If the country focuses on creating finished cotton goods, rather than just exporting the raw material, Tajikistan stands to profit substantially, economists say.
By Negmatullo Mirsaidov, Central Asia Online
KHUJAND – Tajikistan is hoping to become a garment exporter, not merely a producer of raw cotton.
In 2012, Tajikistan harvested 417,977 tonnes of cotton and exported about 90% of it as raw materials to countries with developed textile-processing capabilities, according to the Ministry of Energy and Industry.
“It works out that Tajik cotton farmers do most of the work, but the foreign firms that process Tajik cotton reap high profits,” Bakokhon Khotamov, a department head at the ministry, told Central Asia Online.
Reversing that trend could substantially boost the Tajik economy and create thousands of jobs, he said.
“We must achieve thorough processing of the maximum possible quantity of the cotton we produce by renovating existing capacities and creating new processing plants,” he said, “so that the profits remain in Tajikistan.”
Historical processing capabilities
In 2006, the country adopted the Programme for Thorough Processing of Domestically Produced Cotton Up to 2015 and many processing plants appeared, Khotamov explained. But officials vastly over-estimated the annual capacity required.
“Though it had the right strategy, [the 200,000-tonne target for annual capacity] was unrealistic,” he said. “We are now working on correcting the target … to about 68,000-70,000 tonnes.”
“The issues are how to update old factories and where to find the investment capital,” Sodik Rustamov, chief of the Sughd Directorate of Industry and Energy, said. “These plants – with an [annual] processing capacity of up to 4,000-5,000 tonnes – are not working reliably. They don’t generate much revenue, they suffer from blackouts and we don’t have enough garment factories to complete the processing cycle in Tajikistan.”
However, Tajikistan is steadily creating more processing capacity, according to the Ministry of Energy and Industry. In the past three years, more than 15 enterprises for cotton processing and production of cotton articles have been built or renovated. Major weaving and spinning works have opened in the Yavan, Gissar, Spitamen and Mastchoh districts and in Khujand and Qurghonteppa. New capacity for processing 12,000 tonnes of cotton fibre annually has appeared in Sughd Oblast alone.
Reduction in sowing to reduce the risk
The Tajik cotton industry, overall, is dealing with myriad challenges. One is that an overabundance of raw cotton is holding down prices.
With that, some cotton-processing plants can barely cover their expenses, Mirzonabi Nematov, a trained biologist and deputy director of the Sughd Oblast branch of the Institute of Crop Cultivation, told Central Asia Online.
The government has attempted to rectify this problem. At the beginning of this century, the government broke up the Soviet-era collective and state farms into smaller, more flexible private farms. One goal was to reduce the amount of land dedicated to growing cotton.
The effort was marginally successful, as 200,000ha of cotton fields exist in Tajikistan today – down 50,000ha from 2006, when the government adopted the 2015 programme for cotton production.
Officials, though, had hoped for a greater reduction so that farmers would stop flooding the market with cotton, but the farmers had a greater fear of growing fruits and vegetables because excess food products spoil, unlike cotton, Nematov explained.
If the country can build on expanding the finishing process, as opposed to the growing process, it can further take advantage of the economic opportunities in the textile industry.
“The creation of capacity for the complete processing cycle right up to manufacturing finished products could give us several times as much income as does the simple sale of the raw material,” Abboskhudja Yakhyoudjayev, head of the Directorate of Crop Cultivation of the Ministry of Agriculture, explained. “But we must do this gradually.”
Reforms could create jobs for women
Such industrial enterprises could also help eliminate unemployment among women, observers say. In 2011, Khujand entrepreneur Djamshed Abdulov built a factory that produced 6,000 tonnes of cotton yarn per year. It created 450 jobs – 80% of them for women.
“In Soviet times, we had big sewing and textile factories where women’s hands were just what was needed. … Now either [the factories] have shut down or they’re working only to 1/10 of their capability,” Umar Salikhov, a retired long-time worker in light industry from Khujand, told Central Asia Online.
Officials and local entrepreneurs intend to revive this industry, he said. When the country succeeds this endeavour, it will create 100,000 new jobs – the majority of them for women, according to the statistics.
Profit margin on finished products higher
Another reason for the push to move into garment production, as opposed to growing cotton, is that it opens up broader economic opportunities.
Finished yarn commands twice the export price of cotton fibre, Bakhtiyor Faizullayev, manager of the Olim-Textile Co., said. “If we produced finished articles too, profits would more than double.”
Such was the case when the Firuz Co. began producing finished kimonos. Last year, it upped annual production to 30,000 units at a retail price of US $18−$55 (85−261 TJS) each, Firuz economist Saodat Mannonova said.
“When we founded our enterprise, we didn’t think that we would be producing kimonos,” she added. “It was important to us to create new jobs by organising the processing of our own country’s raw material and turning yarn into fabric.”
“The kimonos, which hit the CIS markets first, have begun to conquer the European market, because they’re 100% cotton,” she said.