1. CENTRAL ASIA AMERICA ENTERPRISE FUND (CAAEF) DIRECTOR RICHARD BERNSTROM AND KANOP COLLECTIVE MANAGER DEMYAN OSACHUK SIGNED A JOINT VENTURE AGREEMENT ON AUGUST 14 TO CREATE "TECHNOTKAN INTERNATIONAL," CAAEF'S FIRST EQUITY INVESTMENT IN UZBEKISTAN. CAAEF PROVIDED USD 2.5 MILLION IN EQUITY FOR EQUIPMENT AND OPERATIONS AND A LOAN OF USD 500,000 FOR WORKING CAPITAL. AMBASSADOR CLARKE DELIVERED BRIEF CONGRATULATORY REMARKS AND SAID THAT THE USG IS PLEASED TO PARTICIPATE IN STRENGTHENING THE PRIVATE SECTOR, THROUGH THE CAAEF AND THROUGH MANY OTHER PROGRAMS THAT SUPPORT PRIVATE FIRMS DIRECTLY OR INDIRECTLY.
2. KANOP COOPERATIVE, ORIGINALLY A STATE ENTERPRISE FOUNDED FIFTY YEARS AGO, HAS BEEN FULLY PRIVATIZED. THE MANAGER SAID IT HAS BEEN OPERATING PROFITABLY FOR SIX YEARS AND HAS A WORKFORCE OF MORE THAN 650. ITS MAIN PRODUCTS ARE BURLAP BAGS AND ROPE WHICH ARE SOLD CIS- WIDE. OSACHUK SAID THAT THE FUNDING RECEIVED FROM CAAEF WILL ALLOW PRODUCTION TO EXPAND AND DIVERSIFY. HE WAS ALSO LOOKING FORWARD TO BEING ABLE TO RAISE THE SALARY OF EMPLOYEES ONCE PROFITS WERE REALIZED. HOWEVER, OSACHUK SAID IT WAS APPALLING THAT LOCAL INSTITUTIONS SUCH AS GKI (PRIVATIZATION COMMITTEE) WERE NOT ABLE TO PROVIDE FUNDING IN ORDER TO KEEP THIS PROFITABLE FACTORY OPERATING. HE SAID THE KANOP LABOR COLLECTIVE HAD AGREED TO THE JOINT VENTURE WITH CAAEF AND PLANS TO DO ITS BEST TO MEET CAAEF'S EXPECTATIONS. OSACHUK PREDICTED THAT THE INTRODUCTION OF NEW EQUIPMENT WILL PROVIDE A PROFIT MARGIN THREE OR FOUR TIMES HIGHER THAN THE CURRENT LEVEL.
3. BERNSTROM SAID THAT CAAEF OWNS THIRTY PERCENT OF THE JOINT VENTURE AND THAT LOAN AGREEMENTS WILL BE SIGNED SOON. ACCORDING TO BERNSTROM, TECHNOTKAN WAS CREATED AS A JOINT VENTURE BECAUSE CAAEF WANTS TO PROTECT ITS INVESTMENT IN NEW COMPANIES FROM WHATEVER LIABILITIES KANOP HAS FROM THE PAST.
4. CAAEF FILLS AN ESSENTIAL NICHE IN UZBEKISTAN'S RAPIDLY DEVELOPING PRIVATE SECTOR. THE FUND'S TASHKENT OFFICE HAS ALREADY IDENTIFIED SEVERAL OTHER POTENTIAL PROJECTS FOR LOANS OR EQUITY FINANCING.