Agribusiness Handbook: Milk / Dairy Products - FAO

of raw, unprocessed milk on the Uzbek liquid milk market is still enormous, at
90% to 95%. Raw milk is fresh milk that farmers or intermediaries sell directly
without any thermal treatment. The bacteriological quality of raw milk is usually
very poor. Processed milk is both imported and produced locally. However, the
appearance of new consumption patterns, at least in urban areas, reveals an
increasing demand for quality products in safer and more hygienic packaging.
The modernization of the Uzbek dairy sector is limited by the low performance
of local dairy farms, which have low productivity and produce milk of poor
quality. The country also suffers from an underdeveloped milk collection
system. Finally, the low purchasing power of most Uzbek consumers limits
the sale prospects of higher-margin dairy products.
The Uzbek government has recently tried to improve the situation. In March
2006, it issued a decree allowing the opening of collection points working with
both agricultural cooperatives and small farms. In 2008, it released 10% of the
land used for cotton cultivation for the production of forage (and vegetables).
Despite the constraints, some large dairy companies are operating. In 1996,
Nestlé took the strategic decision to invest in the Uzbek market. In 2003, a EUR
7.5 million framework guarantee facility was signed between Nestlé Uzbekistan
and the EBRD, with the initial participation of a local bank, Uzjilsberbank. The
project aimed to help Nestlé Uzbekistan increase its access to local currency
borrowing. Nestlé is now the largest player in the Uzbek dairy market. In 2004,
Wimm-Bill-Dann, one of Russia’s largest manufacturers of dairy products,
juices and beverages, took over and modernized the Tashkent-Sut factory,
formerly Uzbekistan’s largest dairy plant. On its Uzbek site, Wimm-Bill-Dann
currently produces pasteurized milk, cream, sour cream and other dairy
products, bearing the Domik v derevne and Veseliy molochnic brands. Wimm-
Bill-Dann’s total investment in the Uzbek dairy sector is estimated at USD 7.3
million.
4.2.8 Tajikistan
In the late 1990s, the conversion of pastures into farmland in Tajikistan was
accompanied by a reduction in fodder crop production. Although livestock
herds declined dramatically after independence, in recent years there have
been some signs of recovery.
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