Investment Guide for Sirdarya Region

Syrdaryo Province is located in central part of Uzbekistan, on the left bank of the Syrdaryo river, one of the longest rivers in Central Asia and length of which along the province amounts to 94 km. Total area of the province amounts 4.3 thousand sq. km. or 0.9% total area of the country. The province’s relief is characterized by flat zones.

In the north Syrdaryo Province borders with the Republic of Kazakhstan, in the east – with Tashkent Province, in the southeast – with the Republic of Tajikistan and in the southwest – with Djizak Province. Size of the province’s population is equal to 692.9 thousand people.

Syrdaryo Province was established on February 16, 1963. The province includes 8 rayons (districts): Akaltyn, Khavast, Bayaut, Mekhnatabad, Mirzaabad, Saykhunabad, Syrdaryo, Sharaf Rashidov; 5 towns: Bakht, Gulistan, Syrdaryo, Shirin, Yangiyer; 5 settlements and 75 villages. Administrative center – City of Gulistan, is situated at the distance of 188 km from Tashkent City.

Climate of the province is sharp continental, dry and fair with some clouds. Average annual temperature is + 13-15 degrees and maximum temperature reaches +45-47 degrees.

According to the outcomes of the year 2007, gross regional product of the province (GRP) amounted to UZS 484.8 billion (USD 384.8 million) comprising 1.9% of Uzbekistan’s GDP. Per capita GRP amounted to UZS 700.2 thousand (USD 555.7 nominal, excluding the purchasing power parity).

Nearly 16 thousand economically active legal entities had been registered in the province.

Process of privatization and creation of enterprises of various ownership forms – joint-stock, private, with mixed capital, including those with foreign investments, are being actively conducted. Many joint-stock companies, including large and quite attractive ones by their economic efficiency, put their shares on sale at exchange auctions.

Share of small business and private entrepreneurship enterprises in the province’s GRP reached 44.3% according to the outcomes of the year 2007.

Population of the province’s is about 692.9 thousand people, and 392.3 thousand people comprise the labor resources. Population of the province is distinct for its substantial reproduction rates.

The province represents a large base of production of cotton fiber, grains, watermelons and gourds, fruits and vegetables. Share of the agriculture in the GRP amounts to 43.9%.

Favorable agroclimatic conditions allow growing of cotton, grains, fruits, vegetables, watermelons and gourds and other crops. Area of irrigated lands amounts to 256.0 thousand ha.

Cotton and grain farming and other branches of crop production and cattle farming are the major directions of the province’s agricultural development

Major types of agricultural products include:
- in crop production – grains (wheat, rice, corn for grain), cotton, potatoes, vegetables, watermelons and gourds, grape, fruit and berries;
- in cattle farming – cattle and poultry meat, milk, eggs, wool, cocoons, livestock and small cattle, sheep, poultry and others.

More than 33.3 thousand tons of grains (239.2 thousand tons of wheat, 24.1 thousand tons of rice, 9.3 thousand tons of corn for grain), 248.0 thousand tons of raw cotton, 19.6 thousand tons of potatoes, 128.7 thousand tons of vegetables, 139.4 thousand tons of watermelons and gourds, 6.2 thousand tons of grape, 14.8 thousand tons of fruits and berries, 33.7 thousand tons of livestock and poultry meat, 163.2 thousand tons of milk, 41.8 million eggs, 317.8 tons of wool and 521.6 tons of cocoons are produced annually. 223.7 thousands of livestock, 6.9 thousands of pigs. 150.5 thousands of sheep and goats, 7.6 thousands of horses and 456.0 thousands of poultry are bred.

More than a half of the gross regional product of the province is produced in the province’s agricultural sector. More than 10.5 thousand tons of fruits and vegetables for total amount of USD 5.6 million were exported in 2007.
 

The province possesses limited reserves of natural and raw material resources. They primarily ensure the potential of development of construction materials production, including:

Raw materials for brick and tile production, reserves of which in Bayaut and Gulistan Rayons as well as at Dmitrov deposit amount to 9.2 million cubic m; 

Reserves of the Bayaut-1 deposit explored in 1970 and located at 8 km to the north from Bayaut Settlement on the bank of the Lake Sultankhauz amount to 1.75 million cubic m.

Reserves of Dmitrov deposit explored in 1983 and located at 20 km to the northwest from Shirin Settlement amount to 4.7 million cubic m.

Reserves of the Bayaut deposit explored in 1985 and located at 23 km to the southeast from Gulistan Town amount to 2.7 million cubic m.

Sand-gravel materials are located at the Upper Volyn deposit in Saykhunabad Rayon of the province. This deposit was explored in 1987 and is located in 32 km to the southeast from Bakht station in the river Syrdarya valley. Reserves amount to 5.5 million cubic m. Sand may be used as a fine aggregate in concrete production.

Mineral underground waters are located at Malek deposit in Syrdarya Rayon in 5 km to the south of Syrdarya Town. Reserves for the Malek site have been approved by the STC of the Uzbekgidrogeologiya in amount of 193.54 cubic m/ day, and 3.15 cubic m/day for Syrdarya site.

More than 428 industrial enterprises, including the largest joint-stock companies such as “Gulistonekstraktyog” (vegetable oil extraction (cotton seeds), “Pakhtasanoat” (cotton fiber processing), “Don Mahsulotlari” (flour production), “Oq-Oltin BKhP” (logistics services (eg. storage of cotton fiber), “Momiq-SV” (mattress cotton wool), etc. are located in this province.

Syrdarya Hydropower Station in Shirin Town is one of the largest in the CIS and generates one third of all electric power of Uzbekistan.

In general, more than 40 most important types of industrial products are manufactured at the province’s industrial enterprises.

An oil-extraction plant producing vegetable oil from cotton seed functions in Gulistan City. In addition, Syrdarya and Yangiyer fisheries, whose activity has been restored, provide the population with high quality fish products. A plant in Khavast Rayon the manufacture of dairy products has started. 

Cotton fiber, flour, rice, soaps, meat products, canned fruits and vegetables, textiles and pharmaceutical products, bread and bakery products, confectionery, garments and knitted clothes, soft drinks, and construction materials are also produced at plants and factories.

Measures for using own cotton fiber for production of yarns has been implemented over the recent years since the country’s independence. Several years ago Joint-Stock Company “Zilola” has organized production of yarn from cotton fiber, and nowadays processes 300 tons of mentioned raw material annually.

During the years of independence, all necessary structures for foreign economic activity have been newly established in Syrdarya Province. Regional focus is directed to maintenance and promotion of centralized export. Substantial growth of foreign economic activity is observed in the province. Export is particularly growing within the structure of foreign trade.

Growth of foreign trade turnover of Syrdarya Province in 2007 amounted to 106.7% against year 2006. Growth of foreign trade turnover was ensured due to export growth, and import volume has actually been reduced. As a result, positive foreign trade balance has been formed.

Although raw material items dominate in the export structure of Syrdarya Province, positive shifts have taken place over recent years. For instance, share of cotton fiber in total export volume substantially decreased, while share of machinery and equipment has been growing year-by-year.

Transport infrastructure of the province is represented by an extensive network of railroads and highways. Total length of railroads is 400 km, and that of highways with hard surface – nearly 2 thousand km. Great Uzbek Highway crosses the territory of the province. All large enterprises have access to railroads. Intraprovincial transport communications have access to neighboring states, and through the latter – access to large sea ports.

Main highways and railroads pass through Gulistan town and connect the province with all other provinces of Uzbekistan. 3 types of transport – buses, microbuses and taxi render transport services to population.

In 2007 volume of freight traffic by all types of transport amounted to 22.3 million tons.

116 mail service branches of the OJSC “Oz’bekiston Pochtasi” (Uzbek Mail) function in the province.

Drama theaters, amusement parks, sport complexes, museums, palaces of culture and libraries offer their services to residents and guests of Syrdarya Province.

There are 198 libraries, 98 clubs, 2 museums, 2 theaters, 27 music and arts schools, 5 amusement parks in the province.

Great attention is paid in the province to development of sports and physical training. 12 stadiums, 42 tennis courts, 10 swimming pools are functioning in the province. There are total of

278 sports facilities in this province.
3 elite hotels: “Camping”, “Alpomish” and “Syrdaryo Mehmonxonasi” are operating in the province. “Syrdaryo Sayyohlik Turizm” travel company carries out its activity.

 

Regional level of export of goods and services performed is primarily connected with volume of investments attracted to the province’s economy.

Syrdarya Province has vast opportunities for large scale attraction of foreign investments. Volume of foreign investments and loans attracted to Syrdarya Province from 2003 to 2007 grew by 4.6%.

Large investment projects aimed at improvement of the province’s production and social infrastructure and funded by loans of ADB and IDB are implemented in the province. 

Enterprises attracting foreign direct investments and located in Syrdarya 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 shall be 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.

Said tax preferences are granted 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.

Currently 45 enterprises with foreign investments, including 9 enterprises with 100% foreign capital are registered in Syrdarya Province. 

Activity of these enterprises provides employment for more than 2 thousand people. In 2007 foreign trade turnover of enterprises with foreign investments amounted to USD 22.7 million, goods and services with total value of USD 18.4 million were exported and volume of import amounted to USD 4.3 million. 

Major enterprises with foreign investments include the following: Uzbek-Swiss JV “Sarruna Textiles” (cotton yarn), Uzbek-Russian JV “Sarbontex” (cotton yarn, medical bandages), Uzbek-Russian JV “MosYanTex” (knitted garments), Uzbek-Russian-British JV Reka Med Farm” (medicaments), Uzbek-Russian-Byelorussian JV “Bakhtselmash” (plough share), Uzbek-Kazakh JV “Shin-Line” (ice-cream), Uzbek-Kazakh JV “Guliston Baraka Uni” (flour), Uzbek-Turkish JV “Khorazm Malikasi” (carpets), Uzbek-British JC “Oqoltin” (cotton wool) and German Foreign Enterprise “Bobur” (poultry farming).

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. Auction Sale of the JV “Lola Model” Property Complex (Production of Cotton Yarn and Grey Cotton Cloth)

• Legal address        -        Gulistan City, Syrdarya Province
• Type of activity       -        production of knitted cotton products, linen
• Capacity                -        40 thousand pieces
• Area of land plot     -        1.7 ha
• Area of buildings and facilities -        1.3 ha
• Provision with         -        production infrastructure - 100 %, labor resources - 100 %
• Equipment             -        brand Kintex and Brayser (China), depreciation –25%
• Terms of sale         -        complex
• Estimated value      -        USD 2,042.3 thousand

SILK INDUSTRY

2. Establishment of a Joint Venture for Production of 30 Tons of Silk Threads based on the Syrdaryo Pilla, Ltd.
 
1. Information on the Originator Enterprise:

2. Authorized Fund and Founders of the Enterprise:

3. Production Volume (2006): 

4. Description of the Proposed Project:
Establishment of a joint venture for production of silk threads
5. Project Performance Characteristics: 

6. Provision of the Proposed Production with Raw Material Resources: 

7. Existing Infrastructure and Availability of Business Plan:

FRUIT AND VEGETABLE PROCESSING

3. Expansion of Dried Onion Production Up To 150 Tons Based On The “Aholi Kumak Savdo” Subsidiary Company
  1. Information on the Originator Enterprise:

2. Authorized Fund and Founders of the Enterprise:

3. Production Volume (2006):  USD thousand

4. Description of the Proposed Project:
Expansion of dried onion production up to 150 tons
5. Project Performance Characteristics: 

6. Provision of the Proposed Production with Raw Material Resources: 

7. Finished Product Markets:

8. Existing Infrastructure and Availability of Business Plan:

FURNITURE PRODUCTION INDUSTRY

4. Organization of New Production of 40 Thousand Cubic m of Tiling Materials Such As Particle Boards and MDF based on the JV “Fayz-Imal System”
1. Information on the Originator Enterprise:

2. Authorized Fund and Founders of the Enterprise:

3. Description of the Proposed Project:
Organization of production of 40 thousand cubic m of tiliing materials such as particle boards and MDF
4. Project Performance Characteristics: 

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

PHRMACEUTICAL INDUSTRY

5. Organization of Production of Finished Cellulose Goods at the Gyulistonfarmtex, Ltd.

I. Information on the Investment Project Originator             

II. Description of the Investment Project     

• Objective of the Investment Project

• Advantages of Investments

Investment Needs

Proposed Sources of Financing

ENERGY

6. Sale of 48% of Shares of the OJSC “Syrdarya Thermal Power Plant”

Investment obligations: according to the resolution of the State Tender Commission

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. Description of the Enterprise

ENERGY

7. Installation of Expansion Engines at the Talimadjan TPP and Syrdarya TPP with Total Capacity of 20 MW with Annual Energy Output of 140 Million KW/h

I. Information on the Investment Project Originator

Founders of the enterprise:

Brief Information on the Enterprise

Infrastructure and Its Condition:

Financial Condition of the Enterprise:                                               million UZS

II. Description of the Investment Project     

• Objective of the investment project

• Advantages and benefits of investments

• Equipment required for the project implementation

• Provision of the proposed production with raw materials

Investment Needs

Proposed Sources of Financing

Expected Financial Results of the Project Implementationmillion UZS

CDM PROJECTS

8. Construction of Syrdarya TPS – Sogdiana Substation 500 kV Power Transmission Line

CDM PROJECTS

9. Improvement of energy using efficiency on electric engines, used in gas compressor units of JSC “Uztransgas” at CS-3B in Yangier

Telephone numbers in Syrdarya Province are seven-digit. In order to dial a number in Syrdarya Province from another province of the Republic of Uzbekistan, one should dial 8 – long beep – 367 (telephone number). International format for dial-up to Syrdarya Province is +998 67 (telephone number).

Operator’s codes for mobile communications subscribers differ and are dialed in international format:

1. - for subscribers of the MTS Uzbekistan: +998 67 (subscriber’s number);
2. - for subscribers of the Beeline: +998 90 (subscriber’s number)
3. - for subscribers of the Coscom (U-Cell): +998 93 (subscriber’s number)

Telephone Numbers: