Oxfam Launches Worker-Owned Factory in Armenia

YEREVAN — On Friday, October 3, the northern Armenian town of Ayrum celebrated the opening of a brand new, 1200 square meter fruit processing plant. With the support of Oxfam in Armenia, the factory is providing thousands of local producers not only with much-needed income, but a sense of solidarity and empowerment.

“For the first time ever, we are instituting a social enterprise business that will create jobs and address challenges facing our remote border communities,” said Oxfam in Armenia Country Director Margarita Hakobyan. “In addition to fighting poverty through this enterprise, we hope to put forward a practical model that can be duplicated throughout the country.”

During the Soviet years, Ayrum was famous for its canned food factory, which employed over 1800 workers and supplied countless cities with quality jams and preserves. But production at the factory stopped after the collapse of the Soviet Union, taking with it the region’s economic lifeline.

Local residents essentially had two options left: either look for work abroad or sell seasonal crops along the roadside.

Things began to change in 2011 when a group of agricultural producers in Ayrum and Lchkadzor established an Oxfam-sponsored cooperative. They began pooling their resources and working together to restore the town’s legacy of canned food production.

In addition to helping with start-up capital for the plant—which stands directly across from the old Soviet factory—Oxfam provided the co-op everything from training and technical assistance, to guidance on marketing and developing a sound business model.

Oxfam in Armenia Country Director Margarita Hakobyan (center) visits workers at the Ayrum Fruits factory prior to its grand openin

The factory is now in full swing with a core, mostly-female, workforce of nearly two-dozen employees and women from the surrounding 10 communities involved as fruit pickers.

“This is a very big achievement,” says factory technologist Sveta Aghayan. “We had a lot of unemployed people who needed a place to work and now they have that.”

Aghayan is one of two remaining experts from the Soviet canning factory who are working at the new plant. At 75-years-old, she came out of retirement specifically to help the co-op succeed in its endeavor.

“I don’t need to work here,” she explains. “I’m merely here to pass on my knowledge to the next generation.”

Several potential buyers have already been identified along with plans for getting the goods to market quickly. The co-op has its sights set on selling consumer ready jams and juices both locally and to countries such as Georgia (whose border is only one mile away) and Russia. Additional financial supporters have also come on board alongside Oxfam.

By the time the factory reaches capacity, it is projected to employee 60 workers and provide a regular source of income to nearly 2000 people in the area.

Perhaps just as important as the economic activity, however, is the immeasurable social value being generated.

Members of the co-op democratically decide the direction of the enterprise through an annual general meeting, while an elected executive runs daily affairs. Workers also share in the profit accordingly, giving them an incentive to work harder to make the business thrive. For Armenia, this is an unprecedented level of employee voice and ownership that is helping foster a greater sense of community and participation.

From the very onset, the co-op has also highlighted the essential role of women in local agricultural life. Special effort has been made to strengthen their voices, provide them with leadership skills, and involve them in all aspects of the production process.

Of course, the whole concept of the cooperative is rooted in people coming together to find their way out of poverty. Rather than struggling in isolation, participants have realized that they can accomplish a great deal more when they join forces and assist one another.

“I want the concept and culture of teamwork to be established in Armenia,” says Ruslan Antonyan, co-founder of the Lchkadzor Co-op and director of operations at the factory. “There is a very important psychological and educational factor at play here.”

In this way, the Ayrum fruit-processing plant is an important development for those seeking a new economic model in Armenia—one that is based on values of participation, empowerment and solidarity

We have seen over the last decade how growth alone is not enough to tackle the fundamental challenges affecting the country. The GDP can reach double-digit figures, yet only benefit a small segment of the elite. Problems such as the lack of a stable middle class, unequal distribution of power, and extreme individualism can only be tackled by a new notion of development that places as much value on the quality of economic growth as on the quantity.

Workers at the Ayrum factory hope to be the harbingers of this alternative vision. They are determined to make their business a success so others will emulate their example throughout the country. In fact, another Oxfam-supported cooperative factory is already scheduled to open next month in the Tavush village of Sevkar.

There are countless challenges yet to be overcome—not the least of which are securing financial support, overcoming the legacy of Soviet top-down structures, and competing viably in the marketplace—but there is no doubt that such people-centered solutions are essential for a more democratic and durable form of development in Armenia.

Oxfam Launches Worker-Owned Factory in Armenia