Economists warn of higher cement prices after new sales quota decision

Last year, in an effort to reduce prices, the tax rate on limestone used for cement production was cut fourfold. However, this measure proved ineffective, as cement prices on the exchange have increased by 30 percent since the beginning of the year.

It is now planned to reduce the mandatory sales quota for all cement producers from 50 percent to 25 percent.

According to economist Otabek Bakirov, this decision could lead to further price hikes during high-demand months.

“This decision will push prices even higher during March–October, when demand for cement sharply rises and supply cannot keep up. Small consumers and retail buyers – who are not of much interest to major producers – will suffer the most,” Bakirov wrote.

Last year, the government had already halved, and in practice nearly quadrupled, the tax cut on limestone used for cement production. The decision was justified by aims to “prevent sharp price increases for cement products” and “boost the competitiveness of domestic producers against foreign suppliers.”

Did cement prices actually fall?

While the tax incentives temporarily slowed price growth, by this year, prices began rising again.

Average exchange prices for cement (per ton):

• 3 January 2025 – UZS 512,000
• 16 October 2025 – UZS 666,000

Thus, cement prices have risen by 30 percent since the beginning of 2025. In practice, the tax cuts failed to reduce prices and instead led to a decline in state budget revenues.

Similar measures had been taken before but without success. For instance, in 2022, Uzbekistan significantly reduced subsoil tax rates: for private companies, the rate on natural gas was cut threefold, and for oil and gas condensate – twofold. The goal was to encourage private investment, but in reality, tax payments from subsoil users fell by nearly UZS 2 trillion (12 percent), while gas output decreased by 4 percent and gas condensate production by 3 percent.

Who owns Uzbekistan’s major cement plants?

According to the Uzbuildmaterials Association, there are 40 cement-producing enterprises in Uzbekistan with a combined annual capacity of 39.7 million tons.

• Qizilqumcement JSC – annual capacity of 5.7 million tons. 68.2 percent of its shares belong to the Cyprus-registered offshore company United Cement Group, and 31.8 percent to Qizilqumcement itself.
• China Energy International Group Samarkand Cement LLC – annual capacity of 3 million tons, 100 percent owned by Chinese companies.
• Tashkent Conch Cement LLC – annual capacity of 2.5 million tons; 65 percent owned by Conch International Holdings and 35 percent by Xin Lei LLC.

Other major producers include:

• Ohangaroncement JSC – annual capacity of 2.4 million tons, 99.9 percent owned by Akhangaron Cement CA;
• Fergana Yasin Construction Materials LLC – annual capacity of 2 million tons, 90 percent owned by Shanxi Xiangsheng and 10 percent by Great Amirxan Oil;
• Huaxin Cement Jizzakh LLC – annual capacity of 1.66 million tons, fully owned by Huaxin Central Asia Investment;
• Bekobodcement JSC – annual capacity of 1.6 million tons, shareholder details undisclosed;
• Quvasoycement JSC – annual capacity of 1.08 million tons, with around 90 percent of shares owned by Cyprus-registered companies Raybird Limited, Rayblock Limited, and Rayeross Limited.

For reference, a 30 percent customs duty applies to cement imports into Uzbekistan.