Presidential Resolution "On the Programme on Modernisation, Technical and Technological Re-Equipment of the Enterprises of Construction Materials Industry for 2007-2011" has set off a sweeping programme of reforms in the construction materials production industry of Uzbekistan.

A key reason for this decision was the fast growing demand in the neighbouring markets, particularly in the region of Central Asia.

According to the plan, within the next five years 36 major projects envisaging the installation of modern equipment will be carried out at 14 large enterprises. The programme is financed in part by the enterprises themselves, and in part through FDI and borrowed funds.

As cement remains one of the main products of the construction materials industry of Uzbekistan with 72% of the market, and 75% of construction materials exports, this will be one of the main areas to be targeted by the programme. The projects in this sector envision the replacement of quarry equipment, modernization of raw and cement mills, installation of new production lines, and repair of existing capacities. As a result, cement product is expected to soar. It will increase 1.5 times compared to 2006 to 8.3 million tonnes.

To mention, this year Russian TKB-Invest LLC and Uzbek UzQurilishMateriallari (UzBuildMaterials) JSC have signed a Protocol on the establishment of a joint venture. The construction of a new cement plant has already been launched in Zafarabad district of Jizzakh region (Uzbekistan). TKB-Invest plans to complete the construction by 2010. The investment project is estimated at US$486.42 million. The projected annual capacity of the plant exceeds 3 million tonnes. The production floor space, including the pits, engineering communications and utility areas will exceed 100 hectares. The enterprise will employ 600 people.

Within the next five years, UzQurilishMateriallari intends to build three other portland cement factories in Karakalpakstan, Surkhandarya and Jizzakh regions. This will boost the country’s export potential, and in the long-term promises high earnings. Provisionally, the markets for Uzbek cement exist in Kazakhstan, Tajikistan and Afghanistan. Surkhandarya based plant is to target the markets of Afghanistan and Tajikistan; the plant in Jizzakh region – the markets of Kazakhstan and Tajikistan; and the plant in Karakalpakstan – the markets of the Caspian region, including the western parts of Kazakhstan.

The plans on modernization of existing capacities and construction of new cement factories are still subject to moderations. If, however, they remain unchanged and are successful, Uzbekistan’s cement output may double compared to 2006 level to 10-12 million tonnes.

Currently, Uzbekistan has six major cement factories – all part of the UzQurilishMateriallari JSC. In 2006, their aggregate output exceeded 5.58 million tonnes of cement, up 10.2% compared to 2005. In general, 12 types of cement are produced in the country, including portland cement, white cement and oil-well cement. Portland cement dominates the market with 99.3% of the aggregate production output. The shares of white and oil-well cement are insignificant. About a fifth of all cement produced in the country (up to 1 million tonnes) is exported to the neighbouring countries: 31.3% to Tajikistan, 20.8% to Kazakhstan, 20.3% to Turkmenistan, 17.3% to Afghanistan, 10.2% to Kyrgyzstan. In 2006, cement export volume grew by 18.5% to US$37.9 million.