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Maker of Uzbekistan's noted Qarataw vodka to be privatised

Maker of Uzbekistan's noted Qarataw vodka to be privatised
Photo: Canva

UzAssets, a subsidiary of the State Assets Management Agency of Uzbekistan (UzSAMA), announced it would sell a 51% controlling stake in state-owned alcohol producer Nukus Vino. As part of an accelerated privatisation drive, UzAssets plans to complete the sale of Nukus Vino, along with eight other wine and spirits producers, by September 2021, and has retained KPMG as privatisation consultant. Nukus Vino generated nearly $14 million in revenue in 2020, with gross profit of $3 million and net profit of $2 million.

Located in the capital of Karakalpakstan, the company is a leader in the alcoholic beverage market and one of the most well-known spirits producers in Uzbekistan. Its flagship vodka, Qarataw, is among the most popular spirits in the country and accounts for 80% of the company’s overall vodka production. Qarataw, which was created in 1991, is known for its unique aftertaste derived from liquorice root used in the distilling process.

Nukus Vino’s factory, established in 1947, employs 170 workers and largely utilises Russian and Italian equipment. Production capacity is currently over 1.1 million decaliters per year, with an 85% capacity utilisation in 2020.

The majority of Nukus Vino’s products are sold domestically, although a small share of revenue comes from exports to Kazakhstan. Alcohol consumption in Uzbekistan is lower than in neighbouring countries, but according to the World Health Organization, it has remained relatively stable since 2015, while levels have fallen in Russia and Turkmenistan. Local distillers plan to increase alcohol production over the next four years with government support as part of a 2018 presidential decree on developing the local liquor industry.

Among the nine spirits and wine producers being privatized by UzAssets, Nukus Vino is the most profitable, generates the highest revenue, and possesses the largest production capacity. The privatization process will unfold in stages, with initial applications and declarations of interest due to UzAssets by July 19, 2021. The remaining 49% of Nukus Vino is held by individuals and private companies.