Monday, April 25 2016 15:21
Alexandr Avanesov

Hrazdan-Cement Armenian Company to get tax preferences

ArmInfo. VTB Bank (Armenia) has submitted a rehabilitation program for Hrazdan-Cement Company to the Government of Armenia, Artsvik Minasyan, Economy Minister, said when introducing the Bill exempting the company from fines and penalties in the third and final readying, on April 25.

The minister said the rehabilitation program looks to raise the annual cement production to 200,000 tons versus 23,300 tons in 2014 and 75,000 tons in 2015. New jobs will be created at the company.  According to preliminary calculations, more than 700 million drams will be provided to the state budget.  If the Bill is not passed, the company's assets that have been placed as collateral at VTB Bank (Armenia) will be set to auction and the state budget will receive 0 drams.

The minister recalled that the sole shareholder of VTB (Armenia) is the Russian VTB Bank. Yet on June 2 2013, the Central Bank approved the application of VTB Bank (Armenia) for preliminary agreement to raise 100% stake in Hrazdan-Cement Company.  As for the rumors that Azerbaijan allegedly controls the activity of VTB Bank (Armenia), Artsvik Minasyan recalled that 60.93% of shares of the statutory capital of the Russian VTB Bank belongs to the Russian Federation represented by the Federal Agency for State Property Management.  Another 26% of shares of the Russian VTB are traded on the stock exchange and any subject can buy them. For the time being, 2.95% of the shares belong to the Oil Fund of Azerbaijan, which cannot have any influence either on the VTB Bank (Armenia) or on its parent bank.

In addition, as of late 2015, VTB Bank (Armenia) invested more than 95 billion drams in the development of Armenia's economy and another 73 billion drams in financing of consumer and mortgage loans.  In addition, VTB Bank (Armenia) increased its statutory capital by $50 million (with the support of the parent bank in 2012-2015) of which about $35 million were invested in economy of Armenia in 2015. In 2012- 2015 the bank did not pay dividends from the profits to the parent bank and invested these funds in capitalization and new projects. In 2010-2015, the bank paid 7.5 billion drams taxes and other payments. 

The minister said Hrazdan-Cement Factory has a significant amount of unpaid taxes since the global economic crisis and due to poor management. This has led the company to bankruptcy. 

A working group including all the stakeholders was established by the prime minister's decision a year ago bearing in mind the importance of the plant for the social-economic development of the country, maintaining of 470 job places and the potential of the plant for Armenia's further economic development.  As a result a draft law was initiated, according to which all the fines and penalties amounted to 504.9 mln drams excluding the main sum of the debt were written off.  The total amount of the debt makes 935 mln drams, including environment payments amounted to 5.2 mln drams. The minister recalled that the plant has new owner VTB Bank Armenia, which has provided additional loan funds amounted to 4.6 mln USD.

The minister emphasized that the cement field in Armenia faced crisis, which led to reduction of the production amounts. Before the crisis the production of the two cement plants of the country was about 1 mln tons, as a result of which the import of the product was stopped. This in turn led to growth of cement price. However, because of the crisis the production was significantly curtailed, as a result of which the component of prime cost significantly grew and led to losses. As a result the plant was not able to overcome competition. 

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. 

POST A COMMENT
Input digits     


News
Ardshinbank has extended the campaign for issuing a digital card for 1 dramArdshinbank has extended the campaign for issuing a digital card for 1 dram
Growth of Armenia`s economic activity to 14.5% in 10 months was  accompanied by increase in exports and importsGrowth of Armenia`s economic activity to 14.5% in 10 months was  accompanied by increase in exports and imports
Unprecedented offer from FLYONE ARMENIA: Beirut, Dubai, Tel Aviv for  only 89 eurosUnprecedented offer from FLYONE ARMENIA: Beirut, Dubai, Tel Aviv for  only 89 euros
Over a half of Armenia`s population live in  communities actively  involved in  CoM East projectOver a half of Armenia`s population live in  communities actively  involved in  CoM East project
Armenia`s transport infrastructure yet unprepared for new geoeconomic  configuration - Vahe Davtyan Armenia`s transport infrastructure yet unprepared for new geoeconomic  configuration - Vahe Davtyan 
AMD 4․653․223 to AMD 4․653․223 to "Aren Mehrabyan" foundation: beneficiary of "The Power of One Dram" for December is the Health Fund for Children of Armenia
Forecast: Without social support, poverty rate in Armenia could rise  to 49%Forecast: Without social support, poverty rate in Armenia could rise  to 49%
PSRC starts process of revising electricity tariffsPSRC starts process of revising electricity tariffs
Poverty rate in Armenia in 2021 increased by 0.1% compared to 2019Poverty rate in Armenia in 2021 increased by 0.1% compared to 2019
Armenia`s government to support IT sector Armenia`s government to support IT sector 
Ardshinbank holds a campaign 10000 AMD for every 300th client making a money transferArdshinbank holds a campaign 10000 AMD for every 300th client making a money transfer
Armenia`s share in UNECE programmes 22%Armenia`s share in UNECE programmes 22%
EU to issue 33mln EUR grant to Armenia EU to issue 33mln EUR grant to Armenia 
Nikol Pashinyan: Introduction of  universal income declaration system  will have significant anti-corruption effectNikol Pashinyan: Introduction of  universal income declaration system  will have significant anti-corruption effect
On December 1, Ameriabank to start initial placement of next tranche  of USD bonds in amount of $10 millionOn December 1, Ameriabank to start initial placement of next tranche  of USD bonds in amount of $10 million
Models of cooperation between public and private sectors are being  developed in ArmeniaModels of cooperation between public and private sectors are being  developed in Armenia
Evocabank launches new contactless cashless payment tool- mPOS for  business entitiesEvocabank launches new contactless cashless payment tool- mPOS for  business entities
Joint Initative of HSBC Bank in Armenia and Jinishian Memorial Foundation (JMF) promotes innovative and sustainable agriculture among the small holder farmers.Joint Initative of HSBC Bank in Armenia and Jinishian Memorial Foundation (JMF) promotes innovative and sustainable agriculture among the small holder farmers.
Civil Contract nominates Armen Nurbekyan for post of CBA Deputy  Chairman Civil Contract nominates Armen Nurbekyan for post of CBA Deputy  Chairman 
Economy Ministry to provide Economy Ministry to provide "oxygen" for IT companies working with  international market 
Party: Draft state budget of Artsakh for 2023 does not reflect  internal and external realities Party: Draft state budget of Artsakh for 2023 does not reflect  internal and external realities
Mher Grigoryan noted key importance of programs implemented jointly  with EBRD Mher Grigoryan noted key importance of programs implemented jointly  with EBRD 
Vahan Kerobyan: Our goal is to bring the volume of investments to 25%  of GDPVahan Kerobyan: Our goal is to bring the volume of investments to 25%  of GDP
Ameria PhonePOS.  New application for receiving non-cash payments with a smartphoneAmeria PhonePOS.  New application for receiving non-cash payments with a smartphone
EDB developed concept for establishing platform on which  multicurrency digital transactions may be carried out - Tigran  SargsyanEDB developed concept for establishing platform on which  multicurrency digital transactions may be carried out - Tigran  Sargsyan
EDB announces 2nd contest of digital technologiesEDB announces 2nd contest of digital technologies
Economy Ministry to support IT companies affected by dram  appreciationEconomy Ministry to support IT companies affected by dram  appreciation
Expert: There are a lot of random people in the tourism sector of  Armenia todayExpert: There are a lot of random people in the tourism sector of  Armenia today
Incomplete fulfillment of capital expenditures indicates a lack of  professionalism - EconomistIncomplete fulfillment of capital expenditures indicates a lack of  professionalism - Economist
EDB forecasts 4.2% GDP growth in Armenia in 2023 and gradual  devaluation of AMDEDB forecasts 4.2% GDP growth in Armenia in 2023 and gradual  devaluation of AMD
Sporadic construction of solar power plants could undermine Armenia`s  food security - expertSporadic construction of solar power plants could undermine Armenia`s  food security - expert
ADB to help Armenia develop wind energyADB to help Armenia develop wind energy
US considers granting Armenia market economy statusUS considers granting Armenia market economy status
Another dollar tranche of bonds from IDBankAnother dollar tranche of bonds from IDBank
Tourists arriving in Armenia faced difficulties due to cashless  payment requirements - MPTourists arriving in Armenia faced difficulties due to cashless  payment requirements - MP
Armenia`s tax authorities on peculiarities of taxation when renting  apartmentArmenia`s tax authorities on peculiarities of taxation when renting  apartment
AraratBank acts as an underwriter of National Mortgage Company RCO bonds   AraratBank acts as an underwriter of National Mortgage Company RCO bonds  
Converse Bank customer wins Visa campaignConverse Bank customer wins Visa campaign
Armenia`s economy recovered quickly after `September shock` - Vahan  KerobyanArmenia`s economy recovered quickly after `September shock` - Vahan  Kerobyan
AraratBank launches Google Pay for its card usersAraratBank launches Google Pay for its card users
Goods imported to Armenia to be liable to excise taxGoods imported to Armenia to be liable to excise tax
Armenia`s national debt in terms of figures not essential - Armenia`s  premier Armenia`s national debt in terms of figures not essential - Armenia`s  premier 
French Development Agency to open permanent office in YerevanFrench Development Agency to open permanent office in Yerevan
Proposed reform to introduce system of mandatory universal income  declaration system for all resident citizens in Armenia cannot ensure  achievement of the declared goals: Tigran JrbashyanProposed reform to introduce system of mandatory universal income  declaration system for all resident citizens in Armenia cannot ensure  achievement of the declared goals: Tigran Jrbashyan
IDBank  “MalatiaIDBank  “Malatia" branch now more comfortable and modern
Largest mining company in Armenia presents its first ESG reportLargest mining company in Armenia presents its first ESG report
It is already possible to make payments with IDBank cards via Apple PayIt is already possible to make payments with IDBank cards via Apple Pay
 Converse Bank announces the launch of the  new coupon bonds placement Converse Bank announces the launch of the  new coupon bonds placement
Vine and Wine Foundation of Armenia: Volumes of wine production in  Armenia almost doubled over 5 yearsVine and Wine Foundation of Armenia: Volumes of wine production in  Armenia almost doubled over 5 years
Armenia`s minister of territorial administration hosts  Ukrainian-Armenian businessmenArmenia`s minister of territorial administration hosts  Ukrainian-Armenian businessmen
Iranian Minister of Energy announces launch of project for  synchronization of electricity between   Iran, Azerbaijan, Armenia and RussiaIranian Minister of Energy announces launch of project for  synchronization of electricity between  Iran, Azerbaijan, Armenia and Russia
Armenia`s economy most likely to not reach its historical high by the  end of 2022: Haykaz FanyanArmenia`s economy most likely to not reach its historical high by the  end of 2022: Haykaz Fanyan
Yerevan, Tehran continue to expand economic relationsYerevan, Tehran continue to expand economic relations
Success of the family business based in Tavush: from a home to a guest house and a small winerySuccess of the family business based in Tavush: from a home to a guest house and a small winery
Armenia becomes popular destination for BelarusiansArmenia becomes popular destination for Belarusians
Satlantis CEO: Armenia did not buy an expensive Mercedes, but rather   established a plant that will produce itSatlantis CEO: Armenia did not buy an expensive Mercedes, but rather   established a plant that will produce it
Robert Khachatryan: Satellite Control Center in Armenia to be ready  by the end of the yearRobert Khachatryan: Satellite Control Center in Armenia to be ready  by the end of the year
Armenia starts construction of its first satelliteArmenia starts construction of its first satellite
Participation of GeoProMining in state subvention projects in Armenia reaches 1 billion 700 million drams ($ 4.2 million )Participation of GeoProMining in state subvention projects in Armenia reaches 1 billion 700 million drams ($ 4.2 million )
Significant progress has been made on the issue of launching the  ferry crossing Poti - Port Kavkaz - Deputy MinisterSignificant progress has been made on the issue of launching the  ferry crossing Poti - Port Kavkaz - Deputy Minister
Read more


Exchange rates
06.12.2022
RUB6.28-0.08
USD395.59-0.32
EUR415.41-1.68
GBP481.67-3.20
CAD290.26-4.47
JPY28.96-0.28
CNY56.720.47
CHF420.08-2.95