World Bank bid to resurrect Nairit chloroprene rubber plant

Yerevan, Armenia – The World Bank has agreed to engage a “globally-experienced” consulting firm to assess the technical and financial viability of the idled Nairit chemical production operation in Armenia.

Nairit operated the only chloroprene rubber plant in the former Soviet Union. It was closed in 1989 for environmental reasons, resumed partial operation in 1992 but ceased operations again in 2010 due to financial problems.

According to the World Bank, the consultancy will provide technical and financial analyses and an environmental assessment to help the Armenian government decide the future of the plant.

“We have agreed with the government to mobilise grant resources of more than $110,000 (€97,000)  from within the World Bank for the proposed expertise ... from internationally recognized experts,” said Laura Bailey, World Bank country manager for Armenia in a 19 Feb news release.

The first phase of the consultancy’s work is scheduled to begin on 25 Feb and take two and a half months, said the World Bank announcement.

The work will encompass: An overview of the global market for the main products that could be produced by the plant; an assessment of the technical feasibility of production based on the existing plant; an assessment of the financial viability of production given current cost structures; and a SWOT analysis.

In the second phase, a basic environmental review of the Nairit operations will be undertaken. The World Bank said it would monitor and review the analysis, but emphasised that the work would be led by Armenia’s minister for energy and natural resources.

In September 2013, Rosneft and Armenian government discussed a potential partnership with Rosneft to restart chloroprene rubber production at the Nairit plant. Engineering firm Jacobs Consultancy Ltd had previously conducted a technical and environment audit of chloroprene rubber production from butadiene at the facility.

At the time, Rosneft said it would take a decision on whether to take part in the project once it received the final audit results and discussed the conditions to join the project with the Armenian government.

Rosneft also reached an agreement with its partner company Pirelli for Pirelli’s delegation to visit the Nairit plant to evaluate and determine possible opportunities for cooperation.

In 2006, 90 percent of Nairit’s shares were sold to Rhinoville Property Ltd for $40m (€30m). The remaining 10 percent belong to the Armenian government. UK-registered Rhinoville was set up by Samex of Poland. US-based Intertex: and Eurogaz of Russia.