Uzbekistan - Food Processing

Food Processing

Last published date: 2023-12-01

Overview

Uzbekistan seeks to increase its production and exports of high value-added food products. The country’s food processing industry has substantial room to grow, given current capacity shortfalls. Only 15% of the 20 million tons of fruits and vegetables grown each year is processed for longer shelf life, while 30% is lost due to insufficient storage and processing capacity. Only 16% of meat and milk is processed. Uzbekistan has set a target of increasing food production to 7.4 million tons and increasing the processing of milk (32%), meat (25%), and fruits and vegetables (28%) by 2026. On June 4, 2021, the government approved a list of 676 types of technological equipment (including several models of food processing equipment) to be exempted from customs tax and VAT when imported into the country. As of August 2023, available refrigerated warehouse capacity was 1.5 million tons, which represented only 7 percent of the total volume of cultivated products. The government plans to double the country’s cold-storage chain capacity by 2025. The government’s current development plan calls for adding 3.4 million tons of processing capacity by 2030, which would account for 30% of the Uzbekistan’s annual harvest. In 2022, the government allocated $140 million to banks to offer preferential loans for the purchase of trucks, as well as sorting and packaging equipment, and there is a possibility it will allocate another $330 million. The presidential decree of September 9, 2020, mandated the establishment of a Main Directorate for the development of the food processing industry at the Ministry of Agriculture. This bureau is tasked with creating conditions for productive collaboration between agricultural producers and food processing companies, devising a strategy for the development of Uzbekistan’s food processing industry, facilitating construction of necessary trade and logistics centers, and promoting the export of food products. The Ministry of Investments, Industry, and Trade has been tasked with attracting funds from IFIs to finance these initiatives.

Table: Food Processing Market Size, Million USD
	2020	2021	2022	2023 estimated
Total Local Production	4,215	4,920	5,472	6,000
Total Exports	1,336	1,372	1,632	2,000
Total Imports	2,197	2,510	3,393	4,000
Imports from the US	0.9	1.4	1.2	N/A
Total Market Size*	5,076	6,058	7,233	8,000
Exchange Rates**	10,056	10,610	11,051	11,600

*Total market size = (total local production + imports) – exports
**Exchange Rates = Uzbek soums per $1
Units: $ millions
Source: The State Statistics committee of Uzbekistan. Data for 2023was estimated by Post using company project implementation progress reports. Data on “Imports from the U.S.” is from the U.S. census bureau.

Leading Sub-Sectors

Juices
Fruit and vegetable processing
Meat and milk processing
Packaging material (cardboard, paper, aluminum foil, stretch films)
Compact processing machinery for use by small businesses

Opportunities

The best opportunities in providing processing/packaging equipment lie in the areas of juice, fruit, vegetable, meat, and milk processing. Uzbekistan’s government encourages private sector development in these areas. The greatest demand for packaging material is for cardboard, paper, aluminum foil, and stretch films. Small businesses have a great need to make small-scale equipment purchases.

For specific opportunities, businesses should contact companies involved in Uzbekistan’s food processing sector. Some of the larger companies currently doing business in food processing in Uzbekistan include Lactalis, Coca-Cola, and PepsiCo. Local companies prefer working with a foreign partner and value foreign management, technology, technical expertise, and export market access.

Resources

U.S. companies and individuals interested in learning more about the food processing and packaging sectors in Uzbekistan, upcoming procurements, and export opportunities are encouraged to visit the following websites: