Publications / WE ARE READY TO RESIST ANY CRISIS - ARAVOT daily

11.06.2011

Zangezur Copper Molybdenum Combine (ZCMC) shareholders' meeting has unanimously decided to pay 5% of the profit to the employees

6 years ago, in 2005, an exceptional event took place in the mining industry sphere of Armenia - the transaction for the privatization of Zangezur Copper Molybdenum Combine was recognized as "One of the best transactions of the year” at the prize-awarding ceremony of the "Mines and investments" international mining industry summit in London. And that was not accidental. Back in 1994, the combine was in the privatization list and it was obvious that it was not possible to reinstate it with state finance, or to increase the production capacity, create workplaces and make serious investments. Therefore, it was privatized for 132 million USD to German "CRONIMET MINING" and its Armenian partners: "Plant of Pure Iron", "Armenian molybdenum production" and "Zangezur Mining" companies. Along with the investments, the transaction was estimated at more than 350 million USD. Until now, for many people it is not clear why the RA government, nevertheless, sold ZCMC to us, and not to Russian "Soyuzmetal" or American "Comsap Commodity ". Firstly, the Russian company had offered the lowest price - 40 million USD, besides, none of the plants handed over to the Russian side within the "Property for debt" transaction resumed its operations, as had been promised, so, it would have been inconsiderate to expose ZCMC to this fate as well. As for the American company, it simply refused to participate any further, since it was not ready to pay a competitive price, whereas we established and implemented a huge investment program aimed at the modernization of the plant, increasing productivity and volumes of processing ore, bringing it to 14 million tons annually.

As you know, CRONIMET is a large supplier for internationally recognized companies in the steel production sphere. We cooperate with such companies as Thyssen Krupp, Arcelor Mittal, Acerinox, Outocumpu, YUSCO, TISCO, and others. "CRONIMET Group" was established more than 30 years ago, and its head office is located in Karlsruhe, Germany. Through its 56 subsidiaries located in different countries, "CRONIMET" operates in Europe, North America, Asia – supplying raw materials and providing services.

Going back to ZCMC, it should be mentioned that the global economic crisis undoubtedly had negative effect on the whole mining industry sphere, but the flexible strategy of sales conducted by "CRONIMET Group", the experience and skills of ZCMC management, as well as the assistance of the RA government made it possible not only to save the combine from destruction, but also to ensure stable production sales, add new workplaces instead of downsizing the headcount, and pay salaries on time. Indeed, the functioning of "CRONIMET " on the world's most important markets and its being the 2nd largest combine in the sphere have had a tremendous influence on ZCMC during the crisis. During this hard period, the workers of the combine did not stop working for one day even, moreover, there was no talk of downsizing or reducing production capacity, unlike other mining industry companies in Armenian and globally. It was obvious that serious problems could arise both in supplying materials and equipment necessary for production and in selling on international markets. A number of well-known companies still feel the effects of the global crisis and are restoring their position in the market with difficulty, whereas ZCMC, owing to its shareholders' investment policy, and by constantly developing and re-equipping the technical-economic base is ready to resist any economic crisis. The list of large taxpayers published by State Revenue Committee this year is a vivid proof of the fact that ZCMC has successfully overcome financial problems and is the largest taxpayer in the country. "CRONIMET MINING" AG is one of the largest investors in Armenia's private sector, one of the main directions of development of ZCMC is the expansion of production capacity. Starting from 2005, in the frame of separate projects in the combine, an investment of more than 350 million dollars was made, and as a result, a 75% growth of production capacities was ensured. In September this year it is intended to start operating the diffraction grinders combine of the ore as well, which is the largest in the region.

ZCMC's shareholders' meeting took place quite recently, at which Günter Pilarsky, founder and president of CRONIMET, the Honorary Consul of the Republic of Armenia in Baden-Württemberg was also present. The shareholders decided to continue the successfully implemented investment program, as a result of which it is envisaged to bring the production volumes up to 20 million tons annually. Besides, ZCMC is one of the largest employers in Armenia, it now provides 3100 stable workplaces and is creating more than 10 thousand workplaces for contractors and subcontractors. By another decision of shareholders every year from now on, after summarizing the results of the fiscal year, 5% of pure profit of ZCMC will be paid to the combine's employees as a bonus, taking into account the work experience, position and the specifics of the work done. Thus, any employee will have his/her own share of the combine's profit.

It is noteworthy that CRONIMET Group attaches great importance to environmental protection and periodically allocates serious finance to various social spheres of Armenia, contributing to the solution of numerous educational, cultural and health-care issues. The sustainability of CRONIMET Group's social initiatives became more evident by establishing CRONIMET Charity Foundation in 2011, which aims at providing long-term assistance to the implementation of social projects in various spheres in Armenia.