Mehdi Mahbub
Uzbekistan, A country with 448,978 square kilometers area and around 33 million population, is the center of central Asia. The country which has a very colorful rich culture and heritage, also righteously boast for its trading history since it was one of the most important business hubs of the great silk route which connected China with Europe and the Middle East. The region has a long track record of producing world class cotton, silk, and wool. Currently, about 7,000 various types of enterprises are involved in textile related industries in Uzbekistan. 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 companies. 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. Uzbek textile products are exported to more than 55 countries. The main export markets are the CIS countries, primarily Russia, as well as the countries of European Union, Latin America, Korea, China, Bangladesh, India, Singapore, Iran, Israel, the United States and others. In 2018, new markets were developed – Pakistan, Georgia, Croatia, Nigeria and a number of other countries. Russia and the CIS countries are the largest importers of Uzbek textile enterprises. They account for more than 51% of all deliveries, 21% are exported to South Asia, over 12% to Europe, 8% to the Middle East and Africa. It is estimated that the export of textile products in 2018 was US$ 1.6 billion which has been experiencing steady growth.
Upon assuming power in 2016, President Shavkat Mirziyoyev began putting in place economic, financial and foreign policy reforms in Uzbekistan. Within a year, world financial and monetary agencies have upgraded sentiments on Uzbekistan. According to the World Bank estimates, its annual GDP growth surpassed 6%. The World Bank has praised Uzbekistan’s rise in Doing Business rankings. For many years, Uzbekistan Textile Industry has suffered for the embargo on its products due to alleged forced labor. Many international brands have stopped using Uzbek cotton. Thanks to successful dialogue between Uzbek government and International Labor Organization as well as other stakeholders, the issue has been resolved and Uzbekistan has started to get its benefits. Foreign Direct Investment (FDI) has been growing in the country due to policy reforms and government initiatives. Foreign investments in the textile industry of Uzbekistan for the last years amounted to $3.1 billion.
Over 80% of the foreign investments are coming to South Korea, Turkey, India, Switzerland, Singapore, Britain, and Germany. Uzbekistan is the sixth largest cotton producer in the world. Its raw cotton exports of around US$ 300 million, accounted for 28% of the country’s total textile exports. Cotton yarn exports at US$ 500 million accounted for 44% of total textile exports. Total textile exports from Uzbekistan are to the tune of $ 1.11 billion. The Uzbek government has announced plans to reduce the export of raw cotton and increase the processing in the domestic market as local value addition. Presently more than 150 textile and garment manufacturing facilities are active in Uzbekistan, of which 50 with 100% foreign capital. Textile and garment-knitting enterprises account for 4.6% of the country’s GDP. Due to its abundance of easily available raw materials, moderately educated good number of workforce, attractive energy price, proximity to markets of Russia and Eastern Europe/former Soviet Republics, global textile and readymade garment (RMG) players have been showing positive interest on Uzbekistan which is ready to be the next star of world textile and apparel industry. This is indeed time for Uzbekistan!
Mehdi Mahbub is the CEO of Best Sourcing and President of Bangladesh RMG Centre. He is an Advisor to Uztextileprom (Textile Ministry of Uzbekistan) and working to develop business opportunities in Uzbekistan. His bio-site is www.mehdimahbub.com and e-mail address is mehdi.mahbub@bestsourcing.biz
