Chinese Government reschedules RMB 50 million loan for Dushanbe Cigarette Factory Project

In January 1997, Xinjiang International Economic Cooperation Corporation and Tadushanbe Cigarette Factory established a Sino-Tajik joint venture cigarette factory, the Dushanbe Cigarette Factory. The Chinese accounted for 10% of the registered capital ($300,000 USD), while Tajikistan accounted for 90%.

The joint venture had a period of 30-years.

The joint venture used a RMB 50 million government loan provided in 1994 to technically transform the tobacco factory, and the Chinese side provided cigarette and printing production lines. After the transformation, the production capacity of the factory was 5 billion cigarettes per year.

The construction officially started in November 1998 and the project was completed in February 2001, and was officially handed over to Tajikistan in November 2001. However, the project was shelved because of tariff issues until October 2002.

After that, the tobacco factory began trial production; producing 80 cases (800,000 cigarettes) of cigarettes per day, according to Economic and Commercial Office of the Chinese Embassy in Tajikistan in 2003. The joint venture was to repay the RMB 50 million loan in installments from December 1, 2002.

Since the joint venture tobacco factory was in a state of intermittent operation at that time, the supply of raw materials required was not timely, and revenue was not yet generated.

So, Prime Minister Akilov of the Tajik government sent a letter to Premier Zhu Rongji in 2002 to propose debt relief or extension.

In 2006, the Economic and Commercial Office reported that the factory was looking for a Chinese company, in the form of our shareholding or other joint venture, to partner with it and introduce technical personnel, management experience and increase its working capital, so that the factory can operate normally.