Cluster Approach

The joint venture Romstar in the Romitan district of the Bukhara region, considered a model of effective cooperation among entrepreneurs of Uzbekistan, Russia and the United States, intends to implement a number of projects to expand its capacities.

The enterprise was established in 2005 in the village of Alamdor and specializes in the processing of silkworm cocoons. In the first half of 2017, a project worth $ 140,600 was realized here. The old spinning looms were replaced by modern, energy-saving and high-performance spinning machines. This made it possible to improve the quality and competitiveness of goods. And so the silk fiber currently produced meets international standards and is in high demand.

“We are exporting all our products,” says the director of the joint venture K. Kattaev. “In 2017, customers from Vietnam and Iran were delivered products worth $ 1.5 million, which is $ 947 thousand more than in the previous year. We direct the income to increase working capital, to develop production, encourage the workers and employees of the enterprise.”

Decree of the President of Uzbekistan on measures to organize the activities of the association Uzbekipaksanoat opened a new stage in the development of the industry. In particular, the introduction of a cluster method into silkworms involves the integration of all processes from harvesting cocoons to processing the crop. In a system like this one, an enterprise that processes cocoons conducts work taking into account the interests of all cluster members. Romstar strictly follows this rule in cooperation with silkworms and home-workers of Alat, Jondor and Karakul districts. Manufacturers of cocoons are financially encouraged; they receive a deposit from a joint venture.

The enterprise will purchase 622 tons of cocoons in the new season from silkworms and homemade workers. Due to the abundance of raw materials, enterprises will not be idle. Hence, the volume of silk yarn produced and, in turn, the export potential of the region will grow. Toward last year, contracts were signed with foreign customers for the supply of silk yarn in 2018 by almost $ 2.8 million. Since the start of this year, thanks to processing of raw materials from last year, products worth $ 380 thousand have been exported.

With a cluster system, an important indicator is the deep processing of raw materials. The management of the enterprise foresaw this in its new project worth 18 billion soums (currency rates of CB RU from 30.05.2018, 1$= 7982.25 soums). At present, the enterprise plans to put into operation a workshop for the production of fabrics. Currently, its own funds allow it to erect a new building. The huge production row will be equipped with modern machinery to be purchased for a loan of 13.5 billion soums allocated by the regional branch of Mikrokreditbank.

The project will be implemented at the end of this year, and at the first stages, 40% of silk will be processed. Thanks to the efforts, 85 more people will be employed, and the number of employees is to reach 210.

(Source: «Uzbekistan Today» newspaper)