Without effective crisis management and government support tragic consequences for businesses will be inevitable – Chief Business Development Officer at Prof Al

YEREVAN, March 30. /ARKA/. The interview of Edgar Avetisyan, Chief Business Development Officer at Prof Al, with ARKA and Noviosti-Armenia news agencies under the special project #SaveBusiness.  

-How has the activity of Prof Al in Armenia changed after the outbreak of coronavirus?

E. Avetisyan - The coronavirus pandemic, of course, had a direct impact on all areas and, first of all, on business.

At our company Prof Al the work of showrooms was the first to suffer: the number of visits decreased noticeably and sales fell incomparably. The pace of production also fell sharply.

Nevertheless, in this situation, until the last week, our company still continued to work. Caring for the health, safety and comfort of our employees and customers, these days we have established an intense control over the observance of sanitary norms and rules and implemented appropriate preventive measures.

Already on March 24, when the commandant decided to restrict the economic activities of shopping centers, for a short time we stopped the work at showrooms of Prof Al and Prof Al Home as well as the entire company.
- How would you describe the situation in your area? Is there a preliminary calculation of the damage caused to the sphere due to the coronavirus?

E. Avetisyan - It’s too early to make any financial calculations, the preliminary picture will be visible only after the end of the epidemic.

Definitely, construction, architectural companies and the business as a whole will be stricken significantly. It will not do without consequences, given that the stable development of the economy is largely due to the smooth operation of these industries.

Somehow, for some reason, I said that the construction boom in 2019 was mainly due to apartment construction. The income tax law, in turn, has contributed to the construction of apartment buildings. According to our forecasts, 2020 should also have been a turning point.

However, now, just imagine a situation when a person does not work, does not receive a salary and cannot repay interest on a loan. In such circumstances, no one will run such a risk of buying apartments, that is, there will be no sales, and therefore, construction will stop.

- How do you imagine a way out of this situation?

E. Avetisyan - We are facing a global economic crisis. In such cases, the activities of any organization - local or foreign - depend on a correct and effective crisis management. It is very important to act quickly and understand exactly where the organization’s resources should be invested.

Prof Al is currently focusing on exports and is implementing projects implying large-scale and long-term cooperation. Moreover, when economic activities are again allowed in Armenia by the law, we will launch large-scale projects aimed at the long-term perspective also in the local market.

We will try to do our best so that our company does not suffer and not a single employee is cut, especially over the whole history of Prof Al this has not happened: even during the global economic crisis of 2008.
- Do you count on state assistance? What measures could support your business in this situation?

E. Avetisyan - Nowadays, specific assistance to small and medium-sized businesses is often discussed. However, it should not be forgotten that big business also needs support, perhaps even more so. True, large enterprises solve their problems due to the fact that they generate large profits and, as a rule, they also have a reserve fund, from which salaries are paid and current expenses are made.

However, I think that this does not apply to Armenian companies, most of which depend on the social and economic situation in the country and the development of other spheres and industries. From this point of view, it can be stated that not all businesses in Armenia can cope with the situation that has arisen, since they mainly exist through credit financing. When there are large financial obligations, when you need to pay salaries, taxes, service loans, but there are no cash flows, the business may be on the verge of closing.

Prof Al has many frozen major projects at this time.

At the same time, we continue to conscientiously pay loans, pay salaries to our employees and pay income taxes, despite the fact that our turnover has noticeably decreased.
Unfortunately, our economy is not so powerful that the government allows itself to provide business with free assistance, as superpowers do. Nevertheless, some assistance from the government, in particular, the introduction of credit and tax benefits, credit holidays, both in terms of interest and the principal amount of the loan, temporary freezing of income taxes, can somewhat mitigate the losses sustained by businesses.
 
The world is rebuilding, and soon in the perception of people a lot will change - from business strategies to consumer behavior and demand for products. In my opinion, for those companies that can overcome challenges and problems, there will be wide opportunities in the future and new doors will open around the world. However, if effective crisis management is not implemented at the country level and the state does not provide appropriate support, tragic consequences will be inevitable.

In any case, we do not despair - thanks to effective cooperation and the consolidation of the private sector and the government we will be able to overcome any difficulties.

Let's hope that all this will end soon and we will work normally again. --0--