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.