IFC signed an agreement on February 2 to assist the government of Uzbekistan in privatizing one of the leading players in the country’s chemicals and fertilizers sector – to help modernize the industry and drive greater foreign direct investment and growth.
Under the agreement between IFC and the Uzbek State Assets Management Agency (SAMA), IFC will act as a strategic advisor for the privatization of JSC Ferganaazot. Established 60 years ago, the state-owned enterprise is one of the country’s largest producers of nitrogen fertilizers, defoliants, and cellulose acetates. International consulting firm Deloitte TCF LLP is acting as a lead advisor on this transaction.
In accordance with a presidential decree last February, SAMA is aiming to sell a 99-percent state stake in the company in a competitive sale process. The goal is to attract an experienced strategic investor to develop the business and bring in industry best practices and new technology.
“To improve the competitiveness of the chemicals sector of Uzbekistan, it is critical to attract capable strategic private investors, and this privatization is one of the most important steps the Uzbek government is taking in this direction,” said Akmalkhon Ortikov, Director of Uzbekistan’s State Assets Management Agency.
While Uzbekistan’s chemicals and fertilizers sector has huge potential for growth, turning it into a modern industry that can support the country's needs and develop its export potential will require reforms and private sector investment.
“The chemicals sector is a key sector in which Uzbekistan has unique resource advantages. With progressive reforms and investments in skills and technology, the chemicals industry can play a catalytic role in the economic development of Uzbekistan,” said Wiebke Schloemer, IFC Director for Turkey and Central Asia.
“We are delighted to support the government of Uzbekistan in modernizing the sector and attracting international companies to invest and bring in the latest solutions and best practices required to build up a sustainable chemical industry in the country.”
Uzbekistan undergoing an unprecedented economic transformation. As of February 1, 2022, IFC had $225 million in investment commitments in Uzbekistan. IFC's advisory services aim to help the government of Uzbekistan in preparing state-owned banks for privatization, developing and diversifying the financial market, transforming the cotton sector, developing the chemicals industry, and piloting public-private partnerships (PPPs) in the power and health sectors.