Uzkimyosanoat substantiates the sale of a tire plant for $80 million

According to “Gazeta.uz”, the Uzkimyosanoat company announced the sale of the state share in the First Rubber Plant in Angren to the Russian company Tatneft for $80 million. The low value of the asset is explained by the presence of loans and debts for $153 million, which will be covered by the buyer.

The first rubber plant in Angren was sold to the Russian “Tatneft” for $80 million. This was reported by the Uzkimyosanoat company.

Earlier, the company posted on the Unified Corporate Information Portal a message about the sale of its 91.8% stake for 826.6 million soums. The company later deleted the message and filed an error. Now the amount has been corrected by 826.57 billion soums.

The remaining share of 8.2% belonged to the structural enterprise of the Uzkimoimpeks holding.

According to Uzkimyosanoat, the international company Deloitte estimated the state’s share in the plant, taking into account credit obligations and debts, at 843 billion soums (about $75 million). As of December 31, 2022, the plant had loans and debts of $153 million.

As part of the Uzbek-Russian business forum in Samarkand on December 1-2, a 100% stake was sold for $80 million to the Russian Tatneft, which undertook to cover all loan obligations and debts, the company told Gazeta.uz.

The sale and purchase agreement was signed on January 20.

About the tire factory

Uzkimyosanoat completed the construction of a tire plant worth about $200 million in August 2018. The production capacity is 3 million car tires, 200 thousand agricultural tires and 100 thousand running meters of conveyor belt per year. The Chinese Poly Technologies and Linglong were the general contractors of the project. Tires were not produced in Uzbekistan before the launch of the plant in Angren.

Tatneft and Uzkimyosanoat holdings planned to create a joint venture with a 51 percent share of a Russian company on the basis of Birinchi Rezinotekhnika Zavodi LLC. The corresponding agreement was signed in November 2019. It was assumed that BRZ would be integrated into Tatneft’s tire business. Then it was reported that the Russian company would invest at least $500 million in the development of production.

In April 2021, “Gazeta.uz”, citing the Vice Speaker of the Legislative Chamber Alisher Kadirov, reported that the plant, built with funds from the Chinese Eximbank in the amount of $156.4 million, was supposed to fully cover the imports of the local automaker (project chronology), but “due to poor quality”, 100,000 tires remained unsold, and during this period UzAuto Motors imported tires worth $60 million.

Later, Uzkimyosanoat company commented on this statement and indicated that the low figures were associated with the coronavirus pandemic, due to which “the import of raw materials was limited, production was repeatedly suspended, and sales decreased.”

In April 2021, MP Doniyor Ganiev raised the issue of the ill-conceived nature of the project and the inefficient operation of the tire plant in Angren. Deputy Head of the Accounts Chamber Bakhodir Turobov said that the materials on this project, on behalf of the Presidential Administration, were transferred to law enforcement agencies.

In 2020, the tire plant was allocated 40 billion soums from the Anti-Crisis Fund in the form of a loan to cover primary expenses.

In 2021, the enterprise manufactured 244.9 thousand tires, 4630 tires for agricultural machinery and 29.7 thousand linear meters of conveyor belts. Automotive and agricultural tires are produced under the BARS brand.