Armenian Chemical Plant Seeks Government Aid

YEREVAN (RFE/RL)–Armenia’s second largest chemical enterprise is seeking millions of dollars in government assistance to kick-start its production operations largely halted late last year because of the global economic crisis.

The Russian-owned Vanadzor-Khimprom company, based in the northern town of Vanadzor, was hit hard by a collapse of international prices of calcium carbide, its main product. It stopped manufacturing the chemical compound, used in steelmaking, and sent much of its 830-strong workforce on indefinite leave as a result.

Earlier this year the Armenian government pledged to give the company a new lease of life after its management submitted a business plan to produce mineral fertilizers widely used by farmers. Prime Minister Tigran Sargsyan strongly backed the idea as he visited Vanadzor in March, saying that Armenia would no longer need to import at least 20,000 tons of such fertilizers from Georgia. He also said the obsolete plant’s operations are important not only for the unemployment-hit town but also the economy as a whole.

Sargsyan similarly pledged government support for the country’s largest chemical plant, Nairit, that also suspended its work last fall. The Yerevan-based plant resumed production operations in late April.

Vanadzor-Khimprom’s executive director, Aleksandr Snegirev, told RFE/RL on Wednesday that the company hopes the government will channel a part of a $500 million anti-crisis loan disbursed by Russia into its rehabilitation. Vanadzor-Khimprom’s British-registered parent company, Roding Limited International, is owned by Russian businessmen.

Snegirev did not specify the amount of funding sought by Vanadzor-Khimprom, saying only that the company needs cash to repair its equipment and manufacture fertilizers and other chemicals. “If we don’t get that money, we won’t be able to do that,” he said.

Snegirev said earlier that about $4 million is needed to “get the plant on its feet” in the short term. Sarkisian, for his part, estimated that Vanadzor-Khimprom’s full modernization will require as much as $300 million in capital investments.

The government has pledged to use some of the Russian loan for providing financial assistance to struggling Armenian firms. But it has not approved any concrete aid allocations yet.

In the meantime, 500 or so people working at Vanadzor-Khimprom now have not been paid for the past three months. Snegirev said the company will eliminate the wage arrears soon with proceeds from the sales of synthetic corundum. He said production of the substance used by engineering industries resumed about a month ago.


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