TURKMENISTAN: TEXTILE FACTORIES NOT AS PRODUCTIVE AS

UNCLAS ASHGABAT 001386 SENSITIVE SIPDIS STATE FOR SCA/CEN, EEB ANKARA FOR AGRICULTURE COUNSELOR E.O. 12958: N/A TAGS: EIND ETRD BTIO EAGR TX SUBJECT: TURKMENISTAN: TEXTILE FACTORIES NOT AS PRODUCTIVE AS GOVERNMENT SAYS ¶1. (U) Sensitive but Unclassified. Not for Internet Distribution. ¶2. (SBU) SUMMARY: The recent inauguration of a new textile factory in the southeastern city of Turkmenabat was supposed to demonstrate the progress that Turkmenistan has made in its textile industry. However, decreasing cotton yields and a lack of trained professionals to run factories have resulted in Turkmenistan's textile industry being less productive now than 10 years ago. END SUMMARY. ¶3. (U) On October 21, President Berdimuhamedov opened a new textile plant in the southeastern city of Turkmenabat. The Turkish firm Engin Group did the construction work and equipped the plant, at a cost of $85,359,000. The plant is capable of producing 17,700 tons of cotton yarn per year. ¶4. (U) According to the Ministry of Economy and Development, 20 new textile enterprises have been built over the past 16 years, including five modern integrated textile complexes and 15 cotton-spinning factories. The Turkmen Government has invested over one billion dollars in their construction. Turkmenistan can process up to 100,000 tons of cotton fiber per year. (NOTE: The end products of the textile factories are yarn, denim and other garments, sheets, and towels. END NOTE.) The value of total annual textile production exceeds $640 million. Turkmenistan exports textiles to the United States, Germany, Switzerland, Turkey and Russia. ¶5. (SBU) The government intends to build a cotton-spinning factory in each of the country's fifty cotton growing areas. By the year 2020, Turkmenistan plans to process up to 500,000 tons of cotton fiber. However, this ambitious plan will be difficult to achieve because of the declining cotton harvests due to the lack of irrigation water, soil depletion and poor management. In 2008, Turkmenistan harvested 1,000,000 tons of seed cotton (the weight prior to ginning) and produced 300,000 tons of cotton fiber. ¶6. (SBU) Most of the local textile enterprises were established in the early 1990s as joint ventures between the Ministry of Textile Industry and Turkish companies, in which the Turkish managers had a leading role in operational and commercial issues. The Turks made significant profits by using cheap Turkmen labor and resources. In 2005, late President Niyazov fired then Minister of Textiles Dortguly Aydogdiyev for fraud, and ordered that the Ministry get rid of Turkish managers and directly engage in marketing operations. ¶7. (SBU) Many Turkish expats who worked in the local textile industry left the country after Niyazov's edict. Following their departure, some large textile factories stopped functioning at full capacity. A specialist at the Ashgabat textile factory told Pol/Econ staff that the factory stopped producing certain types of textile products because it did not have a specialist able to run the software for their production. Local sources confirm that, since 2006, the quality and selection of Turkmen textile goods has declined. ¶8. (SBU) COMMENT: While many locals welcomed Niyazov's order because they believed the Turks were stealing Turkmenistan's wealth, they now realize that Turkmenistan does not have home-grown specialists capable of running modern textile factories effectively. Until the government implements comprehensive education reform, the textile industry will continue to lack trained cadres and will have to rely on foreign professional expertise and knowledge. END COMMENT. CURRAN