ELBAT CJSC, an Armenian-German JV, one of the leading manufacturers in Western Asia producing a full range of high quality SLI lead-acid batteries, is going to increase the output by 30% to 80 thsd units in 2014 versus nearly 60 thsd in 2013, Gagik Mkrtchyan, Chief Commercial Officer of Elbat CJSC, has told ArmInfo's correspondent.
He says that the company is growing mostly due to the export. The largest sales market is Russia (60% of the supplies). Mkrtchyan says that in 2013 the company signed big contracts with the Russian AvtoVAZ and KAMAZ and is successfully implementing them. Some difficulties have arisen due to the RUR devaluation because the contracts were concluded in USD, he says. "We are selling the products in USD. Some problems have arisen due to the RUR exchange rate decline and now we have to revise the prices", he says. He adds that the company cannot sell batteries to UAZ, which has sharply reduced the demand because of the poor financial situation. In the meantime, Russia remains a large sales market and the niche for the Armenian company has enlarged following the Ukrainian manufacturers' withdrawal from the market. Russia's annual demand for batteries is 12-14 mln units and only the 6-7 mln is covered by the local production.
Elbat is not yet entering the European market because it needs to complete the relevant certification procedure. Armenian batteries are also exported to Iran, Georgia, Syria, Qatar, UAE. "We do not consider the domestic market as a prospect for development and we focus no attention on it", he says.
Mkrtchyan says that in order to reduce the prime cost, the plant is going to build a shop to process the old batteries. The processed lead will be much cheaper than the lead purchased as a raw material at exchange prices, he says. According to Mkrtchyan, today lead is purchased in Russia and Italy at the prices of the London Metal Exchange. He adds that the German partner of the JV has approved these plans and is ready to fund them.
Earlier Elbat CJSC stated that it was going to increase the output by 35% in 2013 to 82 thsd units.
Elbat CJSC was commissioned in November 2010. The majority shareholder of Elbat CJSC (51%) is Cronimet Њining. The other 49% of shares belong to the residents of Armenia. Cronimet Mining also owns shares in Zangezur Cooper Molybdenum Combine CJSC (60%) and Pure Iron OJSC (51%).