Industry, Science and
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.
in Industrial Output (percentage in comparison with previous
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
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.
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
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.
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
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
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.