The proposed project involves the establishment of a modern textile plant in Uzbekistan to manufacture basic and polo T-shirts for export using locally available cotton yarn. The sponsors are private Turkish textile manufacturers, i.e. Baha Tekstil and Ultas. In view of the rising production costs in Turkey and increased competition in the global textile industry after the lifting of textile quotas in Jan 2005, the Sponsors decided to shift part of their operations to Uzbekistan, a low cost cotton growing country, in order to maintain their competitiveness.
Uzbekistan is one of the world’s largest producers of cotton and the second-largest exporter, yet only less than one third of the cotton is processed domestically. The rest is exported unprocessed, representing a big loss of potential earnings for the country.
The proposed project will promote
(i) economic development in Uzbekistan and contribute to its foreign exchange earnings by increasing the production and export of value added goods in an economically important key sector
(ii) private sector development through the Bank's involvement in a manufacturing project undertaken by a 100% privately owned company. It will also have a good demonstration effect by signaling the commercial viability of cotton processing in Uzbekistan.
The Borrower is Bayteks, a private company established in Uzbekistan, which is majority owned by Ultas (a state-of-the-art spinning mill in Nigde) and Baha Tekstil (a knit-wear plant in Istanbul), both private Turkish companies.
USD 7 million senior loan.
USD 29.3 million.
The Project was screened B/1.
Environmental and social due diligence, which is currently underway, will address relevant national employment laws and standards and International Conventions, particularly in relation to core labour standards. Information on the local suppliers of cotton will also be collected in relation to Conventions of the International Labour Organisation related to the employment of children and young people, discrimination at work, and forced labour. Other environmental issues associated with this type of project include wastewater discharge, air emissions, dyeing, noise and waste management. Worker health and safety issues may also be of concern particularly in relation to workplace noise exposure and cotton dust emissions. Preliminary due diligence indicate that the Sponsor operates all their existing facilities to the highest international environmental and social standards and the Uzbek facility is being built to ensure full compliance with international standards on health and safety, life and fire safety, core labour standards, and child labour.
Mr. Haluk Bayatli
Tel: +998 71 398 80 80
Fax: + 998 71 148 03 05
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