Armenian Tycoon Branches Out With Sugar Plant

Samvel Aleksanian, whose Alex-Grig company is one of the country’s largest corporate taxpayers, claims to have invested $92 million in the plant in the local town of Akhurian, which is due to be completed next spring.

President Serzh Sarkisian inspected the modern facility on Monday as he toured the area to mark the 21st anniversary of a powerful earthquake that devastated much of Shirak and the neighboring Lori region.

A Soviet-era sugar plant located in the Lori town Spitak, the quake epicenter, was among major industrial enterprises that were destroyed by the 1988 calamity. Armenia has been totally dependent on sugar imports since then.

Aleksanian has enjoyed a de facto monopoly on these and other essential food imports over the past decade, capitalizing on his close ties with Armenia’s current and previous presidents. His tight grip on one of the most lucrative forms of business in the country has long been cited by local and foreign pundits as proof of the “oligopolistic” structure of key sectors of the Armenian economy.

Prime Minister Tigran Sarkisian publicly acknowledged the existence of “oligopolies” and pledged to dismantle them last month. Earlier this year, Sarkisian urged leading national importers to help his government cope with the grave effects of the global economic crisis by switching to manufacturing operations and creating jobs.

Aleksanian, who has held a seat in Armenia’s parliament since 2003, began branching out years before that, mainly showing interest in food-processing. The sugar plant construction, which began in 2007, is by far the largest of his manufacturing projects.

“Why are you surprised?” the tycoon told journalists when asked to comment on his changing business strategy. “I used to import alcohol, now I have an alcohol distillery. I used to import flour, now I own a flour mill.”

“I’ve imported sugar and am now building a plant,” he said. “It’s better to create jobs for our people.”

Aleksanian, who has long been accused by the Armenian opposition of rigging elections and bullying government opponents in his native Malatia-Sebastia district of Yerevan, said the Akhurian plant will employ 1,000 people and also provide income to some 20,000 farmers that will supply it with sugar beet.

“The plant will have a capacity more than twice exceeding Armenia’s sugar demand,” its director general, Eduard Sargsian, told RFE/RL. “We will be able to produce about 220,000 tons of sugar a year.”

“We plan to export it to Georgia, northern Iran and, if there are shortages, even to Russia and some parts of Europe,” he said.