The opening of the market in the Central Asian country is closely linked to its first change of government in 27 years. The newly elected President Shavkat Mirziyoyev has been in power since December 2016 and has initiated numerous reforms. The government wants to use foreign investments to advance the country, create jobs for the population and thus slow emigration.
Liberalization of currency exchange
One of the biggest hurdles removed concerns currency exchange. Companies can now exchange the local currency, the s’om, at banks without restriction and use it to pay for transactions. Prior to this reform, foreign companies often had to sit on any money they made in Uzbekistan, as exchange was restricted and the currency was practically worthless outside the country. Better conditions were also created for import and export taxes, which have been lifted. At the same time, Uzbekistan has created several special economic zones – zones in which foreign companies can set up shop.
Among other things, the government wants to strengthen the country’s value chain with these measures, as the Uzbek economy is still heavily dependent on imports. There is an enormous need to catch up in various industries.
Industries with great potential
The sectors of infrastructure, energy, food processing and textile could prove to be highly promising for Swiss companies:
- Infrastructure: There is a need to catch up in areas such as energy supply, road construction, railway lines and water treatment. Some citizen still don’t have access to clean water, despite the fact that Uzbekistan is a water-rich country.
- Energy: Uzbekistan is interested in renewable energy, especially in the fields of water and solar energy. In order to advance these projects, large state investments are needed. Swiss companies can already position themselves as ‘early movers’ in Uzbekistan.
- Food Processing: The aim of the Uzbek government is to improve the quantity and quality of food production and processing in order to strengthen its own products (such as milk or meat) for the local market.
- Textile industry: Uzbekistan is one of the largest cotton producers in the world. The government also wants to improve and expand production in this sector in terms of quantity and quality.
Michael Kühn, consultant for the CIS states at S-GE, is convinced that there are promising opportunities for Swiss companies and their expertise in Uzbekistan, and not just in the aforementioned sectors: “Business opportunities may also arise in the chemical and pharmaceutical industries.”
Successful Swiss companies in Uzbekistan
Several Swiss companies have already successfully established themselves in the country with its 32 million inhabitants: For example, the Ticino-based company Casale is building a plant for the production of nitric acid in Uzbekistan and will then operate it. The project is part of the state program to modernize industrial production. The Winterthur-based company Rieter Maschinenfabrik AG is successfully active in Uzbekistan through its development and production of machines and systems for textile processing.
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If you have any questions about the Uzbek market, please do not hesitate to contact Michael Kühn, Senior Consultant Russia, CIS and Nordic Countries. Email
