A Chinese-Armenian synthetic rubber factory, once heralded as the largest cooperation project between the two countries, has failed to yield any profits for Armenia since it’s 2010 opening in China.

"The Government of the Republic of Armenia has not received any profits or dividends from the Shanxi-Nairit joint venture to date,"  responded Acting Armenian Deputy Minister of Territorial Administration and Infrastructure Hovhannes Harutyunyan to a Hetq inquiry.

The Shanxi-Nairit joint venture was established by an agreement signed between the governments of Armenia and China on December 10, 2003, to produce chloroprene rubber, a synthetic used in many consumer and industrial products.

Then Armenian President Serzh Sargsyan attended the plant’s opening in China’s Shanxi Province.

The enterprise was established between two state-owned companies: China’s Shanxi Synthetic Rubber Group Joint Stock Company  and Armenia’s Nairit CJSC. Armenia owns 40% of Shanxi-Nairit.

Of note is that chloroprene rubber was the main type of chemical products manufactured at the Nairit factory outside Yerevan that went bankrupt and closed its doors in 2010.

The joint venture was supposed to incorporate the manufacturing experience of Nairit and transfer it to China with new financial backing.

Hetq has written extensively about the financial shenanigans that forced the Nairit synthetic rubber plant, that opened in 1936 and was the engine of Soviet Armenia’s economy, into bankruptcy.

See: Nairit Loan Scam: Is the Government Implicated in Millions of Dollars Going “Missing”;  Nairit Rubber: A Twisted Tale of Offshore and Russian Financial Dealings

Former Armenian Minister of Energy Infrastructure and Natural Resources Artur Grigoryan visited the Shanxi-Nairit plant in 2018. During a tour of the plant, representatives of Shanxi-Nairit JV introduced the minister to the production capacities of the enterprise, as well as its current production and technical situation.

The plant, in 2023, produced thirty thousand tons of chloroprene rubber.

Various Armenian officials, past and present, have visited Shanxi-Nairit over the  years and have talked about an international financial audit of the enterprise, but nothing of the sort has been implemented.

“The Armenian government has never taken the initiative to conduct an audit at the mentioned enterprise, but a existing audit is conducted at the Shansi-Nairit joint venture every year,” Harutyunyan told Hetq.