Investment Guide for Djizak Region

Djizak Province is located in central part of the Republic of Uzbekistan between the rivers Syrdarya and Zarafshan, and borders with the Republic of Kazakhstan and Syrdarya Province in the north, northeast, with the Republic of Tajikistan in the southeast, and with Navoi and Samarkand Provinces in the west and southwest. Area of the province is equal to 21.2 thousand sq. km or 4.8% of Uzbekistan’s territory.

As of January 1, 2008 the province’s population amounted to 1.1 million people (4.1% of the country’s population).

The province includes 12 administrative districts: Arnasay, Bakhmal, Gallyaral, Djizak, Dustlik, Zaamin, Zarbdar, Zafarabad, Mirzachul, Pakhtakor, Farish and Yangiabad; and city of Djizak, which is its administrative center.

By its natural and climatic conditions the province belongs to the sharp continental climatic zone with hot, dry summer and relatively mild winter. Average temperature in January is +1С, +4С, in July - +26С, +28С degrees. Up to 400-500 mm of precipitation falls annually, vegetation period last for 240-260 days, and relative humidity amounts to 78-80%, and during summer – 20-40%.

Djizak Province has an ancient history.

Most ancient settlements on the province’s territory had become famous due to the Greek chroniclers who described the campaign of Alexander of Macedonia to Asia. Particularly, they mentioned the cities of Cyrapol (contemporary Zaamin) and Gazo. Archelogists has not established the exact location of the City of Gazo; however, some sources indicate that the city was situated between Samarkand and Tashkent. According to some researchers, possibly, Gazo means the ancient Djizak. The very word “Djizak” translated from the Soghdian means “fortress”.

What is important, due to waters of the river Sangzar, irrigated farming and workmanship flourished in this area - a place where mountains are replaced by steppes. Such favorable natural and climatic conditions contributed to emergence of ancient cities here.

A trade road linking the East with the West and passing through the Ustrushana had substantially affected the progress of the oasis’ life.

VII - XII centuries had been the favorable period in the province’s history. Agriculture and workmanship drastically developed during this period. International bazaar convened every month in Mirasmand, near to Djizak. Wool fabrics and clothes, silk, jewellery and metal items, Ustrushanian jade were traded here. Historian Ben Khavkal wrote that ore mining and processing were developed in Minc and Mirasmand of Ustrushana.

During the Timurids’ epoch the land of Djizak achieved spectacular prosperity.

However, in XVI - XIX centuries people had to experience many external invasions and plunderings. The Mongols’ invasion had lead to collapse of major fortresses and fortifications. During Sheibanikhan’s rule they were almost completely destroyed. Continuous feuds, invasions by rulers of neigboring states caused substantial damage to economy and cultural life.

Since 1866, after annexation to Russia, Djizak had started being called “uyezd” (district), and after administrative division in 1924 – rayon (district). On December 29, 1973 Djizak became a province in the Uzbek SSR.

ХХ century can called as the period of renewal in the life of Djizak Province. Many new towns and settlements were founded vırgın lands of the Djızak Steppe were developed, many large irrigation and reclamation complexes were built, and modern industrial facilities were established during this period. Public education and culture reached advanced development.

Uzbekistan’s independence in 1991 gave a new impulse to prosperity and welfare of people in the province, great opportunities for establishing direct trade and economic, cultural contacts with foreign states emerged.

According to the outcomes of the year 2007, gross regional product of the province amounted to UZS 782.8 billion or USD 597.6 million, which constitutes 3.8% of Uzbekistan’s GDP. Per capita GRP amounted to UZS 720.8 thousand or USD 550.0 (nominal, excluding purchasing power parity). More than 22 thousand legal entities had been registered in this province.

Total volume of foreign trade turnover of Djizak Province in 2007 amounted to USD 112.5 million (growth of 116.2% against 2006), including export – USD 97.7 million (116.8%) and import – USD 14.7 million (112.8%).

As of January 1, 2008, population of Djizak Province amounted to 1,081.5 thousands people (4.1% of country’s population). Population density in this province is relatively low and forms 49 persons per 1 sq. km. Rural population with share of 69.5% prevails in this province.

Representatives of more than 70 nationalities live on the province’s territory.
As of January 1, 2008 labor resources of the province amounted to 580.4 thousand people or 4.4% of total amount of the country’s labor resources. 312.4 thousand people are employed in various branches of economy, including 35.1% employed in agriculture, 6% - in industry, 13.5% - education and culture, 3% - in transport and communications, and 5.5% - in construction.

Number of workers and employees has been growing year after year due to industrial development and growth in population’s demand in services sector.

Economy of the province is based on agriculture. 300 sunny days a year and a sharp continental climate allow full provision of population with food due to farming agricultural crops in the foothills and steppe zones.

According to the outcomes of the year 2007, share of agriculture in gross regional product amounted to 49%.

Cotton and wheat are the most valuable crops. In addition, vegetables, watermelons and melons, fruits, grape and forage crops are cultivated. More than 200 thousand tons of vegetables and fruits are cultivated here annually.

Sericulture is also developed – the province is among of the leading producers of silk cocoons.
Djizak Province has large farming lands, major factor of agricultural development. 1.3 million ha out of available 2.05 million ha of land are considered farming ones, 0.8 million ha are allocated for pastures, fodder is procured on 12.5 thousand ha, 5.5 thousand ha constitute virgin fallow lands, and 20.2 thousand ha are occupied by perennial groves.
Cattle farming, and, in particular, sheep breeding and poultry keeping are of great importance in agriculture. In addition, goats and livestock are bred in this province. A poultry factory with capacity of 250 thousand hens functions.

Enterprises engaged in production of sausages and dairy processing function in the province’s towns. Business contacts with companies from Germany, China, Greece and Turkey in the sphere of cattle product processing had been established.

Djizak Province possesses sufficient raw materials base for organization of industrial production of construction materials.

There are 20 deposits in Djizak Province, of which 6 deposits are developed and 14 are not developed.
According to the State Committee for Geology data, there are deposits of the following types of raw materials in Djizak Province which are suitable for industrial development:

• wollastonite – at Kaytash mine in Gallyaral Rayon (reserves of 4.1 million tons according to the category А+В+С1);
• mining raw material – barite (associated component in processing of lead-zinc ores, content in ore – 9.1%) at Uchkulach mine in Farish Rayon (reserves of more than 11.9 million tons);
• cement raw material at Gallyaaral, Kutarma, Dunyo-Tepa and Khavast deposits in Gallyaaral, Farish and Yangiabad Rayons (aggregate reserves of more than 196 million tons according to the category А+В+С1);
• facing stone at Malguzar, Aktash, Sharaksay and Kulsuyuk deposits in Bakhmal, Gallyaaral and Farish Rayons (aggregate reserves of 7.3 million cubic m according to the Category А+В+С1);
• gypsum at Timiryazev and Zafarabad deposits in Farish and Zafarabad Rayons (estimated reserves of up to 2.0 million tons according to the Category А+В+С1);
• claydite at Saykhan deposit in Djizak Rayon (reserves of nearly 6.7 million cubic m according to the Category А+В+С1);
• limestone at Djizak and Kutarma deposits in Djizak and Farish rayons (aggregate reserves of more than 5.8 million tons according to the Category А+В+С1).

Industrial potential of the province is represented by more than 200 enterprises, of which nearly 35 enterprises are large ones.

In the province there are production capacities in such branches as chemical, light industry, agricultural processing, food production, engineering and metalworks. The province holds a leading position not only in Uzbekistan, but also in Central Asia in production of alkali batteries, hosiery and knitted garments, flour and mixed fodder.

Large industrial enteprises of the province include: JSC “JIzzakh Plastmassa” (polyethylene film), JV “UzExide” (accumulators for cars and trucks, agricultural machinery), enterprises of the HJSC JSC “JIzzakhpaxtasanoat” (cotton fiber, cottonseeds), enterprise of the JSC “Jizzakhdonmahsulot” (bakery products).

More than 50 most important types of industrial goods, including 34 types of consumer goods are manufactured at industrial enterprises of the province.

In addition, there are 46.2 thousand sq. m of free production infrastructure with all necessary engineering communications (heat and electric power, water) where establishment of new production is possible.

Chemical Industry
The OJSC “Djizak Plastmassa”, one of the largest chemical industry enterprises specialized in plastic mass processing, production of polyethylene pipes, polyethylene film, technical items and consumer goods (flasks, pans and pails) functions in the province.

The JV “LRS Plast” producing polyethylene and polypropylene pipes with diameter of up to 400 mm on modern equipment is also located in this province.

Engineering
The Uzbek-American JV “UzExide” producing accumulators for vehicles and agricultural machinery carries out activity in engineering sphere. Whole accumulator production string, starting from processing of secondary raw materials to finished goods packaging is placed in a single complex. The enterprise is equipped with up-to-date equipment made in the USA, Germany and Switzerland, which allows to ensure the required accuracy of performing the production operations.

Total volume of foreign trade turnover of Djizak Province in 2007 amounted to USD 112.5 million (116.8% against 2006), including export – USD 97.7 million (116.8%) and import – 14.7 million (112.8%).

Major volume of export comprise of carpeting items, fruit and vegetable preserves, polyethylene gas pipes, car accumulators. Major part of import consists of machinery and equipment, chemical products, ferrous and non-ferrous metals.

The province possesses quite developed infrastructure facilities for further implementation of investment projects.

Network of railroads and highways is connected to all major national transport communications. This allows conducting the transportation of export-import cargo in all strategically important directions. Total length of highways is 2,543 km and railroads - 255 km. Internal railroad lines are linked to such large industrial facilities as cotton processing, flour milling, construction enterprises, Uchkulach mine in Farish Rayon, and cotton terminal in Pakhtakor Rayon.

Modern railway terminal “Djizak” and Djizak-2 cargo depot of the SJSRC “Uzbekiston Temir Yullari” are located in Djizak City, administrative center of the province.

166 branches of mail service of the OJSC “Uzbekiston Pochtasi” are functioning in the province.

94 clubs, 1 museum, 2 theaters, 17 music and arts schools and 2 amusement parks function in Djizak Province.

Great attention is paid in the province to sports and physical training. 9 stadiums, 24 sports schools for children and youth, 40 tennis courts, 5 swimming pools function in the province. Total of 2,570 sports facilities function in the province.

Territory of the province is characterized by diversity of natural landscapes, unique, exotic elements of relief and climate. Mountain chain of Turkistan mountain range at the foothills of which lie 3 thousand sq. km. Of virgin lands gives it such uniqueness.

There are unique opportunities in the province for development of ecological tourism, mountain and forest vicinities of Zaamin and Bakhmal with dizzy canyons and strong river currents in the province. National park and reserve function near Zaamin with full preservation of nature.

4 elite hotels: Uzbekistan, N&J, BEK and Me’mor are functioning in the province. The “Sangzor” Complex also renders services for the province’s guests.

Foreign investments in amount exceeding USD 200 million have been attracted to Djizak Province during the years of independence, and total per capita foreign investments amounted to nearly USD 200.

In 2007 foreign direct investments and loans in total amount of USD 5.4 million were attracted in 2007.

National treatment is established in the Republic of Uzbekistan for foreign investments, which provides for creation of the same conditions for foreign investments as for those made for legal and physical entities of Uzbekistan.

Enterprises attracting foreign direct private investments and located in Djizak

Province as well as carrying out their activity in the following branches of economy: production of radio-electronic devices and accessories to computer equipment, light industry, silk industry, building materials industry, industrial production of poultry and eggs, food industry, dairy and meat industry, chemical and pharmaceutical industry are exempted from income (profit) tax, property tax, tax for social infrastructure development and area improvement, single tax for microfirms and small enterprises, as well as compulsory deductions to the Republican Road Fund.

Mentioned tax preferences are provided depending on volume of foreign direct private investments:

• from USD 300 thousand to USD 3 million – for the period of 3 years;
• in excess of USD 3 million to USD 10 million – for the period of 5 years;
• in excess of USD 10 million – for the period of 7 years.

As of January 1, 2008, 42 enterprises with foreign investments, including 33 enterprises currently engaged in production of goods and services had been registered in the province. Major part of these enterprises work in the industrial production sphere and 19 of them produce consumer goods. In addition, two enterprises carry out activity in agriculture, two – in communications, and one – in trade sphere.

Proposed list of investment projects for implementation jointly with foreign investors may be changed from time to time. More updated information on currently proposed projects is provided on the website of the Uzinfoinvest Agency at: www.investuzbekistan.org.

CONSTRUCTION MATERIALS PRODUCTION

1. Construction of New Cement Plant in Zafarabad Rayon with Capacity of 3.0 Million Tons of Cement Annually

I. Information on the Investment Project Originator

Full name

Legal address

Director of enterprise: Fax:

telephone:

e-mail:web-site:

Infrastructure and other conditions:

II. Description of Investment Project

• Goal of Investment Project

• Advantages and Benefits from Investment

• Brief Description of Technological Cycle:

• Proposed Market for the Products

• Provision of Proposed Production with Raw Materials

Investment Needs

• Project cost• Required volume of investments

• Financing form

• Contribution and participation share of attracted investor

Proposed Sources of Financing

Directions of Investment Use

Expected Financial Results of Project Implementation
billion UZS

Project Payback (in months)

Stage of Preparation of the Project
Design Estimates

CONSTRUCTION MATERIALS PRODUCTS

2. Auction Sale of the Jizzakh Marmar, Ltd. Property Complex (Marble Production)

• Legal address - Djizak City, Djizak Province
• Type of activity - marble production
• Capacity - 20 thousand sq. m. annually
• Area of land plot - 15.5 ha
• Area of buildings and facilities - 2.5 ha
• Provision with - production infrastructure - 100 %

labor resources - 100 %

• Equipment - made in Italy
• Terms of sale - complex
• Estimated value - USD 1,910.1 thousand

CONSTRUCTION MATERIALS PRODUCTION

3. Organization of Production of Pressed Abaculus Based on the “Zoyirjon Bobo” PPF
1. Information on the Originator Enterprise:

2. Cost of Fixed Assets:

3. Produced Goods:
Building gypsum, construction limestone, paving tile, slagstone brick, marble aggregate
4. Description of Proposed Project:
Organization of production of pressed abaculus
5. Project Performance Characteristics:

6. Provision of Proposed Production with Raw Material Resources:

7. Finished Product Markets:
domestic market, export
8. Existing Infrastructure and Availability of Business Plan:

CONSTRUCTION MATERIALS PRODUCTION

4. Organization of Production of Chemically Precipitated Chalk with Annual Capacity of 30 Thousand Tons and Hydrated Lime with Annual Capacity of 80 Thousand Tons based on the “Vostok-Hematite” Small Enterprise

I. Information on the Investment Project Originator

Full name

Legal address

Director of the enterprise: fax:

Contact person: telephone:

e-mail:

Founders of the Enterprise:

Servicing bank of the enterprise

Brief Information on the Enterprise

Production Volume:
Million UZS

Infrastructure and its Condition:

Book value of the enterprise as of January 1, 2008 (Million UZS)

II. Description of Investment Project

• Goal of investment project

• Brief description of a technological cycle and required equipment
• Market demand for proposed products (services)

• Provision of the Proposed Production with raw Materials

Investment Needs

• Project cost • Required investment volume

• Financing form

• Contribution and participation share of the attracted investor

Proposed Sources of Financing

Directions of Investment Use

Payback of the Project (in months)

CONSTRUCTION MATERIALS PRODUCTION

5. Modernization and Expansion of Existing Gypsum and Alabaster Production based on the SPPCF “Imorat ADA”
1. Information on the Originator Enterprise:

2. Value of Fixed Assets:

3. Description of the Proposed Project:
Modernization and expansion of existing gypsum and alabaster production
4. Project Performance Characteristics:

5. Finished Product Markets:
domestic market, export
6. Existing Infrastructure and Availability of the Business Plan:

FRUITS AND VEGETABLES PROCESSING

6. Organization fo Production of 3 Thousand Tons of Fruit Sauce and 3 Thousand Tons of Tomato Paste at the JV “Al Samur TIA”

I. Information on the Investment Project Originator

Full name

Legal address

Director of the enterprise:

Contact person:

telephone: fax:

Founders of the enterprise:

Servicing bank of the enterprise

Brief Information on the Enterprise

Infrastructure and Its Condition:

Book value of the enterprise as of January 1, 2008

II. Description of the Investment Project

• Goal of the investment project

• Market demand for proposed products (services)

• Provision of the proposed production with raw materials

Investment Needs

• Project cost • Required investment volume

• Financing form

• Contribution and participation share of the originator enterprise

• Contribution and participation share of the attracted investor

Proposed Sources of Financing

Directions of Investment Use

Expected Financial Results of Project Implementation
million UZS

Payback of the Project (in month)

Stage of preparation of the Project
design estimates

FOOD INDUSTRY

7. Organization of Raising and Initial Processing of 1,000 Tons of Fish based on the PPF “Zoyirjon Bobo”
1. Information on the Originator Enterprise:

2. Cost of Fixed Assets:

3. Description of the Proposed Project:
Organization of raising and initial processing of 1,00 tons of fish
4. Project Performance Characteristics:

5. Provision of the Proposed Production with Raw Materials Resources:

6. Finished Product Markets:

7. Existing Infrastructure and Availability of the Business Plan:

FOOD INDUSTRY

8. Organization of Production of Soft Drinks and Mineral Water in PET Bottles based on the Grand Vizier, Ltd.
1. Information on the originator Enterprise:

2. Value of Fixed Assets:USD 118.4 thousands
3. Description of the Proposed Project:
Organization of production of soft drinks and mineral water in PET bottles
4. Project Performance Characteristics:

5. Finished Product Markets:
domestic market
6. Existing Infrastructure and Availability of the Business Plan:

CHEMICAL INDUSTRY

9. Sale of 57.7% Shares of the OJSC “Djizak Plastmassa”

Investment obligations: at least USD 5 million.
Current condition: tender has been announced

1. Main Information on the Company

2. Information of Securities Issue and Placement

3. Financial Indicators (million UZS)

4. Information on Sale of Share Stock at the Tender

5. Brief Description of the Enterprise

CHEMICAL INDUSTRY

10. Auction Sale of the JV “LRS Plast: Property Complex (production of polyethylene pipes)

• Legal address - Djizak City, Djizak Province
• Type of activity - polyethylene pipe production
• Capacity - 8,000
• Area of land plot - 2.2 ha
• Area of buildings and facilities - 2.0 ha
• Provision with - production infrastructure - 100 %
                           labor resources - 100 %

• Equipment - made in Germany
• Terms of sale - complex
• Estimated value - under appraisal

CHEMICAL INDUSTRY

11. Organization of Production of 314.5 thousand cubic m of Industrial Oxygen based on the Samo, Ltd.
1. Information on the Originator Enterprise:

2. Authorized Fund and Founders of the Enterprise:

3. Description of the Proposed Project:
Organization of production of 314.5 thousand cubic m of industrial oxygen
4. Project Performance Characteristics:

5. Provision of the Proposed Production with raw Materials Resources:

6. Finished Product Markets:

7. Existing Infrastructure and Availability of the Business Plan:

SILK INDUSTRY

12. Modernization and Expansion of Production of Silk yarn and Threads Based on the JV “Adash Ipagi”
1. Information on the Originator Enterprise:

2. Cost of Fixed Assets:

3. Description of the Proposed Project:
Modernization and expansion of production of silk yarn and threads

4. Project Performance Characteristics:

5. Provision of the Proposed Production with Raw Materials Resources:

6. Finished Product Markets:
export, domestic market
7. Existing Infrastructure and Availability of the Business Plan:

CDM PROJECTS

13. Improvement of energy using efficiency on electric engines, used in gas compressor units of JSC “Uztransgas” at CS-3 in Galla’aral

CDM PROJECTS

14. Reduction of Natural Gas Leakage at the Compressor Unit CS-3 for Separate Electric Power Generation

1. Telephone numbers in Djizak Province are seven-digit. In order to dial a number in Djizak Province from another province of the Republic of Uzbekistan, one should dial 8 – long beep – 372 (telephone number). International format for dial-up to Djizak Province: +99872 (telephone number).
2. Operator’s codes differ for mobile communications subscribers and are dialed in international format:
3. - for subscribers of the MTS Uzbekistan: +998 72 (subscriber’s number);
4. - for subscribers of the Beeline:  +998 90 (subscriber’s number)
5. - for subscribers of the Coscom (U-Cell):  +998 93 (subscriber’s number)

Telephone Numbers: