Page 14 - Uzbekistan rising bne IntelliNews special report

14 I Special Report: Uzbekistan Rising bne December 2021
“We are the biggest private employer in the city,” says Kholmorodov. “We used to assemble TVs here too but three months ago that was moved to another factory in Akhangaran in the Tashkent region, which also makes TVs, to consolidate the production in one place.”
And the factory doesn't only assemble the vacuum cleaners, but presses
its own components in a series of Chinese-made giant plastic machines.
“In the beginning we made only 10 components here but now it’s over 150,” says Kholmorodov. “About 65% of the component production has been localised, with the rest imported
Nukus to support the beleaguered local economy and the company has kept
it there as part of its developing ESG (environment, social and corporate governance) policies to support society with its work. It is part of the reason that Artel has built facilities around the country in several of the larger cities to provide jobs for the locals.
The presence of the government in business has retreated but the state
is still a major driver for business in the country. A portrait of Mirziyoyev hangs on the wall in the main meeting room, as is common across the whole CIS, and a giant banner hangs across the main wall in the production hall,
The domestic market for white goods has been growing steadily in the last decade as the economy has stabilised and since President Shavkat Mirziyoyev took over in 2016 business has been good. Stability and the opening of the economy have allowed companies like Artel to flourish. One of the biggest changes was the lifting of exchange rate controls in 2017 that killed international trade. A large share of
the Nukus output now is exported.
“Ukraine and Kazakhstan are the most important markets, but we export to all the countries of the CIS,” says Kholmorodov. “And this year
we are just about to start exports to Nigeria, Tanzania and Syria.”
Exports have helped bolster the company’s bottom line during
the pandemic. Kholmorodov says that domestic sales were hurt somewhat during the lockdowns in 2020, but the expanding exports have more than compensated.
The factory is an important component in bringing Nukus back to life and Artel is also planning to open
a second factory in the city in the coming month that makes doors and flooring for the construction industry. It has also signed a co-operation
deal with the local university, has invested in its engineering and IT departments, and will hire some of its students on graduation.
The UN has identified Nukus as one that needs special attention to prevent its depopulation. The UN has launched a special fund, in addition to assistance to the federal government, in order to support and develop the local economy.
The government is also working to improve the city’s situation and is about to make the region a free economic zone to promote more business and investment.
“We are not sure exactly what this will mean,” says Kholmorodov, “but I’m sure it will bring benefits and we will take advantage of them.”
“In the beginning we made only 10 components here but now it’s over 150”
from China, Vietnam and Korea, where Samsung also has factories.”
Nukus may seem a little out of the
way, as it is in the far west of the country. Artel has its biggest flagship production facilities in Tashkent, the nation’s capital, but when the company was founded then-president Islam Karimov insisted a facility was built in
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a quote from the president: “Innovation is the future for our country’s development.” Old habits die hard.
Nukus’ local economy is now back on its feet. The plastic granules for the Chinese presses come from the local state-owned plant that employs 7,000 people and mostly exports
its output all over the world.