YBC planning to be done with crisis

Ara Grigoryan:

YBC planning to be done with crisis

PanARMENIAN.Net - 2009 was a hard year for Yerevan Brandy Company, its downswing reaching 35%. However, YBC cut grapes purchases by 10% only and registered a 10% growth in sales volumes in July-August 2010. To tackle the crisis, the Company management took a number of measures, including research to expand the sales market, investments and re-equipment of the bottling workshop. YBC executive director Ara Grigoryan commented on the Company's future plans to PanARMENIAN.Net.
How do you assess the amount and quality of grape harvest this year?
By experts’ estimate, good harvest was reaped this year. Fortunately, unfavorable weather conditions which caused certain slump in agricultural indices did not affect the grape yield, except for Tavush region, where heavy rains damaged the vines in June. The Company wrote off an AMD 5.6 mln debt of viticulturists [contractors] who suffered from the bad weather. The matter is that the factory provides the farmers with sprayers, pesticides, the cost of which is usually paid back during the purchase period.

How many tons of grapes is the Company planning to buy this year? Can the number of contracts be reduced?
This year, YBC is planning to buy 29 thousand tons of grapes, what is explained by social responsibility rather than practical necessity. The planned purchase volume will be 10% less than last year. One of the most important factors in the process is storage. Deciding on the amount of raw products, it’s essential to think about their storage. Thanks to a correctly developed program, we could avoid cutting the number of contracts. Moreover, we signed more contracts with farmers, whose newly planted vineyards will yield for the first time this year. As to process, I would not like to break traditions. We will make an announcement during a news conference in mid September.

Are the sales volumes improving after the crisis?
I think it would be correct to find out how a certain period during the crises affected this or that sector. To compare the sales volumes in 2008-2010, the slump reached 35%. Meanwhile, compared shorter periods, positive tendencies are noticeable. The sales volumes in July-August 2010 exceed last year’s index by 10%. Under the circumstances, even insignificant progress inspires optimism. The first post-crisis stage is the hardest one. Nevertheless, we are hopeful to be done with the crisis by the end of the year.

What measures do you take to expand the sales market?
It’s urgent for any entrepreneur to develop export. Although ArArAt brandy has its export geography, search for new markets is among the Company’s priorities. We launched export to Romania and Vietnam; negotiations with Sweden are under way. I would also like to mention Akhtamar film, which has already been nominated for EFFIE 2010 and M&M AWARDS. Besides, new labels and bottles will be produced. There are some preliminary agreements with a number of Middle East countries, including Lebanon and Israel.

How much will be spent for retooling and when will Ararat in new bottles go on sale?
Changing of bottles and labels may seem pretentious. But it’s a demand of our investment plan. We have established new bottling lines, what cost AMD 352 mln. This year we are putting on sale ArArAt 3* and 5*. We are hopeful that that the new appearance will help boost sales volumes.

Aren’t you planning to establish branches abroad and are there any plans to expand the range of goods?
To open a branch abroad is impossible, as a matter of fact. Brandy may be called Armenian only in case it’s made of special sort of grapes grown in Armenia and then kept to mature and bottled. So, establishment of any branch abroad would be first of all violation of the law. Besides, Pernod Ricard adheres to the principle ‘Local roots, global reach’. As to expansion of the range of goods, now we have 7 brandy names (3*, 5*, Ani, Otborny, Akhtamar, Nairi and Prazdnichny). Periodically, we put on sale our exclusive brandy – Dvin, Erebuni, Cilicia and Sparapet. In the near future 25, 30 and 50-year old brandy will be bottled.

Hripsime Hayrapetyan / PanARMENIAN News