COOPERATION RESOURCE

This year, the International Industrial Fair and Cooperation Exchange has celebrated anniversary - for the fifth time Uzexpocenter opened the doors of its pavilions, where leading enterprises and companies featured the achievements of country’s Industry since independence. The popularity of these events is seen in steady increase of the exhibitors, their number has tripled for the last two years. If in 2009 the fair was attended by 386 enterprises and companies, the last year there participated over 700 of them. In 2011, about 1,030 enterprises and companies exhibited more than 6,500 different products, including 420 new samples mastered in 2011. Also, over 800 representatives of foreign firms and companies, interested in expanding cooperation with Uzbek companies attended the fair.

It has become a tradition to hold the fair and cooperation exchange in two phases: at first were conducted regional and sector exhibitions and fairs, then - The International Industrial Fair and Cooperation Exchange. During the first phase small and large businesses had the opportunity not only to present their products, but also to get acquainted with technical innovations and novelties in production, to learn achievements in co-operated sectors and enterprises, to determine the demand on manufactured materials and components for the near future. At the end of the phase of regional events, the participants signed the treaties of intentions for the development of new industrial products. During the second stage, these contracts have transformed into supply contracts, becoming manufacturers’ portfolio of orders for the next year. Between these two stages enterprises work through the manufacturing of new types of outputs, produce experimental batches, conform to the customers, and refine the products to required level of the quality specifications.

According to experts, the fair stimulates further development of sustainable long-term cooperative relationships, expands the number of participants, and increases the number of localized projects of producing finished goods and components, based on local raw materials and industrial cooperation. The event aims to actively engage into industrial cooperation the ventures from small businesses and private entrepreneurships, as well as to raise - for at least 20%, as compared with last year, - the portfolio of orders for the delivery of products and export contracts.

This year, the fair was filled with new content in connection with the fact that 2011 has been declared in Uzbekistan as The Year of small business and private entrepreneurship. The exhibition has become a good platform for establishing strong cooperative ties between small businesses and large industrial enterprises. This year fair’s novelty was the presentation of industrial potential of the regions of Uzbekistan. According to analysts, this will allow regional companies to expand cooperative ties for the development of new products, and to make contracts for the supply or purchase of required raw materials, components and finished products of manufacturing purposes. Also at the forum were held 62 presentations of industries and enterprises, where their technical and technological capabilities were shown. According to organizers, the presentations were attended by more than 5.2 thousand people.

Last year, the volume of signed contracts was $2.6 trillion soums. According to provisional data, at the end of this year’s fair, contracts totaling for over $3.5 trillion. soums were signed. Moreover, contracts in foreign currencies were signed also. Indeed, as representatives of foreign firms and companies actively took part in the Fair, agreements on exporting of domestic products were reached. This signed contracts worth more than $3.9 billion. In tote, the fair and the exchange were attended by over 70 thousand people.

LOCALIZING THE IDEAS AND TECHNOLOGIES

Present conditions have shown how world economic situation is rapidly changing, and even dynamically developing economies have to look for internal reserves for additional growth. Taking into account Uzbekistan’s rich natural resources, its production capacities, high-skilled workforce and a favorable investment climate, this reserve was in development by domestic enterprises of new kinds of industrial outputs and components, which previously were imported from abroad, with additional transportation and currency expenditures. The stimulation of this process put the basis for establishing The International Industrial Fair and Cooperation Exchange.

Localization has become the basis for new stage of cooperative ties development. Experts say that the increase in localization of the finished products will contribute to dynamic and sustainable development of Uzbek economy. It will reduce its dependence on external factors, and will expedite the introduction of new, efficient technologies in production processes. In addition, it will allow greater use of local raw materials and manufacturing resources and on this basis to increase production of modern and competitive products. Localization will also lead to more efficient and economical use of monetary resources, and will create new jobs.

Therefore, in August this year the country approved Program of Intensifying Production Localization of Finished Goods, Components and Materials for 2011-2013. Over 930 various projects of product localization are now being implemented under the Program. In addition, companies engaged in these projects have received a number of privileges and preferences. They are exempt until 2014 from customs duties on imported equipment, spare parts and components which are not produced in the country and are used in localized goods’ manufacturing. They are also exempt from profits tax, single tax payment in area of outputs manufactured by project localization. They also not pay property tax for basic production assets used for the production of localized goods.

Capitals freed from these benefits will be directed at: creation of new facilities; expansion, renovation, technical and technological modernization of existing ones; introduction of quality management systems; incentive payments for engineering and technical personnel of the enterprises; funding scientific researches and engineering development; product cost reduction.

Examples of successful development of product localization can be seen in car industry. During a relatively short period of time, the country has created an entire system of enterprises specializing on production of automobile parts for GM Uzbekistan. Over the past five or six years, the number of local suppliers has increased from 20 to 200, while the level of localization of passenger cars has exceeded 60%. Today ongoing projects will bring this figure up to 80%.

The results of country’s socio-economic development over the first 9 months of this year confirm the rightness of the chosen course. During January-September gross domestic product has grown to 8.2%, industrial output – to 7%, and agriculture – to 6.8%. Wide support and encouragement of export-oriented companies, active seeking and developing of new foreign markets, diversification the export structure all this resulted in 21.4% increase of export and in significant positive trade balance. In addition, 828 industrial facilities were put into operation in food, light industry, chemical industry, machinery, building materials and in other industries. Active realization of investment projects provided the growth of investments development to 8% and foreign investments attraction to over $2.3 billion.

The foundation for this was laid in the Program on industry development priorities of the Republic of Uzbekistan in 2011-2015, adopted at the end of last year. It is designed for stable, dynamic and balanced development of Industry in the country, for deepening structural reforms aimed at diversifying key industries and the growth of export potential, further improving of efficiency and competitiveness of sectors, industrial enterprises and complexes on the basis of their modernization, technical and technological renovation of the production. As part of this document until 2015 it is planned to increase the share of Industry in GDP to 28%, the percentage of final finished products in the total industrial output up 61.2%. It is planned to use within Industry $25.6 billion, and to increase the share of manufactured goods inside total export to 71.8%.

Another step towards the modernization of production has become the Program of priority measures to increase production and development of new types of competitive products. This document was elaborated by the Ministry of Economy, Ministry of Finance, Ministry of Foreign Economic Relations Investments and Trade of Uzbekistan together with business associations and enterprises.

The program plans to realize in Uzbekistan in the next few years 50 projects aimed at expanding the production of competitive products on the basis of existing enterprises. Total cost of the projects is $658 million, where $176 million – are enterprises’ own funds, $164 million – capital of the Fund for Reconstruction and Development of Uzbekistan, $210 million - commercial banks’ loans, $108 million - foreign investments and loans.

In addition, the document approves the list of 77 investment projects on production of import-substituting deliverables, materials and supplies totaling $787.6 million.  It should be noted that the Program also approves 101 investment projects with accelerated implementation, that should be realized through shortening the preparation and implementation of construction and commissioning works.

Our company participates in the fair for the fifth time. It brought to the company substantial economic effect, contributed to saving of foreign exchange, created new jobs after running additional production and processing lines. In the first phase, the units of Uzbekneftgaz have signed 33 contracts for the purchase, by the end of this year, import-substituting products for more than 5 billion soums. Following the second phase we plan to sign more than 240 contracts on amount of 370.9 billion soums for the next year.

Work on import substitution annually yields in significant results. The volume of imported technical-material facilities and components has reduced. Over the past five years the number of projects of localization program within the industry has increased from 19 to 60 with the volume of production at 130.7 billion soums. Rate of growth reached 461.8%. In 2012 we plan to produce localized products for 170 billion soums through 65 projects.

I note that the fair extend the range of business contacts with domestic producers. Thus, since 2010 we have launched several joint projects to produce import-substituting products in FIEZ Navoi.

Association’s companies transport passengers in 1659 buses, 120 trams, 203 vans, 188 passenger taxi and 212 subway cars. Every day we transport over 1.5 million people. Therefore, our main objectives are to provide high-level service and to secure traffic on the routes, according to international standards. Of course, this can not be achieved without upgraded vehicle fleet, and without creating necessary conditions for its operation. Thus, at Toshshahartranskhizmat was created service center for Mercedes-Benz, which is the only center of this kind in the region. We repair the busses with special high-tech equipment from German Evo Bus GmbH. I note that the center provides servicing for more than 350 passenger buses Mercedes-Benz monthly.

The production of many parts used for repair operations is localized in Uzbekistan. It allows us to purchase them at a lower price while quality remains high. For example, modern equipment used at Association’s enterprises enables to produce a wide range of wind and side windows for all types of domestic and imported cars, as well as for railway passenger transport.

As a result of modernization, the joint venture Uzelektroapparat-Electroshield has become one of the country’s leading manufacturers of low voltage, medium voltage and high-voltage equipment. I am confident that during industrial fair we will manage to conclude a large number of new contracts, to attract new partners and investors and to explore new equipments for further modernization of production.

Our company specialized on a manufacturing of a wide range of electrical equipment is one of the leading companies on Central Asia markets. Over the past year we have continued increase of production and sales. According to our estimates, in 2011 they will rise to an average of more than 20%. Our export has drastically increased from $4 million in 2010 to $9 million expected by the end of this year.

The annual production growth to 25-30% was achieved through continuous process of improvement and optimization of the technological processes, the introduction of modern methods of production control. Ultimately, all these innovations and improvements have their specific cost parameters, expressed in investments in mainline production. And in our case, company’s founder and investor is focusing not only on additional new investments, but also on reinvestment of his profits.

In today's market conditions, any economy in order to be successful must be energy efficient. Our project is aimed to reduce energy consumption and greenhouse gases related emissions by public buildings, particularly in health and education facilities, through improvement of building construction norms and standards. Through demonstrating integrated approaches to building design and growing potential of local architects and experts in the field of design, construction and operation of buildings. Our experts have already selected 2 rural medical centers and 4 schools from five regions of Uzbekistan, which will be reconstructed for the introduction and demonstration as modern technological solutions that enhance energy efficiency in public buildings. In addition, together with the Tashkent State Technical University and the Tashkent Institute of Architecture and Construction we work on the development of new educational standards and training programs on energy efficiency, which will serve as the basis for training of the specialists. The total budget of the project is $13.3 million.

Our company is the firstborn iron-and-steel industry of Central Asia. Uzmetkombinat is the oldest enterprise in Uzbekistan which produces section iron rolling for construction industry, grinding balls for mining industry, strips from copper and its alloys for the automobile and electrical industries, steel enamel wares for public consumption. The plant’s new quality management system was implemented and certified. The system successfully operates in accordance with the requirements of ISO 9001, which ensures sustainable development and sustainable positions both on domestic and international markets.

We pay attention to modernization and technological upgrade of the production line. This year completes the implementation of large-scale project of replacement of the obsolete unit K-5 №2 KKC on modern air separation plant. Its total cost is $33 billion soums. Not less important is the project of organizing the production of copper and brass foil. In order to maximize production capacity and enable production of export-oriented products, it was decided to acquire a strip slitting unit and a four-high reversionary cold rolling mill. The realization of this project will allow till the end of 2011 to ensure the production of copper and brass foil and sell annually up to 2000 tons of export-oriented production.

The company was established in 2008. It is specializing on manufacturing of a wide range of apparel products. At the fair we have presented our several models of working clothes, in particular: a working uniform with high comfort; medical clothing with original styles; and promotional clothing. Today, introducing international standards of quality, the industry of Uzbekistan has very dynamic growth. One of the standards is the safety of the employee, which largely depends on what type of clothing he wears. In modern terms, each manufacturer must care not only about the quality of the products, but also about creating necessary conditions for its production, he must abide all rules of technical safety and personnel health protection.

Fair is a good chance to discuss all issues regarding staff health protection with enterprises, research institutes and manufacturers of various protection means. Here we can raise difficult questions concerning the safe living. We can try to find answers, gain new solutions, share experiences and broaden our horizons. The proposals of our partners and industry enterprises, who use different types of working clothing, help us to identify trends, areas for further development and to produce more advanced protection clothing.

The event is attended by over 30 enterprises of JSC Uzqurilishmateriallari, 23 of them are representatives of small business and entrepreneurship. One of the main goals of this event is to create favorable environment for small private business; in its aspiration to production efficiency and localization. Today, a lot can be successfully produced at domestic plants, not imported from abroad.

Therefore, our company has been implementing an ambitious program on modernizing the industry, and development of new products. Particularly, it provides for the establishment of new facilities for production of cement, gypsum, dry mix, drywall, glass and other products. In general, the measures taken in recent years for the reconstruction and upgrading of existing facilities, along with rational distribution of funds have resulted in annual growth of the production at 10-12%.

At the fair we plan to conclude 27 contracts for the supply of goods, raw materials, components and services for 2012 totaling $51.4 billion soums. About 45% of all deals will be signed with small businesses and private entrepreneurships.