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Armenian Chemical Giants Stand Idle Despite Foreign Takeovers


By Atom Markarian

Armenia’s two biggest chemical enterprises controlled by a British-registered firm are standing idle and facing uncertain prospects despite their new manager’s pledge to bring them back to life.

Ransat Group, which runs the Nairit giant in Yerevan and the Prometey-Khimprom chemical complex in Vanadzor, has so far been unable to end the post-Soviet troubles of the two flagships of the once thriving Armenian chemical industry.

The London-based company pledged to invest $25 million in Nairit when the Armenian government granted it a five-year management contract for the struggling factory in February. The deal was seen as a prelude to Nairit’s privatization by Ransat.

Nairit resumed its work in May only to go idle again last month, running up $1.5 million in additional debts to electricity suppliers. The sprawling factory reportedly ground to a halt after Ransat’s failure to bring in fresh deliveries of butadiene, a liquefied gas used in the production of synthetic rubber.

As a result, Nairit’s 2,500 employees, who have grown accustomed to such stoppages, have not yet been paid even their July salaries.

Ransat officials in Yerevan declined a comment on Wednesday, citing the absence from the country of Anil Kumar, Nairit’s Indian-born chief executive.

Speaking to reporters in February, Kumar pledged to “modernize and bring the factory to international standards,” saying that Armenia’s isolated geographical position “doesn’t really bother Ransat.” He also promised a threefold increase in Nairit’s production in the next three years.

In July, Ransat purchased a 50 percent share in and took over the management of Vanadzor’s Prometey-Khimprom from Senik Gevorgian, an Armenian-born Russian businessman.

Gevorgian had privatized the chemical complex in 1999 at a knock-down price, pledging to create 4,000 jobs and invest $55 million. Government figures show that less than $19 million was actually invested. Prometey-Khimprom, which includes two chemical plants and a thermal power plant, resumed its operations in the middle of last year, but ground to a halt several months later.

Ransat’s reportedly $6 million takeover of the complex raised fresh hopes for its recovery. Prometey’s chief manager, Vartan Vartanian, told RFE/RL that preparations are now underway to resume production operations there. But he gave no dates.

Analysts say that at the heart of Prometey’s woes is its failure to receive Russian natural gas, its main raw material, at a discount price, as Gevorgian had initially hoped. The existing price of $79 per 1000 cubic meters of gas has proved too costly for the Vanadzor factory.

Some informed sources claim that Gevorgian, who also owns Armenia’s biggest private television station, has finally reached agreement with the Russians on cheaper gas supplies and now hopes that Ransat will find new markets for Prometey’s products.
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