Cotton and Textile Fair Showcases Uzbekistan Investment Opportunities

On the 17th October 2012 at the Uzexpocentre in Tashkent, the eighth International Uzbek Cotton and Textile Fair began. National and international companies involved in the cotton business arrived for the two-day fair. Participants at the event have had the opportunity to sign contracts for Uzbek cotton and sample many different Uzbek cotton products such as cotton yarn, knitted items and silk garments.

The point of the fair is to expand and diversify¬† metropolis-clothing Uzbekistan’s cotton export destinations. As one of the leading cotton producers in Central Asia, as well as the world, Uzbekistan is looking to tap into some emerging markets to continue expanding this industry, as well as its entire economy.

There are a number of opportunities for investments in Uzbekistan, but the International Uzbek Cotton and Textile Fair showcased the great potential this one product has, and foreign investors were eager to be a part of this growing industry.

Officials from the Uzbek government announced that domestic cotton consumption would increase up to 70 per cent within the next three years. This industry is one that has a tendency to experience constant growth. Uzbek light industry companies commissioned forty-three industrial companies worth US$387 million.

In 2012 alone, 17 new textile enterprises were established. Foreign investment in Uzbekistan’s textile industry is worth about US$2 billion, and according to government officials, it plans to increase the volume of textile products, including yarn, fabrics, and apparel, by 20 per cent and exports by 10 per cent annually. If these predictions come to fruition, the number of investment opportunities will be increasing dramatically in the near future.

Though many of the speeches at the fair expressed the increasing figures for cotton production in Uzbekistan, many government officials spent time discussing on another aspect of Uzbek cotton, quality. The cotton policy in Uzbekistan is aimed at maintaining stable production and improving the quality of the cotton produced.

In the last two decades, the Uzbek Research Institute of Cotton Breeding developed 162 new varieties of cotton. 45 of those new varieties were recommended for planting in various regions around the country. Uzbekistan has also made technological improvements in the existing cotton gins. Between 2007 and 2012, 41 cotton gins were fully modernised and reconstructed. Uzbekistan plans to keep improving the cotton produced as well as how it is produced currently well into the future.

Uzbekistan’s economy is much more than cotton however. Mining is extremely important to the national economy, as Uzbekistan is the seventh largest gold producer in the world and is estimated to make up 20 per cent of total exports. Its abundance of natural gas also plays a major role in its economy. However, the cotton and textile industry is still the fundamental aspect of the economy in Uzbekistan. The fair held in Tashkent demonstrated just how true this is. Uzbekistan is looking to continue improvement of the industry in all aspects, and this means the door is wide open for investors to get a piece of the incredible dish Uzbekistan is laying out for everyone.

Paul Henderson is an experienced frontier markets investor and has previously lived and worked in Central Asia for several years. He is currently an Associate with Sturgeon Capital, the leading investment management specialist focused on Central Asian markets.


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