NEWS AND EVENTS
June 16, 2014
Prospects of attracting foreign investments to the textile industry of Uzbekistan
In today’s world, the textile industry is considered to be one of the biggest export-oriented sectors. Textile enterprises all over the globe export the widest selection of goods – from yarn to a great variety of finished produce.
The Republic of Uzbekistan these days is busy implementing dramatic structural reforms in the textile industry, with the fact testifying to an ever growing image and competitiveness of the national textile output in the world market. For the time being, more than 2,500 textile enterprises successfully operate in the Republic.
At present, massive investments are enticed to Uzbekistan from abroad for the development of the textile sector. It should be observed that for overseas investors, the attractiveness of a given industry can be explained by several factors: the abundance of raw materials, cheap and qualified labour force and, above all, the strong state support and favourable liberal business conditions created in the country. These include a stable legal framework for economic activity, elimination of any excessive outward interference, streamlining of check-ups by controlling authorities, reduction of forms, in which accounting reports are to be presented, simplification of licensing, registration and certification procedures and, what is even more important, a wide system of privileges, preferences and guarantees granted to joint ventures and foreign enterprises, which are enshrined in the national legislation.
Today, more than 400 joint ventures operate in the light industry of Uzbekistan. Over US $2 billion worth of foreign investments have been attracted to the sector. Among the investors are many leading overseas manufacturers of textile produce and equipment, such as Indorama Industries PTE. Ltd. (Singapore), DAEWOO International, Daishin Textile, Shindong Enerkom (South Korea), Rieter AG, Swiss Capital (Switzerland), Bayteks Tigaret, Tekfen, Bo Group, Mert Iplik (Turkey), Vayreks, Osborne Trading, Tagus (Great Britain) and many others. The State Program of Regional Development for the period 2013-2016 provides for the implementation of 1,629 investment projects in the national light industry. Valued at US $1286.3 million, they are expected to create 63,194 new jobs, according to data from the State Joint-Stock Company Uzbekengilsanoat.
It is also necessary to emphasize that between 2011 and 2013 a number of important projects have been realized in the Republic’s light industry with the help of foreign investments. In 2011, in particular, a joint venture enterprise, called Indorama Kokand Textile, has been set up with the participation of Indorama Industries PTE. Ltd. (Singapore).
As of 1st January 2014, the total volume of funds this company has already invested in the Uzbek textile sector exceeds US $90 million.
Another serious project realized in the textile industry of Uzbekistan is the creation of a joint venture specializing in the production of textile equipment. It was accomplished together with Indorama Industries PTE. Ltd., a Swiss machinery-building company. With the project’s first stage having been finalized, the enterprise is now capable of turning out carding and belt equipment. During its second stage the production of ring-spinning machinery will be mastered. Putting into operation metal-working and dyeing facilities for textiles is planned in the course of the project’s third stage.
Production volumes tend to swell in the textile industry of Uzbekistan from year to year. In 2013, as one example, indigenous textile enterprises have made 6.7 trillion Soum worth of output, an 11.2 per cent increase on the year before. An even higher rate of growth - 23.8 per cent – has been reached by garment enterprises (718.1 billion Soum), according to data from the State Statistics Committee of the Republic of Uzbekistan.
The main foreign markets for Uzbek textile exports include the CIS member states, and the Russian Federation in the first place, Turkey, the European Union, Korea, the US, Canada, Venezuela, Morocco and others.
By and large, the light industry of Uzbekistan now boasts a reputation of a reliable business partner in the international arena. It is increasingly becoming one of the key centers of the world economy, where a wide selection of high quality goods is manufactured.
(Source: “Business partner” newspaper)