High quality leather production for the garments industry, Armenia Ever since the collapse of the Soviet Union, Armenia's leather processing facilities have deteriorated. Soviet time equipment sits idle or has been taken apart. Currently, almost all of Armenia's raw hides and skins are exported and processed abroad.The project partners want to renew Armenia's leather processing industry by setting up a state-of-the-art tannery.The applicant is Arma Beheer B.V., Europe's fourth biggest supplier of leather garments. Arma Beheer B.V. was set up in 1985 by six businessmen, four of them brothers with Armenian roots. The company was developed into an internationally operating firm which sells high quality products in the top-segment of the market.The local partner has acquired an old Soviet-era tannery, two years ago. The tannery is located in Lukashin, some 50 km West of Yerevan.Tanning is potentially a polluting process which requires a lot of water. Partners are paying attention to this and invest in an Industrial Water Treatment Plant which prevents polluted water from being released into the environment.Corporate Social Responsibility (CSR)Tanning is potentially very polluting. The budget includes an industrial waste water treatment plant which will be designed and constructed by a Turkish engineering firm. Solid waste from the project will be handled by a specialised industrial waste company, "Ecoprotect". Furthermore, a "pre-audit" will be carried out for BSCI participation in the last result. Obtaining an SA 8000 certificate is mandatory.Impact•	Employment and working conditionsWages will be at least 30% above minimum wages and will include pension schemes and health insurance. Special attention will be paid to safe and healthy working conditions. The project will bring about considerable improvement of the working conditions compared to the situation in the old tannery.•	Innovation / Transfer of knowledgeThere is no tannery at industrial scale in Armenia. Virtually all of the estimated 3,000 tons of raw hides and skins are exported abroad for processing. There used to be one big tannery in Soviet times which is in disarray now. The second smaller tannery which was opened in times of perestroika, is the location where this project will take place. The hardware that will bought by the joint venture is second hand, but more state-of–the- art than the equipment from the local partner as it runs computer controlled programs and has automatic supply of chemicals.•	Chain effectsButchers will be trained how to skin a slaughtered animal. Currently, the skinning techniques of local butchers are very poorly developed. As a result the hides and skins are often full of holes and have irregular thickness. If the quality of the raw hides and skins improves, the butchers will get better paid for their product.Local customers will receive better quality products.•	Impact on the sectorAfter a couple of years leather-based clothing industry may develop, e.g. by the production of jackets, shoes and hand bags.•	EnvironmentNeutral impact. However, compared to the old situation positive.Currently, waste water is released in the environment. Most likely in the current situation this results in pollution with chrome. The project however, will include the construction of an industrial waste water treatment plant. Any chrome containing dry matter will be collected by a specialised industrial waste company so that no chrome will be released in the environment. An environmental impact assessment is conditional for the subsidy to Arma.•	Position of womenAbout 40% of the employees of the new joint venture will be female. The establishment of a high quality leather production facility for the processing of 1.7 million square feet for the Armenian market and for export.