UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION
Project of Tajikistan
Project number: 180274 Project title: Industrial modernization and upgrading of carpet-weaving, embroidery and traditional textile sectors in Tajikistan: Phase II Thematic area code HC22 Competitive Trade Capacities and Corporate Responsibility Starting date: February 2019 Duration: 36 months Project site: Dushanbe, Tajikistan and other regions to be identified by the counterpart
Government co-ordinating agency: Ministry of Industry and New Technologies of the Republic of Tajikistan Counterpart: Ministry of Industry and New Technologies of the Republic of Tajikistan Executing agency: UNIDO Project Inputs: - Project costs USD1,061,947
- Support costs (13 USD 138,053 percent): - Total project costs: USD 1,200,000
Brief description:
Based on the letter of H.E. Mr. Shavkat Bobozoda, Minister of Industry and New Technologies of the Republic of Tajikistan, to the Director General dated 11 December 2014, expressing the request for UNIDO’s technical assistance in the implementation of the “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”, UNIDO has developed and successfully implemented (2015-2017) a technical cooperation project entitled “Industrial modernization and competitiveness improvement of carpet-weaving and embroidery/textile sectors in Tajikistan”. A two-year pilot project (or Phase I) with a budget of USD 1,200,000 aimed to increase the productivity and competitiveness of Tajik enterprises in the carpet weaving and embroidering sectors by identifying regional and international export markets, improving the technological cycle and industrial modernization, introducing innovative marketing tools, and strengthening national expertise to provide required technical support and services to local enterprises on a sustainable basis. Within the framework of the pilot project, fully fledged enterprise diagnosis of carpet weaving and embroidery manufacturers was carried out, activities were conducted to train experts throughout the production and market access cycle, including product design, personnel management, financial management of enterprises, marketing of finished products. As a result of the technical support of the project, the products of Tajik enterprises under a joint brand “LA'AL Textiles”, including carpet weaving, home textile, and Adras products, were presented at more than 16 national and international exhibitions, while commercial contracts were signed with leading hotels and retail chains in Tajikistan for the supply of Tajik products. Furthermore, over the duration of 2 years, new jobs were created at the beneficiary enterprises and technical support institutions. As a result of the UNIDO Project, the beneficiary companies established business contracts for production of carpets and home textiles with international hotel chains (such as Serena hotel in Dushanbe), restaurants, international retail shops (such as Auchan and JYSK), supermarkets and other partners.
The Ministry of the Industry and New Technologies of Tajikistan indicated strong support and appreciation of the project results and achievements in the short time frame, and requested UNIDO to
1 extend the project aiming to ensure the sustainability of achieved results and further facilitate industrial development of carpet weaving, embroidery and traditional textile sectors of Tajikistan (as per the letter of the Ministry of Industry and New Technologies of Tajikistan dated 5 September 2017).
Based on mentioned above, as well as with reference to the preliminary funding interest expressed by the Government of the Russian Federation, the project was proposed to be extended to its Phase II to provide technical assistance to extended number of pilot beneficiaries in carpet weaving, traditional textile, embroidery sectors in expanded geographical coverage, thereby also focusing on enhanced support to technical support institutions to ensure long term sustainability of the project impact.
2 Table of Contents
A. Context ...... 4 A.1. Background ...... 4 A.2. Textile, Carpet Weaving and Embroidery Sectors ...... 8 A.3. Professional and technical support institutions ...... 14 A.4. Main challenges and opportunities of the national textile and carpet sectors ...... 16 A.5. National Development Framework ...... 16
B. Reasons for UNIDO Assistance ...... 17 B.1. Origin of the request ...... 17 B.2. Expected target beneficiaries and eligibility criteria ...... 19 B.3. Counterpart organizations ...... 20
C. The project ...... 21 C.1. Objective of the project ...... 21 C.2. The UNIDO approach ...... 21 C.3. RBM code and thematic area code ...... 22 C.4. Expected outcomes ...... 22 C.5. Outputs and activities ...... 23 C.6. Communication and visibility ...... 24 C.7. Gender mainstreaming strategy ...... 25 C.8. Sustainability of the project...... 25 C.6. Timeline of the activities ...... 26 C.7. Country level coherence ...... 27 C.8. Risks ...... 27
D. Inputs...... 27 D.1. Counterpart inputs ...... 27 D.2. UNIDO inputs ...... 28
E. Budget ...... 28 E.1. Project breakdown by budget lines, outputs and year of implementation ...... 28
F. Monitoring, reporting and evaluation ...... 29
G. Prior obligations and prerequisites ...... 29
H. Legal context ...... 30
ANNEX 1. Logical Framework Analysis ...... 31
ANNEX 2. Key achievements of the Project’s Phase I and way forward ...... 33
3 A. Context
A.1. Background
Macro-Economic Context
The current economic structure of Tajikistan was shaped by its role in the integrated Soviet economy. Tajikistan’s role as a cotton-producing area remains one of the country’s priorities until today. Aluminium production was also introduced in Tajikistan during the Soviet period, with the construction of an aluminium smelter at the Tajik-Uzbek border in 1972. As Tajikistan produces no aluminium ore, it had to be shipped from other Soviet republics using the wide-reaching Soviet rail network.
At the end of the civil war in 1997, agriculture was the highest contributor to the GDP amounting to 39 percent, the industry contributed 32 percent and services – 29 percent. In 2003, GDP structure changed and industry grew to 37 percent of GDP, while services and agriculture contributed 36 percent and 27 percent, respectively. Since then, services have taken over as the main source of GDP, followed by industry and agriculture. In 2013, the economy expanded by 7.5 percent (year-on- year). The growth rate of GDP for 2017 is projected to fall to 4.5 percent, down from an average of 6.8 percent since 2010. Agriculture output grew by 12.1 percent mainly on the back of high crop production. Industrial production grew by 6.6 percent, mostly driven by an expansion in woodworking, chemicals, and food processing, and the output of extractive industry nearly doubled. Remittance inflows from migrant workers working abroad (mainly from Russia) helped maintain retail trade and services at about 50 percent of total GDP growth. Industry is projected to grow by more than 10 percent in real terms through 2018, albeit from a low base and accounting for only about 4 percent of the employment1.
Figure 1. Contribution to GDP growth by sectors between 2010-2018 (in percentage)
14.0% 12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018
GDP Agriculture Industry Services
Source: World Bank calculations (2018)
High-scale labour migration of Tajik citizens abroad during the last two decades was caused by the severe economic recession during the post-conflict period in mid-1990s. Lack of well-paid and stable employment and low labour costs in Tajikistan’s economy forced many to migrate for a better-off. Since 2005, the year when, Tajik authorities started leading migration statistics, the number of
1 WB office in TAJIKISTAN, a profile of poverty and prosperity in Tajikistan, May 2017
4 economic migrants jumped from 412,1 thousand people in 2005 to 779,4 thousand in 20132. Unofficially though, the figure of economic migrants working abroad exceeds the staggering mark of 1 million persons.
Tajik migrant workers' remittances increasingly contribute to the Tajik economy: from 5 percent in 2002, the GDP share of net remittance inflows skyrocketed to 45 percent in 2008, with an estimated value of nearly USD 2.5 billion, before declining during the global crisis to reach 25 percent in 2010 (Figure 2). In 2010, the remittance inflows were coming from an estimated 791 thousand migrants working in Russia, Kazakhstan, Ukraine, and the Kyrgyz Republic3. By stimulating domestic consumption through soaring imports, remittances have significantly contributed to Tajikistan’s growth since 2004. With the estimated USD value of remittances falling from nearly 50 percent of GDP in 2013 to about 29 percent in 2015, the sources of growth have shifted from private consumption to greater public investment, financed by both foreign and domestic sources.
Figure 2. GDP Expenditure Decomposition, 2002-2010 (share of GDP)
Source: World Bank, July 2012
Dependence on raw materials exports leaves the country vulnerable to global commodity price fluctuations, and particularly with respect to aluminium, cotton, and gold markets. Largely dependent on the export, particularly, of cotton and aluminium, the Tajik economy took a severe hit during the global economic crisis4, as small and medium size enterprises (SMEs) suffered from the poor investment climate5 impeding the creation of new jobs.
External Trade
The major contributors to exports from Tajikistan are precious and non-ferrous metals (mainly aluminium). Since 1992, the share of aluminium in the total exports declined from 80 percent to less than 25 percent in 1997, mainly due to the civil war. In 1998 the share of aluminium exports increased and since 2008 reached about 70 percent of the total exports. Other sectors contributing to the Tajikistan’s exports are textile manufacturing (cotton yarn and fabrics, garments), chemicals and chemical products (concentrates of mercury-antimony, lead-zinc and fluorite ore, vanadium alloys, and compounds of strontium, barium, rhenium, bismuth, and phosphors, chlorine-containing products), food and beverages and scrap metal. Overall, the exports from Tajikistan increased from USD1,739 billion in 2011 reaching USD1,803 billion in 2012.
2 Lailo Kosimova, “Charo todzhikon rub a mokhodzhirati mekhnati ovardaand?”, Muhochir Magazine, No.04 (44) from 27/03/2014, publication of Migration Service of the Ministry of Labour, Migration and Employment of the Population of the Republic of Tajikistan, 2014 3 Migration Fact book, 2011 4 World Bank, 2012. 5 International Organization for Migration, Tajik Migrants with re-entry bans to the Russian Federation, January 2014.
5 Figure 3. Sectoral composition of exports, 1992-2010 (percent of total exports)
Source: World Bank, July 2012
The main export destinations for Tajik products are Turkey (23 percent), Kazakhstan (18 percent), China (5.7 percent), the Russian Federation (5.2 percent), and others. The combination of a narrow export stance as well as geographical concentration of Tajikistan’s foreign trade flows increases the country’s vulnerability to external shocks.
The key import partner of Tajikistan is China, representing 51 percent of the total imports, which constitutes USD 1,8 billion. Imports from the Russian Federation and Kazakhstan currently are comparatively low, 21 percent and 12 percent, respectively. Other countries importing to Tajikistan include Turkey (4.6 percent), and other trade partners.
With the total amount of USD 3.54 billion (as of 2015), country’s major import products include petroleum products (8.9 percent), machines, wheat, clothing, and other products.
Figure 4. Country’s major import products
Source: Country Profile, Observatory of Economic Complexity
The country’s exports as of 2015 were dominated by the raw aluminium that constitutes 30 percent of the total exports, which is USD 257 million. Other export products include gold (17 percent), lead and other ores (6.7 percent), raw cotton (9.8 percent), and others.
6 Figure 5. Country’s major export products
Source: Country Profile, Observatory of Economic Complexity
Tajikistan is a member of WTO since March 2013 and is considering joining the Eurasian Economic Union of Armenia, Belarus, Kazakhstan, Kyrgyzstan and the Russian Federation.
Socio-economic situation and impacts of labour migration
According to the International Organization for Migration (IOM), in 2012 the number of legal migrants from Tajikistan to the Russian Federation reached over 400,000. The actual number of undocumented migrant workers was estimated at that time to be more than 600,000. According to the Migration Service of the Ministry of Labour, Migration and Employment of Tajikistan, approximately 700,000- 800,000 citizens of Tajikistan travel to Russia every year. One in four households in Tajikistan has members who regularly leave the country in search of work, mainly to Russia. Most of these households receive regular support from their migrant relatives in the form of remittances6. Their remittances make up a significant portion of the GDP – recent estimates pin the net remittance inflow at around 40 percent of Tajikistan’s GDP, making it one of the world’s most remittance-dependent countries7.
Labour migration has had a significant social impact on the migrants’ family members who are left behind in the place of origin, especially women. Traditionally, women are responsible for family care and, since the country became an independent state, the female population increasingly do not work outside home. As wives, women usually live with the husbands’ family. In-laws assume the role of the head of the household and are able to claim remittances sent from husbands working abroad as migrant workers. Women whose husbands have migrated for labour purposes receive limited or no assistance from the authorities or international organizations. Furthermore, wives often do not receive any information or sufficient financial assistance from their migrant husbands who are working abroad. Abandoned women from migrant households are subsequently forced to search for alternative sources of income to support their children and to escape overall poor living conditions8.
Most women from abandoned migrant households are economically inactive, lacking skills and qualifications to find a job, or overburdened by household chores and child-rearing. Although many abandoned women dream of starting their own business, they are, however, unlikely to apply for a loan9.
6 Accessed at https://www.iom.int/cms/en/sites/iom/home/what-we-do/labour-migration/harnessing-remittances-for-devel.htm 7 International Organization for Migration, Tajik Migrants with re-entry bans to the Russian Federation, January 2014. 8 ODIHR, Social and economic inclusion of women from migrant households in Tajikistan, September 2012 available at
7 A.2. Textile, Carpet Weaving and Embroidery Sectors
In the mid-80s, about 10 percent of the carpet and other textile coverings of the overall carpet production in the Soviet Union were produced in Tajikistan. For instance, Tajikistan in 1980 produced carpets and other related products in 9,9 million square meters, whereas in more recent past this number has reduced to about 1,4 million.
Due to its labour intensity, the carpet weaving sector plays an important economic role as a provider of employment, especially for women from both urban and rural areas. Before industrialization, hand- made carpet weaving was the main source of employment for women and youth, which was done by families with rich traditions. Currently, this production obtains greater importance as hand-made production and it is well demanded on export markets, providing income generating opportunities for women and youth, as well as for SMEs. Currently, numerous micro and small producers specializing in the handmade carpet weaving are spread across the country. Despite presence of industrial enterprises, smaller scale production of hand-made carpet weaving and handmade Ikat Adras fabrics and Atlas-making weaving is still present in rural areas.
During the Soviet times, local industry included a number of state owned SMEs producing handmade carpets, embroidered textile products for the local market, as well as for other Soviet Union republics. One of the enterprises was “Guldasta”, which had over 1000 employees, and had 8 branches all over Tajikistan and produced over 430 types of goods including, embroidered bed linen, table clothes, and other types of home and kitchen textile products. After the collapse of Soviet Union, “Guldasta”, as many other state owned enterprises in the country, went out of operation. Later, the factory was privatized by local entrepreneurs. One of the branches of “Guldasta” is still operating under the name “Suman”, and still produces the embroidery home textiles, and golden embroidery traditional - occasional clothing.
Currently, the industrial production of carpets in Tajikistan is mainly represented by 5 enterprises, the largest of which are situated in Kayrakkum and Khujand. In 2007, the highest indicators of utilization of industrial capacities were observed, among others, in the carpet weaving sector with an indicator of 30.5 percent. The carpet sector exports decreased drastically from USD 84,145 in 2010 to USD 16,838 in 2012. In 2013, the volume of carpet production reached 1,353 million square meters, which is 452,000 square meters more compared with indicators of 2012 (901,000 square meters) corresponding to the growth rate of 150 percent.
The Tajik carpet goods were mainly exported to the Russian Federation in 2010 and to lesser extent in 2011, though in 2012 the exports to Russia dropped to USD 6,450, while there was a slight increase in exports to EU countries in the same year.
Figure 6. Production of carpet products in Tajikistan 2007-2017 (in thousand square meters)
3000 2710.8
2400 1763.3 1705.2 1800 1355.5 1189.5 1200 896.9 558.2 656.8 600
0 2010 2011 2012 2013 2014 2015 2016 2017
Source: MINT Annual report for 2017
The adoption of the “National Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”, which anticipated a number of policy amendments in tax and custom regulations helped to establish 2 machine carpet factories in suburb of Dushanbe in 2016 («Mavlonoi Rumi», «Taj Feiza» with Turkish investments), as well as a number of carpet training
8 centres across the country. The number of officially registered carpet production entities, as per the Ministry of Industry and New Technologies of Tajikistan, in 2017 was 7, out of which the handmade production was represented by 2 enterprises and machine production by 5 enterprises.
Table 1. Officially registered carpet weaving enterprises in Tajikistan as of 2017
Production in thousand Number of workers № Name of enterprise square meters 2016 2017 2016 2017 1 «Kolinhoi Kayrokum» 1600 1653 184 232 2 «Kolinhoi Nigor» 1,5 1,5 30 32 3 «Kolinhoi Somon» 0,7 2,0 5 5 4 «Mavlonoi Rumi» 0,0 547,5 15 53 5 «Taj Feiza» 85,1 483,9 21 33 6 «Sheroz» 3,4 22,6 30 35 7 «Gulvard”* 1,3 1,9 57 69 Total 1690,7 2710,5 285 390 Source: MINT annual report for 2017. * Gulvard data on carpet production is not included into the official reports
During 2017, the industrial capacity of carpet weaving enterprises was around 2,5, - 3,0 million square meters a year. It is planned to produce 5 million square meters by 2020 in order to meet the needs of the local market. Additionally, in 2017, the volume of carpet production reached 2,711 million square meters, which is 1,006 million square meters more compared with the indicators of 2016 (1,705 million square meters) corresponding to the growth rate of 160 percent.
Figure 7. Production of carpets in Tajikistan (2016-2017) by months in thousand square meters
2017 2016 500
400 330.5 300.6 300 264.6 243.2 233.6 227.6 236.2 211.8 214.6 214.9 182.9 191.5 184 200 174.4 161.4 169.9 135.7 135.3 130.5 120.3 104 114 100 160.4
0 0 1 2 3 4 5 6 7 8 9 10 11 12
Source: MINT annual report for 2017
Export of textiles: While a small portion of output is sold domestically either for further processing or final consumption, the majority of products in the sector are exported. Tajik enterprises exported USD 38.2 million worth of textile and clothing products in 2013 including yarns, fabrics, ready-made clothes, technical wear, and home textiles and carpets. The following graph illustrates the evolution of foreign demand for Tajik products since 2001. Of particular note is that exports expanded for all product groups with the exception of fabrics, whose foreign sales have fallen dramatically since 2001.
9 Figure 8. Export of textile products by Product group
60,000
50,000
40,000 Home textiles & carpets Technical wear 30,000 Garments 20,000 Fabrics 10,000
Exports (USD thousands) Yarn 0
Source: International Trade Centre (2015). Trade Map Database. Available from www.trademap.org.
Export of fabrics: Tajik enterprises exported USD 4.1 million of refined and crude fabrics in 2013, including USD 3.56 million of cotton fabrics, USD 401.000 of knitted or crocheted fabrics, USD 125.000 of synthetic fabrics (from imported synthetic yarn), and minor amounts of wool fabrics. The most important markets for cotton fabrics are Italy (35 percent of exports), the Czech Republic (25.01 percent), Lithuania (18.43 percent), Belgium (8.74 percent), and Russia (6.91 percent).
Figure 9. Exports of carpets and home textiles from Tajikistan between 2011 and 2013 (HS categories 57 and 63)
800 700 600 Other 500 Pakistan
400 Afghanistan
USD USD thousands ( 300 Kazakhstan 200 Italy
Exports 100 Russian Federation 0
Source: International Trade Centre (2015). Trade Map Database. Available from www.trademap.org.
Between 4 percent and 5 percent of fabric production output is sold to domestic sewing enterprises. Knitted or crocheted fabrics are mainly exported to the Russian Federation (79 percent) and Belarus (20 percent). The decline in fabric exports over the past ten years is associated with falling sales in all of Tajikistan’s major markets, driven largely by the dissolution of Tajik-Polish joint venture limited liability company TajPolTex10. In 2013, Tajik enterprises exported no fabrics to Asia or the Americas, and sales to the EU, CIS, and North Africa/Middle East have fallen drastically. Indeed, Korea and the United States were the most important markets for Tajik fabrics in 2001, having received over 51 percent of total exports. Today, neither of these countries is a destination for Tajik fabrics.
10 TajPolTex was established on the basis of the Bofanda enterprise in March 2006. A joint venture between Nassojii Dushanbe and Polish investors, this enterprise was the main contributor to the increase in cotton fabric production from 2006 to 2010.
10 Figure 10. Trade in home textile and carpets from Tajikistan and respective importers of the final goods (2001- 2013)
Importers of Tajik home textiles Importers of Tajik carpets
100% 100%
80% 80%
60% 60%
40% 40%
20% 20%
0% 0%
Russia Italy Other Kazakhstan Russia Other
Source: International Trade Centre (2015). Trade Map Database. Available from www.trademap.org.
As per ITC report (2015), although the production of carpets and home textiles is minimal compared to that of other product categories, USD 616 000 worth of goods were exported in 2013 (USD 207 000 home textiles, and USD 409 000 carpets). The vast majority of home textiles (91.8 percent) were exported in Russia. Carpets were exported mainly to Kazakhstan (70.4 percent) and the Russian Federation (27.8 percent). It should be noted that the markets have shifted significantly: Tajikistan used to export nearly 90 percent of home textiles to Italy (in 2001), whereas today Italy no longer receives any of Tajikistan’s home textiles. The part of the trade of Tajik produce to Italy was replaced by increased exports to the Russian Federation. A similar evolution can be noted in the carpets segment, where Kazakhstan eventually surpassed Russia as the main destination for Tajik carpets. Despite shifts in trade patterns, the markets remain heavily concentrated. Product assortment has also shifted over the years. Curtains and drapes have overtaken bed, table, toilet, and kitchen linens as the dominant product group. Tajikistan exports presents a greater variety of home textile products as of 2017 when compared to 2011.
Figure 11. Exports of home textiles production from Tajikistan in 2001 and 2013
Export of home textiles, 2001 Exports of home textiles, 2013
Curtains, drapes 2% & interior blinds 3% Rags,scrap 5% twine,crodage,rop Rags,scrap e 13% twine,crodage,rop Bed, table, toilet e and kitchen linens Bed, table, toilet and kitchen linens 19% 63% Blankets and 95% travelling rugs
Worn clothing and articles
Source: International Trade Centre (2015). Trade Map Database. Available from www.trademap.org.
Overall, despite the increasing production of carpet and other textile coverings in the country, in early 2010s there has been a tendency of increased import of goods, including the carpets. Hence, the
11 carpet goods import increased from USD 297,509 in 2010 to USD 1,2 million in 2012. In 2014, the import of carpets and carpets related goods reached 6 million square meters of carpets. Turkish carpets imports increased dramatically in 2010s, but due to lack of transparent customs statistics are not registered properly. The ratio of imports far outpaces the internal production in the market. This also means the potential of greater domestic demand for the industry.
The volume of import of carpet products still high compared to the volume of exports, though it dramatically dropped since 2015, but it still indicates the level of demand on the local market and potential for local production grows. Therefore, all possible efforts should be undertaken in nearest future by policy makers and companies to satisfy this demand, which in turn will help to establish new jobs for local population, increase profit of companies, increase the investment and protect local market from foreign producers and slowly start strengthening the export potential of local SMEs.
Figure 12. Ratio of exports to imports of carpet & other coverings from/to Tajikistan, 2015-2017 (in USD)
10,000,000 8,889,442
8,000,000 6,195,506 6,000,000 Export in USD 4,000,841 4,000,000 Import in USD
2,000,000 82,485 48,636 191,176 0 2015 2016 2017
Source: Custom service under the Government of the Republic of Tajikistan11 BLIC
The largest enterprise producing carpets and related goods in Tajikistan, OJSC "Carpets of Kayrakkum”, is practically the only company that sets and implements its marketing strategy adopted for short- and mid-term time-framework. The company employs a number of professional artists and skilled weavers, who took on the centuries-old traditions of Tajik carpet-making, with its peculiar technological and artistic traits, and enriched the folk artists' experience with the adoption of Russian and European carpet weaving methodologies. The company includes spinning mill with dyeing production, weaving factory producing woollen carpets that uses electronically controlled carpet- weaving machines ("Schönherr" Germany, STM - 640/1) and the carpet factory for the production of flooring. The company maintains technical capacities and holds several patents for different technical solutions, such as: the structure of cotton fabric of the width 3 m - tarpaulin, waterproof, patent TJ- 204; wool carpet using weft-wool, yarn reinforced patent TJ-236; and wool carpet in seven colours scheme, which is currently examined to obtain a patent. In 2007, the OJSC "Carpets of Kayrakkum” had production facilities capable of manufacturing of: 200 tons of yarn, 500 thousand square meters of woollen carpets and rugs, 1,500 thousand square meters of tufted floor coverings, 35 thousand woollen blankets, and other goods. In 2012, the daily production capacity of the company was 750 square meters of carpets. In 2013, the production increased to 1.3 million square meters of carpets. The output level achieved almost 2 million square meters of carpets in 2014, in line with development strategy of the company.
In 2013, the number of full-time employees of the OJSC "Carpets of Kayrakkum” was about 1 thousand, more than half of whom are women. The staffing figure, though, varies and seasonally changes substantially. The wage range of the employees based on their qualification and responsibilities is in the range of USD 75 – 380 per month. Carpets and textile coverings produced by
11Custom service under the Government of the Republic of Tajikistan, 2018 available at
12 the company are mainly exported to the Russian Federation, Kyrgyzstan, Turkmenistan, Uzbekistan, China and other countries.
Other carpet weaving and embroidery enterprises have very limited or non-existent knowledge and tools to market their products, thereby heavily relying on alliances with the Iranian and Afghan carpet weavers that purchase and export the carpet goods under their own brands. Thus, the lack of national marketing and market access expertise hinders further development of the national carpet weaving, embroidery and artistry traditions.
As part of the UNIDO technical cooperation project “Industrial modernization and competitiveness improvement of carpet-weaving and embroidery/textile sectors in Tajikistan” implemented in 2015- 2017 with the financial support of the People’s Republic of China and the Russian Federation, OJSC "Carpets of Kayrakkum” was identified as one of the pilot beneficiary carpet manufacturers. Upon completion of human capacity building activities conducted by the UNIDO, this company expanded its design department and hired a specialist on PR and marketing/advertisement, which resulted in launch of an advertisement campaign all over the country and through all possible social media channels, including local TV and Radio channels, local magazines and newspapers. As a result of this project, as of 2017 the company was planning to launch new production line of tufting floor coverings.
OJSC "Carpets of Kayrakkum” was providing employment to up to 250 persons in 2017, while the production of final goods reached 1,563 million square meters, which is more than 53 thousand square meters compared to the production volume of 2016. The company is planning to produce about 450,000 square meters of tufting floor coverings annually, thereby benefiting from increasing demand in country and potential for export to the regional markets. Expansion of production is expected to help for creation of new workplaces for up to 40 experts on production, and up to 20 resellers/dealers around the country.
Suzani – traditional embroidery
In addition to carpet weaving, one of the internationally known traditional Tajik textile goods that includes silk as one of the components and produced in the country is “Suzani”. Suzani in Tajikistan is a wall hanging, embroidered with silk or satin floss on cotton, silk or velvet. The product is lined, trimmed with braid or black cloth. Suzani is composed of a wide rim and elegant field of flowers and rosettes and symbolic traditional motives. Traditionally, Suzani is embroidered by hand, having several national compositions and colours, which are always followed by embroiderers. A special feature of a Suzani is its closed composition with a large rosette size on the entire height of a Suzani or a composition of six to nine colourful rosettes arranged in a strict symmetry. Each region of Tajikistan has its own traditional embroidery techniques, which differs in size of rosettes, colours and other specific details of Suzani. The machinery used for production of Suzani called “Popuri” (or “Urama” depending on the region).
Due to the relative increase in the country’s tourism sector, the local souvenir retailing sector is expanding the sales of traditional, vintage Suzani. Given the popularity of the craft, other related embroidery traditions also being revitalized by the local designers in their collections of every day garments, occasional garments, home textile and related products. Suzani production by far is a nascent industry which is also experiencing setbacks by a low access to external markets. The potential for growth and employment within the industry is underutilized at the moment.
Silk and cotton fabric production in Tajikistan
The success in the carpet weaving and Suzani production would also depend largely on revitalization of silk production in the country. Silk production used to be one of the significant export items of the Tajik economy in the former Soviet Tajikistan. In 1985, the country produced 64,4 million square meters of the silk for local and export consumption. The industry, however, has drastically reduced its production in the recent decades reaching the level of 0,07 million meters in 2013. Nevertheless, the expertise which has been maintained in the country would be key in revitalizing the industry as a whole. Although small, there is an existing expertise in production of silk and traditional art produce such as Suzani that could be tapped into for further development. Moreover, the demand for both local and export supply would make the development of production sustainable in the long run.
13 Along with the carpet weaving production and silk production, the production of traditional textiles, such as ikat Atlas and Adras is considered as one of the priority sub-sectors of the textile industry development in Tajikistan. This traditional sub-sector of textile industry is considered to have potential comparative advantage due to available extensive experience and knowledge in production techniques and rich cultural and creative heritage that can contribute to the manufacturing of higher value added products. Relatively small scale investment would be required to modernize the technical capacities, which would then service as a potential source of new jobs, especially in rural areas. The production of Adras and Atlas is considered flexible in terms of required facilities, which allows production at home as it was practiced for centuries in the region and is an alternative for an income generation activity, especially for women in rural areas. In recent years, the number of Adras weaving centres was growing in all areas of Tajikistan reaching up to 500. Most of those with higher competitiveness potential are located in Sughd region, mainly due to historical reasons. Most of these centres are mainly focusing on training functions rather than production, which is related to a temporary adjustment preferred by the operators due to fiscal incentives such as tax exemption and other measures by the Government aimed to encourage entrepreneurship and economic growth. However, this resulted in unavailability of official statistics about the production and sales in this sub- sector, while only the reporting on trainee numbers is maintained.
Table 2. Production of Atlas and Adras in 2016-2017 Name of enterprise Production in thousand Number of square meters workers 2016 2017 2016 2017 Adras fabric 1,7 6,7 25 54 «Atlasi Khujand» Atlas fabric 0,0 12,6 25 54 «DUK» adras fabric 0,0 5,1 0,0 15 «Suman» adras fabric 0,0 0,2 3 5 Other Atlas and Adras centres 0,0 31,9 0* 0* Total 1,7 56,5 53 128
Source: MINT annual report for 2017 (0*- data is not available on Adras weaving centres)
Similarly to the traditional embroidery, the traditional textile industry observed relative growth in production and improved the quality of produce due to increased demand from tourism industry. One of the high demand products is the home textiles and accessories with traditional embroidery and traditional textile fabric (such as Atlas, Adras, Bekasab, Ziragi, Alocha). Nevertheless, this sub-sector also experiences setbacks by a low access to external markets, while demonstrating potential for growth and employment generation.
A.3. Professional and technical support institutions
The vocational training for textile and carpet weaving reflects the overall situation with professional training in the country, which is mainly characterized by the limited linkage and interaction between training institutions and the industry. During 1990s and 2000s, the carpet weaving professional and industrial support was quite limited and mainly concentrated around the in-house training capacities at the largest carpet producer OJSC "Carpets of Kayrakkum”.
One of the few higher education institutions in Tajikistan providing professional training on industrial design and artistry is the Tajik Technological University. The University’s Faculty of Technology and Design trains students on two related subjects: Artistic Design and Fashion Design. The focus of design courses is on national costumes, handcrafting, design of souvenirs, national apparel and embroidery, with limited focus on market-oriented or enterprise demand-driven textile, carpet-weaving and embroidery produce and related techniques. With overall acknowledgement of University management and trainers that the light industry companies are potential recipients of the Faculty’s graduates, the professional support of the University and its cooperation with the real sector remain low.
14 As of 2017, there were 492 training and production centres providing services for carpet weaving and other handicrafts sectors operating in country, thereby providing capacity building activities to more than 17,213 people in 2017. The below Table provides an overview of the trainings conducted across the country in 2017.
Table 3. Training and production centres on carpet and adras weaving in 2017 № Regions in Tajikistan Number of centres Number of trainees 1 Sughd 318 4372 2 Khatlon 137 5429 3 Dushanbe and RRS 26 6302 4 Gorno-Badakhshan 11 1110 Autonomous Region (GBAO) Total 492 17213 Source: MINT annual report for 2017
In Sughd region, there were 318 official craftsmen/training and production centres, 191 is involved in Atlas and Adras weaving, and 71 in carpet weaving. Some of them have both production and training facilities. Adras weaving centres produced 193 000 meters of Adras in 2015-2017, which were locally sold through retailers at the local markets12. It is worth to mention, that this data might not correspond to the official data indicated in the Tajik statistical agency and Ministry of Industry and New Technologies of Tajikistan reports due to the fact that most of the centres are only functioning as training centres, and have no official reporting on production at the moment.
Gulvard LLC training and production centre was established in 2014 in A.Jomi district of Khatlon Oblast. It focuses on training of local women on hand-made carpet weaving. It is one the few carpet weaving enterprises of the Oblast. The training facility of the company lacks proper curriculum, modern and industrial level approach for professional trainings. The designing and sketching, dying and colouring training techniques need professional teaching approach. The issue had been addressed via involvement of carpet weavers from Iran, though knowledge and know-how sharing has not been established that resulted in poor professional support to the sector.
Professional and Industrial support on marketing is nearly non-existent in the country. OJSC "Carpets of Kayrakkum” is practically the sole company that sets and implements its short- to mid- term marketing strategy. Other companies do not hold knowledge and tools to market their products heavily relying on alliance with Iranian and Afghan carpet weavers that purchase and sell carpets under their own brands.
The similar challenges were observed in other professional institutions, whose reliance on handicraft technology, outdated curricular, and the lack of cooperation with private enterprises lead to the discontent among students admitting little relevance of the obtained skills to the real needs of the industry. In turn, existing companies express little interest in engaging graduates. As a result, most of the employees are trained directly at enterprise, which increases enterprises’ transaction costs.
As per the results of the UNIDO technical assistance and upon the conducted analysis of the existing professional technical institutions and the carpet weaving industries, a number of major challenges and potential intervention areas were identified, including a major lack of coordination between the educational institutions and the production and development needs of the manufacturing industry. Furthermore, the analysis found out that the training efforts delivered by other development organizations were rarely coordinated with industry’s and market needs and requirements. As a result, the myriads of efforts and programs poorly align with the economy’s needs. To some extent, the issue is being addressed by other international development institutions that include the Asian Development Bank’s program addressing the outdated training of professionals in Tajik technical education institutions.
12 Data from the Sughd Region Administration officials received on January 2018
15 A.4. Main challenges and opportunities of the national textile and carpet sectors
The existing textile, carpet weaving and embroidery facilities of Tajikistan still feature under-exploited manufacturing potential and decreasing competitiveness of local producers. Among other industry development challenges, these sectors face the following challenges: Insufficient supply of the local raw materials: fabric, accessories, embroidery threads (cotton and silk), wool and silk yarn for carpet weaving; Management gaps mainly characterized by a lack of know-how on technical procedures, business, accounting practices; Absence of sound marketing techniques, limited skills and tools in the area of international sales, networking and branding; Shortage in reliable and mutually supportive links between producers, inter alia, when accessing markets; Lack of knowledge and resources necessary to comply with international standards to meet the social and environmental concerns of high-end markets; Insufficient business, marketing and technical support to the establishment/expansion of local operators; Difficult access to up-to-date technologies and related information on operations and technical maintenance; Lack of cooperation between designing institutions/designers and companies; Weak curricula of vocational education entities and industry support institutions in the field of design, technology and marketing of the carpet and home textiles; Absence of technological manuals on standards and quality control of the traditional hand- woven textiles (such as Atlas, Adras, Bekasab, Ziragi, Alocha) and handmade carpets; Limited access to finance and inability to access working capital, inter alia, at favourable rates; As a result, low productivity and competitiveness of sector’s output and insufficient capacities to expand product sales to local, regional and international markets.
The expansion of the upgrading scope of the traditional textile, carpet weaving and embroidery enterprises through technological modernization and managerial capacity building would contribute to the increased efficiency and productivity levels, improved trade capacities and work environment. Enhancing existing marketing practices and introduction of new tools would facilitate market access and sales of locally manufactured production of the carpet weaving, embroidery, traditional textile sectors at the local, regional and international markets. Besides, upgrading of these sectors would generate employment opportunities, especially for women. Thus, the proposed project is expected to address those challenges faced by the traditional textile, carpet weaving and embroidery sectors in Tajikistan and also facilitate more inclusive and gender-equitable employment opportunities for the local population, especially vulnerable groups of women in the rural and urban areas of Tajikistan.
A.5. National Development Framework
The recently adopted National Development Strategy (NDS) of Tajikistan till 2030 and Mid-term Development Program of the Republic of Tajikistan for 2016-2020 (MTDP 2020) are two key tools for nationalization of the SDGs and its further integration into the national development policy. The Government of Tajikistan has identified four strategic development goals for the next 15 years which are fully aligned with the SDGs:
I. Ensure energy security and efficient use of electricity (SDG 7); II. Exit from communication dead-lock and turn country into a transit path (SDG 9); III. Ensure food security and people’s access to good quality nutrition (SDG 1 and SDG 2); IV. Expand productive employment (SDG 8).
In January 2014, the Ministry of Industry and New Technologies of Tajikistan was requested to develop and submit to the Government of Tajikistan a “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”. On 28 November 2014 the Government of Tajikistan adopted this national development programme. The Programme intends to
16 revive the country’s carpet weaving industry through introduction of new technologies and provision of new employment opportunities.
The Government of Tajikistan prioritizes the development of the carpet weaving, embroidery and textile sectors, along with the development of SMEs. Active efforts with the technical and experts' support from other international development organizations are currently ongoing, along with the reforms to streamline the tax and customs procedures to improve the investment climate as well as the exporting potential of the locally produces goods.
In 2014, the Government of Tajikistan issued an order entitled “Reviving the handmade carpet weaving and other handicraft traditions” with the main purpose to develop handmade carpet traditions and other handicraft traditions in country, especially in rural areas, which, among others, led to the establishment of handicraft, carpet weaving, Adras weaving centres all over the country.
In December 2017, 2018 was announced as the “Year of Development of Tourism and Handicrafts” by the President of Tajikistan with respective development of action plans by responsible ministries. As a result of the UNIDO technical assistance, the Ministry of Industry and New Technologies of Tajikistan incorporated most of the UNIDO recommendations into this action plan to improve the carpet weaving, embroidery and Atlas/Adras weaving sectors. Recommendations included: - Streamlining capacity building activities on design, computer designs, marketing into the curricula of most of the industry support educational institutions, including in rural areas; - Supporting SMEs (in rural and urban areas) in establishing production on raw materials: wool and silk to produce high quality carpets, embroidery products and Atlas/Adras; - Expand the network of Development partners, bringing other traditional Donors of Tajikistan to the sector of Industry and Handicrafts; - Strengthening the marketing and advertisement activities on local Mass Media and social public media.
Overall, despite Government efforts and international development partners support, the Tajik textile, carpet weaving and embroidery sectors continue to face the development challenges associated with the low productivity and, respectively, the low level of income for the carpet weavers, especially in case of handmade carpets. Defined as a labour intensive and involving mostly women, the carpet weaving, textile and embroidery sectors have a strong socio-economic role for income generation activities and potential for increased value added, employment creation and improvement of livelihood of the local population as well as for market expansion benefiting from region’s rich traditions of carpet making, suzani embroidery, silk production and derivative products for fashion and domestic use. At the same time, the aforementioned review of the sector confirmed the potential for enhanced expertise based on the extensive experience and knowledge in carpet weaving, embroidery and textile in the country. Upgrading and expanding the industry would not only allow to preserve and maintain the existing facilities, but would also contribute to their expansion with potential engagement of the labour in the production and would assist in creating additional export-oriented traditional and creative production niches for future development.
B. Reasons for UNIDO Assistance
B.1. Origin of the request
In an official letter of H.E. Mr. Shavkat Bobozoda, Minister of Industry and New Technologies of the Republic of Tajikistan, to the Director General dated 11 December 2014, UNIDO was requested to develop and implement a technical assistance project to support the implementation of the “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014- 2020”. Furthermore, under the framework of the regional cooperation and South-South Cooperation, and taking into account the strategic inclusive and sustainable development goals of Tajikistan, the Governments of the People’s Republic of China and the Russian Federation agreed to support the Government of Tajikistan in the implementation of the overarching development goals of the National Development Strategy of Tajikistan and the sectoral development objectives as identified in the Programme on development of carpet weaving in Tajikistan. The People’s Republic of China earmarked funding for the pilot project from the voluntary contributions of the Ministry of Commerce to
17 UNIDO’s Industrial Development Fund (IDF) (USD 500,000 from 2013 and USD 100,000 from 2014). The Russian Federation has confirmed interest to co-finance the pilot project from its voluntary contributions to IDF and requested to develop a fully-fledged project document. The provided amount of co-funding is USD 600,000 from the Russian contribution to IDF.
Based on the above, the UNIDO formulated and implemented a two-year pilot project (or Phase I) co- funded by the Governments of the People’s Republic of China and the Russian Federation with a total budget of USD 1,200,000. The project implemented in 2015-2017 aimed to increase the productivity and competitiveness of Tajik enterprises in the carpet weaving and embroidering sectors by identifying regional and international export markets, improving the technological cycle and industrial modernization, introducing innovative marketing tools, and strengthening national expertise to provide required technical support and services to local enterprises on a sustainable basis. The pilot phase generated the following tangible results and impact.
Over 40 capacity building activities were conducted between October 2015-December 2017, covering up to 535 participants (out of which 404 or 75% are women) in several regions of Tajikistan. The training activities for experts covering various topics throughout the production and market access cycle, including product design, personnel management, financial management of enterprises, and marketing of finished products. As such, more than 535 national experts receiving training and hands on coaching over the duration of the project, majority of whom are young women from lower income population, as well as Afghan refugees, and other marginalized groups.
The project strengthened institutional cooperation between national governmental, non- governmental institutions and vocational training institutions, as well as the private sector enterprises, resulting in establishment of training centre and show room for demonstration of products designed and created by the local craftsmen and enterprises. Three training and service centres (including show room) were established in the country to serve the carpet and home textile manufacturers.
As a result of the technical support of the project, the products of Tajik enterprises under a joint brand “LA'AL Textiles”, including carpet weaving, home textile, and Adras products, were presented at more than 16 national and international exhibitions, while commercial contracts were signed with leading international hotels and retail chains in Tajikistan for the supply of Tajik products. Furthermore, over the duration of 2 years, about 93 new jobs were created at the beneficiary enterprises and technical support institutions.
It is worth mentioning that on 13 December 2017, the brand “LA’AL Textiles”, joining pilot project beneficiary enterprises producing carpets and home textiles, received the Award “Peak of fame” at the national competition “Brand of the year 2017”. In January 2018, Ministry of Industry and New Technologies of Tajikistan named the brand “LA’AL Textiles” as the Best National Brand for contribution to sustainable industrial development of Tajikistan and to creation of new jobs, as well as facilitating expanding exports of Tajik products.
Representatives of the Ministry of the Industry and New Technologies of Tajikistan, including First Vice Minister of Industry and New Technologies of Tajikistan, Mr. Khaidar Khol, indicated strong support and appreciation of the project results and achievements in the short time frame, thereby confirming the interest to extension of the project for its Phase II. Furthermore, the Ministry indicated the need to expand the geographic coverage of the project. Respectively, a letter of request of the Ministry of Industry and New Technologies of Tajikistan was received on 5 September 2017.
Based on mentioned above brief overview of this project’s results and achievements, as well as strong support and indication of interest for continuation of this project at its next phase by the Government of Tajikistan, and preliminary funding approval expressed by the Government of the Russian Federation, the project is expected to launch its Phase II to provide technical assistance to extended number of pilot beneficiaries in carpet weaving, traditional textile and embroidery sectors in expanded geographical coverage, thereby also focusing on enhanced support to technical support institutions to ensure long term sustainability of the project impact.
18 UNIDO in cooperation with development partners will seek to extend its contribution to the inclusive and sustainable industrial development and regional integration of the Tajik economy via the proposed project on “Industrial modernization and upgrading of carpet-weaving, embroidery and traditional textile sectors in Tajikistan: Phase II”. The proposed project is expected to upscale its efforts addressing the productivity and competitiveness challenges faced by the sector as well as facilitate more inclusive and gender-equitable employment opportunities for the local population.
As such, the Phase II of this project is expected to conduct the following technical activities:
The Phase II is aimed to upscale the technical support to wider scope of pilot beneficiary enterprises (up to 12 new enterprises) from various regions of Tajikistan to additional sub- sectors of the textile industry, including the production of traditional textiles, such as ikat Atlas and Adras.
The additional pilot enterprises will receive fully fledged technical support (including coaching of each of the enterprise management and production staff, transfer of know how and technologies) to improve the quality and quantity of their produce, establish sustainable production practices and effective marketing strategy through joining the umbrella brand “LA’AL Textiles”, thereby participating the international and national exhibitions, B2B and other platforms to support collective marketing and export activities.
The produce of each pilot beneficiary will be analysed and tailor made market positioning to be established and implemented jointly with the beneficiaries for accessing new competitive external targeted export markets.
Along with direct support to each pilot enterprise, the capacity building activities will be conducted at various training institutions including those established/strengthened during the Phase I of the UNIDO Project, thereby ensuring sustainability of the impact of the project and facilitating continuity of the influx of qualified talented expertise to the industrial sector of Tajikistan.
Jointly with, and within the national training institution(s), a technical support/training/demonstration/service Centre is to be established/upgraded aiming to serve as a sectorial centre/point providing services related to design, pattern-making, etc., to local manufacturers through supply of equipment and software, appropriate training to centre operators, and creation of a comprehensive library on products. The Training/Service Centre will be providing access to trainings, demonstration facilities, extensive information about new technologies and know how in the targeted industries, thereby allowing conduct of various capacity building and conference activities for wider scope of experts of Tajikistan. For the establishment of a Centre, the Russian-Tajik University will be considered as a partner.
Based on mentioned above, the Phase II of this project will strive to contribute for increased value added and quality competitive produce of textile subsectors of Tajikistan, facilitating their targeted market positioning at the external markets and establishing new business contacts, creation of new jobs for urban and rural population, especially women and youth, thereby ensuring sustainable in- country institutional and technical support for continuous industrial development of Tajik textile industries.
B.2. Expected target beneficiaries and eligibility criteria
Private sector SMEs operating in the traditional textile, carpet weaving and embroidery sector; relevant sectorial associations; technical support and financial institutions dealing with SMEs and industries; export promotion agencies; local experts; local population, especially women in urban and rural areas.
A pilot group of up to 10-12 voluntary SMEs (in addition to the 9 SMEs from the Phase I) in the carpet weaving, embroidery, traditional textile sectors that will benefit from the proposed project are to be selected based, inter alia, on the following enterprise eligibility criteria:
19
- Enterprise/production entity on carpet weaving, embroidery and traditional textiles consisting of minimum 10 employees, providing a letter confirming interest and readiness to spare/absorb the project supported expertise, which includes participation at coaching, training, exhibition and presentation activities providing its human and technical resources and facilities for these needs, as well as for production of joint collections under the “LA’AL Textiles” brand; - Enterprise is financially solvable and meets the criteria of positive financial performance (a positive net worth for the year under review and for the last financial year); - Enterprise is not a subsidiary of a transnational company, a very large national or regional industrial group; - Enterprise’s capacity for employment and exports creation.
UNIDO will continue provision of technical assistance to beneficiary companies from the carpet and embroidery sectors, participated in the Phase I, if companies consider such assistance needed for their future development. Several additional SMEs will be invited to join Phase II of the project from the same sector. Additional sector which is planned to be incorporated is the sector of traditional textiles, which is producing hand weaving and semi manual weaving traditional fabrics such as Atlas, Adras, Bekasab, Ziragi, Alocha on the base of locally produced cotton and silk. The number of the beneficiary SMEs from the traditional textiles sector is up to 12.
B.3. Counterpart organizations
The main counterpart of the proposed project is the Ministry of Industry and New Technologies of the Republic of Tajikistan. The Ministry is responsible for the development of the “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”. The UNIDO established close and fruitful cooperation during the project’s Phase I with the main national counterpart, Ministry of Industry and New Technologies (MINT), On 12 January 2018, “LA’AL Textiles” received an award of the MINT as the Best National Brand for contribution to sustainable industrial development of Tajikistan and to creation of new jobs, as well as facilitating expanding exports of Tajik products. The award was presented at the Final collegium of the Ministry by the Minister of Industry and New Technologies.
Other expected stakeholder organizations include:
Ministry of Labour, Migration and Employment of the Republic of Tajikistan (MLME): responsible for vocational education. Ministry operates the national training centres all over the country, as well the vocational/technical colleges that offer carpet weaving, embroidery and Adras weaving courses. UNIDO cooperated with MLME within Phase I on capacity building components, provided trainings for the instructors and talented students of vocational colleges. MLME Employment Departments in Jomi and surrounding areas also proposed to cooperate as part of the project Phase I and recommended to include in the trainings the unemployed population, especially women, in the region. The respective trainees attended the trainings at the beneficiary training centre “Gulvard”, providing them small stipends/incentives to gain new skills. In the period of 2015 - 2017, over 100 unemployed women attended the trainings offered at “Gulvard” training centres, gaining carpet weaving skills. As a result, successful trainees were further employed at “Gulvard” production site, some started carpet weaving home based.
20 C. The project
C.1. Objective of the project
Global objective
To contribute to the implementation of the National Development Strategy of the Republic of Tajikistan for the Period to 2030 and “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014- 2020”, and to take advantage of opportunities afforded by prospects of regional integration through strengthening productivity, export and employment generation capacities of the national carpet weaving, embroidery and traditional textile sectors.
Immediate objective
To improve productivity and competitiveness of Tajik enterprises operating in the carpet weaving, embroidery and traditional textile sectors through the identification of regional and international market opportunities, enterprise upgrading and technological modernization, introduction of innovative marketing tools, as well as capacity building of national experts and business support institutions for the long term sustainability of the project.
C.2. The UNIDO approach
Over the years, UNIDO has gained significant experience in the development and implementation of technical assistance programmes addressing such issues as the development of the private sector manufacturing enterprises, including SMEs and strengthening their support infrastructure. This experience includes enhancing productivity and international competitiveness of local manufacturers along with ensuring the upscaling and sustainability of these activities through building up an appropriate infrastructure of technical expertise and institutional capacities for technical and business support to local producers.
The UNIDO Industrial Upgrading Methodology proposed for this project encompasses a wide range of competitiveness and productivity improving tools provided to enterprises and their networks in the context of regional and international trade and economic integration. Industrial upgrading assumes undertaking actions that intend to improve financial situation of companies, their productive performance and material and energy efficiency, ability to produce according to international standards and technical requirements, and to facilitate their integration into the regional and international markets. Thus the methodology allows existing manufacturing SMEs and their networks to build interlinked capacities necessary to reliably produce larger volumes of manufactured goods in compliance with the requirements of regional and international markets.
Along with the direct support in implementing the pilot upgrading activities in the traditional textile, carpet weaving and embroidery sectors, the UNIDO intervention will strengthen technical capacities of local counterparts and private sector support organizations in delivering the above services on a sustainable basis to other priority industrial sectors of the national strategy and to the wider business community of Tajikistan. In particular, the project will strengthen technical and human capacities of an existing institution(s), aiming to upgrade the quality and quantity of services delivered by this institution to the public and private sector enterprises operating in the carpet weaving, embroidery and traditional textile sectors. Thus, for the purposes of implementation of this activity, UNIDO, jointly with an existing institution, will facilitate establishment and/or upgrading of an available Training/Service Centre. Such a Centre is aimed to serve as a sectorial centre/point providing services related to design, pattern-making, etc., to local manufacturers through supply of equipment and software, appropriate training to centre operators, and creation of a comprehensive library on products. This Centre will also serve the needs of the industry in sustainable manner and provide a pool of technical expertise and know how, transfer the technologies and demonstrate the internationally available solutions and methodologies in the focus industry to the wider scope of interested public and private sector entities in Tajikistan.
21 Figure 13. Three Levels of the UNIDO Industrial Upgrading Approach
Apart from the technical intervention, the UNIDO project will also strive for more active participation and involvement of vulnerable groups of population, especially women and youth in the supported productive activities. This will be done, inter alia, through the conduct of trainings on in the area of industrial carpet weaving skills development, new methods and techniques in carpet weaving, design and colouring, use of carpet weaving equipment, as well as trainings on the establishment of small businesses and activities to raise awareness of gender issues among local population. By doing so, the UNIDO initiative will expand its contribution to Tajikistan’s efforts for poverty eradication, income and jobs generation, and empowering women and youth’s socio-economic potential and role for the national economy.
C.3. RBM code and thematic area code
RBM code: HC2 Advancing Economic Competitiveness Thematic area code: HC22 Competitive Trade Capacities and Corporate Responsibility
C.4. Expected outcomes
Beneficiary carpet weaving, embroidery and traditional textile enterprises of Tajikistan enhance industrial efficiency, expand production, improve quality and gain access to markets with the support of the reinforced national technical expertise.
The UNIDO project is expected to contribute to the development of traditional textile, carpet weaving, embroidery, traditional textile sectors and to improve Tajikistan’s international position in manufacturing value addition, manufactured exports and global competitiveness. The project will also contribute to increased job creation capacity and development of sector specific skills, while also will seek to decrease the gender wage gap and enhance the position of women in the beneficiary enterprises. It is expected that the practices established as a result of the project implementation in the beneficiary enterprises will also stimulate adoption of similar activities in other enterprises in the manufacturing sector.
As such, the project will contribute to the implementation of the National Development Strategy of the Republic of Tajikistan for the Period to 2030, as well as of the “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”. This will be achieved through supporting the private sector development, job creation, upgrading of existing industry and fostering inclusive and sustainable industrial development with equal opportunities for all.
22 C.5. Outputs and activities
1. Enterprise diagnosis and industrial modernization for the selected pilot carpet weaving and embroidery and traditional textile enterprises in Tajikistan, and strategic market positioning for selected niches in the carpet/embroidery industries/value chains in the context of regional and international export markets. 1.1 Identify and select an additional group of 10-12 selected carpet weaving, embroidery and traditional textile manufacturers/enterprises to participate in the programme and responding to the approved eligibility criteria 1.2 Conduct diagnosis study of each additional beneficiary enterprise, including technical assessment of present technical/production situation and operated technologies to collect, analyse and evaluate marketing data, gender disaggregated employment data, position and wage levels, and develop modernization plans 1.3 Carry out strategic market positioning for selected niches in the carpet weaving, embroidery, traditional textile industries in the context of regional and international export markets (domestic and export sales, employment, current markets and distribution channels, products range, etc.), including analysis of supply-side constraints, main direct competitors, benchmarking of main competitiveness factors at the international level, market survey on reference markets 1.4 Extend coaching of the nine project beneficiary enterprises (as per Phase I) and coach additional selected (up to 12) pilot enterprises in implementing respective modernization plans and marketing implementation strategies based on networking approach and findings of the strategic market positioning studies 1.5 Conduct technological modernization and transfer know how to the pilot beneficiary enterprises in carpet, traditional textile and embroidery industries to complement human capacity building activities aiming to ensure sustainability of acquired skills and knowledge13 1.6 Support collective marketing and export activities, including participation at the national, regional and international fairs/exhibitions, and B2B meetings with potential establishment of export consortia and facilitate communication of project results.
2. Human and technical capacities of national counterpart institutions and of national expertise (experts, trainers, engineers and technicians) strengthened on applied market positioning, industrial upgrading and export promotion approaches and methodologies, while inter-institutional networking and business partnerships are built for promotion of the national carpet weaving, embroidery and traditional textile products. 2.1 Identify and assess capacities of the national expertise and existing industry support institutions, industry-related testing centres and/or vocational training institutions in supporting national carpet weaving, embroidery and traditional textile operators 2.2 Provide training sessions to the identified national expertise on strategic diagnosis and modernization techniques, evaluation of modernization plans, applied market positioning and marketing techniques, export promotion approaches, business communication, intellectual property and intellectual rights (including copyright), and provide related methodological tools adapted to the Tajik context for continuous use 2.3 Strengthen the existing institution(s) for carpet weaving, embroidery and traditional textile sectors through establishment and/or upgrading of existing Training/Service Centre to serve as a sectorial centres/points providing services related to design, patterns, etc., to local manufacturers through supply of equipment and software, appropriate training to centre operators, and creation of a comprehensive library on products14
13 Trainings and know-how transfer activities will be designed in such a way that the women, especially in rural areas, will face no obstacles, e.g. in terms of time allocation and transport, in accessing these trainings 14 The project will strengthen technical and human capacities of an existing institution(s), aiming to upgrade the quality and quantity of services delivered by this institution to the public and private sector enterprises operating in the carpet weaving, embroidery and traditional textile sectors. Such upgraded Centre is aimed to serve as a sectorial centre/point providing services
23 2.4 Conduct expert meetings/technical workshops for selected experts and trainers on design process methodology based on concept creation and its development, methods of collecting information and new product development, and other relevant topics based on the sector needs 2.5 Explore scope for upscaling the pilot initiatives inter alia within the national policy framework, national, regional and international support (including financial) mechanisms, and provide recommendations on the quality related policies. 2.6 Produce a report analysing the technical assistance experience and impact of it for the beneficiary country aiming to generate a replicable project model for other industries and beneficiaries in the region and internationally.
The Logical Framework of the project is presented in Annex 1. The above outputs/activities will be implemented by the project technical team composed of international and national experts.
C.6. Communication and visibility
In order to promote and disseminate the achievements and successes of the project, advocacy and communication activities will be undertaken during the project implementation. UNIDO will continue the communication activities for the project in order to facilitate the flow of information about project activities, results and achievements among project partners, including Donor(s), national and local counterparts and beneficiaries. Secondly, the communication strategy will make provision for raising awareness about the initiative and ensuring visibility of the project and its achievements among a wider audience. The promotional activities will include dissemination of information on the project implementation through the UNIDO website. The communication and visibility strategy might include:
• Press releases • Press conferences • Press visits • Leaflets, brochures and newsletters • Web sites (containing cross-links to the relevant UNIDO/ Donor(s) web-pages) • Display panels • Commemorative plaques • Banners • Stickers/ labels on vehicles, supplies and equipment • Promotional items • Photographs • Audiovisual productions • Public events and visits.
In addition, the project will design marketing strategies that will include promotion of the industrial activities supported by the UNIDO project. The latter will be developed to promote on the one hand the new and value added products, and on the other, to promote the project beneficiary enterprises/institutions and their services. It is foreseen that the advocacy activities will select the most appropriate communication and marketing channels for each of the above mentioned activities, designing the production of promotional materials (i.e. promotional videos, brochures and websites) and broad media coverage in Tajikistan and in selected countries in the region and beyond, including TV channels, blogs and social media.
All materials (publications in press, the beneficiaries of the project, all related publicity materials, official notices, reports) produced in the course of the project will include reference on the financial support from the Donor(s) and will carry national flags/coat of arms of the Donor(s) and recipient country (Tajikistan), and the logo of the executing agency (UNIDO).
related to design, pattern-making, etc., to local manufacturers through supply of equipment and software, appropriate training to centre operators, and creation of a comprehensive library on products.
24 The concrete usage of the above visuals will be adapted to the specific circumstances of the project and the nature of the items to be produced. The visuals of Donor(s) and recipient will be included on an equal footing. At the same time, the size and prominence of the acknowledgement and visual identity will be clearly visible in a manner that will not create any confusion regarding the identification of the project as UNIDO project. The promotion materials will aim to ensure equal representation and the use of gender inclusive language.
C.7. Gender mainstreaming strategy
The project will promote initiatives that contribute to continuity and enhancement of gender equality, in particular to promote the inclusion of women in productive activities. The project aims to ensure that women and men equally benefit from capacity building and other activities of the project, equal participation of women and men in both project management arrangements and as beneficiaries, partners and key stakeholders of the project, as well as ensuring coordination among key development actors to further enhance gender mainstreaming and promote gender equality and empowerment of women. The project activities will cover respectively a gender analysis with respective inclusion of gender indicators (incl. gender disaggregated employment data, gender wage gap, etc.) in the M&E tools to be developed for this project. Among other, the project also will seek to decrease the gender wage gap and enhance the position of women in the beneficiary enterprises. Adequate financial resources will be reserved for gender-related activities.
C.8. Sustainability of the project
As the capacity building at the institutional and enterprise level is crucial to ensure the project’s sustainability, the project intends to facilitate continuation of benefits from a development intervention after major development assistance has been completed. Expertise and skills gained during the UNIDO project will enable the project counterparts and beneficiaries to replicate these experiences and practices also in other industrial sectors of Tajikistan, not covered within this intervention.
The lessons learnt from the industrial upgrading programmes carried out by UNIDO in different countries and regions demonstrated that upon successful completion of pilot phase, the upgrading programme implementation is extended among others interventions through the establishment of national financial mechanisms for funding of the SMEs during the upgrading programme’s roll out phase (Phase II). The objective of these funding mechanisms is to ensure the sustainability of the IUM Programmes. The financing of these mechanisms could be provided through governmental allowances, transfers from national development funds, as well as through other mechanisms, such as networking with potential private sector investors and investment funds, setting up of a funding scheme, establishment of a credit line and guarantee scheme, direct budget support. Thus, capitalizing on the UNIDO expertise and extensive experience in implementation of upgrading and modernization projects worldwide with respective facilitated establishment of sustainable mechanisms in close collaboration with national counterparts, as well as the effective mechanisms and collaboration established in Tajikistan as part of the UNIDO’s Phase I project implementation, the project will further explore effective approach for ensuring adequate technical and human capacities to facilitate the respective access to technologies and funding mechanisms for implementation of upgrading plans. Further sustainability of the achieved results and established practices will be explored and facilitated as part of the UNIDO’s Phase II project implementation through the upscaling of results of the Phase I and direct assistance and collaboration with the main national counterparts to ensure the enhanced absorption of gained skills and establishment of national framework for sustainability.
25 C.6. Timeline of the activities
Year 1 Year 2 Year 3 Activities 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1.1 Identify and select an additional group of 10-12 selected carpet weaving, embroidery, and traditional textile manufacturers/enterprises to participate in the programme and responding to the approved eligibility criteria 1.2 Conduct diagnosis study of each additional beneficiary enterprise including technical assessment of present technical/production situation and operated technologies to collect, analyse and evaluate marketing data, gender disaggregated employment data, position and wage levels, and develop modernization plans 1.3 Carry out strategic market positioning for selected niches in the carpet weaving, embroidery, traditional textile industries in the context of regional and international export markets (domestic and export sales, employment, current markets and distribution channels, products range, etc.), including analysis of supply-side constraints, main direct competitors, benchmarking of main competitiveness factors at the international level, market survey on reference markets 1.4 Extend coaching of the nine project beneficiary enterprises (as per Phase I) and coach additional selected (up to 12) pilot enterprises in implementing respective modernization plans and marketing implement-tation strategies based on networking approach and findings of the strategic market positioning studies 1.5 Conduct technological modernization and transfer know how to the pilot beneficiary enterprises in carpet, traditional textile and embroidery industries to complement human capacity building activities aiming to ensure sustainability of acquired skills and knowledge 1.6 Support collective marketing and export activities, including participation at the national, regional and international fairs/exhibitions, and B2B meetings with potential establishment of export consortia and facilitate communication of project results 2.1 Identify and assess capacities of the national expertise and existing industry support institutions, industry-related testing centres and/or vocational training institutions in supporting national carpet weaving, embroidery and traditional textile operators 2.2 Provide training sessions to the identified national expertise on strategic diagnosis and modernization techniques, evaluation of modernization plans, applied market positioning and marketing techniques, and export promotion approaches, business communication, intellectual property and intellectual rights (including copyright) and methodologies), and provide related methodological tools adapted to the Tajik context for continuous use 2.3 Strengthen the existing institution(s) for carpet weaving, embroidery and traditional textile sectors through establishment and/or upgrading of existing Training/Service Centre to serve as a sectorial centres/points providing services related to design, patterns, etc., to local manufacturers through supply of equipment and software, appropriate training to centre operators, and creation of a comprehensive library on products 2.4 Conduct expert meetings/technical workshops for selected experts and trainers on design process methodology based on concept creation and its development, methods of collecting information and new product development, and other relevant topics based on the sector needs 2.5 Explore scope for upscaling the pilot initiatives inter alia within the national policy framework, national, regional and international support (including financial) mechanisms, and provide recommendations on the quality related policies. 2.6 Produce a report analysing the technical assistance experience and impact of it for the beneficiary country aiming to generate a replicable project model for other industries and beneficiaries in the region and internationally.
26 C.7. Country level coherence
The project is in line with the Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”, and other related national programmes. The proposed project is in line with UNIDO’s commitments within the United Nations Development Assistance Framework (UNDAF) for the Republic of Tajikistan 2015-2020 that aims at supporting Tajikistan’s goals stated in the National Development Strategy (NDS) and meeting the Sustainable Development Goals (SDGs).
Searching for synergies with sectorial strategy and considered as a complementary tool for implementing national policy for export-oriented industries, the project will seek eventually to incorporate the ISID momentum into the national policies and ensure sustainability of the results achieved by the project implementation.
C.8. Risks
Potential risks to achieving the project objectives relate to both internal and external political, economic and geopolitical factors that may partly divert the attention of policy- and decision-makers from the private sector development issues. These risks are, however, unlikely due to the strong commitment and interest shown by the main national counterparts to initiate this project inter alia as the means to contribute to the implementation of the country’s “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020” and the National Development Strategy of the Republic of Tajikistan for the Period to 2030.
Political changes, staff turnover and slowdown of economic growth in the beneficiary country and/or in the target priority markets may also affect the implementation of the project. To mitigate the staff turnover risk, it is expected that the major national counterparts will ensure job tenure of civil servants involved in the implementation of the current project.
Other operational risks for the accomplishment of expected results may include: Needed funds for the implementation of modernization plans/export promotion activities, etc. are not available, or not sufficient. In such case expected outputs will not be fully achieved or will be subject to delays; An insufficient number of local companies can be persuaded to opt into the current project or that participating companies drop out for reasons beyond the project's control; Individual companies do not actively collaborate with the project throughout its different stages.
In terms of the sustainability, due to limited duration of the technical support provided by the project and limited funding, there is potential risk of insufficient impact of the technical assistance to the performance of the pilot beneficiary enterprises due to the lack of absorption capacities and transfer of transferred knowledge. The extension of the project to its Phase II is aimed to remedy this risk through expanded scale of technical support and facilitation of replication and enhancement of project results to extended number of beneficiaries.
The project is closely coordinated with the Ministry of Industry and New Technologies of the Republic of Tajikistan, and strongly correlated with the “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”. This will ensure strong ownership by the national counterparts and will minimize the above mentioned possible operational risks.
D. Inputs
D.1. Counterpart inputs
It is envisaged to receive in-kind support from the national counterparts and main stakeholders in forms of dedicated staff, project office and venues for training and expert meeting activities. The Ministry of Industry and New Technologies of Tajikistan will allocate an office at the premises of the Ministry for the project staff, including the provision of facilities such as power supply, telephone, other communication services, and other related facilities to ensure efficient work of the project.
27 The Government and the participating institutions and agencies will make available to UNIDO and international as well as national staff, who is recruited by UNIDO all relevant studies, documents, information and data that are required for the successful implementation of the programme.
D.2. UNIDO inputs
The UNIDO project manager will monitor the project implementation from the headquarters and through monitoring mission to the country. UNIDO will also recruit an international expert (team leader), and will recruit a team of highly qualified short-term international and national experts.
The final number of experts (especially national) required for efficient and results-oriented implementation of the project depends on the number of enterprises selected for the modernization programme. If the beneficiary enterprises are homogeneous in terms of gaps identified and recommended group solutions, one expert can work with 2 and more companies.
E. Budget
E.1. Project breakdown by budget lines, outputs and year of implementation
BL Description Year 1 Year 2 Year 3 Total
Outcome: Output 1: 11 International experts 45,000 45,000 40,000 130,000 15 Project travel 10,000 10,000 5,000 25,000 16 Staff travel 5,000 5,000 5,000 15,000 17 National experts & admin staff 45,000 45,000 45,000 135,000 21 Subcontracts 57,700 55,000 45,000 157,700 30 In-service training, conferences, workshops 25,000 25,000 25,000 75,000 45 Equipment 10,000 10,000 10,000 30,000 51 Miscellaneous 4,300 4,300 4,300 12,900 Sub-Total Output 1 202,000 199,300 179,300 580,600 Output 2: 11 International experts 30,000 30,000 25,000 85,000 15 Project travel 5,000 5,000 5,000 15,000 16 Staff travel 5,000 5,000 5,000 15,000 17 National experts & admin staff 40,000 40,000 40,000 120,000 21 Subcontracts 25,000 25,000 15,000 65,000 30 In-service training, conferences, workshops 10,000 10,000 10,000 30,000 45 Equipment 40,000 40,000 40,000 120,000 51 Miscellaneous 4,000 4,000 3,347 11,347 Sub-Total Output 2 159,000 159,000 143,347 461,347 Independent mid-term and terminal evaluation 11 International evaluator 10,000 10,000 15 Project staff travel 2,000 2,000 17 National evaluator(s) 3,000 3,000 51 Miscellaneous 5,000 5,000 Sub-Total Evaluation - - 20,000 20,000 TOTAL 361,000 358,300 342,647 1,061,947 Programme Support Cost (13%) 46,930 46,579 44,544 138,053 GRAND TOTAL 407,930 404,879 387,191 1,200,000
28 F. Monitoring, reporting and evaluation
Management: A project Working Group will advise the project implementation team, including the Intentional Expert/Team Leader, and the National Technical Administrator/Coordinator on the overall coordination and management of the project implementation. It will, inter alia, provide overall monitoring and ensure the follow-up of the project implementation activities, endorse enterprise and institution selection criteria, facilitate and promote synergies with national programmes and those of international development partners, and carry out respective project promotion and resource mobilization activities. The Working Group shall also serve as an effective platform for ensuring the incorporation of ISID into national policies and development goals. The Working Group will also serve as a public-private dialogue platform enabling enhanced cooperation and contributing to increased role and involvement of private sector in the country’s endeavours towards inclusive and sustainable industrial development. A representative of the project Donor will be part of the project Working Group.
The overall technical management and coordination of the project implementation will be ensured by a team of project experts composed of the International Expert/Team Leader, international experts and national staff headed by the National Project Administrator/Coordinator, and under the technical guidance and supervision from the UNIDO Project Manager (PTC/TII/BCI, Headquarters). International expert will be the team leader of project experts, work in close collaboration with the key national stakeholders, report to UNIDO and to the project Working Group.
Monitoring: Monitoring activities will be carried out on the basis of the periodic reports prepared by the National Project Administrator/Coordinator, the reports of the international experts, and based on the evidence collected during the visits carried out by the UNIDO Project Manager. The monitoring will be carried out taking into account the indicators listed in the Logical Framework Analysis (Annex 1).
A detailed baseline will be developed following the inception of the project implementation. In addition to monitoring the quantitative results, the national experts will prepare a short qualitative Project Progress Report every year using the standard UNIDO template, which will be used as input for reporting to the Donor(s).
The UNIDO Project Manager will monitor the progress of the project. The project will be subject of a tripartite review (by the Donor(s) and UNIDO) at the end of the project and a final report will be prepared.
Reporting: The National Project Administrator/Coordinator will present a report to UNIDO and the Working Group every three months on the activities realized during the implementation of the project work plan. The report will also cover the benefits and impacts achieved from the implementation of these activities. In addition, the report will include evidence to demonstrate the progress made in the achievement of the indicators enlisted in the Logical Framework Analysis. The Project Manager will produce the six-monthly narrative and annual Project progress reports. At the end of the Project implementation a final project report will be produced.
Evaluation: The UNIDO Project Manager will review the baseline and follow-up data and suggest revisions to be taken into account by the Working Group. At the end of the project, the Working Group will meet with representatives of the target beneficiaries to review the project's overall impact and prepare an evaluation report. This should be circulated sufficiently in advance to allow technical clearance by UNIDO and be followed by a terminal review meeting involving the national counterpart, the Donor(s) and UNIDO upon completion of all other project activities.
The project will be subject to a midterm review and an independent terminal evaluation in line with UNIDO Evaluation Policy.
G. Prior obligations and prerequisites
N/A
29 H. Legal context
The Government of the Republic of Tajikistan agrees to apply to the present project, mutatis mutandis, the provisions of the Standard Basic Assistance Agreement between the United Nations Development Programme and the Government, signed and entered into force on 1 October 1993.
30 ANNEX 1. Logical Framework Analysis
INTERVENTION LOGIC OBJECTIVELY VERIFIABLE INDICATORS SOURCES OF VERIFICATION ASSUMPTIONS
Development goal/impact
To improve productivity and competitiveness of Tajik enterprises Domestic and regional market share of Tajik carpet Project Reports operating in the carpet weaving, embroidery and traditional weaving, traditional textile and embroidery products textile sectors through the identification of regional and increased Statistical reports international market opportunities, enterprise upgrading and technological modernization, introduction of innovative marketing tools, as well as capacity building of national experts and business support institutions for the long term sustainability of the project. Outcomes/immediate objectives Beneficiary carpet weaving, embroidery and traditional textile Improved economic performance of beneficiary carpet Project reports Political situation in the country is enterprises of Tajikistan enhance industrial efficiency, expand weaving, traditional textile and embroidery enterprises stable. production, improve quality and gain access to markets with the Market statistics support of the reinforced national technical expertise. Project funding is timely and Publications sufficient OUTPUTS/RESULTS
1. Enterprise diagnosis and industrial modernization for the Strategic market positioning prepared incorporating Strategic positioning report Information on local carpet and selected pilot carpet weaving and embroidery and traditional the identification of principal competitors and suppliers, textile industry and regional markets textile enterprises in Tajikistan, and strategic market positioning as well as the at least three market niches in the Commercial performance reports available for selected niches in the carpet/embroidery industries/value carpet weaving, embroidery and traditional textile Enterprise annual reports chains in the context of regional and international export industries identified SMEs are willing to cooperate markets. Product margins, growth rates, relation between Project reports enterprise’s unit selling price and sales terms with those of competitor enterprises Surveys Enterprise performance indicators e.g. evolution in factor costs, turnover, value added, percent exported, employment indicators, etc. Number and quality of export activities facilitated Number of enterprise employees trained (female and male)
1.1 Identify and select an additional group of 10-12 selected carpet weaving, embroidery, traditional textile manufacturers/enterprises to participate in the programme and responding to the approved eligibility criteria 1.2 Conduct diagnosis study of each additional beneficiary enterprise including technical assessment of present technical/production situation and operated technologies to collect, analyse and evaluate marketing data, gender disaggregated employment data, position and wage levels, and develop modernization plans 1.3 Carry out strategic market positioning for selected niches in the carpet weaving, embroidery, traditional textile industries in the context of regional and international export markets (domestic and export sales, employment, current markets and distribution channels, products range, etc.), including analysis of supply-side constraints, main direct competitors, benchmarking of main competitiveness factors at the international level, market survey on reference markets
31 INTERVENTION LOGIC OBJECTIVELY VERIFIABLE INDICATORS SOURCES OF VERIFICATION ASSUMPTIONS
1.4 Extend coaching of the nine project beneficiary enterprises (as per Phase I) and coach additional selected (up to 12) pilot enterprises in implementing respective modernization plans and marketing implementation strategies based on networking approach and findings of the strategic market positioning studies 1.5 Conduct technological modernization and transfer know how to the pilot beneficiary enterprises in carpet, traditional textile and embroidery industries to complement human capacity building activities aiming to ensure sustainability of acquired skills and knowledge 1.6 Support collective marketing and export activities, including participation at the national, regional and international fairs/exhibitions, and B2B meetings with potential establishment of export consortia and facilitate communication of project results.
2. Human and technical capacities of national counterpart Number of trained experts/trainers (female and male) Project reports To be determined according to institutions and of national expertise (experts, trainers, engineers complete background information and technicians) strengthened on applied market positioning, Number of fully-fledged partnerships between local International and national expert gathered on the industry support industrial upgrading and export promotion approaches and and foreign enterprises established reports market in Tajikistan methodologies, while inter-institutional networking and business Number of technical support institution/service/training Training reports partnerships are built for promotion of the national carpet centre strengthened/established weaving, embroidery and traditional textile products. Media, press releases Capacity building events organized Partnership agreements
2.1 Identify and assess capacities of the national expertise and existing industry support institutions, industry-related testing centres and/or vocational training institutions in supporting national carpet weaving, embroidery and traditional textile operators 2.2 Provide training sessions to the identified national expertise on strategic diagnosis and modernization techniques, evaluation of modernization plans, applied market positioning and marketing techniques, and export promotion approaches, business communication, intellectual property and intellectual rights (including copyright) and provide related methodological tools adapted to the Tajik context for continuous use 2.3 Strengthen the existing institution(s) for carpet weaving, embroidery and traditional textile sectors through establishment and/or upgrading of existing Training/Service Centre to serve as a sectorial centres/points providing services related to design, patterns, etc., to local manufacturers through supply of equipment and software, appropriate training to centre operators, and creation of a comprehensive library on products 2.4 Conduct expert meetings/technical workshops for selected experts and trainers on design process methodology based on concept to creation and its development, methods of collecting information and new product development, and other relevant topics based on the sector needs 2.5 Explore scope for upscaling the pilot initiatives inter alia within the national policy framework, national, regional and international support (including financial) mechanisms, and provide recommendations on the quality related policies. 2.6 Produce a report analysing the technical assistance experience and impact of it for the beneficiary country aiming to generate a replicable project model for other industries and beneficiaries in the region and internationally.
32 ANNEX 2. Key achievements of the Project’s Phase I and way forward
H.E. Mr. Shavkat Bobozoda, Minister of Industry and New Technologies of the Republic of Tajikistan, in the official letter to the Director General dated 11 December 2014, has expressed the request for UNIDO’s technical assistance in the implementation of the “Programme on development of carpet weaving in the Republic of Tajikistan for the period 2014-2020”.
Further, under the framework of the regional cooperation and South-South Cooperation, and taking into account the strategic inclusive and sustainable development goals of Tajikistan, the governments of the People’s Republic of China and the Russian Federation agreed to support the Government of Tajikistan in the implementation of the overarching development goals of the National Development Strategy of Tajikistan and the sectoral development objectives as identified in the Programme on development of carpet weaving in Tajikistan. The People’s Republic of China earmarked funding for the project from the voluntary contributions of the Ministry of Commerce to UNIDO’s Industrial Development Fund (IDF) (USD 500,000 from 2013 and USD 100,000 from 2014). The Russian Federation has confirmed interest to co-finance the project from its voluntary contributions to IDF and requested to develop a fully-fledged project document. The provided amount of co-funding is USD 600,000 from the Russian contribution to IDF.
The project’s pilot phase aimed to increase the productivity and competitiveness of enterprises in Tajikistan, both in the carpet weaving and the embroidering sectors. It did so by identifying regional and international export markets, improving the technological cycle and industrial modernization, introducing innovative marketing tools, and strengthening national expertise to provide required technical support and services to local enterprises on a sustainable basis.
Within the framework of this pilot phase, a full enterprise diagnosis of nine pilot beneficiary enterprises in carpet weaving and embroidery sectors was carried out. These pilot enterprises were struggling to make sufficient sales to maintain production and pay salaries to their staff, most of whom were women. Through UNIDO project funded by the Russian Federation and the People's Republic of China, these pilot beneficiary companies went through full enterprise diagnosis studies resulting in the development and joint implementation of industrial modernization plans to help improve the technological cycle, introduce innovative marketing tools, and develop new unique competitive products not only for local markets, but also targeting potential export markets based on the market positioning conducted.
Over 40 capacity building activities were conducted between October 2015-December 2017, covering up to 535 participants (out of which 404 or 75% are women) in several regions of Tajikistan. The training activities for experts covering various topics throughout the production and market access cycle, including product design, personnel management, financial management of enterprises, and marketing of finished products. As such, more than 500 national experts receiving training and hands on coaching over the duration of the project, majority of whom are young women from lower income population, as well as Afghan refugees, and other marginalized groups. As a result of the UNIDO project support over the duration of 2 years, about 93 new jobs were created at the beneficiary enterprises and technical support institutions.
The capacity building activities were accompanied with the procurement of equipment for the project beneficiary technical support institutions and pilot beneficiary manufacturing enterprises, including carpet and home textile production equipment (including the shearing cylinder and accessories to complement the carpet manufacturing equipment at beneficiary major carpet producer in Tajikistan, cutting machines for carpet production, embroidery, sewing and over stitching machines for home textile production), professional software for design of carpets and home textiles, IT equipment (including computers, printers, plotter and related software), furniture and related interior items for exhibition and training facilities of the project beneficiary technical support institutions.
Based on the findings of the fully fledged diagnostic reports for each pilot project beneficiary enterprise, respective tailor made modernization plans were developed and implemented. Pilot beneficiary enterprises received coaching on business negotiations, and, respectively, industrial links
33 were established with various potential buyers, including international retail and hotel chains, local shops and supermarkets, on production of traditional embroidery, textile decoration and accessories.
With the UNIDO technical support, project pilot beneficiaries created three new collections under the joint brand “LA’AL Textiles”, including two home textile and accessories (hand and machine made) collections, as well as the machine made and handmade carpet collection. “LA’AL Textiles” was formed in 2015 as part of the project’s activities aimed to improve market access of Tajik carpet and embroidery textile good producers at the national and regional markets.
“LA’AL Textiles” collections were presented at various exhibitions and fairs in Tajikistan and abroad, including International Trade Fair for Home Textiles, Floor Coverings and Interior Furnishings “Heimtextil Russia”; “Home Deco Kazakhstan-2017” in Almaty, Kazakhstan; as part of the Tajik-Uzbek Business Forum held in Tashkent, Uzbekistan; and many other national and international exhibitions and fairs.
With the support of UNIDO project, the beneficiaries have been conducting business negotiations with various potential buyers of carpet and home textile products of “LA’AL Textiles”, including international retail and hotel chains, local shops and supermarkets. As a result of the negotiations, contracts were signed for production of carpets, home textile and embroidery products, textile decoration and accessories with the international hotel chain “Serena”, International Hypermarket Chain “Auchan”, home furniture shop “Khonai Man” of the Scandinavian brand “JYSK”, local home textile shop “Yovar” and other local partners, including restaurants, diplomatic missions, retail shops and others.
It’s worth mentioning that on 13 December 2017, the brand “LA’AL Textiles”, joining pilot project beneficiary enterprises producing carpets and home textiles, received the Award “Peak of fame” at the national competition “Brand of the year 2017”. In January 2018, Ministry of Industry and New Technologies of Tajikistan named the brand “LA’AL Textiles” as the Best National Brand for contribution to sustainable industrial development of Tajikistan and to creation of new jobs, as well as facilitating expanding exports of Tajik products. These awards confirmed the success and achievements of the UNIDO technical cooperation assistance to the carpet weaving and embroidery industries and national recognition as a national brand with high impact on the employment generation and increased international competitiveness of Tajik produce.
Ministry of the Industry and New Technologies of Tajikistan indicated strong support and appreciation of the project results and achievements in the short time frame, requested the UNIDO to extend the project aiming to ensure sustainability of achieved results and further facilitate industrial development of carpet weaving, embroidery and textile sectors of Tajikistan (as per the letter of the Ministry of Industry and New Technologies of Tajikistan dated 5 September 2017).
Based on mentioned above brief overview of this project’s results and achievements, as well as strong support and indication of interest for continuation of this project at its next phase by the Government of Tajikistan, and preliminary funding approval expressed by the Government of the Russian Federation, the project is expected to launch its Phase II to provide technical assistance to extended number of pilot beneficiaries in carpet weaving/traditional textile/embroidery sectors in expanded geographical coverage, thereby also focusing on enhanced support to technical support institutions to ensure long term sustainability of the project impact.
UNIDO in cooperation with development partners will seek to contribute to the inclusive and sustainable industrial development and regional integration of the Tajik economy via the proposed project on “Industrial modernization and competitiveness improvement of carpet weaving, embroidery and traditional textile sectors in Tajikistan”. The proposed project is expected to address productivity and competitiveness challenges faced by the sector as well as facilitate more inclusive and gender- equitable employment opportunities for the local population.
34