Bukhara, Uzbekistan – July 13, 2022 – A Decree of the Cabinet of Ministers of Uzbekistan, No. 357 dated July 4, 2022, has authorized the creation of a new Free Economic Zone (FEZ) “Karakul” in the Bukhara region.
The gas chemical complex based on MTO technology (GCC MTO), currently under construction at the location of the FEZ, will form the core of an industrial cluster, where high-tech industries and production capacity will be developed.
The GCC MTO will become both the anchor industrial producer of the Karakul FEZ, and Uzbekistan’s largest producer of polymer products based on MTO (Methanol to Olefin) technology, based on the processing of methane natural gas.
The Decree and Karakul FEZ creation will support the strategic course of President Shavkat Mirziyoyev to use the natural resources of Uzbekistan to produce value-added goods.
The plant will produce up to 730,000 tons of polymer products per year including polyethylene terephthalate (PET) and polypropylene (PP), plus ethylene vinyl acetate (EVA) and low density polyethylene (LDPE) – which are new to the Uzbek market. This facility is one of the very few plants in the world to produce such products from methane.
Masrur Shakirov, MTO Project Director and Deputy General of SEG (project initiator), said:
“This is an important step in the development of Uzbekistan’s energy industry and is creating our country’s and Central Asia’s first industrial platform to implement large gas chemical projects. The cluster will become a new industrial and economic centre in Southern Uzbekistan, create over 2,300 new jobs and contribute to the development of the whole region.”
Azim Akhmedkhadjaev, First Deputy Minister of Energy of the Republic of Uzbekistan, commented:
“Uzbekistan is fully focused on expanding its capacity for the deep processing of natural gas, and to further diversify the country’s economy. The MTO Gas Chemical Complex in Bukhara is an example to the whole world in this regard, and we are also delighted to use the complex as a hub in the new Karakul Free Economic Zone. When completed the plant will support the strategic goal of President Mirziyoyev to produce high value-added goods from our country’s natural resources and optimise momentum to creating even more jobs via development of a wider industrial cluster.”
Several large enterprises – producers of polymer products in Uzbekistan – have already expressed interest in locating facilities within the FEZ. Among them are the largest carpet manufacturers SAG and UrGaz, pipe manufacturer Vero Group and textile manufacturer Mergantex.
Various tax, financial and regulatory benefits are available to companies which establish facilities in the Karakul FEZ, enabling manufacturers to build new enterprises more rapidly and start supplying consumer goods to the market.
Over the next 10 years, the Karakul FEZ and GCC MTO will become a hub of rapid production development in the Karakul district of the Bukhara region, where it is expected to form additional industrial, business, transport, logistics and social infrastructure.
Special faculties at Bukhara State University and the Bukhara Engineering and Technology Institute will be opened for the training of specialists. In turn, the Karakul FEZ, MCC MTO and related industries will create new jobs for Uzbekistan’s educated youth and highly qualified specialists, developing more local businesses and growing the tax base of the region.