Investment opportunities / By Industry

Leather-Shoe Industry

The country’s leather industry is booming and one of key areas of its development is import substitution both on the finished products market and raw material market. Currently, the company has developed production of virtually all types of footwear and is expanding the model range of footwear for women, children and adolescents. Moreover, purchase of imported raw materials has significantly declined. Only raw materials for soles and glue among all materials required for shoemaking are not produced in the country, while production of the rest has been developed in the country and currently the course was set for production of these goods. Recently, production of shoe lasts, without which no pair of shoes may be produced, has been put in place. It should be noted that domestic manufacturers use synthetic raw materials only for the production of shoe soles, while only natural materials are used for making the shoes as such.

According to the results of 2010, Uzcharmpoyabzali Association exported leather goods in the amount of 13.6 million U.S. Dollars and plans to increase exports to 15 million U.S. Dollars in 2011. The goods are exported not only to neighboring countries, but also to European countries such as Spain, Italy, Turkey and several Asian countries like China, India, and Pakistan. At present, tanning factories, haberdashery and footwear producers are upgrading and reequipping their production facilities and renewing equipment. The producers prefer the most recent models of the world’s leading manufacturers when purchasing new equipment. Volume of investments at the enterprises of the Association alone including investments for procurement of new technology totaled 16.3 million U.S. dollars by the end of 2010. Currently, seven projects totaling 7,852 thousand U.S. dollars have been already implemented out of the planned scope of work. As a result, the Guzal Messinia and Kafolat Kapoor Fashion Joint Ventures purchased and installed equipment for leather processing and JVs Peng Sheng, Kofra and PE Sahiy commissioned new equipment for the production of shoes.

This year promises to be similarly eventful for the leather and footwear industry of Uzbekistan. Capacities are being augmented. Investments in the amount of 15 million U.S. Dollars are being disbursed at 19 enterprises. Upgrading of LLC Al-Aziz for the amount of 150,000 U.S. Dollars implies renewal of the children’s footwear production line. A series of projects are underway in Quqon. The city has been since long famous for shoe makers. There are 11 tanning and 4 footwear production enterprises.

The Association Uzcharmpoyabzali is setting up a Footwear Design Center to assist enterprises in manufacturing high-quality competitive goods. Its opening is associated with a new development phase and rise among domestic footwear manufacturers. This center will research the demand and supply in the footwear market, create and launch production of new models at the enterprises. As a result, the center will enhance the competitiveness of domestic products. In addition, the center will operate a department of quality assurance of products, which will test and certify the quality of footwear.

In addition, the leather and haberdashery industry is working to introduce quality management systems that meet international standards. In particular, recently LLC Hamkor nur savdo was certified O'zDST ISO 9001:2009 confirming that the company has implemented and is successfully operating a management system in the processing of the hides of cattle and small ruminants in line with international standards. By the certification procedure for compliance with ISO actively preparing LLC Grand Making Business, JV Kafolat Kapoor Fashion, LLC Peng Sheng, LLC Xing Long.

Currently, traditions are being revived according to the modern market demands and the industry is slowly gaining momentum displacing imports, which as consumers repeatedly reported are not high-quality alternatives, from the shelves. Government Resolution On Measures for Further Development and Modernization of the Leather and Footwear Industry and Increase in Production Output of Finished Leather Goods for 2009 – 2012 adopted on 17 June 2009 contributed to next phase of production growth. The program included 42 enterprises. Fifty million U.S. Dollars have been allotted for upgrading their capacities as well as for the setting up of new production. The expected outcome is an increase in marketable products 3 times, the footwear - 4 times, and leather goods – 12 times.