By Atom MarkarianA British-registered firm accused the Armenian government at the weekend of hampering its efforts to revitalize Armenia’s largest chemical factory. A top executive from Ransat Group, which runs the struggling Nairit giant in Yerevan, claimed that some governing circles and businessmen connected with them are bent on squeezing his company out of the country.
The criticism, made in unusually strong terms, came two weeks after the new owners of Armenia’s power utilities cut off energy supplies to Nairit, forcing it to go idle less than three months after it resumed production operations. The management of the Armenian Electricity Network is demanding the urgent repayment of Nairit’s oustanding electricity debts totaling $5 million.
A similar decision by the Russian-controlled Armrosgazprom gas distributor brought the Soviet-era factory to a halt last summer. Nairit resumed its work in early September only to face new sanctions imposed by Midland Resources Holding, AEN’s new owner which is also registered in Britain.
The Nairit chief executive, Anil Kumar, argued that under the terms of its management contract with the Armenian government, Ransat Group was due to start repaying Nairit’s old debts from May 2003. He complained that the government thus failed to ensure stable supplies of electricity and natural gas which are vital for Nairit’s work.
Kumar also attacked the authorities for ordering a major financial inspection of Nairit’s books on an apparent suspicion of tax evasion. The tax authorities themselves owe Nairit $1 million worth of value-added refund.
Suggesting that unnamed top officials are trying to force Ransat to leave Armenia, Kumar said the company remains committed to its long-term plan to revive the once thriving flagship of the Armenian chemical industry.
“There is a negative force here that doesn’t want us to work, but it is not going to stop us,” he told reporters. “If somebody thinks that I will back away after 16 months of hard work, he is bloody mistaken.”
The London-based company pledged to invest $25 million in Nairit when the Armenian government granted it the five-year management contract in February. It was hoped that the deal will give Nairit, which employs more than 2,500 people, a new lease of life after a decade-long steep decline. It was also seen as a first step towards Nairit’s privatization by Ransat.
Kumar, however, questioned the government’s commitment to the success of the recovery plan, saying that the repeated stoppages make it extremely difficult to clear all wage arrears at Nairit and have already cost Ransat $4 million in damages -- as much as it has invested in the factory since May.
With an annual turnover of $500 million, Ransat Group specializes in the worldwide sale of various commodities such as chemicals, metals and ceramics. The company also has software development and financial service divisions.