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Regional

Light industry in Armenia is desolate but not hopeless

  • by Elita Babayan

  • Friday, July 18, 11:16

 Light industry in Armenia is desolate but not hopeless, Suren Bekirski, Director General of the Tosp knitwear factory, says in an interview to ArmInfo when commenting on the lack of progress in the light industry development in Armenia.    

To recall, the development of the given sector is part of the Armenian Government's concept of export promotion, which implies boosting 11 sectors of Armenian economy, with the 7th sector being the light industry. 

Bekirski welcomes the authorities' program, however, he points at the lack of integrated measures to support the manufacturers. "The rehabilitation of light industry in Armenia needs the state's serious support in creation of a raw material base, considerable facilitation of the tax burden, promotion of the Armenian brand first in the Russian and Asian markets, and then in the European markets", he says. He adds that the given sector has similarly been developing in China, Israel, Turkey and Belarus. "The light industry sector in these countries enjoys the state's support, even the taxes are completely cancelled and preferential loans and other privileges are provided", he says. He stresses that the lack of support questions the further existence of light industry in Armenia. 
"Over the past two decades, the light industry sector has completely collapsed, and the almost full loss of sales markets has become the biggest problem for entrepreneurs", Bekirski says. He thinks the country's reputation as a serious supplier has been undermined. 

Nevertheless, the entrepreneur points out the importance of the fact that light industry is declared a priority by the Armenian Government. Bekirski says that the state budget has allocated nearly $300 thsd for elaboration and implementation of the marketing strategy for the light industry companies. "In addition, we are currently studying an idea to open a trade center of light industrial goods in Moscow and we need state- secured borrowed funds. Besides, we need highly skilled marketing specialists and traders in the Russian market, who will be able to promote and sell the Armenian brand. The Armenian community in Russia may also considerably help promote the local brand", says Bekirski. 

The large enterprise, which had about 5,000 employees and used to supply all the post-Soviet area with knitwear, has turned into a small factory. The factory's condition has been very difficult for over two decades, but the factory hopes that some day the loud promises of the authorities will turn into specific actions at last. 
To note, the Armenian authorities started speaking of the need to rehabilitate light industry back in 2010. In 2013 the Made in Armenia store opened in Yerevan. It unites several Armenian brands. The founders of the store believe that the small store will mark the beginning of big achievements in light industry. However, the customers of the store have a different impression about the prospects of the store. 

The local manufacturers' goods cover only 10% of the domestic demand, while the annual turnover of light industry goods in Armenia is $280 million. To recall, in August 2011 the Union of Light Industry Employers was registered in Armenia. The Union includes about 25 companies, while there are about 60 companies in the sector. Meanwhile, the owner of the Made in Armenia store has frankly told ArmInfo's correspondent that he is aware of neither the Union nor any other association of light industry manufacturers. The state's support is out of the question. He says that the store operates on the basis of minimum margin in order to ensure sales. 
To recall, Tosp was reorganized into an OJSC in 1995. At the moment, the factory has 4 stores in Yerevan.  The average monthly revenue of each of the stores is about 3.5 million AMD.

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