VANADZOR CHEMICALS PLANT NEEDS $4MLN FOR RESUMING ORGANIC FERTILIZER PRODUCTION

ARKA
March 18, 2009

VANADZOR, March 18. /ARKA/. The Vanadzor-based Prometey-Khimprom CJSC
needs $4mln to resume the production organic fertilizers, Director
General Alexander Snigeryev told reporters during RA Prime Minister
Tigran Sargsyan’s visit to the enterprise.

"This will enable the plant to annually produce 30,000 tons of
organic fertilizers, particularly carbamide, and 30,000 tons of potash
fertilizers," Snegiryev said.

He pointed out that the products are exclusively intended for domestic
needs. Snegiryev also said that the demand for organic fertilizers
reaches 120,000 tons in Armenia.

He said that the plant’s top priority task is to restore large-scale
production of organic fertilizers.

For decades the plant was one of the best plants in the former
USSR. Organic fertilizers were used in the production of saltpeter
and carbamide.

Snegiryev believes that the plant will produce the first lot of
carbamide in six months. According to him, the plant does not have
to operate at full capacity now.

"The present situation shows the need for several solutions for the
production of substitute goods," he said. Snegiryev pointed out
that the plant plans to offer the Government a program of potash
chlorine-free fertilizers and "raise the issue of a program of
phosphoric components."

"Phosphorus, nitrogen an d potassium are the three central factors of
agriculture which allow developed western countries to get high-quality
yield," Snegiryev said.

He pointed out that the plant expects the Government’s assistance in
resuming the production, creating customs facilities and preventing
the import of low-quality saltpeter to Armenia.

"We plant to present anti-crisis programs to the Armenian Prime
Minister and exchange views and present manufacturing equipment,"
Snegiryev said.

According to him, the plant is presently hardly operating – the one
ton of potash fertilizers daily produced at the plant is distributed
among the farmers free of charge.

Snegiryev reported that 480 of the 830 employees are currently
working at the plant, the rest have been laid off and have not
received wages for two months. He stressed that the carbide-producing
shop is not operating because of a two-fold decrease in the world
prices for carbide. "We are considering the possibility of resuming
carbide production because we used to export 95% of our products,"
Snegiryev said.

The Prometey-Khimprom CJSC resumed operation in 2005. After an abortive
attempt to transfer the plant to the Slovakian Dividend Group, the
plant was re-operated by it actual owner, Zakneftegazstroy-Prometey
OJSC (Russia), which purchased the plant for $1.5mln in May 1999.