Armenian government believes in successful recovery of Hrazdan Cement plant

ArmInfo. "There were two options either to launch the procedure of announcing the company's as a bankrupt or maintain it and receive profit from it", Minister of Economy of Armenia Artsvik Minasyan told journalists commenting on the issue of Hrazdan Cement Company, the second largest cement plant in Armenia.

The Minister does not doubt that after the plant is passed under operation of creditor VTB Bank (Armenia) it will be able to ensure production of a competitive product both for the local market and for export.  Despite the fact that the government does not have any control levers Minasyan thinks that in this case VTB Bank's (Armenia) image is the best guarantee of reliability and success.

To recall, in February 2016 the Armenian government approved draft decision on releasing Hrazdan Cement company from a fine amounted to 510 mln AMD. Former Minister of Economy Karen Chshmaritian informed that according to the presented program on the plant, which had been agreed with VTB Bank Armenia and under which the bank will provide 4.6 mln USD loan for recovery of the plant, the annual amount of cement production should be reached to 200 thousand tons and 450 new job places should be created.  In 2015 around 80 thousand tons of cement was produced, which was mainly exported.

It should be noted that the company "Hrazdan cement" (formerly "Mika Cement") is created on the basis of "Hrazdan cement plant", which was launched in 1970 as a structural unit of "Hrazdan mining and chemical plant", which in 1977 was transformed into "Hrazdan cement factory".  The company's product was used in Armenia in almost all construction sites and areas of importance and was largely exported to the Transcaucasian countries and to Russia.In the 90s the plant was practically not functioning. In 2001 President of MIKA Armenia Mikhail Bagdasarov privatized the plant.  In the same year, the factory was renamed into "Mika-Cement" CJSC.  Later, the plant was handed over to VTB Bank (Armenia) against debt.  The cement plant was reopened in July 2014 thanks credit received from VTB Bank (Armenia). The plant specializes in production of about 10 brands of Portland cement. The company is located in the town of Hrazdan on an area of 540 thousand square meters. The plant has two production lines with a designed capacity of 1.2 million tons of cement and 1 mln ton of clinker per year.