Uzbekistan’s pharmacies are packed with Ukrainian medicines.
In 2020, according to the State Customs Service, 25% of all Ukraine’s pharmaceutical exports ended up there.
According to the State Statistics Service, the same year, Ukrainian drug companies sold $72 million worth of medicine to Uzbekistan, accounting for 16% of the bilateral trade between the countries.
“Ukraine’s pharmaceuticals are highly demanded in our country,” Abdurahmon Mahmudov, first secretary at the Embassy of the Republic of Uzbekistan, told the Kyiv Post. “There is not enough production in Uzbekistan and the market is large.”
Ukrainian pharmaceuticals are more affordable to Uzbeks, whose average monthly salary is only $280 ó $220 less than in Ukraine.
“The quality, if compared with Western countries, might be slightly worse, but the price is good enough,” said Mahmudov. “It is the best choice for our middle class.”
Tashkent Pharma Park
Overall, last year Uzbekistan spent $1.1 billion importing medicines for the nation’s needs, according to the country’s Ministry of Health.
Competing with India, Russia, China, and Belarus, Ukraine is among the top-five largest foreign sellers of pharmaceuticals in Uzbekistan, the most populous post-Soviet country in Central Asia, with 34 million people.
With the country’s population growing by 1 million people per year, the government needs more medicine. Uzbekistan’s pharmaceutical market is a top priority for Ukraine. Half of the exports to ex-Soviet republics of Farmak, Ukraine’s pharmaceutical giant, go to Uzbekistan.
The company currently ranks fifth in the Uzbek market with a share of 2.3%, according to Anton Zubov, marketing & sales director in charge of CIS countries at Farmak. Farmak mainly sells antiviral drugs, diabetes medications and blood thinners in the country.
“Uzbekistan is a key country in the export for our company,” said Zubov.
Uzbekistan massively imports from Ukraine, but it also plans to bring Ukrainian companies to produce drugs on site.
Two years ago, the Uzbek government allocated 80 hectares in the Zangiata district near the capital to set up Tashkent Pharma Park, a state-of-the-art research and production zone to tackle the lack of medical innovation in the country.
The park offers lucrative opportunities for foreign pharmaceutical companies, like free land, access to all utilities, tax breaks and reduced import duties.
Foreign companies producing drugs in the industrial park will also be allowed to participate in public procurement, a right only given to domestic producers so far.
Ukraine’s Farmak wants to produce drugs in Uzbekistan, but the company is still in ìactive negotiations,î Zubov said.
According to Eleonora Miroshnik, head of marketing at Lekhim, one of the two Ukrainian companies that is considering whether to enter the Tashkent Pharma Park, the company successfully established its branch in Uzbekistan in 2015.
And Lekhim already knows the scale of its yearly production in the Tashkent Pharma Park: 165 million ampoules of liquid drugs, 15 million vials to contain medicines, nearly 500 million pills, and 150 million capsule drugs.
“The new pharmaceutical plant will meet all modern high-tech international standards and norms,” the company’s official statement reads.
But Ukrainian producers still weigh pros and cons, according to Mahmudov. They should move quickly to keep up with competitors, he said.
“If Ukrainian companies do not enter, we will cooperate with Indians, Chinese, Belarusians,” he said. “They’ll just lose the market.”
Perfect location
Uzbekistan is the ancient crossroads of trade routes linking Europe and Asia — and at the heart of Central Asia.
Mahmudov said that setting up shop in Uzbekistan will allow Ukrainian companies to solve logistical hurdles created by Russia’s war in 2014. As a result of the Kremlin’s invasion, Ukrainian companies had to increase export prices through the Black Sea, the Caucasus, and the Caspian Sea and pay higher custom prices to deliver their products.
Plus, Uzbekistan may become a new spot for Ukrainian companies to expand into new markets in Central Asia.
“Once set in Uzbekistan, they will be able to sell their product to neighboring countries,” said Mahmudov.
Farmak’s Zubov agreed that building a plant near Tashkent is the best option for keeping its presence on the Uzbek market, where domestic producers are favored.
“Uzbekistan actively defends the interests of its producers,” said Zubov.
