allowing privatization have been on the books for only a few months, and the process is virtually impossible without political support. The cannery’s privatization was backed by the governor of Sakhalin Province, Valentin Fyodorov, a former economics professor who worked in West Germany for six years in the 1980s.

Fyodorov has pushed the privatization of the fishing industry, the mainstay of the local economy. But he is one of Russia’s main proponents of a gradualist approach to market reforms and has accused Yeltsin of recklessly tearing apart the central planning system.

″We must be cautious about dismantling the old economy, not just once and ’sssst,‴ Fyodorov said, whistling and chopping off an imaginary head with his hand.

″We must create new, private businesses first, and the appearance of the new system will itself gradually destroy the old one,″ he said.

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