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Home / Business and Innovation / "Uzbekengilsanoat" JSC is liquidated, th...

"Uzbekengilsanoat" JSC is liquidated, the Uzlegprom Association is created

President of Uzbekistan Shavkat Mirziyoyev signed a decree "On Measures for the Accelerated Development of the Textile and Sewing-Knitting Industries".

The Decree is the most important step in the practical implementation of the Concept of Administrative Reform in the Republic of Uzbekistan, approved by Presidential Decree No. UP-5185 of September 8, 2017, which provides for further reduction of administrative influence, expansion of market mechanisms for managing sectors of the economy.

In particular, the Decree approved the Roadmap for the Accelerated Development of the Textile and Sewing-Knitting Industries in the Republic of Uzbekistan, which contains more than 20 measures to improve the system of management and training of personnel, modernization of production, technological process and development of textile industry infrastructure, enhancement of foreign economic activity, implementation of international standards in the textile industry.

In order to develop a healthy competitive environment and introduce market mechanisms in the organization of production of raw cotton, the decree provides for an experiment in which it is planned to introduce for the first time a system for ordering raw cotton directly from farms and other agricultural producers by domestic textile enterprises.

Now domestic textile enterprises have been forced to purchase cotton fiber from a monopoly supplier - Uzpakhtasanoatexport HC - at export prices. This procedure reduced the profitability of production and the competitiveness of textile products.

In accordance with the experiment initiated by the President of the Republic of Uzbekistan, the textile industry enterprises will finance the main costs of farms for growing raw cotton by advancing at least 60 percent of the value of the contract. At the same time raw cotton, supplied to enterprises, will be used exclusively for further deep processing and production of finished competitive products.
In addition, in his Decree, the Head of State supported the proposal of the textile industry enterprises, the shareholders' meeting of "Uzbekengilsanoat" JSC and a number of departments on the establishment of the Uztekstilprom Association. At the same time "Uzbekengilsanoat" JSC, combining state regulatory and economic functions, is liquidated.

The Uztekstilprom Association is assigned a wide range of tasks to ensure sustainable development of the textile industry of the republic.
The adoption of this decision is due to the fact that the industry management system does not meet the current trends in the development of the textile industry, is unable to support manufacturers. For example, "Uzbekengilsanoat" JSC includes 436 enterprises, which is only 6 percent of their total number. The activity of this society basically comes down to collecting statistics, holding various meetings, organizing exhibitions. Its organizational form also does not correspond to the legal status of the joint-stock company.

As the experience of foreign countries shows, one of the most effective forms of development of the textile industry is the creation of clusters. This model implies the organization of a single production cycle, which includes the cultivation of raw cotton, primary processing, further processing at cotton ginning enterprises and the production of final textile products with high added value.

Proceeding from this, the special Working Commission was entrusted to develop a draft Concept of development for the medium-term perspective of cotton-textile clusters, taking into account the results of the organization of similar clusters in the Bukhara and Navoi regions.
Along with this Decree, measures are envisaged to support enterprises of the textile industry, including the provision of privileges for payment of customs payments.

It should be emphasized that the inefficiency of laboratories for testing products, the lack of international accreditation for most of them, is hampered by the domestic producers of textile products entering foreign markets and increasing their export potential. To solve this problem, it is planned to develop a set of measures to improve the system of standardization and certification in the textile industry, including the implementation of international standards.
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