Monday, November 5, 2012

Introduction to Turkmenistan


By Olesya Kucherova, Kutztown University SBDC & Martin Brill, Kutztown University SBDC Program Manager, International Trade

About the size of California with just over 5 million people, Turkmenistan is frequently grouped with other nations of the former Soviet Union. Yet the country, with its capital Ashgabat, significantly differs from its neighbors in architecture and business environment, somewhat resembling neighboring Muslim countries. The country has its business entities tightly regulated by the government. It is currently initiating a phase transition to a mixed-marked economy, with a strong public sector and modern market infrastructure.

The hydrocarbon sector is the largest industry of Turkmenistan. There are major opportunities for U.S. oil & gas service providers, industrial equipment and chemical products. Petroleum refining and petrochemical facilities are also some of its larger priorities. Turkmenistan is experiencing a massive construction boom. Since the domestic construction industry can only meet part of the local demand, companies must import construction and building materials from abroad. There is also a demand for consulting services towards construction in a seismic zone.

There is also potential for U.S. pharmaceutical exports. The sale of medical supplies is subject to licensing in Turkmenistan. There are about ten registered and licensed distributors, with the Ministry of Health being the largest. While low cost Asian products dominate the market, commercial drug stores offer a variety of good quality, though expensive, pharmaceuticals from such producers as Pfizer, Gedeon Richter, Nycomed / Takeda Pharmaceuticals and Schering-Plough.

Turkmenistan imports most of its consumer goods and foods sold through private channels. Food items in Turkmenistan need to be labeled in Turkmen and/or in Russian although English, Turkish, Persian, Ukrainian and Arabic labels are also not uncommon. Home appliances and electronics are almost exclusively labeled in English.  Poultry imports (mostly chicken legs) have risen to up to 20,000 tons per year, the majority coming from the U.S. The increasing prices for beef, pork and lamb can also fuel this demand.

The core exports from Turkmenistan are oil & refined oil products, textiles, carpets and small quantities of produce, cottonseed oil, raw silk and Persian lamb wool.

In order to export, it is required to have a thorough understanding of the local market and a strong local distributor. American suppliers can also participate in trade shows, which are listed in the Chamber of Commerce of Turkmenistan website at: http://cci.gov.tm/en/. Published by the US Commercial Service, the Country Commercial Guide for Turkmenistan is an authoritative, the current outline about how to export to the country and is available at http://www.buyusainfo.net/docs/x_5915490.pdf