The fat-and-oil industry is the essential part of the food industry of the Republic of Uzbekistan, and covers the production of oilseed crops, production and processing of vegetable oils into various types of products — food and technical vegetable oils, margarine products, industrial fats, mayonnaise, glycerin, raw and distilled fatty acids, detergents, etc. Also, the fat-and-oil industry is the main supplier of high-protein feed for the agricultural economy.
In the early 90's, there were 19 fat-and-oil enterprises operating in the country, with the general production capacities of 3.6 mln tonnes of cottonseed per year. Despite the relatively large-scale capacities, the enterprises were not able to process other oilseed varieties, due to the deficit of infrastructure and lack of the processing experience.
In terms of introduction of the market-driven economy and realization of the program to ensure food independence in the fat-and-oil industry of Uzbekistan, there were observed the significant changes in both production capacities and technologies, focused on processing of various types of oilseed crops.
The government of the country paid really great attention to development of the food industry. Despite the fact that the technological equipment level of Uzbek enterprises was aimed at processing of cottonseed, the government started importing soybeans and successfully completed the technology of soybeans processing. The country started constantly developing the industries of growing and processing of local non-traditional oilseeds — safflower seed, sunflower seed, flaxseed, sesame, as well as stone fruits.
To date, the domestic consumer market of fat-and-oil products of Uzbekistan is specified, as receptive and dynamically growing. The growth of the market capacities developed in terms of increasing of the consumption of fat-and-oil products by both households and corporate food commodities producers, as well as the steady growth of the country's population. The average annual standard rate of consumption of vegetable oils on the country's consumer market totals at least 14 kg per capita. In addition, the needs of the processing industry total nearly 250 thsd tonnes per year. The industry mainly covers the rapidly growing margarine production, cooking and processing segments. The annual growth rates of the population total more than 3%, which specify the increase in the consumption of vegetable oils and expansion of the geography of its sales.
To date, there are more than 240 fat-and-oil enterprises in Uzbekistan, which employ over 15 thsd people, and which in 2019 produced nearly 280 thsd tonnes of vegetable oils and more than 650 thsd tonnes of oilseed meals.
The general annual capacities of oil-producing enterprises total more than 4.39 mln tonnes of oilseeds for processing, including 3.59 mln tonnes of cottonseed, and more than 0.80 mln tonnes of soybeans and sunflower seed. According to the recent statistics indices, in the coming years the processing capacities will somewhat increase, but the processing capacities of cottonseed will continues rapidly decreasing.
It should be noted that by 2022, the annual processing capacities of sunflower seed will reach almost 1.1 mln tonnes. The most positive trends in the reporting direction are observed in regions of the Fergana Valley, Tashkent and Samarqand regions, as well as in the capital — Tashkent. As a result, it is expected to develop the production of a wide range of new products, and their selling on the domestic market, which will balance the consumer market, and reduce the prime cost of goods and the growth in incomes.
The Resolutions of the President of the Republic of Uzbekistan dd. 22.05.2016 PP-2692 "On additional measures of the accelerated renewal of physically run-down and obsolete technical equipment, as well as reduction of the production costs of industrial enterprises" and PP-3012 dd. 25.05.2017 "On the Program of measures for the further development of renewable energy sector, improving of energy efficiency in the economic and social sectors for 2015-2019 period", assisted in development and approvement of "Program of measures to improve the energy efficiency, application of energy-saving technologies and systems at fat-and-oil enterprises".
For the timely and proper fulfilment of the above-mentioned resolutions:
— the country took the measures to improve the energy efficiency, fat-and-oil enterprises replaced the major share of outdated energy-intensive technical equipment and processing lines, with modern energy conservation ones;
— every year, there are developed technical and organizational measures to save fuel and energy resources at fat-and-oil enterprises;
— in terms of formation of the annual sets of measures to improve the performance efficiency and reduce the prime costs, the enterprises pay special attention to measures in the sphere of energy efficiency;
— there are organized conferences and workshops with participation of representatives of domestic and foreign companies, specializing in the production of energy-saving and power-efficient technical equipment;
— there is provided the constant monitoring to reduce the specific consumption rates of fuel and energy resources at the enterprises;
— under support of the World Bank Mission supporting realization of the Pilot Program on the Energy Sector Management Assistance Program, there are actively realized the projects on application of the Energy management systems ISO 50001.
In 2019, companies of the Association of enterprises of fat-and-oil products of Uzbekistan JSC Uzkimyosanoat produced 21 thsd tonnes of localized products for 6 projects with the import substitution at more than 10 mln USD. In the following years, Uzbekistan plans to increase the production of localized products.
Improvement of the technologies and increasing of the range of products allowed developing the export market. The analysis of export potential demonstrates that neighbouring countries need vegetable oils, margarine products, detergents and animal feed.
Despite the growth of domestic production, Uzbekistan still remains highly dependent on the imports of the certain types of fat-and-oil products. In 2018, the imports provided more than 50% of vegetable oil resources for the country's food market. In 2019, the same indicator decreased, due to the growth of the imports of oilseeds. Despite decreasing of the figures in percentage terms, the imported volumes of ready-to-use sunflower oil increased by 80 thsd tonnes, which refers to the sharp increase of demand on the domestic market.
As explained above, the fat-and-oil industry of Uzbekistan has the great potential for providing consumers with fat-and-oil products and needs of the animal husbandry with animal feed.
The technical and technological potential of the fat-and-oil industry during establishment of the market economy was formed under impact of various factors related to development of the markets of domestic products, looking for the channels of products selling on foreign markets, as well as realization of the state policy to protect the domestic food market of the country. Combination of the reporting factors will create the favourable conditions for attracting investments in development of the technical basis of the fat-and-oil industry.
Production of food products on basis of vegetable oils (margarines, specialty fats (confectionery, bakery, cooking), milk fat replacers, cocoa butter substitutes and equivalents) is one of the most dynamically developing segments of the fat-and-oil industry.
The confectionery, dairy, bakery, food processing, canning and other food industries, as well as public catering enterprises, are the main consumers of margarine products and specialty fats.
In the margarine sector, in the short period of time it was possible to realize technical re-equipping of enterprises based on application of innovative technologies and modern equipment, diversify the production capacities, and develop competitive products, as is evident from the exports of finished products to the neighbouring countries.
In the period of 2015-2020, the leading enterprises applied modern technologies, such as interesterification of vegetable oils, and introduced modern production facilities for the production of new types of import-substituting fat-and-oil products (specialty fats, cocoa butter substitutes and equivalents).
For several recent years, Uzbekistan provided modernization of the fat-and-oil industry mainly on the basis of imported technological equipment, which creates additional risks for development of the industry.
Not fully developed material and technical facilities of many organizations of the fat-and-oil industry, as well as the storage and transportation infrastructure of raw materials, do not allow processing of raw materials in integrated manner, and creating the optimum storage conditions, which leads to additional losses, reduction of the safety and quality.
The level of application of the modern types of packing is insufficient for solution of the issues of improving the quality and safety of products, and optimizing the process of goods distribution.
Solution of the issues of improvement of the demographic situation in the country and the health level of people requires establishment of the measures for development of social catering, provision of food products of dietary and therapeutic purposes for different age-specific groups.
Based on the foregoing, the main systemic problems, which are typical for the whole industry, are the following ones:
— deficit of oilseed raw material with the certain qualitative characteristics for industrial processing;
— small-scale diversification of the raw material base — agrarians cultivate sunflower seed and soybeans throughout rather small areas to increase application of the production capacities, and the volumes of produced safflower seed vary within noncommercial figures;
— deficit of area-specific, elite seeds material, including soybeans and cottonseed, with the high oil content, and modern agricultural technologies that prevent contraction of any plant diseases;
— poor infrastructure for storage, transportation and logistics of goods distribution of oilseed raw materials;
— low provision with technical equipment for deep processing of vegetable oils to improve the customer appeal of the products;
— low level of competitiveness of fat-and-oil producers on the domestic and foreign food markets;
— absence of technologies for protein supplementation of oilseed meals, which reduces the efficiency of oilseed crushing plants and poultry organizations that consume the meals;
— high level of physical wear of technical equipment of soap plants;
— inefficient use of waste products, etc.
Fat-and-oil plants mainly produce wastes, when refining raw vegetable oils. Soap stock is the main waste product to be recovered, which is received in the process of fatty acids neutralization, and widely used in the industry of soap production. Spent bleaching earth, which contains nearly 20% of fatty acids, can be used as energy source material for heat generation.
Developing of new cost-effective technologies is necessary to increase the level of waste management of the fat-and-oil production, which will reduce the negative impact of plants on the environment, reduce the energy consumption figures, and increase the production profitability.
In order to increase the energy and economic efficiency of fat-and-oil processing enterprises, there are good reasons to use the boiler houses fueled by biofuels, in particular — sunflower husks and fuel briquettes produced from stem biomass of oilseeds.
The measures taken to develop the fat-and-oil industry should be focused on solution of the main systemic problems, forming of new industrial potential, modernizing and developing of innovations in the fat-and-oil industry, and improving the life quality of various social categories of the population.
For reaching of the specified goals, there is required to solve the following tasks:
— improving of the raw material supply of the industry;
— construction of oil-extraction plants with modern technical equipment and infrastructure;
— reconstruction and modernization of the live fat-and-oil plants, in order to equip them with modern lines for deep processing of vegetable oils and fats (technical equipment for interesterification, fractionation, etc.).
Several factors that influence development of the fat-and-oil industry, will form the sequence of active tasks. In the medium term, the main factors will include the following list:
— expected innovation wave of the leading countries, in terms of application of new technologies;
— sound investment climate for attracting investments and development of closer cooperation on interlocking investments, formation of the economic institutions that stimulate business and investment activities;
— harmonization of standards with the international standards of the ISO series, development of standards in the sphere of environmental management.
The above-mentioned factors determine the investment attractiveness of the fat-and-oil industry of Uzbekistan for local and foreign businesses. The geographical location and current infrastructure are quite favourable for business operations in Uzbekistan.
To date, there are actively realized various investment projects, which are aimed at modernization of live plants and construction of new plants for oilseeds processing.
The country created all required conditions for foreign investors to attract new investments. The investor rights are protected by the international legal enactments and the following laws and regulations:
— Law of the Republic of Uzbekistan "On foreign investments";
— Law of the Republic of Uzbekistan "On investment operations";
— Law of the Republic of Uzbekistan "On guarantees and protection measures of the rights of foreign investors";
— Decree of the President of the Republic of Uzbekistan "On additional measures to stimulate the generation of direct private foreign investment", as well as laws and regulations adopted in the form of resolutions of the President and the Government of the country.
The enterprises with foreign investments are excused from paying of:
— corporate income tax;
— property tax;
— tax on land improvement and development of social infrastructure;
— unified tax payment for micro companies and small-sized enterprises;
— compulsory levies to the Republican road fund.
The reporting preferential tax treatment is provided for the following volumes of direct private foreign investments:
— from 300 thsd USD to 3 mln USD — for the period of 3 years;
— from over 3 mln USD to 10 mln USD — for the period of 5 years;
— from over 10 mln USD — for the period of 7 years.
It is expected that by 2025, the accumulated potential of technologies and investments will specify the continuance of trends in the sustainable development of the fat-and-oil industry, based on the innovative development vector as the main driving force of the economic growth of the industry.
Oybek Zufarov will provide more detailed information about development of the fat-and-oil industry of Uzbekistan within frames of the conference "Asia Grains&Oils Conference in Tashkent 2020", to be held in the capital of Uzbekistan (hotel International Tashkent), on April 15-16.