LT Textile Cooperatief U.A. to create textile capacities in Kashkadarya region

The Government of Uzbekistan issued a resolution “On measures on organization of modern textile capacities in Karshi district of Kashkadarya region” on 31 October 2014.

The document was adopted to attract foreign direct investments to organize modern textile capacities and increase export potential of the industry, create new jobs.

The Government approved an investment agreement between the Ministry of Foreign Economic Relations, Investment and Trade of Uzbekistan and LT Textile Cooperatief U.A.

The investment agreement was signed on 17 October 2014 and envisages concrete liabilities of foreign investor on implementation of the project on organization of modern textile capacity at 30 hectare land in Karshi district of Kashkadarya region.

In line with the agreement, LT Textile Cooperatief U.A. undertook liabilities to invest at least US$55 million in 2015-2016 to create textile capacities, of which US$17 million will be own resources of the Dutch company and US$38 million – loans of foreign banks, attracted without guarantee of the Government of Uzbekistan.

The Dutch company undertook obligation to organize textile production, equip it with modern and high technologic, as well as energy saving equipment. It will also create service center to provide maintenance services to textile equipment.

According to the resolution, the Dutch company will commission textile capacities in November 2016. In the first quarter of 2017, it will reach its designed capacity of processing 20,000 tonnes of cotton fibre and produce 15,000 tonnes of cotton and mixed yarn a year.

LT Textile Cooperatief U.A. will export at least 80% of produced goods and create 700 new jobs after the plant will reach its designed capacity.

The Dutch company will organize production of cotton and mixed fabrics in 2017-2018, investing another US$5 million into production.

Ministry of Foreign Economic Relations, Invetsment and Trade of Uzbekistan and Uzbekyengilsanoat were entrusted to take under control execution of liabilities of the Dutch company within the agreement.

Kashkadarya regional administration was entrusted to provide 30 hectare lans in Karshi district to create textile capacities. The Government provided several preferences to enterprise, created by LT Textile Cooperatief U.A., till 1 January 2022.

The company will be also exempted from payment of custom duties at import of equipment and materials for creation of the plant.