In Uzbekistan, 19 strategic enterprises sill have to cut their manufacturing costs by 10-20%, the president Shavkat Mirziyoyev stated today at a government meeting.
Last year, the National Investment Fund was set up in the country, and its management was transferred to the international company Franklin Templeton.
Over the course of the year, the company analyzed the performance of strategic enterprises. According to experts, the management of several companies lacks a well-developed corporate culture, while there is significant potential for cost reduction and profit growth.
Shavkat Mirziyoyev indicated that the management of the 19 strategic enterprises must strengthen efforts to improve procurement, logistics, digitalization, and energy efficiency. Through these steps, manufacturing costs should be reduced by 10-20%.
"The cost-saving plan should not be achieved through manufacturing cuts or deferral of any expenses, but solely by reducing unit costs," the president emphasized.
Furthermore, strategic enterprises are planned to be connected to the Unified Treasury information system. All purchases are planned to be categorized into "red," "yellow," and "green" based on risk analysis to completely eliminate inefficient spending.
By his order of November 19, 2025, the president gave directives to take steps to reduce costs and improve efficiency at state-owned enterprises.
To this end, a number of mandatory reform areas are being implemented. These include quarterly spending reviews and the introduction of the "zero-based budgeting" principle, whereby the budget is re-formulated based on priorities.
Also envisaged are:
- optimization of material and technical costs and joint procurement of similar goods;
- outsourcing of support functions;
- implementation of lean manufacturing;
- process automation and implementation of artificial intelligence technologies;
- transition to International Financial Reporting Standards (IFRS);
- energy audits and improved energy efficiency;
- optimization of the structure and number of personnel;
- strengthening internal controls and compliance.
State-owned companies have been given one month to develop and approve their own cost reduction programs.
A Republican Commission has been set up to coordinate the changes. It will monitor the implementation of steps, assist in the development of optimization programs, identify internal reserves, analyze the debt burden of enterprises, and report quarterly to the Presidential Administration.
Furthermore, the commission must propose reducing the management staff of state-owned companies by up to 10% and set up a system of joint procurement.
State-owned enterprises are ordered to cease providing sponsorship assistance, except in cases stipulated by presidential decisions.
Key performance indicators (KPIs) for management for 2026 must be developed by December 1, 2025. Once approved, shareholder expectations for each enterprise will be determined.
It has been set up that deputy chiefs of enterprises who fail to implement an ERP system or achieve cost reduction targets by July 1, 2026, will be dismissed.
Starting March 1, 2026, the Unified Treasury information system will be implemented at strategic enterprises managed by UzAssets. All income and expenses will be centrally processed through it.
The list of strategic enterprises includes companies in the manufacturing and service sectors, as well as banking, including Navoi Mining and Metallurgical Plant, Almalyk Mining and Metallurgical Plant, Uzmetkombinat, Uzbekneftegaz, Uzbekugol, Khududgaztaminot, UzAuto Motors, Uzkimyosanoat, Navoiazot, Uzbekgidroenergo, Thermal Power Plants, Uztransgaz, and UzGasTrade.
As a reminder, the National Investment Fund's portfolio includes shares in a number of large enterprises in the country (18 in total, later reduced to 15). These include: Navoiazot (25%), Regional Electric Grids (40%), Uzsuvtaminot (25%), Khududgaztaminot (40%), Uzsanoatqurilishbank (SQB, 30%), People's Bank (Xalq Banki, 30%), Uzbekistan Airways (25%), and others.
