Identifier
Created
Classification
Origin
04YEREVAN2485
2004-11-17 09:24:00
UNCLASSIFIED
Embassy Yerevan
Cable title:  

(IMI) ARMENIA: REPORT ON TAVUSH PROVINCE

Tags:  KTDB BBSR BEXP BTIO AM 
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UNCLAS SECTION 01 OF 03 YEREVAN 002485 

SIPDIS

COMMERCE FOR 3150/PBRADLEY/BSMITH
COMMERCE FOR 4201/ITA/IEP/OEERIS/BISNIS/EHOUSE
EMBASSIES - PLEASE PASS FCS
DEPT FOR EUR/CACEN, EB/CBA
ANKARA ALSO FOR CFC/ SNYDER/BALLINGER
PASS TDA-STEIN, OPIC, EXIM-TUMMINIA/PANARO

E.O. 12958: N/A
TAGS: KTDB BBSR BEXP BTIO AM
SUBJECT: (IMI) ARMENIA: REPORT ON TAVUSH PROVINCE


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SUMMARY
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UNCLAS SECTION 01 OF 03 YEREVAN 002485

SIPDIS

COMMERCE FOR 3150/PBRADLEY/BSMITH
COMMERCE FOR 4201/ITA/IEP/OEERIS/BISNIS/EHOUSE
EMBASSIES - PLEASE PASS FCS
DEPT FOR EUR/CACEN, EB/CBA
ANKARA ALSO FOR CFC/ SNYDER/BALLINGER
PASS TDA-STEIN, OPIC, EXIM-TUMMINIA/PANARO

E.O. 12958: N/A
TAGS: KTDB BBSR BEXP BTIO AM
SUBJECT: (IMI) ARMENIA: REPORT ON TAVUSH PROVINCE


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SUMMARY
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1. In October 2004, Embassy's BISNIS representative
visited the Tavush province of Armenia to explore
investment and trade opportunities for U.S. companies
and to expand U.S. - Armenian commercial ties. He met
with the province's business leaders and government
officials. This is another in a series of regional
trips that reach out to local companies throughout the
country to promote the BISNIS "Search for Partners" and
"Trades and Tenders" programs and collect information
on investment and commercial opportunities for U.S.
companies. Best prospects are listed in paragraphs 14-
16 below. End Summary.

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TAVUSH: GENERAL BACKGROUND
--------------


2. Tavush province is located in the North-Eastern
part of Armenia. The total area of the province is 969
sq. miles. According to the Tavush Governor's Office,
the province's population is 134,000, including 49,000
urban residents and 85,000 rural residents. The
province shares a border with Azerbaijan to the East
and Georgia to the North.


3. The climate in Tavush is mild continental, with
average maximum temperatures of 90 degrees Fahrenheit
in summer and 50 degrees in winter, and minimum
temperatures of 68 degrees Fahrenheit in summer and 23
degrees in winter. The region's altitude ranges from
980 feet to 9,200 feet.


4. Tavush's mineral resources include a wide range of
building materials including basalt, granite,
quartzite, and marble, as well as bentonite, mineral
paints, semiprecious stones, coal, dolomite and gyps.


5. Tavush's industrial potential is concentrated in
the four largest cities, the capital Ijevan, Dilijan,
Berd and Noyemberyan. The province's large and medium-
sized enterprises are involved mainly in building
materials, woodworking, rug manufacturing and food
processing industries. All of the former Soviet
factories in this region have been privatized. The
province's industrial production in 2003 totaled
approximately USD 7 million, while agricultural

production grossed USD 47 million.


6. Food processing is one of the fastest growing
sectors of the province's economy. Tavush has a long
history of wine making. The region's vineyards are
located at an altitude of 2,300-3,900 feet. The Ijevan
Wine Factory was established in 1976 as a small
processing enterprise and was converted into an open
joint stock company in 1995. The factory is equipped
with modern grape processing and wine bottling lines
imported from Germany. The winery's products include
several types of wines, including red dessert wine,
semi-sweet wine, white table wine, red table wine, and
rose table wine. The company exports its products to
the United States, Russia, and Japan. The company
received both financial and technical assistance from
the U.S. Department of Agriculture's Marketing
Assistance Project Office in Yerevan.


7. The Bentonite Joint Stock Company was established
in 1973 and privatized in 1996. It specializes in the
production of bentonite powder used for oil-well
drilling, molding and rubber manufacturing. Bentonite
deposits are located very close to the plant.
Bentonite JSC exports its products mainly to CIS
countries. Companies from Poland and Switzerland have
expressed interest in purchasing Bentonite's products.
Bentonite's new owner (the Moscow-based company Okro
Okroyan) and management have ambitious plans to
increase the company's exports as well as upgrade
existing production and processing lines.


8. The province's leading industrial enterprise is the
Ijevan Rug Factory, which was established in 1964 and
privatized in 1995. The factory produces a wide range
of wool rugs. During Soviet times it was one of the
largest rug producers and exporters. Since 1981 the
factory has been the only exporter of wool rugs from
the former Soviet Union to Arabic countries, China and
Eastern Europe. The factory is equipped with German
made machines and is able to manufacture approximately
13 million sq. feet of rugs annually. Currently the
factory does not utilize its full capacity. Production
and sales have been growing, however, since the local
bank recently acquired a stake in the company.


9. Dilijan-MIGE JSC operates a mineral water bottling
plant in the resort town of Dilijan. The company is
owned by Mikhail Bagdasarov, an Armenian-Russian
businessman. Most of the company's production is
exported to CIS countries, the Middle East, and the
U.S. Currently, the company is upgrading the existing
equipment to increase the plant's capacities.


10. Dilijan's Impulse plant was founded in 1967
specializing in the production of communication
equipment ordered by the Soviet Defense Ministry. In
1995 the plant was turned into a state-owned joint-
stock company. In 2002 it was privatized by Yerevan-
based Radiotechnika LLC, the owner of several
production plants as well as large trade centers
throughout Armenia. After a significant renovation of
the plant's facilities it plans to establish a
production of truck semi-trailers as well as an
assembly line for consumer electronics.


11. Tourism is an attractive sector for investments in
Tavush province. The resort town of Dilijan is located
in the mountainous part of the province near several
old monasteries. During Soviet times it was one of the
most famous tourism centers in Armenia. The city has
numerous spas and health centers. Recently Armenian-
American businessman James Tufenkian initiated the
Dilijan city center development program with an
investment of more than USD 500,000. The development
program includes the construction of a 24-room hotel,
restaurants, stores, and small studios and showrooms
where Armenian art and crafts will be exhibited.


12. Tavush province is a transit point for road and
rail traffic to and from Georgia. The largest Armenian
customs post is located at the village of Bagratashen
on the Georgian border. Near the village there is a
popular wholesale open-air market for consumer goods
and food products. A large number of Armenian and
Georgian small- and medium-sized vendors trade at this
market where they can take advantage of a customs
exemptions for the goods they personally carry across
the border.


13. Most enterprises operating in Tavush have
potential and need to establish long-term cooperation
or a partnership with foreign investors. The Embassy
encourages interested U.S. firms to contact the
Political-Economic Section of the Embassy or the BISNIS
Trade Specialist for Armenia Ellen House by phone at:
(202) 482-2284 or e-mail at Ellen_House@ita.doc.gov.

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TRADE OPPORTUNITIES
--------------

RUG MANUFACTURING


14. (1) COMPANY: IJEVAN RUG FACTORY (IRF)

IRF was established in 1964 as a state-owned
enterprise. It was fully privatized and converted into
a joint stock company in 1997. The company produces
various sizes of wool rugs. IRF imports raw materials
mainly from Turkey and Russia. The company seeks an
established U.S. supplier of raw materials, including
wool yarn, polyamide yarn, linen, and cotton yarn. The
projected annual demand for these products is 3,000
tons.
--------------
INVESTMENT OPPORTUNITIES
--------------

AUTOMOTIVE


15. (2) COMPANY: IMPULSE

Dilijan's Impulse plans to produce truck semi-trailers.
Impulse seeks a U.S. partner that would provide
financing and new technologies. Impulse will
contribute its production space, inexpensive labor
force as well as partial financial investment. The
total project cost is estimated at USD 500,000.


16. (3) COMPANY: IJEVAN MECHANICAL PLANT

Ijevan Mechanical Plant (IMP) was established in 1951.
In 1995 in was privatized and turned into an open joint-
stock company. The plant specializes in the production
of small-sized farming equipment, including
cultivators, mowing-machines, and plows. The company
would like to become a distributor of a U.S.
manufacturer of small- and medium-sized farming
equipment. IMP also seeks to establish a joint venture
with an American company to begin production of
equipment for farmers, including cultivators and
mowers.

--------------
USEFUL CONTACTS
--------------


17. For more information on business opportunities in
Tavush province, please contact:

Ijevan Business Promotion Center
Mr. Arthur Tsutsulyan, Director
5 A. Melikbekyan Street
Ijevan, 377260
Tavush province
Armenia
Tel/fax: (374-63) 34-409
E-mail: Ijevan_BPC@rambler.ru

Dilnet Business Support Center
Mr. Ashot Hovhannisyan, Director
80 Myasnikyan Street
Dilijan
Tavush province
Armenia
Tel/fax: (374-68) 07-250
E-mail: dilnet@freenet.am

Tavush Governor's Office
Mr. Ararat Gasparyan, Economic Department
Tel: (374-63) 31-697

George Isayan, BISNIS Representative
American Embassy, Yerevan
18 Baghramian Ave.
Yerevan-19
Armenia
Tel: (374-1) 524-840
Fax: (374-1) 520-800
E-mail: isayangx@state.gov
www.bisnis.doc.gov
www.bisnis-eurasia.org

EVANS