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Uzbekistan’s Artel looks to build on 'exponential' growth in exports

Uzbekistan’s Artel looks to build on 'exponential' growth in exports
Photo: Artel

Uzbekistan is rapidly opening up to the world. Recent reforms mean we are now welcoming tourists and attracting international investment. Like our country, we at Artel are seizing the opportunity to transform ourselves from a domestic company, to a truly international one.

 

Artel is a prime example of an Uzbek corporate success story. Uzbekistan’s 30th year of independence coincides with our 10th year of operations. From humble beginnings in 2011 - with one factory and limited products - we have grown to become one of Central Asia’s most recognizable brands. We are also one of the country’s biggest employers, with a team of around 10,000 people working on our products throughout the country. Our wide range of appliances and electronics are a feature of every Uzbek home.

 

This year, I took up the role of CEO of Artel. I have been intimately involved in our growth to date, having held various roles within the company over the last decade. I am now responsible for leading us through this period of accelerated change.

 

So, what are we doing? As a major company with international ambitions, we have prioritized our corporate reorganization to align with global best practice. The 2019 tax reforms have been fundamental to these efforts, allowing us to restructure our holdings and operations to increase transparency and maximize efficiency. Earlier this year, we completed the consolidation of our previous corporate entities into one company, ‘Artel Electronics LLC’. Deloitte has audited our combined financial statements from the last three years in accordance with the IFRS, and our entire operations are now accounted for under one roof. We have also introduced a professional supervisory board to advise on and monitor our operations.

 

Most recently, in June we obtained our first Fitch rating, and became Uzbekistan’s first private manufacturing company to be rated by one of the “Big Three” international credit rating agencies. Fitch’s acknowledgement of our strong profitability, leading domestic market position and successful cooperation with some of the world’s leading brands is affirmation of the strength of our business. As a globally recognized assessment of our creditworthiness, the rating will streamline discussions with lenders and potential partners. It is a sign of the progress we have made, and provides useful directions for further development.

 

Each of these steps in our corporate transformation builds on the other to strengthen our business. They contribute to our resilience as we explore new opportunities for growth and investment, and as we look towards entering the international capital markets. Reforms are also supporting us in other areas. Externally, Artel is a flagship for Uzbek manufacturing abroad. Our products are now sold in over 20 countries and our exports are seeing exponential growth. A 2021 Presidential Decree providing measures that promote exports and help cover transportation costs will assist in this momentum, and increasing our competitiveness internationally.

 

On innovation, as one of the leading investors in research in Uzbekistan we are well positioned to take advantage of reforms promoting Research & Development (R&D). The Government is introducing measures to increase the tax efficiency of R&D expenditure, making our outlay on innovation even more worthwhile. Our plans for R&D expansion are significant; we will add over 100 specialists to our teams in the coming years and to open up departments in robotics and automation. Our products will continue to develop to serve our customers in the best way possible.

 

These are just a few examples of the changes currently taking place inside Artel. We are enhancing our processes and introducing new forms of communication. In ESG, alongside our attention to corporate governance, we are researching our impact on the environment and seeking ways to mitigate it. We are overhauling our HR strategies and bringing in processes to benefit our employees. We are reviewing and standardizing our sales and procurement procedures to optimize our operations and to increase our efficiency.

 

Yet this transformation is not without its challenges. For a company of our scale, we must critically assess all of our current processes and judge their suitability for where we want to be. There is a long road ahead.

 

But we are up to the challenge. We have a strong team that is working tirelessly towards our ambitions. Together, in this continued business-friendly environment, we know we can achieve our goals and be a beacon of Uzbek private business internationally.

 

As a proud Uzbek company, we are delighted to congratulate our country on 30 years of independence. We look forward to celebrating another 30 years of growth and prosperity together.

 

Shohruh Ruzikulov is the CEO of Artel