by AGBU News
"It's not for the faint-hearted," explains Rouben Terzian. Establishing the ArmenToy joint venture in Armenia two years ago, the company has had to face the collapse of the Soviet Union, sky-rocketing inflation, shortage of energy and the never-ending problems of transportation.
"You can't go in for the short term," adds Mr. Terzian. "You have to have survival power." Mr. Terzian and his partners in the Chicago-based firm Breslow, Morrison and Terzian originally signed their joint venture contract in 1990 (60% share with the remaining shares to the Armenia partners) in cooperation with the Moscow Ministry of Electronics who guaranteed the supply of raw materials and equipment for purchase in rubles. Now everything must be paid in dollars. Sourcing in the former Soviet Union has become near impossible as factories throughout the republics shut down.
Very satisfied with the quality of production and the skills of the laborers, ArmenToy has a manufacturing capacity of 800,000 toys a year. At present five different toys are available. "We have to keep pushing our partners in Armenia," reports Mr. Terzian. "They can't understand why we must generate new products. They are used to making the same product forever there." A substantial market in the Middle East has been developed after exhibitions at various international toy fairs, but at the same time the Soviet market has declined considerably because of economic conditions.
Transportation is a major problem. Guards accompany shipments to the nearest ports in Georgia and Ukraine but the recent OPIC agreement eased, at least, insurance problems for shipment into Armenia from abroad. Packaging is another challenge with cartons and corrugated paper difficult to obtain.
All the problems never deter Mr. Terzian as he prepares business plans and seeks investors for the operation of a second plant manufacturing micromotors. "Armenia must have industry. We have no port and few natural resources. It's our brain power and service that will build a nation."
Rouben Terzian is a member of the Central Board of Directors of the AGBU.
