STATE STOCK - JOINT COMPANY

O’ZBEKYENGILSANOAT O’ZBEKYENGILSANOAT

1

TEXTILE INDUSTRY OF UZBEKISTAN:TEXTILE INDUSTRY OF UZBEKISTAN:

POTENTIAL TO RISE & OPPORTUNITY TO POTENTIAL TO RISE & OPPORTUNITY TO INVESTINVEST

“O’ZBEKYENGILSANOAT” : SIZE AND GROWTH

Uzbekistan Uzbekistan textile industrytextile industry

Uzbekistan Uzbekistan textile industrytextile industry

Location wise concentration of cotton processing in %, 2011

4

48%

63%

90%

95%

23%

14%

23%

14%

14%

10%

44%

18%13%

Our main partners

Indorama Kokand Textile:Partner company – IndoramaInvestment - US$ 43 mln.Production – 7 500 of cotton yarnExport – abt US$ 20 mln.Start – September 2011

Rieter Uzbekistan:Partner company – Rieter AGInvestment - US$ 4,0 mln.Production – 40 draw frame and carding machinesStart – April and September 2012 (est)

Daewoo-Bukhara-Textile: Partner company – “Daewoo

International” Investment - US$ 52,5 mln. Production - 16’000 of cotton yarn Export – abt US$ 30,0 mln. Start – November 2009

TTG-Tashkent: Partner company – TTG, Korea Investment - US$ 80,0 mln. Financing – 100% FDI Production - 6’000 of cotton yarn 7,5 mln. sq.m fabric 5 mln. pieces of garment Start – September 2012 (est) Facility – Green Field at Zero cost

Factors of competitiveness

Item Cost in USD

Cotton fiber production 1,1 + mln. tons

Yarn production 370 + thousand tons

Low energy cost at US$ 0,04/kWt

Skilled labor resources

at US$ 200/month

1 Institute of Light Industry & Textile in Tashkent city, 42 Specialized colleges

15% price reduction of the cotton purchase and VAT refund on export

Domestic market of 29,5 mln. population

CIS market of US$ 6,4 bln. in free trade regime

Item Cost in USD

Water 0.25/1m3

Natural gas 0.05/m3

Power energy 0.04/kWt/h

Petroleum 0.86/1

Diesel 0.78/1

Furnace oil 0.29/1

Coal 0.02/kg

Quality - Medium staple of world recognized premium quality (3rd ranking in world export)

Price - 15% price reduction of the purchase of cotton (upfront)

20% reimbursement of VAT on the purchase price of cotton

Supply – from one of the 20 cotton terminals from all over the country

Cotton Yarn 370 thousand tons 95% produced at world class

spinning capacities 80% spinning capacities less

than 10 years old priced in local currency as

well as in US Dollars

Silk• Row silk – 900 tons• Silk yarn – 190 tons• 40% produced at modern

technologies less than 10 years old

Main incentives & benefits for textile producers

producers of hosiery & ready garment are exempted from all taxes (except VAT);

textile exporters (more than 80% to be exported) are exempted from property tax (3,5%).

100% exemption from payments of custom payments on technological equipment;

100% exemption from payments of custom payments on row materials not produced in Uzbekistan (synthetic fiber, fabric, etc);

15% discount from world cotton price;Special facilities to finance the cotton with the rule of 15% cash

payment and 85% payable in 90 days, covered by bank guarantee;Zero rating VAT (20%) on export.

Financial capital.

Know-how (modern technologies).

International management (brand).

Distributions channels and access to international markets.

Main incentives & benefits for textile producers

producers of hosiery & ready garment are exempted from all taxes (except VAT);

textile exporters (more than 80% to be exported) are exempted from property tax (3,5%).

100% exemption from payments of custom payments on technological equipment;

100% exemption from payments of custom payments on row materials not produced in Uzbekistan (synthetic fiber, fabric, etc);

15% discount from world cotton price;Special facilities to finance the cotton with the rule of 15% cash

payment and 85% payable in 90 days, covered by bank guarantee;Zero rating VAT (20%) on export.

Green field project designed by Project initiator (we could offer land or unfinished constructions);

Development of the Project in existing buildings (existing textile factories with all necessary infrastructure);

Projects requiring new management to be developed in Partnership with Uzbek companies and Banks (defaulted textile companies with modern production facilities).

2nd part of Bukhorotex2nd part of Bukhorotex Date of establishment: Date of establishment: 197419742nd part of Bukhorotex2nd part of Bukhorotex Date of establishment: Date of establishment: 19741974

Type of activity: stopped 2007 for Type of activity: stopped 2007 for renewing and deep modernization (1renewing and deep modernization (1stst part part restarted in 2009 with capacities 16’000 restarted in 2009 with capacities 16’000 combed and carded yarn)combed and carded yarn)

Type of activity: stopped 2007 for Type of activity: stopped 2007 for renewing and deep modernization (1renewing and deep modernization (1stst part part restarted in 2009 with capacities 16’000 restarted in 2009 with capacities 16’000 combed and carded yarn)combed and carded yarn)

LOCATIONLOCATION

JSCJSC “Bukhorotex”“Bukhorotex”

Transport infrastructure:

Distance km

- to highway 2

- to railway 0.2

BUILDINGS AND FACILITIESBUILDINGS AND FACILITIESMain units Production area,

hectaresTotal area, in

hectaresBuilt year

2-part (Spinning & weaving mills)

13,36 24,8 1981-1983

3-part(dying house)

1,7 4,7 1976-1977

4- part (Finishing mill)

8,44 18,26 1985

5- part (Mechanical factory)

0,67 1,65 1972

7- part(Transport Department and other buildings)

0,23 1,4 1994

1st Phase Production: Cotton yarn - 8-16 thousand tons (ring and

open end) Grey Fabric – 10-16 mln sq meters Denim – 4-8 mln sq meters Garment - 10 mln. pcs a yearInvestment: Reconstruction works – US$ 2 - 8 mln. Equipment – US$ 20 – 100 mln Working capital – US$ 1 - 3 mln

“Bobur” Joint Stock Company

Address: Andijan city, 73 Bobur avenue;

Buildings, constructions and utilities:

Total area of the enterprise – 66.5 hectares

Production (covered) area – 41 700 sq. m.Utility units available – electricity, water, gas,

sewage

Logistics: Highway – 0.5 km. Railway – 2 km.Airport – 3 km.

State ownedProposed for establishment ofnew integrated production

Production: Cotton yarn - 6-10 thousand tons (ring

and open end) Grey Fabric – 8-12 mln sq meters Denim – 4-6 mln sq meters Garment – 3,5 mln. pcs a yearInvestment: Reconstruction works – US$ 2 - 4 mln. Equipment – US$ 50 – 80 mln Working capital – US$ 1 - 3 mln

JSC “Kitop ip yigiruv” Address: Kitop city, Kashkadarya region;

Project capacity: 6 thousand tons of yarn

Total cost of the project: 10,5 mln. US dollars

Buildings, constructions and utilities:

Total area of the enterprise – 21.0 hectares.

Production (covered) area – 17 400 sq. m.

Utility units available – electricity, water, gas

Providing 100% with local raw materials.

Private owned, not operational

Proposed for establishment of new production

Production: Cotton yarn - 5-8

thousand tons (ring and open end)

Investment: Reconstruction works –

US$ 1 – 2 mln. Equipment – US$ 5 – 15

mln. Working capital – US$ 1

- 2 mln.

Organization of integrated mill (unfinished construction)

Address: Harezm Region, Bagat city;

Buildings, constructions and utilities:

Total area of the enterprise – 199 000 sq. m.

Production (covered) area – 31 104 sq. m.

Utility units available – electricity, water, gas

Logistics: Highway – 3 km. Railway – 10 km.Airport – 20 km.State owned

Proposed for establishment of new production

Production: Cotton yarn - 6-8 thousand

tons (ring and open end) Grey Fabric – 8-12 mln sq

meters Finished Fabrics – 4-6 mln

sq meters Garment – 3,5 mln. pcs a

yearInvestment: Reconstruction works - US$

2 - 4 mln. Equipment – US$ 40–70

mln Working capital – US$ 1-3

mln

Thank you for your attention!

State Joint-Stock Company “O’zbekyengilsanoat ”

45 Babur Str., Tashkent, 100100, Uzbekistan

Tel: +998 (71) 239-17-11Fax: +998 (71) 253-93-58http://www.legprom.uz