Uzbekistan textile industry is considered to be one of the most dynamic and socially important sectors and ranks high among export-oriented industries of the country’s economy. The Uzbek textile industry is mainly focused on cotton, silk and wool. Currently, about 7,000 enterprises of the industry are operating in the republic. Capacity for production of cotton fiber in the amount of 1.4 million tons has been created, of which about 60 percent is used to meet the needs of domestic textile enterprises. One of the policy priorities of Uzbekistan, the world’s fifth-largest cotton exporter, is further development of its textile industry. Annually, the country grows about 3.5 million tons of raw cotton, produces 1.1 million tons of cotton fiber.
Domestic production was supplied to more than 50 countries of the world, and the share of goods with high added value exceeded 40 percent. If in early 2017 there were 293 exporting enterprises, then by the end of the year their number had reached 350. In addition, the growth of export indicators was facilitated by the activity of 64 trading houses which were opened in foreign countries. One of the effective forms of further development of the textile industry will be the creation of clusters. This model implies the organization of a single production cycle, which includes the cultivation of raw cotton, primary processing and its further processing at ginneries with the release of final products. As many as 34 investment projects on modernization, technical and technological re-equipment of existing and creation of new enterprises with a total export potential of $151.7 million were realized this year in the light industry. At the same time, their total value exceeded $356 million.
Uzbekistan takes consistent steps to increase the volume of cotton fiber processing. In particular, it is planned to create 112 modern, high-tech industrial factories, expand, modernize and technologically upgrade 20 operating capacities. All this will increase the export potential of the industry up to $2.5 billion a year and create more than 25,000 jobs.
Currently, Uzbekistan continues to attract foreign investments for construction of textile enterprises in the country.
In the period 2010-2014, the textile industry of Uzbekistan received and spent foreign investments worth $785 million while 147 new textile enterprises with participation of investors from Germany, Switzerland, Japan, South Korea, the U.S., Turkey and other countries were commissioned. Export potential of these enterprises amounted to $670 millions. In 2015, the textile industry increased production by 12.1% compared to 2014 – up to 8.939 trillion. The growth of production in the silk industry was 10.4%, the cotton – 7.0%, cotton – 22.7%, clothing – 13.5% and sewing industry of Uzbekistan increased production by 18.9%.
Uzbek President Shavkat Mirziyoyev signed a decree to deepen reforms in the textile industry to fully reprocess raw cotton domestically and increase export potential of the country. The decree, titled “On measures to further deepen reforms and expand the export potential of the textile and garment and knitwear industry,” instructs the government, within three months, to develop and approve the Concept of accelerated development of the textile and clothing-knitting industry for the period 2019-2025.
Under the concept Uzbekistan should be able to reprocess all the produced cotton domestically and increase the export volumes of textile products to 7 billion U.S. dollars per year by 2025. Uzbekistan, the world’s sixth-largest cotton producer, produced 2.3 million tons of raw cotton in 2018.
Traditionally, cotton is Uzbekistan’s most important cash crop. But in recent years the country has been taking serious steps to develop its textile industry to produce value-added products rather than exporting raw cotton. According to the statistics of the National Statistical Committee of Uzbekistan, the textile exports of Uzbekistan maintained a rapid growth in 2018. The annual export of textiles reached 1.6 billion U.S. dollars, up by 41.4 percent from the previous year.
The industry development strategy for 2019-2021:
More than 150 textile and garment and knitwear enterprises operating in Uzbekistan today, of which 50 with 100% foreign capital. The bulk of foreign investment from Turkey, Korea, China, Singapore, Switzerland, Germany, the UK, and Russia has been used. Textile and garment-knitting enterprises account for 4.6% of the country’s GDP.
In 2019–2021, the industry will be implementing a strategy for the development of the textile industry.
The Strategy was developed by the Cabinet of Ministers of the Republic of Uzbekistan, the Ministry of Economy of the Republic of Uzbekistan, the International Textile Manufacturers Federation (Switzerland), KOFOTI (Korea), KITECH (Korea), KOTRA (Korea), the Ministry of Textiles (India), CITI (India), IFC (IFC ), Gerzi (Switzerland), Rieter (Switzerland), Indorama Corp. (Singapore), Jinsheng Group (PRC).
The main objectives of the development strategy of the textile industry are:
- Increase of technical and technological level;
- Ensuring production efficiency;
- Competitiveness and high technology products;
- Export growth;
- Active investment and innovation activities;
- Deepening sectoral cooperation;
- Formation of market infrastructure.
In the medium term (until 2021) the growth in volumes will be:
- Industrial production – 19.2 trillion soums (1.6 times)
- Fabrics – 934 million square meters. (1.5 times)
- Knitted garments – 615 million units (1.8 times)
- Hosiery – 230 million pairs (3.3 times)
In addition, it is planned to create a base of innovative and design developments.
As a result of the implementation of the Strategy, Uzbekistan intends to change the structure of textile production and increase exports to US$7 billion by 2025. Thereby, having begun a new stage of transformation of the republic into a leading producer of textiles.
So in the long term, the growth of volumes will be:
- Industrial production – 35 trillion soums (3.5 times)
- Fabric -1 425.9 million square meters (3.1 times)
- Knitted garments – 1 516.9 million units (3.6 times)
- Hosiery –429.0 million pairs (4.4 times)
- Exports – US$7.0 billion (4.3 times)
As part of the development of international cooperation, it is planned to establish regional representative offices of the Uztekstilprom Association covering the regions of the CIS countries (Russia, Belarus, the Republic of the Transcaucasus), the EU and South-East Asia.
Prospects for the development of the Uzbekistan textile industry in the world economy:
It is well known that Uzbekistan cannot perform an export program on world markets, with the exception of the production of raw materials, such as cotton and other raw materials, in foreign markets and sell our products. First of all, it is necessary to accelerate the development and targeted support of industries and enterprises that can be equally competitive in the world market and at the next stage can become t he driving force of economic growth, further modernization and diversification of the economy. At the same time, in the textile and light industry, more profound processing of raw cotton, the export of finished products such as dyed yarn, knitted fabrics and fabrics to foreign countries, active production of modern innovative technologies and design, production of finished textile products. An in -depth study of the experience of foreign companies, such a s German y, i n the development of Uzbekistan’s textile industry in the world economy, the development of the textile industry and technologies, and the creation of exemplary structures for our textile enterprises. The production enterprises of the textile industry of Uzbekistan are equi pped with a high-tech large industrial complex that produces cotton fiber, cotton fiber, socks, knitwear, sewing, not only domestic, but also foreign markets. Taking this into consideration, the country consistently implements practical measures to ensure the further development of the industry. In particular, in accordance with the Decree of the President of the Republic of Uzbekistan dated, December 21, 2016 No. 2687, the program of measures for the further development of the textile and clothing and knitting industries for 2017-2019 was approved. Today, the country has formed a textile network with a high production potential, numbering about 7000 enterprises. A production capacity of 1.4 million tons of cotton fiber has been created, about 60% of which is used to meet the needs of local textile enterprises.
The Decree of the President of the Republic of Uzbekistan “On Measures to Accelerate the Development of the Textile and Clothing and Knitted Industries” identified a number of priority measures t o address existing problems, as well as to expand the production of high-quality textile products and to promote the world market. Gave:
– Increase in the share of the textile industry in the economy, increase in the volume and quality of textiles produced in the country;
– A radical revision of the management system of the textile industry;
– Further improvement of the system of standardization and certification in the textile industry;
– Wide introduction of advanced information and communication technologies into the network;
– Implementation of a cluster model for the development of the textile industry;
– A radical revision of the management system of the textile industry;
– Further improvement of the system of standardization and certification in the textile industry;
– Wide introduction of advanced information and communication technologies into the network;
– Implementation of a cluster model for the development of the textile industry;
– ensuring a balanced distribution of raw materials and location of established enterprises in close relationship with the development of logistics and engineering infrastructure;
– Wide introduction of advanced innovative technologies, know how, developments in the production process, localization of production of modern models and accessories;
– Improvement of the system of training, retraining and advanced training of the textile industry.
It should be noted that this Decree is an important step in the practical implementation of the Concept of Administrative Reforms in the Republic of Uzbekistan, approved by Presidential Decree No. PP-5185 of September 8, 2017,which provides for further reduction of administrative influence on economic sectors and expansion of market management mechanisms. In addition, the head of state supported the offer of the textile industry enterprises, the shareholder s’ meeting of “Uzbekengilsanoat” and a number of agencies for the establishment of the “Uzto’kimaliksanoat” Association. At the same time, “Uzbekengilsanoat”, including the regulatory and economic functions of the state, will be eliminated. The lack of management of the sector management system to meet modern trends in the development of the textile industry and its inability to support manufacturers required this solution. For example: JS C “Uzbekengilsanoat” includes 436 enterprises, accounting for only 6% of the total. The activity of this community is mainly focused on the collection of statistical data, organization of various meetings, organization of exhibitions, its organizational form also does not correspond to the legal status of the joint-stock company. The experience of foreign countries has shown that one of the most effective forms of development of the textile industry is a cluster organization. This model provides for the creation of a single production cycle, including the production of raw cotton, the initial processing, the sub sequent processing of the product in granaries and the production of finished textile products with high added value. It should be noted that the low efficiency of product testing laboratories, as well as the lack of international accreditation in most of them, hinder the access of domestic textile manufacturers to external markets. To solve these problems, it is planned to develop a complex of standardization and certification systems in the textile industry, including the introduction of international standards. In 2017-2021 years. The strategy of actions on five development priorities of the Republic of Uzbekistan was adopted.
– The Strategy for Action focuses on the development and liberalization of the economy; – maintaining high growth rates of gross domestic product by maintaining macroeconomic balance and deepening structural and institutional changes based on medium-term programs;
– The development of international economic cooperation, including the expansion of relations with leading international and foreign financial institutions, the continuation of a carefully thought out foreign debt policy and the effective use of foreign investments and credits; as well as their own goals.
The prospect s for the development of Uzbekistan’s textile industry in the world economy, the mutually beneficial cooperation of developed countries, the experience of a number of economic transformations in them, and the wide spread use of innovative technologies are, of course, of great interest for Uzbekistan, which seeks to adopt economic modernization in the modern textile industry as an active participant in the international division of labor. Thus, Uzbekistan became a member of powerful groups in the economic cooperation of a number of international organizations. It is very interesting to analyze the state and prospects for expanding cooperation between developed countries and Uzbekistan.
