Development of chemical industry discussed in Uzbekistan

(MENAFN- AzerNews) By Kamila Aliyeva

A meeting on the current financial and economic situation of the chemical industry enterprises and further development of the sector was held on December 28 under the chairmanship of the Uzbek President Shavkat Mirziyoyev, the press service of the president reported.

In accordance with the Strategy for the five priority areas of development of Uzbekistan in 2017, a number of transformations have been made in the chemical industry.

In particular, in accordance with the decree of the president 'On measures to improve the management structure of Uzkimyosanoat JSC of April 12, 2017, the membership of the board of the joint-stock company was completely updated; the structures of the branches and the administrative apparatus of the chemical industry were reorganized.

By the decree of the head of state dated August 23 of this year, the Program for the Development of the Chemical Industry for 2017-2021 was approved.

It is envisaged to implement 43 investment projects with a total cost of $3.1 billion, to increase industrial production by 2.4 times, their exports - 2.7 times, to raise the share of localized products up to 42.5 percent and to master the production of 43 new types products, as well as to create over 3,200 jobs.

In order to regulate the export-import activities of the industry, ensure transparency of foreign trade operations, and most importantly, increase the volume and expand the geography of sales of chemical products in the foreign market, further increase its competitiveness and attractiveness, the limited liability company Uzkimoyimpeks was organized.

The ongoing large-scale reforms have a positive effect on the chemical industry. However, the systemic problems in the industry that have accumulated over the years still await their solution. Thus, industrial enterprises for the production of mineral fertilizers found themselves in a difficult financial situation.

A complete lack of attention or a superficial approach to the financing of agriculture is the reason for the shortcomings in the system of mutual settlements in this sphere, the president noted.

The costs associated with mineral fertilizers for agricultural needs are not covered. As a result, chemical enterprises are limited in their ability to pay for the consumption of natural gas, electricity, phosphate raw materials, sulfuric acid and other types of goods and services consumed, and their accounts payable.

In this regard, starting from 2018, the supply of mineral fertilizers to consumers is planned to be carried out through exchange trades through the intermediation of the 'single agent organized under Uzkimyosanoat.

However, there are shortcomings in reducing the cost of mineral fertilizers and increasing the profitability of the industry.

In particular, 67 percent of the cost of nitrogen fertilizers are energy costs. Ferghanaazot, Dekhkanabad Potash Fertilizer Plant, Kokand Superphosphate Plant, Ammophos-Maxam and Maxam-Chirchik companies conclude 2017 with low profitability, and Navoiazot with losses.

In such conditions, enterprises are completely limited in the formation of their own working capital and are forced to solve problems by attracting loans at 16-18 percent per annum.

In this connection, Uzkimyosanoat JSC was instructed jointly with the relevant ministries and departments to develop a program of concrete measures to reduce the cost of production of chemical products and increase its competitiveness in 2018-2019.

Another problem that needs attention is the wear of the main process equipment. As a consequence, the technological process is disrupted, due to lack of funds, the equipment remains without current and major repairs.

Mirziyoyev noted the need to develop a sectoral plan for the implementation of current and major repairs.

When considering the issue of providing agriculture on a scientifically based basis with phosphate fertilizers, it was noted that the existing requirement for 639,600 tons is provided only by 25 percent. In this regard, by upgrading the existing facilities, it is envisaged to increase production to 177,000 tons in 2019, and by building a new phosphate fertilizer production complex in 2021 - up to 550,000 tons.

At the meeting, the activities of research and design institutes, centers for professional development and diagnostics were analyzed in a critical spirit.

The development of the chemical industry, the provision of appropriate products of competitiveness in the world market, the fundamental diversification of the sphere directly depend on research, design, engineering, diagnostic centers and, most importantly, on the capacity of personnel.

However, the state of affairs in this direction is still in an unsatisfactory state.

In this connection, Uzkimyosanoat JSC was entrusted together with the relevant ministries and departments, as well as the South Korean Research Institute of Chemical Technologies, to organize a single center combining research, engineering, design and diagnostic activities, as well as staff development.

The officials were given appropriate instructions on the issues discussed at the meeting.


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