Challenges Facing Uzbekistan’s Textile Industry

On April 16, President Shavkat Mirziyoyev chaired a government meeting on increasing exports and investments in Uzbekistan’s textile industry which currently comprises over 6,000 enterprises and has a workforce of 570,000. Due to investments and new technologies, productivity has increased 4.2-fold over the past seven years. Last year, the manufacture of textiles, clothing and knitwear was valued at $8.2 billion and exports amounted to $3.1 billion. However, the share of products with high added value in the export of finished goods remains low. Almost 80% of all exports are destined for traditional markets, while exports to Europe fall below expectations. This is largely because only 175 Uzbek enterprises are equipped with international certifications required for export to developed countries. According to an analysis by the Boston Consulting Group of Uzbekistan’s raw materials, the country has the potential to provide products worth at least $15 billion and create 500,000 new jobs. The cost of one kilogram of yarn is 28% cheaper than the world average giving Uzbekistan a major competitive advantage but access to raw materials remains a key challenge faced by domestic textile enterprises. Whilst the country has the capacity to process 1.3 million tons of cotton fibre, it currently produces about 1 million tons due to the high costs of cultivation. Reflecting on the situation, President Mirziyoyev emphasized the pressing need for Uzbekistan’s textile industry to engage in the complete processing of existing raw materials to create high added value and redress the balance by switching from exporting to traditional cheap markets to more lucrative alternatives. In addition to increasing the number of international export certificates to producers, the meeting highlighted the importance of extensive advertising campaigns in European countries and forging new partnerships with international textile and garment brands.