From: Justin Burke (JBurke@sorosny.org)
Date: Tue Nov 26 2002 - 17:25:00 EST
British firm invests 3.5m dollars in troubled Armenian rubber plant
Text of report by Armenian news agency Arminfo
Yerevan, 23 November: Britain's Ransat PLC company has invested about 3.5m dollars
in the Nairit-1 closed-type joint-stock company, whose operation is now suspended,
the company president, Anil Kumar, told a news conference today.
Kumar said that the investments had been made since the middle of June when 100 per
cent of Nairit-1 shares were acquired. The investments were made in the resumption
of production of chloroprene rubber, acquisition of raw material, management and
marketing. Since the middle of June 3,000 tonnes of chloroprene rubber were
produced against planned 6,000 tonnes. Kumar said that this occurred because the
plant stopped work twice due to suspension of energy supplies. The plant suffered
losses to the tune of 4m dollars as 21 days were needed to restore production.
Kumar said that since 3 November this year the plant was not working due to cut off
energy and gas supplies. The energy supplies were suspended by Britain's Midland
Resources company which owns Armenia's energy distribution network. After that,
Ransat was forced to reject the gas supplies. Midland Resources substantiates this
action by unpaid debts. Kumar said that Ransat had no outstanding energy debts. As
far as previous debts for gas and energy are concerned, they are subject to
rescheduling under an agreement with the Armenian government and their payment will
start only next year. Kumar believes that Midland Resources' action is illegal and
he is ready to file a lawsuit over the issue.
In addition, Kumar said, it is strange that the Armenian authorities themselves are
hampering the operation of the plant. Tax inspectors have been holding an
inspection at the plant over one month already. But the government has promised to
render all the necessary assistance to Ransat in case of the privatization of
Nairit-1. Meanwhile, Kumar said that he was not going to retract and next year
Nairit-1 would be profitable. This will be achieved due to a transfer to rubber
production based on butadiene technology.
Kumar told an Arminfo correspondent that Nairit-1 was consuming energy to the tune
of about 1m dollars per month. Ransat is not currently holding talks with Midland
Resources. An agreement has been reached that Ransat will pay for energy and gas to
ArmRosgazprom closed-type joint-stock company [Armenian-Russian joint venture],
which in turn will pay for energy to Midland Resources, Kumar said.
Source: Arminfo, Yerevan, in Russian 1450 gmt 23 Nov 02
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