|
EBRD equity and loan for Uzbek woollen textile plant
To help Uzbekistan to make greater use of its indigenous wool, the European Bank for Reconstruction and Development (EBRD) is providing a US$ 24 million financing package for a new integrated woollen textile plant to be built by Kasansay-Tekmen Wool Products Textile Industry and Marketing (Kasansay-Tekmen).
"Even though Uzbekistan has a large sheep population, the country did not have the technology to process local wool into high-quality textile products", explained Junichi Maruyama, Director of the EBRD Uzbekistan team. "Most woollen products had to be imported, affecting the country's trade balance. By investing in such a plant, the EBRD is playing a pivotal role in advancing the transfer of technology and know-how".
On behalf of the Uzbek government, Avazkhon Kazakhanov, Chairman of the State Corporation "Makhally Sanoat", noted that this project is a top priority for Uzbekistan and said, "Woollen fabrics and garments are vital for Uzbekistan's population. Production at Kasansay-Tekmen will also assist the development of private small and medium sized enterprises in garment making, as well as in hand knitting and carpet weaving."
"This will be Uzbekistan's first woollen textile plant and will set high standards in raw material preparation, blending, waste utilisation, manufacturing and marketing of a broad range of woollen products", explained Tahsin Tekoglu, chairman of Kasansay-Tekmen. "Based on low labour costs and use of local wool, the plant will attract foreign investors, especially those manufacturing woollen garments. Our output will go some way to meeting domestic demand and also provide significant export earnings."
The EBRD financing package includes a US$ 10 million (ECU 7.7 million) equity investment and a seven-year US$ 14 million (ECU 10.8 million) loan, the proceeds of which will be used to partially finance the construction of the plant, to purchase equipment and to fund pre-production expenses. The plant will produce worsted and woollen fabrics, yarn for hand knitting and carpets, as well as blankets for both domestic and export markets. The plant is located in Kasansay City, 350 km east of Tashkent in the Namangan region and is expected to create direct employment for over 1,000 people in this densely populated area.
Kasansay-Tekmen is a joint venture between the Kasansay Silk Factory, a privatised Uzbek company manufacturing woven silk and cotton textiles, and the Tifas Group, a Turkish group of companies active in woollen textiles manufacturing. Kasansay Silk Factory is investing US$ 12.25 million in the company and the Tifas Group is contributing US$ 15.75 million equity via a new entity, Tekmen International Marketing and Investment Inc. (TIMI). Additional finance has been provided by Turk Eximbank in the form of a US$ 24 million loan to the National Bank for Foreign Economic Activity of Uzbekistan (NBU) for on-lending to Kasansay-Tekmen. Vakifbank of Turkey, together with the NBU, will be supporting the project in the investment and operation stages through guarantees and other banking services.
|
