Household Cleaning Products Manufacturing in Uzbekistan: Systemic Challenges and Possible Solutions
Author: Azam Umarov
1. Introduction: Problems That Often Go Unnoticed
In recent years, the manufacture of household cleaning products in Uzbekistan has changed significantly. Local companies have expanded their product ranges, improved quality, modernized equipment and gradually strengthened their positions in the domestic market.
Yet behind these positive developments, problems are accumulating that are not always visible from the outside.
Medium-sized manufacturers face a particularly difficult situation. On one side, they compete with small workshops operating mainly in the low-price segment. On the other, they face large international companies with substantial financial, technological and marketing resources.
At the same time, established enterprises must deal with rising raw-material and logistics costs, changes in customs rules, higher mandatory expenses and lengthy payment terms imposed by retail chains.
It would, however, be wrong to explain every difficulty solely by external circumstances. Businesses also face internal problems involving management, productivity and financial discipline.
As the manager of an operating household cleaning products factory, I encounter these issues directly and see how closely they are connected.
The purpose of this article is to identify the industry's main problems, examine their causes and consequences, and discuss potential solutions — both on the government's side and on the manufacturers' side.
2. Economic Pressures on Manufacturers
2.1. Unequal Competitive Conditions
One of the challenges facing household cleaning products manufacturers is the difference in the conditions under which businesses operate.
Small workshops often have substantially lower fixed costs. Some businesses that do not fully comply with tax and employment requirements gain a further price advantage over producers operating formally.
Meanwhile, large international companies possess resources that allow them to invest in technology, marketing and distribution, and to withstand prolonged periods of low profitability.
Tax preferences for participants in special economic zones (SEZs) deserve particular attention.
Such mechanisms are important for attracting investment. Nevertheless, a reasonable question arises: why does an established company that has developed its production for years, created jobs and invested its own funds in modernization not always have access to comparable support?
It should be acknowledged that SEZ benefits depend on a company's status and investment conditions, rather than solely on the origin of its capital. Moreover, the mechanism for certain tax benefits for new participants changed in April 2026.
Even so, differences in access to support remain a relevant issue.
In my view, it is worth considering extending selected investment incentives to existing manufacturers that upgrade equipment, introduce automation and increase productivity, regardless of location.
This is not about abolishing benefits for new investors, but about creating additional incentives for industries that are already operating.
2.2. Dependence on Imported Raw Materials and Geopolitical Factors
Household cleaning products manufacturing in Uzbekistan depends heavily on imported chemical inputs.
Surfactants, including SLES, specialty additives, certain thickeners, fragrances and other components are predominantly purchased abroad.
The country's geographic position makes matters more complicated. Uzbekistan is one of the world's doubly landlocked countries, increasing its dependence on transit routes, freight operators and international logistics.
In 2026, escalating tensions involving Iran became an additional source of instability.
Disruptions to international supplies of oil and petrochemicals, changes in transport routes and higher freight costs had a significant impact on global raw-material markets.
For household cleaning products manufacturers, the consequences of such events are not limited to purchases made directly from the Middle East.
Changes in petrochemical markets can affect the cost of surfactants, polymer feedstocks used for plastic packaging and certain chemicals produced in other countries.
The effect on any particular product nevertheless depends on its composition, origin and supply chain.
For Uzbek enterprises, such instability creates additional risks in procurement planning and production cost calculations.
The issue is especially sensitive for medium-sized manufacturers that lack the substantial raw-material reserves and financial resources available to multinational corporations.
2.3. Customs Duties: How Actual Payments Affect Production Costs
The customs treatment of basic chemical raw materials deserves separate attention.
For certain products classified under tariff heading 3402, the standard tariff provides for a 5% import duty. At the same time, preferential treatment applies to some inputs: Presidential Resolution No. PP-5262, in its 2026 version, provides a zero-duty rate until January 1, 2027 for the goods specified in the resolution. Eligibility depends on the tariff code and import conditions.
In our practical experience, from the beginning of 2026 a 5% duty began to be charged on certain raw-material shipments during customs clearance, whereas we had not paid that duty previously. The reason why the exemption was applied differently to particular shipments needs to be checked against customs declarations and the applicable legal basis. It would be inaccurate to claim that the zero-duty treatment ended for the entire heading 3402.
For a company using substantial quantities of chemical raw materials, an actual increase in customs payments becomes a significant expense.
For example, where the customs value of a raw-material shipment is USD 100,000, a 5% duty would amount to USD 5,000, provided that rate applies and no exemption is available.
Such expenses increase the procurement cost of inputs and ultimately affect the cost of finished products.
Manufacturers cannot always raise their selling prices automatically. The household cleaning products market remains highly competitive, while retail chains and distributors are sensitive even to modest price increases.
This raises a question: how reasonable is it to increase customs costs on essential inputs when domestic production of those materials cannot yet fully meet the needs of local manufacturers?
If industrial policy seeks to support domestic manufacturing, the potential effect of such measures on the competitiveness of locally made finished products should be assessed in advance.
Possible solutions might include clear support mechanisms for imports of essential inputs, tariff relief where domestic alternatives are unavailable, or targeted compensation for manufacturers.
Of course, these measures require economic analysis and an assessment of their impact on the budget and competition.
2.4. Renting Production Premises: Important Differences to Consider
The cost of renting production and warehouse premises is another important issue.
Household cleaning products manufacturing requires considerable space.
In addition to production workshops themselves, companies need storage for raw materials, empty plastic containers, labels, packaging supplies and finished goods.
One characteristic of the industry is that many stored materials take up considerable physical space despite their relatively low value.
For example, empty plastic bottles require substantial warehouse capacity but do not, by themselves, generate much added value.
In Uzbekistan, legislation sets minimum property rental rates for tax purposes.
In 2026, the basic minimum rate for non-residential premises in Tashkent is UZS 48,000 per square meter per month.
Including adjustment coefficients approved by the Tashkent City Kengash, the minimum reference rates are:
• For production premises: UZS 48,000–67,200 per square meter.
• For warehouse premises: UZS 52,800–72,000 per square meter.
The applicable rate depends on the designated geographical zone.
There is, therefore, already some differentiation by property use. The question is whether the current rates adequately reflect the realities of production operations.
Consider an illustrative example.
Take a warehouse measuring 2,000 square meters. At a rate of UZS 52,800 per square meter, the minimum reference rental amount used to calculate the landlord's taxable rental income is UZS 105.6 million per month.
This is neither the amount of tax nor a mandatory contractual rent. The example illustrates the scale of the reference amount, which may affect the landlord's ability to offer discounts.
The difficulty is as follows.
A landlord may be willing to rent premises to a manufacturer at a lower price. However, where the agreed rent falls below the minimum, in the cases specified by law the tax base for rental income is still determined with reference to the minimum rates.
Thus, a lower agreed rent does not always bring a corresponding reduction in the property owner's tax burden.
In my view, the economic purpose of different premises should be considered in greater detail.
A production warehouse holding raw materials, plastic containers and finished goods serves a different function from a commercial warehouse used primarily to trade imported finished products.
This is not a proposal to restrict import trade. Rather, it is about allowing regulation to reflect the specific characteristics of manufacturing more accurately.
It is also worth considering mechanisms that would recognize an economically justified contractual rent for tax purposes without creating opportunities to artificially understate taxable income.
Predictability matters just as much.
Manufacturers invest in utilities, equipment installation and adapting premises to production needs. Relocating an operating factory involves substantial costs and disruption to production processes.
For this reason, stable rental conditions over several years are particularly important to manufacturers.
2.5. Higher Certification Costs and Annual Inspections
Demonstrating that products comply with applicable requirements is another cost item.
In my own practical experience, the cost of obtaining certificates of conformity for household cleaning products has risen two- to threefold in recent years.
A further expense is paid surveillance inspection which, under the certificates issued to our company, takes place annually. The inspection frequency depends on the applicable certification scheme and current requirements.
For a manufacturer with a broad product range, the total cost of certification and subsequent inspections can become significant.
The need to control product quality and safety is not in question.
The issue is whether the cost of mandatory procedures is economically justified.
It may be worth considering full or partial government reimbursement of periodic surveillance-inspection costs for domestic manufacturers, or mechanisms to establish more accessible and transparent fees.
Before adopting such measures, it would be necessary to review actual service costs, the cost structure of certification bodies and the inspection requirements updated in September 2026.
The aim should not be to weaken safety standards, but to reduce unjustified financial pressure on businesses.
2.6. Financing Manufacturing: A Positive Example of Government Support
A discussion of economic difficulties should also acknowledge positive developments.
In Uzbekistan, the government is taking substantial steps to expand manufacturing companies' access to financing for investment projects, equipment purchases and capacity modernization.
From my practical experience, support for industrial lending is quite tangible.
For that reason, I do not regard access to loans as the main obstacle to manufacturing development in my experience.
The availability of financing instruments does not, by itself, guarantee successful modernization.
Companies must assess investment projects carefully, calculate equipment payback periods and ensure that borrowed funds are used effectively.
The positive experience of government support for financing shows that effective mechanisms for helping industry already exist. Similar approaches should be developed in other areas.
3. Retail Chains and the Working Capital Challenge
3.1. Higher Sales Do Not Always Mean Financial Stability
One serious issue for household cleaning products manufacturers is the terms on which they work with major retail chains.
Being present in chain stores gives local manufacturers access to a large customer base, raises brand awareness and allows them to increase production volumes.
At the same time, it brings additional financial obligations.
Some retail chains, for example, require payment terms of up to 90 days.
For a medium-sized manufacturer, these terms place considerable pressure on working capital.
The business must buy raw materials and packaging in advance, pay wages and cover electricity, rent and taxes.
The goods have already been made, delivered and placed on store shelves, yet the manufacturer may not receive payment for several months.
Consider a hypothetical example.
Suppose a company ships products worth UZS 300 million each month, with shipments and payments distributed evenly. With payment due in 90 days (approximately three months), accounts receivable could reach about UZS 900 million.
With 30-day terms, the figure would be around UZS 300 million.
The difference is UZS 600 million.
This is the difference in funds temporarily outstanding from the buyer. To continue manufacturing, the supplier must cover shipment-related expenses from its own resources or through external financing.
This is an illustrative calculation: actual receivables depend on shipment schedules, payment timing and other contract terms.
A paradox arises: a company can increase sales while simultaneously needing more and more working capital.
3.2. Unequal Bargaining Power
A large retail chain has considerable leverage when negotiating commercial terms with suppliers.
For a medium-sized manufacturer, losing a major retail customer may mean a substantial reduction in sales. For the chain, replacing one supplier with another is often a less serious problem.
In addition to lengthy payment terms, manufacturers may face demands to participate in promotions, offer discounts, fund marketing campaigns and bear other expenses.
Such arrangements are, in themselves, part of modern retail.
The problem arises when their combined financial burden becomes disproportionate to the resources of a medium-sized enterprise.
As a result, higher turnover does not necessarily translate into more free cash or stronger finances.
3.3. The Need for More Balanced Terms
In my view, this question deserves discussion among manufacturers, retail chains and relevant government agencies.
One possible approach would be to limit the maximum period for paying suppliers of specified product categories — for example, to 30 calendar days.
However, applying such a mechanism specifically to household cleaning products would require a separate legal and economic assessment.
Responsibility cannot be placed entirely on retail chains.
Manufacturers themselves need to develop independent retail outlets, regional distribution, business-to-business sales and other channels.
It is equally important to monitor receivables, set credit limits and measure the real profitability of each sales channel, taking financing costs into account.
The goal is not to set manufacturers against retailers, but to create more balanced conditions for cooperation.
4. Government Support: Expectations and the Real Needs of Manufacturers
4.1. Supporting New Investment and Developing Existing Enterprises
In Uzbekistan, considerable attention is given to industrial development, attracting investment, establishing new manufacturing facilities and expanding export capacity.
These are important priorities in economic policy.
However, I believe no less attention should be given to companies that are already operating, providing employment, paying taxes and supplying the domestic market.
It is particularly important to recognize that a company which does not export can still contribute to the country's economic resilience.
A medium-sized household cleaning products manufacturer may sell entirely within Uzbekistan while replacing comparable imported goods on the domestic market.
Every batch of domestically made products that genuinely substitutes for imports can potentially reduce the need to purchase finished goods using foreign currency.
Of course, local manufacturers also import raw materials, equipment and certain types of packaging.
The actual foreign-currency effect must therefore be assessed after accounting for the imported content of local production.
Nevertheless, import substitution makes it possible to create added value within the country, sustain jobs and generate tax revenues.
It would therefore be wrong to evaluate a manufacturer's contribution solely by its export earnings.
Estimated import substitution, domestic value added, employment and tax revenues should also be considered important indicators of national industrial development.
4.2. The Chamber of Commerce and Industry and District Hokimiyats
The Chamber of Commerce and Industry of Uzbekistan should play an important role in dialogue between the government and businesses.
An organization of this kind should not merely advise businesses, but also identify systemic problems, consolidate entrepreneurs' proposals and help bring them to the attention of the authorities.
My own experience of dealing with the Chamber, however, does not yet suggest effective two-way communication.
I have observed virtually no proactive contact from it, despite the existence of specific issues affecting household cleaning products manufacturers.
Similar questions arise regarding Tashkent's district hokimiyats (local administrations).
Company representatives are occasionally invited to meetings where business issues are discussed, but in my experience these meetings have not yet produced tangible practical results.
My impression is that much of the local authorities' attention is directed toward large investment and export projects, while the day-to-day problems of existing medium-sized manufacturers receive less attention.
The effectiveness of interaction between government and business should be judged not by the number of meetings or consultations, but by concrete results.
Which problems were identified? Which proposals were considered? Which decisions were made? What actually changed for enterprises?
The answers to these questions should determine how support institutions are evaluated.
4.3. Shortages of Specialists and Technological Infrastructure
Another challenge is the training of qualified personnel, particularly chemical technologists who can not only reproduce existing formulas, but also develop new products, improve their performance and maintain consistent quality.
A medium-sized company can establish basic laboratory controls, but creating a fully equipped research center requires substantial financial and human resources.
Closer cooperation between specialized universities — notably the Tashkent Institute of Chemical Technology — and active household cleaning products manufacturers could be one avenue forward.
This could include specialized educational programs, practical training for technologists, joint research and access to laboratory equipment.
Another option would be to develop shared-use laboratories where local manufacturers could carry out necessary testing at affordable rates.
Such infrastructure would allow enterprises to devote more resources directly to improving their products.
5. Internal Constraints on Manufacturers
Not all the problems faced by household cleaning products manufacturers are linked to external economic conditions or government policy.
Many constraints arise within the businesses themselves.
In my earlier article, “Household Chemicals in Uzbekistan: Industry Evolution, Growing Pains and Future Prospects,” I already examined the transition from small workshops to systematically managed manufacturing businesses: reliance on hands-on management, insufficient automation, excessive range expansion, weak planning and the need for consistent quality control.
I will therefore not repeat those issues in detail here.
What matters is a different point: government support and a favorable business environment cannot make up for ineffective management.
Manufacturers themselves must improve productivity, control costs, develop professional capabilities and invest in product quality.
Industry development requires effort on both sides: government provides predictable conditions, while businesses take responsibility for their own efficiency and competitiveness.
6. Why Household Cleaning Products Manufacturers Are Barely Heard
6.1. Manufacturing Remains Largely Out of the Public Eye
In my view, one of the industry's problems is the limited public visibility of manufacturers themselves.
Businesses face questions every day involving production costs, logistics, rent, taxation and relationships with retail chains.
Yet these issues rarely become the subject of broad professional or public discussion.
Manufacturing executives are generally focused on day-to-day operations.
They tend to resolve difficulties individually, through negotiations with suppliers, customers or particular government agencies.
That approach is understandable, but it has a significant drawback: problems affecting an entire industry continue to be treated as difficulties of individual companies.
For comparison, consider the food-service sector.
Restaurants and cafés are directly connected with the everyday lives of city residents. Business owners in this sector make relatively active use of social media and professional communities to discuss emerging issues.
There is another feature of public perception as well.
When a popular restaurant or café closes, customers, employees and local residents notice immediately. Such events can become topics of discussion on social media.
By contrast, the closure of a medium-sized manufacturing enterprise may pass almost unnoticed by the wider public.
A shopper may simply see another manufacturer's product on the shelf, without knowing that a local factory has ceased operations.
Yet the consequences of a factory closure can be much broader: lost jobs, reduced tax receipts, a loss of manufacturing expertise and greater dependence on imported goods.
This creates a contradiction: industry is regarded as one of the key areas of economic development, but the problems of individual operating factories often remain almost invisible to society.
6.2. Fragmentation Among Manufacturers
Local household cleaning products manufacturers compete for customers, retail chains and regional markets.
Alongside this competition, however, they share many concerns: imported raw-material costs, logistics, rent, retail requirements, staff training and technological development.
Despite these shared concerns, businesses generally try to resolve them on their own.
Consequently, each manager spends their own resources discussing issues that may affect dozens of other manufacturers.
For a substantive dialogue, it is not enough merely to say that costs have risen. Companies need to present specific figures: changes in production costs, the scale of additional expenses, the effect of new requirements on operations and their possible consequences for the industry.
Such analysis would move the conversation from individual complaints toward professional dialogue.
In my view, the household cleaning products sector needs to represent its interests in a more active and organized way.
7. The Need for an Independent Industry Association
One reason manufacturers' interests are poorly represented may be the absence of a sufficiently strong, independent industry association capable of systematically addressing shared business problems.
Establishing yet another formal organization that does little beyond holding conferences and meetings would, however, bring little benefit.
The industry needs an association whose effectiveness is measured by concrete results.
7.1. Representing Manufacturers' Interests
The association's first task should be to represent the industry's interests professionally before government agencies, the Chamber of Commerce and Industry and other institutions.
Customs duties, minimum rental rates, certification costs, tax rules and conditions of cooperation with retail chains affect not just one company, but a substantial share of manufacturers.
Yet it is difficult for an individual factory to prepare an industry-wide economic assessment, engage specialist lawyers and secure consideration of its proposals at the appropriate level.
An association could gather information from businesses, conduct analysis and prepare evidence-based proposals to improve the business environment.
Instead of numerous separate appeals, manufacturers could engage in systematic dialogue based on the industry's interests and actual economic indicators.
7.2. Reducing Production Costs Through Cooperation
Another area of activity could be voluntary cooperation between enterprises.
Many manufacturers purchase the same inputs: SLES, other surfactants, chemical additives and packaging materials.
Pooling purchasing volumes could, in some circumstances, secure better terms from suppliers and optimize international logistics.
At the same time, direct imports are not always more economical than buying from local suppliers, who may themselves handle substantial volumes and offer competitive prices.
Decisions should therefore be based on the total cost of procurement, including logistics, customs payments, order volumes and delivery times.
Joint activities must also comply with competition law and preserve the commercial independence of participants.
The association must not become a vehicle for coordinating selling prices or dividing up the market. Its purpose should be to reduce shared costs and expand manufacturers' capabilities.
7.3. Shared Technological Infrastructure
An association could support the development of shared laboratories, advanced training programs for technologists and the involvement of international specialists.
Such cooperation would give local manufacturers access to expert knowledge and testing services without requiring every company to build expensive research facilities of its own.
Cooperation with specialized universities, research organizations and technical regulation centers appears particularly promising.
7.4. Independence, Transparency and Measurable Results
The main question is not merely whether to create an association, but how it would operate.
It should represent manufacturers of different sizes rather than becoming a vehicle for the influence of a few large companies.
Transparent financing, elected leadership, clear decision-making rules and regular reporting to members are essential.
The organization's effectiveness should be assessed not by how many events it holds, but by tangible achievements: legislative proposals considered, sector-wide issues resolved, joint projects implemented and useful services delivered to manufacturers.
Of course, establishing such an association will require overcoming some distrust between competitors.
But cooperation on shared issues does not mean abandoning competition in the market.
Manufacturers can continue competing in sales, product range and brand development while working together to address the industry's systemic problems.
8. Possible Solutions and Prospects for the Industry
The problems discussed above show that further development of household cleaning products manufacturing depends not only on market demand and the ability of individual companies to increase production.
Predictable economic conditions, effective interaction between business and government institutions, and manufacturers' own willingness to change are no less important.
In my view, further work should focus on several areas.
First — creating more balanced conditions for existing manufacturers.
New investment projects and export development should be complemented by support for enterprises that are already operating, creating jobs and replacing imported products.
Second — improving the predictability of economic policy.
Changes in customs duties, minimum rental rates and the cost of mandatory procedures need to be evaluated in light of their impact on the cost of domestically produced goods.
Third — establishing more balanced relationships between manufacturers and retail chains.
Payment deferrals, the impact of commercial requirements on working capital and possible mechanisms to protect suppliers' financial stability deserve discussion.
Fourth — developing technological and human-capital infrastructure.
Accessible laboratories, technologist training and cooperation with specialized universities can improve the competitiveness of local manufacturers.
Fifth — developing independent industry representation.
A professional association could help manufacturers discuss common challenges systematically, prepare economically substantiated proposals and implement joint projects.
At the same time, government support must not substitute for effective business management.
Every manufacturer is responsible for its own productivity, quality, financial discipline and resilience.
Conclusion
Over recent years, Uzbekistan's household cleaning products industry has made considerable progress. Local manufacturers have expanded their ranges, improved quality and strengthened their presence in the domestic market.
The next stage of development, however, requires more complex challenges to be addressed.
Government support is already producing positive results in some areas, particularly in financing industrial projects. At the same time, questions remain regarding customs policy, rental conditions, certification, specialist training and financial relationships with retail chains.
These questions call not for isolated, ad hoc decisions, but for systematic and professional discussion involving manufacturers themselves.
Responsibility for the industry's development does not rest with government alone. Enterprises must increase their efficiency, improve product quality and learn to address shared challenges together.
The development of national industry should be assessed not only by the number of factories opened, the volume of investment attracted and export revenue, but also by the resilience of existing enterprises, their technological progress and their ability to compete in the domestic market.
Preserving and expanding this manufacturing capacity is essential to the long-term competitiveness of Uzbekistan's household cleaning products industry.
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