Everyone in Armenia is talking about stimulating local production. The
state officials in that field are the ones who talk about it the most.
However, in many cases the conversations of stimulating local
production are just announcements. In this field, the absence of a
politics as a whole brings us to the conclusion that many of the local
businessmen often meet serious obstacles as a result of different
contradictions.
For example, based on different evaluations, 80,000 tons of sugar is
consumed in Armenia and nearly 90% is imported from abroad. There
should be a consummation of, if not the whole, then at least more than
half of the sugar taking into consideration the good conditions in
Armenia for sugar production.
The Sevan sugar factory, which according to owner Armen Arakelyan
produces 4-5% of the sugar consumed in Armenia, has some problems with
the customs legislation-especially with the fees. When the raw material
of the sugar is being imported into Armenia, the factory is charged the
same price as when the ready-made sugar is imported. However, besides
paying the 10% customs tax for the imported sugar, the factory also
pays a value added tax which increases the price of sugar.
As a result of this, Armenia starts to make sure that the price of
sugar is not lower than the price of the imported sugar. As to whose
interests are involved, everyone knows. The major importer of sugar in
Armenia is National Assembly deputy Samvel Alexanyan. Now we are
indirectly connected with the state, however if the state protects its
interests, then this is how the import takes place. Of course, the
opposite is unacceptable, when import crosses with local production,
especially now when Armenia is a member of the World Trade Organization
which forbids state interference.
Besides the Sevan sugar factory, the Spitak sugar factory has plans on
producing sugar in Armenia. Of course, the Spitak sugar factory is just
relatively speaking due to the fact that the only thing left from the
former factory is the territory. However, there are plans on making it
work. The “Armenian Technological Academy” and the “Spitak BAC group”
company are the ones who especially have outlooks.
According to member of the academy Pavel Mirzoyan, if everything goes
the way they have planned, the Spitak sugar factory will be able to
produce 50,000 tons of sugar yearly. The factory must work with the
local raw materials and can grow 300,000 tons of sugar beets yearly. In
order to do this, they need 15,000 hectors of land. Pavel Mirzoyan says
that the factory will have about 1500 workers and the number of workers
growing the sugar beets will reach 25-30,000.
The factory will be composed of four mini-factories: sugar, lemon
spice, bread yeast and alcohol spirit. The factories will work with any
sugar that remains after the sugar production. In order to implement
this project, according to Pavel Mirzoyan, an investment of $85,000,000
dollars must be made which will be compensated during the course of 4-5
years. With the help of investments, the factory will be able to
function in 2-2.5 years. The most interesting thing though is that in
case the factory does produce sugar, the price of sugar will be around
120-125 dram. It is evident that the sugar factory will hurt the
businessman involved in importing sugar and it is rare for them to let
sugar be produced in Armenia at those prices.