DIRECTOR OF THE STATE ASSETS MANAGEMENT AGENCY OF UZBEKISTAN
PPPs & Privatization I Interview I Uzbekistan 2023
_BIOGRAPHY He was appointed to his current position in December 2020. He worked as the First Deputy Minister of Economic Development and Poverty Reduction. He graduated from the Tashkent State Economic Institute and worked in various positions in the Ministry of Finance, First Deputy Khokim of Namangan and Ferghana Regions and at the Cabinet of Ministers Secretariat.
“THE AGENCY IS LEADING THE PRIVATIZATION PROCESS FOLLOWING THE HIGHEST INTERNATIONAL STANDARDS AND FOCUSING ON TRANSPARENCY AND ACCOUNTABILITY.”
CAN YOU SHARE WITH US SOME SUCCESSFUL EXAMPLES OF PRIVATIZATION?
The Coca-Cola Bottlers Uzbekistan deal has been the first fruitful outcome of this process. The deal process followed international standards with the support of the financial consultant Rothschild, while Dentons acted as a legal consultant and KPMG conducted an analysis and evaluation of the company. Seven bidders from the USA, France, Türkiye, South Africa, Israel, and Uzbekistan took part in the process. Eventually, the sales price has been much higher than the estimated asset value, and successfully reached an agreement to sell for U$252 million to «Coca-Cola İçecek A.Ş.» (CCI). The deal will serve as a benchmark for the government to attract foreign investment and act strategic indicator for entering the Uzbek market. This once again demonstrates that we are ready to negotiate and close deals with large businesses following international practice.
I would like to highlight the post-privatization on the investment climate. Coca-Cola İçecek A.Ş. (CCI) has implemented international corporate governance along with the introducing new technologies to modernize the existing production infrastructure, namely by investing U$40 million to modernize the plant in Urgench and they are expanding business opportunities by investing more than U$100 million, including the construction of a 4th plant in Samarkand region, which will have a great positive impact on the position of Coca-cola bottlers Uzbekiston, Ltd. as one of the strongest beverage distributors in Central Asia.
CAN YOU TELL US MORE ABOUT THE MOST IMPORTANT UPCOMING PRIVATIZATION OPPORTUNITIES IN 2022/23?
The scale of the privatization has covered all aspects of the economy through the privatization program which includes more than 1,500 state assets to be privatized. In the chemical sector, next year the "Dehkonobod potash plant" JSC will be privatized and we are currently carrying out an estimation of its reserves and resources under the standard JORC. In the transportation and energy sectors, we are developing the privatization strategy of "Thermal Power Plants" JSC and "Uzbekistan Airways" JSC with attracted international professional consulting companies KPMG and Deloitte.
Besides, privatization strategies for "Uzbekneftegaz" JSC will be developed together with "Rothschild & Co". International tender on the attraction of professional consulting companies will be announced to develop a privatization strategy for “Navoiazot” JSC which is one of the largest fertilizer producers in Central Asia. At the same time, work is underway to privatize automotive parts companies such as Uz- Dongju Paint Company and UzAuto Trailer.
We have recently attracted KPMG as a privatisation consultant for Universal Mobile Systems LLC, a telecommunication company of Uzbekistan, which provides modern services of mobile voice communication and mobile Internet access in 4G LTE, UMTS and GSM standards under Mobiuz trademark and soon its privatisation process will be launched.
WHAT AT THE REASONS FOR THE SUCCESS OF THE PRIVATIZATION PROCESS?
The main factors are transparency and accountability. We have hired the world's leading consulting companies as Rothschild, Deloitte, KPMG, PwC, and others to carry out the M&A process to the highest international standards. They are leading the whole privatization process including marketing, market analysis, due diligence, and closing the deal which will provide full transparency and accuracy in the process. With the implementation of the electronic online trading platform “E-auksion”, we have initiated fair and transparent sales of small and medium-sized state assets (mainly real estate). This platform allows users to participate in bidding without restrictions and can also be used by non-residents. We have also accelerated the transformation of SOEs through the introduction of modern corporate governance, strengthening the financial audit, as well as improving operational efficiency. These companies now have independent supervisory members and foreign managers on their boards.
WHAT WOULD BE YOUR MESSAGE TO INVESTORS INTERESTED IN UZBEKISTAN?
A huge wave of privatization is ahead. The State will continue to support after the privatization process and develop private businesses in all sectors of the economy. This is vital to the social and economic development of the country. Uzbekistan is one of the fastest-growing countries in the world. If the investors want to receive a high return on their investment, it is time to participate in the privatization process.