VZCZCXRO7319
PP RUEHLN RUEHVK RUEHYG
DE RUEHDBU #1749/01 2651424
ZNR UUUUU ZZH
P 221424Z SEP 06
FM AMEMBASSY DUSHANBE
TO RUEHC/SECSTATE WASHDC PRIORITY 8638
RUEHDBU/AMEMBASSY DUSHANBE PRIORITY 0058
INFO RUCNCIS/CIS COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 1837
RUEHBS/USEU BRUSSELS 1102
RUEAIIA/CIA WASHDC
RUEHIL/AMEMBASSY ISLAMABAD 1833
RUEHBUL/AMEMBASSY KABUL 1792
RUEHML/AMEMBASSY MANILA 0100
RUEHNE/AMEMBASSY NEW DELHI 1821
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEHFR/AMEMBASSY PARIS 1533
RUEHVEN/USMISSION USOSCE 1802
RUCNDT/USMISSION USUN NEW YORK 1345
RUCPDOC/USDOC WASHDC 0098

UNCLAS SECTION 01 OF 02 DUSHANBE 001749 
 
SIPDIS 
 
SIPDIS 
STATE FOR SCA/CEN 
STATE/EB/TPP/ABT THOMAS LERSTEN 
COMMERCE/ITA/OTEXA MARIA D'ANDREA 
USTR ABIOLA HEYLIGER 
 
E.O. 12958: N/A 
TAGS: ECON ETRD TI EAGR EIND ELAB PGOV
SUBJECT: FASHION ALERT - TAJIKISTAN'S TEXTILES HIT THE WORLD MARKET 
 
REF: (A) SECSTATE 138090; (B) DUSHANBE 1667; (C) Dushanbe 1667 
 
DUSHANBE 00001749  001.2 OF 002 
 
 
¶1.  This cable responds to action request (ref A) for data on 
the textile and apparel market in Tajikistan. 
 
¶2.  INTRODUCTION:  Walking down the streets of Dushanbe, a 
trained eye easily spots the latest fashion trends among the 
many pedestrians.  Men sport short-sleeve button-down shirts and 
trousers, or suits of shiny synthetic fibers.  A small but 
growing number of men wear "traditional" clothing reminiscent of 
more religious Muslim countries.  Fewer women wear western 
clothes since the mass emigration of ethnic Russians from 
Dushanbe.  Many now wear flowery traditional dresses similar to 
a mumu.  Little of Tajikistan's cotton is processed 
domestically, thus the local market features largely 
Chinese-made goods, or expensive imported Western wear. 
However, a small but growing domestic textile industry produces 
apparel for both internal and external markets.  More than just 
mumus, Tajiks at these joint ventures are producing chic urban 
wear: EmbOffs purchased weathered jeans at Giavoni's outlet 
store in Khujand.  Foreign investors face snags with 
infrastructure and corruption, but an oversupply of cotton lures 
them to Tajikistan.  END INTRO. 
 
¶3.  Embassy Dushanbe provides the following data on Tajikistan's 
textile and apparel sector as requested in reftel (a).  Data 
were collected from the State Statistical Agency, Ministry of 
Industry, and press reports.  In addition, please see reftels 
(b) and (c) for further insight into the domestic textile 
industry and cotton industry. 
 
-- Total Industrial Production 
2005: USD 1.336 billion 
2006 (mid-year): USD 729.74 million 
 
-- Textiles and Apparel Production 
2005: USD 234.72 million (includes cotton) 
2006 (mid-year): USD 87.21 million (textiles only) 
 
-- Textile/apparel share of host country imports 
2005: 1.07 % 
2006 (mid-year): 1.18% 
 
-- Textile/apparel share of host country exports 
2005: 20.7 % (includes cotton) 
2006 (mid-year): 12.6% (textiles only) 
 
-- Exports in textiles and apparel (according to the Ministry of 
Industry) 
2005: USD 32.9 million 
 
-- Exports in textiles and apparel to the U.S. (according to the 
State Statistical Agency) 
2005: USD 9,000 
2006 (mid-year): N/A 
 
-- Total manufacturing employment 
2005: 86,500 
2006 (mid-year): 87,200 
 
-- Total textiles and total apparel employment 
2005: 26,900 (light industry), including 23,200 in textiles 
industry 
2006 (mid-year): 26,500 (light industry) 
 
-- Textile enterprises: 
18 major textile enterprises, including 13 joint ventures in 
cotton textile industry; seven new joint ventures are set to 
open in Tajikistan in 2006 
107 textile companies as of Sept 1, 2006 
 
-- GDP (projected): 
2006: USD 2.47 billion 
 
---------------------- 
Fashion Comes to Tajikistan 
---------------------- 
 
DUSHANBE 00001749  002.2 OF 002 
 
 
 
¶4.  Turkish, Polish, Russian, Chinese, Korean, Italian and U.S. 
companies have 13 joint ventures in the textile business in 
Tajikistan.  Textile workers at these joint ventures often earn 
$75-100 per month, well above the national average.  JV Giavoni 
(Tajik-Italian-U.S.) exports jeans under the "Carrera" brand to 
the EU, which then re-exports them to the United States. 
According to the Ministry of Industry, Tajikistan exports 
textile products to the EU, CIS, Americas, Korea, Vietnam and 
China. 
 
¶5.  In 2006 seven more textile manufacturing companies are set 
to open in Tajikistan.  These are located in Yavan district 
(4,000 ton capacity of cotton), Matchoh district (6,000 tons), 
Zafarobod district (3,000 tons), Spitamen (3,000 tons) and a 
knitting factory in Farhor.  On September 18, Khima Textiles 
opened a new factory in Khatlon Oblast with an initial 
investment of $18 million in Italian equipment. 
 
---------------------- 
Impact of international competition on Tajik textile 
manufacturers 
---------------------- 
 
¶6.  The Deputy Minister of Agriculture has pushed for import 
quotas to protect the Tajik textile industry from Chinese 
competition.  However, Tajikistan must submit its proposed trade 
barriers to the CIS Customs Union for their approval, and thus 
far the union has denied Tajikistan's requests.  A major textile 
manufacturer in Dushanbe, Tajik Textiles, claims to not need 
protection from Chinese products, describing these as inferior 
in quality and higher in price than its products (reftel (b)). 
However, for the majority of processing plants without recently 
invested foreign equipment, quality does not meet international 
or even domestic standards.  Imports of Chinese products 
(including textiles) have increased to USD 70 million during the 
first six months of 2006 - 40% higher than the same period in 
¶2005. 
 
---------------------- 
Future Outlook 
---------------------- 
 
¶7.  According to the government's Light Industry Development 
Program for 2006-2015, Tajikistan intends to expand its textile 
industry in order to process all domestically-produced cotton by 
¶2015.  However, the state does not have any funds allocated for 
this purpose.  Instead, the government is seeking USD 320 
million in foreign investment to develop the textile industry. 
The government lacks resources to invest in textile 
manufacturing, but may ease onerous regulations on foreign 
investment to promote development in the sector.  In addition, 
processors should face no shortage of cotton since the 
government still mandates farmers to grow the crop. 
 
¶8.  Corruption, an untrained workforce, and aged equipment 
remain major barriers to the success of this plan.  The lack of 
infrastructure also constitutes a major obstacle to development 
of the textile industry.  Energy supplies in the winter are 
unreliable at best, and many factories face severe rationing. 
Limited transportation networks inhibit the supply of materials 
to and from factories.  Even water and sewage problems can bring 
production to a halt.  But a company that can get through these 
difficulties can spin a good yarn. 
JACOBSON