POSCO International CEO Ju Si-bo, left, poses with Governor Khayrullo Bozarov of Fergana Region, after signing a memorandum of agreement to form cotton cluster in Uzbekistan, at POSCO International's headquarters in Incheon, Tuesday. Courtesy of POSCO International

By Kim Jae-heun

POSCO International, Korea's largest trading company, signed a memorandum of agreement with Governor Khayrullo Bozarov of Fergana in eastern Uzbekistan to establish a raw cotton cluster in the Central Asian country, the company said, Tuesday.

The cotton cluster refers to the Uzbek government's project to invite companies to cultivate the crop and establish a stable supply chain.

Uzbekistan is one of the world's top five cotton exporters with annual shipments totaling 3 million tons. POSCO International first established a spinning factory in Uzbekistan in 1996 and developed it into the largest cotton producing company there employing about 4,000 workers and generating $37 million in operating profit last year.

Bozarov is currently visiting Korea and met with POSCO International CEO Ju Si-bo to express his gratitude, while requesting investments in food manufacturing facilities and the construction of a business center in Uzbekistan.

"Central Asia is one of the company's strategic areas and we have been discovering hidden value there. Apart from simply processing raw cotton there, we plan to create a sustainable industrial ecosystem by managing the whole process from cultivation to the production of the finished products," Ju said.

POSCO International requested the Uzbek government's support to secure raw cotton plantations while revealing its blueprint to invest in building eco-friendly production lines and modernizing facilities there.

POSCO International has already confirmed a 5,000 hectare cultivation plot in Fergana and is working to secure 2,000 more hectares in Tashkent, the capital city. The company also plans to expand its raw cotton cultivation area to a total of 35,000 hectares by 2025 through the Uzbek cotton cluster project in western part of the country.