Will secrets of the Nairit factory be unveiled?

Employees of the largest chemical factory in Armenia, "Nairit", protest in front of the government building 

Will secrets of the Nairit factory be unveiled? Employees of the largest chemical factory in Armenia, "Nairit", protest in front of the government building Susanna Petrosyan, Yerevan. Exclusively for VK On September 4 workers of one of the largest chemical factories in Armenia, "Nairit", staged a protest in front of the government building. They demanded that the government pay them 18 monthly salaries which the government owes them. The proposal of Minister of Energy Yervand Zakarian to pay them one month's salary was met without enthusiasm. The minister said that the government will solve the problems of the factory and its employees. This is not the first protest organized by Nairit workers. This has been going on for more than four years. Even during the election campaign, Serzh Sargsyan said that he had the political will to relaunch the factory. However, to this day the situation has not changed. "Nairit" was the largest producer of chloroprene rubber in the USSR. Problems started with the collapse of the Union. Armenia, in a state of war, and having serious socio-economic problems, was not able to solve the problems of the giant, aimed at servicing the whole Soviet Union. "Nairit" worked with varying degrees of success: at times certain production departments were working, at other times they remained closed in connection with serious financial problems. One of the reasons for the crisis was the decreasing demand for chloroprene rubber in the world due to the economic crisis. Moreover, it is faced with a clear challenge of upgrading the outdated technology, paying debts for rent, electricity, gas, etc.. Wage arrears, which currently amount to about $13 million, are by far not the only financial problem of the factory. According to information announced in February, the total debt of the plant is $400 million. In 2006, "Nairit" was purchased by the British company Rhinovile Property, which owns a 90% stake, the remaining 10% is owned by the government. However, despite the new owner, many problems remained unresolved. According to the former factory director, Karen Israelian, if Rhinoville Property fulfilled its investment obligations on time and invested the promised 60 million dollars in upgrading the plant, "Nairit" would not be in the situation it is now. Israelian believes that the government, with its 10% stake, should also be accountable, because it did not pressure the British company. The Armenian press reports that "Nairit" began to acquire debt starting from 2006, when Rhinoville Property opened a credit line worth $70 million with the CIS Interstate Bank. In 2009, the bank gave the company a loan of $90 million, and an additional $10 million in the next year. Given that in 2010 the plant was shut down and its owners have not paid a penny to the creditor, the debt more than doubled. Moreover, in March 2014 the Moscow Arbitration Court granted a right to the CIS Interstate Bank to demand $107,950,000 from Rhinoville Property. However, it is not only a question of paying penalties for financial noncompliance. The Armenian government has still not provided an answer to the question of when and on what the $170 million loan was spent? In February this year the parliamentary opposition accused the now former Prime Minister Tigran Sargsyan, whose two brothers have occupied the directorial seat of "Nairit", of deliberately bankrupting the factory. The ex-prime minister denied any involvement of his brothers in it. Sargsyan, during whose premiership the second and third tranches of the loan were allocated, said he knew nothing about the fate of the $170 million. Law enforcement agencies have also not been paying due attention to the fate of the loan. Given the scandal, the government has initiated negotiations with Rosneft. In December 2013 the Ministry of Energy of Armenia and the Russian company Rosneft, as well as Pirelli Tyre Russia SpA and Oil Techno, signed a Memorandum of Understanding in Yerevan. The memorandum provides for the establishment of a joint venture for the production of styrene-butadiene rubber in Armenia at the Nairit plant. Rosneft will play the role of the leading investor in the project. The head of the Ministry of Energy said that in one month Rosneft is expected to present its findings about the possibility of relaunching "Nairit". It is still not clear whether the Russian company will want to go ahead with the plan and pay the $400 million debt of the plant, given the obscure history of the company and the mysterious disappearance of the loan. Yervand Zakarian's words during a meeting with the participants of the protest on September 4 is tacit proof of it. In his speech he mentioned that the Armenian government should not rely only on Rosneft and needs to develop its own plan for the rehabilitation of the plant. He also said that, on behalf of the prime minister, the government is currently developing a package of measures which will help relaunch the plant. It will be submitted by September 15.Employees of the largest chemical factory in Armenia, "Nairit", protest in front of the government building 

Susanna Petrosyan, Yerevan. Exclusively for VK 

On September 4 workers of one of the largest chemical factories in Armenia, "Nairit", staged a protest in front of the government building. They demanded that the government pay them 18 monthly salaries which the government owes them. The proposal of Minister of Energy Yervand Zakarian to pay them one month's salary was met without enthusiasm. The minister said that the government will solve the problems of the factory and its employees. 

This is not the first protest organized by Nairit workers. This has been going on for more than four years. Even during the election campaign, Serzh Sargsyan said that he had the political will to relaunch the factory. However, to this day the situation has not changed. 
"Nairit" was the largest producer of chloroprene rubber in the USSR. Problems started with the collapse of the Union. Armenia, in a state of war, and having serious socio-economic problems, was not able to solve the problems of the giant, aimed at servicing the whole Soviet Union. "Nairit" worked with varying degrees of success: at times certain production departments were working, at other times they remained closed in connection with serious financial problems. One of the reasons for the crisis was the decreasing demand for chloroprene rubber in the world due to the economic crisis. Moreover, it is faced with a clear challenge of upgrading the outdated technology, paying debts for rent, electricity, gas, etc.. 
Wage arrears, which currently amount to about $13 million, are by far not the only financial problem of the factory. According to information announced in February, the total debt of the plant is $400 million. 
In 2006, "Nairit" was purchased by the British company Rhinovile Property, which owns a 90% stake, the remaining 10% is owned by the government. However, despite the new owner, many problems remained unresolved. According to the former factory director, Karen Israelian, if Rhinoville Property fulfilled its investment obligations on time and invested the promised 60 million dollars in upgrading the plant, "Nairit" would not be in the situation it is now. Israelian believes that the government, with its 10% stake, should also be accountable, because it did not pressure the British company. 
The Armenian press reports that "Nairit" began to acquire debt starting from 2006, when Rhinoville Property opened a credit line worth $70 million with the CIS Interstate Bank. In 2009, the bank gave the company a loan of $90 million, and an additional $10 million in the next year. Given that in 2010 the plant was shut down and its owners have not paid a penny to the creditor, the debt more than doubled. Moreover, in March 2014 the Moscow Arbitration Court granted a right to the CIS Interstate Bank to demand $107,950,000 from Rhinoville Property. 
However, it is not only a question of paying penalties for financial noncompliance. The Armenian government has still not provided an answer to the question of when and on what the $170 million loan was spent? In February this year the parliamentary opposition accused the now former Prime Minister Tigran Sargsyan, whose two brothers have occupied the directorial seat of "Nairit", of deliberately bankrupting the factory. The ex-prime minister denied any involvement of his brothers in it. Sargsyan, during whose premiership the second and third tranches of the loan were allocated, said he knew nothing about the fate of the $170 million. Law enforcement agencies have also not been paying due attention to the fate of the loan. 
Given the scandal, the government has initiated negotiations with Rosneft. In December 2013 the Ministry of Energy of Armenia and the Russian company Rosneft, as well as Pirelli Tyre Russia SpA and Oil Techno, signed a Memorandum of Understanding in Yerevan. The memorandum provides for the establishment of a joint venture for the production of styrene-butadiene rubber in Armenia at the Nairit plant. Rosneft will play the role of the leading investor in the project. 
The head of the Ministry of Energy said that in one month Rosneft is expected to present its findings about the possibility of relaunching "Nairit". It is still not clear whether the Russian company will want to go ahead with the plan and pay the $400 million debt of the plant, given the obscure history of the company and the mysterious disappearance of the loan. Yervand Zakarian's words during a meeting with the participants of the protest on September 4 is tacit proof of it. In his speech he mentioned that the Armenian government should not rely only on Rosneft and needs to develop its own plan for the rehabilitation of the plant. He also said that, on behalf of the prime minister, the government is currently developing a package of measures which will help relaunch the plant. It will be submitted by September 15.