In a highly competitive market, access to affordable financing is essential for small and medium-sized enterprises (SMEs), enabling them to grow rapidly. To support the development of competitive and sustainable businesses in Armenia, the EU4Business-EBRD SMECI Credit Line offers SMEs loans and investment incentives aimed at boosting their capabilities and market presence.
A few years ago, Hrashk Group LLC – a local manufacturer of furniture and mattresses –realized the need to invest in advanced machinery to enhance both productivity and product quality. While searching for affordable financing options, they discovered the EU4Business-EBRD Credit Line, which enabled them to make investments that led to sustained growth in the following years and a transition to a modern production model.
From garage to renowned manufacturer
Hrashk Group LLC was founded in 1990 as a furniture manufacturing company.
“The founder is my father, Hakob Hambarchyan, a craftsman, who started production in a garage. In the early years of newly independent Armenia, the idea of creating something new was the driving force,” recalled Hayk Hambarchyan, co-founder and director of Hrashk Group.
The company initially produced picture frames, later expanding into desks, and gradually developed into a full-scale home furniture manufacturer. A turning point came in 2010, when the family decided – around the dinner table – to launch a new direction: mattress production. At the time, 16-year-old Hayk Hambarchyan decided that he should take full responsibility for the mattress direction, handling everything from raw material imports to production and sales.
Today, the company operates under the HayBed and Shkaff brands, both widely recognized in the local market. Over the years, they expanded their production facility and with growth, realized the need for new machinery and production lines. Seeking financing, the company turned to Inecobank CJSC, where they learned about the EU4Business-EBRD Credit Line.
Since 2022, with the support of the program’s loan funds, the company has launched a series of strategic investments in both its furniture and mattress production facilities.
Investments and rapid results at Hrashk Group
The EU4Business-EBRD Credit Line has supported Hrashk Group through several investment rounds. When first applying, Hayk Hambarchyan had concerns that the processes would be overly complicated and burdened with paperwork – but the reality turned out to be a pleasant surprise.
“Thanks to the program’s highly professional and empathetic team, the entire process was fast and efficient,” he added.
Under the credit line, Hrashk Group received investment financing through Inecobank CJSC and ACBA Leasing CO CJSC. The company acquired 15 new machines for the furniture production unit and 5 for its mattress production, including two full assembly lines. According to the company’s director, these upgrades significantly boosted both production capacity and sales. The investments also resulted in primary energy savings of 77.02 MWH/year and GHG emissions reductions of 14.95 tCO2/year.
“With the help of the program, we have achieved two- to threefold growth. We continue to set ambitious goals – namely, to double the results within the next 1-2 years,” said Hayk Hambarchyan.
With the support from the EU4Business-EBRD Credit Line, Hrashk Group has also installed a 267.3 kW solar power plant at its production site. The company received investment incentives from the EU, for all the investments, which helped reduce the initial investment costs.
Today, Hrashk Group serves both individual consumers and business clients. Retail sales are conducted through their high-street showrooms, while B2B clients are often received directly at the factory’s showroom. In 2021, with the support of EBRD Advice for Small Businesses program and EU donor co-funding, Hrashk launched its first e-commerce platform, haybed.am, an important milestone in a market still adapting to digital retail.
Quality management
For the company director, the most significant advantage gained through the new equipment has been product quality management.
“A major breakthrough in our mattress production line was the installation of a spring production machine for orthopaedic mattresses. Previously, we had to import spring frames from external suppliers, which limited our control over the final product’s quality. Years ago, we had an incident where the adhesive used in the imported springs began to dissolve, damaging our products and operations. Now, with this machine in-house, we use only the best raw materials and adhesives for the springs,” he explained.
Another major innovation, according to Hambarchyan, is the 3D-capable packaging line.
“We can now offer three types of packaging: standard, pressed, and rolled packaging of pressed mattresses. The rolled format is particularly important for exports, as it helps save space,” he said.
In the furniture workshop, a range of advanced equipment has also been introduced – including sawing, edging, drilling, and woodworking machines – all of which have contributed to improved product quality.
“In fact, we would have had to purchase all these machines sooner or later. But thanks to the program, we were able to do it earlier and grow faster as a result. The cash back incentive also helped these machines become self-financing, covering their own cost through the revenue they generate,” he added.
The need for process optimization
In recent months, Hrashk Group has been operating at full capacity in its production facility. According to Hayk Hambarchyan, the volume of orders has grown so significantly that they occasionally have to decline some requests.
“We realized it was time to optimize our processes and increase productivity. That’s why we turned to the EBRD again, this time for business process optimisation consulting support. With the assistance from the EBRD Advice for Small Businesses program and co-funding from EU, a few days ago we completed the consulting project focused on business and production processes development and optimisation, the results of which we have already begun to implement in the production facilities,” Hayk said.
He added that in the near future, they will introduce a newly developed assembly line system, which will enable the company to produce higher-quality products in less time.
The secret to good sleep
At the HayBed production facility, Hrashk Group manufactures around 60 types of mattresses, ranging from budget-friendly options to premium models. But for the company, it is not just about offering variety – it is about promoting healthy sleep.
“We use different technologies. The production of the hormone melatonin is very important during sleep. However, due to modern factors like signal channels and Wi-Fi, melatonin production can decrease. In one of our premium mattresses, we have integrated a technology that generates the right magnetic field, which supports the body’s natural melatonin production during sleep. This ensures healthy and sweet sleep, allowing people to wake up refreshed,” Hayk Hambarchyan explained.
He added that they aim to respond to customer needs through their products, constantly developing new solutions for specific problems based on professional analysis.
Exports and Armenia’s image abroad
Hrashk Group began exporting its products this year. At present, the company primarily exports to two countries, but it is actively working to expand into new markets.
“We are in active negotiations to ensure our exports become more stable and continuous. In the near future, we plan to enter both EU and Arab markets,” said director Hayk Hambarchyan.
To meet international quality standards that would support Hrashk Group’s export ambitions, the company obtained ISO 9001 Quality management and ISO 14001 Environmental management certifications in 2023, with support from the EU and the EBRD.
According to Mr. Hambarchyan, the biggest challenge in exporting is not the paperwork or logistics, but the fact that Armenia is not perceived as a manufacturing country abroad.
“Our image as a manufacturing country is at stake. As producers, we – all local manufacturers – must work together to change that and export not just raw molybdenum or gold, but finished products,” he emphasized.
Hambarchyan views local producers not as competitors, but as partners, while seeing foreign manufacturers as his real competition.
“By helping one another, our local market producers will grow faster and more effectively and be better positioned to compete internationally. That should be our shared goal. There are many difficulties, but none of them scare us,” he concluded.
Developed and supported by:
Implemented by:
Verified by:
© Copyright 2021. All Rights Reserved.
