The main parameters of the program are determined by the Decree of the Cabinet of Ministers of March 7, 2012 \"On additional measures to reduce production costs in the industry\".

The item-by-item reduction of production costs of business associations and large industrial enterprises in 2012 is provided in an average of 11.2%, the document says. Among the main factors were identified rationalization of production processes and consumption rates of raw materials and energy, increased utilization and labor productivity, reduction of operating and overhead costs, optimization of staffing levels and other factors.

The average percentage of reduction of cost is spread by all industries. The countdown for saving started from fuel and energy, chemical and petrochemical industries. In this area, the projected cost savings is 12.8%. Enterprises of the National Holding Company Uzbekneftegaz will reduce production costs by 14.8%, public joint stock company Uzbekenergo - by 14.7%.

Reducing costs of production of electricity, in turn, will serve as the basis for cost reduction in other industrial sectors.

In the automotive industry, electrical engineering and aviation industry the expected average of costs reduction in 2012 will amount to 5.1%. In industries that produce consumer goods - light, textile, food, leather, etc., this figure will be 14.8%.

Utilities, transportation, capital construction and building industry to take a course of an average reduction of production costs by 14.6%. State enterprises of joint-stock company Uzpharmsanoat and Shark will reduce costs by 14.9% in 2012.

The government introduced a stimulus tool. Savings from cost reduction are provided for the enterprises and can be used on their own.

Directors of companies that have achieved performance parameters of the approved cost reduction, at the end of the year shall be paid a lump sum bonus of up to 8 salaries due to additional profits.

Analysis of official data on the structure of production costs in the industry of Uzbekistan shows that in 2010, 79.2% accounted for production material costs, 7.9% - wages, 2% - social contributions relating to production, 5 3% - depreciation of fixed assets for production purposes, 5.6% - other costs.

Cost reduction will increase the competitiveness of domestic goods, experts of the Ministry of Economy say. The need for formulation of this problem, in their opinion, is driven by increasing competition every year in the world markets of raw materials and finished products in particular. (Source: UzReport.com)