On a Par with Europe

Italian and British fashion brands of men’s suits are known all over the world. Their products have won recognition owing to quality and the maximum orientation to the customer needs. The Lux Plus Service company of Namangan has been pursuing the same policy by producing a broad range of men's suits and other textile articles for more than a decade. The company’s director Tokhirjon Juraev told about the progress they have achieved in the years of independence:

“Our company exemplifies the successful application of privileges and preferences that have been provided for small businesses in Uzbekistan in the years of independence. We started with a few sewing machines 10 years ago, while today we rank among the largest producers in the region, and actively enter new markets.

We have been empowered by benefits and preferences for our sector. Small business and private enterprise have not just turned into the main link that ensures employment and source of income, but it is also an important factor for economic stability, the guarantor and the pillar of social and political stability of our society, an active driving force behind promoting the country on its way towards progress.

Much has been done in recent years to create a favorable business climate for the development of small business and private entrepreneurship. For example, the registration procedures for small businesses have been significantly simplified and became more transparent, tax rates have been unified and reduced, the product standardization and certification system was streamlined, many issues of free access for entrepreneurs to financial and technical resources have been settled through the development of exchange trades, new forms of crediting entrepreneurship by micro-credit and micro-leasing have been introduced.

Specializing in sewing men's and children's suits, jackets, jackets and coats, the favorable conditions have enabled us to arrange exports in short terms. Production volumes have been growing, the product range expanding and quality has been improving year by year. In 2009, we produced articles for 300 million soums (currency rates of CB RU from 13.09.2016, 1$= 2994.76 soums) and exported for $42,000, while last year these figures made up 5.2 billion soums and $327,000 respectively. In the first quarter of the current year, the production volumes exceeded 1 billion soums, and exports - $80,000. The phased upgrade of the plant has been a remarkable contribution to the progress.

Our products are exported to several countries. We are currently signing contracts with new partners, and hope to increase export volumes to $200,000 by the end of the year.

We attach importance to the implementation of new projects aiming to expand the range and volume of manufacture. Under the Presidential resolution on the ‘Program of industrial development of Namangan region for 2016-2019’, we are completing a new project at $1.38 million by our own funds. That would help to increase the production capacity, and improve product quality.

We have recently built a new shop, and are currently equipping it by importing state-of-the-art sewing machines and technologies for almost $90,000 from Japan and Turkey. Employing 150 people, the project will enable the company creating 50 more new jobs.

The constantly growing demand in the international market for high-quality costumes under the Vakkoni trademark is a good motivation for our team to start up new business projects.

(Source: «Uzbekistan Today» newspaper)

industry

Light industry: achievements and fresh gains

Look at the following two figures: US $7 million and US $1 billion. The first one indicates the volume of produce, clothes and knitted wear exported by domestic enterprises in 1994. The second figure characterizes the same indicators for 2015. Just a glance is quite enough to say with certainty that during the years of Uzbekistan’s development as an independent sovereign state its light industry has not only resolutely entered the international marketplace, but also consolidated its position there by expanding the national export potential.

To better understand and appreciate at its true value the grandiose effort undertaken in this direction by the country’s leaders jointly with light-industry workers, it is necessary to recollect the posture of affairs in a given sector at the beginning of the 1990s.

One day your correspondent took part in a meeting of Uzbek specialists with their foreign colleagues, who visited the Republic in order to see for themselves the situation in its manufacturing, especially in the light industry. They couldn’t comprehend why the country, which grew such a great amount of cotton, had no fabrics and garments of its own production. As a consequence, its population had to buy clothes of dubious quality at local flea markets. Questions starting with “why” and “how it comes that” were asked most frequently at the meeting. How it comes that Uzbekistan concentrates only on the production of fiber on the basis of raw cotton? Why does it process just a mere 10 per cent of the total amount of fiber? Why does the Republic export only cotton fiber, despite the fact that exporting finished garments with high value added is much more profitable? How it comes that local cotton-growers have to buy imported shirts made of Uzbek cotton at an exorbitant price? The Uzbek participators made their utmost to answer all those and many other hard questions. In particular, they explained that in the former Soviet Union, Uzbekistan was assigned a part of the main producer of raw cotton, with the cotton fiber being then processed in other republics. They also mentioned the fact that a handful of indigenous textile enterprises were outfitted with morally outdated and physically depreciated equipment, which made it impossible for them to turn out competitive goods. It was also added that all export-related issues were the prerogative of a so-called “center”, which, inter alia, determined a range of product categories to be made, their amount and export destinations. As for the republic itself, it didn’t receive any profit from its cotton fiber exports.

The Uzbek participants were well informed that, with a good raw material base at the country’s disposal, it is much more profitable to develop textile production, because yarn and fabrics usually account for some 80 per cent of value added in the commodity’s final cost. It means that exporters of yarn and fabrics receive 8 times as many receipts as do those countries, which export only cotton fiber. In case of the exportation of finished garments, the exports receipts will be even higher. But at that time under the regime established by the former command-administrative system, all the decisions were taken not in the member republics, but in the “center”.

The situation changed dramatically after the Republic of Uzbekistan proclaimed independence. One of the country’s first steps was the elaboration and realization of a targeted systemic state industrial policy, aimed at diversifying, modernizing and increasing the competitive edge of the national economy, as well as at backing the development of its leading industries and raising their export potentialities through a deeper processing of local raw materials.

The consistent and systematic transition from the export of raw materials to the export of finished produce with high value added enabled Uzbekistan to formulate a new long-term strategy of growth in the light industry.

A powerful impetus to the sector’s new stage of development was given by the creation of an appropriate legal framework. The successful implementation of a number of legislative documents approved by the Uzbek government, combined with the tangible assistance it rendered to the sector, made it possible to lure a significant inflow of foreign investments towards the realization of projects and initiatives to upgrade and technologically renovate the production base of the national light industry and to acquire state-of-the-art equipment. At the same time, special stress was laid on a further stable and balanced increase in the share of fiber processing and in the volume of produce with high value added and its level of competitiveness.

In the period 1995-2015, more than US $2.5 billion worth of foreign investments was attracted to the light industry of Uzbekistan. Over the past few years 200-plus projects were implemented there in conjunction with investors from Great Britain, Germany, Switzerland, Italy, the Republic of Korea, Japan, Singapore, India and other countries. As a result, a number of modern textile enterprises were put into service. They are worlds apart compared with those operating in the sector hitherto, because they cover the entire production cycle – from processing of cotton fiber to the production of finished goods. In 1994, there were only 3 textile enterprises set up with a share of foreign capital, which accounted for a mere 2 per cent of the total output. Today, over 200 joint ventures functioning in the sector represent more than 80 per cent of its total output. It means that close cooperation with some world-famous foreign companies and the introduction of the latest highly efficient technologies have borne fruit.

Over the years of independence spectacular results were attained and necessary measures taken to expand the presence of Uzbekistan-made textile commodities in the global textile market and to transform the national light industry into one of the world’s top exporters of goods with high value added.

The domestic textile enterprises started exporting their output in 1994. At that time, the overall volume of textile exports from the Republic, including clothes and stockinet, was estimated at some US $7 million. It should be pointed out here that between 1994 and 1996 the Uzbek light industry exported only brown Holland and cotton fiber. In 2003, the composition of exports was enlarged to include terry towels and knitted fabric. By the year 2010, the textile exports already included carpets, clothes and knitted wear.

The step-by-step realization of targeted consistent policy designed to swell the export potential of the Republic’s textile industry yielded encouraging results. In particular, there emerged a number of excellently outfitted enterprises, which led the sector in terms of labour productivity, profitability, the range and the quality of output and other important indicators. By 2006, Uzbek textile exports generated US $300 million in profit. In 2011, this figure more than doubled, reaching US $650 million.

These days the industry’s range of exported commodities is wide – from yarn to finished garments and knitted wear. Moreover, its enterprises are actively expanding their presence in the international marketplace. Testifying to this fact is an increase in their exports indicators for the past year. 260-plus enterprises of the Uzbek light industry exported over US $1 billion worth of goods in 2015. The composition of their exports comprised a lot of new categories of textile produce, such as bamboo, modal and blended yarn, Jacquard loom, ready-made garments and knitted wear of new types, models, design and weave. The last year’s figures demonstrate that the share of goods with high value added in the total volume of textile exports from Uzbekistan was in excess of 40 per cent and tends to increase. In the current year, all exports indicators are on the rise. By the end of 2016, the total volume of exported textile produce, clothes and knitted garments is expected to exceed US $1.1 billion, notwithstanding the fact that during the world crisis the prices for major product groups and raw materials have fallen sharply.

Contributing to an increase in textile exports from the Republic is the tireless work on the expansion of direct contacts with foreign consumers. Previously, the indigenous textile enterprises didn’t lifted a finger to find customers. Nowadays the sector’s enterprises run about 40 trading houses all over the world. This allows domestic producers to carefully choose foreign partners and to augment their exports volumes. Thanks to their efficiently operating overseas sub-divisions, they are planning to intensify foreign deliveries of raw materials, semi-finished goods and ready-made produce with high value added.

At present, the goods made in Uzbekistan are exported to more than 50 countries worldwide, including the EU, the CIS, Latin America, the Republic of Korea, China, Singapore, Iran, Israel, the US and others.

In 2015, Uzbek exports have penetrated a number of new markets, such as Pakistan, Georgia, Croatia, Nigeria etc. With a view to expanding the range of exported goods, enterprises incorporated in AO Uzbekengilsanoat take part in many international exhibitions and fairs held in Germany, the Republic of Korea, China, Russia, Belarus, Latvia and many others.

No wonder, then, that the light industry these days tends to occupy a leading position in the real sector of the national economy. The introduction of new production technologies, the application of highly productive latest equipment and machinery, combined with efficient management, guarantee a high level of labour productivity, an increase in the volumes of manufactured goods and the improvement of output’s quality. Add to this an annual growth of the sector’s absolute indicators. The assortment of commodities turned out at its enterprises has been expanded thanks to more than 60 new product categories.

Another interesting peculiarity of the light industry is that its enterprises are seeking to produce not just semi-finished goods and fabrics, but ready-made articles as well. To back their efforts in this direction, a design center has been set up in Uzbekistan, specializing in the development of up-to-date models of clothes, taking into consideration national traditions and climatic conditions. Of no less importance is the center’s aim to promote the output of the national light industry to foreign markets. Its specialists are busy designing perspective models, studying the latest trends in the field of world fashion, as well as carrying out marketing research of the home and international markets for light-industry produce. Much attention is also devoted to the attraction of overseas designers, for the latter to conduct master-classes for indigenous specialists. Another target of such cooperation is the joint development of brand-new models and the subsequent organization of their production at local enterprises.  

To sum up, it should be stressed that over the past 25 years, the light industry of Uzbekistan has worked its way from an outdated sector dominated by the production of cotton fiber to a modern leading industry of the national economy. Despite the enormous strides it has made in the course of that historical period, the light industry is far from resting on its laurels. In keeping with the Program of measures to ensure structural reforms, modernization and diversification of the national economy in 2015-2019, approved by the Presidential Decree as of 4th March 2015, some 80 projects will be implemented in the sector by the year 2020. With their total value estimated at US $1 billion, they are expected to result in a 1.8-fold rise in exports potentialities of the Republic’s light industry. Additionally, this Program stipulates the launch, in honour of the 25th anniversary of the country’s independence, of new 11 industrial facilities, whose total worth and export potential come, respectively, to US $90 million and US $41.8 million.

Domestic analysts are watching closely all the new trends that are unfolding in the light industry. In their opinion, much is yet to be accomplished to uncover its true exports potential. In the foreseeable future, the sector will retain its key role in the development of national manufacturing. What’s more, according to international experts, in prospect the Republic of Uzbekistan should become one of the world’s top producers of light-industry output.        

(Source: «Business partner.uz» newspaper)

International cooperation

Information Message of Jahon Information Agency

Uzbekistan, being the initiator of the creation in Central Asian zone free of nuclear weapons, advocated and advocates a strict compliance with the provisions of the Treaty on the Non-Proliferation of Nuclear Weapons and attaches great importance to reduce the threat of its use.

With this in mind, Uzbekistan is concerned about the DPRK's September 9, 2016 regular nuclear tests, which are a flagrant violation of UN Security Council resolutions and a direct threat to security in the region and the world at large.

The Uzbek side calls on Pyongyang to stop provocative actions, leading to the escalation of tensions, and resolve existing contradictions through peaceful diplomatic means.

(Source: IA «Jahon»)