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Investment Guide for Karakalpakstan Republic

 

 

 

Republic of Karakalpakstan is located in the northwest of Uzbekistan in the lower bench of the river Amudarya, along the southwestern shore of the Aral Sea. Plains transforming into the plateau Ustyurt, in the southwest – into hilly chain of the Karakums, and in the east – into the Kyzylkums Desert occupy the most part of its territory. Sultan-Uvays rise in the southeast.
It borders with the Republic of Kazakhstan in the north, northeast and west; with the Republic of Turkmenistan in the south and southeast; and with Navoi and Khorezm Provinces of Uzbekistan in the east and southeast.
Republic of Karakalpakstan is a sovereign republic in the structure of the Republic of Uzbekistan, and has its own Constitution, emblem, flag and anthem. Karakalpak and Uzbek languages are official languages of the Republic of Karakalpakstan. Russian language is also widespread.
Area of the republic is equal to 166.6 thousand sq. km (37.1% of total area of Uzbekistan’s territory). Population is 1,604.8 thousands people.
Administrative and territorial division of the republic is represented by 14 rayons (districts): Amudarya, Beruniy, Kanlykul, Karauzyak, Kegeili, Kungrad, Muynak, Nukus, Takhtakupir, Turtkul, Khodjeili, Chimbay, Shumanay and Ellikkal’a Rayons. Nukus, modern industrial center with well-developed infrastructure, is the capital city of the Republic of Karakalpakstan, and its population is 264.4 thousands people.
Climate in Karakalpakstan is sharply continental with hot and dry summer and cold winter with some negligent precipitation. Average temperature in January varies from –5 to –8º. Minimum temperature during winter fall down to –38 . Average temperature in June varies from +26 to +28º, and in July and August - +50º. Average precipitation level is 100mm annually.

 

Contemporary territory of Karakalpakstan is situated on the territory of Khorezm, the most ancient state of Central Asia. This region has rich history and culture, interesting cultural monuments.
Toprak-Kala, I-IV centuries A.D. It has been established that one of quarters was occupied by patronal buildings traditionally built here over the whole history of the city’s existence. Decorated glassware, adornments, fragments of alabaster sculptures and wall paintings, warriors’ figures in the warriors’ hall and kings’ hall – sculptural Image of kings’ figures had been found in another building.
Kyzyl-Kala, I-II centuries, XII - early XIII centuries was probably erected as a defensive fortress and was included in the chain of Khorezmian fortifications created by the state for protection of northeastern borders of the Ancient Khorezm. In addition, the fortress served as the center of rural neighborhood and the joint of caravan roads through the Sultanuizdag Mountain Ridge.
Djanbas-Kala, fortress of IV century B.C. - I century A.D. Materials collected on its territory, mostly ceramics, are inherent to the early antique (Kangyuy) culture of the Khorezm.
Great Guldursun – fortress of III-IV centuries B.C., XII-XIII centuries A.D.. Located in 20 km to the east from Beruni Town. Great Guldursun, one of largest border fortresses of Khorezm, was built based on a desolated ancient fortress. The last period refers to 1220., i.e. time of invasion of Mongol troops.
Mizdakhkan (Khodjeili Gyaur-Kala) – archaeological and architectural complex of IV century B.C. – XIV century A.D. situated on the substantial area of more than 200 ha.
Mazlumkhan Sulu Mausoleum. This monument is located half in the ground, and only cupola and entry portal were above the surface. Stairs from the portal lead down to a small interim cupola facility through the vaulted corridor. Another stairs go down to the central room from here.
Shylpyk – religious building of II-IV, IX-XI centuries A.D. Ring-shaped building was built in II-IV centuries as a Zoroastrian dakhma. In IX-XI centuries it was used by local people as a beacon.
Koykrylgan-Kala – religious building of IV century B.C. - IV century A.D. Defensive wall with nine towers represented a reliable fortification. Ancient architects relied on calculations that allowed use of building as a place for astronomical observations.
As a result of national and state demarcation of republics in Central Asia, an autonomous province in the Kazakh ASSR was founded in 1924. In 1932 it was annexed to the Russian Federation, and was turned into the Karakalpak ASSR, and in 1936 it was included in the Uzbek SSR.

 

Analysis of gross regional product (GRP) indicators over the last several years shows the tendency of its growth. Thus, while the GRP of the Republic of Karakalpakstan amounted to UZS 234.8 billion, then in 2007 this indicator reached UZS 754.2 billion with annual growth rate of 106-110%. Growth in per capita GRP is also observed.

 

 

 

 

 

Dynamics of GRP Growth in the Republic of Karakalpakstan

Indicators

2003

2004

2005

2006

2007

GRP (billion UZS)

234.8

331.7

426.1

578.0

754.2

         (million USD)

186.3

263.3

338.2

458.7

598.6

Taxes (40.1%) and agriculture (27.1%) occupy key place in the structure of GRP of the Republic of Karakalpakstan. Share of industry is 8.5%, construction – 8.1%, trade and public catering – 6.1%, transport and communications – 6.1%, and others – 4.2%.
In 2007 the number of small business enterprises reached 18.7 thousand. Share of small business in the GRP reached 54.4%.

As of January 1, 2008 total population of the Republic of Karakalpakstan was equal to 1,604.8 thousand people.
Size of able-bodied population is equal to 876.7 thousand persons (54.6% of the republic’s total population) and has grown by 7.6% against 2002. Natality is equal to 17.4 per 1000 persons.
Share of urban population of the Republic of Karakalpakstan amounts to 48.6%, and rural – 51,4% of total population size. Population density is equal to 9.6 persons per 1 thousand sq. km.
Capital city of Nukus with population of 264.4 thousands people is the largest city of the Republic of Karakalpakstan. Khodjeili, Takhiatash, Beruniy, Turtkul and Kungrad are amongst other metropolis.
Size of employed population amounted to 551.1 thousands people (62.9% able-bodied population). Of them 356.1 thousands people are employed in production sphere. 195.0 thousands people are employed in the immaterial production sphere. Number of the registered unemployed is equal to 2.3 thousands people (0.3% able-bodied population).
Major part of employed population is concentrated in agriculture (32.8% of the employed population), education and culture (17.9%), construction (9.3%), industry (9.2%), trade (8.5%) and healthcare (7.9%).

                                 The Aral Sea Problem

The problem of drying of the Aral Sea began in 1960 after diverting of a part of Syrdarya and Amudarya rivers’ flowing to irrigate cotton and rice fields on the territory of Uzbekistan and southern Kazakhstan. As a result the sea has been steadily shrinking, and exposing the bottom, full of salt. Every year, 150 million tons of salt are rising from the bottom of the Aral Sea by winds.
By 2007 the sea's area shrunk to 10% of its original size.
Sea drying slightly affected the climate of the region, which has become more continental: summer has become more dry and hot, winter - more cold and prolonged.
The disaster caused considerable damage to the population of the Aral Sea region. The number of diseases such as tuberculosis, and also such infectious and parasitic diseases as typhoid, paratyphoid, hepatitis, hypertension as well as  psychosomatic illness has increased. Medical experts establish linkage berween these diseases and shrinking of the sea.
Mitigation of consequences of the ecological crisis in Uzbekistan are solved comprehensively at the state level. The laws governing the use of natural resources and activities in environmental protection were adopted. The country acceded to the main international instruments in this field, including the Convention on the Protection and Use of Transboundary Watercourses and International Lakes. Extensive programs aimed at the overall socio-economic development of the situated in the Aral Sea region Republic of Karakalpakstan and Khorezm province, are implemented.
Many international organizations including UN agencies, financial institutions such as the World Bank, Asian Development Bank and others also promote to the stabilization of the situation in the Aral Sea region.
An international conference "The problems of the Aral Sea, their influence on the gene pool of the population, flora and fauna and measures for international cooperation to mitigate their effects" was held in Tashkent on March 12, 2008 on President Islam Karimov’s initiative. As a result of the forum Tashkent Declaration of the international conference was adopted.

Karakalpak Republican Department of the Central Bank of the Republic of Uzbekistan and 12 branch offices of commercial banks of the Republic of Uzbekistan, which actively participate in financial support of development of entrepreneurship, function in this republic: Department of the National Bank for the Republic of Karakalpakstan, Promstroybank, Pakhta Bank, Microcreditbank, Savdogar Bank, Galla Bank, Turon Bank, Asaka Bank, Alokabank, Ipoteka Bank, Khalk Bank and Universal Bank (Nukus Mini Bank).

In 2007 volume of lending by all banks amounted to UZS 56.2 billion (USD 44.6 million).

                                                                   

Grain farming (production of wheat and raw rice), cotton farming, cattle breeding and sericulture are major branches of agriculture of the Republic of Karakalpakstan.
As of January 1, 2008 area of agricultural lands in the republic amounted to 5.2 million ha.
Number of private farms is equal to 9.6 thousand where 85.4 thousands people are employed. There are also 25 shirkat farms.
Volume of gross agricultural product is equal to nearly UZS 300 billion (USD 238.1 million).
More than 196 thousand tons of raw cotton and 75 thousand tons of grains were produced in 2007. 99.6 thousand tons of vegetables, 17.0 thousand tons of potatoes, 50.0 thousand tons melons and gourds, 16.3 thousand tons of fruits and berries, and nearly 3 thousand tons of grapes were also produced.
46.6 thousand tons of meat, 146.6 thousand tons of milk, 32.3 million eggs, 56.8 thousand pieces of karakul and 743.8 tons of silkworm were produced by cattle farmers in 2007.

Mining of construction materials: porphyrites for production of fence stone, as well as crushed stone and hydraulic concrete is conducted in Amudarya Rayon (District) of Karakalpakstan.
Mining of construction materials: gabbroamphibolites (decorative and facing material) and marble of various colors is conducted in Beruniy Rayon. There are also marbled stone, limestone deposits, clay, mining raw materials: talc and talk stone, feldspar.
Porphyrite used in construction for obtaining of crushed stone is mined in Karauzyak Rayon. Development of granodronites and pyroxenite (construction materials) is performed. There are deposits of ganch (used for gypsum production), bentonitic clay, limestone, crushed stone, titaniferous magnetite and vermiculite.
There are natural deposits of salt cake (used for production of ceramics, glass, in medicine and for fertilizer production) and bentonitic clay in Kegeili Rayon. Natural gas and gas condensate at 7 deposits are mined in Kungrad Rayon. Confirmed reserves of gas amount to 219.4 billion cubic m and gas condensate – 7.8 million tons. There are also natural reserves of salt cake and table salt.
Natural gas and gas condensate are also mined in Muynak Rayon.
There are natural reserves of glauconite, which may be used as water distiller and for production of mineral fertilizers in Nukus Rayon.

 

 

 

 

In 2007, industrial enterprises of the republic produced goods and services for total amount of UZS 224.2 billion (USD 177.9 million) and production growth amounted to 115.7% against 2006.
79.9% of total volume of industrial production goes to share of the largest industrial enterprises and 20.1% - share of small business subjects.

In 2007 goods for total value of UZS 83 billion (USD 65.9 million) were produced in light industry, in fuel and energy complex – UZS 35.5 billion (USD 36.1 million), in food industry – UZS 27.3 billion (USD 21.7 million), in flour-and-cereals and feed mill industry – UZS 21 billion (USD 16.7 million), chemical and petrochemical – UZS 15.4 billion (12.2 million).

Growth of industrial production in fuel, chemical and petrochemical industries, and metallurgy has been observed over recent years. Such growth in fuel and energy industry is explained by increased production of gas, fuel and lubricants, and that in chemical and petrochemical industry – by commissioning of the Kungrad Soda Plant which produces new type of product – soda ash.

29 major industrial enterprises function in the Republic of Karakalpakstan. Zarubejneftegaz GPD Central Asia, LLC (natural gas extraction), Kungrad Soda Plant (soda ash), Uzbek-Russian JV “Igilik-Gaz” (kerosene, fuels and lubricants), Takhiatash Thermal Power Plant (electric power), JSC “Chimbay May” (vegetable oil), OJSC “Karakalpakboyan” (sweet-root), Uzbek-Chinese JV “Lanekstrakt” (sweet-root processing), Beruniy Yoggar. Ltd. (vegetable oil), Nukus Vinzavody, Ltd. (wine and vodka), Uzbek-Austrian-Bangladeshi JV “Univer” (garments), Nukus Balyk, Ltd. (fish preparation) and Karakalpak Vermi (vermiculite production) can be mentioned among them.

According to the outcomes of the year 2007, foreign trade turnover of the Republic of Karakalpakstan amounted to USD 120.5 million, including export – USD 103.8 million and import of USD 16.7 million. Positive balance of foreign trade turnover reached USD 87.1 million. 

Tendency of growth in foreign trade volume has been observed over the period since 2001. Thus, while this indicator amounted to UZS 64.1 million, then it reached USD 120.5 million. Gradual growth of exports volume has also been observed. Imports volume increased till 2004, however, thereafter, tendency of its reduction has been observed. Positive balance of foreign trade turnover has been increasing from USD 10.2 million in 2001 to USD 87. million in 2007.

Major exporter enterprises in 2007 included “Karakalpaktolasi, Ltd., JSC “Paruaz”, JV “Zarubejneftegaz-GPD Central Asia” JSC “YUlduz”, JSC “Turtkul Oq Oltin”, JV “Berunitex”, Nukus Airport and JV “Igilik-GAZ”

In export structure of the Republic of Karakalpakstan cotton fiber (67.9% of total exports volume) and energy resources (22.2%) have major shares. Share of cotton fiber in the export structure has been reducing year after year – in 2001 its share amounted to 92.6%. At the same time, export of energy resources and services have been growing. Food products have been steadily exported, and their share varied from 1.6 t0 6.0% of export volume during the period from 2001 to 2007.

Machines and equipment (47.5% of total import volume), food products (20.2%), chemical products (11.8%) and services (7.0%) were major items in the import structure in 2007. Share of import of machinery and equipment has been steadily reducing during recent years. At the same time, growth in import of food products has been observed. Import of chemical products (11-13% of total import volume) remains stable.

Motor transport is of key importance in cargo transportation in Karakalpakstan. Length of highways in Karakalpakstan is equal to 4,389 km, including 4,241 km of roads with hard surface. Almost all settlements of the republic have access to highways.

25.6 tons of cargo and 116.3 million passengers were transported in 2007 in the Republic of Karakalpakstan.

Length of railroads is equal to 880 km. Railway routes are performed to other provinces of Uzbekistan, Kazakhstan and Russia. The Chardjou-Kungrad-Beneu-Makat railroad passing through Karakalpakstan is the main route from Central Asia to Russia and other European countries.

 

 

There are airports in three cities of the Republic of Karakalpakstan: Nukus, Muynak and Turtkul. In Muynak and Turtkul Towns airports are designed for small airplanes. Nukus City Airport has capacity of admitting large passenger and freight aircrafts. Flights to Tashkent City are performed on daily basis twice a day. Flights to the cities of Russian Federation (Moscow and Samara) are also performed (3-4 times a week).

Cable, international and long-distance, urban and rural, as well as postal and mobile communications function in the Republic of Karakalpakstan. Providers of cellular communication include: MTS-Uzbekistan, Beeline, Perfectum Mobile and Coscom (U-Cell).

Capital city of Nukus is the central city of the Republic of Karakalpakstan.

Two amusement parks, Central Stadium, two museums, three theaters, two central markets, network of stores with wide range of consumer goods function in the capital city.

There are 76 colleges, 7 academic lyceums, 761 education school, including 85 special schools with advanced study of certain subjects, 17 lyceums, 2 gymnasiums, and 406 children’s pre-school institutions in the republic.

116 libraries, 174 clubs and 10 movie theaters function in the republic.

Particular attention is given to the public health in the republic. 73 hospital institutions, 315 medical outpatient clinics and 203 first aid and obstetric stations functions in towns and rayons.

Karakalpak people have ancient, richest history. Its national culture, unique arts, classical literature, customs and traditions wide widely known.

State Arts Museum named after I.V. Savitskiy with more than 1,000 exhibits is located in the Republic of Karakalpakstan. Museum of Berdakh, outstanding classical poet of the Karakalpak people is the pride of the Nukus City.

 

Foreign investments in excess of USD 3,367.8 thousands, including foreign direct investments in amount USD 2,392.2 thousand were attracted to the Republic of Karakalpakstan 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 by legal and physical entities of Uzbekistan.

Enterprises attracting foreign direct private investments and located in the Republic of Karakalpakstan as well as carrying out their activity in the following branches of economy: production of radioelectronic devices and accessories to computer equipment, light industry, silk industry, construction materials industry, industrial production of poultry and eggs, food industry, dairy and meat industry, chemical and pharmaceutical industry shall be exempted from payment of 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 the 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.

47 enterprises with foreign investments, including 41 joint ventures and 6 foreign enterprises are registered in the Republic of Karakalpakstan. 37 enterprises have been registered in the production sphere, 5 – in trade sphere, 4 - in agriculture and 1 – in communications sector.

Currently 38 enterprises with FDI are actually functioning. Foreign trade turnover of enterprises with foreign investments in 2007 amounted to USD 24.97 million.

3 joint ventures for conduction of exploration of ferrous ore, production of asbestos-cement sheets  and rendering constructions services were established in 2007.


Conducted analysis of enterprises’ needs for investments has shown that investment capacity of the Republic of Karakalpakstan exceeds 1.1 billion USD, including breakdown by sectors according to the following graph: 

Priority branches of industry of the Republic of Karakalpakstan for attraction of foreign investments include:
1. Textile industry, where reconstruction of existing enterprises and initiation of new textile production projects is envisaged.
2. Construction materials industry – initiation of investment projects for mining and processing of cement raw materials, limestone, feldspar, claydite, talc and production of vermiculite.
3. Oil and gas – further development of Ustyurt region and Aral Sea water area based on production sharing agreements for survey and extraction of oil, gas and gas condensate.
4. Chemical and gas-chemical industry – achievement of full design capacity of the Kungrad Soda Plant, initiation of complex gas processing projects.
5. Metallurgy industry – development of investment projects for mining and enrichment of ferrous and tungsten ores.

 

Project name and goal Project amount/value of property, share stock (thousand USD)
Textile Industry
1 Expansion of production of cotton yarn up to 2,400 tons and denim up to 3 million running meters annually at the JSC “Eltex” 2,900
2 Auction sale of the JV “Turtkultex” Property Complex (textiles production) 3,586.9
3 Auction sale of the JSC “Raykhon” Property Complex (production of cotton yarn and gray cloth) 3,254.9
4 Auction sale of the OJSC “Khodjeili Textile” Property Complex (production of cotton yarn and gray cloth) 651.4
5 Auction sale of the “Mangyt Spinning and Weaving Factory, Ltd.” Property Complex (production cotton yarn) 299.1
6 Auction sale of the JV “Berunitex” Production Complex (production of cotton yarn and gray cloth) under appraisal
7 Auction sale of the OJSC “Katex” Property Complex (production of cotton yarn and gray cloth) under appraisal
Clothing Industry
8 Auction sale of the JV “Kart” Prperty Complex (production of hosiery) 1,088.5
Construction Materials Production
9 Construction of a new cement plant in Karauzyak district with annual capacity of 1.5 million tons of cement 250,000
10 Production of 3,000 tons of calcium carbide on the basis of "Stroy intrak torg" LLC 2,770
11 Establishment of a crushing-and-sorting plant producing 200 thousand tons of crushed stones on the basis of subsidiary “Shilpik kurilis” 2,122.5
Power Industry
12 Sale of 47.9% shares of OJSC "Takhiatash TPP " under evaluation
Mining Industry
13 Development of the Tebinbulak titaniferous magnetite deposit by open-cut method with annual mining volume of 575.7 thousand tons of ferreous concentrate 149,797

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

TEXTILE INDUSTRY

1. Expansion of Production of Cotton Yarn up to 2,400 tons and Denim up to 3 million Running Meters Annually at the JSC “Eltex”

1. Information on the Originator Enterprise:


Name:

Open Joint-Stock Company “Eltex”

Location:

Ellikkal’a Rayon, Republic of Karakalpakstan

Type of activity:

Production of cotton yarn and denim

Date of establishment:

1994

Number of employees:

22

2. Authorized Fund:


Authorized Fund:

USD 400 thousand

Management:

R. Yakubov (Director)

3. Production Volume (2005): 


Products

Production volume

cotton yarn

728 thousand kg

denim

4 174 thousand running meters

Product market

domestic market

4. Description of the Proposed Project:
Expansion of production of cotton yarn up to 2.4 thousand tons and denim up to 3 million running meters
5. Project Performance Characteristics: 


Project amount:

USD 2,900 thousand

Required investment volume:

USD 2,500 thousand

6. Provision of Proposed Production with Raw Material Resources: 


Required raw materials:

cotton fiber

Sources of raw materials:

procurement at domestic market

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


Existing infrastructure:

water and gas supply, electric power, heating, sewerage

Distance to railway:

12 km

Distance to highway:

25 m

Availability of Business Plan:

Not available

TEXTILE INDUSTRY

2. Auction Sale of the JV “Turtkultex” Property Complex

  • Legal address       -        Turtkul Town, Republic of Karakalpakstan
  • Type of activity     -        textiles production
  • Capacity                -        2 million items annually
  • Area of land plot    -        7.9 ha
  • Area of buildings and facilities         -        2.4 ha
  • Provision with        -        production infrastructure - 100 % labor resources - 100 %
  • Equipment             -        “Pfaff” (Germany), depreciation - 15%
  • Condition               -        accounted for on the Asaka Bank’s balance sheet
  • Terms of sale        -        complex
  • Estimated value     -        USD 3,586.9 thousand

TEXTILE INDUSTRY

3. Auction Sale of the JSC “Raykhon” Property Complex

  • Legal address       -        Beruniy Rayon, Republic of Karakalpakstan
  • Type of activity     -        production of cotton yarn and gray cloth
  • Capacity                -        1,400 tons of yarn and 3,600 thousand running meters of gray cloth
  • Area of land plot    -        4 ha
  • Area of buildings and facilities         -        3.6 ha
  • Provision with        -        production infrastructure - 100 %, labor resources - 100 %
  • Equipment             -        made in Russia
  • Terms of sale        -        complex
  • Estimated value     -        USD 3,254.9 thousand

TEXTILE INDUSTRY

4. Auction Sale of the OJSC “Khodjeili Textile” Property Complex

  • Legal address       -        Khodheili Rayon, Republic of Karakalpakstan
  • Type of activity     -        production of cotton yarn and gray cloth
  • Capacity                -        500 tons of yarn annually
  • Area of land plot    -        9 ha
  • Area of buildings and facilities         -        8 ha
  • Provision with        -        production infrastructure - 100 %, labor resources - 100 %
  • Equipment             -        made in Russia
  • Terms of sale        -        complex
  • Estimated value     -        USD 651.4 thousand

 TEXTILE INDUSTRY

5. Auction Sale of the “Mangyt Spinning and Weaving Factory, Ltd.” Property Complex

  • Legal address       -        Amudarya Rayon, Republic of Karakalpakstan
  • Type of activity     -        production of cotton yarn
  • Area of land plot    -        17.1 ha
  • Area of buildings and facilities         -        15.2 ha
  • Provision with        -        production infrastructure - 100 %, labor resources - 100 %
  • Current condition   -        transferred to the balance sheet of Amudarya Rayon Khokimiyat (Administration) of the Republic of Karakalpakstan
  • Terms of sale        -        complex
  • Estimated value     -        USD 299.2 thousand

 TEXTILE INDUSTRY

6. Auction Sale of the JV “Berunitex” Property Complex

  • Legal address       -        Beruniy Rayon, Republic of Karakalpakstan
  • Type of activity     -        production of cotton yarn and gray cloth
  • Capacity                -        2,270 tons of yarn and 1,800 tons of fabrics annually
  • Area of land plot    -        0.9 ha
  • Area of buildings and facilities         -        0.9 ha
  • Provision with        -        production infrastructure - 100 %, labor resources - 100 %
  • Equipment             -        picking, carding, belting, spinning and knitting equipment made in Czech Republic, Germany, depreciation – 15%
  • Terms of sale        -        complex
  • Estimated value     -        under appraisal

TEXTILE INDUSTRY

7. Auction Sale of the OJSC “Katex” Property Complex

  • Legal address       -        Nukus City, Republic of Karakalpakstan
  • Type of activity     -        production of cotton yarn and gray cloth
  • Capacity                -        6 tons of yarn daily
  • Area of land plot    -        27.8 ha
  • Area of buildings and facilities         -        17.5 ha
  • Provision with        -        production infrastructure - 100 %, labor resources - 100 %
  • Equipment             -        carding, spinning and belting equipment of “Marzovi” brand (Italy)
  • Terms of sale        -        complex
  • Estimated value     -        under appraisal

CLOTHING INDUSTRY

8. Auction Sale of the JV “Kart” Property Complex

  • Legal address       -        Nukus City, Republic of Karakalpakstan
  • Type of activity     -        production of hosiery
  • Capacity                -        20 thousand pairs of socks daily
  • Area of land plot    -        rent
  • Area of buildings and facilities         -        rent
  • Provision with        -        production infrastructure - 100 %, labor resources - 100 %
  • Equipment             -        made in Italy, brands: Stemar, Albatross
  • Terms of sale        -        complex
  • Estimated value     -        USD 1, 088.5 thousand

CONSTRUCTION MATERIALS PRODUCTION

9. Construction of a new cement plant in Karauzyak district with annual capacity of 1.5 million tons of cement

I. Information on the Investment Project Initiator     

Full name

Joint Stock Company “Uzstroymaterialy”

Legal address 

68-a, Mirakilov Street, Tashkent, Republic of Uzbekistan

Director of enterprise:

Mr. E.M. Akramov

Fax

255 77 07

Telephone:

152 20 63

e-mail:

uzbild@ars.uz

web-site:

www.uzsm.uz

 Infrastructure and its condition:

Motor road

There is a highway, distance to the highway is 0.5 – 1.0 km

Railroad

Karauzyak railway station is at a distance of 1.0 – 2.0 km

Power supply

Installation of double-circuit 220 kV high voltage line (with length of 140 km) is necessary for the project implementation

Water supply

Ground sources of water will be used.

Sewerage

Construction of bio-treatment facility.

Gas supply

Coal is the main fuel.

Heat supply

Determined by the project

II. Description of Investment Project  

• Objective of investment project

Construction of new cement plant in Karauzyak district of the Republic of Karakalpakstan with annual capacity of 1.5 million tons of cement.
Plot under industrial site was selected near the Karauzyak railway station of Karauzyak district.

• Advantages and benefits from Investment

Project implementation will allow to produce high quality goods in demand both in domestic and external markets.

• Brief Description of Technological Cycle:

Complex of operations for generation of Portland cement from clinker includes the following technological processes: clinker crushing, baking of mineral additives, gypsum stone crushing, thin crushing of clinker together with active mineral additives and gypsum, stocking, packing and shipment of cement to consumers.

• Proposed Market for the Products

It is planned to sell up to 35% of manufactured products (Portland cement M

• Provision of Proposed Production with Raw Materials

Limestone of Jamansay deposit are located in 1.5-2.5 km from proposed construction site. North-Jamansay deposit of clay is located in 6 km from the industrial area. Gypsum of the Mamajugata deposit and Tebinbulak deposit of chamosite will be used as mineral additives.

Type of raw material

Required volume of raw material

Local raw material

Quantity

Price

Limestone

4 mln. tons per year

 

own extraction

Clays

300 thsd. tons per year

 

own extraction

Mineral additives:

 

 

Gypsum

75 thsd. tons per year

1 ton

14,000

Cinders

50 thsd. tons per year

1 ton

31,000

Investment Needs

Project cost

USD 250 mln.

Financing form

Foreign direct investments

Required volume of investments

USD 250 mln.

Project cost

USD 250 mln.

Financing form

Foreign direct investments

Required volume of investments

USD 250 mln.

Contribution and participation share of attracted investor

USD 250,000 thousand for procurement of equipment, performance of construction works, formation of working capital

Proposed sources of Financing

Own funds, UZS mln.

Foreign direct investment, USD mln.

Borrowed funds

Local, UZS mln.

Foreign, USD thsd.

 

250.0

-

-

Directions of Investment Use

 

Expenses in national currency, UZS billion

Expenses in hard currency, USD million

Acquisition of equipment

 

250

incl. – locally made

 

 

        - imported

 

190

Construction works

66

 

Formation of working capital

13.2

 

Expected Financial Results of Project Implementation                                      UZS billion

Indicators

Project Implementation years

Year 1

Year 2

Year 3

Year 4

Sales volume

205

236

262

263

 - incl. atexternal market

105

121

134

134

Cost price

55

70

89

93

After-tax profit

33

49

64

65

Investments profitability, %

16

21

24

25

 

Project pay-back 

60 months

Stage of Preparation of the Project Design Estimates 

Business-plan is developed

CONSTRUCTION MATERIALS PRODUCTION

10. Production of 3,000 tons of calcium carbide on the basis of "Stroy intrak torg" LLC

I. Information on the Investment Project Initiator     

Full name

«Stroy intrak torg» Limited Liability Company

Legal address 

Build 32, Sari Altin str., Kisketken settlement, Nukus city

Director of enterprise:

Mr. K.T.Toremuratov

Contact person

Mr. K.T.Toremuratov

Telephone:

355 7292, 225 1447

Founders of the enterprise:

#

Name of organization, founder

Share in the Authorized Capital, %

In UZS million

1

Private individual Mr. K.T. Toremuratov

25

0.098

2

Private individual Mr. S. Ikmetullaev

25

0.098

3

Private individual Mr. H.S. Ikmetullaev

25

0.098

4

Private individual Mr. A.S. Gobenov

25

0.098

 

Total

100

0.392

Brief information on the Enterprise

The enterprise was established on 10 May 2005. Measures for acquisition of production basis are currently taken.

Infrastructure and its condition:

Motor road

available, distance – 0.5 km

Railroad

railway branch is available

Power supply

brought

Water supply

available

Sewerage

not required

Gas supply

available

Heat supply

available

II. Description of the Investment Project         

• Objective of the Investment Project

Production of 3 thousand tons of calcium carbide per year

• Advantages and Benefits from Investment

Proximity to the sources of raw materials, high level of localization of production (up to 99%), high demand for production.

• Brief Description of Required Equipment

A set of equipment for production of calcium carbide is needed.

• Market demand for proposed products

Up to 85% of products to be sold to export.

• Provision of the proposed production with raw materials

Required raw materials: 2,562 tons of limestone per year (Sultanugizdag and Jumurtau opencast mines in the Republic of Karakalpakstan), 972 tons of coking coal (Bausun deposit in the Surkhandarya province).

Investment Needs

Project cost 

USD 2,770 thousand

Required investment volume

USD 2,500 thousand

Financing form

Foreign direct investments in amount of USD 2.5 million

Contribution and participation share of the project’s initiator

USD 270 thousand for carrying out of construction works, acquisition of raw materials and formation of working capital

Contribution and participation share of investor

USD 2,500 thousand for acquisition of equipment

Proposed Sources of Financing

Own funds, UZS million

Foreign direct investment, USD thousand

Borrowed funds

Local, UZS million

Foreign, USD thousand

62.9

2,500

288.0

 

Directions of Investment Use

Directions

Expenses in national currency, UZS million

Expenses in hard currency, USD thousand

Acquisition of equipment

 

2,500

incl.    - imported

 

2,500

Construction works

229.2

 

Acquisition of raw materials

68.0

 

Formation of working capital

53.7

 

Expected Financial Results of Project Implementation                                     UZS million

Indicators

Project implementation years

Year 1

Year 2

Year 3

Year 4

Sales volume

2,300

2,688

2,988

3,000

Incl. at external markets

1,150

1,344

1,494

1,500

Cost price

816.3

842.3

845.2

804.8

Investments profitability, %

18

18

32

34

 

Pay-back of the project 

48 months

Stage of Preparation of the Project Design Estimates 

Business-plan is developed

CONSTRUCTION MATERIALS PRODUCTION

11. Establishment of a crushing-and-sorting plant producing 200 thousand tons of crushed stones on the basis of subsidiary “Shilpik kurilis”

I. Information on the Investment Project Initiator     

Full name

Subsidiary “Shilpik kurilis” under JSC “Nukus SDSK”

Legal address 

5, Kizketken settlement, Nukus city

Director of enterprise:

Mr. B.Matekov

Contact person

Mr. B.Matekov

Brief Information on the Enterprise

Full name

Subsidiary “Shilpik kurilis” under JSC “Nukus SDSK”

Legal address 

5, Kizketken settlement, Nukus city

Director of enterprise:

Mr. B.Matekov

Contact person

Mr. B.Matekov

 

Date of enterprise’s establishment – May 1, 2006. This is a construction

Infrastructure and its Condition:

Motor road

passes at 2.5 km

Railway

passes at 0.3 km

Power supply

brought

Water supply

available

Sewerage

not required

Gas supply

available

Heat supply

available

II. Description of the Investment Project         

• Objective of the Investment Project

Establishment of a crushing

• Advantages and Benefits from Investment

Proximity to the sources of raw materials, wide consumption.

• Brief Description of Necessary Equipment

Crusher of a new generation with Automatic control system – DRO 560 ACS

• Proposed Markets

It is planned to sale production to enterprises of Uzbekistan as well as export to Kazakhstan

Investment Needs

Project cost

USD 2,122.5 thousand

Required investment volume

USD 1,810 thousand

Financing form

Foreign direct investments in amount of USD 1.81 million

Contribution and participation share of project’s initiator

USD 312.5 thousand for carrying out of construction works, acquisition of raw materials and formation of working capital

Contribution and participation share of attracted investor

USD 1,810 thousand for acquisition of equipment

Proposed Sources of Financing

Own funds, UZS million

Foreign direct investment, USD thousand

Borrowed funds

Local, UZS million

Foreign, USD thousand

400

1,810

-

-

Directions of Investment Use

Directions

Expenses in national currency, UZS million

Expenses in hard currency, USD thousand

Acquisition of equipment

 

1,084.5

incl.    - imported

 

1,084.5

Construction works

238.3

 

Acquisition of raw materials

1,002.3

 

Formation of working capital

88.04

 

 

Project pay-back 

36 months

Stage of Preparation of the Project Design Estimates 

Business-plan is developed

 POWER INDUSTRY

12. Sale of 47.9% shares of OJSC «Takhiatash TPP»

Investment obligations: according to Decision of State Tender Commission

1. Main Information on the Company

1. Issuer’s name

OJSC «Takhiatash TPP»

2. Legal address

#1, Takhiatash town,
Republic of Karakalpakstan

3. Year of establishment

2005

4. Sector

Power Industry, State Joint Stock Company «Uzbekenergo»

5. Chairman of the Board (full name)

Mr. Oleg Petrovich Revenkov

6. , ,

tel: (998 61) 222-02-83
fax: (998 61) 222-02-83

7. Number of employees, including administrative staff

1070 persons

8. Total area

94.4 hectares

9. Raw materials for production

Natural gas, fuel oil is also used as a reserve

2. Information on Securities’ Issue and Distribution

1. Authorized capital

19,774.9 million UZS

2. Structure of the Authorized capital

Share of SJSC «Uzbekenergo» - 51%,
State share – 32.9%,
Share of employees – 1.1%

3. Value of 1 share (UZS)

10,000

3. Financial Indicators (UZS million)

Indicators

Years

2005

2006

I half of 2007

1. Current assets, total

69,351.8

82,708.8

96,964.1

2. Income

40,230.4

50,361.1

28,985.4

3. Expenses

38,314.4

48,188.0

28,474.4

4. Gross profit

1,916.0

2,173.1

511.0

5. Net profit

1,330.1

1,704.2

407.6

6. Accounts payable

43,594.7

55,377.2

64,266.1

4. Information on Sale of Holding of Shares at the Tender

1. Size of assets proposed for sale

47.9% of shares

2. Ground for sale

President Resolution #PP-672 dated July 20 2007

3. Estimated value of shares for sale

Under evaluation

5. Tender orginizers

State Property Committee of the Republic of Uzbekistan

6. Date of tender

According to Decision of Sate Tender Commission

7. Place of tender

5. Brief Description of the Enterprise

Tahiatash TPP - thermal power plant with installed capacity of 730 MW, the purpose of which – to produce electricity and heat energy. The first unit of the plant was launched on September 10, 1961, and it is capable to produce 8.5 million kWh of electricity.
The main facilities of the power plant are: main building, outbuildings, fuel and transportation facilities, technical facilities of water supply, electrical facilities, pumping facilities, water treatment station, motor pool.
The main types of technological equipment are: boiler and turbine units, located in the main building; boilers, which are available in the boiler room; turbo-units and auxiliary equipment, which are in the generator hall of the plant.
The power plant provides electricity to Samarkand - Bukhara energy unit and heat energy to Production association “Navoiazot”, residential areas and industrial sectors of the city of Navoi (Navoi province).

MINING INDUSTRY

13. Development of the Tebinbulak titaniferous magnetite deposit by open-cut method with annual mining volume of 575.7 thousand tons of ferreous concentrate.

I. Information on the Investment Project Initiator     

Full name

State Committee for Geology of the Republic of Uzbekistan

Legal address 

Tashkent City, Republic of Uzbekistan

Contact person

Mr. I.B. Turamuradov

Telephone

153-86-38

Brief Information on the Deposit

The deposit is located in Karauzyak District of the Republic of Karakalpakstan.
Area of the object is equal to 82.5 hectares. There are no buildings and facilities.
Ore productivity – 4,000 thousand tons per year.
Production:  ferreous concentrate.
Proposed volume of production for the period of mine working: 22.954 million tons.

Infrastructure and its Condition:

Motor road

distance to Karatau town: 16 km.

Railroad

distance to Karauzyak station: 8 km

Power supply

distance to the 110 kV substation “Karatau” is 12 km

Water supply

underground water intake in the river Amudarya through water conduit of 12 km

Sewerage

not available

Gas supply

Gas-main pipeline

Heat supply

not available

II. Description of the Investment Project         

• Objective of the Investment Project

Development of the Tebinbulak titaniferous magnetite deposit by open-cut method with annual mining volume of 575.7 thousand tons of ferreous concentrate
Technological scheme of reproseccing – gravitation.

• General Advantages and Benefits:

The enterprise will be established in the deposit area.

• Market demand of the proposed products

It is planned to sale all of the products (575.7 thousand tons of ferreous concentrate) to the Uzbek metallurgical enterprise (Bekabad town, Tashkent province)

• Provision of the proposed production with raw materials

Required volume of raw materials: 4000 thousand tons of ore per year

Investment Needs

Project cost

USD 149, 797 thsd

Required investment volume

USD 24,188 thsd.

Financing form

Foreign direct investment and foreign credits

Contribution and participation share of project’s initiator

USD 1,000 thousand

Contribution and participation share of attracted investor

USD 24,188 thousand of Foreign direct investment and USD 124,609 thousand of foreign credits

Proposed Sources of Financing

Own funds, UZS million

Foreign direct investments, USD thousand

Borrowed funds

Local, UZS million

Foreign, USD thousand

1,000

24,188

-

124,609

Directions of Investment Use

Directions

Expenses in national currency, UZS million

Expenses in hard currency, USD thousand

Acquisition of equipment

 

90,000

Incl. – locally produced

9,600

 

        - imported

 

82,500

Construction works

71,168

 

Formation of working capital

5,372.2

 

Expected Financial Results from the Project Implementation                  USD thousand

Indicators

Project implementation years

Year 1

Year 2

Year 3

Year 4

Years
1 – 38

Sale volume

 

 

 

34,300

1,641,220

Cost price

 

 

 

35,900

 

After-tax profit

-258

-441

-710

-680

285,844

 

Project pay-back 

27 years

Stage of Preparation of the Project Design Estimates 

Not developed

 

Telephone numbers in the Republic of Karakalpakstan are seven-digit. In order to dial a number in the Republic of Karakalpakstan from another province of the Republic of Uzbekistan, one should dial 8 – long beep – 361 (telephone number). International format for dial-up to Karakalpakstan: +99861 (telephone number).
    However, operator’s codes differ for mobile communications subscribers and are dialed in international format:
    - for subscribers of the MTS Uzbekistan: +998 61 (subscriber’s number);
    - for subscribers of the Beeline:  +998 90 (subscriber’s number)
    - for subscribers of the Coscom:  +998 93 (subscriber’s number)

Telephone Numbers:

Name of organization
Telephone number
Public authorities
Jokargy Kenes (Parliament) of the Republic of Karakalpakstan 222 14 00
Council of Ministers of the Republic of Karakalpakstan

222 15 07

Ministry of Economy 222 17 65
Department of Statistics 222 66 22
Ministry of Finance

222 24 58

Committee for Demonopolization

222 30 03

Main Tax Department 222 23 62
Ministry of Labor 222 86 83
Ministry of Foreign Economic Relations, Investments and Trade 222 13 62
State Property Committee 222 02 87
Chamber of Commerce and Industry 770 71 01
Real estate exchange 222 17 10
Banks
Central Bank 224 15 26
National Bank for foreign economic activity (NBU) 780 00 01
Pakhta Bank 222 16 77
People’s Bank 224 04 17
Ipoteka Bank 222 34 75
Promstroybank 222 93 24
Mikrokreditbank 222 89 32
Asaka Bank 223 34 68
Turon Bank 222 15 16
Galla Bank 223 72 19
Inquiry
Nukus City railway terminal directory inquiry 005, 222 03 22
Nukus Airport directory inquiry 006, 223 22 45
Long distance and international calls 007
Telephone exchange directory inquiry 009

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