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Turkmen cotton industry boosted by EBRD loan and equity
The European Bank for Reconstruction and Development (EBRD) today signed a US$ 13.8 million (ECU 10.8 million) equity investment and a US$ 17.5 million (ECU 13.6 million) loan for Gap-Turkmen, to create the first vertically integrated textile production company in Turkmenistan. The loan and equity investment will enable the company to expand an existing denim weaving plant by building a spinning plant and a ready-made jeans manufacturing plant.
At the signing, David Hexter, Deputy Vice President of the EBRD, said: "The construction of this complex is an important step for Turkmenistan's textiles industry. Gap-Turkmen will have one of the most technologically advanced and competitive integrated cotton plants in the world. The project also marks a significant step in attracting foreign currency earnings and foreign private investment to the country."
Mr Ahmet Calik, President of Gap Group, thanked the President of Turkmenistan and the EBRD for their invaluable contribution to the project which has enabled Gap to expand its existing investment.
Mr Begenc Nepesov, Turkmenistan's Minister of Textiles, stated that the government's primary goal is to raise both the value and the level of cotton production in the country, and to attract foreign capital.
Gap-Turkmen is a joint-stock company established under Turkmen law. In 1995, the Gap Group (a Turkish textile group) and Turkmenistan's Ministry of Textiles decided to expand the Gap-Turkmen denim weaving plant to a fully integrated textile complex.
The project involves the construction and operation of an integrated textile production complex named "Turkmenistan'in Presidenti Saparmurat Turkmenbasi". It will include a denim weaving mill with an annual capacity of 12 million linear metres, a new spinning plant to produce annually 7.8 million tons of open end and ring yarns which will be entirely consumed by the weaving mill, and a new jeans manufacturing plant to produce annually 4.9 million pairs of jeans, consuming half of the denim fabric output from the weaving operation.
The EBRD's loan and equity participation represents 35 per cent of the total long-term capitalisation of the company. The equity subscription will represent 20 per cent of company shares.
Turkmenistan is among the world's top 10 cotton-producing countries, with an annual production of over 400,000 tons of cotton fibre.
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