ARMENIAN RAILWAY CONCESSION

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ARMENIAN RAILWAY CONCESSION
ARMENIAN SHIPPER/FORWARDER COMMUNITY
Arsen Ghazaryan President Union of Manufacturers
and Businessmen
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C O N T E N T S

• INTRODUCTION
• ARMENIAN RAILWAY FREIGHT MARKET
• RAILWAY AND ROAD TRAFFIC
• MARKET PARTICIPANTS

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INTRODUCTION
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GENERAL INFORMATION

• Fast facts
• Population 3.2 million
• Capital Yerevan
• Area 29.743 sq km (11.484 sq miles)
• State language Armenian
• Religion Christianity
• Main exports Processed diamonds, machinery,
  metal products, foodstuff
• Sovereign Country Ratings
• Moodys Ba2
• Fitch BB- (ceiling BB)

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ECONOMY

• GDP in 2006 about 6.4 billion
• Leader in economic growth among non-oil-exporting
  countries
• Real GDP was 13.4 in 2006, the 5th consecutive
  year of double-digit growth
• GDP comprised of
• Services 39
• Construction 25
• Agriculture 18
• Manufacturing 11
• Energy 4
• Mining 3

• GDP growth

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GEOPOLITICAL ENVIRONMENT

• Intensive Geopolitical situation around Armenia
  and Caucasus
• Increasing ties with Russia and maintaining good
  relations with US and EU
• Armenia has good relations and developing
  economic cooperation with Southern and Northern
  neighbors - Iran and Georgia
• No diplomatic relations with Turkey in the West,
  but substantial volume of trade (the imports from
  Turkey has increased by 42 to 95 million USD in
  2006 while exports is moderate about 2 million).
  
• No diplomatic and trade relations with Azerbaijan
  in the East, because of conflict around
  historical Armenian disputable lands.

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ARMENIAN RAILWAY FREIGHT MARKET
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ARMENIAN RAILWAY TRAFFIC

• Main active directions
• Yerevan to Poti (Georgia) for export (cement,
  metals, industrial raw materials, construction
  materials) and import (wheat, sugar, oil,
  chemicals, other goods) traffic
• Sodk to Ararat (gold ore) and Shorja to Hrazdan
  (raw materials for cement) for domestic traffic
  and

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ARMENIAN RAILWAY TRAFFIC

• Main active locations and commodities

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AR FREIGHT COMPOSITION

• During 2000-2006 AR freight traffic grew at rate
  of about 11, approximately the same rate as
  Armenian GDP

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RAILWAY AND ROAD TRAFFIC
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RAILWAY VERSUS ROAD FREIGHT
2006 Freight Traffic by Transport (thousand
tonnes)
Railway vs. Road (tonnes)
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RAILWAY VERSUS ROAD FREIGHT
Railway vs. Road (tonne kilometers)
Comparative Advantages Railway vs. Road

• Road carriers carry twice as much freight as
  railway
• Railway carries 7 times longer traffic
• Railway is convenient for bulk and long distance
  shipments
• Railway is cheaper

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MARKET PARTICIPANTS
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ARMENIAN RAILWAY REVENUE BY CUSTOMERS

• 80 of revenue came from 18 customers
• About 60 relatively large customers

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FORWARDER COMMUNITY

• There are more than 50 registered forwarders
• 16 of them use railway services
• 12 most active are members of Armenian
  Association of Freight Forwarders (AAFF -
  www.aaff-association.narod.ru)
• AAFF is a member of International Federation of
  Freight Forwarders Associations (FIATA
  www.fiata.org) since 2000
• International forwarders such as MAERSK,
  Mediterranean Shipping company and CMN France are
  present in the market through local forwarders

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MAJOR FORWARDERS

• Export traffic goes mainly through several
  forwarders

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MAJOR INDUSTRIES AND EXPORTERS

• Major export and domestic shipments comprise of
  construction materials and mining and metals

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MAJOR IMPORTERS

• Large importers work directly with the railway

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T H A N K Y O U