Identifier
Created
Classification
Origin
05YEREVAN1968
2005-11-07 13:01:00
UNCLASSIFIED
Embassy Yerevan
Cable title:  

ARMENIA COMMERCIAL NEWS SUMMARY:

Tags:  ECON ETRD KTDB BBSR BEXP BTIO AM 
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UNCLAS SECTION 01 OF 02 YEREVAN 001968 

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: ECON ETRD KTDB BBSR BEXP BTIO AM
SUBJECT: ARMENIA COMMERCIAL NEWS SUMMARY:
OCTOBER 2005

-------
SUMMARY
-------

UNCLAS SECTION 01 OF 02 YEREVAN 001968

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: ECON ETRD KTDB BBSR BEXP BTIO AM
SUBJECT: ARMENIA COMMERCIAL NEWS SUMMARY:
OCTOBER 2005

--------------
SUMMARY
--------------


1. This cable summarizes press reporting on commercial
developments in Armenia for October 2005. Major
headlines include:

-- Synopsys Inc. signs agreement to acquire HPL
Technologies Inc.;

-- Vanadzor Chemical Factory reopens;
-- Armenia becomes 64th member of the Asian Development
Bank;

-- Glassware factory reopens in Byureghavan;

-- Armenia pays off debt to Russia; and

-- September 2005 economic data.

END SUMMARY.

-------------- --------------
SYNOPSYS SIGNS AGREEMENT TO ACQUIRE HPL TECHNOLOGIES
-------------- --------------


2. Synopsys Inc., a semiconductor design software
company, signed an agreement to acquire HPL
Technologies Inc., working in yield management software
and test chip solutions. Both companies have
subsidiaries in Armenia, Synopsys Armenia and HPLA,
respectively. Since its establishment in 1995, HPLA
has been one of the largest IT companies in Armenia.
Synopsys Armenia began operations in Yerevan
approximately one year ago and, as of July 21, 2005,
Synopsys Inc. had invested approximately USD 270
million in Armenian operations. As a result of the
merger of their parent companies, the Armenian
subsidiaries plan to merge later this year. By
acquiring HPL products and engineers (most of whom are
based in Armenia),Synopsys Inc. hopes to become a
world leader in Design for Manufacturing (DFM)
solutions for the semiconductor industry.

--------------
VANADZOR CHEMICAL COMPLEX REOPENS
--------------


3. The Vanadzor Chemical Complex "Prometey Khimprom,"
which includes a chemical plant, a synthetic fiber
plant and a thermal power station, reopened on October
20 after being closed for six years. The plant
produces synthetic corundum and has an estimated annual
output of 40 tons, valued at approximately USD 7.7

million. The plant operators import raw material for
the corundum production from Ukraine and plan to market
the product in South-Eastern Asia. A new calcium
carbide production department, using raw materials
imported from China, is scheduled to open in November

2005. Newspaper reports indicate that companies from
Ukraine and Thailand have agreed to purchase 12 and 15
thousand tons of carbide per month from the plant. The
director of the complex hopes to partially reconstruct
the plant's thermal power station to ensure
uninterrupted power supply for plant operations.

--------------
ARMENIA 64TH MEMBER OF ASIAN DEVELOPMENT BANK
--------------


4. In late September, Armenia became the 64th member
of the Asian Development Bank (ADB) and subscribed to
10,557 shares of the bank's capital stock. The ADB's
authorized capital stock is 3,509,728 shares equivalent
to USD 51.6 billion. Established in 1966, the ADB has
focused primarily on reducing poverty in Asia and the
Pacific. Last year, the ADB approved USD 5.3 billion
in loans and USD 196.6 million in technical assistance
to support its developmental mission.

--------------
GLASSWARE FACTORY REOPENS IN BYUREGHAVAN
--------------


5. A British businessman of Armenian descent has
pledged to invest USD 100 million to restart a
crystal/glass factory in the town of Byureghavan, 20
kilometers north-east of Yerevan. Byureghavan was
renowned for glassware production before the fall of
the Soviet Union. Minister of Trade and Economic
Development Karen Chshmarityan told members of the
press that the plant will be fully operational by the
end of the month. According to the Minister, the plant
has already received orders for glass containers from
both domestic and foreign buyers and annual post-
reconstruction output is expected to reach between USD
50-70 million.

--------------
ARMENIA PAYS OFF DEBT TO RUSSIA
--------------


6. As widely reported by the local media, Armenia has
repaid all of its outstanding debt to Russia. The
final payment of USD 1.8 million covered outstanding
interest from earlier loans. In 2002, Armenia
transferred to Russia five of its largest state-owned
companies as part of debt-for-equity swap whereby
Russia agreed to write off the vast majority of
Armenia's USD 100 million debt. The enterprises
included in the agreement were the Hrazdan thermal
power plant, the Mars electronics and robotics plant
and three research-and-production companies.

--------------
SEPTEMBER 2005 ECONOMIC DATA
--------------


7. According to National Statistical Service data,
Armenia's real GDP grew in January-September 2005 by
11.6 percent year-on-year to USD 3.2 billion.
Industrial production increased by 6.2 percent during
January-September 2005 to USD 1 billion. Agricultural
output grew by 9 percent to USD 706 million, and
construction volume increased by 34 percent to USD 579
million. Armenia's foreign trade from January to
September 2005 increased by 32.2 percent to USD 1.9
billion. In January-September 2005, exports amounted
to USD 687 million, and imports USD 1,248 million, with
a foreign trade deficit of USD 561.30 million.

EVANS