Investment and export potential

of Uzbek textile industry

Shahrukh Rakhimov – Head of Investment Department JSC “Uzbekenegilsanoat”

Tashkent, 2017

UZBEKISTAN TEXTILE INDUSTRY COMPANYO’ZBEKYENGILSANOAT

TEXTILE SECTORCOTTON YARN // COTTON

FABRICS

KNITTING & SEWING SECTORAPPAREL // GARMENTS //HOSIERY // ACCESSORIES

MARKETING & ADVERTISING AGENCY

DESIGN CENTER “SHARQ LIBOSLARI”

“O’ZBEK YENGILSANOAT QURILISH” CONSTRUCTION

COMPANY

Trade Company“YENGILSANOAT SAVDO”

O’ZBEKYENGILSANOAT

460associated members

Employees – 110’000

Attracted Foreign Investment – US$ 2,5 bln.More than 300 implemented projects

Cotton yarn - 590 ths.tons

Fabrics - 485 mln.sq.m.

Knitted fabric – 103 ths. tons

Apparels - 660 mln. pcs.

Hosiery - 132 mln. pairs

Production capacity

$660mln.

$825mln.

$1,1 bln.

$1,3 bln.

Fabrics (woven, non-woven

& knitted)18 %

Garment &Hosiery

(inc. carpet, terry products, etc)

28 %

Yarn (inc. cotton, blended,

syntetic)54 %

Export of Textile Products

East AsiaLondon

Paris

Berlin

Moscow

Beijing

Tokyo

Seoul

Singapore

Jakarta

МанилаBangkokPhnom Penh

Maskat

Kair

Abu Dabi

Доха

IerusalimBagdad

Riiad

Aman

Tegeran

Europe

South-East and South Asia

Ankara

Shanghai

Minsk

Kiev

CIS

Middle East & Africa

Central Asia

Astana

Ashgabat

Kabul

Bishkek

Brussels

44%

29%7%

6%

6%

8%

Export geography

Number of projects

Inc.: - new projects- modernization and expansion

The total cost of the projects bln. USD

180

15822

2,9

Annual exports bln. USD 3,0

Created job places more than 38 000

Industry development program 2017-2020the main directions of the program is:

Production capacity 2017 // Target 2020

Traditions in textile

productions -skilled labor

resources

General and special

incentives (tax, custom,

cotton)

Availability of vast stocks

of raw materials

(cotton, yarn)

Low-cost energy

resources (gas,

electricity), infrastructure

Access to local,

regional and international

markets INVESTMENTOPPORTUNITIES

INFRUSTRUCTURE (in view of VAT)water - 0.12$/1 m3;

natural gas - 0.06$/1m3power energy - 0.05$/kWt/h;

petroleum - 0.76$/litr

MARKETDomestic market

of 32 mln. populationCIS market – in free trade zone (300 mln.population)

SKILLED LABOR RESOURCESTashkent Institute of Textile

& Light Industry2 High Education Institutions

& 42 Specialized Colleges

RAW MATERIALS

1,0 + mln.tn of cotton fiber 590 + ths. tn of yarn

Factors of competitiveness

SUCSESS STORY of implemented projects

Indorama Kokand Textile4th phases

Total investment – $ 164 mln.

Capacity – 153,800 spindles

Employees – 1050

Export – $ 100 mln.

UZTEX Group together with Swiss Capital International Group AG

(vertical integrated complex)

Total investment – $ 150 mln.

Capacity – 21,0 ths. tn compact yarn, 4,0 ths. tn dyed yarn,

7,0 ths tn dyed stockinet13,0 mln.pcs garments

Export – $ 40 mln.

Employees - 1500

Rieter-Uzbekistan» -manufacturing / assembly

of textile machinery in TashkentTotal investment – $ 12,0 mln.

Range of products –carding, draw frame

& ring spinning machines

Export – $ 0,2 mln.

Training center launched 11/2016

Osborn Textile -the vertical integrated complex

Total investment: $ 50,0 mln

Capacity: 5,2 ths.tn of yarn, 4,3 ths. tn. dyeing yarn, 0,2 ths. tn bamboo yarn, 2,2 mln.sq.m of fabric,

3,2 ths. tn stockinet, 1,5 mln.pcs. ready-made products

Export – $ 21 mln.

Employees - 850

Creation of Korean-Uzbek Training and Research Center

innovative textile technologies in Tashkent ($ 15,0 million)

Office, Lab., Business Support Institution

Test, Certificate Equipment Room, Class

Room, Conference room, Meeting room,

Exhibition Room

Pilot Plant Facilities for Pilot Products

Joint R&D Lab., Business Support Department

Pilot Products Analysis/Evaluation

LT Textile InternationalOrganization of textile complex in Karshi

(Kashkadarya region)Total investment – $ 105 mln. –

“LT Textile Cooperatief U.A.” (Netherlands)

Capacity – 22 ths.tn blended yarn50 mln.sq.m. fabric (two phases)

Created job places – 800

Export – $ 60 mln.

Launched in July 2017

The new steps achieved

Onthewaytocreate10Cotton- textileClusters

AccesstotheNEWmarkets,internationaltransitrailwaycorridortoEurope&China

Standardization-Certification(Oeko-Tex,GOTS,Naturtextile,ISO,TUV)

Kor-UzTechnopark,Rieter,TrutzchslerDilmenler,Picanoltrainingcenters

Liberalizationofthecurrencyregulation,entryvisaforinvestors(China,Turkey)

Cluster

Newmarkets

Qualityimprovement

Education&Innovation

Investmentenvironment

Surkhandarya region“Surkhantex”, “Nortex”

20 thousand hectares

Republic of Karakalpakstan“Nukus Textile”, “Eltex”

20 thousand hectares

“Indorama” (Singapore), 50 thousand hectares

Andijan regionLLC "Soxib omad barakasi"

20 thousand hectares

Navoi region“Baht Tex”

8 thousand hectares(Government Decree #158)

Bukhoro regionBCT Cluster

6 thousand hectares(Government Decree #2978)

Syrdarya regionBek Cluster

18 thousand hectares(Government Decree #3279)

Textile clusters for 2017-2020

Khorezm region“Khorezm Tex”

12 thousand hectares

Tashkent region“Rikom” (China)

10 thousand hectaresNamangan region

Uztex Group40 thousand hectares

Access to the EU market

Cooperation and Partnership Agreement (CPA)

Privileges provided to Uzbekistan in trade with accordance CPA:

ü July 1, 2017, the "Textile Protocol" to the Agreement on Partnership and Cooperation between Uzbekistan and the European Union

ü the reduction of import duties and customs payments on products of domestic enterprises from 12% to 6%

ü to increase production and export supplies to the EU countries.

The next stage in the deepening of bilateral relations with EU:

Ø The accession of Uzbekistan to the project of the European Union GSP + which provides privileges and preferences for developing countries, in the form of a reduction in the rates of customs payments to 0%.

Investment proposals for joint implementation:sh

irts • invest– $46mln.

• Capacity– from12mln.sq.m.fabricto9mln.pcs.ofshirts(inc.dyeing&finishing)

• Profitability – 15,4%

• Payback time – 4,8years

deni

m • invest– $37,7mln.• Capacity– from14mln.sq.m.fabricto6mln.pcs.ofdenimproduct(inc.dyeing&finishing)

• Profitability – 9,9%

• Payback time – 4,9years

terr

y • invest– $36,5mln.• Capacity– from6ths.tonsterryclothsto10mln.pcs.ofterryproducts(inc.dyeing&finishing)

• Profitability – 16,3,%

• Payback time – 4,1years

From the processing of yarn to the release of finished products (incl. dyeing and finishing)

There are a lot of types of yarn is available in the domestic market at competitive prices*) the payback period depends on the capacity utilization**) profitability improved in the implementation of branded products***) the parameters of the projects would be specify by Investor

Thank You For Your Attention!