The consortium of Korean companies purchased property complex of Yangiyul Pulp and Paper Mill for total sum of US$19.2 million through newly created enterprise. The enterprise will direct purchase fee within 10 years.

As earlier reported, the sides founded joint venture, Global Komsco-Daewoo, to carry out the project in Uzbekistan. Daewoo International Corp. holds 65% in the venture and Korea Minting & Security Printing Corp. – 35%.

The establishment of Global Komsco-Daewoo shows a collaboration of KOMSCO’s cotton pulp manufacturing technology and Daewoo International’s experience of running a local corporate body in Uzbekistan.

The company will organize production of 20,000 cotton cellulose per year by the end of 2013, including for production of cotton cellulose for banknotes, chemical products and high technological fiber Lyocell. The enterprise will export at least 90% of goods.

The enterprise will create at least 180 new jobs after the enterprise will reach its full capacity, which should take place by 31 December 2013.

The Government of Uzbekistan adopted decision to extend preferences, envisaged in the clause 1 of the presidential decree “On additional measures on stimulating attracting foreign direct investments” from 11 April 2005. The preferences were given for seven years from the state registration date.

In line with the decree, the enterprise is exempted from payment of income tax from main activity, property tax, accomplishment and development of social infrastructure tax, single tax for microfirms and small businesses, as well as mandatory deductions to the National Road Fund.

The Uzbekistani Government also exempted the enterprise from payment of customs duties, except customs registration, for imported equipment, spare parts, components and construction materials, which are not produced in Uzbekistan, during investment period (2010-2013). The list of imported products should be approved by the Cabinet of Ministers.

The enterprise received a right to purchase annually 30,000 tonnes of cotton lint on average weighted price of the Uzbekistan Commodity Exchange, published a day before from payment to cotton lint. But, the enterprise will purchase cotton lint at the price not higher than US$400 tonnes a tone.

Uzbekistan Economy Ministry was entrusted to include purchase of 30,000 tonnes of cotton lint to balance of production and consumption of cotton lint, which is formed annually, within 15 years.

Yangiyul Pulp and Paper Mill was commissioned in 2001. The project with total cost of US13 million envisaged construction of the capacities with 20,000 tonnes of cellulose and 12,000 tonnes of paper a year. France’s Clextral supplied equipment to the mill. SocieteGenerale issued loan to finance the project.