By Province

Bukhoro province

The Bukhara Province is located in the Zeravshan Valley in the western part of the Republic of Uzbekistan. Hemmed in by deserts and steppes, its climate is sharply continental. The region gets ample sunshine 300 days a year on the average. As of 1 January 2007, the Bukhara Province has a population of 1,543 million.

The type of the regional economy can be classified as agrarian-industrial, with the shares of agriculture and manufacturing in its gross regional product being estimated at 35.1 per cent and 11.8 per cent, correspondingly. At the same time, there is a clear downward trend in the agrarian complex’s contribution to GRP. The share of industry and services, on the contrary, is on a rising trend.

As of 1 January 2007, the manpower resources available in the Bukhara Province work out at 882,700 people. Last year has seen a 2.5 per cent increase in their number (22,100 people). To meet their educational and training needs, the region runs a ramified network of educational establishments, including 49 colleges, 5 academic lyceums and 3 institutes of higher education. They train specialists of 297 professions in 99 disciplines.

In 2006, the gross regional product in the Bukhara Province reached 1.213 trillion Soum, or 5.8 per cent of the country’s GDP. Small enterprises and private businesses accounted for 54 per cent of this figure.

In the period under review, the revenues of the regional budget totaled 144.6 billion Soum, with its volume of expenditure amounting to 135 billion Soum. There are 20,000 registered economic operators in the Bukhara Province these days.

On the lower reaches of the Zeravshan River lies ancient Bukhara. The early existence of this city is affirmed in documents dating back to the 2nd century BC. During the more than 2,000 years of its history Bukhara has witnessed periods of prosperity and decline. 997 mosques, madrasahs, mausoleums and other unique architectural and historical monuments testifying to the rich culture of the past have survived in this historic center down to the present day. Bukhara was renowned for the development of crafts, trade, science, literature and art.

Nowadays, there are 43 hotels and 10 tourist firms operating in the Bukhara Province. What is worth mentioning in connection with this is that 37 of them are in private ownership.

The Bukhara karakul sheep skins (astrakhan fur) of excellent quality is far-famed all over the world. Each year some 211,000 skins of cattle, sheep and goats are produced there.

Promising directions for investment activity in the Bukhara Province
Processing of farm produce

The region’s farm produce includes some 80,000 tons of fruit, 200,000 tons of vegetables, 40,000 tons of melons, water-melons and gourds, and 95,000 tons of grapes. For the time being, only 45 per cent of all fruit and vegetables grown in the Bukhara Province is processed domestically, meaning that the opportunities for foreign capital investment in these sectors are many and varied.

The vast pasturelands surrounding the Bukhara Province provide favorable conditions for livestock farming in general and astrakhan sheep breeding in particular. Livestock raising is one of the most developed sectors in the region. Processing of leather and production of finished goods are highly promising activities in terms of investment. Bukhara karakul sheep skins are much in demand worldwide. The same is true of grey lambskins, which are notable foe the perfection of their curls, fine luster, silkiness and beautiful pattern. The Bukhara Province annually produces more than 250,000 skins of cattle, sheep and goats, 1,700 tons of wool,

For now, there are 3 joint ventures operating in this sector. They have been set up with the participation of investors form Poland, Afghanistan and the Russian Federation. To ensure its further development, 3 more projects, to the tune of 719 million Soum, will soon be launched in the Bukhara Province. They will be capable of processing no less than 40,000 karakul sheep skins for a total of 1.2 billion Soum.

Main production indicators for farm produce in the Bukhara Province for 2006 

Source: State Statistic Committee

Eight projects currently under way in the region are aimed at expanding the region’s processing facilities in the agricultural sector. All these projects are implemented under 458 million Soum worth of contracts made during the Agrominitech-2007 Exhibition. They are mainly financed by initiators themselves, plus credit facilities attracted from commercial banks.

Textile industry

Cotton cultivated in the Bukhara Province, with its fertile irrigated lands and an abundance of sunshine, is of high quality and may serve as an excellent raw material for the textile industry. In 2006, 373,600 tons of this valuable crop and 192,200 tons of cotton fiber were produced in the region. At the same time, a mere 11 per cent of the output is processed at local enterprises to date. The biggest textile enterprise operating in the Bukhara Province is AO Bukhoroteks.

The sector’s investment attractiveness is amplified by a whole system of privileges and incentives granted to investors. A favorable investment climate created in the region enables the latter to make extra profit when pouring their capital in the establishment of new enterprises and modernization of existing production facilities. For instance, in accordance with the 13 November 2006 Presidential Decree No ПП-510, textile enterprises involved in the implementation of investment projects are exempt (till 1 January 2009) from taxes and customs duties imposed on imported equipment, raw stuff and materials.

A program for expansion of the region’s production and exports potential and creation of new jobs by attracting foreign investments for the period 2007-2009, which is now under development, stipulates the realization of 15 investment projects valued at more than US $100 million. Their implementation will make it possible to process no less than 50 per cent of raw cotton within the region.

Potential foreign investors are offered a number of textile enterprises based in the Bukhara Province. Among them are branch enterprises of AO Bukhoroteks located in the Djondor, Ramitan and Shafrikan districts, and a spinning-weaving mill incorporated in the same company. In addition, put up for sale are a 44 .8 per cent stake in AO Bukhoroteks and a 32.2 per cent stake in the Joint-Stock Company I. Fozilov.

Production of building materials

The region’s mineral-and-raw stuff base encompasses 31 deposits, of which only 19 are now under development. These include deposits of graphite, facing stone, limestone, sand and raw materials needed for the production of brick and tile.

By its qualitative parameters, gypsum mined in the Bukhara Province is regarded as the best in the world. The Uzbek-German Joint Venture Bukhorogypsum operating in the region is unfolding a program for a stage-by-stage expansion of production as part of fulfillment by its foreign investor (Germany’s Knauf) of its investment obligations associated with the acquisition of the enterprise’s shareholding.

Mineral resources available in the Bukhara Province

Production of consumer goods

In an attempt to increase the production of foodstuffs and consumer goods, the Bukhara Province plans to implement 5 projects between 2007 and 2009. These are believed to speed up the production of furniture, polypropylene bags and packaging material.

A number of other projects – production of cognac alcohol (JV Gala-River), spirits (JV Bukhtel) and soft drinks (OOO Bukhara Prestige Service) will be realized with the help of foreign direct investments attracted to the region.

To lure credit facilities from commercial banks, there are plans to launch 6 projects stipulating the production of flour, soft drinks, confectionery and macaroni foods.

Program of re-establishment of state ownership rights and privatization

In addition to AO Bukhoroteks and AO I. Fozilov mentioned above, the following enterprises will sell their shareholdings to investors: 25 per cent of shares - in Bukhoro Ekstrakt Yog (production of vegetable oil), 25 per cent of shares - in TAO Bukhoro Kishlok Khuzhalik Kimyo (sale of the chemical industry’s output) and 24.1 per cent of shares - in AO Bukhara Karakul (production of karakul sheep skins).

Offered for sale are also the stakes in specialized oil and gas enterprises: 25 per cent of shares – in OAO Bukhoroneftegazishchitaminot, 64 per cent of shares – in OOO Korovulbozorneftgazishchilartaminoti, and 23 per cent of shares – in OAO Neftgazkuduktamirlash.

The rational exploitation of the Bukhara Province’s economic potential will allow the region to manufacture high quality competitive produce and thereby scale up its exports potential, as well as the exports potential of the Republic of Uzbekistan as a whole.

Investment projects

Investment projects, assuming attraction of foreign direct investments

Investment projects, assuming sale of shares

Enterprises for sale at auction tenders as property complexes