BURSEL TASHKENT TEXTILE JV

Location:

Uzbekistan

Project number:

26361

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

B

Approval date:

30 Sep 2003

Status:

Completed

PSD disclosed:

26 Mar 2003

Project Description

The establishment of a textile plant in Chirchik, Uzbekistan, to manufacture high-quality knitted cotton garments (underwear, nightgowns and t-shirts). The plant will operate with the latest technology using locally manufactured cotton yarn and grey fabric to produce finished products for export.
 
The sponsor’s strategy is to benefit from the low-cost environment in Uzbekistan and locally available raw materials combining these with modern technology and effective management and marketing skills to manufacture value added finished goods for export. Raw materials will be supplied by the sponsor’s two existing new spinning and knitting plants in Uzbekistan (built in partnership between Bursel Textile Industry and Foreign Trade Inc., Mitsubishi and Uzbeklegprom, the Association of State Cotton Enterprises). The proposed plant will transform the intermediate products of these plants into finished garments thus enabling the Sponsor to move downstream into garment production (forward vertical integration) where operating margins are considerably higher than in yarn and fabric production.

Transition Impact

The project has good transition impact potential:
  • Private sector development is still at a very early stage in Uzbekistan and the project will be the first majority privately owned garment-manufacturing company in Uzbekistan.
  • Although Uzbekistan is the world’s fifth largest cotton producer, at present, only about 25% of the total cotton fibre output is processed domestically. The project will promote economic development in the country and contribute to its FX earnings by increasing the production and export of value added goods in an economically important sector.
  • It will generate considerable employment;
  • It will have a good demonstration effect by signalling the commercial viability of cotton processing in Uzbekistan and promoting the country as a reliable supply source for clothing; and
  • It will provide new facilities with modern production technology and will facilitate the transfer of skills, technology and know-how in garment manufacturing.

The Client

Bursel Tashkent Textile JV - a joint stock company to be established between Bursel Textile and two local partners as minority shareholders. Bursel Textile will own 94% of the shares and have management responsibility while Uzbeklegprom (Association of State Cotton Enterprises) and the Governorate of Chirchik (where the project site is located) will have minority shareholding.The sponsor of the project is Bursel Textile Industry and Foreign Trade Inc., a private medium-sized Turkish company. Bursel Textile (est. 1993) is a manufacturer and marketer of textile products in the FSU and western markets.

EBRD Finance

US$ 13 million loan.
OPEC Fund will also provide a loan of US$ 5 million.

Project Cost

US$ 44 million.

Environmental Impact

The project was classified B/1. Independent environmental due diligence did not identify any significant environmental issues associated with the company's operations. The Bank's Environmental Specialist also visited the sponsor's facilities in both Turkey and Uzbekistan.  Environmental standards in Bursel's two existing production facilities in Uzbekistan are of the highest standard and those same standards will be adopted in the new facility.
  • Dust control measures, including state-of-the-art exhaust ventilation and humidifying systems will be incorporated to ensure compliance with international dust control standards;
  • All solid waste including raw materials, packaging and auxiliary materials will be recycled.
  • Employees will be trained to ensure safe working practices and a specialised doctor and nurse will be employed to provide comprehensive medical care.
  • Provisions for fire protection and prevention in the new facilities will comply with EU standards.
  • Construction of a new wastewater treatment plant, which will ensure discharge of effluent to both EU and international discharge standards, and other environmental upgrades, will form part of the Bank's investment and will be included in an environmental action plan (EAP).

Technical Cooperation

None.

Company Contact

c/o Gulsema Cerezci, Senior Banker, EBRD
Tel: +44 20 7338 6054
 

Business opportunities

For business opportunities or procurement, contact the client company.

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