Bilateral economic cooperation evolving fast

Uzbekistan’s President Shavkat Mirziyoyev delivers a keynote speech during the Korea-Uzbekistan Business Forum at the Shilla Hotel in central Seoul, Thursday, to encourage Korean companies’ investment in his country. / Yonhap

The Embassy of Uzbekistan contributed the below article on the occasion of President Shavkat Mirziyoyev’s visit to Korea. ― ED.

Today South Korea is one of the largest investment partners of Uzbekistan. Over the years of cooperation the total volume of the declared Korean investments into economy of Uzbekistan has exceeded $7 billion.

Currently in Uzbekistan there are representative offices of 79 South Korean firms and companies and 449 joint ventures, including 71 with 100 percent Korean capital. The sphere of activity of the enterprises covers such directions as the light, mining and metallurgical, chemical, food-processing industries, mechanical engineering and metal working, health care, tourism and services.

In Uzbekistan the leading South Korean companies such as KOGAS, Lotte Group, KNOC, POSCO Daewoo, Korean Air, Youngone Corp., Hyundai E&C, Samsung E&C, GS E&C, Shindong Resources, Shindong Enercom and others have been successfully operating for an extended period of time.

Uzbekistan’s interest in investment cooperation with the Korean side, first and foremost, is stipulated by its desire of bringing into the country modern technologies, advanced practices and methods of management and quality standards, rather than attracting just financial resources.

In this direction important tasks are: firstly, inviting Korean companies to the process of the implementation of programs of modernization, technical and technological rearmament of key branches of the economy and infrastructure; secondly, creation of export-oriented productions of modern consumer goods.

Thanks to cooperation with South Korea, Uzbekistan has mastered production of goods with high value added using most advanced technologies and joined the elite group of car-manufacturing countries.

In its turn, the presence of South Korean business in Uzbekistan opens for them a myriad of opportunities thanks to the following major factors.

Firstly, Uzbekistan holds an advantageous position among other countries of the region regarding indicators of the stability, cost of the main energy resources and existence of necessary raw materials and a qualified and highly competitive workforce.

Secondly, creation of production in Uzbekistan not only provides entry into the market of Central Asia with a population of 60 million people, but also the CIS countries of the aggregate population of 300 million people with which Uzbekistan has bilateral free trade agreements. Huge consumer markets of China and India are also located in close proximity to the country.

Today with active participation of Korean business, in Uzbekistan a number of strategically important projects are being carried out in the following main directions:

Petro-chemistry: In cooperation with a consortium of Korean companies the construction of the Ustyurt Gas Chemical Complex on the basis of the Field Surgil, worth $ 4 billion, has been successfully implemented. It has become not just a symbol of Uzbek-Korean investment collaboration but also gave it a new impetus. In 2012 this project was recognized as the best one in the sphere of the oil and gas industry by a reputed international publication, the Project Finance International.

Korean companies also participate in implemention of construction projects of the 900 MW Talimardzhan Thermal Power Plant, and other large-scale petrochemical projects (construction of plant on production of synthetic liquid fuel).

The collaboration in the sphere of development in Uzbekistan of solar power has been launched.

Development of fields: In cooperation with the Korean National Oil Corporation (KNOC) geological prospecting is being carried out in the territory of Uzbekistan. Projects on development of fields of tungsten (Shindong Resources Company), as well as of raw materials containing quartz for production of technical silicon (Shindong Enercom and Neoplant company) are nearing the stage of their practical implementation.

Together with the Korean corporation on mineral resources (KORES) a study has been done of titanium magnetite ores of the field of iron in Tebinbulak for the choice of technology of their processing and extraction of passing useful components.

Automotive industry: Currently more than 20 Korean manufacturing enterprises of auto-components are present in Uzbekistan and 15 joint ventures for production of accessories for the automotive industry have been established.

Textiles: POSCO Daewoo Corporation owns three textile factories and one pulp-and-paper factory in Uzbekistan; Shindong Enercom is involved in textile production in the Surkhandarya region.

Logistics: For the last seven years the project of the international center of logistics at Navoi Airport operated by the world leader in air-cargo transportation ― Korean Air ― has been successfully implemented. This center is located near the Free Industrial and Economic Zone (FIEZ) “Navoi” that creates exclusive conditions for development of highly profitable production and fast delivery of finished product to the world markets through the adjusted system of multimodal air, automobile and rail transportation.

Finance: Today the Korean Development Bank, and representative offices of Eximbank and Shinhan Bank, are actively working in the market of Uzbekistan.

Large-scale investment projects currently are being implemented with financial assistance of Eximbank of Korea, Korean Development Bank, K-Sure Agency and Korea Finance Corporation.

Information and communication technology: This area has become a new perspective direction in bilateral cooperation. Both Uzbekistan and South Korea show commitment to further promoting close interaction in this field.

The opening in Tashkent of Inha University's branch in the sphere of ICT has become a concrete result of cooperation. Currently feasibility of creation of joint ventures with the leading Korean companies in the field of the software and cooperation with the profile research centers is being studied.

Jointly with the Korean investors cooperation on developing Uzbekistan's free economic zones is also being carried out. In the territory of the Special Industrial Economic Zone “Navoi” projects on manufacturing automobile wires, gas cylinders, compressors and generators for cars, cosmetic products and light-emitting diode lamps are underway.

In addition, within the Special Industrial Zone “Angren” cooperation on production of energy saving LED lamps and sanitary ceramics is set up.

Positive experience of the partnership of Uzbekistan with South Korea serves as a good prerequisite for continuation of dynamic interaction in the investment sphere. In this context, regularly held Uzbek-Korean summits give a powerful impetus to further advancing bilateral cooperation.

During the last state visit of President of the Republic of Uzbekistan Islam Karimov to the Republic of Korea in May 2015, a wide range of issues pertaining to expansion of trade-economic and investment cooperation have been thoroughly discussed.

Today, there are broad prospects for strengthening investment cooperation in the sphere of the mining industry, investigation, development and extraction of non-ferrous metals and construction materials, further deepening of cooperation in the automotive industry, the textile industry, production of electronics and electro-technical products, information and communication technologies industry, pharmaceuticals, solar power and many other areas.

Given the high level of bilateral relations and strong base for their further expansion, one should assert that South Korea, being a strategic partner of Uzbekistan, will continue to render support in implementation of large-scale national programs of radical reforming and deep modernization of its economy.