TURKMENISTAN: SOUTH KOREAN COMPANIES DOMINATE A

UNCLAS SECTION 01 OF 02 ASHGABAT 000740

SENSITIVE

SIPDIS

STATE FOR SCA/CEN; EEB

E.O. 12958: N/A
TAGS: PGOV ERD EIND TX KS
SUBJECT: TURKMENISTAN: SOUTH KOREAN COMPANIES DOMINATE A
TEXTILE EXHIBITION


1. (U) Sensitive but unclassified. Not for public
Internet.


2. (SBU) SUMMARY: The June 7-9 textile exhibition in
Ashgabat, organized by the Turkmen Government, hosted the
representatives and displays of local enterprises and
some 30 foreign companies seeking to enter the market or
expand their business in the country. Although many of
the exhibitors were the usual crowd of local companies,
13 South Korean companies that provide a variety of
materials and services to the textile industry were
represented at the exhibition this year. The South
Korean Government and businesses may have assessed that
there is a market opportunity in this developing sector,
and they are taking it. Alternatively, Korean officials
may be promoting further bilateral cooperation in this
sector as a quid pro quo aimed at improving the prospects
for more lucrative energy or construction projects. END
SUMMARY.


3. (SBU) The Ministry of Textile Industry of Turkmenistan
organized an international textile exhibition named
"Principal Directions of the Turkmen Textile Industry
Development," June 7 - 9 in Ashgabat. More than 60 local
and foreign enterprises displayed their products at the
exhibition. The organizers also conducted an economic
forum alongside the exhibition on June 8. Foreign and
local textile experts, business representatives and
government representatives participated in the forum,
which reportedly focused on joint development of
Turkmenistan's textile industry. All the Deputy Cabinet
Chairmen, other high-ranking government officials and the
diplomatic corps attended the opening ceremony of the
exhibition, which included a Turkmen-themed, runway-style
fashion show.


4. (SBU) The Turkmen textile industry was represented by
30 state-controlled factories that produce various types
of textile materials and end products that are well-known
in the country. A small number of local private firms
also exhibited their products, mostly small-scale textile
production including traditional crafts.


5. (SBU) The percentage of foreign companies present at
the exhibition was surprisingly high for Turkmenistan,
mostly due to the participation of 13 South Korean
companies that produce various types of textile industry-
related materials ranging from dyes and chemicals to
machinery and finished products. (NOTE: The presence of
13 Korean companies constituted almost half of the
foreign private enterprise representation. END NOTE.)
None of the Korean companies currently operates in
Turkmenistan nor has ties with local businesses, so for
them it was a first attempt to enter the Turkmen market.
The Korean Institute of Industrial Technology (KITECH),a
Korean Government-funded research institute that supports
the industrial and technical development of small and
medium enterprises, arranged the participation of the
South Korean companies in the exhibition. A South Korean
Embassy employee told Post local staff in a telephone
conversation that the Turkmen-Korean Intergovernmental
Commission also played a significant role in bringing the
Korean companies to the exhibition.


6. (SBU) Among other foreign companies that used the
exhibition as an opportunity to enter the local textile
market were Sympatex Technologies GMBH (Germany),
Chaykovsky Tekstil (Russia),Kamvol (Belarus),and TK-
Donbass (Ukraine). There was an allegedly U.S.-based
company called VPK International LLC that was exhibiting

ASHGABAT 00000740 002 OF 002


uniforms and industrial clothing. (NOTE: A quick
internet search revealed no U.S.-based company by that
name. It was more likely Ukrainian. END NOTE.) The
exhibition also included foreign companies that have been
doing business in Turkmenistan for a long time. These
included the Turkish construction companies Kotam
Enterprises, Engin Group, and Ahmet Calik's Gap Insaat,
Swiss companies Bezema, Rieter, and Huntsmann, the
Russian firm UTUMA, Italian companies Marzoli and Savio,
and Belgian firms Le Kler and Meert.


7. (SBU) COMMENT: The extensive South Korean
participation made this exhibition different from other
exhibitions of this kind that take place in Ashgabat
quite often. South Korean officials and businesses have
become increasingly active in Turkmenistan over the last
two years, and the two governments exchanged presidential
visits and established an intergovernmental commission
for economic cooperation during that time as well. In
general, high-level bilateral contacts and agreements
have been the easiest and fastest way for foreign
companies to enter the Turkmen market. Although it is
hard to tell whether the Korean companies participated at
the behest of the Turkmen government or on their own
initiative, joint business activity in this sector could
benefit other areas of the bilateral relationship in
which the Koreans are seeking progress, including energy
sector work and major construction. It may be that the
Turkmen side, through the bilateral "intergovernmental
economic commission" -- tasked with mapping out the two
countries' economic cooperation -- requested the
participation of the Korean textile industry companies in
the exhibition, in order to encourage the industry's
further development in Turkmenistan. END COMMENT.

MILES