KAZNEX INVEST intro for MATRADE

KAZNEX INVESTKAZNEX INVESTTrade Promotion Organization ofTrade Promotion Organization ofTrade Promotion Organization of Trade Promotion Organization of

KazakhstanKazakhstan

MEIRZHAN MAIKENOVDeputy Chairman

October 10, 2011MATRADE, Kuala Lumpur

NATIONAL EXPORT & INVESTMENT AGENCY«KAZNEX INVEST» JSC

Ministry of Industry and New Technologiesof the Republic of Kazakhstan

www.kaznexinvest.kz www.invest.gov.kz

ContentKHAN SHATYRKHAN SHATYR

the the biggest tent in the biggest tent in the WorldWorld

Kazakhstan InsightKazakhstan GloballyKazakhstan’s Competitive PositionspChallenge for Kazakhstan’s EconomyForeign Trade of Kazakhstan

Processed ExportNational Export Development & Promotion SystemKAZNEX INVEST as a National TPOActivity of KAZNEX INVESTActivity of KAZNEX INVEST

Export TeamAnalytical ToolsExport Development ToolsExport Promotion Tools

How do we assess our efficiency?International CooperationKAZNEX INVEST & MATRADE P t hi

National Export & Investment Agency2

KAZNEX INVEST & MATRADE Partnership Designed by Lord Norman Foster

Kazakhstan Insight, 2010

Population: 16.5 mln (62nd in the World, 4th in the CIS)Muslims ≈ 70%, age of 15-64 ≈ 70%, urban ≈ 55%

2 h dArea: 2.7 mln km2 (9th in the World, 2nd in the CIS)87 cities (capital – Astana, largest – Almaty)

Key economic figures:1) GDP total (PPP): $197 bln (53rd in the World, 3rd in the CIS)

per capita (PPP): $12 000 (73rd in the World, 3rd in the CIS)annual growth: 7.3% (2010/09), 8.3% (ave. in 2001-2010)g ( ), ( )

2) Unemployment rate: 5.8%3) Inflation: 7.8%4) Foreign trade turnover: $90 6 bln (61 2% in GDP current prices)4) Foreign trade turnover: $90.6 bln (61.2% in GDP, current prices)

export: $59.8 bln (40.4%), import: $30.8 bln (20.8%)5) FDI inflow: $17.4 bln; $114.1 bln & 20% ave. annual growth in 2001-2010


Source: KazStat, National Bank of Kazakhstan (FDI), IMF (GDP)

Kazakhstan Globally

1Singapore

Ease of Doing Businessrank

1Hong Kong

World Competitivenessrank

1Switzerland

Global Competitivenessrank

2

3

21

Hong Kong

New Zealand

Malaysia

2

3

16

USA

Singapore

Malaysia

2

3

21

Singapore

Sweden

Malaysia

59

65

68

79

Kazakhstan

Turkey

Belarus

Chi

36

39

42

44

Kazakhstan

Turkey

Italy

B il

26

59

66

72

China

Turkey

Russia

K kh t79

123

127

China

Russia

Brazil

Source: Doing Business 2011, WB

44

49

57

Brazil

Russia

UkraineSource: IMD World Competitiveness Yearbook ‘11

72

82

85

Kazakhstan

Ukraine

ArgentinaSource: Global Competitiveness Report 2011-12, WEFg ,

According to DB’11 Kazakhstan leads TOP 10 reformer countries

p p p ,

12

69

Hong KongSingaporeJapanMalaysia

Source: Heritage Foundation

Index of Economic Freedom 2011 (among the Asia-Pacific region)

rank

KZ scores increased by 20%


911

a ays aKazakhstan

KZ scores increased by 20% in 2001-2011

Kazakhstan’s Competitive Positions

96Finland

Political Stabilityscore (0-100)

1Brunei

Macroeconomic Environmentrank

1Norway

Social Capitalrank

93

92

90

70

Switzerland

Norway

Singapore

K kh t

2

8

10

Kuwait

Hong Kong

China

2

3

18

Denmark

New Zealand

Saudi Arabia

70

66

65

57

Kazakhstan

France

Italy

Belarus

18

29

44

69

Kazakhstan

Malaysia

Russia

T k

33

35

53

54

Kazakhstan

Spain

Russia

Si57

47

22

Belarus

Malaysia

Russia

Source: Worldwide Governance Indicators ‘09, WB

69

83

112

Turkey

France

UkraineSource: Global Competitiveness Report ‘11-12, WEF

54

90

108

Singapore

Malaysia

TurkeySource: Legatum Prosperity Index Report 2010p p g p y p

82,173,8

65,150,5

KazakhstanOECD

Europe and Central AsiaMalaysiaSource: Human Development

Population with at least secondary education (% ages 25 and older)

%


50,522,3

MalaysiaTurkey

Source: Human Development Report 2010, UNDP

There is no alternative except There is no alternative except economic diversification

H E N lt N bH.E. Nursultan Nazarbayev


Challenge for Kazakhstan’s Economy

18115

Strategic goals: 7% average annual growth of GDP in 2011-1512.5% share of processing industry in GDP till 2015

16,4

113,5109,8 109,3 109,6 109,7 110,7

108,9107,3 16

18

110

115% %

14,5 14,2

13,3103,3

101,2 14

100

105

12,011,6 11,5 11,8

10,911,3 12

95

100

10902001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Share of processing industry in GDP GDP annual growth


Source: KazStatShare of processing industry in GDP GDP annual growth

Foreign Trade of Kazakhstan

Strategic goal: in 2014 – 40% share of processed export in total volume

30 7100 %bln $ Foreign trade 2010, $ bln

71,2

28,029,3 30,7

28,2 27,8 27,727

30

80

$

59,830,8

Export Import

47,843 2

59,8

21

2460

43 3Primary export

27,8

38,243,2

18

21

40 16,6

43,3

Processed export

Primary export

15202005 2006 2007 2008 2009 2010

Export, bln USD Share of processed export in total volume, %

Focus group of KAZNEX INVEST ($2.3 bln)food industry, chemistry, machinery, metallurgy, tanning, pulp-and-paper industry, textiles, construction materials, mineral products, shoes


Source: KazCustoms, KAZNEX INVEST estimate

Processed Export, 2010

2 123Uranium

TOP10 processed export productsmln USD

537 Wheat flour

Focus group’s TOP10 processed export productsmln USD

1 850

1 392

553

Copper cathode

Ferrochrome with > 4% carbon

Zinc

151

108

80

Copper wire

Yellow phosphorus

Fish filetProcessed export’s destination

l $ l553

553

537

Zinc

Propane liquefied

Wheat flour

80

58

47

Fish filet

Roller bearing

Tanned cattle leather

mln $ % in total

China 3 293 19,9Russia* 2 486 15,0Switzerland 1 149 6,9

410

403

352

Aluminum unalloyed

Aluminum oxide

Half-finished products form iron and steel

40

34

32

Sodium triphosphate

Cigarettes

Chromium trioxide

UK 899 5,4Turkey 790 4,8Iran 732 4,4German 724 4 4

282Butane liquefied 21 Sodium dichromateGermany 724 4,4USA 688 4,2Uzbekistan 645 3,9Belarus* 246 1,5


Source: KazCustoms, KAZNEX INVEST estimate*In Customs Union with Kazakhstan since the middle of 2010

W h t t k th We have to stake on the manufacture oriented to final production export


f p p

H.E. Nursultan Nazarbayev

National Export Development & Promotion System

MINISTRY OF INDUSTRY AND NEW TECHNOLOGIES (Minister is also Vice PM)

Exporters’ Council (troubleshooting)

KAZNEX INVESTNational TPO since 2008

K E tG t (i f t d t dit )KazExportGarant (insurance of export and export credits) & National development institutions (DBK, IFK, NIF)

P i tI t ti l Chamber of Commerce and Industry (special law)

“Atameken” National Economic Chamber and other business associations

Private sector

Representation Network of KAZNEX INVEST

Diplomatic and trade representatives abroad

InternationalNetwork

Export promotion oriented amendments (2011) to the Law on Trade Regulation (status, goals and tasks

f ti l TPO i i t t )

Export 2020 - Governmental program with main measures on processed export

d l t d ti

and other business associationsabroad


of national TPO, economic instruments) development and promotion

KAZNEX INVEST as a National TPO

State mandateState mandate- Ministry of Industry and New technologies is a sole shareholder- Main governmental institute on processed export development

and promotion since 2008- Totally financing from the state budgety g g- Services are free of charge

Strategic roleStrategic roleStrategic roleStrategic role- Participant of the State Program for Accelerated Industrial-

Innovative Development of Kazakhstan till 2015 (including Export 2020)(including Export-2020)

- The main goal is not to gain profit, but to implement strategic tasks of the State ProgramO t f th NEDPS


- Operator of the NEDPS

Activity of KAZNEX INVEST

EXPORT TEAM INVESTMENT TEAMEXPORT TEAM INVESTMENT TEAM

SERVICE SUPPORT SEARCH FOR FOREIGN INVESTORSFOR EXPORTERS FOREIGN INVESTORS

(greenfield FDI)

FINANCIAL SUPPORT FOR EXPORTERS

(Export Grants)

SERVICE SUPPORT FOR INVESTORS

(total accompanying)(Export Grants) (total accompanying)


Export Team

Analytical Platform- Identification of ready to export productsy p p- Investigation of global trade- Assessment of perspective global export niches for national productsExport DevelopmentExport Development- Improvement of exporters’ competence on global trade- Assessment of export readiness of Kazakh companies- Encouragement of processed export via the Export Grants- Troubleshooting through the Exporters’ Council under the MINTExport Promotionp- Search for perspective foreign buyers of Kazakh products- Collecting the “Buyers List”

Matchmaking: trade missions “Buyers & Sellers” meetings exhibitions


- Matchmaking: trade missions, Buyers & Sellers meetings, exhibitions

Analytical Tools

Trade Performance Index

l i f K kh t ’Optimal directions for export extensionPerspective export niches by products

Macro level

analysis of Kazakhstan’s foreign trade and world trade

Perspective export niches by productsBasis for export promotion tools

Country Overviews

information about trade partner countries (34)

Exporting Guide

annual publications with whole country information (14)countries (34)

Brief Analysis

country information (14)

Micro levelBrief Analysis

micro marketing research 1 product – 3 countries (36)

Indicators for exportersImprovement of individual export strategiesMethodological assistance for companies


Export Development Tools

Main task is to extend a coverage of state support for Kazakh companies producing processed goods and to stimulate further export activity of current exporters

Exporters Databasemore than 1500 companies

regularly receiving our

Training programsmore than 170 specialists from around 80 companies

Instructive materialsmore than 20 publications: marketing, standards, risks, g y g

servicesp

completed the coursesg

tariffs, packaging, etc.

Inquiry processing

1 2 3

Troubleshooting Packaging issuescollect and process different inquiries from Kazakh and

foreign companies4

assistance in problem solving by means of Exporters’

Council or independently5

assistance in creation of packaging infrastructure via

Packagers Association6

Ideology of export orientation

new export oriented mentality via mass media7

Stimulation of export activitySince 2010 new tool of financial support has been applied.

Reimbursement of a part of exporters’ expenditures spent for foreign markets penetration (registration, certification, branding, etc.)

8 NEW


via mass media7 p ( g , , g, )

Export Promotion Tools

Main task is to assist Kazakh exporters in foreign markets penetration and to demonstrate the reality of processed goods exporting

Trade missions abroad12 TM in 10 countries:

Korea, China, India, Romania,

“Buyers & Sellers” meetings

6 B&S meetings in 4 cities of

Exhibitions abroadmore than 80 Kazakh

companies participated in exh. Iran, Russia, Central Asia

6 B&S meetings in 4 cities of Kazakhstan

p p pmainly in CIS countries

Trade marks promotion

1 2 3

Humanitarian E-commerce NEWNEW

presentations & promo-actions of Kazakh production

& sectoral brands abroad4

procurements (HP)promotion of Kazakh products

into the HP market5

assistance in exporting through the international

e-trade platforms6

Buyers Listdisseminating info on Kazakh

production & collecting perspective buyers list7

Export contractsconcluded with assistance of KAZNEX INVEST in 2009-10

$340 mln

!Logistic routesestimation of optimal logistic

routes for export from Kazakhstan8


p p y7 $340 mln8

How do we assess our efficiency?

Strategy of KAZNEX INVEST for 2011-15- integrated with all state strategic documents: Strategy 2030,

Strategic Plan 2020 Industrialization Program 2010 14 Export 2020Strategic Plan 2020, Industrialization Program 2010-14, Export 2020- identifies mission, vision, strategic activity directions, goals, tasks,

performance indicators, risks of the Agency, etc.

Measurable performance indicators (productivity & costs)- 111 indicators of direct result- 10 target indicators of final result

Export contractswith KAZNEX INVEST assistance in 2009-10

$340 mln

$1 from state budget ensured export contracts for

$50$

Export volumecosts of which were refunded by KAZNEX INVEST in 2010

$293 l

$1 from state budget covered with state support export for

$300


$293 mln $300

International Cooperation as a factor of efficiency improvementas a factor of efficiency improvement

The aim is to:

scrutinize and apply TPO’s best practice through technical assistance projects, studyscrutinize and apply TPO s best practice through technical assistance projects, study courses, internship programs and information exchange;

improve positive image of the Agency, build up well-known “Made in Kazakhstan” brand;

extend Agency’s opportunities on interaction with foreign buyers of Kazakh production;extend Agency s opportunities on interaction with foreign buyers of Kazakh production;

expand Agency’s activity in the region of Customs Union, Central Asia, as well as China, Iran, Iraq and Afghanistan: trade facilitation, representation of regional interests, common projects within the region.p j g

Our partners are: ApexBrasil

JEDCO

Kazakhstan-Malaysia Chamber of Commerce

ITC

ICDT JEDCO

KOTRA

JETRO

ROTOBO

Federation of Korean Industries

and others…

ICDT

IGEME

DEIK

A t d


ROTOBOAustrade

KAZNEX INVEST & MATRADE Partnership

Possible ways

Foreign trade with Malaysiamln USD

Possible ways of collaboration between:

exchange information on potential trade partners (from Kazakhstan and Malaysia) analytical reviews results of

2009 2010

Export to Malaysia 0.4 0.5

Import from Malaysia 69.0 77.1Source: KazCustoms

&

Kazakhstan and Malaysia), analytical reviews, results of market research, state regulatory measures, news;

share experience on trade promotion and development issues through presentations, seminars, training, study

Rise

Maize

Perspective export products from Kazakhstan to Malaysia

courses, internships, sharing methodological materials;

support trade promotional activities in Kazakhstan andMalaysia, such as trade missions, training tours for entrepreneurs business forums exhibitions and fairs;

Maize

Wheat flour

Aluminum unalloyed

Rolled iron and steelentrepreneurs, business forums, exhibitions and fairs;

cooperate within the international trade organizations.

Copper alloys

Parts of taps & valves for pipelines

Overhead type cranes

Transportation with ICE


pSource: ITC, Trade Map

TERIMA KASIH TERIMA KASIH ATAS PERHATIAN ANDAATAS PERHATIAN ANDA!!ATAS PERHATIAN ANDAATAS PERHATIAN ANDA!!

www.kaznexinvest.kzwww.kaznexinvest.kz2525 S kS k St A t K kh t | 7 (7172) 79 93St A t K kh t | 7 (7172) 79 93 939325 25 SyganakSyganak Str., Astana, Kazakhstan | +7 (7172) 79 93 Str., Astana, Kazakhstan | +7 (7172) 79 93 9393

www.welcometokazakhstan.com

NATIONAL EXPORT & INVESTMENT AGENCY«KAZNEX INVEST» JSC

Ministry of Industry and New Technologiesof the Republic of Kazakhstan