FREE INDUSTRIAL ECONOMIC ZONE “NAVOI”: 
HALF A YEAR AFTER THE START

INVESTMENT PROPOSALS:

FIEZ PROJECTS
UZBEKISTAN PROJECTS
LIST OF PROJECTS

NOTIZIE14.08.2009

Developing a deeply thought-out legal basis for the activity of the Free Industrial Economic Zone (FIEZ) “Navoi” allowed to quickly and efficiently start its creation. In the beginning, when the work had just begun, some skeptics asserted that the creation of the FIEZ would prolong for years and the effect, which is expected by the country, is a matter of remote prospective. The first half of the year has passed, and now one can speak about the first results. 

First, the territorial location of the FIEZ was defined. Such factors as proximity to power, water and gas supply units, settlements – sources of manpower, as well as a favorable ecosystem, which is necessary for comfortable work and life of the residents of the FIEZ, were taken into account. The relevant documents were prepared and the building plan was developed, and today the first outlines of the new industrial center are almost visible. 

Second, a four-strip highway from the international motorway to the "Navoi" airport, a branch railway, a gas pipeline of high pressure and drinking water-supply conduit are under construction. In immediate proximity from the airport, a three-star hotel with 60 rooms is operating. 

The work on capital reconstruction and establishing new sites of social, transport and industrial infrastructure, service sphere, development of a raw-material base, modernization of the “Navoi” thermal power station (TPS) is going on at its full speed.

The proximity to wide commodity markets is one of the key factors of appealing and success of the establishment of a free industrial economic zone. It is worth reminding that the FIEZ is inherently located in the center of the five largest and most dynamically rising markets of the CIS countries, Central and Eastern Europe, South and South East Asia and the Middle East. Today major consuming countries are intending to limit the access of importing goods to domestic markets by increasing custom duties with a view of smoothing over the negative consequences of the international economic crisis. But the competitiveness of the production of the residents of the FIEZ in foreign markets is guaranteed by the Agreements on Establishing the Most Favored Nation Treatment with 44 countries and a Zone of Free Trade, which was established between 12 states of the CIS. The duty-free access to the markets among the CIS countries is a sufficient condition to launch practically any production.

The experts note that free economic zones being established in other countries, as a rule, are specialized to small sections of production, while in the FIEZ "Navoi" all types of production activity are allowed. Taking into account the availability of rich mineral resources and raw material base, enterprises have an opportunity to carry out a thorough reprocessing of raw materials and produce goods with a high added value cost. This, in turn, optimizes the prime cost of the production to the utmost by reducing considerably the transportation expenses of raw materials and production stuffs. 

According to the preliminary estimations, all these taken measures will make it possible to attract the foreign investment worth up to 0 million to the free zone till the end of 2009. About 50 projects will be implemented. The enterprises established in the framework of the projects will annually produce goods worth of more than newscat="news",5 billion in their full capacity, of which the goods worth newscat="news" billion will be oriented for export. Next year the implementation of twice as many projects is being planned and the volume of the investment is estimated at ,5 billion. The production capacities will make it possible to produce goods to the amount of more than ,5-8 billion, of which export accounts for up to billion.

SOUTH KOREAN LANDING

Today South Korean business is seriously interested in investing in the prospective project on Establishing the First Free Industrial Economic Zone of Uzbekistan. The visit of more than 100 South Korean businessmen to our country to familiarize with the project FIEZ “Navoi” and participate in the business-forum at the beginning of June testifies that. Another group of businessmen led by the Chairman of Korea Federation of Small and Medium Business Kim Ki-Mun visited Uzbekistan in July to familiarize with the investment opportunities provided in the FIEZ “Navoi”. In the framework of the visit a business-forum and cooperation stock exchange with the participation of entrepreneurs of the two countries took place. Today a number of agreements on cooperation have already been signed with the South Korean companies.

Thus, "Uzbekneftegaz" NHC and "Blitix Co. Ltd." have agreed to organize the production of equipment for auto gas-filled compressor stations and automobile gas cylinders. Another joint project is the organization of joint manufacturing of plastic products with "Honam Petrochemikal". In partnership with the Korean company "DongHo ENC Co. Ltd." a joint-venture on producing and assembling electronic devices for gas volume assessment is being set. 

The "Uzeltehsanoat" Association signed agreements on Cooperation with the Companies "Orion communication" on producing fiber-optical products, with the company "Deybang Fostec" - on joint production of energy-saving lamps, and with the company "Dong Seung Korea" - on producing LCD monitors within the FIEZ “Navoi”.

Till the end of 2009 the establishment of a joint venture "Central Asia Logistics LLC" on transportation of goods between the companies "Orta Osiyo Trans" and "Hanjin Logistics" (South Korea) is being planned.

In partnership with a consortium led by "T&T Sistemi" (Italy) an automobile fuel devices production is being organized. 

A number of projects have been developed with the Chinese partners. The Company "Tianye" together with SHC "Uzbekneftegaz" will produce systems of drop irrigation, "Bayhayhuimin" will establish in Uzbekistan polyethylene pipes manufacturing plant. Besides, the Chinese experts from the Company "Tian Jin Ring-Top Petroleum Manufacture" together with the Uzbek colleagues will organize the production of oil-and-gas and drilling equipment. 

All products of these enterprises will be marketed within the country, as well as exported. About 200 additional jobs will be created.

It is worth noting that the enhancement of trade and economic cooperation of Uzbekistan and Republic of Korea was preceded by the establishment of friendly and trustworthy relations between the Leaders of the two countries, as well as successive formation of extensive legal basis of bilateral cooperation. The Joint Declaration on the Strategic Partnership, adopted during the visit of the President of the Republic of Uzbekistan to the Republic of Korea in 2006 is one of the most important documents regulating the relations between the two countries. In 2007 a new multilateral format of cooperation of South Korea with the states of Central Asia "The Republic of Korea - Central Asia" was established.

Our countries support each other at international level. In particular, in March 2006 Uzbekistan supported the candidacy of the Minister of Foreign Affairs and Trade Ban Ki-moon to the post of the UN Secretary-General.

The wide celebration of the 70th Anniversary of resettlement of ethnic Koreans in Uzbekistan with participation of the special envoy of the President of the Republic of Korea in September 2007 became an example of strengthening the friendly relations between the two countries.

During the visit of the President of the Republic of Korea Lee Myung-bak to Uzbekistan on 10-12 May 2009 the President of Uzbekistan Islam Karimov noted with profound satisfaction: "We highly value that during the visit of the President of Korea Agreements on granting by the “Eximbank of Korea” to the “Uzbek National Bank” and “Asaka Bank” the loans to the amount of 0 million, of which 0 million for financing the projects, which are being implemented in the FIEZ "Navoi, million - for financing the projects of Small and Private Enterprise, will be signed". The formation of such a logistics center will promote the establishment of new hi-tech production in neighboring regions.

THE TRANSPORT CENTER OF "EARTH-AIR" CLASS

One of the main vectors of the “Navoi” Economic Zone - transcontinental multimodal logistics center, the first in the CIS, which will for three times reduce the distance of the international air traffic through the “Navoi” hub from South East Asia to South and North America, as well as simplify the delivery of humanitarian cargoes to Afghanistan.

Here, promptly handling, distributing and storing of goods are supposed. The FIEZ located in the center of the multimodal transport-logistics junction of Navoi in immediate proximity to the international airport, highway and railways of international destination. Within the establishment of the FIEZ "Navoi" the construction of the second trunk railway line "Navoi-Uchkuduk-Nukus" is being planned within the next 5 years.

At the moment a work on modernization of the "Navoi" airport with the establishment on its basis the largest in Central Asia the International Center of Logistics that meets the international requirements, is being conducted.

- The hub on the basis of the "Navoi" airport is equipped with the high technologies, while the constructed 4-km airport runway is today the biggest in Central Asia, - said the Director of "Korean Air" Nho Myung Chul. – The establishment of the transport hub in this region of Uzbekistan stimulates tourism, considering the closeness to Samarqand, Bukhara and Khiva.

The "Korean Air" has started to carry out regular air cargo flights on the route “Seoul-Milan-Seoul” with six intermediate stops in the “Navoi” airport per week. The regular flights of the “National Uzbekistan Airways” and Russian "Moskoviya" on the route Navoi-Tashkent-Moskva are in progr



2009 anno dello sviluppo













Navoi FIEZ: the history of creation, modern development and prospects

Enjoying enviable economic assets, stupendous and varied natural resources, lots of skilled personnel and considerable production capacities, Uzbekistan’s geographical location is very important, since it links up Europe with Asia and thus benefits from its tremendous transit potentialities.

The large-scale reforms implemented across all industries of the national economy and spheres of life help to maintain the political stability and a fast rate of economic growth in the country as well as to gradually raise the living standard of its population. At the same time, the government approves a number of state programs to develop manufacturing, infrastructural facilities and indigenous production.  Their successful realization is highly conducive to turning the Republic into an attractive investment destination for foreign investors. A striking endorsement of this fact is the volume of investments from all sources of funding attracted and implemented in 2015. Estimated at US $15.8 billion, the figure is 9.5 per cent above the 2014 indicator. More than 21 per cent of that amount, or over US $3.3 billion, is accounted for by foreign capital.

It is necessary to stress here that for the moment, a big effort is underway to create an auspicious investment climate in the country. Special attention is attached in this context to the performance in Uzbekistan of free economic zones, which operate in a special tax, currency and customs regime and have a great potential for developing successful business. The Navoi Free Industrial Economic Zone is one of the biggest such establishments in the Republic to date. It offers foreign investors a variety of business opportunities and great competitive advantages.

Set up in compliance with the December 2, 2008 Presidential Decree, the Navoi Free Industrial Economic Zone occupies an area of 564 hectares. It is situated near the town of Navoi, at the 100-175 kilometers’ distance from Bukhara and Samarkand, the big towns and industrial centers of Uzbekistan.

A special legal regime is in force on its territory, including tax, currency and customs privileges, a simplified procedure for entry, stay and departure, a simplified procedure for acquiring permission by non-residents to carry out labour activity. Furthermore, lots of privileges on taxes, customs and other obligatory payments are granted to them.

In a move to create a favorable environment for investors to do business, enterprises functioning on the territory of the Navoi Free Industrial Economic Zone are offered different means of transport, ramified engineering communications, effective labour safety systems and comfortable conditions for their personnel.

The Navoi FIEZ is located in immediate proximity to Navoi international airport, the E-40 motor-road and a railway of international significance, all of which make it possible to get the most out of the existing advantages of the Navoi multimodal transport logistics center. In particular, Navoi airport, based in the country’s central part, at a crossroads of the international ground and air transport corridors “North – South” and “East – West”, represents an ideal regional junction, from which to control the international goods traffic.

Under an agreement signed with Korean Air, a Korean air company, the first stage of the Navoi Airport Modernization Project has been finalized. It covered, among other things, the construction of an international intermodal logistics centre and a cargo terminal, capable of handling up to 300 tons of cargo a day. In prospect, with an increase in goods traffic volumes, the terminal’s daily capacity may be brought to 1,000 tons.

The Multimodal Logistics Center is designed to operate as a full-fledged system of distributing the goods traffic throughout the region, using different means of ground transport. The Center can also redistribute the goods traffic by air in the following directions:  north – south and west – east.

The exploitation of air corridors with the landing at Navoi international airport ensures a tangible economy of time and transportation costs.

In terms of territory, the Navoi Free Industrial Economic Zone is closer to the railway, which has access to the markets of Central Asian republics, the CIS member states, South-East Asia, Europe, the Near East and the Persian Gulf.

On top of this all, the region’s main railway routes run across the Navoi Free Industrial Economic Zone.  All of them have access to the ports of Iran and Turkey in the south and to the ports of the Black Sea and the Baltic Sea in the west and in the north. The shortest railway route from China to Europe also runs across the Navoi FIEZ. Putting into service the Guzar – Baisun – Kumkurgan section of the railroad has created a short transit route to Afghanistan, Pakistan and India.

So, it is safe to say that at the present time the Navoi Free Industrial Economic Zone is rapidly becoming a leading logistically sound and commercially profitable industrial and logistics center of regional and international level, with developed transport communications and unprecedented privileges available.           

(Source: «Business partner.uz» newspaper)