British-Armenian Coalition Gives Birth to Dvin Gomputers

LONDON ersonal computers named after *te ancient Armenian capital of Dvin should soon be rolling off ths new production line of the British.Armenian joint venture Micrograf Intemational.

- They axe the result of a collaboration between British Micro. whose chairman 'is an Armenian, Minas Heghoyan, and -{rs Soviet Ministry of Computer Techsslogy in Yerevan, which has made **ainframe computers for 17 years.

The Wadord, Englard-based company modsmized the Yerevan factory and the joial venture has just installed a $1.5 million Honeywell Bull production line, eaprblc of tuming out 250,000 personal computers a year.

The line is still being tested and is unlikely Io mn at full capacity for some time because components must be bought with hard curency from the Far East.

Thougft it wants to export, initial production will be for Armenian and Soviet markets. Government ministries, with their hard currency reserves, will be prime customers for the lBM-compatible machines, which will be sold fcr a mix of rubles and dollars.

British Micro was one of the first to set up a joint venture in the Soviet Union, in November 1988, following a friendship struck up two years earlier between Heghoyan and the then prime minister of Armenia.

Like other oprating joint ventures, it benefited from the influence the govemment partner could wield in Soviet bureaucracy.

"The senior personnel there have got very powerful contacts with the Kremlin. Geaing bits of paper signed is like second nature to them and &at was extremely helpful," said Heghoyan.

The computer factory has about 120 workers, with plans to recruit up to 200 more. They eam between zl{il and 2,000 rubles a month.

But &e joint venture emplcys a total of 1,2fi) people in a variety of activities. These include selling waste material to Europe, modernizing factories bought cording to Yeghiayan. who adds that 90 days is "rcalistic."

Annentoy's l'actory was up and running within I'ive nronths. By contrast, Techport International has taken two years to rcach the registration stage after ninc visits to Armenia.

"Things go very slowly thcrc, you have to bc very patient," says vice-prcsident John Mosstaghimi. "You ncccl lots of money and cllirrt, patiencc antl pcrscverancc."

Once your deal is signed and registered, and your lbreign bank account opened. you arc rcady to do business. Now you l'ind out how determincd you are lo succeetl.

Problems arise with transport, in Ar menia and 1o thc outsidc world, supplics ol'raw materials, changing workers' habits, even powcr cuts caused by thc rcpublic's fucl shortagc.

From the expericnces of'those working in Armenia, the lirre ign parlner must be constantly involved to tackle these opcrational headachcs.

This usually rncans cmploying Western managcrs on site, as Armentoy has donc. Tcchport expecls to havc up to lfi) Amcrican staff in its vcnturcs initially, scaling back 1o about 20 manilgers once local workers arc trainccl.

"1'heir rcsponsivcncss to take direc- from the Armenian Govemment, and a plan to build holiday homes in Yerevan and the Sevtm area for Diaspora Armenians. Branch offices in Kiev and Moscow sell computer-aided design systems.

"We gave the tuticles of association very wide powers, from chemieal$ to computers, from building materials to metals," Heghoyan said.

"Under one joint venture there are 50 or 60 different operations, some as branch offices, some of them parmerships with a number of co-operatives."

Heghoyan invested about $200,000 for a 30olo share. Workers tmd director* will get some of the ministry's 707o share when privatization laws come into play.

Turnover in 1990 was more than 100 million rubles with profits of around 30 percent, much of which is used to buy other companies outright from the Armenian Government.

"The assels of the company are getting enorrnous, There's no way I can change that to dollars but that !ryasn'l my wish. I warted to help build up Armenia and get things going," Heghoyan said.

"I don't need to make any further investment with my company. The joint venture itself now has enough capital to do viaually anything it likes." r tion and actually follow or absorb the knowledge that we were trying to fansplant was very disappointing," said Novak.

"We may have had a naive belief that over a period of time we could have imported that knowledge, have a board meeting once a quarter, and the Armenians could run it Westem-style. "But we are becoming more and more convinced that the only way to run this is to have one if not as many as three Western people there."

Teruia\ his partner, takes a more sanguine view. "You have to sit down and explain and once they understand they are very adaptable. You have to explain."

Some, like Micrograf and Armentoy, rely at least partly on importing components they can not get in sufficient numbers or quality in the Soviet Union. This can restrict production because of the nonconvertibility of the ruble.

Money, Authority, Determination. Pull it all together and, with luck, out of the MADness you'll have a profitable business operating on free-market lines to the benefit of the partners and Armenia.

Almost everyone interviewed for this story agreed that, if the present prospects were difficult, the long-term outlook in Armenia was much brighter.

"Cennal controls will probably be less important. Over time one will be dealing wirh local authorities who should be more flexible," said Zimbler.

"Armenia is a gateway into the Soviet Union. They are open-minded and have had exposure to the West before. This is a good place to start," said Mosstaghimi

"Armenia is a heaven for business to opemte in. The only thing that has stopped people is that the very first thought they have is 'can I make money there and bring it out," said Heghoyan.

., 'The answer is 'no, not yet'. You have got to have r patience,a 20-yeat program{ot a one- month one of going in and making a quick profit. That's wrong, maybe even hostile."

"Yes invest, but the time is not right. The necessary conditions are not yet in says Gregor. are all being on, and it's my hope that in 12 months time they will be in place.

"Go for it, if you have persistence, energy, and passion to make it hap pen," says Terzian. "But you can't go in half-heartedly and walk away after two or three obstacles.

"We are successfirl in what we are doing but on a daily basis there are obstacles. Some of them are very serious but you overcome them."

Alll correspondents in Yeteyan, Parls, Tokyo and Lorf,on mntrlbuhd to this re prt be open in two years.

"We think many business people would like to go there and wort but they need

SAN