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NEWS AND EVENTS
June 25, 2013
Traditions of Constancy
Seventh Exhibition of National Industry Achievements to take place this fall.

The first stage of the largest exhibition event - the International Industrial Fair and Cooperation Exchange finished in the capital last week. The largest enterprises in the country, as well as small businesses during two months showed their products in the Uzbekistan Exposition Center.

A friendly format

Such a demonstration of achieving the national industry is not new in the world. Every year, many countries have national exhibitions, trying to impress and attract the world\'s attention with their goods and developments. There is a review of achievements and global industry – the World Expo Exhibition, traditionally the symbol of industrialization and open platform to demonstrate the technical and technological achievements. Conducting the first time in Uzbekistan more National Industrial Fair and Cooperation Exchange in 2007, of course, was not reinventing the wheel. However, in this case, it was important not come up with innovative steps, but quickly and efficiently use the already well-proven in the world of the mechanisms for the development of production and to stimulate demand for domestic goods. With the advent of the fair Uzbek enterprises have the opportunity not only to present their products at the nationwide level, but also to get acquainted with technical innovations and novelties production achievements related industries and businesses, to identify the needs in the short term in the manufactured materials and components. There was a good opportunity to find a reliable long-term partner, to make contracts and develop a portfolio of orders for the supply of their own production for the next year.

Results of the first year showed that it is too \"tight\" for the event in the national framework, and in 2009 it was held for the first time in the international format. In justifying the decision, experts said that participation in the fair representatives of leading foreign companies would increase the requirements for the products, and established links between domestic and foreign companies to create new joint ventures and production of high-quality, export-oriented production.

In addition, the fair has become a good basis for further development in the country of import and localization. Today, many countries are adopting these two economic processes for the development of the national industry. It is important to understand that the Uzbek economic model of import substitution - is just the first step, after which there is localization.

Many experts have rightly criticized the policy of import substitution, which is the process of reducing the import of certain products by replacing them in the domestic market of similar domestic, saying that in most cases it does not give long-term results to improve the efficiency of the economy. Really - this is common practice, when many countries are helping their commodity producers by establishing customs duties on imports and government subsidies, which ultimately reduces the competitiveness of the economy and leads to the fact that the goods are in demand only in the domestic market.

Uzbekistan went the other way. The industrial policy of the country was aimed at not just assembling goods from accessories being brought in. The manufacturers were set broader objectives - not so much to deliver components as to organize their production in the country. Of course, this problem could not be solved overnight. It had to be solved in stages - first to build assembly plants, followed by the development of production of the imported components. It took advantage of such a scheme \"Asian dragons\" - South Korea, Taiwan and Singapore, which are today the world\'s industry leaders. These countries are in the early days of the short period of its industry relied on a policy of import substitution. This allowed them to strengthen the national economy and create the basis for the implementation of the export-oriented strategy.

Therefore, the basic focus in Uzbekistan was made at localizing products. According to experts, localization compared with import substitution has a more complex character and is a transition stage to the expansion of export-oriented industries. In general, these two processes, to organize several new country-tech industries and to master the production of advanced products satisfy the domestic market with high quality products which are much cheaper than imported counterparts. In addition, it provided an opportunity to create jobs and stimulate domestic demand. During the years of independence Uzbekistan has built dozens of new large industrial enterprises in the oil and gas, engineering, electrical, metallurgical industry. A new sector of the economy - the automotive industry with advanced infrastructure, in which the level of localization of production exceeded 60%.

In modern conditions, localization continues to be one of the main priorities of the economic policy of Uzbekistan. The country has an annual program adopted by the localization of production, and the enterprises that implement these projects receive substantial benefits and preferences. In particular, they are exempt from income tax, single tax and property tax, customs duties for imported technological equipment and spare parts to it, as well as components that are not produced in the country and in the process used in the production of localized products. The funds of the enterprises, which are released through these exemptions should be directed to the creation of new, expansion, renovation, modernization, technical and technological re-equipment of existing facilities, the implementation of quality management systems, the promotion of engineering and technical personnel of enterprises, funding for research and development, as well as reducing the cost of production.

In addition, in the making of national industry attention paid to the quality of products, which consist of three main factors - the training of qualified personnel, the introduction of modern equipment and quality management systems. This allowed for a short time to make a difference, for example, in the food market, building materials industry, which previously imported goods ruled the ball. Today, the stores domestic products pressed the imported, primarily due to the quality and price.

From theory to practice

Today, many major companies set ambitious targets to achieve new levels of localization. Uzbekneftegaz actively works in this direction. To recall, in 2007 the total volume of imported raw materials and components purchased by the company was more than US$490m, while domestic producers of goods purchased for 22.2 billion soums (Currency rates of CB from25.06.2013 1$=2090.70 soums).

However, thanks to the implementation of the Program of Optimization of Imports, the National Holding Company managed to radically change the situation. In the past, the company has bought imported goods for US$348m, the domestic - for more than 432.1 billion soums.



In addition, in 2012, due to the development of new technologies for production of goods total production of localized products exceeded 149.1 billion soums, and the effect on the localization of US$79.7m is more than 6.7 times higher than the level achieved industry in 2007. The plan of this year is to increase the volume of localization to 164.7 billion soums.

To note, during last year\'s International Industrial Fair and Cooperation Exchange the Uzbekneftegaz concluded 12 contracts, agreements and contracts of intent for 2013 to export products worth US$228.9m, of which 5 contracts for the supply of export products of own production - engineering equipment of the Uzbekkhimmash Plant and bentonite claypowders for JV Bentonit. Also, the work is continuing to expand the resource base and increase the production of barite. In Olmaliq barite concentrate is produced based on deposits Sarybulak and Qushrabot. The volume of localized production in 2013 will reach 13 million tons, and by 2016 will reach 15 million tons.

Do not lag behind other industries. By the end of this year the AMMC plans to launch in the Angren Special Economic zone the production of copper pipes of different diameters. Experts estimate that the project will create conditions for a more in-depth processing of copper raw materials and the organization of production of finished and competitive in the domestic and external markets with high added value, which enjoys strong demand in high-tech industries.

A major project in the automotive industry in the Khorazm region was launched. On the basis of Khorazm Automobile Production Association a production of passenger cars of Damas model will be organized. The project will be implemented in two stages - in the first quarter of 2014 will start to assemble, and in the fourth quarter of the power switch to full production cycle.

It is impossible not to note the success of the domestic electrical industry. One of the largest manufacturers of home appliances in Uzbekistan - Artel plans this year to fully develop the production of refrigerators. Now, at the company assembles this type of home appliance, but in the near future to produce parts, components and assemblies that will localize the production of refrigerators in Uzbekistan. Since the beginning of this year, the country has also localized production of parts, components, washing machine body under that brand. In addition, the manufacturer plans to expand the range of cell phones, assembly plant that opened last year. This includes plans to launch CDMA standard mobile phones.

(Source: “Uzbekistan Today” newspaper)


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