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NEWS AND EVENTS
September 20, 2013
Textile industry of Uzbekistan
In the Republic of Uzbekistan, the textile sector enjoys the centuries-old traditions of processing locally produced raw stuff: cotton fiber, silk and wool. Thanks to the Great Silk Road that ran across the region, excellent cotton and silk fabrics, smart and everyday clothes, syuzanes with original designs and other commodities made by skillful Uzbek artisans were well known in many countries of the world.

Today, the textile industry ranks high among export-oriented industries of the national economy. It manufactures the broadest range of exported goods - from yarn to finished produce with a high value added (including garments and knitted wear). That’s why the industry’s export potential is enormous. As for the directions of its development, they may be selected on the basis of conditions available at the moment of decision-making: the availability of a strategic investor, the demand-and-supply situation in the global marketplace, the efficiency of a business plan, the level of personnel’s proficiency in accordance with the requirements of export-oriented production etc.

The State Joint-Stock Company Uzbekengilsanoat incorporates the bulk of textile enterprises, functioning in different regions of Uzbekistan.

These include over 290 enterprises and associations of cotton (textile), knitted-goods, garment, wool and ceramic industries, which run their own networks of branches, fashion houses and special outlets. The aggregate production capacity of Uzbekengilsanoat’s enterprises consists of the following components:

373,000 tons of cotton yarn; 281 million sq. m. of cotton fabrics; 81,800 tons of knitted linen; 5,000 tons of half-woolen yarn; 23,700 sq. m. of nonwoven linen; 5,000 tons of hydroscopic cotton-wool; 222.3 million conventional spools of sewing threads; 189.1 million items of knitted wear; 71.3 million pairs of hosiery; 2,500 tons of threads made of raw silk.

During the years of the nation’s independence, the textile industry has undergone drastic changes. To take only one example, there were only 4 large-scale textile complexes in the Republic before 1991. Since independence, the sector has mushroomed in size. Today, a lot of joint ventures and 100 per cent-owned foreign enterprises are operating nationwide. Among those with especially vast production potentialities are FE Daewoo Textile Fergana, FE Indorama Kokand Textile, FE Daewoo Bukhara Textile, JV Papfen, FE BF Textile Production etc. Each year, the assortment of textile output turned out in Uzbekistan extends by more than 100 new commodity categories. In 2012, for instance, goods such as compact and blended yarn, table-linen, bedclothes and new models of garments and knitted wear were added to the range of Uzbek textile exports.

The results of the current year’s 7 months demonstrate that the textile industry of Uzbekistan has manufactured 4.2 trillion Soum (Currency rates of CB from 20.09.2013 1$=2140.95 soums) worth of produce. Between January and July 2013, enterprises of the light industry have turned out goods to the tune of 4199.8 billion Soum, 15.9 per cent higher than in the similar period last year, including cotton commodities to the tune of 984.3 billion Soum (up 18.2 per cent on the same period of 2012), knitted wear – 405.0 billion Soum (up 30.9 per cent), clothes - 398.7 billion Soum (up 23.2 per cent) and leather goods – 219.7 billion (up 21.2 per cent).

Compared with a corresponding period of the year before, the Republic’s big textile enterprises have augmented production volumes of blended fabrics (2.2-fold), knitted linen (1.6-fold), cotton fabrics (1.4-fold), knitted wear (1.4-fold) and cotton yarn (1.3-fold). The stable pace of growth has allowed the home textile sector to exceed several production indicators of 2012: textile haberdashery – 4.3 times, raw silk threads – 1.5 times and hosiery – 1.3 times. In the period under discussion, the light industry has accounted for 12.6 per cent of the overall volume of manufactured output.

Specialists for the textile industry are trained at a number of specialized secondary vocational colleges and the following higher educational establishments: the Tashkent Industry of Textile and Light Industry, the Bukhara institute of High Technology, the Andijan Machine-Building Institute and the Namangan Engineering-Pedagogical Institute. They occupy leading positions in the development of the cotton-cleaning, textile, light and printing sectors of Uzbekistan.

A big centre of qualified personnel training, the Tashkent Institute of Textile and Light Industry has 27 departments, 9 sectoral laboratories, 3 training-production workshops, a training-production laboratory, a center of pre-college training and an academic lyceum. Some 300 high-calibre lecturers work at the Institute’s departments. Practical training and a portion of educational practice are carried out in its training –production laboratories; weaving, knitted-goods, sewing, cotton-spinning and silk laboratories, mechanical workshops and a printing-house. Different types of production practice are demonstrated there.

The last few years have seen the introduction of progressive educational methods and advanced pedagogical technologies. Besides, the Tashkent Institute of Textile and Light Industry has inculcated new methods f knowledge assessment based on rating control. All stages of the educational process are computerized. Taking account of the fact that the development of the textile industry depends, in the first place, on the state and qualification of its workforce, a great deal of attention is placed on this very aspect. In the past 8 years, more than 6,000 employees of indigenous textile enterprises were retrained, with a portion of them having raised their skill levels in Korea, Germany, Italy, Turkey and Japan.

Another important factor attracting western investors to Uzbekistan is a steady reduction in the number of light-industry enterprises in the European countries because of the high cost of land plots and growing expenses associated with cotton-fiber processing. But a steady increase in the standard of living in the developed world, plus a high level of solvent demand on the part of their population necessitate a continued enlargement of the volume of ecologically-friendly goods, including textile fabrics. That is why European, Japanese and American textile companies, commanding the enviable professional experience, can expand their activity in Uzbekistan, where all pre-requisites are in place for the development of the light industry.

To ensure a steady pace of growth in the textile sector, a comprehensive legal framework has been created in the Republic of Uzbekistan. What’s more, procedures for licensing, registration of enterprises and certification of produce have been simplified noticeably and a multitude of privileges and preferences are stipulated for joint ventures and foreign enterprises operating in the country. Textile enterprises in Uzbekistan may buy, for production purposes, cotton fiber at a discount of 15 per cent. There are also tax and other privileges, including:

Exemption from paying all taxes and duties, except for value-added tax;

Exemption from paying customs duties, except for duties chargeable for registration with customs authorities of equipment, components, raw stuff and materials imported onto the customs territory of the Republic of Uzbekistan for production purposes, because they are not produced domestically;

Deferment of payment of customs duties (with the exception of duties charged for customs registration) for a term of 60 days since the acceptance of the customs declaration when manufacturing textile goods;

A reduction, within 3 years, of the taxable base of profit tax by the amount of funds invested in modernization, technical and technological re-equipment of production facilities, repayment of credits given for the indicated purposes and reimbursement of a leased installation’s cost, on condition that sinking funds for a corresponding period under review are used;

Exemption, within 5 years, from tax on property, which is put into operation together with new technological equipment;

Exemption, up to the 1st January 2016, from paying import and customs duties chargeable on chemicals, dye-stuff, accessories and fittings, as well as other auxiliary materials that are imported to the Republic for production purposes, but are not manufactured domestically;

Exemption from property tax, in cases where over 80 per cent of output is exported.

Taken together, all these factors make it possible to annually process some 40 per cent of cotton fiber produced in Uzbekistan. At the same time, in the next few years the Uzbek textile industry plans to achieve a 1.5-fold rise in a given indicator.

Between January and June of the current year US $431.2 million worth of textile goods has been exported from the country, or 127 per cent on the comparable period of 2012. In the total volume of Uzbek exports, their share now reaches 6.3 per cent.

Compared with the 2012 level, the exported volume of knitted linen has increased 2.2-fold, cotton yarn – by 28.7 per cent, fabrics – by 27.7 per cent and knitted garments – by 23 per cent.

According to experts’ estimates, in the near future the textile industry of the Republic of Uzbekistan is well-placed to augment its exports volume up to US $1.5 billion.

(Source: “Business partner.uz” Newspaper)


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