The European Bank for Reconstruction and Development (EBRD) is lending US$9.5mn to privately held Uz-Arctech to build a modern plant in Uzbekistan to manufacture welding electrodes, wires and machines, mainly for export, as well as for the domestic market.

The project will provide Uzbekistan and the wider region with modern facilities to manufacture welding products that are used in a wide range of applications in industries that form the backbone of a country’s infrastructure and manufacturing capacity. Uz-Arctech will employ about 200 people and manufacture, at full capacity, 16,000 tonnes of welding electrodes, 3,000 tonnes of welding wires and 900 welding machines a year, conforming to international standards.

Uz-Archtech, established in March 2004 and based in Tashkent, is a wholly-owned subsidiary of Arctech, a leading producer and exporter of welding products in Turkey.

Vedat Kozinoglu, general director of Uz-Arctech, said at the signing ceremony in Istanbul: “Arctech has made a strategic decision to expand its production base outside of Turkey, to Uzbekistan, where production costs are considerably lower, in order to supply its existing and potential clients in export markets such as the FSU, Afghanistan, the Middle East, eastern Europe and South Asia.”

The seven-year loan will cover 36% of the cost of building the new plant on the outskirts of the capital, Tashkent. Hubert Pandza, EBRD business group director for Russia and Central Asia, says the loan is consistent with the bank’s strategy for Uzbekistan, which stresses export-oriented private-sector project finance as a core priority.