The Uzbek company SinoInternational has inked an agreement to produce 3 million pairs of shoes in total under the Nike and Adidas 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. Currently, SinoInternational launched 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 shortly after the end of the coronavirus pandemic.
Nearly 50 percent of Nike and Adidas footwear is expected to be sold to Central Asian countries, 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 destined for the Uzbek market, according to Uzcharmsanoat.
In 2020, Uzbek shoe production jumped by 30 percent, to 111.8 million pairs, said Fakhriddin Boboev, chairman of Uzcharmsanoat.
He noted that one of the problems for the local footwear industry is its dependence on exports to China, its main market. “It is necessary to expand the geography of exports, giving priority to the CIS and EU countries. For example, the Russian market is very promising for our industry,” Boboev said.
“Uzbekistan possesses a sufficient quantity of high-quality leather raw materials. The labor force is much cheaper compared to other countries. All these benefits need to be shared with potential partners. Then, it will be possible to increase the number of world-famous brands manufacturing their products in Uzbekistan,” he added.
In 2020, Uzbekistan exported leather products and shoes for $400 million, compared to $193.3 million in 2019, $151.7 million in 2018, and $101.5 million in 2017, Uzcharmsanoat said.
As explained by Boboev, currently, the government is working on turning Uzbekistan into a Central Asian production hub, importing rawhide from all over the region, manufacturing footwear, and exporting final products.
Uzbekistan is also attractive due to relatively low tariffs and taxes. The country’s government is also frequently providing state aid to foreign investors.
Uzbek authorities have also 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 has recently put a lot of effort into attracting 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 in the country.
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