DUSHANBE, February 18, 2011, Asia-Plus — The Khujand-based textile enterprise, Kabool-Tajik Textiles, is expected to begin operating at full capacity in late February, the enterprise director Damir Boyev said in an interview with Asia-Plus.
“After being closed for four months, Kabool-Tajik Textiles was reopened in early January but only one line for production of jeans fabric was reintroduced into operation in January,” the director said, noting that the enterprise will begin to operate at full capacity at the end of February.
After resuming operations in June 2010, the enterprise has delivered a total of US$30,000 worth of cotton fabrics to Belgium and Switzerland, but it was forced to suspend operations on October 25 due to lack of raw materials. The problem has resulted from increase in prices of cotton, which is feedstock for the enterprise that produces cotton yarn.
“Cotton prices are continuing to rise. Cotton prices have doubled during last year, reaching US$4,700 per one ton of cotton fiber,” said Boyev, “In the meantime, cotton fabric and cotton clothing prices have risen at a slower rate than cotton fiber over the report period”
He expressed concern that the enterprise may lose its outlet in Belgium and Switzerland. “In Tajikistan, cotton prices are set on the basis of Liverpool Cotton Exchange price quotation Index set for CA cotton, while quotations at the New York Cotton Exchange are little lower that may be more profitable for importers,” the director said.
Boyev added that it could not be ruled out cotton prices would continue rising at least two more years.
In the meantime, Emerging Textiles.com reported on February 14 that cotton prices further surged to new record highs in the last week, with buyers anticipating a new increase in rates in the coming weeks. There are widespread rumors of massive hoarding by cotton suppliers in India and elsewhere trying to get the highest possible price this season. Anticipation of higher prices would also push up demand and inventories in the textile and clothing pipeline.
Founded in 1994, Kabool-Tajik-Textiles had initially been the Tajik-Korean joint venture. South Korea’s Kabool LTD assumed the 56% ownership interest in the enterprise and Tajik open-joint-stock company (OJSC) Abreshim (Silk) owned 44 percent of the shares. In October 2008, Abreshim sold its equity stake in the enterprise to Zarin Holding Limited at 500,000 U.S. dollars. After long examinations a part of equity stake of South Korea’s Kabool LTD in the enterprise was transferred to the Tajik side and other part of Kabool LTD’s equity stake was given towards the repayment of its debt.
At present, Tajikistan’s largest commercial bank, Orienbonk, reportedly assumes the 100% ownership interest in the enterprise.
