Investment and export potential of Uzbek textile industry

1. Investment and export potential of Uzbek textile industry UZTEXTILEPROM UZBEKISTAN TEXTILE AND GARMENT INDUSTRY ASSOCIATION

2. About us TEXTILE SECTOR COTTON YARN // COTTON FABRICS KNITTING & SEWING SECTOR APPAREL // GARMENTS // HOSIERY // ACCESSORIES 1300 associated members Employees – 150’000 Foreign Investments – US$ 2,8 bln. Exchange Company “Uztextile Brok” Marketing & Advertising Agency Design Center “Sharq Liboslari” Trade Company “Uztextile Export” “Yengilsanoatqurilish” Construction Company Textile Universities in Tashkent, Namangan and Bukhara • Kor-Uz Textile Technopark

3. Industry Structure Uzbekistan Textile and Garment Industry Association "UZTEXTILEPROM" Export with a single Uztextile brand More than 6000 textile manufacturers Contracts of cotton buy-sell operations straight with farmers (Cluster system) Developing a system of certification of textile products according to world standards Visa support Members of the Association are exempted from payment of customs duties100% exemption

4. Production capacity Uztextileprom

5. Technology share in textile sector * factory of Rieter-Uzbekistan in Tashkent ** training & service center

6. Export of textile products Uztextileprom • Fabrics (woven, non-woven& knitted) • 7 % • Garment &Hosiery (inc. carpet, terry products, etc.) 48 % • Yarn (inc. cotton, blended, synthetic) • 45 %

7. Main directions of Textile Industry Development Program for 2018-2021 Uztextileprom Number of projects 143 Inc.:- new projects - modernization and expansion 121 22 The total cost of the projects bln.USD 2,4 Annual exports bln. USD 2,5 more than Created job places 30600

8. Economic potential of UZB producers of hosiery & garment are exempted from all taxes (except VAT) producers of hosiery & garment are exempted from all taxes (except VAT) textile exporters are exempted from property tax textile exporters are exempted from property tax 100% exemption from custom payments on raw materials and accessories not produced in Uzbekistan 100% exemption from custom payments on raw materials and accessories not produced in Uzbekistan 100% exemption from custom payments on technological equipment 10years tax holiday for foreign investments

9. Factors of competitiveness Uztextileprom INVESTMENT OPPORTUNITIES

10. Success stories Uztextileprom LT Textile International Organization of textile complex in Karshi(Kashkadarya region) Total investment – $ 105 mln. – “Jinsheng Group” (China) Capacity – 22 ths. tn of blended yarn 50mln. sq. m. of fabrics(second phase) Created job places – 800 Export – $ 60 mln. Launched inJuly 2017 Indorama Kokand Textile 4thphase Total investment – $ 164 mln. Capacity – 153,800 spindles Employees – 1,050 Export – $ 100 mln. Rieter-Uzbekistan» - manufacturing / assembly of textile machinery in Tashkent Total investment – $ 12,0 mln. Range of products – carding, draw frame & ring spinning machines Export – $ 0,2 mln. Training center launched 11/2016 UZTEX Group jointly with Swiss Capital International Group AG (vertical integrated complex) Total investment – $ 150 mln. Capacity – 21,0 ths. tnof compact yarn, 4,0 ths. tnof dyed yarn, 7,0 thstnof dyed stockinet 13,0 mln. pcs of garments Export – $ 40 mln. Employees– 1,500 Creation of Korean-Uzbek Training and Research Center innovative textile technologies in Tashkent($ 15,0mln.) 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 Osborn Textile - the vertical integrated complex Total investment - $ 50,0 mln. Capacity – 5,2 ths. tnof yarn, 4,3 ths. tn. of dyed yarn, 0,2 ths. tnof bamboo yarn, 2,2 mln. sq. m of fabrics, 3,2 ths. tnof stockinet, 1,5 mln. pcs. of ready-made products Export – $ 21 mln. Employees -850

11. The new steps achieved • Cluster • New markets • Quality improvement Education &Innovation • Investment environment

12. Measures to increase the development of textile industry of Uzbekistan Full coverage of farm expenditures and increased financial interest Introduction of efficient management, innovations, advanced technologies, modern scientific achievements in the field of growing crops, soil cultivation, fertilizers and pest control Attraction of highly qualified specialists in the agrarian field (agronomist, foreman, etc.) and introduction of modern forms and control mechanisms Mechanization with modern agricultural machinery and technology.

13. Access to the EU market Uztextileprom Cooperation and Partnership Agreement (CPA) • Next stage in the deepening of bilateral relations with EU: • Theaccession of Uzbekistanto 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%. • Privileges provided to Uzbekistan in trade in accordance with CPA: • July 1, 2017, the "Textile Protocol"to the Agreement on Partnership and Cooperation between Uzbekistan and the European Union • the reduction of importduties and customs payments on products of domestic enterprises from12% to 6% • to increase production and export supplies to EU countries.

14. Investment proposals for joint implementation Uztextileprom 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

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