Russia’s Offer Manufacturing of Sport Planes in Armenia

YEREVAN (RFE/RL)–The designer and manufacturer of Russia’s famous Sukhoi fighter jets intends to assemble sport airplanes in Armenia provided it is granted a five-year exemption from corporate tax–company executives said on Thursday.

"We propose to organize an assembly production line [of the aircraft] in one of Armenia’s industrial enterprises," Hovannes Ohanian–a top executive from the Sukhoi Production Company–said on a visit to Yerevan. Ohanian and other Sukhoi representatives–led by the company’s CEC Mikhail Simonov–met the same day Prime Minister Armen Darbinian and parliament speaker Khosrov Harutiunian to discuss details of their project.

Sukhoi is currently exporting sport aircraft to 12 countries–the United States being the main market. Ohanian said the ongoing economic crisis in Russia is forcing the company to move its production operations into other countries with cheaper work force and better tax conditions. He said speaker Harutiunian "expressed readiness" to secure passage of a law exempting Sukhoi’s Armenia division from profit tax for five years.

Armenian law allows foreign companies not to pay the 15 percent tax during first three years of their activities. Sukhoi’s executives say they envisage to begin production operations as early as next year after investing a total of $7 million.

They say the would-be Armenia division could produce from 40 to 80 sport planes in 2000–each of them priced at some $200,000 in the world market. The territory of the largely idle Hrazdanmash industrial giant in the city of Hrazdan is seen as the most likely production site.

The Russia’s plan only assembly operations in Hrazdan during the initial period and expect on-site manufacturing of all aircraft parts later on. Asked by reporters if Sukhoi considers also manufacturing its sophisticated military aircraft in Armenia in the future–Ohanian said it is not up to the state-controlled company to make such decisions. "Military aircraft is the prerogative of the Russian ministry of defense," he said.

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