**ARMENIA: REPORTON KOTAYK PROVINCE**

** **

DATE:  22 DEC 99

SOURCE: U.S. EMBASSYYEREVAN

 

INTERNATIONALCOPYRIGHT, U.S. AND FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE,1999.  ALL RIGHTS RESERVED OUTSIDEOF THE UNITED STATES.

 

SUMMARY

 

ON NOVEMBER 22-24,1999, EMBASSY'S BISNIS REPRESENTATIVE VISITED THE ARMENIAN PROVINCE OF KOTAYKTO EXPLORE INVESTMENT AND TRADE OPPORTUNITIES FOR U.S. COMPANIES AND TO EXPANDU.S.-ARMENIAN COMMERCIAL TIES.  HEMET WITH THE PROVINCE'S BUSINESS LEADERS AND GOVERNMENT OFFICIALS.  THIS IS ANOTHER IN A SERIES OF REGIONALTRIPS THAT REACH OUT TO LOCAL COMPANIES THROUGHOUT THE COUNTRY TO PROMOTE THEBISNIS "SEARCH FOR PARTNERS" AND "TRADE AND TENDERS"PROGRAMS AND COLLECT INFORMATION ON INVESTMENT AND COMMERCIAL OPPORTUNITIES FORU.S. COMPANIES.  BEST PROSPECTS ARELISTED IN PARAGRAPHS 6-17 BELOW. END SUMMARY.

 

 

KOTAYK: GENERALBACKGROUND

 

 

KOTAYK PROVINCE ISLOCATED IN THE CENTRAL PART OF ARMENIA. THE PROVINCE WAS FORMED IN 1996 AND INCLUDES THREE FORMER ADMINISTRATIVEREGIONS: HRAZDAN, ABOVIAN, AND NAIRI, WITH A TOTAL AREA OF 797 SQ. MILES.  BASED ON 1989 CENSUS FIGURES, KOTAYKHAS 328,5OO INHABITANTS, DIVIDED BETWEEN 2O1,4OO URBAN RESIDENTS AND 127,1OORURAL RESIDENTS.  THE CLIMATE ISMILD CONTINENTAL.  KOTAYK'S MINERALRESOURCES INCLUDE A WIDE RANGE OF BUILDING MATERIALS, E.G., BASALT, TUFA,PERLITE, AND MARBLE.  THE PROVINCEALSO HAS A LARGE NUMBER OF MINERAL WATER SOURCES LOCATED NEAR ARZNI, HANKAVAN,AND BJNI.  KOTAYK IS HOME TOSEVERAL MINERAL WATER BOTTLING PLANTS. ONE OF THESE, BJNI, IS A MEMBER OF THE SIL GROUP, THE LARGEST COMPANY INARMENIA.  BJNI IS EQUIPPED WITHMODERN BOTTLING LINES AND HAS STARTED TO EXPORT ITS PRODUCT TO THE MIDDLE EASTANO TO THE UNITED STATES.

 

THANKS TO ITSPROXIMITY TO YEREVAN, KOTAYK IS ONE OF THE MOST DEVELOPED PROVINCES OFARMENIA.  ITS INDUSTRIAL SECTORINCLUDES 180 LARGE-, MEDIUM-, AND SMALL-SIZED ENTERPRISES WITH TOTAL OUTPUTREACHING APPROXIMATELY USD 100 MILLION IN 1998.  THIS CONSTITUTES 20 PERCENT OF ARMENIA'S OUTPUT.  MOST COMPANIES IN KOTAYK ARE LOCATED INTHE PROVINCE'S THREE MAJOR CITIES: HRAZDAN (CAPITAL OF KOTAYK), ABOVIAN, ANDCHARENTSAVAN.

 

 

KEY SECTORS

 

 

KEY SECTORSREPRESENTED IN KOTAYK INCLUDE:

 

-  ENERGY: THE HRAZDAN THERMAL POWER PLANTAND THE SEVAN-HRAZDAN HYDROPOWER PLANT CASCADE HAVE A COMBINED INSTALLEDCAPACITY OF 1,660 MW.  BOTH STATE-OWNEDPLANTS ARE ON THE GOVERNMENT'S LIST OF COMPANIES TO BE PRIVATIZED.

 

- DIAMOND CUTTINGAND PRECIOUS AND SEMI-PRECIOUS STONE PROCESSING: A NUMBER OF SUCCESSFUL DIAMONDCUTTING ENTERPRISES ARE LOCATED IN THE VILLAGE OF NOR GEKHI.  SHOGHAKN AND SAPPHIRE, TWO STATE-OWNEDCOMPANIES, CURRENTLY EXPORT DIAMONDS TO THE EU VIA THE DE BEERS DISTRIBUTIONNETWORK.

 

- MACHINEMANUFACTURING: ARMAVTO, LOCATED IN THE CITY OF CHARENTSAVAN, IS ONE OFARMENIA'S LARGEST MACHINE MANUFACTURERS. THE PLANT PRODUCES SMALL- AND MEDIUM-SIZED FORK LIFTS.  ARMAVTO SEEKS AMERICAN INVESTORS TOHELP UPGRADE ITS FACILITIES AND EXPORT ITS PRODUCT TO THIRD COUNTRIES.

 

- TEXTILES AND SHOEMANUFACTURING: KOTAYK INCLUDES ABOUT A DOZEN SMALL- AND MEDIUM-SIZED COMPANIESENGAGED IN TEXTILES AND SHOE MANUFACTURING.  THE CHARENTSAVAN SEWING FACTORY, WHICH WORKS WITH ITALIANCOMPANIES, EXPORTS ITS HIGH-QUALITY WOMEN'S UNDERGARMENTS TO ITALY AND TO OTHEREU COUNTRIES GARNI-GREAT ARARAT COMPANY, LOCATED IN THE CITY OF ABOVIAN, IS ONEOF THE LARGEST SHOE MANUFACTURERS IN THE COUNTRY.  USING WESTERN COMPONENTS, MODERN GERMAN EQUIPMENT, AND ASKILLED LABOR FORCE, IT PRODUCES HIGH-QUALITY AND COMPETITIVELY PRICEDSHOES.  THE COMPANY'S MAIN MARKETIS RUSSIA.  IT SEEKS AN AMERICANPARTNER TO HELP PENETRATE NEW MARKETS.

 

- FOOD PROCESSING:FOOD PROCESSING HAS BECOME A GROWTH SECTOR IN KOTAYK.  TAMARA PRODUCES A WIDE RANGE OF ICE CREAMS USING A MODERNITALIAN PRODUCTION AND PACKAGING LINE. TAMARA IS THE MOST POPULAR BRAND OF ICE CREAM IN THE LOCAL MARKET.  IT PLANS TO EXPORT ITS PRODUCT TO THEUNITED STATES SOON.  TAMARA HOPESTO ESTABLISH A NEW FACILITY TO PRODUCE SUCH DAIRY PRODUCTS AS YOGURTS, CURDS,AND SOUR CREAMS USING RAW MATERIALS SUPPLIED BY LOCAL FARMS.  GEGHARD RECENTLY INSTALLED A NEW GERMANLINE TO PRODUCE HIGH QUALITY

MEAT PRODUCTS.  (BOTH GEGHARD AND TAMARA ANTICIPATEUSING THEIR OWN FINANCIAL RESOURCES AS WELL AS CREDIT LINES PROVIDED BY THEARMENIAN BRANCH OF THE LONDON-BASED HSBC BANK TO EXPAND.)  ARTASHES CANNERY IS ONE OF THE OLDESTPRIVATE FOOD PROCESSING ENTERPRISES IN ARMENIA.  THE COMPANY PRODUCES JUICES, JAMS, AND

PRESERVES FORDISTRIBUTION IN ARMENIA, RUSSIA AND IN THE U.S. (MAINLY IN THE LOS ANGELESMETROPOLITAN AREA, ONE OF THE LARGEST ARMENIAN-AMERICAN COMMUNITIES).  ARTASHES HAS INCREASED ITS EXPORTS TOTHE U.S. TO MEET A GROWING DEMAND FOR ITS PRODUCT.  THE COMPANY IS INTERESTED IN PURCHASING A NEW JUICE PROCESSINGAND PACKAGING LINE UNDER FLEXIBLE PAYMENT TERMS.

 

- TOURISM: TOURISMIS ONE OF THE PROVINCE'S MOST PROMISING SECTORS FOR AMERICAN INVESTORS.  THE WINTER RESORT TOWN OF TSAKHKADZORIS A POPULAR TOURIST DESTINATION. LOCATED 2,000 METER ABOVE SEA LEVEL, ITS CLIMATE RANGES FROM PLUS 30DEGREES CELSIUS IN SUMMER TO MINUS 30 DEGREES CELSIUS IN WINTER WITH 260 DAYSOF SUNSHINE PER YEAR ON AVERAGE. THE MOUNTAINS NEAR TSAKHKADZOR HOST A SKI RESORT.  DURING THE SOVIET ERA, THE TOWNATTRACTED TOURISTS AND PROFESSIONAL SPORTSMEN FROM THE SOVIET UNION AND ABROAD.  THE TSAKHKADZOR SPORTS COMPLEX WAS THEMAIN TRAINING CENTER FOR THE SOVIET NATIONAL OLYMPIC TEAM.  A NUMBER OF SPAS AND HOTELS INTSAKHKADZOR ARE INTERESTED IN COOPERATING WITH U.S. COMPANIES TO HELP REFURBISHTHEIR FACILITIES TO MEET INTERNATIONAL STANDARDS.  YEREVAN-BASED ALCON HAS BEGUN A MULTI-MILLION DOLLAR PROJECTTO RENOVATE THE HOTEL TSAKHKADZOR AND CONVERT IT INTO A MODERN SPORTS ANDRECREATION FACILITY.  ALCON PLANSTO PURCHASE ALL NECESSARY EQUIPMENT FROM THE UNITED STATES, INCLUDING HOTEL FURNITURE,BOWLING EQUIPMENT, GAMBLING MACHINES, AND FITNESS EQUIPMENT.

 

 

INVESTMENTOPPORTUNITIES

 

 

MANY COMPANIES INKOTAYK HAVE GROWTH POTENTIAL. MOST WISH TO COOPERATE OR ESTABLISH A PARTNERSHIPWITH FOREIGN INVESTORS, AND SOME OF THESE OFFER INTERESTING INVESTMENTOPPORTUNITIES.  THE EMBASSYENCOURAGES INTERESTED U.S. FIRMS TO CONTACT THE FOLLOWING ARMENIAN COMPANIESDIRECTLY.

 

MACHINE BUILDING

 

 

COMPANY:ARMAVTO.  ESTABLISHED IN THE CITYOF CHARENTSAVAN IN 1980, THIS FORMERLY STATE-OWNED FORK-LIFT PLANT WASCONVERTED INTO A PRIVATE COMPANY IN 1994. IT PRODUCES SMALL TONNAGE FORK-LIFTS AND ELECTRIC LOADERS WITH 1 TONLIFT CAPACITY.  DURING THE SOVIETERA, ARMAVTO WAS THE MONOPOLY SUPPLIER TO THE SOVIET MARKET.  THE COMPANY NOW EMPLOYS 250 PEOPLE.  ARMAVTO OWNS 37,900 SQ.M. OF PRODUCTIONSPACE AND 6,100 SQ.M. OF STORAGE FACILITIES.

 

7.  TO EXPAND ITS ACTIVITIES, ARMAVTO SEEKSA U.S. PARTNER TO UPGRADE ITS EXISTING FACILITIES.  THE AMERICAN COMPANY WOULD PROVIDE MODERN TECHNOLOGY ANDEQUIPMENT.  ADDITIONAL MARKETINGASSISTANCE WOULD ALSO BE APPRECIATED. ARMAVTO OFFERS ALL OF ITS PRODUCTION AND STORAGE PREMISES AND ITS LOWCOST, SKILLED LABOR FORCE.

 

8.  CONTACT: SAMVEL SHAHGALDIAN, CEO

1 YEREVANIAN ST.

CHARENTSAVAN

KOTAYK PROVINCE

ARMENIA

TEL: (374-2) 285-380;505-357

FAX: (374-2) 285-380;505-357

 

 

SHOE MANUFACTURING

 

COMPANY: GREATARARAT (GA).  GREAT ARARAT, ALIMITED LIABILITY COMPANY ESTABLISHED IN 1989 AND PRIVATIZED IN 1996,SPECIALIZES IN THE PRODUCTION OF SHOES FOR MEN AND WOMEN.  GA'S PREMISES TOTAL 34,000 SQ.M.,INCLUDING PRODUCTION SPACE AND STORAGE FACILITIES.  THE COMPANY EMPLOYS 200 PEOPLE.  THE FACTORY IS EQUIPPED WITH GERMAN EQUIPMENT CAPABLE OFPRODUCING 1 MILLION PAIRS OF SHOES ANNUALLY. IN 1998 THE COMPANY PRODUCED40,000 PAIRS OF SHOES.  ALLCOMPONENTS FOR SHOE PRODUCTION ARE CURRENTLY IMPORTED FROM WESTERN EUROPE.  GA EXPORTS MOST OF ITS PRODUCT TORUSSIA, WHERE THE COMPANY HAS WELL-ESTABLISHED DISTRIBUTION CHANNELS AND AREPRESENTATIVE OFFICE.

 

GA SEEKS A U.S.PARTNER TO INCREASE ITS SHOE PRODUCTION. THE AMERICAN COMPANY WOULD PROVIDE MARKETING ASSISTANCE FOR EXPORTING TOTHIRD COUNTRIES.  GA OFFERS ITSPRODUCTION AND STORAGE FACILITIES, EXISTING EQUIPMENT, AND QUALIFIED LOW COSTLABOR FORCE FOR THIS PROJECT.

 

CONTACT: SAMVELGOROYAN, DIRECTOR

20 HATIS ST.

ABOVIAN-378518

KOTAYK PROVINCE

ARMENIA

TEL: (374-61) 25-278

FAX: (374-2) 522-172

 

DAIRY PRODUCTION

 

COMPANY:TAMARA.  TAMARA, A PRIVATE COMPANYESTABLISHED IN 1988 IN THE TOWN OF ABOVIAN, SPECIALIZES IN THE PRODUCTION OFICE CREAM.  THE COMPANY'S PRODUCTIS SOLD IN ARMENIA, WHERE IT IS ONE OF THE MOST POPULAR BRANDS.  TAMARA IS EQUIPPED WITH A MODERNITALIAN PRODUCTION AND PACKAGING LINE. ITS MAIN COMPONENTS AND INGREDIENTS ARE IMPORTED FROM ITALY, FINLAND,AND THE UNITED ARAB EMIRATES.  THECOMPANY'S SALES TOTALED USD 1 MILLION IN 1998.  TAMARA EMPLOYS 128 PEOPLE AND OWNS 3,000 SQ.M. OF PRODUCTIONAND STORAGE SPACE.

 

TAMARA IS LOOKING TOEXPAND BY INCREASING PRODUCTION VOLUME AND VARIETY.  THE COMPANY SEEKS A U.S. PARTNER TO PROVIDE MARKETINGASSISTANCE TO EXPORT TAMARA'S PRODUCT TO THIRD COUNTRIES.

 

CONTACT: BORISHOVHANNISIAN, GENERAL DIRECTOR NAIRI-1 TOWN OF ABOVIAN

KOTAYK PROVINCE

ARMENIA

TEL: (374-2) 281-664

FAX: (374-61) 306-606

E-MAIL:[email protected]

 

 

SPORTS COMPLEX, HOTEL

 

COMPANY: TSAKHKADZORSPORTS COMPLEX (TSC). TSAKHKADZOR SPORTS COMPLEX, A STATE-OWNED COMPANY, WASESTABLISHED IN 1966 IN THE RESORT TOWN OF TSAKHKADZOR, 6O KM NORTHEAST OFYEREVAN.  LOCATED 2,000 METERSABOVE SEA LEVEL, ITS CLIMATE RANGES FROM PLUS 30 DEGREES CELCIUS IN SUMMER TOMINUS 30 DEGREES CELSIUS IN WINTER WITH 260 DAYS OF SUNSHINE PER YEAR ONAVERAGE.   THE COMPLEXOCCUPIES 650,000 SQ.M. OF LAND THAT INCLUDES FOUR SPORTS HALLS (72X18M EACH),TWO OPEN-AIR SWIMMING POOLS (21X33M AND 21X50M), A AND HOTEL COMPOUNDCONSISTING OF THREE BUILDINGS WITH 246 ROOMS.  TSC ALSO HAS ON-SITE RESTAURANTS, BARS, AND CAFES.  DURING THE SOVIET ERA, TSC, WHICH NOWEMPLOYS

140 PEOPLE, WAS THEMAIN TRAINING CENTER FOR THE SOVIET OLYMPIC NATIONAL TEAM.  IT WAS ALSO A POPULAR RECREATION CENTERFOR TOURISTS FROM MORE THAN 40 COUNTRIES. TSC CURRENTLY USES ONLY 10-15 PERCENT OF ITS TOTAL CAPACITY.

 

TSC SEEKS ASTRATEGIC U.S. PARTNER/EQUITY INVESTOR TO UPGRADE EXISTING FACILITIES ANDJOINTLY OPERATE A COMPLEX TO ATTRACT TOURISTS AND SPORTSMEN.

 

CONTACT: MKHITARHAROUTYUNIAN, EXECUTIVE DIRECTOR TOWN OF TSAKHKADZOR

KOTAYK PROVINCE

ARMENIA

TEL/FAX: (374-67) 26-979

E-MAIL:[email protected]

 

 

USEFUL CONTACTS

 

FOR MORE INFORMATIONON BUSINESS OPPORTUNITIES IN THE PROVINCE OF KOTAYK, PLEASE CONTACT:

 

VALERI BAKLACHIAN,HEAD OF THE FINANCIAL AND ECONOMIC DEVELOPMENT DEPARTMENT

KOTAYK GOVERNOR'SOFFICE

TEL: (374-67) 25-301OR 24-637

 

GEORGE ISAYAN,BISNIS REPRESENTATIVE

AMERICAN EMBASSY,YEREVAN

18 BAGHRAMIAN AVE.

YEREVAN-19

ARMENIA

TEL: (374-2) 151-551

FAX: (374-2) 151-550

E-MAIL:[email protected]

HTTP://WWW.ARMINCO.COM/EMBUSA/COMMERCIAL/FRAME.HTM