Yerevan/Mediamax/. “Nairit” Chemical Plant interrupted production in March because of debts for electricity (about 1bln AMD) and for gas (1bln 91mln AMD).

Since early March, the Plant has been electrified partially, receiving electricity in minimum quantity. Gas supply of the plant has been interrupted as well. General Director of “Nairit” Vahan Melkonyan agreed to answer Mediamax’s questions on the reason of problems, which have occurred in the plant.

- Which are the reasons of problems, which the plant has faced? How does “Nairit” intend to come out of the current situation?

- The reason of the company’s debts is that as a result of the financial crisis, the plant started to sell its production in fact only in January-February, and we will be able to pay the debts, which have been stored up since December, 2009, up to March, 2010, only in April-June.

Delay in approval of the company’s financial program for the current year also had a negative influence on the work of the plant. The program will be approved by the end of April.

There are two ways out of the situation and we have taken both of them: first of all, we should continue proper operation of the plant and sale of production, and secondly, we should approve the annual financial program of the company, including in it all vitally important programs for the plant on reconstruction, continuity of implementing which is provided for due to credit means. It is not a secret that before shifting to butadiene technology of producing chloroprene rubber, the company will be working at a loss. I believe that by the end of April all organizational problems will have been solved and the production process of the plant will be restored.

- Does the plant enjoy many orders from abroad? Doesn’t the fact that the orders may not be fulfilled because of idle state jeopardize the reputation of the Armenian plant?

- Your idea on non-fulfillment of orders is inaccurate. Of course, the market has not fully revived yet, and we sell 20% less production, as compared to the usual volumes. Reestablishment and development of the market is extremely important for us.

A threat to the reputation of the Armenian plant is out of the question. Any chemical plant interrupts operation from 2 to 4 times every year for prophylactic reasons. Interruption in of “Nairit” production process coincided with prophylactic works, and, as I have already mentioned, the production process will be resumed by the end of April.

- Last year, representatives of the Armenian government stated that as an enterprise of strategic importance, “Nairit” would receive funding from the Russian stabilization credit. Did the plant enjoy the state support?

- I am unaware of such statements by the authorities, but it is obvious that the Armenian government attentively watches the developments and is trying to find solutions to problems which the plant has faced. Concerning funding, I should say that the government has taken up the corresponding steps, which, I hope, will allow realizing a fundamental reconstruction of the plant. Here we do not speak of simple shift to butadiene technology of chloroprene rubber production, but of deeper reconstruction and modernization.

- What are the measures that “Nairit” English shareholder takes up? Does the shareholder keep its promise to have invested $120mln in the plant by 2011?

- So far, all works on the plant reconstruction have been funded and are funded by its owner - Rhinoville Property Limited Company. Concerning further works, the global crisis, as well as the damage, which took place at the plant in May, 2009, made certain corrections in our programs. Nevertheless, the investment program will be continued without serious changes.