STATE STOCK - JOINT COMPANYO’ZBEKYENGILSANOAT 1 TEXTILE INDUSTRY OF UZBEKISTAN: POTENTIAL TO RISE & OPPORTUNITY TO INVEST

“O’ZBEKYENGILSANOAT” : SIZE AND GROWTH

Uzbekistan textile industry

Location wise concentration of cotton processing in %, % 63% 90% 95% 23% 14% 23% 14% 14%14% 10% 44% 18% 13%

Our main partners

Indorama Kokand Textile :  Partner company – Indorama  Investment - US$ 43 mln.  Production – of cotton yarn  Export – abt US$ 20 mln.  Start – September 2011 Rieter Uzbekistan:  Partner company – Rieter AG  Investment - US$ 4,0 mln.  Production – 40 draw frame and carding machines  Start – April and September 2012 (est) Daewoo-Bukhara-Textile :  Partner company – “Daewoo International”  Investment - US$ 52,5 mln.  Production - 16’000 of cotton yarn  Export – abt US$ 30,0 mln.  Start – November 2009 TTG-Tashkent:  Partner company – TTG, Korea  Investment - US$ 80,0 mln.  Financing – 100% FDI  Production - 6’000 of cotton yarn  7,5 mln. sq.m fabric  5 mln. pieces of garment  Start – September 2012 (est)  Facility – Green Field at Zero cost

Factors of competitiveness ItemCost in USD Cotton fiber production1,1 + mln. tons Yarn production370 + thousand tons Low energy costat US$ 0,04/kWt Skilled labor resources at US$ 200/month 1 Institute of Light Industry & Textile in Tashkent city, 42 Specialized colleges 15% price reduction of the cotton purchase and VAT refund on export Domestic market of 29,5 mln. population CIS market of US$ 6,4 bln. in free trade regime ItemCost in USD Water0.25/1m3 Natural gas0.05/m3 Power energy0.04/kWt/h Petroleum0.86/1 Diesel0.78/1 Furnace oil0.29/1 Coal0.02/kg

 Quality - Medium staple of world recognized premium quality (3 rd ranking in world export)  Price - 15% price reduction of the purchase of cotton (upfront)  20% reimbursement of VAT on the purchase price of cotton  Supply – from one of the 20 cotton terminals from all over the country

Cotton Yarn  370 thousand tons  95% produced at world class spinning capacities  80% spinning capacities less than 10 years old  priced in local currency as well as in US Dollars Silk Row silk – 900 tons Silk yarn – 190 tons 40% produced at modern technologies less than 10 years old

Main incentives & benefits for textile producers producers of hosiery & ready garment are exempted from all taxes (except VAT); textile exporters (more than 80% to be exported) are exempted from property tax (3,5%). 100% exemption from payments of custom payments on technological equipment; 100% exemption from payments of custom payments on row materials not produced in Uzbekistan (synthetic fiber, fabric, etc); 15% discount from world cotton price; Special facilities to finance the cotton with the rule of 15% cash payment and 85% payable in 90 days, covered by bank guarantee; Zero rating VAT (20%) on export.

Uzbekistan requires investors who possess:  Financial capital.  Know-how (modern technologies).  International management (brand).  Distributions channels and access to international markets.

Main incentives & benefits for textile producers producers of hosiery & ready garment are exempted from all taxes (except VAT); textile exporters (more than 80% to be exported) are exempted from property tax (3,5%). 100% exemption from payments of custom payments on technological equipment; 100% exemption from payments of custom payments on row materials not produced in Uzbekistan (synthetic fiber, fabric, etc); 15% discount from world cotton price; Special facilities to finance the cotton with the rule of 15% cash payment and 85% payable in 90 days, covered by bank guarantee; Zero rating VAT (20%) on export.

 Green field project designed by Project initiator (we could offer land or unfinished constructions);  Development of the Project in existing buildings (existing textile factories with all necessary infrastructure);  Projects requiring new management to be developed in Partnership with Uzbek companies and Banks (defaulted textile companies with modern production facilities).

2nd part of Bukhorotex Date of establishment: nd part of Bukhorotex Date of establishment: 1974 Type of activity: stopped 2007 for renewing and deep modernization (1 st part restarted in 2009 with capacities 16’000 combed and carded yarn)

LOCATION JSC “Bukhorotex” Transport infrastructure: Distance km - to highway2 - to railway0.20.2

BUILDINGS AND FACILITIES Main unitsProduction area, hectares Total area, in hectares Built year 2-part (Spinning & weaving mills) 13,3624, part (dying house) 1,74, part (Finishing mill) 8,4418, part (Mechanical factory) 0,671, part (Transport Department and other buildings) 0,231,41994

1 st Phase Production:  Cotton yarn thousand tons (ring and open end)  Grey Fabric – mln sq meters  Denim – 4-8 mln sq meters  Garment - 10 mln. pcs a year Investment:  Reconstruction works – US$ mln.  Equipment – US$ 20 – 100 mln  Working capital – US$ mln

Investment project proposal # 2 (textile complex): “Bobur” Joint Stock Company Address: Andijan city, 73 Bobur avenue; Buildings, constructions and utilities: Total area of the enterprise – 66.5 hectares Production (covered) area – sq. m. Utility units available – electricity, water, gas, sewage Logistics: Highway – 0.5 km. Railway – 2 km. Airport – 3 km. State owned Proposed for establishment of new integrated production

Production:  Cotton yarn thousand tons (ring and open end)  Grey Fabric – 8-12 mln sq meters  Denim – 4-6 mln sq meters  Garment – 3,5 mln. pcs a year Investment:  Reconstruction works – US$ mln.  Equipment – US$ 50 – 80 mln  Working capital – US$ mln

Investment project proposal # 3 (spinning and weaving): JSC “Kitop ip yigiruv” Address: Kitop city, Kashkadarya region; Project capacity: 6 thousand tons of yarn Total cost of the project: 10,5 mln. US dollars Buildings, constructions and utilities: Total area of the enterprise – 21.0 hectares. Production (covered) area – sq. m. Utility units available – electricity, water, gas Providing 100% with local raw materials. Private owned, not operational Proposed for establishment of new production Production:  Cotton yarn thousand tons (ring and open end) Investment:  Reconstruction works – US$ 1 – 2 mln.  Equipment – US$ 5 – 15 mln.  Working capital – US$ mln.

Organization of integrated mill (unfinished construction) Address: Harezm Region, Bagat city; Buildings, constructions and utilities: Total area of the enterprise – sq. m. Production (covered) area – sq. m. Utility units available – electricity, water, gas Logistics: Highway – 3 km. Railway – 10 km. Airport – 20 km. State owned Proposed for establishment of new production Production:  Cotton yarn thousand tons (ring and open end)  Grey Fabric – 8-12 mln sq meters  Finished Fabrics – 4-6 mln sq meters  Garment – 3,5 mln. pcs a year Investment:  Reconstruction works - US$ mln.  Equipment – US$ 40–70 mln  Working capital – US$ 1-3 mln

Thank you for your attention! State Joint-Stock Company “O’zbekyengilsanoat ” 45 Babur Str., Tashkent, , Uzbekistan Tel: +998 (71) Fax: +998 (71)