Page 30 - Uzbekistan rising bne IntelliNews special report

30 I Special Report: Uzbekistan Rising bne December 2021
Founded in 1964, the NavoiAzot chemical works has been in a comprehensive rejuvenation programme since 2016 that is starting to bear fruit.
The rejuvenation of Uzbekistan’s NavoiAzot chemical works
Ben Aris in Navoi
Odil Temirov, the deputy chairman of the chemical plant NavoiAzot in the industrial city in the Qizilqum (aka Kyzyl-Kum) desert is
a busy man. He was late to pick us up and show us around the Soviet era plant that is in the midst of a large- scale modernization drive.
“I’m sorry. I was on the phone to our new Polish partners Alliance Capital who we are setting up a joint venture with,” he explained.
The plant is one of the biggest
in Uzbekistan and was founded
in 1964. Much of the original
plant is a fairly typical post-Soviet installation; run down and rusty. But in between the original production lines are gleaning new buildings
and chemical-making equipment.
The plant’s renovation was kicked off
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in 2016 with some state guaranteed credits, but since then it seems
the investment drive has reached
a critical mass and NavoiAzot has attracted several partners, each that have invested into separate projects and business is booming.
In total the company is planning to invest $1.7bn in new production facilities that includes ammonium, urea and nitric acid production amongst other things with a variety of partners from different countries.
There is still plenty of untapped potential in just meeting domestic demand, but NavoiAzot has also seen exports soar by 170% in the last year to over $200mn expected by the end of 2021. Now a second stage of investments has started that will only increase in the next few years, Temirov explains.
PVC
Our first stop was the new PVC facility that was co-built with Chinese partners to produce PVC (polyvinyl chloride), the basic input for plastics, for the first time in Uzbekistan.
Previously all the PVC in Uzbekistan was imported but now the plant's entire 100,000 tonnes a year production
has been snapped up by domestic customers. Demand remains so high NavoiAzot is already breaking ground on a second even bigger 120,000 tonnes per year facility on its own territory
to expand production further.
Once the new facility comes online next year, it hopes to cover domestic demand and probably will be able to start exports to its neighbours in Central Asia.
The first plant was built in cooperation with a Chinese consortium including CAMC Engineering and HQC Shanghai using a $439mn state guaranteed debt that primed the pump, but the new facility was funded commercially with the Chinese partners contributing
to the investment of $397mn.
Partners
NavoiAzot has commissioned a new $1bn ammonia and urea (carbamide) production facility that is used to make fertilizers amongst other things. The facility is being constructed with its Austrian partners Continaz, and a second $216mn facility to make 500,000 tonnes capacity nitric acid is being
built with the Swiss company Casale.
A consortium of Japanese companies Mitsubishi Heavy Industries and Mitsubishi Corporation built the complex. The Danish Haldor Topsoe supplied technologies for the production of ammonia, the Italian Saipem - for
the production of urea, and the German Uhde for the granulation of urea.
Japanese banks and financial institutions provided $ 577mn in loans for the $985.7mn project, and the Uzbekistan Fund for Reconstruction and Development contributed a $320mn loan, while the company allocated $88mn from its own resources.