Business forum, which gathered together representatives of business circles, government organizations and private structures, more than 100 companies, took place in Milano under official visit of President Gurbanguly Berdimuhamedov to the Republic of Italy.
Trade Agency of the Ministry of Commerce of the Republic of Italy and Trade and Industrial Chamber and the Union of Industrialists and Entrepreneurs of Turkmenistan were the hosts of the event under the aegis of foreign departments of two countries. Heads and specialists of number of ministries and departments, export oriented branches, private facilities – the members of the UIET have also taken part in the forum.
The meeting in the conference hall of Rosa Grand Hotel was an important step in activation and expansion of trade and economic cooperation of Turkmenistan and Italy, having outlined strategic targets of its further development. Exhibition of production made in our country, which illustrated the main directions and perspectives of practical cooperation, has been organized in the fields of the forum. It presented textile and chemical industry, oil and gas sector, agriculture, transport sector of Turkmenistan as well as tourism sphere of the country.
The forum was opened by General Director of the Trade Agency of the Ministry of Commerce of the Republic of Italy Roberto Luongo. In his greeting speech, he noted that subjects of the forum is not limited by export – import relations but also spreads to the study of wide opportunities of cooperation. At the same time, MrLuongo pointed out significant growth of trade between Turkmenistan and Italy by the outcomes of the first half of 2019, having added that volume of trade between two countries is able to exceed 200,000,0000 Euros.
Orienting Italian business to detail study of the potential of modern Turkmenistan, Roberto Luongo said that current meeting has to be continued during return visit to Ashgabat next year. As for this meeting, he proposed the sides to exchange the visions on what directions and channels Turkmen – Italian cooperation would be developed in near term with future perspective. Having highlighted again that theme of current consultations is very comprehensive, he listed number of spheres from oil and gas to tourism where both countries can reveal promising opportunities.
Vice-president of Lombardi Region of the Republic of Italy Fabricio Sala has also made a greeting speech. Introducing the most populated region of his country to the guests, which has 2 times more residents than in the second biggest region of Italy, he said that Lombardi has 820,000 private facilities. In other words, 1 out of 12 people in the country is engaged in entrepreneurship.
Heavy engineering is one of the most important branches of the economy of the region. Lombardi is the main supplier of components for all European vehicles. 55 percent of the components of all vehicles in Europe is studied, planned and implemented in this region, Mr Sala said. At the same time, measures in other new directions are taken. For example, the Centre of Study of Human Genome, which is the most important centre in Europe, are taken. Pharmacology, processing industry, chemical branch of the region also have good positions both in Italy and in Europe, Fabrizio Sala said, having invited Turkmen delegation to visit industrial centres of Lombardi.
In his speech, he noted that current forum gives good opportunities for study of future cooperation. Being one of the rapidly developing economies of Central Asia with huge natural resources, Turkmenistan represent huge economic potential for establishment of trade and investment relations.
In his turn, business community of Italy is aware of economic potential of Turkmenistan, results of reforms and major projects initiated by President Gurbanguly Berdimuhamedov in different spheres and production branches.
In particular, the following figures have been presented – the growth rate of the GDP of Turkmenistan was 6.3 percent by the results of the first half of 2019. Annually, the share of investments is around 35 – 40 percent to the GDP while the share of foreign investments is up to 15 percent from total volume. Just in 2018, 11.5 billion US dollars have been invested to the economy of the country in 2018 and more than 1,700 production, technical and social facilities have been built.
Volume of foreign trade was equal to 7.2 billion US dollars for six months of 2019. At the same time, the volume of export was 4.7 billion. The mission of International Monetary Fund confirmed the stability and competiveness of economic development of Turkmenistan. Forecasted economic growth of the country in 2019 – 2025 is expected within 6.2 – 8.2 percent.
Willingness of Turkmenistan and rapidly developing private structures of our country to cooperation with leading Italian companies, which recommended themselves in the world arena as reliable partners and professionals, has been confirmed.
As of today, 22 investment projects to total amount of around 13 million US dollars and 16 companies with Italian capital are registered in our country.
Due to old cooperation between Turkmenistan and Italy, our countries have accumulated rich practice of cooperation in different directions including in trade and economic, communication, scientific and educational and other spheres. It was highlighted that Turkmen – Italian cooperation yet has big reserves, which potential has to be implemented.
Turkmenistan not only has big reserves of natural resources like oil, gas, mineral resources, wide territories for diversification of agriculture but also developed industry, which is provided with latest equipment from the leading manufacturers.
Europe is a priority vector in the policy pursued by the President of Turkmenistan, where, as it was mentioned, special attention is paid to cooperation with Italy on different levels – highest, intergovernmental and departmental, including participation of Italian businessmen and specialists in forums and session sin our country.
Working visit of President Gurbanguly Berdimuhamedov to the Republic of Italy in May 2015 including for participation in the World Exhibition EXPO 2015, which was held in Milano, gave strong impulse to bilateral relations. Talks, which have been held under the visit, gave new opportunities for further development of beneficial Turkmen – italina relations.
Such perspective spheres of cooperation as fuel and energy and power energy complexes, industrial technologies, engineering, transport and communication sphere and logistics, food industry and pharmacology, construction, agricultural complex and other have been outlined during the talks and meetings with Italian businessmen.
This March, the foreign Ministry of Turkmenistan hosted the talks, which resulted in signing of the Programme of cooperation in 2019 – 2020 between foreign departments of two countries. These examples demonstrate not only business-like character of old Turkmen – Italian relations but also the opportunity to bring them to new level.
Certain place in cooperation of our countries is given to industrial and communication spheres. Turkmenistan makes big investments to development of these branches, opening of new and modernization of existing facilities. Opening of automated production facilities provided with innovative equipment and advanced technologies significantly improve export capabilities of Turkmenistan.
Modern facilities provided with equipment from leading world manufacturers of relevant equipment are built in the country and works for modernization and increment of production output of existing facilities is carried out.
It gives the opportunity not only to produce new goods by own capabilities providing the population of Turkmenistan and opening new working places but also to supply competitive goods to the world markets.
Modern Italian technologies introduced to industrial and communication complexes of Turkmenistan significantly enhance the quality of production making it to be more demanded and competitive not only in local and foreign markets. For example, equipment of famous Italian Mazoll and Savio is installed in number of textile factories.
In future, it is also planned to implement technologies of such Italian companies as Gamma Meccanica S.p.A to the facilities of Turkmensenagat Agency, which produce sound and heat insulation materials, Danieli & C. Officine Meccaniche S.p.A to mining and metallurgic facility with design capacity of 2,000 tons of metal per year (Gyzylkaya settlement, Balkan Velayat).
Programme of industrial development of Turkmenistan provides the construction of production complex with output capacity of 300,000 tons of metal items per year, which is planned to be equipped with technologies of PLAN S.t.l in Kelyata, Ahal Velayat in 2020 – 2021.
The Agreement on establishment of air flights has been signed between the Government of Italy and Turkmenhowayollary Agency as well as other bilateral document aimed at strengthening and further development of relations between our countries.
Cooperation in textile industry of Turkmenistan was one of the subjects of the Forum that raised interest of Italian businessmen. The growth rate of production volumes in this sphere were 143 percent and export volumes more that 122 percent in 2015 – 2018.
Construction of two other textile complexes is carried out in the country, the programme of rearmament of profile facilities, which network includes 70 facilities was developed and opening of more than ten innovative facilities, which would use local raw materials, are planned to be opened. It includes the facilities for production of non-weaving materials, velvet fabrics and new silk fabrics. Specialists of Italian Cormatex will install automatic technological lines at the facilities for processing of camel and goat wool.
In general, it is planned to invest more than 300 million US dollars to the implementation of more than 30 projects in textile industry.
Rich mineral resources of Turkmenistan and growing potential of chemical industry of the country raised big interest of industrialists and investors of Italy. Introduction of efficient, energy and resource saving technologies based on latest scientific and technical developments is one of the utmost objectives of this industry. therefore, the interest in the partnership in this sphere is mutual taking into account the plans of Turkmenistan for construction of new chemical facilities.
It is worth to mention that for the last 10 years, total volume of production of mineral fertilizers in the sphere has increased more than 3 times. Facilities to total amount of more than 3.3 billion US dollars have been built for this period. Leading world companies from Japan, USA, European Union including form Italy were the partners of our country in realization of these projects. for example, carbamide synthesis technology developed by Italian Saipem has been used in ammonia and carbamide complex in Garabogaz.
Resting on significant natural reserves of the country, the programme of development of chemical industry of Turkmenistan provides realization of perspective projects of construction of new facilities for production of mineral fertilizers, iodine and bromine derivatives, integrated development of mineral resources of Garabogaz Gulf as well as deep processing of natural gas.
Production of household chemicals, organic polymers, carbamide formaldehyde and melamine formaldehyde epoxy and various paints, adhesives, construction materials on its base is very perspective in Turkmenistan. At the same time, it was noted that the policy of Turkmen leader, which is aimed at development of transport infrastructure and its integration to international system including big seaports, allows solving the issues of export of multi-tonnage chemical production.
Representative of the Board of Italian RINA Consulting, which provides consulting and engineering services in chemical industry, energy, environment protection, construction, oil and gas, transport, electronics and telecommunication, transport systems and heavy engineering, made proposals for development of joint projects of opening of innovative production facilities.
Presentation of oil and gas industry of Turkmenistan, which was supported by slides demonstration and review of international cooperation of our country in this sphere, its regulatory base, comments to relative legal acts, was very substantial.
Four projects in Turkmen part of Caspian Sea and three onshore projects are under realization with foreign companies based on Production Sharing Agreement. ENI Turkmenistan Limited, the branch of Italian Energy company ENI, carries out its activity since 2008 under the PSA on Nebitdag contractual territory.
Presentation of Turkmenistan – Afghanistan – Pakistan – India gas line, during which current state of the TAPI project including its technical, procurement, social and financial indicators was introduced to Italian businessmen, took place at the business forum.
It was informed that Turkmengaz State Concern has already built 100 km of pipline in Turkmen part of the pipeline. The length of Afghan and Pakistani part of the TAPI is 1,635 km. 3 stations for gas sampling will be opened in each Afghanistan and Pakistan.
Attention of the audience was attracted by the importance of the project in the aspects of economic benefits for the regions. The TAPI will give significant impulse for rapid development of Afghanistan, Pakistan and India. First, this is because the production of electricity on natural gas is significantly cheaper than use of diesel fuel and heavy fuel oil. The second, the access to natural gas will stimulate industrialization and investments. The third, Afghanistan and Pakistan will receive billions for transit.
In addition, contractors for operation and technical service of the pipeline based in Germany, Greece and Turkey and their local subcontractors in Afghanistan will receive significant economic benefits without speaking of other indirect economic benefits.
It is expected that the project will create more than 40,000 working places in Afghanistan and Pakistan. The biggest part of work places will be related with construction, operation, service and provision of work of the pipeline, which will also serve as a stimulus for industrialization of these countries and improvement of social life level of the population. Following this, the project is considered as a lighthouse of peace and stability in the region and therefore, is supported by international organizations and financial structures. Italian suppliers and construction companies have been invited to realization of the project.
In his speech at the business forum, Vice-president of ENI, Central Asia Luca Vignati noted that his company has invested more than 2 billion US dollars foe development of the fields in contractual territory for 11 years of successful activity in Turkmenistan. As for today, the company produces more than 2,000 tons of oil per day.
He has also noted that ENI, which has its presence in 63 countries, treat the technologies providing ecological safety, which has special requirements in Turkmenistan, with high priority.
For the last 3 year, we have managed to achieve such standards of safety, which play an important role in further development of the industry, Luca Vignati said, having highlighted that position of the company in this aspect corresponds with criteria given by President Gurbanguly Berdimuhamedov for industrial facilities.
In addition, Eni Turkmenistan Limited gives thousand work places and most of them is occupied by Turkmen citizens. In development of human capital, the Company also organize work in different formats. For example, the Company opened training centre in Ashgabat, which provides trainings for managers and technical personnel. Employees of the company are also sent to Italy for participation in seminars.
Big investments are made to technologies and know-hows. Number of them has been first implemented in Turkmenistan and later, was started to be used in other countries and regions of the world. continuing th subject of innovative cooperation, Luca Vignati expressed his vision of the opportunity of diversification of activity of his company in Turkmenistan beyond the limits of oil and gas sphere, for example, in the development of renewable sources of energy.
Speaking of the recipe of successful cooperation with Turkmenistan, Mr Vignati highlighted that political stability of the state, which is personal merit of President Gurbanguly Berdimuhamedov, has an important role fin efficient cooperation in such strategic sector as oil and gas industry, which provides long-term perspective of cooperation.
Turkmenistan is one of few countries, where agreements are precisely regulated and complied with, Luca Vignati said. This is also a big stimulus for development of business and attraction of new investments to the country.
Industrial Business Director for Central Asia of CNH Industrial Concern Stuart Campbell has spoken of the intent to continue 20 years of cooperation with Turkmenistan.
The Concern is among the top world leaders, which develop and supply commercial transport, construction and agricultural equipment, special transport vehicles. At present time, the production line of concern is represented by 12 trade marks including Case, Iveco, New Holland. He expressed hope that Turkmenistan might be interested in automated tractors, which do not require an operator, vehicles working on electricity.
In their turn, the activity the Union of Industrialists and Entrepreneurs of Turkmenistan has been introduced to Italian businessmen. Due to support of President Gurbanguly Berdimuhamedov, representative of private business have an important place in realization of social and economic reforms in the country. The share of non-governmental sector of the economy in the structure of gross domestic product of our country without fuel and energy complex was 64 percent in 2018.
For ten years, the members of the Union have invested around 5.5 billion US dollars, where 2 billion to agriculture and agro-industrial complex. Realization of these projects allowed opening of around 200,000 new work places.
Regarding trade relations between Turkmen and Italian businessmen, the trade between business representatives of two countries was around 9 million US dollars for nine months of the year. Members of the UIET work with such famous Italian companies as Desmet Ballestra, SACMI, Fondital, Eurosicma, Navatta, Storci and other.
Owing to such fruitful partnership, Turkmen private facilities were able to achieve high results in provision of local market with high-quality production and enter foreign markets
Achievements of entrepreneurs in industrial sector also deserves some attention. Carpet complex Abadan Haly is a bright example in this case. Annual output of this facility is 1.5 million square meters of carpets and carpet items. Most part of the production is made of polypropylene yarn from local material. Members of the Union utilize paper factory in Yashlyk with production output of 30,000 tons per year.
Facilities for production of such chemicals as iodine, synthetic washing liquids, disinfectants, baking soda, paints, adhesives, insulation materials, aero concrete blocks and other goods, which are also exported to other countries, have been built.
Members of the Union actively works on realization of the projects of construction of facilities for production of potassium fertilizers (potassium chloride and potassium sulphate), technical carbon, ethyl alcohol, develop investment projects for production of caustic soda, chlorine, sulphuric acid, sodium sulphate, cement and other chemical production from local natural and mineral resources.
Opening of facilities for production of liquefied gas, carbamide and ammonia, graphite electrodes are perspective directions for cooperation in chemical industry. Projects in heavy industry, metallurgy, gold production are attractive from investment point of view. Works in development of electronic and electrotechnical industries are carried out. Businessmen have started production of local payment terminals and learning computers, tablets and routers.
IT cluster has been made, Turkmen IT Park, which activity is aimed at development of digital infrastructure in the country, improvement of relations between science, production and investors as well as for entry to international market of digital technologies, has been opened taking into account capabilities of instruments of digital economy in innovative business development. Opening of the University of Business and Digital Technologies, which is planned in by the Union next year, is aimed at this.
Attraction of foreign investment to the economy of the country receives big importance for successful realization of investment policy of Turkmenistan. The State Bank for Foreign Economic Affairs, which works on attraction of investments for financing of projects in industrialization, transport and telecommunication infrastructure, development of private sector in the country, serves as an agent of the Government of Turkmenistan in international financial markets.
Italian businessmen were informed about the condition of credit portfolio of the bank, which structure is occupied by 56 percent by petrochemical industry, 31 percent by oil and gas production, 6 percent by transport and communication, 5 percent by agriculture and 2 percent by chemical industry.
It was also mentioned that this year, the bank has signed five agreements with foreign financial organizations to total amount of 575 million US dollars during the first Caspian Economic Forum, which was initiated by President Gurbanguly Berdimuhamedov, in Avaza on August 11 – 12. These finances would be sent to investment of the projects of energy and agricultural sectors, realization of small and medium business projects.
Learning investment capabilities of Turkmenistan, representatives of Italian business circles paid special attention to such large-scale project as regular phase of development of Galkynysh gas field, construction of the second complex for production of gasoline form natural gas in Ahal Velayat, second carbamide plant in Garabogaz and other petrochemical facility for production of polymers in Balkan Velayat.
In addition, the State Bank for Foreign Economic Affairs works together with such financial institutions as Intesa Sanpaolo - the Italian banking group, which is a leader in the market of banking services in Italy and one of the biggest banking groups in Europe, Monte dei Paschi di Siena – the oldest bank in the world, Milano branch of Deutsche Bank. It is planned to finance projects in gas production section of Turkmenistan, medical and textile industry of the country, railroad transport and other sphere to total amount of around 144 million US dollars with participation of these institutions.
Dario Liguti, Corporate director of SACE S.p.A, Agency, which works with Italian companies promoting them in in international markets via financial support, shared his visions of perspectives.
It understands the attraction of direct investments of Italian companies to foreign countries. Today, SACE is also involved in the TAPI project, in industrial development of Galkynysh deposit and development of textile industry.
Outlining the direction of partnership, Executive Director of RINA Consulting, Stephano Socci noted big experience of the company in consulting in energy carriers and renewable sources of energy, in transportation and infrastructure, certification of vessels, personnel management systems and services. He attracted the attention of representatives of Turkmenistan to exclusive competency in the sphere of digital mobility in industrial branches.
In 2010, RINA Consulting has opened its office in Turkmenistan. Since then, more than 30 important projects has been developed in the country with its participation. We won relative tender in 2018 and soon, we would sign the agreement for Turkmen part of the TAPI, Stephano Socci said. We would like to speak of the future when we speak of the TAPI. We want to continue investing to Turkmenistan, he said.
Other top managers of competent companies and financial organizations of Italy made speeches during the Forum. Communication of the participants took place in question and answer format, which allowed specifying some ideas and better understanding of each other, getting details of possible contracts and their terms.
In addition, the members of Turkmen delegation had number of meetings in the fields of business forum, having discussed real opportunities for intensification of trade, economic and investment cooperation between Turkmenistan and Italy, development of the dialog in traditional spheres and in new directions.
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