Country: Uzbekistan

Lonati, the world’s leading manufacturer of socks machinery, has signed a Euro 40 million contract with Uztex, a leader in the production of socks, for the supply of 1,024 machines, including sock finishing lines manufactured by Tecnopea, the Lonati Group’s company specializing in automated machines for ironing and packaging of socks.

Uztex claims to produce 30 per cent of Uzbekistan’s textile production, and with the latest contract signed in Zurich in May, 2016, which the company states is the largest order in the history of Lonati, the equipment included will further increase its output. The delivery of the equipment is scheduled to take place at the end of 2016 and in the beginning of 2017, while the negotiations on the deal have been in motion since the past four years.

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This order is the latest in a series of large orders received by the Italian company from Uzbek, which since 2015 has entered into a number of agreements for the supply of more than 1,000 of the latest generation automatic closed toe socks knitting machines, bringing the numbers to 2,064 – the overall share of total equipment purchased.

Over the course of time, Uztex has grown in terms of production. The company expanded with Uztex Chirchik for the production capacity of 11,000 tonnes of dyed yarns and fabrics per year. Last year, it doubled up the manufacturing capacity of its Shovot facility, which at present produces 8,000 tonnes of combed yarn every year. And this year only, the manufacturer had set up a new plant in Namangan for the production of 7,000 tonnes of towelling material annually.

Uzbekyengilsanoat, Uzbek Light Industry in cooperation with the Ministry of Trade, Industry and Energy of South Korea will set up an Education-research Textile Techno-Park at Tashkent in Uzbekistan. The textile park is being created with an estimated cost of US $ 15 million and will be equipped with weaving, knitting, dyeing equipment.

The project will be financed through the grants of Official Development Aid programme of South Korean Government, which will aid in carrying out the construction, assembly, purchase and installation of technological equipment and training.

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It is expected that the design team of the Textile Techno-Park will work closely with the companies of Uzbekyengilsanoat to develop and introduce new type of products and design works for production. The project will be implemented by the end of 2017. Currently, the Uzbek and Korean sides are working over the feasibility study and developing designs.

Also Read – Large textile complex construction starts in Uzbekistan

The project is aimed at creating international educational and research programmes organizing education of Uzbek specialists with the use of modern ICT technologies, in particular, in the production of products with high added value (ready fabrics, clothes and knitted products) and transfer of technical products, etc.

LT Textile Cooperatief UA, is organizing textile production with the latest technology and energy saving equipment. The textile company has started the construction of the new textile unit which is expected to start production in November 2016 and at least 80 percent of its output will go for export. The project is expected to create about 700 jobs. Government of Uzbekistan approved the investment agreement signed last October between the Uzbek Ministry of Foreign Economic Relations, Investment and Trade and LT Textile Cooperatief UA to provide specific obligations to the foreign investor for the new textile project, and provided 30 hectares of land in Karshi for the new factory.

The Ministry of Foreign Economic Relations, Investments and Trade of Uzbekistan and LT Textile Cooperatief signed an investment agreement in October 2014. The Dutch company will invest at least $55 million in the textile enterprise in 2015-2016 in accordance with this agreement, including $17 million of its own funds, $38 million from foreign banks. The government of Uzbekistan approved an agreement envisaging the organization of the textile production with the capacity of processing 20,000 metric tons of cotton fiber by producing 15,000 metric tons of cotton and mixed yarn per year. It is planned to export 80 percent of the enterprise’s products. The Department of Justice of Uzbekistan’s Kashkadarya province registered the foreign enterprise LT Textile International with US $ 1 million worth authorized capital in late January 2015. A land area of 30 hectares has been allotted for the construction of textile complex, as well as a number of privileges and preferences has been granted: in particular, until 2022, the enterprise is exempt from customs duties on technological equipment, spare parts and accessories, imported within the framework of implementation of this project.

Following Cotton Campaign’s directives to verify whether World Bank’s cotton cultivation projects in Uzbekistan are contributing to child labour, Inspection Panel – World Bank’s internal watchdog is expected to release results of the verification today. In response to a complaint from independent Uzbek groups in 2013, the Inspection Panel found that “as long as Bank financing is supporting in some measure cotton production and there is a residual possibility that there can be child/forced labour on farms receiving project support (since they do not allegedly have a choice of whether to accept child or forced labour), then it is plausible that the [Rural Enterprise Support] Project can contribute to perpetuating the harm of child and forced labour.” Globally, human rights activist opine that World Bank’s proposals fall short in Uzbekistan, where forced labour in the cotton sector is uniquely Government-orchestrated and supported by repressing independent groups.

Uzbekistan’s state-run Uzbeklegprom Joint Stock Company (JSC) has planned a five year project from 2015-2020 to increase domestic processing of cotton fiber for which the company will direct about US $ 1 billion. At a press conference organized by the international exhibition company ITE Uzbekistan prior to opening of the Central Asian International Textile Machinery Exhibition (CAITME 2014) and TextilExpo Uzbekistan, Dilbar Muhamedova, Head-JSC said, “The program provides for an increase in domestic processing of cotton fiber from 44 per cent this year to 70 per cent in 2020, with a corresponding increase in textile export from US $ 800 million to US $ 1.5 billion.” The domestic processing of cotton fiber was increased from 7 per cent in 1991 to 44 per cent in 2014.