Analysis of commodity and financial markets in 2020
Overview of the market for the production of electrical and household products
Current situation in the industry
As of 01.08.2019, the number of manufacturers of electrical and household products was 454 enterprises, 60 of them are members of the Association “Uzeltehsanoat”, with the production of more than 160 items of electrical and household products.
The total volume of production of electrical and household products in 2017 amounted to 6.7 trillion soums, in 2018-10.2 trillion soums. (growth of 52.2 %).
The structure of manufactured products are dominated by cable and wire (57%), electrical appliances (20%), power equipment and other products – 23%.
The total volume of imports of electrical products (more than 50 types of products) in 2018 amounted to 788.3 million dollars, the volume of exports of electrical and household products in 2018 amounted to 78.2 million dollars.
In 2018, the average capacity utilization of enterprises producing electrical appliances was 68.0 % and that of power equipment was 79.5 %.
Needs
The study of the needs for household and electrical products shows that for every 1000 people, on average, there are 29 TVs, 16 refrigerators, 10 air conditioners, and 25 gas stoves. At the same time, the estimated demand in 2018 for televisions was more than 1.2 million units (replacement of old equipment and the number of new families), for refrigerators about 1.1 million units, vacuum cleaners-1.4 million, microwave ovens-1.2 million, air conditioners and gas stoves-921 units each.
The estimated data shows that the domestic demand (excluding imports) for televisions is 69.8 %, refrigerators – 79.7 %, air conditioners – 83.0 %, gas stoves – 100.3 %, while the domestic demand for power equipment is covered mainly by imports, which amount to an average of 76.2 %.
For example: the internal need for transformers is covered
by imports by 63.0 %, low-voltage and high-voltage complete devices by 90.3 %, plugs and sockets by 88.7 %, devices and equipment for measuring or monitoring electrical products by 82.5%.
Standardization and the state of innovation in the industry
The level of enterprises that have implemented innovations in the country is quite small compared to world estimates – – 0.34% (the world average is 40%). Difficulties in commercializing new technologies are associated with the lack of a developed technology transfer system, an appropriate regulatory framework, and experience in the interaction of science and industry.
As of 01.08.2019, the number of standards (GOST, TU)
for electrical and household products is applied to more than 200 types of products.
Quality management systems in accordance with ISO standards in the electrical and household industry is introduced in more than
30 companies.
There are 16 laboratories in the system of the Agency “Uzstandart”, while the number of private laboratories is 47.
Tax and customs benefits
In accordance with the decree of the President of the Republic of Uzbekistan № 2772 “on measures for further improvement of management, accelerated development and diversification of the electrical industry for 2017-2021” as of February 13, 2017, and resolution of the President of the Republic of Uzbekistan № 4090 as of January 4, 2019 “On measures to further develop and increase the export potential of the electrical industry”, the following tax and customs privileges were granted to enterprises producing electrical and household products that are members of the Association “Uzeltehsanoat” until January 1, 2022:
Exemption from customs payments (except for customs clearance fees) of equipment, materials and components, not produced in the Republic;
on applying the zero rate of value added tax for export of copper pipes under 7411 group of the HS code;
on applying the zero tax rate until January 1, 2020 for value added tax on the export of copper products in groups 7407-7410 and 7412-7419 of the HS codes with the acceptance of 50 percent of the value added tax amount for the purchased copper and attributing the remaining half to the company’s expenses;
deferred payment of value added tax for a period of 120 days from the date of acceptance of the customs Declaration for the import of components, raw materials and materials for their own main and auxiliary production, as well as construction materials imported within the framework of investment projects implemented by them;
exemption from paying property tax, as well as corporate income tax.
In 2018, out of the total number of enterprises in the industry (454), 187 enterprises or 41% (28 of them are members of the Uzeltehsanoat Association) used customs and tax benefits for a total amount of 738.6 billion soums.
The total amount of tax benefits used by 145 industry enterprises during this period amounted to 234.2 billion sum and the total amount of customs privileges used by 127 enterprises of the industry amounted to 504.4 billion soums.
The level of localization of production.
According to data as of 01.08.2019, the average level of localization for all types of products was 56.2 %.
For example: the localization level of built-in hoods is 39.4 %, single-channel air-conditioning with air cooling for domestic use 40.0 %, washing machines with front loading 40.3 %, electric household vacuum cleaners 41.0 %, kitchen stoves for cooking 48.2 %, electrical refrigeration equipment and appliances (household and commercial) 45.8 %.
