30 years hand in hand: Djavoni's astonishing trajectory in Tajikistan

In the early 1990s, as the civil war raged in Tajikistan, Carrera put his hand in his pocket to create a Tajik-Italian joint venture. An unusual story of cooperation whose success continues to be visible in 2021.

Novastan reproduces and translates here an article published on December 2, 2021 by our German version.

On October 9, 1992, when a violent civil war was raging in the southern regions of Tajikistan and almost all industrial enterprises in the country were paralyzed, a company was established and registered with the Ministry of Finance in the city of Khoujand, located in the north of the country. Djavoni (“youth” in Tajik) was created on the basis of the joint-stock company Abrechim, itself financed by the Italian jeans manufacturer Carrera, thus becoming the first Tajik-Italian company in the history of the Republic of Tajikistan.

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The local authorities allocated the company about six hectares of land for the construction of a factory. And the founders probably knew that they would get the desired results if they designed production and organization according to new rules and methods and with creative thinking.

A traditional manufacturer

Djavoni's arrival owes everything to the past success of Carrera. In 1965, the three brothers Imerio, Tito and Domenico Tacchella founded their company in the Italian province of Verona. They call it “Carrera”, which in Spanish means “search for success”. From the earliest days, the founders made it their mission to produce the highest quality goods possible, thus meeting the demands of the time.

It is not by chance that the Italian company chose Abrechim. After all, Tajikistan is one of the main producers of raw cotton in Central Asia. Fine-fiber cotton produced in Tajikistan is particularly in high demand on the world market, explains the Tajik media Asia-Plus.

In addition, before the arrival of the Italians, Abrechim was already one of the oldest renowned industrial enterprises in Tajikistan and throughout Central Asia. In the 1970s, more than 6,000 workers worked there, and their products, including yarns and knitwear, were exported to all Soviet republics and abroad. The company employed engineers and technologists with degrees from Moscow, Tashkent, Ivanovo, kyiv and Kharkiv.

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In Soviet times, Abrechim was called the Silk Combine. The company included a vocational school which trained staff below management level. Therefore, the new company had practically no personnel problems. In addition, the relatively cheap labor made it possible to produce goods at low prices. This is how the new factory was built on Djavoni Street in Khujand. The main shareholder was the company itself (with 93%), 7% of the shares being held by the World Bank.

In 1995, Djavoni launched its first products on the market under the “Carrera SPA” brand. In order to improve the completeness of the goods produced and to guarantee their high quality, the company also begins collaboration with other companies such as Ponte Melini or Diadora.

From Tajikistan to the whole world

Today, Djavoni is an active company in Tajikistan, which is engaged in the processing of cotton fibers as well as the production and sale of cotton yarns, fabrics and garments. The products manufactured are of high quality and the diversity of the range makes it possible to compete with well-known brands on the market. "But the main line is jeans - denim and color jeans, which are produced in Tajikistan," Firouz Youssoupov, the company's foreign trade director, told Asia-Plus in December 2018.

According to Firouz Youssoupov, products made in Tajikistan are sold in official Carrera stores as well as multi-brand stores in Europe and America. In Tajikistan, on the other hand, there is only one store in Dushanbe, the capital. “Carrera's primary buyers are people who value the natural, eco-friendly cotton product and its natural treatments. That is why the products sell well in European countries,” continues the foreign trade manager.

“Our factory exports more than 20 million euros worth of jeans to Europe every year,” notes Firouz Youssoupov. “We, producers and entrepreneurs, lack spirit and optimism. Our producers […] could benefit from special programs to protect domestic producers. Of course, tax and customs benefits are needed, which we have in our country. But for reasons of efficiency, we must also introduce special customs duties for the import of foreign products,” he adds to Asia-Plus.

New management methods

One of the key factors for the proper functioning of the company is, according to experts, the application of new management methods. From the start, Djavoni had abandoned the old, stereotypical methods. Managers had then started to use a linear and functional management structure, in which there is no intermediary between them and their subordinates. And the director is appointed to his position by the board of the foundation.

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The characteristic of the company is that the general manager takes care of both financial management and production issues, since he is a specialist in this field. The general manager is surrounded by assistants who are responsible for product quality. Each production site has its own superiors who are accountable to the general manager or their assistants.

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Djavoni has six workshops: spinning, weaving, sewing, dyeing, wet heat treatment and a technical department. In each workshop, the technological process generates waste, but this is reduced to a minimum and partly sold on the local market. The company invests in several cotton farms in the districts of Spitamen, Zafarobod and Mastchoh. After the harvest, they transport the cotton to Khujand with their own vehicles, which saves transport costs.

International promotion

In 2003, the International Finance Corporation (IFC) granted Djavoni a preferential loan of 3 million dollars (2.5 million euros) to support the private sector in emerging countries, as noted by Radio Ozodi, the Tajik branch of the American media Radio Free Europe. The money was to be used to upgrade technological equipment, which could have created 3,500 jobs following the introduction of new production lines, according to IFC estimates. In addition, a rational use of the allocated funds would have allowed the company to generate 15 million dollars (12.7 million euros) per year.

“The Djavoni company works according to European standards, and it is great in Tajikistan – a country which has not been independent for a long time and whose economy has faced many difficulties since the beginning”, had then IFC deputy director Assad Jabr told Radio Ozodi.

But neither the press service of the company, nor the city of Khujand, nor the administration of the province of Soughd wanted to tell Novastan if Djavoni had finally received the promised money and how it had been used.

A stable sales market

Questioned by Novastan, the Tajik Ministry of Industry and New Technologies said that Djavoni employed 756 people as of October 1, 2021. The he company produced 313.4 tons of cotton yarn in the first nine months of 2021. This represents an increase of 18 tons compared to the previous year. In addition, 1.35 million meters of cotton fabric were produced and used for business needs. During this period, textiles and clothing were produced worth 29.58 million somoni (about 2.6 million euros). The annual production capacity of the Djavoni spinning mill amounts to 2,000 tonnes of raw cotton. In 2020, this workshop would have produced 770 tons of cotton yarn.

As reported by the Russian media Sputnik, according to official data, more than 100 such factories are in operation in Tajikistan, producing more than 100,000 tons of cotton fibers. But only about 20,000 tonnes are processed each year in Tajikistan. Among these processing companies, there is in particular SATN, another company that Carrera opened in 2001 in Khujand. Its main profile is the manufacture of textile products such as pants, shorts, shirts and denim jackets. As of October 1, according to data from the Ministry of Industry 2021, SATN employed 600 people.

According to Akmalchon Charipov, a senior official of the Department of Light and Silk Industry of the Ministry of Industry, one of the factors for the smooth running of the company is the stability of the sales market. “If we consider the activities of enterprises and companies from an economic point of view, it depends on the market situation, the economic crisis and other factors that influence the production process. Despite the difficulties encountered during the Covid-19 pandemic, Djavoni was able to produce and deliver 2.7 million medical masks to Italy,” the official told Novastan.

A success story

According to economic observer Negmatoullo Mirsaydov, several new industrial enterprises were established in Tajikistan in the early 1990s, using modern technologies. Djavoni would be one of them. “They had a clear strategy. The foreign partner knew exactly what to invest in, what to produce and where to sell. The secret to Djavoni's longevity and success is that the company was, from the outset, export-oriented. Its main investor, the Italian company Carrera, guaranteed the sale of its products. If Djavoni has been successful for three decades, it is also because its products have withstood fierce competition thanks to the use of the partner's brand, which enjoys great prestige in the specialized trade", explains the expert. in Novastan.

Djavoni Joint Venture is an eloquent example of the practice of fruitful cooperation between economic enterprises from different countries. It could contribute to the emergence of Tajikistan as a country benefiting from an investment-friendly environment.

Furthermore, since Djavoni is profitable, brings high taxes to the public treasury and thus attracts urgently needed foreign capital to the Republic, the authorities are trying to support the company. The latter is, for example, continuously supplied with electricity despite recurring energy shortages. And its production is considered the showcase of the country and it is presented in exhibitions at different levels.

Aziz RustamovEditor for Novastan

Translated from Russian by Robin Roth

Reviewed by Jacqueline Ripart

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