Investment opportunities / By Province

Farghona province

1. Geograpgical location. Territory, climate

Fergana province is located in the Republic of Uzbekistan in southeast of a southern part of Fergana valley. From the northwest it borders with Tajikistan, from the south – with Kyrgyzstan, from the north – with Namangan province and from the east – with Andizhanprovince of Republic of Uzbekistan.

The province territory is 6,8 thousand sq. km, or 1,5 % of territory of the republic. The general length of the border is 600 km. 79 % of the province area are plains, the other 21 % are mountains and foothill regions.

The province includes 15 districts: Altyaryksky, Ahunbabaevsky, Baghdad, Besharyksky, Buvajdinsky, Dangarinsky, Kuvinsky, Rishtansky, Sohsky, Tashlaksky, Uzbekistanskiy, Uchkupriksky, Fergana, Furkatsky and Jazjavansky. The Administrative centre is the city of Fergana. Other big cities are Kokand, Margelan and Kuvasay.

The climate is continental with mild winters and hot summers.

2. Historical excurcus

The big blossoming oasis of Fergana valley is named a pearl of the Central Asia, the Gold valley for its riches and picturesqueness, the fertile lands and a fine climate. It is protected from intrusion of cold fronts by Tjan-Shan and Gissaro- Alay mountains and only in the west it opens its gates to Syr-Darya.

Margelan, being one of the most ancient cities of the Central Asia and, particularly of  Fergana province  remembers Alexander the Great invasion. From historical sources it is known that the great conqueror has made a way from Hodjent to Uzgen and went back through a city subsequently named Margelan. In Хth century Margelan was the largest city of Fergana oasis which was famous for the silk fabrics, taken out by merchants on the Great silk road to Egypt and Greece, Bagdad, Khurasan and Kashgar. And today it is possible to name Margelan the silk capital of Uzbekistan. The well-known khan-atlases weaved and painted manually by the ancient technology are produced here. In 2007 it was 2000 years to Margelan.

For a long time Kokand was the major town of Fergana valley. The first written illustrations about the city of Havokand are met in annals of the Хth century, as about a city lying on the Great silk road being famous for its crafts. In XVIII-XIX centuries it was the capital of the strong Kokand khanate which has extended the power on the most part of present Uzbekistan and on the territory of the adjacent states. Kokand was the large centre of religion. In days of blossoming, thirty five madrasas and hundred mosques were available in the city. Unfortunately, the majority of them are destroyed by time, earthquakes and the Soviet power.

Kokand has been ruled by 29 khans, but, perhaps, the most known of them was the last one Hudoyar-khan ruling from 1845 till 1876. He lost his throne for times and restored the power four times. In 1868 Hudoyar-khan recognized himself as the vassal of the Russian emperor, and after eight years he and his confidants, four wives and a harem arrived in Tashkent  where he transferred a State Seal and other attributes of the power to the governor- general of land of Turkestan. So the history of existence of Kokand khanate has ended.

In the history and culture of the Central Asia Fergana valley always played a considerable role. So, the messages about the Fergana state Davan has already contained in the first Chinese annals, and in the Middle Ages it was one of the leading destinies of Movarounnahr. The traces of antique sites of ancient settlement and Middle Ages monuments remind the fact about the valley being the centre of various civilizations in the ancient time.

There is an expression in the East: the new governor is a new coin. It is also possible to tell it like this: the new governor is a new palace. In a rough history of Kokand, the palace of Hudoyar-khan which has remained up to now, has already been the seventh residence of governors and this is only during one and a half century.

In fifty kilometres from Fergana there is a small city of Rishtan. Since ancient times Rishtanians were famous for their pottery. The masters of pottery transfer trade secrets of pottery work consisting of local grades of red clay, glaze from natural mineral dyes, and ashes of mountain plants throughout eight hundred years from generation to generation. The big dishes “lagans”, deep bowls "shokosa", jugs for water, vessels for the milk, decorated with an ornament from glaze "ishkor" with an unforgettable turquoise and ultramarine colours have brought the Rishtanian masters popularity at numerous international exhibitions, decoration expositions of many museums of the world and private collections.

Fergana province borders in their present condition have been formed on January, 15th, 1938.

3. Economic development

In 2010 the volume of gross regional product (GRP) in Fergana region made up 4095.5 billion som (2559.7 million USD). Growth rate reached to 105.8% as against same period of previous year. GRP made up 1305.8 thousand som (816.1 USD) per head without taking purchasing-power parity into view.

In 2010 industrial outputs worth 2712.1 billion som (1695.1 million USD) have been produced in the region.  On the outcomes of 2010 region’s foreign trade turnover reached to 921.7 million USD, including export – 450.8 million USD.  

Forming of the market infrastructure is going on in region. About 42 thousand organizations, enterprises and managing entities engaged on economical activity.

3.1. Population

Up to January 1, 2011, the number of region’s population makes up 3 million 128.5 thousand people and 58% of them live in rural areas, 42% - in urban areas. There are representatives of over 60 nations in region. Density of population – 457 person per square kilometer.     

Up to January 1, 2011 the number of manpower resources reached to 1760.0 thousand people and 1340.4 thousand or 76.2% of them employed in economics.

 There are 9 cities, 197 settlements of city type, 1020 rural settlements in the territory of province.

Fergana, Kokand, Margelan are big cities.

3.2. Banking and Financial System

There are operating 74 commercial banks’ branches, 203 mini-banks’ branches, special-purpose cashiers, 13 credit unions and 3 micro-credit companies in the region.  

Credits to the amount of 476.9 billion som (298.1 million USD) allocated by commercial banks in 2010.

3.3. Development of agrarian sector

Agrarian sector has a vital importance for region’s economics.

In 2010 agricultural gross product made up 1281.3 billion som (800.8 million USD) and growth rate reached to 106.5% as against same period of previous year. Farm products makes up about 64.2% and cattle breeding products – 35.8%.  

Favorable climatic conditions in Fergana region enables to achieve rich harvest of fruit and vegetable products with unique taste.

Over 280 thousand ton of cotton, 650 thousand ton of grain, as well as fruit and vegetables, in particular 100 thousand yon of potato,  310 thousand ton of vegetables, 160 thousand ton of fruits, 24 thousand ton of melons and gourds, 44 thousand ton of grapes raising in Fergana region per year. 

In the field of cattle breeding over 98 thousand ton of meat, 580 thousand ton of milk, 110 million pieces of eggs, 630 ton of wool and 2 million ton of cocoon producing per year.

There are operating 12 enterprises on working up fruit and vegetables, manufacturing tomato paste, fruit juices, dried fruits, canning fruit and vegetables in the region. 

3.4. Mineral and Raw materials potential

The region has reserves of oil, gas, ozokerite, sulfur, gypsum, lime stone, dolomite, marble, sand, gravel, granite, clay, gravelite and siltstone. 

Oil deposits located at the southern part of region – at the Beshariq district and northern part of the region.

The main gas reserves are at the Northern Soh and Chimyon.

Reserves of Ozokerite, which used for production of sulfur, asphalt, bitumen located at the Shorsu community of Uzbekistan district of region.

Gypsum fields are at the Quvasay, Shorsu and Chimyon hills.

There are marble reserves at the Shakhimardan, Soh and Quvasay.

Clay, raw materials for produce brick, cement, ceramics and tile are available at the Vadil community of Quvasay district, as well as Rishtan, Kopchugay, Soh and Avval hills.

Subsurface mineral waters used both for drinking and medical purposes are available at the Fergana and Chimyon hills as well as Altyariq district.

There are sand and sand-stone, used for produce glass at the Altyariq, Central Fergana and Yazyavan barkhans. 

Detritus, used for produce concrete available at the coasts of Shkhimardan and Isfaramsay (Quvasay) rivers.   

3.5. Industrial potential

There are 43 largest enterprises engaged on industrial activity in the region. Total capacity of industrial manufacture in 2010 made up 2712.1 billion som (1695.1 million USD), 100% of which produced by non-governmental sector. 

Oil and gas, textile, chemical, silk, energy, fat-and-oil, as well as building materials production are more developed sectors of industry. Such industrial outputs as equipments for petroleum-refining, gas, textile industry, silk and cotton fabrics, clothes and footwear manufactured in region. Number of thermo-power stations is operated. Factory on manufacture the national ceramic ware working in Rishtan town.   

Oil and gas industry

Fergana oil-refinery, which was established in 1958, is one of the key factories in Central Asia on production fuels and lubricants.     

The enterprise is producing 45 sorts of petroleum-products, including light oil (petroleum solvent, kerosene and gasoline), fuel (petroleum fuel, boiler oil, diesel oil and jet fuel), oil (engine oil and turbine oil), bitumen, cokes and lubricants. In 2000 reconstruction of factory was finished by Japanese “Mitsui” and “Toyo Engineering” with the object of ensuring the light oil quality according to world standards and improving environmental conditions. The volume of financing the project made up over 200.0 million USD.      

Chemical industry

Fergana chemical fiber plant, one out of two enterprises in CIS, which produce acetate threads is working in region. The plant has latest processing line on production Polyamide-6 chip and cord fabric.   

Another chemical enterprise is Fergana chemical plant of furan compounds, which manufacture cotton cellulose of various kinds, widely used in many industrial sectors.   

“Koqand superphosphate plant” PC – is one of the first chemical industries of the country, which has been placed into operation in 1935. The company oriented to produce mineral fertilizers for agriculture and superphosphates.   

There is also operating “Ferganaazot” PC in region, which is exclusive manufacturer of cellulose acetate in CIS and one of the largest producers of chlorate-magnesium defoliant and natrium chlorate.

Textile industry

“Daewoo - Fergana - Textile” factory is working in region now. Productive capacity of the factory enables to manufacture 21 thousand ton of yarn and 12 million running meter of gray cloth per year.      

Processing of fruit and vegetable products

There are operated 12 enterprises in region engaged on fruit and vegetable products processing.  Over 70 fruit and vegetable products are working up in these plants per year. For instance, more than 100 kinds of goods, including canned fruits and vegetables, juices and fruit pastes producing at the enterprises of  “MC Food processing Co. LTD” JV, “Mega Dry” JV, “T.Butaev” farm, “Fayzli Adirabod mevalari”, “APC Uzbegim” and “Valley mountains fresh” agricultural firms, “Kokand spirt” JSC (alcohol production).   

Engineering industry

Uzbek-British “Evrasia TAPO-Disk” CJSC, which manufactures 19 modifications of 14-inch and 13 modifications of 15-inch steel stamped car wheel disks operated in Fergana region since 1988. Productive capacity – about 1.1 million wheel disks per year. The company is supplier of GM and AvtoVAZ. Now the enterprise is able to self-conduct of engineering designs.  Since 2010 “Uz Hanwoo Engineering” JV, “UzdongyangFergana” (the company with contribution of Korean investment), “Nikeuqarqaq” Uzbek-Russian JV, “FerganaAutoglass” LLC started to produce new outputs – over 50 kinds of automotive spare parts.   

Building materials production

 “Quartz” JSC – one of the top-ranked companies in Central Asia on manufacture glass jars, bottles, sheet-glasses, colored and tinted glasses, as well as glasses for automotive industry.   

For over 33-year history “Quartz” JSC run up to one of the largest plants of country and 2006 it has been awarded ISO-9001 certificate of conformance of the management system quality.    

3.6. Transportation and communication

The structure of transport communications is well developed in the province. The length of used tracks makes 262 km, the asphalted highways make 8,2 thousand km.

Over 81.5 million ton of cargo and 466 million passengers have been conveyed by carrier companies in 2010.   

International chartered flights to Sharjah, Istanbul, Aleppo, Delhi, Karachi and Teheran are carried out from Fergana municipal airport.  

Mobile telecommunication services are also developed in region. Provincial branches of “MTS-Uzbkekistan”, “Usell”, “Beeline”, “Uzmobile” and “Perfectum Mobile” cell phone operators working in Fergana and Koqand cities.  

3.7. Social infrustructure

There are 5 higher educational institutions in the province. The Fergana State university, the Fergana polytechnical institute, the branch of the Tashkent institute of an informational technology, the branch of the Tashkent medical Academy, Kokand teacher training institute, 919 comprehensive schools, 866 institutions of preschool education, 144 professional colleges and 12 academic.

In Fergana province functions 149 hospitals, 598 outpatient medical clinics and 15 sanatoriums.

In the sphere of culture there are also 1599 libraries, 176 clubs, 12 museums, 4 theatres, 1 Philharmonic, 9 culture and recreational parks which favors intellectual development of population of province.

The special attention pays for development of physical culture and sport. There are 46 stadiums, 27 swimming pools, 104 courts and other sport institutions.

Fergana region attracts visitors from various world countries due to its beautiful environment, hospitality, great national traditions and historical sightseeing. Among them it’s necessary to note complex of “Jamiy” (the Mosque and Madrasah), home-museum of Muqimiy in Kokand city, the tomb of Al-Roshidoniy in Rishtan district, local lore museum in Fergana city, architectural complex of Burkhoniddin Al-Margilaniy. Another splendid and unique place is Shakhimardan, located at a height of 1.500 meters above sea level between two mountain rivers – Oqsuv and Koksuv.  

There have been built hotels, which meet the requirements and standards at the level of 4 star hotels. These are “Asia- Fergana”, “Hotel-777”, “Ziyorat” and “Vostok”.

4. Investment potential

4.1. Foreign investments in region

Total volume of investments reached to 934.7 billion Uzbek som (584.2 million USD) including foreign investments worth 97.1 million USD (17% of total investment volume) were attracted in 2010.

Light, chemical, petroleum industry and agriculture are promising directions of cooperation. 

Assessed requirement on foreign investments volume makes up 1.5 billion USD.  

National regulations, which envisage granting conditions for foreign investors no less favorable than relevant conditions for investments, attracting by Uzbek legal and physical entities have been established in Uzbekistan.

Companies, which attracting foreign direct investments and located in rural areas of Fergana region, as well as engaged on such spheres of economics as manufacture of radio-electronic outputs and component parts for computer techniques, light, silk and building materials industry, building materials production, chicken-meat and eggs production, food, meat and milk, chemical and pharmaceutical industry are exempts from income tax, property tax, infrastructure and area development tax, single tax for micro-firms and small-scale enterprises, as well as obligatory assessments to National road fund on principal activity.       

Aforesaid tax remissions are granted at following volume of foreign private direct investments:    

- from300 thousandUSDto 3 millionUSD– foratermof 3 years;

- over 3 million USD to 10 million USD – for a term of 5 years;

- over 10 million USD – for a term of 7 years.

At that, aforesaid tax remissions are administered on following terms: 

- carrying out of direct foreign private investments by foreign investors without guaranties of Uzbek government;

- share of foreign contributors in authorized capital stock of company must be no less 50 percent;

- attraction of direct foreign private investments after state registration of aforesaid enterprises;

-  attraction of foreign investment in a form of hard currency or modern technologic outfit;

- assigning if income, derived as a result of granting aforesaid remissions within the term of their administration to reinvestment for purpose of further development of company. 

4.2. Enterprises with contribution of foreign investment

There are operated 97 enterprises with contribution of foreign investment from such countries as Russian Federation, Turkey, China, South Korea, USA and Germany.  Joint ventures activity focused on working up of cotton and silk, manufacturing of knitwork, processing of fruit and vegetable products, producing of building materials, consumer goods, services and trade.      

Up to January 1, 2011, authorized fund of these enterprises exceeded 161,7 million USD, 115.6 million out of which – foreign investors share. 

The volume of production of goods, works and services of enterprises with contribution of foreign investment makes up 480.4 billion Uzbek som (300.2 million USD).