Industry

he industry sector in Armenia consists of Machine Building, Instrument Making and Radio Electronics, Chemical Industry, Construction Materials Industry, Precious Metals and Stones Processing, Light Industry, and Consumer Goods. The Ministry of Industry is responsible for the development. of sector policy, investment programs, and privatization in the sector. 

The period from 1960 to 1980 generated dynamic growth of Armenian industry. New enterprises were established in conjunction with scientific research facilities creating the opportunities for innovations and technological growth in the industry. Supporting this endeavor was an intensive network of higher and specialist educational institutions for research personnel and a well trained labor force. In comparison with 1960, the gross industrial output in 1987 grew 8.3 times. The outputs of this industry were highly integrated with market demands in the USSR and several Armenian enterprises were exclusive producers or had a large share of the output for synthetic rubber, melamine, acetate filters, aluminum foils, portable electric power engines, pumps and generators, high temperature heating appliances. and molybdenum concentrate in the country. The high degree of integration, both for the import of raw materials and export of the finished product, especially defense products, weighed heavily on the industry with the collapse of the FSU. 

Dynamics in Industrial Output (percentage in comparison with previous years) 
 

	1990	1991	1992	1993	1994	1995
Mettalurgy	80	89	27.1	46.2	136.1	165.4
Chemical	61.6	108.8	54.2	61.3	121	116.4
Machine Building	93.7	89.4	46.9	111.3	95	108.5
Light Industry	106.7	96.9	56.2	89.9	90.4	100.3
Construction Materials	86.4	89	30.5	82.7	102.9	193.7

Machine Building 

mportant divisions of the sub-sector are the electrotechnical, machine tool, and automotive industries. Armenia was the third largest producer of electrotechnical equipment within the former Soviet Union in the 1980s. The large domestic stocks of nonferrous metals, particularly copper, provided a firm material base. Five institutes carry out scientific and technological research. Currently the enterprises produce electrotechnical equipment including cables and wires, power transformers and mobile stations, generators. alternators. a/c electric motors, electrical welding devices, elevators, lamps and various illuminators, and equipment for controlling and distributing electricity. Close integration of the metallurgical, energy, and electrotechnical divisions allows for a facilitating environment in the production and consumption of electrotechnical equipment. 

The Machine Tool division consists of 15 enterprises producing metal cutting machines including lathes, drilling. milling, rotary table, and grinding machines. Progress has been made in the production of high precision and program managed machine tools. This division also produces various types of stone cutting and processing machines, special types of electroerosive, electrochemical and vibration processing machine tools, components, and spare parts. Due to negative industrial investments in the CIS countries, the machine tool division is currently experiencing demand reductions. 

Within the division there are enterprises for the production of microbuses, fork lift loaders, special pumps, and compressors as well as synthetic diamonds. diamond powder, cutting, and grinding diamond tools. 

Instrument Making and Radio Electronics 

he Instrument Making division primarily produces equipment connected with automation facilities, digital instruments and spare parts, components for laser systems, electric measuring instruments, and devices to automate, control, and regulate technological operations. Other products include clocks and computer control systems! telecommunication equipment, radio equipment, domestic appliances, spare parts, and components. 

Researchers have made improvements in the technology of unique optical space telescopes and equilibrium systems; laser and optical devices and components; digit analogue transformers and other related equipment; apparatus for measurement, diagnosis, and controlling of semiconducting components; integral schemes and various complex electronic components for defense and space technologies; and temperature measuring instruments for power engineering, ship, and machine building. 

The growth of this division was due to centralized investments of the Soviet Union and was primarily for the production of defense related equipment. Today it is urgent to convert research and production capacities for civilian needs. 

Chemical Production 

here is a well developed chemical sub-sector in Armenia. Currently 18 factories are manufacturing products that are in demand in CIS countries and abroad. The interconnection of the plants results in 40 to 45 percent output being utilized within the sub-sector. The companies produce synthetic chloroprene rubber and latex, acetic acid, formic acid, melamine, chemical fibers and threads, polyvinilacetate dispersion, calcium carbide, carbamide, synthetic crystals, caustic soda. paints and lacquers, and 800 types of chemical organic reagents. Also in operation are pharmaceutical and vitamin companies. The major share of chemical products adheres to the international standards of quality allowing for competitiveness in the market. 

Mining and Metallurgy 

he availability of natural resources (molybdenum, copper, gold, silver. and polymetallic ores) and a well developed infrastructure makes it possible to support a nonferrous metallurgical sub-sector. 

Refineries for major copper and molybdenum operate near the mining towns of Kapan, Kadjaran, and Agarak. A metallurgical plant in Alaverdi producing pure copper, blue vitriol sulfur pyrite, as well as sulfuric acid, brass, and bronze powder was forced to close several of its sections when operations caused a major environmental crisis. The Ararat gold refinery processes gold ore of domestic deposits. Imported raw materials are used in the production of aluminum foil, and special metallic powders are produced from the iron scrap. Reconstruction of the Alaverdi metallurgical plant and upgrading the metallurgical production in Kapan is projected by the Government within the next five years. 

Construction Materials 

rmenia is rich in natural stone, clay, and limestone materials. There are 330 mines throughout the country with total estimated reserves of 3 billion cubic meters of volcanic tufa, basalt. andesite, cienite, colored marble, and Perlite. Domestic reserves of limestone provide an annual production of 3,000,000 tons of cement and 1,400,000 cubic meters of reinforced concrete structures. Before the earthquake the sector grew at an average annual rate of 5 percent. This natural disaster and the collapse of the USSR caused construction funding to be reduced and the demand ceased. The interruption of transport routes, difficulties in energy and fuel supply. and a lack of modern equipment and spare parts also were responsible for the decline. Currently the level of capacity utilization is below 15 percent.

Precious Metals and Stones Processing 

uring the post independent period, this sub-sector provided a large share of export revenues ($59 million in 1993, $78 million in 1994, and $90 million in 1995) as it was not heavily affected by the adverse transport conditions. Diamond polishing plants currently operate in the country using raw diamonds from Russia and European Union countries. Jewelry is produced for domestic use and exports by both state owned and private enterprises using diamonds, gold, silver, and semiprecious natural stones. 

Light Industry Consumer Goods 

rmenia's light industry is a traditional branch of its economy. Production is diversified throughout the country with major plants in Yerevan, Gyumri, and Vanadzor. The products are mainly cotton, woolen and silk garments, textiles, knitwear, hosiery, shoes, and carpets. Formerly these goods were in great demand in Armenia and the CIS markets. Subsequent liberalization of foreign trade exposed this sub-sector to international competition, leading to a decrease of traditional markets. Raw materials are usually imported. An experienced labor force and modern equipped factories provide an essential infrastructure. To meet the international standards of quality, improvements must be made in design. furnishing, packaging, marketing, and transportation.