Cenomi’s Uzbekistan debut a sign of Saudi trade ambitions

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• Retailer opens in new Tashkent mall
• Saudi-Uzbek trade more than triples
• Green energy tops wider GCC interests

Saudi retail major Cenomi has announced its debut in Uzbekistan in tandem with the kingdom’s efforts to expand bilateral trade with the Central Asian nation.

Uzbekistan is Cenomi’s 11th-largest international market, and it has signed a deal to open eight international brands – including a flagship Zara store – at the newly developed Tashkent City Mall.

Under the agreement, brands such as Cinnabon, Pull & Bear, Stradivarius, Massimo Dutti, Bershka, Oysho and Zara Home will launch in Uzbekistan.

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The latest figures from the Statistics Agency of Uzbekistan show that Uzbek-Saudi trade exceeded $15 million in January compared to about $4 million in the same month last year.

In 2023, Uzbekistan’s total foreign trade turnover surged to more than $62 billion, up 24 percent compared to the previous year. Its biggest trade partners include China, Russia, Kazakhstan and Turkey.

Experts at Middle East Briefing, a platform owned by the Dezan Shira & Associates foreign investment practice, said Tashkent and Riyadh have seen a significant increase in investments and trade since 2021. 

Uzbekistan mostly exports agricultural products while Saudi Arabia’s major export is oil.

“Saudi Arabia’s close ties with Uzbekistan are a part of Riyadh’s broader strategy in Central Asia which involves bolstering political and economic connections, illustrated by significant investments, such as the $2 billion Joint Investment Fund for regional projects,” said Emil Avdaliani, a professor of international relations at European University in Tbilisi, Georgia, in a research paper.

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With a population of more than 30 million people, Uzbekistan’s retail sector has seen a marked increase in interest from international retail brands hoping to capitalise on maturing consumer habits. 

Having previously been dominated by the traditional market format, the country’s retail sector is moving towards retail chains as it modernises to meet the increasing demands of a growing consumer population.

During a visit by a Saudi delegation to Uzbekistan in November, agreements worth $12 billion were signed on projects in energy, agriculture, pharmaceuticals, IT and infrastructure development. 

Uzbek officials are especially interested in attracting Saudi investment in green energy. 

In December, Saudi-listed Acwa Power broke ground on the first phase of a 3,000 tonne per year green hydrogen project in Uzbekistan. The country is its second-largest market in terms of investments, with a portfolio of 12 projects, 11 of which are renewable.

Uzbekistan, which has an average of 330 sunny days a year, wants to generate 35 percent of its electricity from renewable sources by 2030.

Wider strategy

Saudi Arabia’s ties with Uzbekistan are also a part of the wider GCC’s strategy in Central Asia.

Last week, the Saudi government signed an agreement with Uzbek neighbour Kazakhstan on cooperation across a range of sectors including oil and gas, refining, petrochemicals, electricity, hydrogen, renewable energy and energy storage.

The deal aims to implement projects including a 1 gigawatt wind farm in Kazakhstan, construction of which is scheduled to start next year.

According to the International Institute for Strategic Studies, the GCC and Central Asian states have placed energy, and particularly renewables, at the centre of their growing relationships. 

“Beyond clean energy, the Central Asian states are potential gas and energy markets, which have attracted GCC investments in new and existing power plants,” it said in a research note.

Acwa has pledged $13.5 billion in investments in Kazakhstan’s and Uzbekistan’s clean energy sectors, while the UAE’s Masdar has invested heavily in solar and wind projects in Uzbekistan. 

Leaders from the GCC and countries in Central Asia, known as the C5 bloc, met at a summit in Jeddah in July when the GCC-Central Asia Strategic Dialogue was launched.