By Atom MarkarianArmenia’s largest chemical plant struggling to remain afloat since the Soviet break-up will not after all be brought back to life despite rosy promises of its most recent owner, it was claimed on Monday.
Nairit, the Yerevan-biased synthetic rubber manufacturer, was purchased last April by a Russian industrial group, Volgoburmash, that pledged to restore its Soviet-era production levels with large-scale capital investments. But according to the Russian head of Armenia’s sole power utility which is owed 800 million drams ($1.6 million) by Nairit, Volgoburmash has failed to make good on its promises.
“There is no owner at Nairit anymore,” Yevgeny Gladunchik of the Armenian Electricity Network (AEN) told a news conference. “The plant hasn’t operated since August. All the promises of the previous owner have turned out to be a bluff.”
“We have done everything to make it work. Unfortunately, all we can say now is that the plant is dead,” Gladunchik said. He added that the AEN management decided earlier in the day to seek bankruptcy proceedings against the former flagship of Soviet Armenia’s chemical industry.
There was no immediate confirmation of the news from Armenia’s Ministry of Trade and Economic Development that had negotiated the deal with the Russian conglomerate. Nairit had previously been handed over to an Armenian private bank in payment for its $14 million debt to the latter.
Volgoburmash is not the first foreign investor to have tried to breathe a new life into the factory that used to employ thousands of people. Ransat Group, a British-registered firm, signed a management contract signed with the Armenian government in early 2002, pledging to invest $25 million within the next five years. However, the deal collapsed several months later, with each other side accusing the other of failing to honor its contractual obligations. Ransat eventually decided to surrender control of Nairit.