September 17, 2014
Light Industry: A Thorny Path To Consumers. 2
OIC Foreign Ministers to hold meeting in Tashkent in 2016. 4
economy
Light Industry: A Thorny Path To Consumers
Today it is obvious that the world’s center of the light industry has moved to the East – India, China, Pakistan, Turkey and other countries. The world-famous brands have long ago reoriented their manufactures in Milan, London, Paris and Madrid to the developing countries that offer optimal conditions for work. Uzbekistan has been playing an increasingly remarkable role in this process with its fast pace towards the global market. Meanwhile, the republic has its own strategic goal: it is not just about attracting foreign investors and well-known brands, but about establishing its own manufactures and winning the world’s catwalks with the label ‘Made in Uzbekistan’.
Many foreign experts explain the phenomenon of the Uzbek light industry by the availability of raw materials, because the country ranks among the world’s leading manufacturers and exporters of cotton. However, not everything is as simple as it looks. The availability of high-quality feedstock is certainly a big plus, but it is still not enough for the big deal.
The boost of light industry in Uzbekistan can be explained primarily by a properly chosen development strategy. For example, Uzbekistan can be compared with the neighboring countries that found themselves in approximately same conditions as Uzbekistan after the collapse of the Soviet Union. That was a time of choice – to work on outdated equipment, gradually replacing certain components with the up-to-date ones, or just leave the foundation of an old manufacture and optimally equip it with new hardware.
Some countries were not ready to spend huge amounts of money and to concentrate on the production, which might not be repaid, so they preferred working in the so called ‘old fashioned way.’ As a result, the Russian and Kazakh light industries seriously lag behind in terms of technologies, leaving their home markets at the mercy of imports.
Uzbekistan has chosen the other way. Light industry is a special sector, which is not about re-equipping just one unit or replacing an outdated machine with a new one, and getting the international standard quality. The production process is built on a long successive chain where each link is important. So if the production needs to be re-equipped, it should be done by modules – at least the whole spinning or finishing manufacture should be upgraded, instead of just replacing separate machines and units.
Therefore, Uzbekistan chose the way of establishment of modern integrated complexes of complete cycle where cotton went through a series of processing steps resulting in finished textile articles. However, it was just a vector of development.
Only a targeted and system-operated national industrial policy could be a true impetus to the industry through supporting priority projects in light industry, including innovations, as well as the fight against counterfeiting, which was a serious challenge in the early years of independence.
A mechanism of interaction between businesses and the state proved itself effective in those conditions, as they jointly superseded the illegal products from the market, replacing them with domestically produced goods and legal import, while building a transparent market and increasing the level of tough competition.
At that time, in the mid-1990’s, experts revealed the problems that needed to be addressed as soon as possible. They included a technological backwardness of the industry, the low level of innovation and investment, high energy consumption, complexity and high feedstock consumption, which ultimately led to the weak competitiveness of domestic goods. At that time, the situation was obvious even without any specialized marketing research. It was enough to go out to the markets that offered imported products of poor quality that were popularly nicknamed as ‘consumer goods’.
To change the situation, it was decided to concentrate on the factors that are unique to Uzbekistan. They provided a range of advantages to domestic enterprises and joint ventures, including low energy cost, skilled staff, developed infrastructure, availability of own research base, tax and customs privileges. Therefore, today it is no surprise that the industry ranks among the leaders in the domestic real economy sector. In the first half of 2014 alone, the light industry sector produced goods valued at over 5 trillion soums with a growth of 12.7% YOY. Its share in the total production of the republic has reached 14.6%, exceeding the previous year indexes by 0.8 percentage points (13.8%). It is worth noting that the growth was demonstrated by all areas: the textile industry produced goods at 3.7 trillion soums (a 12% increase against January-June 2013), the cotton industry – at 1.08 billion soums (22.1%), knitting – at 336 billion soums (22.3%), clothing – at 884.5 billion soums (13.6%), leather and footwear – at 239.1 billion soums (18% increase). (Currency rates of CB from 17.09.2014 1$= 2359.56 soums)
Introduction of modern quality standards and equalization of the overall level of technological processes is another important factor in the industry’s development. Previously, many domestic entrepreneurs faced the problem when some enterprises manufactured fabrics of a certain size, type or quality, but they did not fit the machines of other manufacturers. This issue was addressed in the shortest terms, as it interfered with the entire chain of production. In many ways that was contributed by specialized international exhibitions, two of which are underway these days in Tashkent.
CAITME, the Central Asia’s only and the CIS largest exhibition of textile machinery and engineering, as well as the International Exhibition of Textile Industry – TextileExpo Uzbekistan have brought together 250 companies from 23 countries in Uzexpocenter halls. It is worth to note the geography of the participants in these exhibitions – Tashkent hosted representatives of the biggest brands, specializing in the production of equipment, clothing, and special fabrics from Austria, Belgium, Britain, Germany, India, Italy, Japan, the Netherlands, the USA, Turkey, France, Switzerland, South Korea, Japan and many other countries.
The exhibitions have won the trust of the leading companies, producers of textile equipment of world-famous brands. They come to Uzbekistan again and again to present their new products in the local market. The recent exhibitions suggest that they turned into a real business platform, arranged in the best traditions of Europe. While last year’s business program included presentations, meetings and discussions with experts from Belgium, national pavilions of Germany and the Republic of Korea, this year’s exhibition presents several companies under the flag of the Italian Republic.
The visitors can watch many devices in action, as the participants offer master classes for potential partners, which is very important. In addition to the direct benefits, when the representatives of the domestic enterprises can directly assess the quality of a product, and hence select the best option, these presentations provide a very important link between consumers and producers.
In the current conditions, the manufacture of equipment is largely a proactive game to be ahead of the competitor, which implies to be always abreast of the time and track client requests. The idea is quite simple – with a customer’s feedback a producer can further perfect his product.
Chinese companies might serve a good example, as they have shifted from purchasing European equipment to the production of their own hardware and exporting it in short terms. In turn, in Europe, where the textile industry is gradually dying out, the manufacturers of equipment are facing certain problems with the feedback, which will consequently disclose problems with quality.
Optimal automation is a special trend in the modern development of industrial equipment for light industry. It was well evident in the expositions of many foreign companies. This trend is understandable, as the automated spinning and weaving mills produce higher quality at a low cost.
Uzbekistan has built its own modern machine manufacture for light industry. A foreign enterprise Rieter Uzbekistan, a producer of conveyor, carding and ring spinning machines, was established under the production association Uzbektekstilmash. The project was empowered by the agreement signed by Uzbekyengilsanoat and the world-famous Swiss company Maschinenfabrik Rieter in 2011. It envisages a strategic partnership in modernization and technological extension of industrial enterprises and phased establishment of production of textile machinery throughout the country. Assembled in Tashkent, the equipment successfully operates in Andijon, Farghona, Bukhoro, Samarqand, and other regions.
Experts anticipate a significant increase in the production of textile products in the near future. According to the development concept of light industry, the volume of industrial production of Uzbekyengilsanoat will exceed 6.97 trillion soums by 2020. In particular, the production of cotton yarn will increase by 2.5 times, finished fabrics – 2.8, silk fabrics – 2.7, nonwovens – 1.5, knitted fabric – by 2.7 times. In addition, the enterprises plan to increase the production of finished articles with high added value. For example, the manufacture of garments will increase by 3.2 times, knitwear by 2.1, and raw silk by by 2.1 times.
There is another interesting trend: domestic enterprises strive to manufacture finished articles instead of semi-manufactured goods and fabrics. To support these aspirations Uzbekistan established a design center specializing in designing modern clothing patterns with an eye to national traditions and climatic conditions, as well as in the promotion of domestic light industry to international markets. Specialists of the center are engaged in promising designing of light industry articles to meet the growing needs and demands of the population, the study of the latest trends in the world of fashion, marketing research of internal and external light industry markets.
Enterprises of the leather and footwear industry have been remarkably active in recent years. The Uzbekcharmpoyabzali Association comprises 72 enterprises. However, only 13 of them are engaged in the primary procurement of rawhide, and the rest deal with the immediate processing and production of finished articles. There is a company specializing in the production of artificial leather. Today, the leather and footwear industry of the country employs more than 15 thousand skilled workers. In five months of 2014, the sector manufactured goods valued at 130 billion soums, and consumer goods at more than 50 billion soums.
Nine investment projects on the establishment of new enterprises on leather processing, manufacture of leather garments, brake pads and linings, consumer goods and others, are underway. It is planned to commission new capacities in Angren and Jizzakh SIZ, Namangan, Qashqadaryo and Bukhoro regions. In the first five months of 2014, the association has drawn about $2 million of investments aimed at the establishment of new enterprises and the expansion of the product range. The industry has localized and released four new kinds of goods – soles, pads, ceramic tile and sports equipment worth 28 billion soums. The volume of exports of leather and footwear industry enterprises has exceeded $38.7 million.
(Source: «Uzbekistan Today» newspaper)
INTERNATIONAL COOPERATION
OIC Foreign Ministers to hold meeting in Tashkent in 2016
The 43rd session of the Council of Ministers of Foreign Affairs of Organization of the Islamic Cooperation will be held in Tashkent in 2016.
The Government of Uzbekistan issued a resolution “On preparation to hosting the 43rd session of the Council of Ministers of Foreign Affairs of Organization of the Islamic Cooperation in Tashkent” on 8 September 2014.
The resolution approved a structure of organizational committee on preparation of the Concept of presidency of Uzbekistan at the 43rd session of the Council of Ministers of Foreign Affairs of Organization of the Islamic Cooperation. Minister of Foreign Affairs of Uzbekistan Abdulaziz Kamilov will chair the organization.
Cabinet of Ministers entrusted the organizational committee to prepare and submit a report to the President of Uzbekistan a Concept of the presidency of Uzbekistan at the 43rd session of the Council of Ministers of Foreign Affairs of the OIC and a plant of main events within the event.
(Source: UzDaily.com)
exhibitions
The Far and Near Oman
Such is the title endowed to a cultural-historical exhibition that has opened September 9 at the Temurids History State Museum.
The opening ceremony of the exposition was attended by representatives of ministries and agencies, creative associations, the diplomatic corps and international organizations, artists and art admirers. The exhibition is organized by the Academy of Sciences of Uzbekistan, the Amir Temur International Charity Fund, the Temurids History State Museum and the National Records and Archives Authority of the Sultanate of Oman.
The First Deputy Prime Minister of the Republic of Uzbekistan Rustam Azimov and Chairman of the National Records and Archives Authority of the Sultanate of Oman – Dr Hamad bin Mohammed al-Dhoyani stressed in particular that the cooperation between Uzbekistan and Oman, as it is the case in all spheres, has been advancing consistently also in the area of culture and arts, basing on agreements reached during highest-level meetings of our two nations.
The cooperation between Uzbekistan and Oman is built on ancient historical ties and the cultural and spiritual association of our two peoples. The interaction between our two countries has been steadily evolving in the spheres of trade, investments, transport communications, tourism and culture.
Our two nations wield immense potential in the travel industry. In Oman, huge interest is manifest to the historic cities and shrines in our country. Musicians from Oman are regular in the Sharq Taronalari (Melodies of the East) International Music Festival organized in Samarkand.
The exhibition launched in the Uzbek capital has become another embodiment of cultural cooperation between our two countries. The exposition demonstrates works of art and photos on the history and the contemporary life of Oman, samples of folk applied arts, historic documents, national costumes, jewelry articles. Exhibition visitors have an opportunity to get familiar with the lifestyle of the people of Oman, customs and traditions, literature and arts, music, culture and other walks of life.
“Following the establishment of diplomatic relations, cooperation started to actively advance along all the spheres of interaction,” says Ambassador Extraordinary and Plenipotentiary of the Sultanate of Oman to our country Mohammad bin Said bin Mohammad al-Lawati. “I would like to note in particular that the state visit by President Islam Karimov to the Sultanate of Oman in October 2009 facilitated a commencement of a new phase of ties between our two countries and served as a foundation for the expansion of cooperation scales. The agreements reached during that visit and the documents signed afforded a new impetus to the development of mutual cooperation. The goal sought by the present exhibition is the introduction of the public of Uzbekistan to the history of Oman and the culture of its people. This will serve for the further consolidation of partnership between our nations.”
Art admirers say they are particularly excited by the works presented at the exposition, the historical documents, ancient coins and maps, brilliant compositions, national melodies, songs and dances performed by Oman’s art connoisseurs. Here, visitors can familiarize with works of scholars and specialists on the preservation of national heritage, restoration and examination of historical documents.
The exhibition program includes also a quiz among students “Do You Know Oman?” Winners of the contest are to be granted an opportunity to visit that country.
(Source: UzA)
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