Recent exhibitions have seen Armenian production pavilions making a positive impression. Among them was Arex Co, a production and trade hub that not only manufactures 350 types of construction materials and finishing products but also implements effective marketing and promotion strategies for these products in Armenia and abroad. We spoke with the company's founder and director, Arthur Manucharyan, about the company's production activities and the unique aspects of the construction materials market.
Mr. Manucharyan, how did your journey as a manufacturing entrepreneur begin?
I began working at Arex Co's parent company as a first-year university student. I started as a warehouse worker, then progressed to courier, customs clearance specialist, and later, after obtaining my second degree, became a marketing specialist. I joined the production side in 2011 when we decided to expand our Bitherm pipe production facility.
In fact, I have been working since I was 12 years old. At that time, our family operated a small workshop. I frequently assisted my father and uncles there. This experience fostered my enduring passion for production.
So, you have been in production for about 20 years, while also continuing to import. From a business perspective, which activity presents more challenges?
I often notice that production is perceived as more complex. However, from my perspective, it only appears at first glance that importing is easier and more profitable. Since we engage in both production and imports, I can assure you that importing also has its challenges, which in many cases can negate much of the effort we put in. Therefore, production is more justified in the long term. Success in this field requires optimism, foresight, and perseverance.
There is a perception that manufacturing in Armenia implies higher costs and inferior quality compared to imported products. How would you comment on this?
The essence of production lies in the ability to create products of varying quality using the same machinery – it's all about how you work with the raw materials. Given that we utilize cutting-edge equipment and continuously update and modernize our facilities, we can be flexible in our production, meeting the quality requirements of different target groups.
High costs are less a result of production itself and more a consequence of small production volumes. Our market is small, with limited demand. This is why we strive to establish reliable export channels, which allows us to maintain stability in the domestic market.
Manufacturers often argue that the government does not adequately protect them from low-quality imports. Do you share this view?
The government should protect domestic manufacturers, but not at the expense of consumers. That being said, I must acknowledge that the government does assist manufacturers in producing higher quality products at lower costs. For instance, at the beginning of 2024, we were able to completely modernize Arex Co's furniture production facility thanks to a government-subsidized loan. We acquired state-of-the-art equipment from Germany and Austria. Moreover, the government does not tax raw material imports or exports. It is important to recognize these positive aspects as well.
Mr. Manucharyan, there is a belief that Armenian consumers are primarily driven by low prices in their purchasing decisions. Doesn't this create challenges for manufacturers?
Armenian consumers used to be primarily price-driven, but that is no longer the case. Twenty years ago, when I was just entering this field, it was indeed like that. However, I would argue that today, our compatriots are more informed and take a more sophisticated approach to home construction and building material selection. While bargaining remains an integral part of our culture, the Armenian consumer, especially in recent years, seems to be looking for products that offer a good price-to-quality ratio and is willing to pay a fair price for value.
The construction materials market appears to be quite saturated. To what extent does competition contribute to market development?
The construction materials market is indeed saturated, which significantly contributes to improving service quality. There is also another trend: people are increasingly time-constrained and prefer one-stop solutions for their needs. Satisfying customers with diverse preferences and requirements is only possible by offering a wide range of products. The market itself seems to be pushing participants towards greater cooperation. So, I would like to take this opportunity to reiterate to my partners that all the production and trade resources of Ceramica Group are at their disposal.
Arex Co is always ready to make our equipment available to partners for producing their own branded products or for utilizing our intermediate services. Furthermore, under the Ceramica Group umbrella, we'll soon be launching a new network of construction material showrooms with an innovative concept. There, we are prepared to showcase any products that will help our compatriots live and create in more comfortable environments.
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