Expert: Reactivation of Nairit plant is one of important steps for Armenian economic modernization

ArmInfo. Reactivation of Nairit plant is one of important steps for Armenian economic modernization, Head of the Union of Local Commodity Producers of Armenia Vazgen Safaryan mentioned at today's press-conference noting that this year Armenia intends to take steps for attracting investments from Russian "Sibur", China and Iran aimed at reactivation of Nairit chemical plant.

"Last year the government managed to return 90% of shares from Russian Interbank, further steps will be aimed at reactivation of the plant, and in this issue an agreement should be reached with Iran on gas supply for rubber production", the expert mentioned, emphasizing that Iranian gas for Armenia will be more beneficial in use than the Russian one. He explained his opinion by the fact that for producing 1 ton of rubber 6.6 thousand cubic meters of Iranian gas are needed, while 8.2 thousand cubic meters of Russian gas are needed to ensure the same amount of production, "Preferring Iranian gas we will benefit 20% in the profit", he stated.  

"In fact 80 mln cubic meters of Iranian gas will ensure production of 12 thousand tons of rubber, half of which may be exported to Iran as a payment for the gas and the remaining amount may be sold", Safaryan sumerized.

To note, Nairit Plant has been idle since April 2010. At the moment the debts of Nairit Plant amount to 50 billion AMD (about 130 million USD). The Plant's shares were given as security against the CIS InterStateBank's 70 mln USD loan provided in 2006 for 5 years - till late Dec 2011 - at 12.5% p.a. In 2006, 90% of Nairit Plant's shares were sold to Rhinoville Property Limited (UK). The latter owns an 89,999% stake in the plant, Armenian Ministry of Energy and Natural Resources - 4,496%, Gazprom Armenia CJSC (previously ArmRusgasprom) - 3,596%, and Yerevan Thermal Power Plant - 1,907%.  In 2015 the World Bank conducted a financial and technical audit at Nairit Plant at the request of the Armenian Government. The WB considers the re-launch of the plant to be inexpedient because it will need at least $250 mln.  But even if investors are found, the WB experts do not think the product will be competitive, because it will have a high prime cost.  Most experts say that the results of the WB audit can be considered as recommendations to the Plant's bankruptcy process.