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How will they compete and repay loans? President - on the debt of textile enterprises $ 2.2 billion

The debt of textile companies in Uzbekistan on bank loans reached $ 2.2 billion, the president said. According to him, a sharp drop in prices in the global cotton market “started not today” and the economic unit should have worked out scripts and solutions for the industry in advance.

The President of Uzbekistan Shavkat Mirziyoyev at a meeting on August 13 discussed the further support of the textile industry, which creates 3% of GDP and 14% of the country`s industrial production.

According to the press secretary of the head of state Sherzod Assades, over the past five years, 396 large enterprises have been launched in the industry in the amount of $ 3.5 billion, the production volume has reached $ 10 billion. More than 500 thousand people are employed in the sector, which is 20% of all industry workers.

In this case, there is a slowdown in production and exports. According to the president, taking into account the international situation, this requires operational measures to maintain production, jobs and exports.

Since 2022, world cotton quotes have been declining: over the past three years, the price has fallen from 3,000 to 1,500 dollars per ton. According to the head of state, this creates problems for clusters.

In particular, entrepreneurs pay off old debts at the expense of a new crop. A preferential loan for the purchase of cotton raw materials, provided for 2022–2023, was extended three times. Last year, a subsidy of 1 million soums per ton was provided to reduce the price of cotton.

Mirziyoev emphasized that “a sharp drop in prices on the world market did not begin today” and the economic block, together with scientific organizations, had to prepare various scenarios and solutions in advance.

The head of state criticized the activities of some “enterprising” companies that, without sufficient fiber processing capacities, are engaged in “speculation” with cotton due to cheap state resources.

It is noted that the debt of textile enterprises for commercial loans is $ 2.2 billion, while 90–95% of loans were issued in foreign currency, and only 16% of enterprises have an international certificate.

“In such conditions as enterprises will compete in the foreign market, how will loans repay?” - the president asked a question.

Although in each region there are 10-15 manufacturers of finished products, work on establishing cooperation with brands and moving to modern standards lags behind.

In the Andijan, Namangan, Ferghana, Navois and Tashkent regions of the fiber processing, 2-2.5 times higher than their own raw materials.

Despite this, the hokims continue to offer projects for the production of yarn in the development of regional investment programs, the president noted, expressing objections.

He also emphasized the importance of more active assistance to the export of textile products from foreign diplomatic missions of Uzbekistan.

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