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 Monday, April 29 2013

President of Shen Holding: The current real estate market dictates the need for new ideas – inexpensive “turnkey” apartments

                    President of Shen Holding: The current real estate market dictates the need for new ideas – inexpensive “turnkey” apartments

The current real estate market dictates the
need for new ideas – inexpensive “turnkey” apartments, President of Shen
Holding Samvel Beglaryan told ArmInfo when asked to comment on continuing
stagnation in Armenia’s construction sector.


He
explains that the market is glutted with high-class apartment houses, built for
Diaspora Armenians, but, in his opinion, the age of luxury housing has come to
an end, and now it is the time of inexpensive comfortable flats. “However, to
build them you need advanced construction technologies and know-how,” he said.


Beglaryan believes that the Armenian Government might
stop the growing imbalance on the real estate market by offering people
affordable housing opportunities. “They could do it in different ways: they
could provide people with either free building plots or long-term mortgage
lending options, like, say, a twenty-year low-interest loan,” he said.


According to Beglaryan, the cost of a housing
construction project depends not only on the price of the construction
materials it applies but also on the degree of its earthquake resistance.
“Being earthquake resistant does not always mean being expensive and bulky -
made of tufa and armature. Present-day construction applies technologies that
can make houses light and cheap. One such technology is the use of concrete
blocks containing expanded perlite. I hope some day our architects will give
this material its due,” Beglaryan said.


He believes that socially-oriented housing
construction can spur demand for building materials within specific price
brackets and encourage local manufacturers to boost own production and import
substitution. This will also prevent the negative impacts currency shifts are
currently having on local construction material prices. “In any case, we need
to find a good way to reduce construction costs. Only companies with
cost-saving and efficient construction policies will be able to succeed on the
market,” Beglaryan said.


According to Shen Holding’s specialists, one square
meter of “turnkey” housing (with full repairs and kitchen furniture) in an
apartment house will cost to potential clients $1,000. “This is a unique offer,
the most affordable price you can find on the local real estate market today,”
Beglaryan said.


The National Statistical Service of Armenia reports
that in 2009 construction activities in Armenia slumped by 36.4%. That year
housing construction was down 20%. In 2012 it almost halved, while construction
materials production dropped by 7.6%. In 2008-2012 cement and gaja production
kept declining from 769,800 tons to 437,600 tons for cement and from 46,000
tons to 30,400 tons for gaja.


In Yerevan
the average price of a 50-kg sack of cement grew by 14.6% to 2,825 AMD, while
the price of gaja fell by 2.1% to 2,160 AMD. In the meantime,
the average price of mostly imported paint and lacquer materials soared: the
price of oil paint by 80%, the price of water-based paint by 44.5% to 1,818
AMD, that of floor varnish by 40.9% to 2,090 AMD.


Shen
Holding dates back to 1970 when the largest enterprise for state supplies of
non-ferrous metals ("HayGunMet") was established.  In 1995, the latter was privatized and
transformed into Shen Concern CJSC. Having merged with “Huntsman Building
Products” LLC and “Shen Group” CJSC,Shen Concern was converted into Shen. Prior to 1999, Shen Holding was into
importing and selling construction materials. 
Thereafter, the management made a strategic decision to develop Armenian
manufacturing, to contribute to the development of the domestic labor market.
As a result, the company established the first production facility of its own,
and is nowadays a major manufacturer of construction materials in the Republic
of Armenia.


In 1999, the company established the first plant to
produce dry mixtures in Armenia. In 2000, the plant to produce paints and varnishes was
commissioned; it was designed to manufacture environmentally friendly
construction paints in conformity with international standards. In 2003, Shen
Concern was granted a license by the Ministry of Economy to operate a gypsum
mine, and in 2010, overburden removal on the mine started. In 2005, Shen
Concern CJSC built and commissioned a new facility to produce concrete blocks
for industrial and household purposes. In the meantime, other production
facilities were upgraded and enlarged. In 2007 and 2009, respectively, Shen
Concern commissioned Shen Textile and Shen Decor stores to sell imported goods
for interior furnishing from leading European manufacturers. In 2008, Shen
Concern launched construction and renovation works using both imported
materials and the ones of its own production. In 2008, Shen Concern also
started the implementation of architecture and design projects.  Since 2012, the company has added a real
estate agency to the long inventory of its activities. To-date, Shen Holding
has created over 500 jobs.

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