Monday, 1 November 2010
The State is my partner
In the last crisis year the government undertook targeted actions to boost the economy: there are facts about their effectiveness nowadays; hundreds of new jobs, investments, exported products.
The first component of real sector support was financial: AMD 39.184 billion was injected into the economy from different funds and organizations. 32mn came from the interstate Russian loan, economic entities received AMD 895 million from the SME DNC fund, and, in 2010, 350 million was provided by “SME investments” UCO: 610 million is to be made available by this yearend, including the option of participating in the economy’s fund.
4 billion 790 million dram was mad available to developers, further 300 million dram was circulated in the economy in the form of state subsidies.
To foster the development of the agricultural sector, 3 companies received capital replenishment of about 440 million dram from “Freda” venture fund. The total amount of loans to agriculture rose to AMD 19.6 billion, which is 72% higher as compared to the 2009.
The imports of equipment in excess of AMD 300 million aimed at starting or developing businesses were encouraged, too: in this case it was decided to postpone the payment of VAT for 3 years.
9 companies took the chance, with nearly 900 additional jobs created mediating about 60 million dollar-worth investments.
Address: Artashat.
Unique in its kind the production of CC2 gas (carbon dioxide) in Artashat, will start producing in a few months. It will be possible to get carbon dioxide of 99.9 % purity, which is widely used in the production of soft drinks, as well as in medicine (during surgeries), thanks to modern technologies.
This is just the small part of the enormous work carried out by “Ararat Group.”
To organize the production of soft drinks and mineral water, “Ararat Group” imported modern technologies and launched production new lines.
General Director of the company Yervand Poghosyan said that the owners of “Ararat group”, who represent the British “Marathon Forest group” Ltd., will donate 27 million USD. About 19 million USD has already been spent on the construction of administrative and industrial buildings.
The foreign investors are willing to fill the promised amount by the end of the year.
The new-built keynote production line is ready waiting for the British professionals, who will lead the assembling of the lines.
Those state-of-the-art lines are meant to use both glass and plastic containers.
The investors have considered it for a long time before founding their business in Armenia in the first place: administrative director of “Ararat Group” Armen Mkrtchyan noted that firstly the investors were concerned about meeting bureaucratic obstacles in Armenia, but he said: “Gladly, we haven’t come across any hardships so far and we were able to convince our investors that Armenia is now at a stage where the Government supports investments.”
The Government’s support to “Ararat Group” consists in extending the period of “temporary custom import” regime used when importing goods by the company for several years.
This, of course, is a unique business development opportunity for entrepreneurs.
The company’s management is confident that the project started with a great investment and the government’s help will become a broad-prospect production with a serious export potential in a short time.
“We’ve laid the groundwork for powerful production and technologies in our country, both in terms of quality and quantity which to my mind may be successful in any European country too”, the administrative director added.
The circuit will be closed at this point: this is why production of plastic bottles and boxes is being arranged in the factory.
220 new workplaces will be created to foster these production lines; the management is considering opening twice as many jobs over time.
Hayk Mirzoyan, the head of the department of industry, who is the first to know about the investments, assures that supporting the entrepreneurs is their duty, especially when it is about creating new workplaces. It couldn’t be otherwise, because the Government attaches great importance to the industry, as well as to the equal development of the sections, and these workplaces created by this company, which is situated in Artashat, stimulate it.
The head of the department of industry says that they are ready to develop business plans with the entrepreneurs for also inspiring them.
The State takes various steps to encourage the investments: from tax privileges to providing special loans. As a reminder; for this purpose governmental operational headquarter was set up.
Address: Vanadzor.
Either the management of “Gloria” sewing factory in Vanadzor was aware of the government’s investment program and asked to postpone the payment of taxes for imported equipment, which was complied with by the Government in a recent cabinet sitting. The director of the company said the Italians had imported equipment to a total cost of about 1.5 million euro. The customs value of said equipment was quite high. They couldn’t afford taking risks in a crisis-hit year, so they turned to the Government for deferring the settlement for a while.
The support had a kind of moral influence on the Italians, who are going to import new equipment and add production capacity, naturally providing with new workplaces.
The director of “Gloria” says that he is expecting support by means of cheap loans, after which they’ve decided to add 300 workplaces, increasing this number to 800 till upcoming February.
Starting operations with only 100 jobs, the ten-year-old enterprise could increase their number to 500, and became one of the leaders in the field. The founders of the company are the Italian company “Sarti” and “Stilisa” sewing fabric of Vanadzor.
According to the 5-year term contract with “Sarti”, Gloria has imported a few dozen equipments, intending to export twice as much as the current amount; ready product of about 600 million drams.
Address: Yerevan.
12 thousand tons of fruits and vegetables will be exported from Armenia by the company “Spika”. For that purpose a refrigerating complex of capacity of 2000 tons was built, a fruit production sorting and a production of exporting containers was founded.
The company organizes exports with its own capabilities: hence they imported “Volvo” and “Iveko” trucks equipped with refrigeration aggregates.
As a result, “Spaika” has provided over 100 new jobs, in addition to some 1500 odd workplaces: fruit and vegetable purchase contracts have already been signed with more than 1500 agricultural companies.
Karen Baghdasaryan, who is responsible for the company’s development programs, said that 12 million dollars have been invested to this business in the last few months.
In an effort to boost exports and jobs, the operative staff of the government decided to support this company as well. It was allowed to extend the payment of VAT.
The group of young company founders is convinced that the financial aspect is not essential (the VAT payment of 450 million drams was delayed). The director of the company Davit Ghazaryan says that it’s very important to feel the government supports you.
As a result of the company’s consistent work and the government’s attention, Armenian fruits and vegetables, packed by “Ararat Fruit” are sold as premium-class product in the Russian hypermarkets, causing serious competitive problems to the Turkish products of the same kind.
Altogether, we have 150 jobs in “Spika”, 220 in “Ararat Group” which will be doubled, 300 new workplaces in “Gloria” after importing new equipment: at the same time – investments, presentable product and export. This is just the target the government’s current projects are aimed to.
Haskim Arakelyan
Economic reform analytical-information center
