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Kazakhstan’s food sector needs development: Can you help?

Kazakhstan’s government has set the nation some lofty food production goals. By 2020, the country hopes to double 2012’s output levels, valued at $5.5 billion, to become a net exporter of agriproducts and processed foods.

Currently, food processing and manufacturing represents 5% of Kazakhstan’s $429 billion GDP. Over the next four years, the government wishes to raise this to 10%, and is willing to spend the cash to do so.

In 2013, the government pledged to invest some 3 trillion tenge, or roughly $8.9 billion, in improving the competiveness of its food industry. But government investment alone cannot fund the nation’s planned activity. The private sector is much needed to push Kazakhstan’s food sector that extra mile.

Kazakhstan’s current reliance on food imports

With an area of 2.7 million square metres and a population of 18.3 million, Kazakhstan is second only to Australia in terms of available arable land. Conditions are ideal for the cultivating of a range of fruits and vegetables, as well as animal rearing. Despite this, the world’s ninth largest country by land area is heavily reliant on imports.

2014 saw imports of meat and dairy, foodstuffs and agriproducts reach $4.8 billion. According to statistics taken from TradeMap, Dairy imports stand at around $401 million annually. 35% of domestic dairy demand is met by imported goods. Meat and vegetables show similar stats, with imports reaching roughly $253 million and $217 million each year respectively.

Why so dependent on food imports? An underdeveloped food manufacturing sector. The Kazakhstani government is aware of this, hence its commitment to inject its food and beverage sectors with increased funding until 2020.

Developing Kazakhstan’s food industry

Plans are afoot to step up agricultural, beef, dairy and processed food production throughout Kazakhstan. Outdated methodologies, obsolete equipment and a lack of investment is hampering all of these areas. Can your company supply the right know-how and machinery to boost production levels?

Take beef production for example. 69% of Kazakhstan’s total land mass is suitable for grazing. Even with this huge advantage, a lack of modern slaughterhouses, distribution centres and animal husbandry equipment means Kazakhstan imports processed beef from Russia. Feed quality is also considered low. 

By 2020, a programme of warehouse, slaughterhouse, farms and requisite transport and logistics network construction is planned. The goal is for Kazakhstan beef farmers to up their annual exports by 40% before the 2020 deadline.

It is much the same story across the dairy and food processing sectors. The systems and facilities currently in place are not up to international standard. New factories are planned. For example, 10 modern meat processing facilities are to be built by 2020. A collection of milk production facilities, able to handle herds of up to 200 cows, are also slated for construction until the decade’s end.

If Kazakhstan wants to become a food producer on the same level of Argentina, Australia or Russia, it needs sustained investment from experienced international companies.

International food knowledge, investment and machinery required in Kazakhstan

The government’s spending on agriculture and food manufacturing is expected to attract an additional 10 trillion tenge, or $30 billion, in private investment. Foreign companies are already starting to make overtures towards using Kazakhstan as a food manufacturing base.

Italian companies, such as dairy-market leaders Granarolo and processed vegetable manufacturers Ottaviani, visited Kazakhstan in February 2016. Their goal was to explore the option of creating joint ventures between local firms and build new production facilities.

In April 2016, Poland’s Deputy Development Minister Radoslaw Domagalski identified Kazakhstan as an area for Polish companies to expand into. 

The potential for investment is huge in Kazakhstan for international companies. With the government committed to investing heavily in updating and improving the nation’s agricultural output, foreign firms are well placed to enjoy some big wins in Kazakhstan.

The opportunities are there: find them at WorldFood Kazakhstan

If this article has whet your appetitive for Kazakhstani investment, then make sure you attend WorldFood Kazakhstan. Running from 2-4 November 2016 at Atakent IEC in Almaty, the event gives you a chance to meet and interact with Kazakhstan’s leading food industry figures. Food processing and manufacturing companies are well represented, so if you want to make the right connections you have to attend this vital trade show.

Interested in attending the event? Visit the WorldFood Kazakhstan page now for more information.


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