Thank you for receiving us today and, as a first question, can you give us some background information on Dunavant Tashkent in terms of its history here in Uzbekistan and its structure today?
Our representative office was opened in Uzbekistan in 1992. Our head office is located in Memphis, USA. After signature of a purchase contract by our Geneva office, our main duty starts with the control of the quality of cotton before shipping and then the shipment to the destination points as indicated by our Geneva office and supervise the logistics. We have started our activity with two-member personnel and with a small purchasing volume of 5,6thousand tones. As you can see we developed a bit in 8 years. At this time we have now 14 persons in our office and the purchasing volume has grown up to approximately 150-160 thousand tones, which is about 15-17% of the total volume are the products of Uzbekistan. Our sales go through the Geneva office. Also, we have a joint venture marketing company "UzDun A.G." with "Uzprommashimpex" under the Ministry for Foreign Economic Relations.
"UzDun A.G." is based in Geneva and deals with marketing, cotton purchasing and selling it abroad.
Since you've been in the country since 1992, can you give us an inside of the development of agriculture, specifically in the cotton industry during last couple of years?
As you know Uzbekistan became an independent country in 1991. The total raw cotton production was exceeding 5 million tons a year. In 1996 the government made a decision to decrease the cotton production to an exact volume of 4 million tons on 1,5 million hectares of land. This decision was made because the country purchases wheat from abroad, and country's own wheat production was not any longer sufficient to satisfy the needs of its population, so the Uzbek government needed to decide to decrease the cotton production. I should note the fact that Uzbekistan again decreased the cotton production to the volume of 3.9 million tons. At the same time the proportion of cotton processed domestically will increase.
A question on your structure. You are a part of a big group and to what extent are you taking advantage here in Uzbekistan being a part of this big group?
As we are engaged in cotton trading I believe that Dunavant being the largest trader of cotton worldwide, is also considered the largest here in Uzbekistan buying the largest volume of cotton. As I mentioned before, we buy 150-160 thousand tons of cotton bringing an income of aboutUS$ 200 million to Uzbekistan. Dunavant Enterprises' marketing network enables this Uzbekistan crop to be exported through Dunavant and UzDun to mills all over the world. Besides that I should say that our Chairman of the Board,Mr.W.B. Dunavant, Jr. pays attention to the personnel of our Uzbek partners by arranging for 3-4 people every year to study in United States in the major cotton school in Memphis.
| Are there new upcoming markets or markets you want to try more?
It is very hard for me to make analysis because the head office in Geneva offers cotton to many markets and the markets are not stable nowadays but we are always paying attention to the investigation of new markets. Modern spinning mills quality requirements are now more stringent and we believe that Uzbekistan appreciates the customers needs and will need to continue to adapt to change.
Question on the Uzbek market. You are an investor here in Uzbekistan, and you are doing business here as a foreign company. What are the main advantages and grey areas of doing business here in Uzbekistan? As you know, our readers are potential investors, they might be interested in coming and investing here.
Companies entering into Central Asian markets should be serious and research the market carefully. Mr. Dunavant, certainly, would not have heavily invested in Uzbekistan during the last 8 years if there had been any major problems or other arising technical problems which we are successfully solving together with our partners. As I mentioned before, our total purchasing volume is constantly increasing. We have a good relationship with the Ministry for Foreign Economic Relations, Ministry of Cotton and all the regions, having about 140 cotton plants.
A final question on your future outlook. As you said production and selling of cotton from your side is growing; where do you see your company in the next three years with all the development in this sector and what would be your final message to our readers?
First of all I would like to mention that through the marketing JV "UzDun", which acts here and by which our company has been constantly strengthening its position in the market for the last three years, many potential buyers have understood the stability of the activity of joint venture. We are intending to increase the cotton selling in the world market through this joint venture. Besides that Dunavant is not only a trading company but it also has several cotton processing plants. We are also planning the construction of new cotton plants and it is on the phase of developing. As you see we are going to engage ourselves in cotton production as well. Dunavant as a large company is freely and steadily acting in Uzbekistan and I believe everybody who is interested in working here will not face big problems. We believe in steadily development of Uzbekistan and that's why we intend to widen our activities here not only in purchasing but also in production. I also hope that I will be working here for a long time.
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