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HISTORY: BUILDING AN ELECTRONICS GIANT
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THE MARS PLANT WAS BUILT IN 1988 TO PRODUCE PROGRMAMABLE LOGIC CONTROLLERS
(PLC'S) SO SOVIET. INDUSTRY COULD KEEP PACE WITH GLOBAL ADVANCES IN FACTORY
AUTOMATION. ORIGINALLY, THE PLANT, USING TECHNOLOGY OF THE BRITISH FIRM, GEC
INDUSTRIAL CONTROLS, WAS TO HAVE AN ANNUAL OUTPUT OF 25,000 PROGRAMMABLE LOGIC
CONTROLLERS (PLC) BASED ON TFLE GEC'S SUCCESSFUL GEM 80 PLC.
THE CONSTRUCTION OF THE PLANT WAS CARRIED OUT BY THE BRITISH FIRM SIMON-CARVES. THE PROJECT WAS A HIGH- PROFILE EVENT INVOLVING PRIME MINISTER MARGARET THATCHER AND FIRST SECRETARY MIKHAIL GORBACHEV. THE COST OF THE CONTRACT WAS 260,000,000 FRENCH FRANCS. THE CONTRACT, SIGNED IN MARCH 1988, WAS THE FIRST EVER TURNKEY DEAL BETWEEN GREAT BRITAIN AND THE SOVIET UNION, AND IT INVOLVED THE LARGEST UK EXPORT CREDIT EVER EXTENDED TO THE USSR.
THE CONSTRUCTION OF THE PLANT WAS CARRIED OUT AGAINST THE BACKDROP OF THE 1988 EARTHQUAKE AND THE COLLAPSE OF THE SOVIET UNION. THE LATTER CAUSED GREAT DISLC)CATION OF THE ECONOMY, WHICH WAS EXACERBATED BY THE ENSUING AZERI AND TURKISH EMBARGO. THEREFORE, THE NEW PLANT, WHICH WAS TO SUPPLY THE MARKETS OF THE USSR AND EASTERN EUROPE, FOUND ITSELF IDLE WITH NO START-UP FINANCING OR MARKETS.
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TECHNICAL DATA
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THE PLANT COVERS AN AREA THE SIZE OF 20 FOOTBALL FIELDS. ITS PRODUCTION AREA
IS 90,000 SQ.M. MOST OF THE PLANT'S 34 PROCESS AREAS (WHICH BRING TOGETHER
20 DIFFERENT TECHNOLOGY PACKAGES) ARE LOCATED UNDER ONE ROOF. BASIC AREAS
INCLUDE PRINTED CIRCUIT BOARD (PCB) PRODUCTION, METAL PROCESSING, ASSEMBLY,
AND PACKING ZONES.
THE PLANT IS EQUIPPED WITH WESTERN EQUIPMENT FROM THE U.S., UK, GERMANY, ITALY,
CANADA, AND SWITZERLAND. AT PRESENT, MARS HAS 500 EMPLOYEES. OF THESE, 200
HAVE BEEN TRAINED IN THE WEST BY THE EQUIPMENT SUPPLIERS. AT FULL CAPACITY,
THE PLANT CAN ENGAGE UP TO 3,000 WORKERS. THE COMPANY IS STILL STATE-OWNED,
AND IS NOT ON THE GOVERNMENT'S PRIVATIZATION LIST. HOWEVER, IT IS NOT SUBSIDIZED,
AND OPERATES ON SELF-STANDING BASIS. ACCORDING TO THE MARS'S DIRECTOR, STEPAN
DEMIRCHYAN, THE GOVERNMENT IS OPEN TO PRIVATIZING THE PLANT IF A PROPER FOREIGN
PARTNER/INVESTOR IS FOUND.
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STRUGGLING THROUGH THE CRISIS YEARS
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SINCE THE VERY START, MARS HAS BEEN DIRECTED BY KAREN DEMIRCHYAN, THE SON OF A FORMER COMMUNIST PARTY LEADER OF ARMENIA. DEMIRCHYAN HAS UNIVERSITY TECHNICAL BACKGROUND. FACED WITH A NECESSITY TO FIND NEW APPLICATIONS FOR THE PLANT, DEMIRCHYAN HAS BEEN ACTIVELY PURSUING BUSINESS OPPORTUNITIES ABROAD, INCLUDING IN THE U.S. THE PLANT HAS BECOME A REGULAR STOP FOR VISITING FOREIGN BUSINESSMEN AND OFFICIALS.
IN 1991, MARS FOUNDED "ASTRA" JOINT VENTURE WITH THE SWISS FIRM "FELA", AND
STARTED FULL-LINE PRODUCTION OF HIGH QUALITY DRILLS USED FOR DRILLING PRI
NTED CIRCUIT
BOARDS. THE DRILLS ARE EXPORTED TO THE U.S., UK, GERMANY, AND HONG KONG. CURRENTLY,
PRECISION CARBIDE TOOLS (USA) IS ALSO INVOLVED IN THIS PROJECT, AND SUPPLIES
INPUTS AND MARKETS THE PRODUCT IN THE U.S.
IN 1994, MARS STARTED PRODUCING TELEPHONES UNDER LICENSE FROM THE FRENCH FIRM "HPF-ASCOM GROUP". THE TELEPHONES ARE SOLD IN ARMENIA AND OTHER CIS MARKETS.
IN 1994, MARS FORMED THE JOINT VENTURE "ARMACO" WITH ICT GROUP (USA) TO PRODUCE ICT'S NEW PRODUCT - A HIGH- TECH VIDEOPHONE SURVEILLANCE SYSTEM. THE FIRST VIDEOPHONES WERE ASSEMBLED IN DECEMBER 1995, AND WERE SHIPPED TO THE U.S. FOR TESTING BY THE FCC. THE BASIC SYSTEM COMPONENTS ARE ASSEMBLED AT MARS AND INCLUDE A TRANSMITTER AND A RECEIVER WHICH, IN COMBINATION WITH PERIPHERAL DEVICES (UP TO FIVE VIDEO CAMERAS, AND TV MONITORS), ALLOW FOR TRANSMISSION VIA REGULAR TELEPHONE LINES OF A SHARP CHANGING PICTURE (FRAMES CHANGE EVERY 15 SECONDS) AND SOUND. MARS ENGINEERS ARE CURRENTLY WORKING WITH ICT IN LOS ANGELES ON THE NEXT GENERATION MODEL, WHICH WILL BE ABLE TO CHANGE PICTURE FRAMES EVERY THREE SECONDS. MARS IS EXPECTING TO PRODUCE 1,000 VIDEOPHONES BY THE END OF 1996.
MARS IS TRANSPORTING INPUTS AND FINISHED PRODUCT, TO AND FROM THE U.S., BY AIR VIA MOSCOW. ACCORDING TO DEMIRCHYAN, HE PREFERS RUSSIAN AIRLINES BECAUSE THEY CHARGE LESS AND ALSO OFFER INSURANCE AS OPPOSED TO THE ARMENIAN NATIONAL CARRIER - ARMENIAN AIRLINES.
THE PRODUCTION OF THE MENTIONED ELECTRONIC DEVICES ENGAGES ONLY A FRACTION OF THE PLANT'S POTENTIAL CAPACITY. DEMIRCHYAN IS ALSO USING THE PLANT'S MACHINERY TO PRODUCE PLASTIC CONSUMER GOODS, AND COMPONENTS FOR ELECTRIC WASHING MACHINES. NONETHELESS, ALL OF THESE PROJECTS COMBINED ONLY HARNESS 10-15 PERCENT OF THE PLANT'S POTENTIAL CAPACITY.
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PARTNERS WANTED
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ACCORDING TO DEMIRCHYAN, MARS' FACILITIES ARE VERY FLEXIBLE AND EASILY CAN BE ADAPTED TO ASSEMBLE A WIDE RANGE OF ELECTRONIC AND ELECTRICAL DEVICES.
MARS IS SEEKING PROPOSALS FROM U.S. FIRMS TO PRODUCE OR ASSEMBLE CONSUMER AND INDUSTRIAL ELECTRONIC AND ELECTRICAL DEVICES OR COMPONENTS (COMPUTERS, TELEVISION SETS, VIDEO, AND AUDIO EQUIPMENT, REFRIGERATORS, TELEPHONE SWITCHES, ELECTRONIC CIRCUIT BOARDS, ETC.). PROPOSALS FOR FINISHED PRODUCTS WILL BE GIVEN PREFERENCE. THE PROPOSALS MAY TAKE A NUMBER OF FORMS, INCLUDING JOINT VENTURE OR DIRECT INVESTMENT AND OWNERSHIP IN THE PLANT.
ANOTHER POSSIBLE PROJECT COULD BE THE PRODUCTION OF DENTAL DRILLS AND RELATED DENTAL EQUIPMENT, BASED ON MARS'S EXPERIENCE WITH PCB DRILLS.
MARS'S MOST ATTRACTIVE FEATURES ARE:
- A FLEXIBLE LAYOUT, AND A RARE GROUPING OF MORE THAN 30 DIVERSIFIED PROCESS AREAS (FEW PLANTS OF THIS DIMENSION AND DIVERSITY EXIST IN EUROPE)
- THE EQUIPMENT IS FROM LEADING WESTERN FIRMS, AND HAS BEEN MAINTAINED IN PRIME OPERATING CONDITION
- THE PLANT IS STAFFED BY HIGHLY SKILLED AND TRAINED PERSONNEL
- IT OFFERS LOW LABOR COSTS (CURRENTLY, THE AVERAGE MONTHLY SALARY IN THE STATE SECTOR IS 15 TO 25 DOLLARS, AND IN THE PRIVATE SECTOR IT IS 50-200 DOLLARS).
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CONTACT INFORMATION
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INTERESTED U.S. FIRMS SHOULD CONTACT THE MARS PLANT DIRECTLY AT THE FOLLOWING ADDRESS:
MARS PLANT
111 RAFFI ST, YEREVAN, ARMENIA
TEL: (374-2) 738-323
TEL/FAX: (374-2) 151-724
STEPAN DEMIRCHYAN, GENERAL DIRECTOR
(ORIGIN: COMMERCIAL SECTION/AHOVHANNISYAN)