Only seven years ago, it was on the brink of ruin.
"The factory was practically dead," admits Georgy Avetikyan, general director of the Armenal plant since its rebirth in 2000.
"But look around at the equipment we have now," he says, surveying a factory floor filled with German-built mills squeezing thin layers of foil from metal shipped in from Russia.
Armenal is owned by United Company RusAl, the aluminum giant controlled by billionaire Oleg Deripaska. After a $70 million revamp completed last year, it can produce 25,000 tons of aluminum foil -- 12 percent of the total in the former Soviet Union.
About half of the foil, used mainly to package food, drinks and cigarettes, is exported to the European Union, 35 percent to North America and 15 percent to the Middle East.
"Not a single ton leaves the factory without an order from a client," said Alexander Burdin, director of RusAl's packaging division, which supplies aluminum foil to companies such as Kraft Foods and Nestle.
Aluminum smelting in Yerevan dates back to the 1950s, when the Kanaker smelter was among the Soviet Union's leading plants. But when the growing city encroached on a plant that was built on its outskirts, pollution became a problem.
The smelter was eventually closed, leaving the foil mill on the same site bereft of raw materials. Financial meltdown followed the breakup of the Soviet Union, and the plant effectively stopped.
"To produce foil, you need aluminum sheet -- and we didn't have any," said Avetikyan. "SibAl came in with their business plan and got approval. There were several companies competing."
SibAl, or Siberian Aluminum, was Deripaska's aluminum company at the time. Deripaska later extended his reach to form a joint venture with the Armenian government in 2000.
Over time, RusAl increased its ownership of the plant and by 2003 controlled it outright. It is one of three foil plants owned by the company, which is preparing a share float in London that bankers say could raise about $8 billion.
The revival of Armenal mirrors consistent economic growth in the country. Armenian gross domestic product is set to rise by about 10 percent in 2007, the fifth successive year of double-digit growth, and the country claims the lowest inflation of any former Soviet state over the past seven years.
Armenal employs over 800 people who earn an average monthly wage of about $300, 50 percent more than the national average, says the company's press secretary, Alexander Melkumyan.
Source: The Moscow Times, Monday, July 23 — 2007