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Yeranuhi Soghoyan

Gyumri’s “Karhat” Plant Faces Imminent Closure

“Government must protect interests of local manufacturers”, argues Deputy Director The plant in Gyumri that manufactures stone-cutting equipment has been on the edge of closing ever since it was privatized back in 2002. Formerly known as “Stromashina”, the Soviet industrial plant now belongs to “Karhat Mekena, CJSC”. Company Deputy Director Davit Ghazanchyan told Hetq,” We have always been in the business of manufacturing stone cutting and processing equipment. During the Soviet era the plant employed 825 workers but today we can’t even keep 55 people on the payroll.” Eight years ago, “International Business Center, CJSC” privatized the plant and invested resources in an attempt to expand production capabilities. The plant seemed to be doing fine until 2008. It exported what it produced to Kazakhstan, Turkmenistan, Ukraine and Russia. “98% of our orders came from Kazakhstan and Turkmenistan. But since Kazakhstan was the first of the CIS countries to feel the full impact of the financial crisis back in 2007, the plant felt the fall-out as early as June, 2008. When the crisis went global in 2009, we were already operating in a crisis mode, says Deputy Director Ghazanchyan. Plant to close by April 22 if new customers not found If the plant doesn’t receive new orders by April 22, it will finally shut its doors after operating in the red for the past two years. Plant workers have already been notified of the inevitable closing. Forty of the fifty-five current workers will be laid off. The director, accountant and security staff will be the only ones left on the payroll. Even Deputy Director Ghazanchyan has received a notice warning that he too will be let go. “Right now, we have eleven pieces of stone cutting equipment ready. We’ve received deposits from Kazakhstan for three. But for the past year and a half our customers haven’t been able to pay the balance owed and take delivery, says Mr. Ghazanchyan. “Last year, we received 100 million AMD in assistance from “International Business-Center”, but we haven’t gotten anything this year.” “Karhat Mekena” hasn’t applied for government assistance even though there are programs available. Mr. Ghazanchyan said the plant never had the need since they had a constant customer base and that “International Business” always lent a hand if the need arose. 40 more workers to get sacked in Shirak The situation has really gotten tense. If the job cuts go through, another forty families in the area will wind up in dire economic straits. “Even without the impending cuts, the region has the highest poverty rates in the country. If we get sacked as well, the ranks of the unemployed will just get that much bigger,” complains Robert Manukyan, the plant’s safety engineer. “I’m the breadwinner for a family of five. We live in a hut. My son fought in Karabakh and came back disabled. I’ve been working in the same factory for forty-four years but the crisis doesn’t care about all that. And the government’s no better. Forty more unemployed here, forty more there; it’s all the same to them.” “Every month our costs run between 7-8 million AMD, without even operating,” says Davit Ghazanchyan. “And I must add that our product is just as good, if not better, than the stone cutting equipment now being imported into Armenia.” “We produce quality equipment but government allows imports from overseas” “We have this plant here in Armenia, but the government allows for similar equipment to be imported from China and Italy. It pains me to no end. Let me be straight with you, the interests of Armenian manufacturers are being defended. As far as I know, in other countries the governments see to it that importers are only allowed to bring in goods and equipment that isn’t manufactured locally. Here in Armenia it’s the exact opposite.” In 2007, “Karhat Mekena” manufactured 883 million AMD worth of product and employed 114 workers who made, on average, between 100,000-110,000 AMD per month. In 2008, production fell to 525 million AMD at the plant which had 115 workers making an average of 126,000 AMD. “The picture in 2009 was even sadder. We only produced 26 million AMD of goods but spent 131 million. We had 68 workers and wound up spending 68 million of wages for the year,” argues Deputy Director Ghazanchyan.”It was “International Business” that bailed us out with 100 million since we were 105 million in the hole. Now, we’re on the verge of cutting 40 workers.” Plant accountant can’t imagine leaving after 40 years Plant accountant Roza Muradyan has been working here for the past forty years. Even though she’s not facing imminent dismissal, she fears the day when she too will be gone, no longer climbing the familiar stairs to her office at the plant. “I’ve been working here since I was 18. I got married and got a job for my husband here. Now, I have two sons working here,” says Mrs. Muradyan. “Our collective is one of the finest around. I just can’t imagine that one day I too won’t be walking into this building after all these years.” Deputy Director Davit Ghazanchyan assured us that neither plant management nor “International Business-Center” had any inclination of closing the factory but that they had to face reality. “The immediate problem we face is coming up with new orders by the April 22 deadline. It’s not much time,” he said. “It’s with a great deal of regret that the plant, the only one of its kind in the region and the country, is on the verge of closing. We will do all we can in the next two months to make sure another forty people don’t wind up on the streets jobless. But, I repeat, the government must help out at least when it comes to regulating imports. That way, we’d at least be able to sell what we produce. Otherwise, the plant will surely close.

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