The Uzbek company SinoInternational has inked an agreement to produce 3 million pairs of shoes in total under the Nike and Adidas brand names at its new factory in the Andijan region, starting from the fourth quarter of 2021. The facility is expected to achieve full production in the third quarter of 2022.
As reported by the Uzbek footwear manufacturers’ association, Uzcharmsanoat, the factory began operation at the end of 2020. It has just started pilot production of 40,000 pairs of shoes per month under local brands.
Investors already pumped $6 million into the project and plan to allocate $12 million more this year, Uzcharmsanoat reported. All equipment for the project must be imported from China soon after the end of the coronavirus pandemic.
Nearly 50 percent of the Nike and Adidas footwear made at the factory is expected to be sold to Central Asian countries like Kazakhstan, Tajikistan and Turkmenistan, while another 30 percent are due to be exported to the countries outside of the region. Only 20 percent of production is slated for the Uzbek market, according to Uzcharmsanoat, which want to see other well-known brands manufactured locally.
The former Soviet republic has a program, supported by the government, to become a major shoe producer, becoming less dependent on China and becoming a source of exports to Russia, other CIS countries and the EU. In 2020, the country’s shoe production jumped by 30 percent, to 111.8 million pairs. In 2020, Uzbekistan exported shoes and leather products for $400 million, compared to $193.3 million in 2019, $151.7 million in 2018, and $101.5 million in 2017, Uzcharmsanoat said.
Uzbekistan possesses a sufficient quantity of high-quality leather, and the labor force is much cheaper than in other countries. Furthermore, Uzbekistan is attractive for foreign investors due to relatively low tariffs and taxes. The country’s government is frequently providing state aid to foreign investors.
Uzbek authorities have signed a contract with Inditex, under which the Spanish corporation plans to source some products in Uzbekistan. No additional details of this agreement have been disclosed so far.
The Uzbek government recently put a lot of effort into attracting other foreign companies to work in the country. In 2020, nearly 20 international brands registered in Uzbekistan, including Netflix, Google and Apple, while Volkswagen began producing cars there.
Photo: © Darrell Chaddock on Unsplash