Investigations revealed that United Cement Group (UCG) also owned two other major cement plants in Uzbekistan — "Quvasoycement" and "Bekabadcement" — as well as the "Kant Cement Plant" in Kyrgyzstan.
This raised concerns among experts and the media. They argued that transferring three major cement plants, which together control half of Uzbekistan's cement market, to a single company — and an offshore company at that — was a strategic error that could harm competition. The decision of the anti-monopoly authorities to approve the deal was sharply criticized.
About a month later, Michael McGaughy, a manager at Fusion Wealth Management Ltd., highlighted discrepancies in the deal. He noted that the market value of "Kyzylkumcement" shares at the end of 2021 was 6,500 soums per share, yet the plant was sold to United Cement Group for just 4,859 soums per share. He criticized the lack of transparency and pointed out the following issues:
- The sale price was illogical. Transactions involving enterprises with significant control potential should typically be priced much higher than the prevailing market rate. However, "Kyzylkumcement" was sold at a 20% discount;
- Foreign interest was overlooked. Companies from Turkey, Pakistan, Russia, and China had expressed interest in acquiring controlling shares at above-market prices. However, they did not participate in the bidding due to insufficient transparency and information;
- A harmful precedent. The deal set a poor example for future privatization processes and the market environment;
- Market dominance. Following the deal, United Cement Group controlled over 50% of cement production in Uzbekistan, contradicting the principles of a competitive market.
Amid the questionable privatization, public scrutiny of developments related to the cement plant intensified. By the end of 2022, it was reported that United Cement Group had not fully paid for "Kyzylkumcement." An announcement by UzAssets did not specify that the company had purchased the plant in installments.
Starting in 2024, Uzbekistan drastically reduced the tax rate on limestone for cement production, lowering it almost fourfold from 22,500 UZS to 6,000 UZS per ton. While officials claimed this measure was intended to "prevent price hikes," public discontent grew. The major beneficiaries of this tax break were offshore-controlled companies like United Cement Group, leading to concerns about reduced state budget revenues.
