Discussion on Measures to Promote the Textile Industry

UZA News

On April 16, President Shavkat Mirziyoyev led a meeting to address the topics of increasing exports and investments in the textile industry.

The textile industry is well-represented in all regions of the country and is a major source of employment. Currently, there are over 6,000 enterprises employing 570,000 individuals.

In recent years, the industry has seen significant growth in productivity due to increased investments and the implementation of new technologies. For instance, in the past year, the production value of textile, clothing, and knitwear reached $8.2 billion, which is 4.2 times higher than seven years ago.

Furthermore, in 2023, the industry’s exports amounted to $3.1 billion, with the sector expanding to 83 new markets this year, totaling 83 countries.

However, an analysis of the export structure reveals certain shortcomings. For instance, the export of finished goods lacks high added-value products, with the majority of exports still going to traditional partner markets. Exports to Europe have not met desired expectations.

To increase exports to developed countries or brands, international standards and certifications are essential. However, only 175 enterprises currently meet these requirements, and in 18 districts, the annual production of textile products does not exceed one million dollars.

During the meeting, problematic issues were identified, and the vast potential of the industry was discussed.

An analysis conducted by the Boston Consulting Group shows that Uzbekistan’s raw material base has the potential to produce products worth at least $15 billion and create 500,000 new jobs.

For instance, in Uzbekistan, the cost of one kilogram of yarn is 28% lower than the average world price, providing a significant opportunity for increasing production of finished products and gaining a competitive advantage.

In addition, the industry receives financial support, with $50 million allocated at the beginning of last year for projects in fabric production, dyeing and finishing, and finished garments and knitwear. An additional $100 million is planned to be used after these funds are exhausted.

The President emphasized the importance of utilizing these opportunities wisely to promote regional projects and create jobs.

“The only way forward for this industry is to fully process existing raw materials and create high added-value products, as well as redirect exports from traditional, low-cost markets to new, more lucrative ones,” stated Shavkat Mirziyoyev.

One effective method for increasing production is to establish branches of large enterprises in mahallas (neighborhoods). For example, the Zarafshon Textile factory in Samarkand has opened 11 regional branches, eliminating the need for additional time and resources to meet standards and obtain certifications. Therefore, it is crucial to expand this practice.

One of the most pressing issues for textile enterprises is access to raw materials. While Uzbekistan has the capacity to process 1.3 million tons of cotton fiber, only about 1 million tons are currently being produced. Therefore, reducing the cost of cotton cultivation and increasing field productivity is essential.

The meeting also addressed the activities of cotton-textile clusters and proposed solutions to ensure their stable operation.

More than 100 industry entrepreneurs participated in the video conference, where the President engaged in a dialogue with them.

Entrepreneurs shared their concerns and suggestions, including promoting the construction of textile enterprises, expanding the practice of receiving VAT refunds within one day, simplifying the process of obtaining pre-export loans, providing accessible financial resources, and promoting domestically produced products.

Responsible parties were instructed to thoroughly study these issues and develop practical solutions, and if necessary, propose amendments to legislation.

The Uzbekistan Textile and Garment Industry Association plays a critical role in the comprehensive development of the industry. It was proposed to restructure the association to have an entrepreneur council oversee each aspect of the textile industry. Each region will elect a representative to the council, and association staff will assist clusters and textile enterprises in increasing production, investments, exports, and job creation.

The importance of conducting extensive advertising campaigns in European countries, collaborating with brands, and increasing the number of exporters with international certifications was emphasized.

It was also proposed to establish research and development (R&D) groups in clusters to integrate science with practice.

Information on the issues discussed during the meeting was reported by responsible parties.


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