OREANDA-NEWS. April 25, 2008. The OSC Bukharateks, Uzbekistan’s second biggest textile company hopes to restore its market positions: the company’s shareholding was successfully sold on tenders and now two investors simultaneously set ambitious tasks of development, reported the Official website www.investuzbekistan.uz.

The Deputy Chairman of the advisory board of the SSC “O'zyengilsanoat” Shamsiddin Sultanov says that Turkish Holding Company Sayilgan intends to purchase part of the enterprise’s shareholding worth nearly USD 12 million.

Within its investment liabilities the Turkish company is to invest USD 141 million in the modernization of Textile Company within six years. In this period, the investor plans to launch in the textile company processing of 32 thousand tons of cotton fibre and production of 26 thousand tons of yarn and 12 million running metres of ready materials and 1,2 million items of ready made garments.

However, a key event for Uzbek textile industry will be launching of the Turkish investor’s main brand and manufacture of 4,5 million running metres of shirt fabric annually.

Now textile companies of Uzbekistan (including the most efficient ones) mainly function in the market of bed-clothes and overalls. It is for historical reasons that Uzbekistan lacks industries for manufacturing clothes fabrics. The majority of textile companies cannot bear to invest in construction of such factories.

“The production of fabric for bed-clothes and overalls is much standardized and focused on greater output volume. While manufacture of fabrics for clothes demands frequent re-equipment, marking of goods and constant renewal of range of products”, believes Sergey Lozinsky, operating partner of Bauman Innovation, consulting company. In addition, the fashion market experiences much harsher competition.

This market is accurately structured: its mass segment is occupied by South-East Asian manufacturers and average and bonus segment belongs to Spanish and Italian companies. Only leaders of the textile market can implement such a labour intensive project. Today Sayilgan is one of the most successful textile industries in its homeland, Turkey and in Asian markets. Its growth rate is 25-30 % a year and its turnover reaches USD 750 million.

Another investor of the Bukharateks, Korea’s Daewoo International has more serious plans to develop production in the Uzbek Company. Buying the 1st spinning-weaving mill, a section of the textile company for USD 5 million, the Korean company plans to fund USD 43 million within five years and launch manufacture of 16 thousand tons of cotton fabric annually.

The new textile assets bought by Daewoo International in Uzbekistan will allow the investor to increase output as well as considerably cut expenses which might be high in textile industry in view of the big capital intensity of the process. We would mention that on November 6, 2006 the Korean company purchased Uzbekistan's “Ferghana textile” LLC worth USD 68 million with additional investment of USD 16 million.

Meanwhile, the development of clothes production, especially shirts and jeans is strategically important for the Uzbek light industry because it is difficult to develop sewing manufacture without it.  The clothes market is a most capacious one: its volume is estimated at USD 1 billion.

The main task of the Uzbek textile industry is to make this great share flow to the Republic.