First Workshop On Human Rights Laws in Caucaus Starts in Tbilisi

YEREVAN (RFE/RL)–One of the former flagships of Armenian heavy industry–Yerevan’s Kanaker Aluminum Plant (KANAZ)–is an object of fierce competition between two Russian firms that use increasingly tough rhetoric to prevent one another from taking part in its expected privatization.

Previously the employer of thousands of workers–KANAZ has gone through an enormous production slump in recent years and currently operates at only 10 percent of its capacity. The Soviet collapse meant a loss of export markets and supplies of raw materials for aluminum’s production which Armenia does not have.

Some foreign investors show strong interest in KANAZ lately–as the price of aluminum continues to soar in the world markets. One ton of the light metal costs more than $1400 at present. It cost less than $1000 as recently eight months ago. Among those interested are Russia’s Petersburg Foil and Siberian Aluminum as well as a French firm. The Russia’s have been more forceful so far in trying to get hold of KANAZ. The competition has already flared into an all-out battle–with top executives from the two companies trading accusations in the Armenian media.

In a recent interview with Snark news agency–a top manager of Siberian Aluminum–Aleksandr Smetanin–claimed that the Saint-Petersburg plant is on the brink of bankruptcy and cannot be considered a reliable partner. The latter has fired back threatening court action against what it sees as attempts to tarnish its reputation.

The two have opted for different tactics of winning control over KANAZ. The Siberians want full ownership of the effectively idle Yerevan giant–whereas Petersburg Foil is ready to set up a joint venture with the Armenian government in which it would have a controlling share. The latter tactics is more indicative of the government’s intentions. Industry and Trade Minister Hayk Gevorgian has spoken out in favor of a "phased" privatization of KANAZ–which means that Yerevan may not be willing to give up a majority stake at once.

Speaking to reporters over the weekend–Gevorgian argued that time is needed to assess the future partner’s credibility. He said the government will soon make a final decision on its plan of actions. Analysts say KANAZ needs at least $15 million in capital investmen’s to become competitive. Foil is its sole production item at the moment–with the monthly production level at standing at 300 tons. The sprawling factory in north Yerevan was to be sold off to another Russian company–Inkom Metal last year. But the Russian economic turmoil that erupted in August 1998 foiled the $16 million deal.

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