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INFORMATION DIGEST No. 33

February 15, 2017

INVESTMENTS
Fayz Company will build a modern production of particleboard from cotton stalks in Syrdarya region by the end of the current year

The capacity of the new enterprise will make up 30,000 cubic meters of products per year. The project cost is $3.5 million.

Previously, a government resolution envisaged the establishment of similar facilities in three regions of Uzbekistan. The production of import substituting and marketable product will be established at the facilities of Jizzah Qurilish Ziynati enterprises (10,000 cubic meters per year), Termiz-Ta’minot (10,000) and Seowon Kiup (30,000).

The total estimated cost of the four projects is $10.8 million. The facilities should be launched by the end of 2017. The project will be funded by own funds of enterprises, loans of domestic and foreign banks, as well as direct foreign investment of Seowon Kiup company.
(Source: «Uzbekistan Today» newspaper)

FREE ECONOMIC ZONE KHAZARASP
Uzbekistan has developed 53 project proposals on siting new production facilities worth $152 million in the territory of the new Khazarasp Free Economic Zone

The industrial precinct will house modern production facilities in processing agricultural goods, their storage and packaging, along with textile businesses, manufacturers of footwear and leather haberdashery products, companies in pharmaceuticals, food and electrical engineering, mechanical engineering and automotive industry, construction industry.

“More than 325 hectares have been already allocated for Khazarasp FEZ. In the future, its area is to expand to 600 hectares. Works are currently underway on the establishment of the border zone, customs post, attraction of foreign and local investors,” says the deputy hokim (governor) of Khazarasp district Maksud Rahimov.

Engineering and communication infrastructure, including gas pipelines, water pipes and mains, sewerage, roads and railways, communications, are currently laid in an accelerated mode to provide modern production enterprises on the territory of the zone with appropriate working conditions.

Many foreign investors already show interest in the projects. An Uzbek-Chinese joint venture Pitnak Panel has come forward with a proposal.

“In cooperation with the Chinese company Hinjiang Zaman Import and Export Trade Co LTD, we are drafting a project for $3.5 million for the construction of a facility to manufacture 200,000 polystyrene blocks and sandwich panels per year. The project envisages employment of about 40 young specialists – graduates of vocational colleges,” said the head of the enterprise Hushnud Jumaniyozov.

There are prospects of even greater interest of foreign investors ahead, because FEZ participants are exempt from customs duties, certain taxes and mandatory contributions to state funds. For example, investments from $300,000 to $3 million earn a privilege of three years of exemptions, from $3 million to $5 million – five years, and $5-10 million investments invite seven years of tax and duty exemptions.

If a party invests more than $10 million, he will get exemption on tax and duty payments for 10 years, and in the next five years, he will pay income tax and single tax payments with a 50 percent discount of the current rates.

In addition, the government released FEZ participants from customs duties on imported raw materials and components for the whole period of its operation.
(Source: «Uzbekistan Today» newspaper)

INTERNATIONAL COOPERATION
On telephone conversation with the President of Turkmenistan

On 14 February 2017 President of the Republic of Uzbekistan Shavkat Mirziyoyev had a telephone conversation with President of Turkmenistan Gurbanguly Berdimuhamedov.

The Head of our state cordially congratulated Gurbanguly Berdimuhamedov on his confident victory in the presidential elections and wished him great successes in this high public post.

It has been underlined that the results of the elections have been a new demonstration of the highest trust and full support by the Turkmen people of the deeply thought-out political and socio-economic reforms, being implemented in Turkmenistan and aimed at ensuring the growth of the well-being of the people, dynamic development and prosperity of the country.

During a conversation, the Heads of the two countries discussed the current state and prospective spheres of the bilateral cooperation, as well as exchanged views on key aspects of regional and international politics. Active promotion of the foreign policy course of Turkmeinistan and successful implementation of Gurbanguly Berdimuhamedov’s initiatives on the international arena has been particularly highlighted.

The Presidents have expressed satisfaction with significant intensification of inter-governmental contacts on different levels and expansion of mutually beneficial cooperation. The parties have positively appraised the results of the working visits of high-level governmental delegations of Uzbekistan and Turkmenistan as well as the interactions among regions of the two countries.

The Heads of state reaffirmed a mutual interest in dynamic development of a constructive and open dialogue between the two fraternal nations and expressed readiness to tap the existing substantial potential in order to foster productive ties in trade-economic, transport-communications and cultural-humanitarian spheres.

Concluding the conversation, Shavkat Mirziyoyev wished Gurbanguly Berdimuhamedov a strong health, well-being and new successes in his public post and peace and further prosperity to the people of Turkmenistan.

The conversation was held in a traditionally warm and friendly atmosphere, characteristic of the dialogue of the leaders of our countries.
(Source: UzA)

ECOLOGY
An integrated waste disposal program for the coming years has been elaborated in Uzbekistan

It was defined well before that: the country will gradually abandon burning and long-term storage of waste at landfills, introducing modern and environmentally friendly technologies of its separate collection and recycling.

Huge amounts of waste that keeps accumulating in landfills, poisoning the life of surroundings, rank among the main challenges of modern society. Most of the states in the world lose in this combat, simply avoiding the worsening of the situation. They prefer using the old, proven, but extremely ineffective mechanisms of waste disposal by expanding landfills, delaying a solution on the back burner, or, even worse, cause enormous damage to the environment, partly burning garbage.

It is no secret that Uzbekistan could not avoid this problem, because huge amounts of industrial waste were accumulated in the country in the years of extensive development in Soviet times, which were thoughtlessly dumped into huge pits and then buried. It was not fashionable to care about the environment or population; the ball was ruled by industrial mega giants and economic projects.

Independence changed the situation; however, the game was still ‘one-sided’. Despite the purchase of new equipment, creation of a network of modern garbage collection points throughout the country, the amount of waste continued to rise, threatening to entail even bigger quandaries. The solution was eventually found. Expert community and the government developed a uniform and phased treatment strategy for production and consumption waste for the whole country with the main focus on the introduction of innovative technologies and attraction of investments, including foreign funds.

It is based on the creation of a network of standard design ultramodern waste sorting and recycling plants. According to expert estimates, even one year of operation of such a plant in every region of the country would significantly change the situation. They would not just address operational problems, but allow being proactive, moving toward complete resolution of the problem.

The initiative was built on the concept of expansion of the scope of application of municipal solid waste while minimizing their negative impact on the environment. Today, millions of tons of garbage are stored in landfills throughout the country and remain unused, while in the European Union, Japan, Republic of Korea, they have long been in demand as a feedstock for the production of a wide range of goods, bringing billions of dollars in revenue.

The first conceptually new and ultra-modern waste sorting and recycling plant will be built in Urgench district of Khorezm region through loan resources of the National Bank of Uzbekistan. The industrial complex will be equipped by the Chinese Beston Group Machinery Co LTD.

The industrial facility, which is scheduled for commissioning by the end of the current year, will consist of two process steps - a specialized waste sorting station, and a complex for processing various types of waste. Annually, the facility will process almost 900 tons of municipal solid waste, and produce six types of finished products.

For example, fuel for boilers will be produced of rubber, tires, cellophane and plastic, and briquettes for heating will be obtained from pruning waste. Plastic bottles of soft drinks will go for the production of padding polyester for textile and construction industry.

It is planned to establish the production of walling blocks out of construction waste. A separate line will process waste paper into packaging material for industrial enterprises. Fruit and vegetable waste and spoiled food will go for the production of biogas and plant fertilizers.

A question arises: what will be the effect of one, or even 15 plants? This initiative should be assessed from a different angle. Plants just imply modern technologies, while triggering as much important system of separated waste collection nationwide, which is now regarded by all international experts without exception as one of the main mechanisms to address waste disposal problems. In this context, Uzbekistan will pioneer the introduction of a full-scale system of separate waste collection and recycling not only in Central Asia and the CIS, but among the most advanced nations of the world.

The scheme is simple: people will carry trash to specialized collection points equipped with modern containers, each of which is intended for a specific type of waste - glass, paper, plastic and so on. Specially procured vehicles of domestic production will deliver waste to factories for processing, which then will supply ready products to the market. The introduction of this system was supposed to start in the country long ago with Tashkent as a pilot project. However, the lack of a network of processing plants and full funding impeded the project. Now it is time for a full-scale launch.

Uzbekistan relies on the European experience. For example, a project on the modernization of solid waste management in Samarkand is partnered by the French Development Agency, which invests €23.5 million, and the EU that allocates €8 million from a special fund.

The project provides for the construction and repair of 200 garbage collection points, purchase of 70 specialized vehicles, construction of a municipal solid waste sorting center and a waste disposal center, as well as the installation of a bioreactor for recycling biogas in landfills.

It is unique for the fact that the waste technical dumping center will be used as a bioreactor to maximize the extraction of biogas as a basis for obtaining fuel for refueling containment machines. The complex will be the first of its kind in Uzbekistan and the entire Central Asia.

This all suggests that with the right approach, Uzbekistan is likely to turn into one of the cleanest countries in the region in a couple of years, earning on seemingly useless waste. The project has been launched, and the results are anticipated.
(Source: «Uzbekistan Today» newspaper)

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