ARMENIAN CEMENT PLANT CLOSED DOWN AMID CONSTRUCTION SLUMP

Asbarez
Dec 16th, 2009
Yerevan

Citing a continuing slump in construction, one of Armenia’s two cement
factories halted production operations and effectively laid off most
of its 600 workers on Wednesday.

The Mika-Cement company said its factory located in Hrazdan, an
industrial town more than 40 kilometers north of Yerevan, will not
function at least until next spring because of a more than 50 percent
contraction of the Armenian construction sector. It also blamed the
shutdown on this year’s sharp increase in the price of Russian natural
gas heavily used in cement production.

According to Naira Martirosian, Mika-Cement’s director general,
domestic demand for cement has halved this year, resulting in 32,000
metric tons of unsold cement stored at the Hrazdan plant. She said
the company hopes to unload the excess inventory "by the spring."

"When demand recovers, when cement sells and when we run out of cement
stocks, the plant will start working again," Martirosian told RFE/RL.

That would enable the company to recall 350 or so Mika-Cement workers
that were involved in manufacturing operations and will be out of
work during the stoppage, she said.

Martirosian insisted that they have been sent on indefinite leave and,
in accordance with Armenian law, will get the minimum national monthly
wage of 30,000 drams ($80) until returning to work.

However, some of the affected workers interviewed by RFE/RL claimed
to have been formally fired. "They fired us, saying that they will
recall and rehire us later on," said one middle-aged man. He said he
therefore does not expect to be paid in the coming months.

Mika-Cement, which is owned by Russian-Armenian businessman Mikhail
Bagdasarov, exported up to a third of its production to neighboring
Iran and Georgia in 2008. Martirosian said the company has had
virtually no exports this year not only because of the economic crisis
but also the rise in the gas price.

Like the other Armenian cement plant based in the southern town of
Ararat, Mika-Cement greatly benefited from a construction boom that
fuelled Armenia’s robust economic growth from in the preceding decade.

However, profits posted by the company were remarkably modest.

It paid only 180 million drams ($480,000) in various taxes and occupied
191st place on the list of Armenia’s largest corporate taxpayers in
the first half of 2008. The Armenian economy was still expanding at
a double-digit rate during at the time.
From: Baghdasarian