Kyrgyzstan plans full cycle of industrial production to boost textile industry

The 9th International Trade Fair in Bishkek dedicated to products and equipment in the fashion industry opened on 2nd March. The Trade Fair aims to strengthen business contacts and expand cooperation between companies working in the garment and textile industries. More than 50 domestic sewing, textile and handicraft enterprises, as well as representatives of companies from Uzbekistan, China, Russia, Turkey, and India are taking part in the Fair.

Kyrgyz Deputy Economy Minister Daniyar Imanaliev at the opening of the fair said that Kyrgyzstan plans to create a full cycle of industrial production to develop its textile industry as local sewing enterprises are now importing accessories and fabrics.

The light industry is one of the priority sectors of the Kyrgyz economy. Kyrgyzstan annually produces textile products worth $190 million and products worth $160 million are exported to Russia and Kazakhstan.

Kyrgyzstan’s sewing industry consists of small and medium-sized enterprises and provides about 160,000 jobs.

Due to the dynamic development of the garment industry, the “Made in Kyrgyzstan” label has gained a niche in the market of the Eurasian Economic Union, Imanaliev said.

The head of the Kyrgyz Association of Light Industry Sapar Asanov at a press conference in Bishkek said that the construction of two techno-parks which will create from 7 thousand to 15 thousand jobs will begin this spring in Bishkek and in one of the cities (Sokuluk or Tokmok) in the Chui province, It is necessary to take into account the availability of the connection to utilities including electricity, water and sewerage.

The Government has allocated land for the techno-parks that will produce textile and clothing for the domestic market and for export. In the future, it is planned to build industrial parks in other region of Kyrgyzstan.

Last year, Kyrgyzstan has increased the export of garment products up to $95.5 million. Garments make 7% of the country’s total export, the Kyrgyz State Committee for Industry, Energy and the Subsoil Use said.

This year, Kyrgyz sewing shops are loaded with orders from abroad, the number of sewing workshops is growing, and there is a lack of sewers.

According to the National Statistics Committee, since 2013 there has been a decline in the garment industry related to the global financial crisis, and as a result, a decrease in orders due to lower purchasing power in Kyrgyzstan’s main export markets — Russia and Kazakhstan.

More than 80% of the garment products in Kyrgyzstan are produced by individual entrepreneurs who work under patents and do not report to the National Statistical Committee. The Committee’s statistics also did not take into account the volume of apparel exports to Russia and Kazakhstan through Bishkek’s Dordoi wholesale market. Hence the difference between the figures reported by the State Industry Committee, the National Statistical Committee and the State Tax Service, which are now jointly working to optimize the registration of individual entrepreneurs.

Kyrgyz sewers are planning to enter new markets, and participate in fairs and exhibitions which will allow them increasing exports. The Kyrgyz sewing industry has found its niche in the Russian and Kazakhstan markets. In the near future, local sewers will start to export their products to Germany and Belarus.

Kyrgyzstan is now creating a value chain in the apparel industry. The Association of Light Industry (Legprom) intends to merge all production stages into a single scheme, starting from farmers who grow cotton to the sewing shops. It is also planned to create Kyrgyzstan’s export brand. The sewing industry still needs to improve the skills of workers and upgrade production facilities and equipment.

Thanks to a soft loan allocated by the Russian-Kyrgyz Development Fund, local Transtekstil corporation has built a modern factory for the production of knitted fabric inside Kyrgyzstan. Prior to joining the Eurasian Economic Union in August 2015, the corporation exported its products to Russia alone, but after the entry to the EEU it started exporting to Kazakhstan. The company is planning to start exporting to Belarus this month and to Germany in April.

New knitwear companies have started operating which creates a healthy competition. There is also a socks factory in Bishkek which provides 250 people with jobs.

The Legprom Association has managed to defend its positions within the EEU including tax preferences and working on the patent system. Legprom said that as a result, they managed to keep the sewing industry. Despite the crisis, ten local knitwear companies have bought new high-tech equipment,