Kasansay-Tekmen Wool Products 2

Location:

Uzbekistan

Project number:

6298

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

C

Target board date:

20 Jul 1999

Status:

Completed

PSD disclosed:

23 Jul 1999

Project Description

Kasansay-Tekmen Wool Products Textile Industry and Marketing JSC is a private joint-stock company based in Kasansay, Uzbekistan. It is an integrated woollen textile plant, which has started production of worsted and woollen fabrics, hand knitting yarn and carpet yarn.

The project aims to promote private sector development and the processing of local raw materials. It also aims to attract foreign direct investment and to develop know-how in wool processing in Uzbekistan. The project will generate hard currency earnings and reduce Uzbekistan’s dependence on the import of woollen products. It will also pave the way for the development of downstream processing of quality woollen products. Direct employment of 1,400 people will be created as well as many more jobs indirectly.

Transition Impact

This operation will have a very positive effect on the transition process. As the Bank’s first private sector textile operation in the country involving a privatised local firm, it will act as a model for other projects. On an international scale, the facility’s first-class technology makes it one of the most technologically advanced and competitive integrated plants in the world. The company intends to achieve ISO 9002 and ISO 14,000 quality certification, which will make it the first local organisation and the second in the Commonwealth of Independent States to do so.

The Client

Kasansay-Tekmen Wool Products Textile Industry and Marketing JSC is a private joint-stock company based in Kasansay, Uzbekistan. It is an integrated woollen textile plant, which has started production of worsted and woollen fabrics, hand knitting yarn and carpet yarn.

EBRD Finance

The EBRD has a 26.3 per cent equity stake (costing US$ 10 million (EUR 9.6 million) in the company and signed a loan for US$ 14 million (EUR 13.4 million)in 1996.

Under this project, the equity stake will be increased by an additional US$ 5 million (EUR 4.3 million), giving the Bank a total shareholding of 27.3 per cent. The proposed additional equity investment is to provide for working capital needs as well as for additional works and equipment to ensure the long-term operation of the integrated textile facility.

Project Cost

The original project cost was US$ 76 million (EUR 72.9 million). The total cost of the restructured project is US$ 93 million (EUR 89.3 million).

Environmental Impact

The project was screened C/1, requiring an environmental audit of the existing facilities. Independent environmental due diligence undertaken in 1995 as part of the original Bank investment did not identify any significant environmental issues associated with the company’s operations. A further independent environmental audit has been undertaken as part of the technical review of the company. No significant issues of environmental concern were identified. The company currently meets all of its obligations related to the environmental conditions attached to the previous loan agreement, and the Bank has been generally satisfied with the environmental reports received to date.

The project has been structured to ensure compliance with all relevant local and EU legal requirements. The recently constructed waste-water treatment plant has been designed to meet EU standards.

Technical Cooperation

None

 

Business opportunities

For business opportunities or procurement, contact the client company.

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