Report: Armenia rubber plant in bankruptcy process

Yerevan – Armenia’s Nairit synthetic rubber plant is currently in the process of bankruptcy, according to a report by the Armenian news agency Arka on 17 Nov.

Finance minister Vardan Aramyan made the announcement during a parliamentary discussion on next year’s draft budget, despite earlier signals this month that the country intended to relaunch the plant.

Earlier in November, Armenia's ministry of energy infrastructures and natural resources announced a tender for private investors to relaunch Nairit chemical plant's production facilities, with bids open until 20 Jan 2017.

Nairit operated the only chloroprene rubber plant in the former Soviet Union. It was closed in 1989 for environmental reasons, resumed partial operation in 1992 but ceased operations again in 2010 due to financial problems. The cost of its relaunch is estimated at $200-$300 million (€189-€283 million).

According to Arka, Aramyan said the plant currently has 360 people on its payrolls, "many of whom do not go to work, do not create added value, but are paid regularly monthly wages."

"If a plant has no future or is not competitive, it is better to direct public funds to more productive spheres", said Aramyan.

In September 2013, Rosneft and the Armenian government discussed a potential partnership with Rosneft to restart chloroprene rubber production at the Nairit plant. Engineering firm Jacobs Consultancy Ltd had previously conducted a technical and environment audit of chloroprene rubber production from butadiene at the facility.

At the time, Rosneft said it would take a decision on whether to take part in the project once it had received the final audit results and discussed the conditions to join the project with the Armenian government.

Rosneft also reached an agreement with its partner company Pirelli for a delegation to visit the Nairit plant to evaluate and determine possible opportunities for cooperation.

In 2006, 90% of Nairit’s shares were sold to Rhinoville Property Ltd for $40m (€30m). The remaining 10% belongs to the Armenian government. UK-registered Rhinoville was set up by Samex of Poland, US-based Intertexand Eurogaz of Russia.