Government Rules Out Cash Injection Into Ailing Chemical Plant

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YEREVAN (RFE/RL)–The Armenian government will not provide direct financial assistance requested by the country’s second-largest chemical enterprise but is ready to help it sell its production to domestic consumers, Prime Minister Tigran Sargsyan said on Tuesday.

The management of the Vanadzor-Khimprom company, which has largely stood idle since last fall, hoped that the government will channel a part of a $500 million loan obtained by it from Russia into its rehabilitation.

The company based in the northern town of Vanadzor has been hit hard by the global economic crisis and, in particular, 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.

Sargsyan ruled out any direct cash injections into the troubled chemical plant as he visited it for a second time in three months. “Borrowing is not a very good idea for a plant with a very low level of profitability,” he told reporters. “In that case, the plant would mainly work for making interest payments.”

Sargsyan said Vanadzor-Khimprom should instead strive to convince its Russian parent company, Roding Limited International, to invest about $6 million which he believes is needed for making it profitable. To that end, he encouraged it to press ahead with the manufacturing of mineral fertilizers widely used by Armenian farmers. Armenia has until now imported them from Georgia and other countries.

The prime minister said he has instructed the Ministry of Agriculture to devise a program of replacing those imports by Vanadzor-Khimprom fertilizers. Besides, he said, local construction firms implementing government-funded infrastructure projects have pledged to buy construction materials which Vanadzor-Khimprom is also beginning to produce.

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