Tasks Set to Accelerate Development of the Electrical Engineering Industry
Uzbekistan
President Shavkat Mirziyoyev reviewed a presentation on the development of the electrical engineering industry and support for the production of competitive goods.
In recent years, the country has implemented systematic measures to develop the electrical engineering sector, boost the production of high-value-added goods, and expand export capabilities. As a result, the industry's production volume has grown from 4.7 trillion soums in 2018 to 43.1 trillion soums, while exports have exceeded $1 billion. Today, electrical engineering products manufactured in Uzbekistan are supplied to 65 countries.
The structure of the industry's output is also evolving. Production and export volumes of copper products are rising, while the share of low-margin goods is shrinking significantly. Domestic products now meet 80 percent of the local demand for home appliances, with 30 percent of total output being exported. Production of hundreds of new product types has been mastered, including solar panels, high-voltage cables, electric vehicle charging stations, vacuum circuit breakers, high-voltage disconnectors, and heat pumps.
In the first seven months of this year, the industry produced goods worth 30 trillion soums, and exports totaled $706 million. Sixteen projects worth $148 million were launched, creating 1,200 new jobs. Targets for the remainder of the year include manufacturing products worth 51 trillion soums, increasing exports to $1.6 billion, and commissioning 67 projects with a total value of $420 million.
During the presentation, plans were reviewed to raise production volumes in the electrical engineering industry and related sectors to $11 billion and exports to $5 billion by 2030. Plans are also in place to attract $3 billion in investment and increase the value-added component of copper products to 35 percent.
The country possesses the necessary raw material resources and sales markets to achieve this. Annual production of copper cathodes currently exceeds 150,000 tons, a figure set to rise to 300,000 tons with the launch of new production facilities. Furthermore, plans include the commissioning of solar and wind power plants with a combined capacity of 15 gigawatts. This will generate an annual market for electrical engineering products worth approximately $500 million.
At the same time, the sector faces several issues requiring resolution. Some enterprises lack the collateral needed to secure loans for working capital; there is a need for more convenient financial instruments for purchasing copper raw materials via the exchange; and guarantee mechanisms must be expanded to attract major international brands. Rising volumes of housing construction are also driving demand for electrical engineering products.
In light of this, new financial support mechanisms for enterprises in the sector have been proposed. Specifically, for copper raw material purchases, enterprises will pay 25 percent of the cost, while JSC Uzsanoatexport will cover the remaining 75 percent. Enterprises will be able to repay these funds within 90 days at an annual interest rate of up to 6 percent. A total of $50 million will be allocated for this purpose.
It will now be possible to accept other forms of collateral—such as export contracts and insurance policies—when granting loans. A portion of the loans issued in both national and foreign currencies for investment projects will be subsidized for a period of three years.
Major international brands investing at least $50 million in the country's economy will be granted tax incentives and offered ready-made facilities equipped with the necessary infrastructure. Plans are in place to extend tax and customs incentives for electrical engineering enterprises until 2030 and to support local industrial enterprises in related sectors.
To boost exports, measures will be taken to establish trade warehouses in foreign markets and to streamline product certification and export procedures. Opportunities for expanding the export of integrated technological solutions to markets in Afghanistan, Mongolia, Kazakhstan, and Iraq were also reviewed.
To strengthen innovation and research and development within the industry, a proposal has been made to establish a Research and Innovation Center for the Fourth Industrial Revolution. The center will focus on digital modeling, testing, and localization of new products, prototype development, and the provision of engineering services to enterprises.
The President has instructed officials to take measures to increase value-added in the electrical engineering industry, launch the production of high-tech goods and materials, and integrate domestic enterprises into global value chains.
The structure of the industry's output is also evolving. Production and export volumes of copper products are rising, while the share of low-margin goods is shrinking significantly. Domestic products now meet 80 percent of the local demand for home appliances, with 30 percent of total output being exported. Production of hundreds of new product types has been mastered, including solar panels, high-voltage cables, electric vehicle charging stations, vacuum circuit breakers, high-voltage disconnectors, and heat pumps.
In the first seven months of this year, the industry produced goods worth 30 trillion soums, and exports totaled $706 million. Sixteen projects worth $148 million were launched, creating 1,200 new jobs. Targets for the remainder of the year include manufacturing products worth 51 trillion soums, increasing exports to $1.6 billion, and commissioning 67 projects with a total value of $420 million.
During the presentation, plans were reviewed to raise production volumes in the electrical engineering industry and related sectors to $11 billion and exports to $5 billion by 2030. Plans are also in place to attract $3 billion in investment and increase the value-added component of copper products to 35 percent.
The country possesses the necessary raw material resources and sales markets to achieve this. Annual production of copper cathodes currently exceeds 150,000 tons, a figure set to rise to 300,000 tons with the launch of new production facilities. Furthermore, plans include the commissioning of solar and wind power plants with a combined capacity of 15 gigawatts. This will generate an annual market for electrical engineering products worth approximately $500 million.
At the same time, the sector faces several issues requiring resolution. Some enterprises lack the collateral needed to secure loans for working capital; there is a need for more convenient financial instruments for purchasing copper raw materials via the exchange; and guarantee mechanisms must be expanded to attract major international brands. Rising volumes of housing construction are also driving demand for electrical engineering products.
In light of this, new financial support mechanisms for enterprises in the sector have been proposed. Specifically, for copper raw material purchases, enterprises will pay 25 percent of the cost, while JSC Uzsanoatexport will cover the remaining 75 percent. Enterprises will be able to repay these funds within 90 days at an annual interest rate of up to 6 percent. A total of $50 million will be allocated for this purpose.
It will now be possible to accept other forms of collateral—such as export contracts and insurance policies—when granting loans. A portion of the loans issued in both national and foreign currencies for investment projects will be subsidized for a period of three years.
Major international brands investing at least $50 million in the country's economy will be granted tax incentives and offered ready-made facilities equipped with the necessary infrastructure. Plans are in place to extend tax and customs incentives for electrical engineering enterprises until 2030 and to support local industrial enterprises in related sectors.
To boost exports, measures will be taken to establish trade warehouses in foreign markets and to streamline product certification and export procedures. Opportunities for expanding the export of integrated technological solutions to markets in Afghanistan, Mongolia, Kazakhstan, and Iraq were also reviewed.
To strengthen innovation and research and development within the industry, a proposal has been made to establish a Research and Innovation Center for the Fourth Industrial Revolution. The center will focus on digital modeling, testing, and localization of new products, prototype development, and the provision of engineering services to enterprises.
The President has instructed officials to take measures to increase value-added in the electrical engineering industry, launch the production of high-tech goods and materials, and integrate domestic enterprises into global value chains.
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