The Contribution to the Society

Financial Contribution

Arthur Hovsepyan is one of the benefactors of the “Mother Lady of Armenia” center which is a nunnery and a center for orphans or the children from poverty-stricken families. Now these children have a playground both in their center in Gyumri, and summer camp in Tzaghkadzor.

All contracts with the orphanages have been signed without revenue. Now all Armenian orphanages have their playgrounds which are under the care of specialists from “Magnon” Company. The same is true for some of the nurseries.

Also the company provides scholarship for the students with good academic performance. The exceptions are the children of employees who get it without any testing.

Job creation

Joblessness is a problem for Gyumri. The majority of the population is educated but hasn’t appropriate job. The men leave the country and find job in Russian Federation for supporting their families and don’t come back for many months.

“Magnon” Company is a working place for 52 employees. This number varies depending on the size of the contract. There are more than 30 temporal employees. The salary is higher than in the companies in the same industry which make possible to provide normal living conditions for their families.

Public Service

There was need for such kind of production as Soviet time production was rough and of low quality, no luxury was permitted. Due to the Soviet ideology it was a sign of inequality in the society. After the collapse of the USSR mainly by the means of media people learned of the life in developed countries and they felt a natural desire for the delicate and high quality production.
The production of the very company was a good start for creation of parks and playgrounds in Armenia. Now there are 47 totally new and 35 reconstructed playgrounds which are full of colors and comfort.

The playground and sport equipment are not only an entertaining place for the children where they develop their imagination and interact with each other, it is also fast and easy way to develop children’s physique.

When “Magnon”’s production first appeared the bunch of imitators began copping the production with low quality materials and without keeping safety standards. Now the management of the “Magnon” Company wants to persuade the governance to implement safety standards for playground equipment production.

If you walk round Gyumri you will notice a big number of benches, trash cans, pavilions, lampposts and shelters produced by “Magnon”. Its production is spread all round the Armenia.

The Need for the Product

After the earthquake in 1988 and the following collapse of USSR in 1991 a big number of international organizations came to Armenia with different missions. They were aimed to support Armenians to regain their normal life flow. There were benefactors who were aimed to make the childhood of the Armenian children better. At the end of 1990s the primary needs of the children were partially solved and the next one was their mental and physical well-being. They needed conditions for out-of-door activities. It was enormously expensive to import weighty playground equipment. So there was a market niche in Armenia for producing it locally. By a happy chance “Magnon” Company got it.

“Magnon” Company is the only specialized company which produces playground and park equipment in accordance with US safely standards. It is the market leader with its quality. It has low dependence on the county’s political life and is financially firm.

From the beginning the market of playground equipments was nearly empty. The existing playground equipment was rough and coarse, they lack colors and wasn’t safe enough. So “Magnon”’s production was real innovation for the current market. They were colorful, nice looking, firm and incomparably safe.

As a rule each customer who orders playground equipment returns for expanding the contract. The point is the playground equipment is so nice that after they are installed the customer realizes that it needs fences and a gate. Later on they also feel need for lampposts, trash cans and benches. So a satisfied customer orders all the rest at the same place.

Since 1999 “Magnon” has installed 86 playgrounds in 13 cities and 6 villages around Armenia. There are 12 playgrounds in Yerevan.

The Challenges

Everyone was exited but at the same time they were frustrated, as the customer was checking each and every little detail. It wasn’t a usual case for the people who had spent most of their life in the Soviet Union. The employees missed the development work a lot, so they began doing it with great pleasure and enthusiasm. But again they had a strange demand from the customer. They had a deadline which happened to be really “dead” and the time was short. For a Soviet people the time could have been expanded easily and without any penalty.

The concepts like competition, market share, price leadership and alike were alien things for Arthur and the management of the company. They had to learn business from the very beginning. So happened that their first customers were Eastern organizations like “Mother Lady of Armenia”, USAID, Peace Corp, World Vision and alike. All of them had Eastern working style and demands. So Arthur began managing his company in the same fashion as the customers were used to see in their countries. He learned how to treat them, also he succeeded in negotiations. These organizations were the first sources of information and the experience in business that Arthur had at that time.

In fact the company didn’t have any marketing department. It was known among Eastern organizations which had experienced a lot of troubles working with the locals who had Soviet working style. As Arthur was honest and trustworthy person and could suggest the service and production they needed in the way Eastern people were used to, he got a lot of orders and soon expanded his company. His company became well known in Armenia.

The Idea of the Venture

In 1999 Arthur and his group privatized the company and it became “Magnon” Open Joined Stock Company. They were no long producing any particular product for sell. They became a company which worked by order. They could produce anything made of metal in accordance with the customers’ needs and wants as they didn’t feel lack of highly skilled engineers.

In the same year the mother superior Sister Arousiag (Jennet Sajonyan) of the “Our Lady of Armenia” Educational Center learned of Arthur. She ordered playground equipment for the camp in Tzaghkadzor city which is the mountainous sporting and holiday center in Armenia. The camp was for the children from poor families or orphans. The “Mother Lady of Armenia” Center was financed by Catholic Church and Armenian Diaspora (mainly Eastern Armenians) who had Eastern style of working and requirements.

For this purpose Arthur was sent to USA for training in the field of playground production. After his arrival the life in the company changed a lot. The engineers began developing the means for producing the playground equipment with the equipment which was not design for such purpose. It didn’t take them long to redesign the equipment.

This was the very product that seems to have a demand. The company became the only specialized producer of playground and park equipment in the South Caucuses.

The Reasons for Becoming an Entrepreneur

A chain of unpredicted events happened. Azerbaijan made a war. Soon after it Soviet Union was collapsed which led to the collapse of the economies nearly in all countries of the former Soviet Union. The 90s of the 20th century was a hard time for the Armenian people and the scientists in particular. It became clear that for the next 10 years no scientific researches will take place. An outflow of brain took place mainly to USA. The majority of the people were leaving the country for Russian Federation, Europe and the USA.

The choice of a small number of scientists who had survived was to stay in their native town. Arthur was one of them. He was a peaceful person who was eager to work all days long in his laboratory without having any interaction with people other than his coworkers. But the life had changed a lot and Arthur had nothing to do but to find any job for keeping his family.

In 1991 together with his friend Arthur founded “Academic” High School and was a teacher of physics for two year there. The school is for the children with good abilities for physics and mathematics. It still exists and is well known for its graduates. I am very pleased to mention that I am a graduate of that school too.

In 1995 Arthur was requested to be the head of “Magnon” Institute of the Space Industry. It is proper to say the head of the sample-making department as it was the only thing which remained after the earthquake. The sample-making department had variety of equipment flexible enough for producing anything made of metals. But the equipment was not designed for mass production and had no distinct purpose. So they decided to enter the business and make production. But HOW to produce and what is even harder to answer is WHAT to produce was the question? None of them had any business background. It was a strange Company. The accountant used to be an engineer the night watchman had been an architect and the blue collars were either Candidates of Physics and Mathematics or Engineering Sciences.

They tried to produce bicycle, heater, coffee grinder and even spoon. Everything was in vain. They had no income. The only thing they had a lot was debts. Arthur realized that a core change must be made as soon as possible.

Welcome Our CEO

Arthur Hovsepyan is the founder and the executive director of the “Magnon” Company a fast growing manufacturing plant which produces playground, sport courts, park and site furnishing equipment.

Arthur Hovsepyan born in 1956 is a representative of the fourth generation of lecturers and teachers in Gyumri which is the second largest city in Armenia and which is also called a city of Arts and Trades.

His father is an Academician of Philosophy and his mother was mathematician. Arthur took after his mother and he got his Candidate Degree of Physical and Mathematical Science in Yerevan State University in 1983. There was no doubt that he would devote the rest of his life to the scientific researches and to either lecturing or teaching as it was a usual case for the Hovsepyan family in Gyumri. So he lectured at Gyumri State Pedagogical Institute and worked as a physicist in research department of “Magnon” Institute of the Space Industry. He had couple of rather successful researches at “Magnon” institute and was supposed to get his Doctor Degree in March 1989.

Unfortunate three months earlier in December of 1988 an earthquake happened which destroyed 70% of the city. By a lucky chance he survived but the building of the Institute was totally ruined.

When I asked him what is his individual feeling about being an entrepreneur his answer had dual character. He feels satisfaction as he has a good venture. He provides his family with good life conditions; he creates job opportunities and is a well known and respected person in the city. But at the same time he feels frustration as the business isn’t the job he enjoyed doing. He is still a person of science and wishes that some day he will have his laboratory where he can continue doing his researches. He is now 52 years old. Hope his wish will come true.

Great Event in the Life of the Company

The building of Magnon Institute of Space Industry was destroyed during the earthquake in 1988. There is a month left when the great event will take place. It is the opening of the new building named Magnon Business Center. It is built on the same place where the first building was ruined.

It isn’t just a new building it is a symbol of hope and trust in the future. The scientists, who have become blue collars after the destruction of the building, now have a sign of a hope that they will soon change the nature of their work. The Magnon Company wants to open R&D department, as the CEO – Arthur Hovsepyan used to be a scientist. His dream is to go back to the R&D department and continue conducting experiments in the field of physics.

Little Anna

Anna is a 6 years old happy active child. She is very smart. She likes to listen to the stories and fairy tails her grandma tells her. She can spend hours listening to the amazing adventures of princess.

The other thing she does with great pleasure is to help her mother in the kitchen. Though this help creates more troubles for her mother. She proudly announces during the dinner that salad was made by her and accepts words of praise with dignity on her face.

She is very curious and likes to discover this world step by step asking very naive questions with shine and interest in her eyes. But her most adorable place to spend time is the playground in Neighborhood Park. Here she can run jump scream and do anything she wants. Trip to park with her grandma is a prize for any her achievement in school or at home. Little Anna likes playing on the Ship-A-Hoy which is her favorite equipment.

Scientists or Blacksmiths

It is nonsense. The employees of “Magnon” Company are all scientists. But the company is a producer of playground and park equipment and it doesn’t have R&D department. Than how has it happened that all employees are people with scientific degree?

Earthquake in Gyumri

On December 7, 1988 an earthquake happened in the second largest city of Armenia – Gyumri. During that earthquake 70% of the city was destroyed about 100 000 people died. This was a disaster for the whole nation. People all over the world supported Armenia to get out of the crisis.

This was an unexpected terrible surprise as any disaster in the world. It left only fragile fragments of many families.

The children have the need for happiness more than ever. For this reason “Magnon” Company made a vow to produce playground equipments for orphanages without any revenue. The company is not that big yet, for donating playground equipment. But in the near future they will be able to do so. At present moment all Armenian orphanages have high quality and safe playground equipment produces by the very company.

These equipments contribute to the physical development of the children. Children have fun with their friends and at the same time train their mussels. You can see their happy faces when they enjoy the time they have with their friends.

Why does “Magnon” Company emphasize the need for the physical training? The earthquake has destroyed the sport and art schools in Gyumri. Children have few means for entertainment. The major one is computer games which makes children to make little or no movement for rather long time period. This will result in health issues in the near future.

20 years has passed since the earthquake which lasted only 40 seconds. The children of Gyumri are still influenced by its negative consequences.

Magnon Playgrounds (Students' porject)

Magnon OJSC is the only specialized company which produces playground and park equipment for the children in Armenia. Magnon is concerned with the absence of safety standards in Armenia. Its primary purpose is to enforce the Armenian Government to accept the safety standards.

After the earthquake in 1988 and the following collapse of USSR in 1991 a big number of international organizations came to Armenia with different missions. They were aimed to support Armenians to regain their normal life flow. There were benefactors who were aimed to make the childhood of the Armenian children better. At the end of 1990s the primary needs of the children were partially solved and the next one was their mental and physical well-being. They needed conditions for out-of-door activities. It was enormously expensive to import weighty playground equipment. So there was a market niche in Armenia for producing it locally. By a happy chance “Magnon” OJSC got it.

“Magnon” OJSC is the only specialized company which produces playground and park equipment in accordance with US safely standards (There haven’t been any safety standards for playground in Armenia and other CIS countries). It is the market leader with its quality. It has low dependence on the county’s political life and is financially firm.

From the beginning the market of playground equipments was nearly empty. The existing playground equipment was rough and coarse, they lack colors and wasn’t safe enough. So “Magnon”’s production was real innovation for the current market. They were colorful, nice looking, firm and incomparably safe.

As a rule each customer who orders playground equipment returns for expanding the contract. The point is the playground equipment is so nice that after they are installed the customer realizes that it needs fences and a gate. Later on they also feel need for lampposts, trash cans and benches. So a satisfied customer orders all the rest at the same place.