The joint venture Kungrad Soda Plant LLC was established 16 years ago, and it is one of the largest industrial enterprises for the production of soda ash not only in the Aral Sea region, but also in the entire Central Asian region. During this historically short period, the plant has consistently increased its production potential as a result of promising projects, taking its place in the world market with competitive products. Today, the plant produces 600 tons of soda per day, about 200 thousand tons per year, which are used as the main chemical additive in the production of glass and detergents, as well as in non-ferrous metallurgy, light and paper industries and water treatment.
In our conversation with Davran AKHMEDJANOV, Deputy General Director for Investment Issues of JV Kungrad Soda Plant LLC, we touched upon the issues of attracting foreign investment for the implementation of projects aimed at modernizing and improving the efficiency of the enterprise.
«Currently, the plant’s products are mainly supplied to the enterprises of Uzbekistan: Quartz JSC, NMMC, CAMPALIA JK LLC, Asl Oina LLC, as well as enterprises of Uzkimyosanoat JSC and others,» says Davran Makhamadjanovich. – However, in the foreign market, the demand for our products is increasing, and the geography of our partners is expanding. The main exports of the plant’s products we are making to Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Afghanistan and Iran. Surely, foreign investment plays a big role in these achievements.
As authorized by the head of state dated in April 3, 2019 «On further reforming the chemical industry and measures to increase its investment attractiveness», the implementation of the Program for the Development of the Chemical Industry until 2030 opened a new milestone in the activities of our plant. It is worth noting that under this program it is planned to implement more than 30 projects in amount of $ 12 billion, including $ 1.7 billion. – these are direct investments. In particular, the Russian group of companies «Salus» participated in the project to increase the volume of production from 200 to 450 thousand tons per year. The cost of this project, which will be implemented before the end of 2025, is 190 million US dollars. By the way, according to the above decision, 51% of the company’s shares were sold to the Emirate company “NCV International DMCC”
– As far as is known, the investor, investing money in the development of production, must be confident in the prospects and profitability of the project. In this regard, as you mentioned above, the investment of the Emirate company in the Kungrad Soda Plant, suggests that the intentions of a foreign investor are quite serious, don’t they? How do you think what factors influenced to the investor’s choice?
– It is commonly known that, the demand for soda ash and thaw salt of our production in the domestic and foreign markets is extremely high, and every year this figure is growing. Certainly, with an increase in production volumes, the company quickly gets back on its feet in the material aspect, and this increases investment attractiveness. It is not surprising that investors from the UAE focused on these factors when they bought a controlling stock interest in Kungrad Soda Plant.
– What other investment projects are currently being implemented in the company? Could you please tell us about the upcoming and long-term projects?
– In February of current year, one of the latest implemented investment projects has been tested, the cost of it is about 1.7 million US dollars, and it is based more on the use of our internal capabilities. The project allows to increase the production of soda by 10 thousand tons by adding to the production process a high concentration of carbon dioxide emitted into the atmosphere. After the approval of the project, construction work was carried out and polyethylene pipes with a length of 15.2 km, a diameter of 280 × 16.6 mm were laid.
Also, all the necessary communication networks of the “Uz-KOR Gas Chemical” joint venture were wired up to ensure the uninterrupted production of highly concentrated carbon dioxide. After the completion of construction and installation works, operational tests were carried out within 72 hours, and in the first decade of February this year it has been put into operation.
One of the medium-term projects is the largest project in the field of «Uzkimyosanoat», which provides for an increase in production by 250 thousand tons, for which tenders were organized with the participation of the Chinese companies «City» and «Kamsi», as well as the company «Salus» from the Russian Federation. According to the results of the tender, the Russian company was pronounced as the winner.
In March 2022, preliminary contracts were signed between the customer and the general contractor, and the specific plans were agreed. According to the project, the total cost of construction, installation and commissioning of new facilities should not have exceeded 190 million US Dollars, which is appropriated to all our technical and other parameters. Moreover, it stands to mention, that our Russian partners have extensive experience in the production of soda.
In May 17-20 of this year, we came to an accommodation with current issues of the project with the specialists of the general contractor – LLC «Salus» and JSC «UNICSIM», who visited the «Kungrad Soda Plant». Particullarly, the main technical solution of the project should be developed by the contractor, and the technical solution of each object should be presented separately; a master plan for the project with the location of the facilities will be developed in the near future; The parties agreed on the factors necessary for the start of construction work, i.e., the initial period of the project, the mobilization of labor and construction equipment. Detailed discussions were held on the technical aspects of the project and a protocol was signed between the parties.
In 17-19 August, Salus specialists visited our plant again and determined specific deadlines for the implementation of the project in accordance with the network schedule.
Furthermore, negotiations with the Russian OJSC Gazprombank on financing the project were held. The technical and economic feasibility study prepared by Uzkimyosanoatloyikha JSC were converted into a financial model and transferred to Gazprombank. By the end of 2022, the project is expected to lure away about 38.0 million US dollars.
– How do investment projects influence over the innovative and scientific component of the company’s activities? Is innovation encouraged by the plant management?