Identifier
Created
Classification
Origin
06DUSHANBE1908
2006-10-18 07:13:00
UNCLASSIFIED
Embassy Dushanbe
Cable title:  

DON'T DRINK THE BOTTLED WATER, EITHER: THREE TAJIK

Tags:  EAGR ECON EFIN EINV EIND ELAB EAID ETRD PGOV TI 
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VZCZCXRO2445
RR RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1908 2910713
ZNR UUUUU ZZH
R 180713Z OCT 06
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC 8845
INFO RUCNCIS/CIS COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHBUL/AMEMBASSY KABUL 1823
RUEHIL/AMEMBASSY ISLAMABAD 1865
RUEHNE/AMEMBASSY NEW DELHI 1872
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHDBU/AMEMBASSY DUSHANBE 0302
UNCLAS DUSHANBE 001908 

SIPDIS

SIPDIS

STATE FOR SCA/CEN

E.O. 12958: N/A
TAGS: EAGR ECON EFIN EINV EIND ELAB EAID ETRD PGOV TI
SUBJECT: DON'T DRINK THE BOTTLED WATER, EITHER: THREE TAJIK
ENTERPRISES

UNCLAS DUSHANBE 001908

SIPDIS

SIPDIS

STATE FOR SCA/CEN

E.O. 12958: N/A
TAGS: EAGR ECON EFIN EINV EIND ELAB EAID ETRD PGOV TI
SUBJECT: DON'T DRINK THE BOTTLED WATER, EITHER: THREE TAJIK
ENTERPRISES


1. (U) INTRODUCTION: EmbOffs met October 13 with
representatives of three companies in Hissor, located 25 minutes
west of Dushanbe. On the railway line from Uzbekistan to
Dushanbe, Hissor is a key wholesale trading area, with
construction materials, gas, wheat flour, canned food, and water
bottling enterprises. A number of local entrepreneurs have
managed to turn crumbling Soviet-era plants into barely
functioning factories, but Hissor is far from a boomtown. END
INTRODUCTION.


2. (U) At the "Farrukh" soft drink factory in Hissor, four
women sit with bare hands in the production line. As the
nearly-filled plastic bottles roll towards them on the conveyor,
one woman scoops syrup out of a bucket into the bottles, the
next two pour additional water to fill the bottles to the top,
and the last screws on the caps. The unappetizing factory
conditions contrast sharply with the modern Obi Zulol water
bottling factory in the northern city of Istaravshan, which has
succeeded in exporting bottled water to ISAF troops in
Afghanistan.


3. (U) Izatullo Razikov, the director of the closed joint
stock company "Farrukh", inherited 11 hectares of the Soviet
factory "Hydro Construction Materials." Utilizing a small room
on the third floor of a massive, dilapidated three-story 1980's
Soviet factory, Farrukh produced poly propylene bags using
Chinese equipment and imported material from Russia and Korea,
until last year when import tariffs as high as 33 percent on the
raw materials made production unprofitable. Farrukh's main
production now includes the water bottling facility described
above and an equally unsavory ice-cream production plant. In
addition, the grounds contain a hodgepodge of other commercial
endeavors, including a small beer brewery, a cotton oil
production facility, a small farm, a gas storage facility,
propane gas storage facility, and an aluminum smelting facility.
(COMMENT: The factory also produces a large number of cobwebs.
We could not fathom why Razikov's suspicious deputy was
convinced EmbOffs were engaged in industrial espionage to steal
Farrukh's corporate secrets. END COMMENT.)


4. (U) Nearby, the privately-owned company "Nuri Dilshod" also
arose from the remains of the "Hydro Construction Materials"
factory when the company's director, Nurullo Huseinov, purchased
twenty percent of the plant in the early 1990's. Conveniently
located steps off the railway line, Nuri Dilshod employs 100
workers and operates a flour mill, several large warehouses, and
gas storage facilities. The gas storage facility has thirty new
72-ton containers (72,000 liters) and two 700-ton containers.
The gas comes from Russia, Turkmenistan and Kazakhstan for
distribution on the local market. The company's five-year-old
Turkish milling equipment produces 75-80 tons of high-grade
flour each day, which is sold in Dushanbe and other local
markets. The company imports wheat from Kazakhstan, and
operates eight months a year. Several large dusty factory
buildings stand largely empty except for stocky Soviet machinery
producing a small order of steel-melting tools for the TadAZ
aluminum plant located 25 kilometers down the road


5. (U) The "Avicenna" company bottles water, beer and alcohol
for local distribution. The company's largely automated yet
scraggly bottling plant is a step up from "Farrukh." Mumbling
director Abdurazok Saidov told EmbOffs his company earns ten
million USD in annual sales, with roughly one million USD
profit. The company also owns an asphalt plant, and cooperates
in the U.S.-Tajik leather processing joint venture Interfur in
Dushanbe.


6. (U) COMMENT: At a Dushanbe briefing October 10, resident
World Bank economist Martin Brownbridge noted that very little
remaining unused Soviet capital stock could still be brought
back into productive use. According to his estimates, "total
factor productivity" (TFP) growth accounted for 7.2 percent
growth out of overall 9.7 percent GDP growth in Tajikistan from
2001-2004. TFP growth occurs by increasing use of underutilized
elements of production, such as old Soviet production capacity.
Brownbridge argued that with most of the usable Soviet-era
equipment already in use, future GDP growth will slow
dramatically. EmbOffs' anecdotal observations in Hissor suggest
that Tajiks continue to come up with new and creative ways of
bringing old equipment back into production. END COMMENT.

JACOBSON