Conversation with Chairman of Uzbekistan Textile and Garment Industry
Undoubtedly, the textile industry is one of the most important sectors of Uzbekistan’s economy. Its capabilities guarantee a leading number of job-places. And this industry demonstrates the most active development. The President of the country has set a goal to bring the export of textile products to 5 billion US dollars, and the level of utilization of the capacities of garment and knitwear industries is planned to increase from the current 65 to 81 percent.
Mr Ilhom Utkurovich Khaydarov, Chairman of the Uztextileprom Association, on a conversation, answered different questions on the development of Uzbekistan Textile and Garment industry.
– Uzbek President Mirziyoyev has signed a Decree PD-155 dated September, 2, on reforming the textile and knitwear industry and expanding its export potential. What goals have already been achieved, what will be undertaken in the near future?
– This Presidential Decree is aimed at the development of the textile industry, its signing once again proves that the state provides large-scale support to the textile industry, turning it into one of the most dynamically developing sectors of the republic, and it will contribute to turn Uzbekistan into a regional textile hub and by 2027 increase annual exports to 10 billion US Dollars.
Moreover, out of the $ 200 million provided for the continuous provision of working capital to enterprises exporting fabric, knitted fabric and finished sewing and knitwear products, an agreement was reached to provide 80 enterprises in the industry, of which more than 20 enterprises have already been approved by banks for the allocation of 30 million USD. The rest are at the stage of approval or consideration.
Furthermore, as part of the implementation of projects in the production of upholstery, carpet, painting and finishing, ready-made garments and knitwear with the allocation of credit lines in the amount of 100 million USD, 14 projects worth 114 million USD have already been developed, for which more than 10 enterprises have applied.
Also, representative offices of Control Union, OEKO TEX, Better Cotton and Better Work have already been launched, according to the clause on the organization of three representative offices of foreign companies providing international certificates for the products of local enterprises. In particular, the Centrastex Trading House in Nuremberg and the Sustainable Cotton Association in Stuttgart, as well as the Trading House in Barcelona, Spain, are opened in Germany. More than 60 trading houses of industry enterprises have been established in 10 countries of the world – in Germany, Poland, USA, Russia, Lithuania and other countries. At the same time, the state encourages the creation of trading houses and warehouses through 100% coverage of the costs of enterprises in the industry for their rent. The state also reimburses up to 70% of transportation costs to exporters for the supply of fabrics, knitted fabrics and finished garments and knitwear to Europe, Turkey, Egypt, Morocco, North and South America, the Arab Republic, Korea, Japan.
– We are the only country in the world that has managed to completely eradicate forced labor in a very short time and prevent the subsequent growth of this phenomenon. How is the industry developing after the abolition of the “cotton boycott”?
– The recognition of Uzbekistan at the beginning of 2022 by international organizations ILO, the Cotton Campaign, the Alliance of Human Rights Non-Governmental Groups, trade unions and business associations as a country free from forced and child labor was not achieved in an easy way. To this end, during 2019–2021, numerous negotiations were held and work was done in accordance with the approved Roadmap. According to Bennett Freeman, co-founder of the Cotton Campaign, Uzbekistan has implemented the historic reforms needed to end forced labor and transform the country’s cotton sector.
The abolition of the «cotton boycott», as well as largescale reforms in the textile sector, about which a lot has been said, led primarily to an increase in exports of textile products several times – up to3.2 billion USD. In 2022, sustainability, traceability and transparency in the supply chain have been achieved. Moreover, the lifting of the boycott gave a new impetus to step up efforts to attract international brands and retailers in Uzbekistan. Negotiations, for further cooperation, are currently underway with many of them.
A significant event for the industry in Uzbekistan is the launch of the Better Cotton and Better Work programs, whose activities in the country testify to the sustainability of the textile and clothing industry, its compliance with international requirements and standards, and the quality of products. The Association became a member of the American Apparel and Footwear Association, a member of the United Nations Forum on Sustainable Development Standards (UNFSS), and Uzbekistan was represented for the first time at the Global Fashion Summit in Stockholm.
The most important achievement is the creation of an attractive environment for investors in the country as a result of textile reforms and the subsequent abolition of the «cotton boycott». So, over the past 2017-2022, due to the implementation of about 430 new projects worth 3.6 billion USD, in total more than 95 thousand new jobs were created. To date, about 600 thousand people are involved in the industry.
– The uniqueness of the industry also lies in the fact that the capacity for processing cotton fiber within the country has been increased to 100%, while other «textile» countries can only dream about that. Could you give us some thoughts on this?
– Being a cotton-producing country in the past, the republic was faced with the acute issue of developing the textile industry by increasing the production of products with high added value. In this regard, large-scale reforms were carried out in the textile industry, which ensured the possibility of complete processing of cotton fiber and the introduction of our cotton to the world market in the form of a finished product, not raw materials.
Today, thanks to the most modern fleet of textile equipment, the industry has the potential to process 1.3 million tons of cotton fiber, which indicates that we have turned from an exporter into an importer of cotton. Furthermore, the republic is pursuing a policy of diversification of production – expanding the types of fibers produced. Here, as an example, we can cite the recent launch of a project for the production of acrylic yarn in Bukhara at the Siyovush Textile enterprise, the capacity of which can meet the needs of local manufacturers of finished products from such kind of fiber. In the future, it is planned to expand its production, and we will have the opportunity to export acrylic yarn to other countries.
These kind of production facilities make it possible to turn Uzbekistan into a regional textile hub.
– Do cotton and textile clusters work as efficiently as expected? Could you list the problems that exist in practice?
– The transition to a cluster system has created the basis for fundamental changes in agriculture and the textile industry in a short period of time. In particular, only the processing of fiber in cotton growing increased by 2.5 times and reached 100%, the production of yarn and finished products also increased significantly, and the volume of exports is growing accordingly. Hundreds of thousands of jobs have been created. Stability and transparency of the supply chain in the global market has been achieved. More than 3.4 million tons of raw cotton are grown in the clusters, which is more than 90% of the country’s total cotton harvest.
Nowadays, the experience of the cluster cotton-textile system of Uzbekistan is already widely known outside the country. Many countries, such as Azerbaijan, Kyrgyzstan, in implementing such a system at home, and some have already started working together with our clusters. Thus, Global Textile in Kazakhstan implements the Global Textile Turkestan project and fruitfully works with cotton farmers from Maktaaral district of Turkestan region. In Tajikistan, a project from Zelal Textile is functioning, in Kyrgyzstan – from Art Soft.
It is definitely worth noting that the most advanced technologies have been introduced in the clusters: watersaving systems, a method of breeding useful insects to protect the crop, the use of satellite technologies. The latest equipment from the world’s leading companies has also been installed, modern laboratories are functioning, standardization and certification projects are being widely implemented. Clusters act as a kind of guarantor of attracting foreign investment and international brands to the republic.
Like everything new, the cluster system also has to stand the test of time. Along with the achievements, there are, of course, problems that mainly relate to the allocation of land for production, infrastructure, electricity, the need for professional specialists and workers. But the state and our Association are actively working to fulfill these tasks. In particular, to address issues with the provision of electricity, the state allocates subsidies and benefits for the installation of solar panels and collectors at the enterprise. In the direction of training appropriate personnel for the industry, the dual education system is being integrated into the education system of the republic with the assistance of GIZ.
– As it is known that Uztextileprom conducts very intensive international activities – this is a lot of meetings with foreign companies and partners, the organization of bilateral visits, cooperation with international organizations, participation in forums and exhibitions and other events. How is Uzbekistan perceived at the world level now?
– Large-scale reforms in the industry have raised the country to the level of an equal international player. So, this year, Milan, Italy, hosted one of the largest exhibitions in the world – the International Exhibition of Textile Technologies (ITMA 2023), which is held every four years. The participation of the President of the Republic of Uzbekistan Shavkat Mirziyoyev at it showed how Uzbekistan has become recognizable in the global textile market, has occupied an important niche as a reliable supplier, and how the attitude of world manufacturers has improved towards it. Major reforms in the industry have raised the country to the level of an equal international player. In addition, the Uztekstilprom Association and more than 70 enterprises took part in 20 international exhibitions and business forums over the past six months, including the prestigious Heimtextil exhibitions in Frankfurt, Kingpins Show Amsterdam in Amsterdam, Texworld USA in New York, Global Fashion Summit in Copenhagen, at the 70th session of the UNECE «Green Economy» in Geneva, which confirms the recognition of Uzbekistan as an international participant. In addition, the leadership of the Association participated in 11 state visits to countries such as France, Singapore, China, Italy, Iran, Kazakhstan, Saudi Arabia, Germany, Russia, Egypt, Korea, as a result of which an agreement was reached on the implementation of 31 investment projects totaling US$ 507.4 million.
– Recently, we have been hearing news from everywhere about the threat of a shortage of the country’s water resources. How is this problem being solved for the cotton industry today?
– The problem of water has become not regional, but global. Climate change has also affected the textile industry, which is heavily dependent on the cotton harvest. A number of measures are known to mitigate the negative effects of water scarcity. Among them are concreting irrigation networks and increasing their efficiency, laser leveling of land, achieving efficient use of water, full digitalization of the industry, expanding the introduction of water-saving technologies, improving the culture of irrigation. The textile and garment and knitwear industry of Uzbekistan has already begun to introduce drip irrigation technologies in the fields (their area is more than 1 million hectares), install water treatment plants, water collectors at enterprises that are heated by solar energy, and also uses technologies that save water in the production and painting of finished products. Khantex, Global Textile, Sardoba Universal Klaster, Mergantex, Agrocluster, Indorama and many other companies are already using water-saving technologies in their activities.
– The geography of exports of local products is expanding. Which regions have recently become our new partners?
– Today, the coverage of countries where Uzbek textiles are exported has exceeded 70 states, the expansion of geography has occurred due to an increase in importing countries in Europe, Southeast Asia, Africa and Latin America. This should also include the United States, whose market is gradually being conquered by Uzbek producers. In this regard, new logistics routes are being worked out, new business contacts and trade relations are being established.
It may safely be said that most of the products manufactured in our factories meet the requirements and standards of European and American manufacturers, brands and retailers. Several global manufacturers are moving their production to Uzbekistan: German Teamdress and Langheinrich, Italian Cottonella and Armonie Intime are launching the production of finished products here.
– How do you see the textile industry in the future?
– For ourselves, we have outlined several priority areas of development, in accordance with which we will carry on to act.
First of all, it is a matter of achieving economic and financial stability by providing enterprises with raw materials, increasing the level of utilization of production capacities, increasing production volumes, including within the framework of the program of localization, expansion and diversification of the range of products.
Secondly, increasing the export potential and strengthening the competitiveness of textile products by further deepening structural reforms, as well as meeting the needs of the domestic consumer market.
Another important area is the implementation of an active investment policy for the implementation of strategically important projects, including an increase in direct and foreign investment, as well as the introduction of mechanisms for the development of a free market, ensuring healthy competition, and creating favorable conditions for organizing entrepreneurial activity. The implementation of the above measures will lead to an increase in employment and the creation of new jobs. Here, through the implementation of this set of measures, social issues, training and retraining of workers, managers and managerial personnel will be resolved, that is, a radical improvement in the system of training, retraining and advanced training of personnel for the textile industry.
The next step is to ensure the economic efficiency of production through environmental aspects, such as the introduction of green economy technologies, the principles of a circular economy in all areas of production, increasing energy efficiency and reducing harmful emissions, resource conservation and improving production culture. Among them is the widespread introduction of advanced innovative and digital technologies into the production process.
We have ambitious plans for the future. We are confident that through the joint efforts of the government, our enterprises and investors, we will be able to achieve our goals. In the future, we see an industry that will not only be economically viable, but also environmentally friendly, socially responsible and technologically advanced. We are ready to work hard and continue to evolve to realize these tasks.
