Textile Industry Support Program launched in Armenia

YEREVAN, January 19. /ARKA/. Textile Industry Support Program was launched in Armenia on January 18 with the funding from the "Good Governance Fund" of the UK government, supported by the EBRD and coordinated by the Business Support Office as part of cooperation with the Ministry of Economy of Armenia.

The program’s aim is to support sustainable and inclusive development of the textile industry, which is one of strategic priorities of the Armenian economy.

As part of the program proposals on possibilities and directions for increasing the added value of textile products made in Armenia, as well as increasing their competitiveness will be worked out.

During the presentation of the program, Deputy Minister of Economy Rafael Gevorgyan said that after the termination of GSP+ trade regime for Armenia, a study was launched, on the basis of which a five-year strategy of textile industry will be designed.

The GSP+ regime of trade preferences with the European Union, which provided for the duty-free exports of more than 6 thousand commodity items, was terminated for Armenian exporters from January 1, 2022, as Armenia is listed in the group of middle-income countries.

"The strategy will include not only the textile industry, but also leather production and a couple of other light industry sectors," Rafael Gevorkyan said.

In his turn, British Ambassador to Armenia John Gallagher stressed that this program is focused on two important tasks: development of women entrepreneurship and environmental protection.

"Textile production is the area, where enterprises are mainly owned by women. For Great Britain, one of the most important goals is to create favorable conditions for women's entrepreneurship. Another important area is the protection of the environment. Combating climate change and restoring biodiversity are the most important tasks to which British funding contributes," he said.
According to him, this program will calculate the volume of carbon produced by the textile industry, as well as suggest steps to reduce it.

Head of the EBRD Armenia Office Dimitri Gvindadze noted that EBRD increases its investments in Armenia. Thus, according to him, last year the volume of business investments reached 175 million Euros, which was the highest figure of annual business investments in the history of cooperation. He said that nearly 90% of those investments were made in the private sector.

Gvindadze specified that the private sector also includes the financial sector: how banks use the investments, financing small and medium-sized enterprises, etc.

"We are also looking for cooperation with all the areas, in which our bank is active and wants to make direct investments," he stressed.

The head of the EBRD Armenia Office informed that the majority of the programs implemented in Armenia were in the private sector, and the total portfolio is about 500mln euros at the moment.

"We are one of the largest investors in Armenia and 80% of this portfolio is in the private sector," he said.

Head of the Entrepreneurship Support Office Hovsep Patvakanyan, in turn, said that there are 8,500 people working in the textile industry. In 2012 the number of small companies producing textile goods was 92, and their number is to grow to 201.

According to him, in 2012 the export of textile products from Armenia was worth only $20 million, but in 2021 this figure increased 9-fold, reaching $180 million.

"Taking into consideration that 46% of the production is exported to the European countries and since January 1, Armenia is not eligible to the GSP+ system any more, there was a need to assess the needs of local producers in these conditions and offer solutions to maintain competitiveness in the EU markets," he said.

He said that within the framework of the program the problems of local producers will be analyzed and a package of proposals made along with a road map to help producers to manufacture more expensive goods and become competitive in foreign markets. -0-