Electronics

The branch of the radio-electronic, electrotechnical and instrument-making industries is one of the important infrastructure sectors of Uzbekistan.

The industry is pursuing a policy of broadly attracting foreign direct investment, primarily strategic partners, for mastering high-tech industries for the production of electrical equipment, modernization, technical and technological re-equipment of the industry, organizing jointly with leading foreign companies of joint production on producing modern electrical products in a wide range and ensuring its export supplies.

In turn, enterprises in the electrical industry are conducting their activities in 4 areas:

• manufacturing cable and wire products:
• (more than 1,300 items: power cables, communication cables, household wires, etc.);
• manufacturing electrical products for industrial and technical purposes:
• (power transformers, switchboards, complete substations, etc.);
• production of household appliances:
• (air conditioners, refrigerators, televisions, washing machines, vacuum cleaners, etc.);
• service maintenance of electrical products and household appliances.

In the nomenclature list of consumer goods – air conditioners, washing machines, vacuum cleaners, microwave ovens, refrigerators, freezers, electric water heaters, cooking appliances, televisions, mobile phones, lamps, paints and varnishes, cable products for household needs, etc.

At the same time, the industry is also pursuing a policy of broadly attracting foreign direct investment, primarily strategic partners, for mastering high-tech industries for the production of electrical equipment, modernization, technical and technological re-equipment of the industry, joint production of modern electrical products in a wide range with leading specialized foreign companies and ensuring its delivery for export.

The Resolution of the President of the Republic of Uzbekistan of February 13, 2017 No. RP-2772 provides for exemption for the period up to January 1, 2022 from customs payments (except for customs clearance fees) equipment, materials and components not produced in the country, imported within the framework of projects according to the lists approved by the Cabinet of Ministers of the Republic of Uzbekistan.

Within the framework of the same Resolution, the distribution is indicated for the period up to January 1, 2022 to all newly created enterprises of the electrical industry, regardless of their location, benefits provided by the first paragraph of unit 1 of the Presidential Decree of April 11, 2005 No. RP-3594 “On additional measures of stimulating the attraction of direct private foreign investments”, in particular, exemption from the payment of corporate income tax, property tax, improvement tax and development of social infrastructure, single tax payment for micro and small enterprises, as well as mandatory contributions to the Republican Road Fund.

It is also defined that from April 1, 2017:

— small enterprises by main activity engaged in production of electrical products, with an average annual number of employees of not more than 400 people (including the rate of exceeding the established average annual number when hiring graduates of vocational colleges, academic lyceums and higher education institutions of the Republic of Uzbekistan), belong to the category of small businesses.

The Resolution of the President of the Republic of Uzbekistan of February 13, 2017 No. RP-2772 “On measures of further improving the management, accelerated development and diversification of electrical industry for 2017-2021” provides for certain credit lines in foreign currency at the expense of domestic resources provided exclusively for import:

— modern equipment and technologies for a period of at least 7 years with a two-year grace period and a refinancing bank margin of not more than 0.5 percent per annum;

— materials and components not produced in the republic for a period not exceeding 12 months, with a view to ensuring their subsequent purchase at the expense of foreign exchange earnings from the export of products.

In recent years, the electrical industry has become one of the most dynamically developing areas of the domestic industrial complex. The volume of production of marketable products in 2017 increased by one and a half times compared to the previous year.

In terms of production of household appliances in Uzbekistan there is an extensive resource base, including copper is being mined (Almalyk MMC), as well as technological process for production of copper pipes are mastered, polypropylene (Uz-Kor Gas Chemical LLC) and polyethylene (JSC Shurtan MCC) are produced. Our enterprises have mastered production of glass used for household appliances.

Existing enterprises in Uzbekistan are ready to assist in inter-sectoral cooperation in the following areas: cable and wire products, metalworking and painting, electronic boards, copper tubes, plastic products for enclosures, fasteners and hardware, packaging products.

The domestic electrical industry has given new impetus to the Program of measures for further development of the electrical industry for 2014-2018, approved by the Head of the state. The main strategic task was to conduct a unified technical policy, providing for the widespread introduction of the latest high-performance technologies at enterprises of the industry, further deepening the localization of production of finished products, components and materials based on industrial cooperation. For 2017, the level of localization in the electrical industry for such goods as cable and wiring products 61%, household appliances 48%, electrical engineering and other goods amounted to 40.8%.

As of today, the total population of Central Asian countries is 72.1 million people (of which 32.9 million live in Uzbekistan), which provides foreign investors with a large potential for exporting their products to neighboring countries. Considering the above, below indicates the demand and total production of household appliances in Central Asian countries and Uzbekistan.

Central Asian countries’ demand for household appliances in 2017, thousand pieces

 Approximate demand for household appliances in Uzbekistan, thousand pieces

The Republic of Uzbekistan actively cooperates with the following companies in the sphere of electrical engineering:

«Falk Porsche technik GmbH» (Germany), JSC Samara Cable Company (Russian Federation). At the same time, the industry highly appreciates cooperation with Samsung Electronics Co., Ltd, LG Electronics Inc (Republic of Korea), Guang Dong Midea Electric Appliances Co, CHANGHONG ELECTRIC CO., LTD, TCL Corporation, Haier Group Corporation (People’s Republic of China), SHIVAKI (Japan), Candy Group S.p.A. (Italy) and Maillefer Group (Finland).

Uzbekistan has a large human resource potential in the electrical industry. In particular, highly qualified personnel are trained in universities such as Tashkent State Technical University named after Islam Karimov, the Turin Polytechnic University in Tashkent in the following areas: industrial design, corporate management, air traffic control, automation and control of industrial production, computer science and information technology, standardization management, metrology and certification of products, mechatronics and robotics, technology of automotive engineering, aerospace engineering, industrial civil engineering and architecture.

Every year, 455 students and 24 masters receive a bachelor’s degree at Tashkent State Technical University, and 400 students at Tashkent Turin Polytechnic University receive a bachelor’s degree. Also throughout the country there are more than a dozen colleges of graduating cadres in the field of electrical engineering.

It is worth noting the low cost of labor. In Uzbekistan, the average labor force amounts to $200 per month, while in neighboring Kazakhstan it is $466 per month, and in the Russian Federation it is $678 per month.

— Resolution of the President of the Republic of Uzbekistan of 13.02.2017. No.RP-2772 “On measures of further improving the management, accelerated development and diversification of the electrical industry for 2017-2021”, http://uzeltexsanoat.uz/Qaror.pdf.