Huntsman Chemical Corp. confirmed Monday that it has decided to terminate its joint-venture plastics operation in Moscow but said it will continue its effort in Ukraine and Armenia.
Huntsman Chemical has spent four years and $50 million in the Russian capital city in a joint venture with Aeroflot, the Russian airline, manufacturing disposable clear plastic dishware for use on airline flights.The packaging plant in Gorlovka, Ukraine, called the Styro Production Association, as well as the precast concrete plant in Yerevan, Armenia, which is a humanitarian effort to rebuild that country following a devastating earthquake, will continue.
Chairman Jon Huntsman told members of Rotary Club last week that the Russian economy is the worst he has ever seen, espousing an "anti-entrepreneur, anti-capitalism" philosophy that has made it almost impossible for American countries to do business there.
He noted that the major oil companies have also become disenchanted with the Russian government and are not likely to continue joint operations there much longer.
Huntsman said he was most disappointed with Russian President Boris Yeltsin, whose government levied a 40 percent tax on foreign operations, retroactive to 1992 assets, including penalties and 250 percent interest.
"It has reached a point of disgust," said Huntsman. "Yeltsin has done his country a great disservice" by the action. "I'm sorry to have to tell you I'm not very positive about Russia."
Huntsman's original investments in the former Soviet Union were based on promises by President Mikhail Gorbachev of open economic relations.