Thursday, February 1 2024 22:42
Alina Hovhannisyan

Ministry of Economy is ready to support  aluminum foil manufacturer  in Armenia, which is already feeling consequences of Western  sanctions

Ministry of Economy is ready to support  aluminum foil manufacturer  in Armenia, which is already feeling consequences of Western  sanctions

ArmInfo. In order to mitigate risks in the aluminum foil industry, as well as to generate  profits and have a positive impact on the economy, it is necessary to diversify the structure of the export supply.

A similar assessment was provided to ArmInfo by the Ministry of Economy of Armenia regarding the situation on the aluminum foil market, including possible negative consequences for the Armenal plant  (the only  manufacturer and exporter of aluminum foil in Armenia, a subsidiary of the Russian Rusal) due to the introduction of Western sanctions.

As main risks for the sector, the department singled out: the fluctuations of prices of aluminum as a product, constantly changing market demand; the ability of manufacturers to keep up with the times  and possible sanctions (the EU plans to introduce the 13th package of  sanctions against the Russian Federation, which will presumably also  include foil, ed. note).

If sanctions are applied to Armenal, the government, as the  department notes, will do everything possible to minimize the  consequences for all companies involved and the economy as a whole.  One of those solutions could be negotiations, the other one could be  changing 's strategy.

In particular, according to experts from the Ministry of Economy, the  enterprise can reorient itself to other markets, including the local  one, the volume of which in to about $10 million2022 amounted. In  addition, the government is also ready to provide additional  assistance to investors wishing to enter the market, including loan  subsidies and tax benefits (in compliance with all requirements).

Referring to the indicators, the Ministry of Economy noted that in  2023, compared to the previous year, the export of aluminum foil  decreased by about 30 percent. "Perhaps this is why we should  diversify our production to keep up with changing global demand. We  would also like to clarify that although foil production volumes are  down, they are only marginally lower compared to the post-COVID-19  boom period (2021 and 2022). ) Aluminum foil export volume in 2023  remains higher than most years prior to 2021,"  the department noted.

According to data from the RA Customs Service, in H1 2023, Armenia  exported 13.1 thousand tons of aluminum foil, which is 16.5% less  than last year's volume (versus a decline of 8.6% for the same period  in 2022). The customs value of exported foil decreased slightly - by  0.3% to $49.3 million.  The lion's share of exports went to Germany  (46.8%), followed by Poland (17.4%), the Netherlands (11.2%), Spain  (7.8%), Italy (5%), the United Kingdom (4. 8%), France (3%), Greece  (2%), Russia (1.1%).  Very small supplies were sent to the Czech  Republic (0.6%), Georgia (0.1%) and Kazakhstan (0.1%).  According to  the Statistics Committee, 23,777.7 tons of aluminum foil were  produced in Armenia, over the 11 months of 2023, which is 20.1% lower  than the year-ago figure.

The production of aluminum plates, sheets, strips and tapes for the  11 months of 2023 reached a significant 8.7-fold  y-o-y growth,  exceeding 1.3 thousand tons.

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