INVESTMENT PROPOSALS OF NUR-SULTAN СIТУ

INVESTMENT PROPOSALS

OF NUR-SULTAN СIТУ

ASTANA INVEST

3

5

6

8

9

10

11

12

13

15

17

19

21

22

23

25

26

27

FOOD INDUSTRY

Production of baby food

Production of bakery products

WOODWORKING AND PULP AND PAPER INDUSTRY

Furniture production

Production of furniture accessories

Production of wallpaper

CHEMICAL INDUSTRY

Production of paint products

Production of plastic products

Production of rubber products

AGRO-INDUSTRIAL COMPLEX

Beef production

Production of sausages and meat products

Advanced wheat processing

Construction of a greenhouse

Top smart spot spray system

CONSTRUCTION INDUSTRY

Ready-build factory

Production of basalt fibre thermal insulation

Production of ceramic coating and plates

Production of electrodes

Production of metal fasteners

ENGINEERING

Production of elevators 28

29

30

31

TRADE

Outlet Center

ENERGETICS

Small solar power plants

Optimization of heating costs

OTHERS

Optoculus innovative security system 32

CONTENT

PRODUCTION OF BABY FOODGeneral Classification of Types of Economic Activity 10.86.0 «Production of baby food and dietary food products»

Construction of a complex for the production of baby food products with a capacity of 25 thousand tons per year (15 thousand tons of baby food based on cereals and 10 thousand tons based on vegetables).

PROJECT DESCRIPTION:

MANUFACTURED PRODUCTPorridges - dry and ready-made;Homogenized vegetables for baby food;Soups and bouillons.

GLOBAL MARKETBased on imports porridges are in the highest demand in the world. The average annual growth rate of the porridge market over the past 5 years is about 9%.

Global import of child and dietary food

REGIONAL MARKET

Imports of cereals, soups, bouillons and vegetable products for babies increased in 2019, especially imports of vegetable products and soups and broths.

Baby food import in Kazakhstan in 2019

Baby food import dynamics in Kazakhstan, million US dollars

Currently, Kazakhstan’s baby food products market mainly represented by foreign production. For Kazakhstan companies, the niche in food production remains undeveloped. The main suppliers of baby food to Kazakhstan are the European Union (EU) and Russia. Exports made to the countries of Central Asia and China.

Baby food import in Kazakhstan in 2018

Homogenized vegetables, thousand US dollars

Import of cereals, million US dollars

*Slovenia, Belarus,Great Britain,Germany, Italy

Baby food export from Kazakhstan in 2018

Cereals, thousand US dollars

PRODUCTIONProduction of cereals, porridge and other products from cereals, vegetable crops and vegetables in Kazakhstan remains stable, but there is a tendency to decrease production.

Volumes of production of vegetables processed andcanned, except for potatoes, tons

2015 2016

9941

,5

9570

,1

8466

,5

11 8

58,7

616,

8

92,1

514,

7

87,7

479

80,6

514,

7

82,2

545,

4

95,3

20172014 2018

homogenized vegetables for baby food cereals soups and

bouillons

10 8

62,7

2015 2016

35,637 38

,60,

9

0,9

1,2

0,91,1

0,50,3

0,41,

4

0,7

20172014 2018

homogenized vegetables for baby food

cerealssoups and bouillons

39,649

,9

2016 2017

24 2

87

26 0

58

151

2016

15 0

45

18 9

72

20182015 2019

Republic ofKazakhstanNur-Sultan

71

19 4

33

20

17918,2

39

homogenized vegetables for baby food

soupsand bouillons

8,21,5

7,61,4

6,6

cost,million US dollar

weight, thousand tons

18,2SwitzerlandRussia

NetherlandsGermany

others*

2,820,8

14,9

*Belarus, Finland, Spain, Portugal, USA and Kyrgyzstan

Import of soups and bouillons, thousand US dollars

490RussiaPolandEstoniaFinlandothers*

443645

244

4 742TajikistanKyrgyzstan

TurkmenistanMongolia

ChinaUzbekistan

1 830636

1199

3 602

494

74

414RussiaPoland

Great Britain Belarus

Soups and bouillons, thousand US dollars

Homogenized vegetables, thousand US dollars

102KyrgyzstanMongoliaTajikistan 10

30

18

21

68

KyrgyzstanMongolia

TurkmenistanUzbekistan

Tajikistan

3

cereals

TAX

%

PRODUCTION OF BABY FOOD

Production volumescanned vegetablesKazakhstan, tons

Volumes of production of flour from grain and vegetable crops and mixtures of fine grinding, thousand tons

In Kazakhstan formed a stable growth dynamics of vegetable products. In 2019, the total amount of vegetable production collected in the surrounding regions was 661 thousand tons.

Gross collection of vegetables in Kazakhstan, thousand tons

Gross collectiob of vegetables in nearby reions in 2019, thousand tons

POTENTIONAL SALES MARKETThe total volume of porridge imports for babies of neighboring countries in 2018 amounted to 5.2 billion us dollars (393.3 thousand tons). The Chinese market accounts for more than 93% of imports.

Import of baby food packed for retail sales of nearby countries, 2018

Exemption from customs duties (0% up to 5 years for import); Tax incentives (VAT, corporate income tax, land tax, property tax - 0%);In-kind grants (land, buildings and structures, etc.); Hiring foreign labor .

Investment preferences

Special economic zone preferences

Tax preferences (CIT, land tax, tax on property);Customs preferences (import of raw materials and equipment);Land with a ready-made infrastructure (gratuitous rent of a salary); Simplified procedure for hiring foreign labor (hiring of foreign labor out of quotas).

Business roadmap - 2025

Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state);Guarantee (project amount up to 1 billion KZT for working entrepreneurs, guarantee up to 50%); Infrastructure supplying.

Economics of simple things

Subsidies (rate not more than 15%, subsidy up to 9% of loan interest rates);Guarantee (up to 50% on loans up to 3 billion KZT and up to 30% on loans over 3 and up to 5 billion KZT inclusive).

Reimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market;to promotion domestic processed goods, works and services in internal market.

State support measures for Kazakhstan manufactures through «Kazakhstan Industry and Export Center «QazIndustry» JSC

4 552

10 4777 650

9 7754 521

20152016

20182019

2017 3 69

2,1

148,

1

160

136,

2

134,

3

132,

2

3 80

3,1

3 30

8,2

3 91

0,1

3 97

4,1

2015 2016 2017 2018 2019

Republic ofKazakhstan

Nur-Sultan

MANUFACTURERSIn Nur-Sultan city, the main manufacturers are small enterprises («AB baby food» LLP, «ECOPROT» LLP, «Factory of medical biotechnology» LLP). To date, the first and only enterprise in Kazakhstan for the production of baby milk nutrition is the factory of the Kazakh Academy of nutrition «Amiran».

The assortment of baby food in supermarkets is represented by such brands as NESTLE (Switzerland), NUTRICIA (Netherlands), HEINZ (USA), BIBIKOL (Russia), Humana (Germany).

RAW MATERIAL BASEThe main grain crops in Kazakhstan are wheat and barley. Akmola region is the leader of the Republic in terms of gross harvest of cereals and legumes in 2018 (28.3%).

Gross collection of cereals harvest (excluding rice) and legumes, million tons

17,2

4,5 4,6 5 4,8 5

20,6

20,320

,6

18,7

2014 2015 2016 2017 2018

3 41

7,314

7,7

159,

5

175,

4

176,

2

216,

9

3 90

5,8

4 13

8,3

3 61

5,7

3 63

5,7

2015 2016 2017 2018 2019oper.data

open field

under cover

Republic ofKazakhstan

Akmolaregion

226,3Pavlodar region North-Kazakhstan region

Karaganda region Kostanay region

Akmola region

105,971,2

54

203,7

333,14 888,5

239,9

48,3

34,9

20,8

China

Russia

Ukraine

Uzbekistan

others* 7,5

6,1

3,3

43,3

thousand tons million US dollar

STATE SUPPORT MEASURERS

*Azerbaijan, Belarus, Tajikistan, Kyrgyzstan, Armenia,Mongolia,Turkmenistan

COMPETITIVE ADVANTAGESRaw material base availability;Potential import substitution and product export; State support for investors and entrepreneurs.

4

PRODUCTION OF BAKERY PRODUCTS


Establishment of a small bakeries chain/production plant of various bakery products.

MARKET ANALYSISAccording to the structure of the minimum living wage in the Republic of Kazakhstan, flour products are in the top 3 food products of Kazakhstan citizens. The bakery products market in Kazakhstan is self-sufficient, the share of imports is insignificant. In monetary terms, imports exceed exports by more than 6.5 times.

Capacity of bakery products market of the Republic of Kazakhstan, tons

Export and import of bakery products of the Republic of Kazakhstan, in thousands of US dollars

The most popular import products are «other bread and confectionery products» and «sweet dry cookies», more than 80%. These products can be included in the list of bakery products.

Export of bakery products of the Republic of Kazakhstan in 2018,%

The most popular Kazakhstan bakery products are used in Kyrgyzstan and the Russian Federation, ~ 27% and China is 14%.

2016

2017

2018

729 964

711 729

703 037333

277

282

2016

2017

2018

17 512

18 923

21 640149 945

135 754

121 240

production import import export

17%

12%

5%

65%

bread and other flour confectionery

sweet drycookieswaffles andwaffle cachets

crackers and toast

Import of bakery products in 2018,%

The main export names are «sweet dry cookies» and «waffles and waffle cachets», 76%. The main export names are.

32%

24%

44%

bread and other flour confectionery

sweet drycookieswaffles andwaffle cachets

5945KyrgyzstanRussiaChina

MongoliaTajikistan

311327211718

5926

Export of bakery products from Kazakhstan, top 5 countries (2018), thousand US dollars

Leading regions for the production of fresh bread in 2018, tons

The top 5 regions of producers of bakery products are the southern regions, Karaganda and Aktobe regions. In this regard, it is possible to export bakery products to the nearby Northern regions. Also, there is a noticeably limited production of this product in the capital, given its population of more than 1 million people.

Bakery products market in Nur-Sultan city

Market volume of Nur-Sultan city = 1 078 384 (population of Nur-Sultan city 2019) * 200 (gr. norm for 1 person) * 20 (KZT price per 100 gr.) * 365 (days) = 15,7 billion KZT or 78 722 tons per year.

Large manufacturers, market share of Nur-Sultan city,%

Number of manufacturers: 89 units (3rd place in the country)

Competitive advantageThe availability of raw materials creates favorable conditions for competitive pricing compared to a number producing regions.

Summary of project benefits The main volume of product sales – imports from other regions, it is possible to replace these market players at a more favorable price.Due to the developed transport interchange of the capital, it is possible to export products both to the nearest regions and abroad.High human potential of the city, relatively high availability of necessary personnel. The growing population of the city is an increase in the sales market.

136 67477 002

67 487

42 69141 874

36 23036 014

28 68928 509

21 23121 529

16 81816 3169 5516 346

64 79745 279

Turkestan region Almaty

Zhambyl regionAktobe region

East Kazakhstan regionKostanay regionPavlodar region

12%

5%

65%

importbakery product

import from other regions production

~13% ~9%




Tax preferences (corporate income tax, land tax, tax on property);Customs preferences (import of raw materials and equipment);Land with a ready-made infrastructure (gratuitous rent of a salary); Simplified procedure for hiring foreign labor (hiring of foreign labor out of quotas).

5

Mangystau regionKyzylorda region

Nur-SultanAtyrau region

Shymkent

Almaty regionNorth Kazakhstan region

West Kazakhstan regionAkmola region

Karaganda region

exportbakery product

importbakery product

Exemption from customs duties (0% up to 5 years for import); Tax incentives (VAT, corporate income tax, land tax, property tax - 0%);In-kind grants (land, buildings and structures, etc.); Hiring foreign labor.

FURNITURE PRODUCTIONGeneral Classification of Types of Economic Activity:31.01.1 «Manufacture of chairs and other seating furniture»; 31.01.2 «Manufacture of furniture for offices and trade enterprises»; 31.02.0 «Manufacture of kitchen furniture».

Construction of furniture manufacture in Nur-Sultan city.

AAccording to the Ministry of National Economy Statistics Committee of the Republic of Kazakhstan, for the period from 2016 to 2019, there is a stable increase in the volume of housing commissioned in Kazakhstan, this trend is positive for the development of the furniture industry.

PROJECT DESCRIPTION:AAccording to the plan of the mayor's office of Nur-Sultan city for the purchase of furniture industry goods for 2020, the total volume in terms of value is about 191 million KZT, which is also one of the indicators of demand for manufactured products. In addition, central government agencies and national companies that are potential buyers of furniture products are located in Nur-Sultan city.

Volume of comissioned housing, thousand sq.m.

74 590 817

86 786 14980 798 444

74 778 53520152016

20182017

Main countries importing furniture product to Kazakhstan in 2019, thousand USD

REGIONAL MARKETIn 2019, the main importer of furniture products to Kazakhstan was Russia, the share of total imports of furniture products was 53.2%, Belarus took second place with a share of 13.7%, and China closed the top three with a share of 7.6%. The main suppliers of furniture in Nur-Sultan city were Russia (65.3%), Turkey (10.6%), and Italy (6.1%).

Furniture product import, million USD

MANUFACTURES

In Kazakhstan, there are 937 small and medium-sized enterprises engaged in the furniture manufacture, 165 of them are located in Nur-Sultan city. The main manufactures are small enterprises, such as «Astana-Zhihaz Fabrikasy» LLP, «Mebelinkz» LLP, «Dara-Art» LLP, «Bespoke furniture&home» LLP.

RAW MATERIALSIn Kazakhstan, 33 enterprises are engaged in the production of hardboard, chipboard, plywood, and veneer, of which the largest are «Favorit» LLP (East Kazakhstan region), «Melissa» LLP (East Kazakhstan region) and «Lam. Tech» LLP (Almaty city). In Nur-Sultan city there is one small enterprise – «Airon-Astana» LLP. Also, the necessary raw materials are imported from nearby countries, mainly from Russia and Belarus. Potential supplier of metal parts:Metallurgical plant «ArcelorMittal Temirtau» JSC (Karaganda region).

Chipboard material import in 2019, thousand USDMain countries importing furniture product to Nur-Sultan in 2019, thousand USD

9 785ItalyTurkeyChina

BelarusRussia

15 61828 006

108 767

14 8571 268,0Korea

ChinaItaly

TurkeyRussia

2 321,34 025,0

24 690,6

1 734,0

5 699106 177

Chipboard, OSB

Fibreboard

Accessories

85 986900

18 682

15 331Nur-Sultan

1791

8,2

1791

8,2

2015

47,8

233,

8

45,6

177

5622

4

37,2

196,

4

37,8

204,

5

2016 2017 2018 2019

Nur-Sultan

Furniture production, million KZT

POTENTIAL SALES MARKETIn 2019, Kazakhstan exported the main volume of furniture products to Russia, which accounted for 40% of the total export volume. It is worth noting that in 2018, the volume of exports to Russia was 1,493 thousand US Dollars, an increase of 55%.

Main furniture buyers from Kazakhstan in 2019, thousand USD2015

1 52

230

256

1 90

1 35 9

59

02 16

1791

8,2 43

482

1 86

438

613

1 81

317

918,

2

37 9

00

2016 2017 2018 2019

Kazakhstan

Nur-Sultan

1791

8,2

2015

1 75

9 8 94

0

2 25

7 10 5

13

2 36

0 11 1

68

2 37

812

521

1 79

417

918,

2

13 1

34

2016 2017 2018 2019

Nur-Sultan

2 317RussiaKyrgyzstan

MongoliaBelarus

Tajikistan

426370

296

1 394

6

GLOBAL MARKET

Analysis of global imports of furniture manufacture for the period from 2015 to 2018 shows growth dynamics. Compared to 2015, global imports increased by 16.4% in 2018.

Global furniture product import for the period of 2015-2018, thousand USD

Kazakhstan

Kazakhstan

Kazakhstan

FURNITURE PRODUCTIONRussia became the main buyer of furniture products in Nur-Sultan city in 2019 (97.1%). In comparison with the previous year, the volume of exports to Russia increased by 63% (exports of Nur-Sultan city to Russia in 2018 – 210.2 thousand US Dollars).

Furniture buyers from Nur-Sultan in 2019, thousand USD

The volume of imports from neighboring countries is 2.6 billion us dollars, which is 7.4% more than in 2017.

Furniture import in neighboring countries, thousand USD




Tax preferences (corporate income tax, land tax, tax on property); Customs preferences (import of raw materials and equipment); Land with a ready-made infrastructure (free land plot rental); Simplified procedure for hiring foreign labor (attraction of foreign labor out of quotas).


Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state);Guarantee (project amount up to 1 billion KZT for existing entrepreneurs, guarantee up to 50%); Infrastructure supplying.



State support measures for Kazakhstan manufactures through «Kazakhstan Industry and Export Center «QazIndustry» JSCReimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market; to promotion domestic processed goods, works and services in internal market.

PRODUCT COSTKazakhstan has a competitive advantage in the markets of neighboring countries such as Armenia and Azerbaijan due to the price of furniture products.

Furniture import to Armenia, 2018

Furniture import to Azerbaijan, 2018

342,4RussiaUzbekistan

TurkeyUAE

Kyrgyzstan

2,41,21,00,60,5

4,6

GermanySerbia

Chin

a 1

334

158

1 25

7 61

786

5 50

579

1 38

411

0 42

299

768

76 0

0561

552

74 8

9361

062

27 2

80 2

4 70

224

127

18 4

6815

973

21 5

5215

597

27 3

29

12 3

7114

239

10 5

3511

865

Russ

ia

Bela

rus

Azer

baija

n

Ukr

aine

Mon

golia

Arm

enia

Kyrg

yzst

an

Turk

men

ista

n

Uzb

ekis

tan

Tajik

ista

n

3 1392 605

3 052296

1 6831 3701 409

4 490 1 344

43

Turkey

Ukraine

Belarus

Russia

Kazakhstan

Price per ton, USD

Cost, thousand USD

41 333992

21 3431 430

15 55613 705

9 2871 003 2 842

54

UK

France

Italy

Germany

Kazakhstan

2018

2017

TAX

%

COMPETITIVE ADVANTAGESHigh demand in the product;Potential import substitution and product export; Housing construction high temp;State support for investors and entrepreneurs.

Exemption from customs duties (0% up to 5 years for import); Tax benefits (VAT, corporate income tax, land tax, property tax - 0%);In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor

7

Price per ton, USD

Cost, thousand USD

PRODUCTION OF FURNITURE ACCESSORIESGeneral Classification of Types of Economic Activity:22.29 «Production of other plastic products»;25.99 «Production of other finished metal products not included in other categories».


Creation of an enterprise for the production of furniture fasteners in the territory of Nur-Sultan city

OUTPUT PRODUCTION:Fasteners and accessories for furniture made of plastic; Fasteners, accessories and similar products for furniture made of metals.

WORLD MARKETThe demand for furniture accessories directly depends on the demand for furniture products. The cost of accessories in the furniture is from 15 to 50 %. The dynamics of global demand for furniture accessories in recent years shows a stable growth. Furniture accessories import, thousand US dollars

There is no production of furniture accessories in the Republic of Kazakhstan. Kazakhstan furniture accessories import, thousand US dollars

Furniture accessories manufacturers:Hettich is one of the largest manufacturers of furniture accessories in the world (Germany);KESSEBÖHMER GmbH is the world leader in production of furniture accessories for kitchens (Germany);Rehau is a company specializing in the development of energy-efficient systems for construction, solutions for industry and furniture production (Germany);INOXA specializes mainly in the production of kitchen accessories made of metal rod (Italy);GTV is one of the largest European distributors of furniture accessories and lighting (Poland);BOYARD is the largest representative of the furniture accessories market in the Russian Federation.

RAW MATERIAL BASEMetal – Metal bases of Nur-Sultan city, «ArcelorMittal Temirtau» JSC, АО «Ulba Metallurgical Plant» JSC Ust-Kamenogorsk;Plastic – Domestic manufacturers of plastic products, «Neftekhim Ltd» LLP Pavlodar;Wood – Import from Russia, logging companies from East Kazakhstan region.

POTENTIAL SALES MARKETSNearby countries collectively imported furniture accessories for total amount 834 million US dollars.

Import of furniture accessories from nearby countries in 2018, US dollars

Dynamics of import prices for metal furniture accessories by country in 2018, us dollars per 1 ton

Dynamics of import prices for plastic furniture accessories by country in 2018, us $ per 1 ton


Investment preferencesExemption from customs duties (0% up to 5 years for import); Tax incentives (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land, buildings and structures, etc.); Hiring foreign labor.


Tax preferences (CIT, land tax, tax on property); Customs preferences (import of raw materials and equipment); Land with a ready-made infrastructure (gratuitous rent of a salary); Simplified procedure for hiring foreign labor (hiring of foreign labor out of quotas).

Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state); Guarantee (project amount up to 1 billion KZT for working entrepreneurs, guarantee up to 50%);Infrastructure supplying.


Economics of simple thingsSubsidies (rate not more than 15%, subsidy up to 9% of loan interest rates);Guarantee (up to 50% on loans up to 3 billion KZT and up to 30% on loans over 3 and up to 5 billion KZT inclusive).State support measures for Kazakhstan manufactures through «Kazakhstan Industry and Export Center «QazIndustry» JSC


20142015201620172018

11 052 5899 760 971

9 795 540 9 206 04

20152016201720182019

17 59616 833

16 154 14 556

18 682

5 5815 975

9 03841 025

83 366115 477

217 849355 583

AzerbaijanGeorgia

UzbekistanBelarus

KyrgyzstanUkraine

ChinaRussia

Russia 33626020

425822802593

40973077

12623026

ChinaKyrgyzstanKazakhstanAzerbaijanTajikistan

Belarus


Russia 15 15641 883

12264373

35993014

869638423619

ChinaKyrgyzstanKazakhstanAzerbaijanTajikistan

Belarus


COMPETITIVE ADVANTAGESLack of production in the Republic of Kazakhstan; Extensive sales market in Nur-Sultan city.

8

11 980 773

REGIONAL MARKET

PRODUCTION OF WALLPAPER General Classification of Types of Economic Activity 17.24 «Wallpaper production»

Manufacture construction for production of wallpaper in Nur-Sultan city.

OUTPUT PRODUCT:Wallpaper with a coating of foamed vinyl on a non-woven basis;Hot stamping vinyl Wallpaper;Non-woven wallpaper for painting.

Import, thousand US dollars

REGIONAL MARKET There is no production of wallpaper in Kazakhstan, while there is demand for this type of product, which is offset by imports in Kazakhstan.

RAW MATERIAL BASE Paper for Wallpaper – the Kazakhstan market is represented by 137 manufactures, including 5 large and 3 medium-sized enterprises. There are 30 small enterprises in Nur-Sultan city.Polyvinyl chloride – at industrial scale it is represented by manufacturers from Russia, China, Germany and Spain. Plastisol paint – the market is represented by manufacturers of China and Russia, with stable demand for this type of product, it is possible to start production in Kazakhstan on the basis of manufacturers of paint and varnish products.Shrink polyolefin film – market presented by numerous domestic companies.

POTENTIONAL SALES MARKETThe total volume of imports from neighboring countries in 2018 was more than 400 million US dollars.

Wallpaper imports by neighboring countries in 2018, thousand US dollars


Exemption from customs duties (0% up to 5 years for import); • Tax incentives (VAT, corporate income tax, land tax, property tax - 0%);In-kind grants (land, buildings and structures, etc.); Hiring foreign labor.

Tax preferences (corporate income tax, land tax, tax on property); Customs preferences (import of raw materials and equipment); Land with a ready-made infrastructure (gratuitous rent of a salary); Simplified procedure for hiring foreign labor (hiring of foreign labor out of quotas).

Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state);Guarantee (project amount up to 1 billion KZT for working entrepreneurs, guarantee up to 50%); Infrastructure supplying.

Subsidies (rate not more than 15%, subsidy up to 9% of loan interest rates); Guarantee (up to 50% on loans up to 3 billion KZT and up to 30% on loans over 3 and up to 5 billion KZT inclusive).


1 437 666

1 455 070

1 360 684

1 432 389 Glob

al m

arke

t 2015

201620172018

Housing fund

Republic of KazakhstanNur-Sultan

387, 7 million sq. m23, 3 million sq. m

2015

2016

2017

2018

2019

17918,2

89401759

2257

2360

2378

179412873

10513

11168

12521

Nur-SultanRepublic of Kazakhstan

Iran

Kazakhstan

Russia

0 10000050000 150000

3137 43349829

10631

11815

14316 14357

2554929350 36132

4375065655

66881

204896

200000 250000

Iraq

ArmeniaTajikistan

Ukraine

Mongolia

KyrgyzstanGeorgia

Azerbaijan

Uzbekistan

Belarus

China

Over the past 5 years there is a stable increase of housing in Nur-Sultan city. Repairs in residential buildings are made on average every 5-7 years.

Total area commissionedresidential buildings, thousand sq. m







Lack of production in the Republic of Kazakhstan; High demand for these product.

The major wallpaper consumers on global market are Russia and China. Kazakhstan has geographical advantage to supply those countries, with Kazakhstan's imports in 2018 amounting to 65.6 million us dollars.

COMPETITIVE ADVANTAGES

9

POTENTIAL SALES MARKETS

PROJECT DESCRIPTION

Creation of an enterprise for the production of paint and varnish products in the territory of Nur-Sultan city

OUTPUT PRODUCT:Paints and varnishes based on polyesters;Paints and varnishes based on acrylic or vinyl polymers; Other paints and varnishes.

WORLD MARKETWorld marketImport of paints, thousand USD

Paints import to neighboring countries in 2018, thousand

USD

Import to the Republic Kazakhstan, thousand USD


Exemption from customs duties (0% up to 5 years for import);Tax benefits (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.);Attracting foreign labor.

Cumulative imports of neighboring countries in 2018 amounted to more than 1.6 billion USD.

The largest consumers in the global paint market are Russia and China. Kazakhstan has a geographical advantage for deliveries to these countries, while Kazakhstan's imports in 2018 amounted to $ 66.8 million USD.

Import prices for paint and varnish products of neighboring countries for 2018 USD per 1 ton

Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state); Guarantee (project amount up to 1 billion KZT for existing entrepreneurs, guarantee up to 50%);Infrastructure supplying.


Reimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market;to promotion domestic processed goods, works and services in internal market

PRODUCTION OF PAINT PRODUCTSGeneral Classification of Types of Economic Activity:

20.30 «Production of paints, varnishes and similar coloring substances, printing ink and mastic»

Kazakhstan has established production of various varnish and paint products, but domestic production does not cover all the needs of the paint market.

REGIONAL MARKETManufacturers of paints - Gaudi Paint (Kazakhstan), PUFAS(Germany), Sniezka (Poland), Alina Paint (Kazakhstan), Marshall (Netherlands), Lacra (Russia), TM Raduga (Russia), Alian paint (Kazakhstan), SKIF (Kazakhstan), Almaty paints (Kazakhstan).

RAW MATERIAL BASEThickener - the market is represented by manufacturers from Russian Federation, Turkey, Poland, Finland, Italy, Spain, Germany, Belarus, Korea and Israel.Sodium polyphosphate - domestic producer in the Zhambyl region ( Group of companies Kazphosphate), import from Russia, Germany, China and the UK;Defoamer - import from Russia, Germany, China, Poland, Turkey, Slovenia and Italy;Solvents - its is planned production launch in the Almaty region, imports from Turkey, Russia, the Netherlands and Germany; Propylene glycol - there are domestic manufacturers, import from Russian Federation, Spain, Germany and China;Titanium Dioxide - Czech Republic, France, Russian Federation; Micromarble filler (calcite) - domestic manufacturer in the Zhambyl region (Group of companies Kazphosphate), import from Russia, Germany, China and Great Britain;Dispersion - there is production in the Turkestan region, import from Russia, Turkey, Poland, Finland, Italy, Spain,Germany, Belarus, Korea and Israel.

14 566 457

13 088 399

12 262 573

12 244 902

13 852 368

2018

201720162015

2014

76 460

58 654

59 703

74 679

66 891

2018

201720162015

2014

75 7

914

537

642

82 6

05

68 0

11

66 8

91

41

961

37 8

13

20 1

50

15 7

87

15 4

20

12 8

82

9 42

8

8 11

8

6 51

4

6 40

9

Kaza

khst

an Iraq

Iran

Azer

baija

n

Uzb

ekis

tan

Geor

gia

Turk

men

ista

n

Kyrg

yzst

an

Arm

eni

Tajik

ista

n

Mon

golia

Chin

a

Russ

ia

Ukr

aine

Bela

rus

7 62

1

3853

3816

3397

3331

317

5

2769

2497

2428

2224

1842

1826

1562

1232

1054

Kaza

khst

an

Iraq

Iran

Azer

baija

n

Uzb

ekis

tan

Geor

gia

Turk

emni

stan

Kyrg

yzst

an

Arm

enia

Tajik

ista

n

Mon

golia

Chin

a

Russ

ia

Ukr

aine

Bela

rus



Business roadmap – 2025



State support measures for Kazakhstan manufactures through «Kazakhstan Industry andExport Center «QazIndustry» JSC

COMPETITIVE ADVANTAGESHigh demand in the product;High demand for technological paints; Proximity to the markets of China and Russia.

10

PRODUCTION OF PLASTIC PRODUCTSGeneral Classification of Types of Economic Activity:22.23 «Production of construction plastic products»;22.21 «Production of plastic sheets, tubes for tires and profiles».


Creation of an enterprise for production of plastic products in the territory of Nur-Sultan city.

OUTPUT PRODUCTS:Plastic containers; Plastic coatings; Plastic pipes.

WORLD MARKETDynamics shows that plastic products in the world are in stable demand, with the growth of plastic coatings from 2014 to 2018 amounted to 63%.

There are a number of enterprises that are generally produce plastic products in Kazakhstan, but they do not cover the inside demand of the republic. Major domestic manufacturers – «Neftekhim Ltd» LLP, Pavlodar, «Aktau fiberglass pipe plant» LLP, «Aktobe non-metallic pipe plant» JSC, «Atyrau polyethylene pipe plant» LLP, «Galaksi» LLP, Almaty, «KazPlast» LLP, Karaganda, «Belem-Plast» LLP, Karaganda, «Petropavlovsk construction materials plant» LLP, «Amitech-Astana» LLP, «PLASTCOM GROUP» LLP.Import of plastic products in the Republic of Kazakhstan, thousand US dollars

Import plastic reservoirs in Nur-Sultan city

neighboring countries in 2018

RAW MATERIAL BASE Polypropylene – «Company Neftekhim LTD» LLP. Import of products are mainly from the Russian Federation and China. A large plant for the production of polypropylene is under construction in Atyrau region. It is planned to complete the construction by 2021, its capacity will be 500 thousand tons per year – it will be the largest production in the world. Polyvinylchloride – Imports of products are mainly from China and Russian Federation.Polyethylene – Import of products are mainly from the Russian Federation and China, in addition, a project is being implemented in Atyrau region on polyethylene production with capacity of 1.2 billion tons.

POTENTIAL SALES MARKETS The total volume of imports from neighboring countries in 2018 amounted to more than 2.7 billion US dollars.

Import of plastic coatings of Import of plastic pipe of neighboring countries, 2018

Import of plastic containers of neighboring countries, 2018

STATE SUPPORT MEASURERSInvestment preferences

Exemption from customs duties (0% up to 5 years for import); Tax benefits (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.Special economic zone preferences

Tax preferences (corporate income tax, land tax, tax on property); Customs preferences (import of raw materials and equipment); Land with a ready-made infrastructure (free land plot rental); Simplified procedure for hiring foreign labor (attraction of foreign labor out of quotas).Business roadmap – 2025

Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state); Guarantee (project amount up to 1 billion KZT for existing entrepreneurs, guarantee up to 50%);Infrastructure supplying.Economics of simple things



KyrgyzstanIran

12117127601481116091167812598789450154918323910556440

1179688

Mongolia


BelarusAzerbaijan

IraqRussia

Ukraine

China

BelarusUkraine

16702264

25043008

8497

RussiaChina

Iraq

BelarusUkraine

1601142725

7258999562

123128RussiaChina

Iraq

20182017201620152014

28 5

58 8

739

610

219

900

133

24 0

31 5

278

000

958

773

059

21 7

41 7

516

933

779

685

798

21 8

86 0

126

132

898

745

785

23 6

67 8

146

060

653

780

682

20182017201620152014

4 45

940

18789

279

3 14

146

17491

918

1 72

829

239

73 9

60

2 99

738

07488

778

2 30

453

763

134

809

plasticpipes

plasticcoatings

REGIONAL MARKET

plasticcontainers

plasticcoatings plastic containers

Import and export of plastic coatings in Nur-Sultan city

2015

2016

2017

2018

2019

37,93418,2

522,9 863,5 1723,8

plastic pipesImport and export of plastic pipes in Nur-Sultan city

10448 11665,7

6469,4 5703,4 5820,9

2015

2016

2017

2018

2019

643,4 735,1 773,2 786,8 11072,5

32125,4 26033,5

28986,139066,132535,1

2015

2016

2017

2018

2019

107,5 469,1 637 204,7 329,7

COMPETITIVE ADVANTAGES High demand on production;Possibility of production of raw materials in Kazakhstan; Industry development all over Kazakhstan.

11

PRODUCTION OF RUBBER PRODUCTSGeneral Classification of Types of Economic Activity 22.19 «Production other rubber products»


Creation of an enterprise for the production of rubber products on the territory of Nur-Sultan city.

OUTPUT PRODUCTS:

Rubber products for the automobile industry; Rubber products for construction materials; Other rubber products.

WORLD MARKETImport in thousands of US dollars

REGIONAL MARKETThere are a number of enterprises that are generally produce rubber products in Kazakhstan, but they do not cover the inside demand of the republic. Major domestic manufacturers - «Rezina» LLP, Almaty region; «Elastopolymer» LLP, Turkestan region; «Vostokremstroymontazh» LLP, Ust-Kamenogorsk; «KZRTI» JSC, Karaganda; «KazakhstanRubberRecycling» LLP, Nur-Sultan city.Foreign trade of the Republic of Kazakhstan rubber products thousand US dollars

Import rubber products in Nur Sultan city

The total volume of imports of neighboring countries in 2018 amounted to more than 3 billion US dollars.

RAW MATERIAL BASESynthetic caoutchouc - imports of primary raw materials from European Union countries and Russian Federation, processing by domestic enterprises of «DDEK» LLP Shymkent city; «KZ TRANSIT» LLP, Karaganda city.

Natural caoutchouc - during the Soviet period, Kazakhstan was a leader in the production of raw materials for rubber products, and has all the prerequisites for the restoration of the industry for growing rubber production in the Southern regions of Kazakhstan.

Rubber crumb - domestic recycling plants of rubber tires - capacity of 40 thousand tons per year is in the Republic of Kazakhstan, capacity of Nur-Sultan city - 12 thousand tons per year – «Kazakhstan Rubber Recycling» LLP. Moreover, this power is not enough to recycle the annual volume of tires requiring recycling.

POTENTIAL SALES MARKETS

The main consumers in the regional market of rubber products are Russia and China. Kazakhstan has a geographical advantage for making deliveries to these countries.

Dynamics of the cost of 1 ton of products in global market in thousands of US dollars.










2015201620172018 30 964 986

29 129 133

26 252 90626 722 522

TajikistanKyrgyzstan

1 250 4 065 5 162 8 055 9 31211 624 20 09120 52122 70334 978

79 035 202 098

253 426637 965

2 398 634

Turkmenistan

MongoliaArmenia

IranGeorgia

AzerbaijanIraq

Uzbekistan

Belarus

UAERussia

Ukraine

China

20142015201620172018

8875

9571

85

2014

2015

2016

2017

2018

80 7012 803

60 0733 506

63 5811 904

74 6413 713

85 1763 907

2015

2016

2017

2018

2019

1361,25826,8

8176201,8

734,56773,2

739,17504,9

10809382

TAX

%

Import ExportQuantity, ton Import, thousand US dollars

Imports from a number of countries, in thousands of US

dollars

COMPETITIVE ADVANTAGESThe development of the rubber processing industry; Low cost;High demand for products.

Exemption from customs duties (0% up to 5 years for import); Tax benefits (VAT, corporate income tax, land tax, property tax - 0%);In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.

12

BEEF PRODUCTIONGeneral Classification of Types of Economic Activity 10.11.0 «Processing and conservation of meat»


The project involves construction full-cycle beef production with the creation of a reproducer and feedlot sites.

BACKGROUNDPopulation growth – the population of the capital grew up to 30% in comparison with 2015;Import substitution - beef imports in January-November 2019 amounted to 98.9% of the city's consumption;Developed infrastructure.

Production of cattle meat in Kazakhstan

Meat processing plant with production capacity 1,5 thousand tons

Production of cattle meat in Akmola region

Production of cattle meat in Nur-Sultan city

Beef import to Kazakhstan, US billion dollars

GLOBAL MARKETDemand on beef is stable and keeps in range of 40-45 billion US dollars.

Global import of cattle meat, bln US dollars

Dynamics of domestic beef market production in Nur-Sultan city

Average cost per ton in fresh or chilled condition, in global market - 6 182 US dollars Leaders in fresh or chilled beef imports:USA ($ 3,1. billion); Japan ($2.1 billion); Germany ($2 billion). Average cost per ton in frozen condition, in global market - 4 565 US dollarsLeaders in frozen beef meat imports:China ($4,7 billion);USA ($2.2 billion);Hong Kong ($2.1 billion).

Main suppliers of beef in Kazakhstan are Ukraine and Belarus. Export is mainly to Russia, Uzbekistan and Kyrgyzstan.

REGIONAL MARKET Main sales markets of Kazakhstan meat are Russia, Uzbekistan and Kyrgyzstan.

Nur-Sultan city imports 98.9% of the consumed beef meat in the city. This fact and the steady growth of the population indicate favorable conditions for the creation of production in the capital.

Over the past 5 years beef production in Nur-Sultan city decreased by 46% which considering import volume indicates great potential of meat production development in the city.

2015 2016 20172014 2018

1791

8,2

fresh or chilledmeat

frozen meat

22,221,3

20,720,9

20,518,1

22

19,9

23,823,1

1791

8,2

Beef export from Kazakhstan in 2018, ton 719

2021

2

1103

330

515

200

Russ

ia

Uzb

ekis

tan

Kyrg

yzst

an

Bahr

ain

Indicators 2015 2016 2017 2018 2019

Production, tonExport, tonImport, tonInternal consumption, tonImport share, %

79,1 62,7 72,5 59,5 38,9

24,3 0,0 0,0 0,0 134,6

154,1 252,1 614,7 210,9 3 352,8

233,2 314,8 687,2 270,3 3 391,7

66,1 80,1 89,5 78 98,9

11 months,

2015

2016

2017

2018

2019

789,1416,8

430,6

450,4

477,5

501,4

814,6

853,5

906,2

960,1

2015

2016

2017

2018

2019

166,979,8

62,66

72,5

59,46

42,73

120,1

139,2

114,1

82,3

2015

2016

2017

2018

2019

7918,2

42,11,2

1,1

1,11

5,6

6,3

35,8

19,4

38,2

39

2015

2016

2017

2018

2019

42,622

21,7

22,3

22,1

23,7

42,2

43,5

43,1

46.2

slaughter weight, thousand ton

life weight,thousand ton

fresh or chilledmeat

slaughter weight, thousand ton

life weight, thousand ton

Beef export from Kazakhstan, US billion dollars

2015

2016

2017

2018

2019

17918,2

2,36,7

6

4,5

2,4

11,7

0,7

0,3

0,6

3,6

frozen meat

fresh or chilledmeat frozen meat

Prime cost of beef exported by Kazakhstan has a price advantage in the global market.

Import price for beef to China in 2018, thousand US dollars/ton18,8

15

8,5

9

4,7 4,74,5

4,43,5 3,2

3,55,5

Braz

il

Bela

rus

Arge

ntin

a

Uru

gvay

Kaza

khst

an

Fran

ce

Italy

Aust

ralia

New

Zea

land

13

BEEF PRODUCTION

RAW MATERIAL BASEGrowers foundation on 10 000 animal units; Approximate location: Akmola region;Total area of grassland in 2018 in Akmola region – 4 483 hectar;Feed base-gross harvest of feed crops in Akmola region in 2019 - 42.6 thousand quintals.

Feed balance for wintering in Akmola region in 2018-2019, thousands tons

Livestock of beef steers in the Akmola region, thousand heads

The number of calves for in meat production

Kazakhstan, thousand heads

1791

8,2

7,7

3,8 3,73,6

11,8

3,6

16,3

3,5 3,63,3

Paraguay Belarus Urugvuay Argentina Kazakhstan

Import prices for beef to Russia in 2018, thousand US dollars/ton

fresh or chilledmeatfrozen meat

PRODUCERSMain producers on beef market in Nur-Sultan are «Tselinnaya plan of delicates» LLP, and «April 2030» LLP, in Kazakhstan are «KazBeef Processing» LLP and «Aktubinsk meat cluster» LLP.

POTENTIAL SALES MARKETBeef import in fresh and chilled condition of nearby countries in 2018

3707

2410

0522

1599

0 3922

414

020

1252

2988

924 18

0547

8 1616

329

1365

61

Russia China Belarus Uzbekistan Azerbaijan Armenia Ukraine

cost,thousand US dollars

weight, ton

4215

Capacity of nearby countries market of fresh and chilled meat is 557 million US dollars,

in frozen meat is 5,6 billion US dollars.

Beef import in frozen condition of nearby countries in 2018

cost, thousand US dollars weight, ton

1023

398

4663

063

8927

9073

3622

047

2047

873

10 1893

1

4391

1273

711

3340

65

253

697

166

463

39 136

3 80

2443

55

Chin

a

Russ

ia

Bela

rus

Kyrg

yzst

an

Azer

baija

n

Tajik

ista

n

Mon

golia

Ukr

aine

Uzb

ekis

tan

Turk

men

ista

n

Arm

enia

5475

Feeding platform for 5 000 animal units in Akmola region in 2018

Workingfeeding platforms

8 feeding platforms for 19 00 cattle stall

Over the past 5 years, the growth of cattle in Kazakhstan and in the Akmola region amounted to 33% and 46.6%, respectively, which is a favorable condition for the implementation of the project in the form of a growing raw material base.

Нур-Султан

20152016

2017

2018

2019

52

51

55

70

76

20152016

2017

2018

2019

918,2

979,8

1078

1168

1222,6

Dry fodder Haylage Silage Concentrated fodder

RequiredProduced% provision

1104 141 113 5261123 142 104 526

102 101 92 100

COMPETITIVE ADVANTAGESRaw material base availability;Potential import substitution and product export;State support for investors and entrepreneurs.

STATE SUPPORT MEASURESInvestment preferencesExemption from customs duties (0% up to 5 years for import); Tax benefits (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.Special economic zone preferencesTax preferences (corporate income tax, land tax, tax on property); Customs preferences (import of raw materials and equipment); Land with a ready-made infrastructure (free land plot rental);Simplified procedure for hiring foreign labor (attraction of foreign labor out of quotas). Preferences in agro-industrial complex Creation and expansion of livestock slaughter and meat processing facilities (the share of the return on investment is 25%);Reducing of beef harvesting cost (175 KZT/kg);Purchase of cattle breeding stock (150,000 - 225 000 KZT/per head);Reducing the cost of bulls sold or moved to fattening areas with a capacity of at least 1000 heads at a time (200 KZT / kg live weight); Creation and expansion of facilities for fattening cattle (share compensation on investment is 25%); Purchase of domestic breeding bulls - producers of meat breeds (150 000 KZT / per head);Purchase of imported breeding or purebred breeding stock (225,000 KZT / animal unit);Keeping of the breeding bull-producer of meat breeds, used for the reproduction of the herd (100 000 KZT / per head); Reducing the cost of fattening gobies for feed lots with a capacity of 1000 heads at a time (200 KZT / kg of weight gain);Purchase of machinery and equipment for growing meat farm animals (share compensation on investment - 25%);Special tax treatment for agricultural products manufacturers (the right to reduce by 70% of amounts of corporate income tax, individual income tax, social tax, property tax and vehicle tax). Business roadmap – 2025 Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state); Guarantee (project amount up to 1 billion KZT for existing entrepreneurs, guarantee up to 50%); Infrastructure supplying.Economics of simple thingsSubsidies (rate not more than 15%, subsidy up to 9% of loan interest rates);Guarantee (up to 50% on loans up to 3 billion KZT and up to 30% on loans over 3 and up to 5 billion KZT inclusive).State support measures for Kazakhstan manufactures through «Kazakhstan Industry and Export Center «QazIndustry» JSC Reimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development; to promotion domestic processed goods in foreign market;to promotion domestic processed goods, works and services in internal market.

14

PRODUCTION OF SAUSAGES AND MEAT PRODUCTSGeneral Classification of Types of Economic Activity 10.13.0 «Production of meat and poultry products»

4,9 4,2 4,2 4,7 5,1

2,4 2,3 2,1 2,1 2,3

7 6,7 6,6 7,2 7,7

2014

sausages semi-finished chicken meat

semi-finished beef meat

2015 2016 2017 2018

Import of sausages and meat products in the world, billion US

dollars

Sausages and meat products production in Kazakhstan, thousand ton

Sausages and meat products production in Nur-Sultan, thousand ton

Import of sausages and meat products in Nur-Sultan city, billion US dollars

60,248,0

59,8 60,968,9

1,7 1,9 3,5 7,321,3

3,5 3,5 4,5 4,1 4,2

2015 2016 2017 2018 2019

0,7

0,3

0,71,0

1,5

0,1 0,1 0,2 0,2 0,20,30,1

0,3 0,3 0,3

2016 2017 2018 2019


In general, the global demand for sausages and meat products from beef and domestic chickens is a positive trend. Beef products is the most popular.

Over the past 5 years, the growth of cattle in Kazakhstan and the Akmola region amounted to 33% and 46.6%, respectively, which is a favorable condition for the implementation of the project in the form of a growing raw material base.

According to the «Union of poultry farmers of Kazakhstan», there are 20 poultry farms in Kazakhstan in the meat direction. The largest are «Ust-Kamenogorsk poultry Farm» JSC (East Kazakhstan region), «Alel agro» JSC (Almaty city), «Alatau-Kus» JSC (Almaty city) and «Makinskaya poultry farm» LLP (Akmola region).

According to the Order of the Minister of National Economy of the Republic of Kazakhstan dated December 9, 2016 №503, the rational consumption rate of sausages products is 11 kg per year. Taking into account the population of Kazakhstan (18,653,467 people as of February 1, 2020), it is necessary to produce 205,2 thousand tons of sausage products per year (Nur-Sultan city – 12,5 thousand tons). Based on these calculations and production volumes in Kazakhstan and Nur-Sultan city conclude that the existing capacity is not enough to provide the population with sausage products.

GLOBAL MARKET

REGIONAL MARKET

Sausages products are the most preferred product from the presented ones. In 2019, Russia imported about 77% of all sausage products, 79% of all semi-finished meat products from domestic chickens and 81% of beef products to Kazakhstan.

Import of sausages and meat products in Kazakhstan, billion US dollars

MANUFACTURERSIn total 180 enterprises in Kazakhstan produce semi-finished meat products, the main part of which is small and medium-sized enterprises. The largest ones are «Becker & K» LLP, «Kubley» LLP, «Rubikom» LLP, «Capital projects LTD» LLP, «Karat» LLP and «April 2030» LLP. 12 companies are operating in Nur-Sultan, of which only one is large, «April 2030» LLP.

RAW MATERIAL BASE

sausages

semi-finished meat (including chicken meat)

canned food sausages and similar meat products


semi-finished chicken meat

2015

sausages semi-finished chicken meat


39,3

44,7

44,3

45

53,7

9,5

6,1

7,6

6,9

7,5

14,4

17,7

16,6

16,1

18,1

2015

2016

2017

2018

January-December 2019 г.

semi-finished meat (including chicken meat)

sausages and similar meat products

1,2

2

2,4

3,1

3,5

1,2

1

1

0,9

0,8

2015

2016

2017

2018

35 35,6 36,9 39,9 44,3

4,4 4,9 5 5,7 7,6

2014 2015 2016 2017 2018

Number of all bird types in Kazakhstan, thousand animal units

Akmola regionKazakhstan

Akmola regionKazakhstan

51,8

918,2 979,8 10781168

122,6

51 55,3 70 76

2015 2016 2017 2018 2019

Livestock of meat direction in Kazakhstan, thousand animal units

Creation of production of sausages and meat products from meat of cattle and chickens, with a capacity of at least 10 thousand tons per year.

15

January-December 2019 г.

PRODUCTION OF SAUSAGES AND MEAT PRODUCTS

PRODUCT COST

9502 715

3 7504 338

5 12610 500

11 60018 611

KazakhstanBelarus

AzerbaijanMongolia

SerbiaArmenia

Italy

Kazakhstan product has great price advantage against other exporter-countries in the Russian market.

Import price of sausage products in Russia in 2018, US dollar per ton

Switzerland

1 2222 000

2 4973 216

4 3254 863

7 00011 417

KazakhstanArmeniaBelarusSerbia

SloveniaDenmark

Czech RepublicGermany

Import price of poultry meat products in Russia in 2018, US dollar per ton

10,75,16,7

9,493,6

TajikistanAzerbaijan

Russia

Import of sausages products by neighboring countries in 2018,

million US dollars

3,83,1

4,56,26,3

*Kyrgyzstan, Armenia, Mongolia, China, Uzbekistan, Turkmenistan and Tajikistan

*Azerbaijan, Kyrgyzstan, Mongolia, Tajikistan, Armenia, Turkmenistan and Uzbekistan

*Ukraine, China, Belarus, Kyrgyzstan, Turkmenistan, Mongolia and Uzbekistan

Armenia others*

RussiaUkraine Belarus

Azerbaijan others*

Import of poultry meat by neighboring countries in 2018, million US dollars

17,18,6

1372,9

77,8RussiaChina

Ukraine Belarus others*

Import of beef meat by neighboring countries in 2018, million US dollars

2 3742 756

3 4483 802

5 6095 888

12 50021 321

24 000

KazakhstanMongolia

ArmeniaBelarusSerbia

BelgiumSpainItaly

Switzerland

Import price of beef meat products in Russia in 2018, US dollar per ton

POTENTIAL SALES MARKETSTotal import volume of sausages, beef and chicken meat formed at the level of 339 million US dollars in 2018. More than 52% of total volume falls on Russia.


Raw material base;Great demand on the product;Potential import substitution and product export; State support for investors and entrepreneurs.


TAX


Exemption from customs duties (0% up to 5 years for import); Tax benefits (Value added tax, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.

Tax preferences (corporate income tax, land tax, tax on property); Customs preferences (import of raw materials and equipment);Land with a ready-made infrastructure (free land plot rental); Simplified procedure for hiring foreign labor (attraction of foreign labor out of quotas).


%


16






ADVANCED WHEAT PROCESSINGGeneral Classification of Types of Economic Activity:10.62.0 «Production of starch and starch products»;10.91.0 «Production of ready-made feed for farm animals»;20.14.2 «Production of bioethanol»;20.14.9 «Production of other basic organic chemicals not elsewhere classified»


Creation of a biotechnological complex for advanced grain wheat processing with a volume of more than 150 thousand tons per year to obtain processed products.

OUTPUT PRODUCTS:Bioethanol (ethyl alcohol with an alcohol concentration of more than 80%);

Lysine; Wheat starch;Gluten; Lemon acid.

GLOBAL MARKETThe global market for wheat-processing products characterized by constant growth, of which bioethanol is the most popular product.

Import of wheat product processing in global market, billion US dollars

REGIONAL MARKETKazakhstan imported about 12,2 thousand tons products of advanced wheat processing (lysine, lemon acid, bioethanol, wheat starch and gluten) on total amount 11,8 million US dollars in 2019.

Kazakhstan imports of grain wheat processing products thousand US dollars

PRODUCERSFor now, the main producer of advanced wheat processing products in Kazakhstan is «BioOperations» LLP with a capacity of 220 thousand tons of wheat per year.There are several dozen enterprises specializing in advanced processing today in Russia, however production of such products as amino acids (lysine), vitamins or bioethanol is carried out only by Belgorod premixes plant No. 1 («Prioskolye» National Company) иand Tyumen agricultural holding «Anniversary».

Exports of wheat and meslin are growing, indicating availability of large stock of raw materials, at the same time, this fact indicates the weak development of wheat processing.

Kazakhstan exports of wheat and meslin, million US dollars

RAW MATERIALS BASE

Kazakhstan consistently occupies one of the leading positions on wheat production in the world. According to the results of 2018, gross harvest of wheat amounted to 13.9 million tons. Akmola region is the leader of the republic in terms harvest of wheat (28.6%).

Gross harvest of wheat, million tons

POTENTIAL SALES MARKET

In comparison with the export price of wheat, processed products have a significant advantage, in other cases reaching almost 10 times the size.

Prices for products exported by Kazakhstan in 2018, US dollars/ton

*Average import price of wheat starch in the world

Total import volume of neighboring countries made more than 390 million US Dollars in 2018.

1,6 1,

71,

50,

35

1,4 1,5

1,4

0,3

4,9

1,4 1,5

1,5

0,3

5

1,5 1,6 1,7

0,3

6,2

1,6 1,7 1,8

0,4

6,3

20152014 20182016 2017 wheat starch

ethyl alcohol with an alcohol concentration of more than 80%

lemon acid lysine gluten

118

128 13

75

731

2 69

9

59 137

290

6 40

12

426

279

100 79

03

742

3 47

051

614

313

98

040

2 94

938

5 281

101

8 52

22

463

20162015 20192017 2018

wheat starch

ethyl alcohol with an alcohol concentration of more than 80%

lemon acid lysine gluten

2015 2016 20172014 2018

Republic of Kazakhstan Akmola region

3,9

13 13,7

15 14,813,9

3,94,3 4 4

2016 2017 20182015 2019

688,7 685,1

659,5965,4

1003,2

157wheat and meslin lemon acid

lysinegluten

wheat starch* ethyl alcohol with an

alcohol concentration of more than 80%

13831 426

4401 333

907

17

ADVANCED WHEAT PROCESSING

Imports of wheat processing products from neighboring countries in 2018, thousand US dollars


Exemption from customs duties (0% to 5 years for import);

Tax incentives (VAT, CIT, land tax, property tax - 0%);

In-kind grants (land, buildings and structures, etc.);

Attracting foreign labor (IRS).


Raw material base availability;Significant demand for products;Potential import substitution and product export; State support for investors and entrepreneurs.


Tax preferences (CIT, land tax, tax on property);Customs preferences (import of raw materials and equipment); Land with a ready-made infrastructure (gratuitous rent of a salary); Simplified procedure for hiring IRS (attraction of IRS out of quotas).

Preferences in agro-industry

Partial reimbursement of expenses for equipment purchase for enterprise production expansion of grain crops products advanced processing with capacity of 170 tons or more (the share of reimbursement of investments is 25%).


Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state);

Guarantee (project amount up to 1 billion KZT for working entrepreneurs, guarantee up to 50%);

Infrastructure supplying.


Subsidies (rate not more than 15%, subsidy up to 9% of loan interest rates);

Guarantee (up to 50% on loans up to 3 billion KZT and up to 30% on loans over 3 and up to 5 billion KZT inclusive).


Reimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market; to promotion domestic processed goods in foreign market.

%

China

Turkmenistan

Russia

Azerbaijan

Armenia

Belarus

Kyrgyzstan

Mongolia

Ukraine

Uzbekistan

Tajikistan

Bioethanol lysine wheat starch lemon acid gluten

158 959

9 542

1 452

784

220

18

2

1

1

3 702

59

111 093

1 313

221

14 461

33

13 174

3 501

64

674

24

1 975

6

9

162

51

559

193

39

6 061

409

37 183

1 199

314

1 259

326

7 513

1 886

276

2 515

3

5 529

9

255

1 512

2 822


18

CONSTRUCTION OF A GREENHOUSE General Classification of Types of Economic Activity 01.13.2 «Vegetables, seeds and seedlings growing»


GLOBAL MARKETAfter a decline in 2015, demand for tomatoes and cucumbers gradually grew and by the end of 2018 exceeded the indicators of 2014.Global import, billion US dollars

Cucumbers gross harvest of covered field, tons

Tomatoes gross harvest, tons

Tomatoes gross harvest of covered field, tonsREGIONAL MARKET

In recent years, the purchase of foreign tomatoes and cucumbers has been declining although it remains at a high level.Kazakhstan import, thousand US dollars

Akmola region Kazakhstan Nur-Sultan

414,8

126,1

121,8

63,6

69,5

396 608,3

404 028,5

409 699,8

460 109,8

494 671,8

11 763,8

12 434,5

11 053,4

9 557,7

10 085,6

2015

2016

2017

2018

2019 (operational data)

684,7

164,6

149,9

60

57,8

687 687,4

705 550,1

739 006,7

765 453,4

790 500,9

12 819

13 132

12 186,9

10 232,1

10 844,8

2015

2016

2017

2018

2019(operational data)

3,3

266,1

321,9

326,2

52,4

83 744,9

101 666,3

99 331,1

92 747,8

122 581,3

506,2

421,8

912,1

962,7

2015

2016

2017

2018

2019(operational data)

291,2

268

1 107,9

30,1

59 013,5

55 998

74 102,4

77 898,6

87 629,5

1 319,1

906

1 581,6

222,7

1 421,1

2015

2016

2017

2018

2019 (operational data)




9,48,6 8,8 9,1 9,5

2,6 2,52,5 2,6 2,9

2014 2015 2016 2017 2018

tomatoes cucumbers

According to the minimum standards of Nur-Sultan city, currently, a minimum of 5.7 thousand tons of tomatoes and cucumbers are required annually (the minimum norm of kg/year for 1 person is 5 kg, the population of Nur-Sultan city on January 1, 2020, is 1,136,008 people). Production covers less than 1% of the required quantity.

Cucumbers gross harvest, tons

tomatoes cucumbers

57 63470 074

41 95756 364

45 051 39 284

11 770 13 3696 168 6 977 6 962 5 809

2014 2015 2016 2017 2018 2019

Nur-Sultan import, thousand US dollars

tomatoes cucumbers

2 323,51 795,7 2 192,5

6 052,0

1 284,9278,4 59,1 80,2 336,0 20,8

2015 2016 2017 2018 2019

MANUFACTURERSThere are 19 companies engaged in greenhouse farming in Nur-Sultan city, the main producer in Nur-Sultan city is «AstanaEcoStandart» LLP. There are 557 companies are operating in Kazakhstan, the largest greenhouse farms are «Pervomaysky» LLP (Atyrau region), «Agrofirma «Zhana AK Dala» LLP (Turkestan region), «Ecoculture fields» LLP (Almaty region), «Green land Alatau» LLP (Almaty region), «Greenhоuse Kazakhstan» LLP (Aktobe region), «Greenhоuse-qaztomat» LLP (Pavlodar region) and «Topar greenhouses» LLP (Karaganda region).

RAW MATERIAL BASESeed producer:The scientific and Production Enterprise «INVENT-plusproduces more than 900 names of varieties and hybrids of vegetable and flower crops (Kostanay region, Tobyl city (previuos Zatobolsk). Fertilizer producers:«KazAzot» LLP produces technical ammonia and ammonium nitrate (Mangystau region, Aktau city, Industry zone 6);«KazPhosphate» LLP is engaged in the production of ammophos, superphosphates, sulfoammophos and nigroammophos (Almaty city, Samal-1, bldg1A);«Kazagrotumar» LLP – enterprise specialized in organic mineral fertilizer production (Pavlodar region, Pavlodar, Central industry zone 1148);Artificial soil substitute producers:«TechnoStroyAGRO» LLP supplies coconut mats for greenhouses in the form of pressed plates in a light-stabilized film (Moscow city, Begovoy district, Skakovaya street, bldg17, str1, office 1216, BC «Skakovaya 17»);«TECHNO» plant of «TECHNONIKOL» corporation produces stone wool substrates, capacity is 200 thousand cubic meters per year. (Ryazan city, Eastern promzone, bldg. 21, str58).

It is considered to create a business for growing tomatoes and cucumbers in covered field conditions.

19

CONSTRUCTION OF A GREENHOUSE

830

1 001

1 041

1 090

1 346

1 840

2 632

Kyrgystan

Moldova

Tajikistan

Russia

Belarus

Uzbekistan

Armenia

462012305491 0581 6523 66011 717

37 154117 433

629 841

UzbekistanTajikistanMongolia

AzerbaijanArmenia

TurkmenistanKyrgyzstan

MoldovaUkraineBelarusRussia

Tomatoes volume import (fresh or chilled) in 2018, thousand US dollars

25

210

248

603

1 089

1 974

1 991

6 353

8 931

123 114

China

Mongolia

Tajikistan

Turkmenistan

Armenia

Kyrgyzstan

Azerbaijan

Belarus

Ukraine

Russia

Cucumbers and gherkin volume import (fresh or chilled) in 2018, thousand US dollars

1 001

1 038

1 154

1 840

6 250

Russia

Tajikistan

Belarus

Armenia

China

Cucumbers import price (fresh or chilled) of neighboring countries in 2018,

thousand US dollars

POTENTIAL SALES MARKETSThe total volume of tomato imports from neighboring countries in 2018 was 803.5 million US dollars or 742.5 thousand tons. Demand for cucumbers in neighboring countries reached 144.5 million US dollars or 151.1 thousand tons.

PRODUCT COSTTaking into account the average export price of Kazakhstan for the products (the export price for cucumbers is 983 US dollars per ton, for tomatoes – 756 US dollars), we have a serious competitive advantage in the markets of neighboring countries.

Tomatoes import price (fresh or chilled) of neighboring countries in 2018, thousand US dollars



TAX


Exemption from customs duties (0% up to 5 years for import); Tax benefits (Value added tax, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.



%

RATESElectricity - 14,5 KZT/kW (without Value added tax); Water supply - 195,36 (without Value added tax); Sewerage - 203,06 (without Value added tax);Gas transported via distribution networks, liquefied, per 1 kg - 140,56 KZT;Heat supply - 3 907,37 KZT /gcal (without Value added tax).


Price advantage in the markets of neighboring countries; Production deficit in the city; Potential import substitution and product import; State support for investors and entrepreneurs.

20






DESCRIPTION OF THE PROJECT:

SUMMARY OF PROJECT BENEFITS

TOP SMART SPOT SPRAY SYSTEM

Production of artificial intelligence system sensors for spot treatment of fields of various crops, including herbicides.

The total sown area in the Republic of Kazakhstan in 2019 was 22 216 964 ha., which is comparable with the area of Almaty region or countries such as the United Kingdom, Romania, Belarus. Farmers of the Republic of Kazakhstan purchase herbicides and pesticides for 32 million US dollars.State subsidizing farmers for the purchase of herbicides up to 50% of the amount.At the moment, in the Republic of Kazakhstan there are 1,376 herbicide spraying devices.

EXAMPLE OF USING THE SYSTEM

Pilot project showed efficiency up to 80%, Agropark «Ontustik»

The close location of agricultural regions of the republic;

Saves up to 60% of herbicides;

Lower government spending on subsidies;

Relatively low price;

High efficiency.

Saves time to refill the tank with herbicides; A «healthier» product by reducing use of herbicides;

Saving water and fuel when spraying; Reducing environmental damage to soil, water, air.

Neighborhood with countries where the agro-industrial complex is relatively developed (Russia, China, Uzbekistan).

1 000 - 10 00010 77610 000 - 20 000

20920 000+72

Field area Company quantity

COMPETITIVE ADVANTAGE

MARKET ANALYSIS

Near the capital there are traditionally agricultural regions such as

Kostanay region;

South Kazakhstan region;

Pavlodar region;

Akmola region.

Number of agricultural companies in Kazakhstan:

Tax preferences (corporate income tax, land tax, tax on property);

Customs preferences (import of raw materials and equipment);

Land with a ready-made infrastructure (free land plot rental);

Simplified procedure for hiring foreign labor (attraction of foreign labor out of quotas).



21

READY-BUILD FACTORY


The project is an industrial area with localized ready-made production enterprises, office space, necessary infrastructure, and service cluster for industrial park function.

PROJECT CONCEPTArea for construction on turnkey basis or land plot lease;Territory with ready-made modules from 1,000 sq.m. up to 10,000 sq.m. for rent;Offices and premises for rent by service companies;Common areas, exhibition hall; Closed security perimeter.

INVESTMENTSInvestments in construction - approximately make up 30 000 KZT per 1 sq. m.;The area of the land for construction in the form of in-kind grant is from 5 ha.

INDUSTRY Agro-industry; Engineering; Construction industry; Chemical industry; Biotechnology; Metallurgy;Light industry






RAW MATERIAL BASEConcrete - Building materials from concrete and its components, take first place in volume in the production of building materials in Kazakhstan;Metalwork - Metalbases of Nur-Sultan city (warehouses and metal processing enterprises), «ArcelorMittalTemirtau» JSC, «Ulba Metallurgical Plant» JSC Ust-Kamenogorsk;Sandwich panels - «Kazakhstan plant of enclosing structures» LLP in Nur-Sultan city, «Nur-Zhas Kurylys» LLP in Almaty city, «PolymerMetall-T» LLP in Kapshagay city, «Alma Grad» group of companies in Ust-Kamenogorsk city, «Z.KZ» LLP in Karaganda city.RENTAL MARKET FOR INDUSTRIAL BUILDINGS:According to real estate sites kn.kz and krisha.kz the volume of industrial space for rent in Nur-Sultan city is 71 354 sq. m. The average cost of renting industrial space in cities of the country is:Almaty - 1 900 KZT per sq. m. (from 800 to 3,000 KZT); Nur-Sultan - 1,500 KZT per square meter. m. (from 1,000 to 2,000 KZT);Atyrau - 1 375 KZT per sq. m. (from 750 to 2,000 KZT); Shymkent - 1,250 KZT per sq. m. (from 500 to 2,000 KZT); Karaganda - 590 KZT per sq. m. (from 180 to 1,000 KZT); Kokshetau - 425 KZT per sq. m. (from 350 to 500 KZT).

INDUSTRIAL PRODUCTION (million US Dollars)

Exemption from customs duties (0% up to 5 years for import);Tax benefits (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.);Attracting foreign labor.




State support measures for Kazakhstan manufactures through “Kazakhstan Industry and Export Center “QazIndustry” JSCReimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market; to promotion domestic processed goods, works and services in internal market.

12%6%

14%

2%

3%

3%2%

1%4%

1%2% 5% 2%

42%Kazakhstan import

structure

2019 year

Population (thousand people)

2015 2016 2017 2018 2019

7950

420

75

1284

1712

1849 19

58

5379

3

6798

7

7783

7

7544

3

Nur-Sultan Kazakhstan

Machines, mechanisms and equipment Base metals and articles thereof Mineral productsChemical industry productsTools and apparatusMiscellaneous manufactured goods Plant ProductsWood and wood productsWeapons and ammunitionTextile materials and products Pearls, precious metals and stones Stone ProductsFood productsAnimal products

Import Volume(million US dollars)

2015

2016

2017

2018

2019

918,218157

18395

18632

17669

17918

873

973

1031 17

1078

1136

2015

2016

2017

2018

2019

305675759

4836

17918,25066

5825

5717

25174

29599

32533

38356

TAX

%

Nur-Sultan

Kazakhstan

COMPETITIVE ADVANTAGESLow cost;The possibility of obtaining in-kind grants in the form of a land plot

22

PRODUCTION OF BASALT FIBRE THERMAL INSULATION General Classification of Types of Economic Activity 23.99.2 «Production of mineral insulating materials»

Сonstruction of a plant for the production of basalt fiber insulation.Basalt fibers have a high natural initial strength, resistance to impact aggressive environments, durability, electrical insulating properties made from natural environmentally friendly raw materials. Products will be in demand in construction industry and energy.

PRODUCTThermal insulation plates (frame walls, ventilated roofs, building facades, floors, attics);Insulation for sandwich panels.

The average annual growth rate of mineral wool over the past 4 years is 8%.

WORLD MARKET

World imports of mineral wool, thousand US Dollars

REGIONAL MARKET

The construction sector is one of the important sectors of economies of the country and the capital, and one of the most attractive investment areas. Volume of construction work and the area commissioned residential buildings in Kazakhstan over the past 5 years have grown by 1.5 times, showing stable growth dynamics. Average annual rate growth of investment in residential housing in the country for the last 5 years amounted to 18.4%, in Nur-Sultan city 16.7%.

Mineral wool production volumes in Kazakhstan for the last three years have grown by 80%.

Mineral wool production volumes, thousand tons.

From 2016 to 2019 volumes of mineral wool imports in Kazakhstan grew by 81%, in Nur-Sultan city by 46%. Russia occupies the largest share in the import of these products - 85%. Potential sales markets are Belarus, Ukraine, Russia, Kyrgyzstan.

Import of mineral wool, thousand US dollars

Potential sales markets, tons

Mineral wool manufacturers in Kazakhstan

In General, there are 14 enterprises operating in Kazakhstan for production of mineral insulation materials, among them the largest are:«MakWool» Company - enterprise for the production of thermal insulation materials based on basalt rocks (Makinsk, Akmola region), 34,000 tons of high-quality thermal insulation per year.«Bazalt-A» LLP is in Kandyagash city, Aktobe region, the structure includes:Plant for the production of crushed basalt;Plant for the production of mineral plates;Plant for the production of aerated concrete blocks; Branch of “Basalt-A» LLP in Nur-Sultan city.

Thermal insulation materials plant «ECOTERM» (Temirtau city) - production of heat-insulating materials;Plant «IZOTERM» (Oskemen city) – modern basalt based thermal insulation materials fiber, 65,000 tons of products per year.

PROJECT DESCRITION

2015

2016

2018

3 889 472

3 978 392

4 905 661

2016

2017

2018

2019

19 766

27 341

28 70810 949

8 207

10 71435 817

11 966

Total area of commissioned residential buildings, thousand m2

2015

2016

2017

2018

2019

2 856

3 234

3 481506

472

6083 843

5064 417

524

The volume of construction works of the Republic of Kazakhstan, billion KZT

2015

2016

2017

2018

2019

1 759

2 257

2 36010 513

8 940

11 168

2 37812 521

1 79412 873

Nur-Sultan

Kazakhstan

Nur-Sultan

Kazakhstan

20152016201720182019

41 609

38 36130 733

55 36340 382

7 012KyrgyzstanRussia

UkraineBelarus

48 13972 913

13 269

23

PRODUCTION OF BASALT FIBRE THERMAL INSULATION

Import price of mineral insulating materials from Kazakhstan has a price advantage in Russian market.

Import price in Russia, 2018, US dollars per kg

Kazakhstan imports over 60% of mineral wool from total consumption in Kazakhstan.

Mineral wool consumption in Kazakhstan, thousand tons

Production of stone wool The highest quality rocks wool obtained from mountain gabbro-basalt rocks, with the insertion of carbonate rocks additives to regulate the acidity modulus.

Deposits of basaltic rocks in Kazakhstan:Bulandynsky stone quarry, Akmola region ;Deposit of building stone Dubirsay, (West Kazakhstan region); Deposit of building stone (diabases) Akshkolskoye (West Kazakhstan region);Building stone deposit (diabase) Bercogurskoe-3 (West Kazakhstan region);Mamytskoe construction stone deposit (West Kazakhstan region); Building stone (diabase) deposit Sartauskoye-1(West Kazakhstan region);Sary-Biik porphyrite deposit (East Kazakhstan region).One of the components of stone wool insulation is a binder that holds the fibers together, provides products with specified shape parameters and density.

Types of binder:Bituminous binders. The main producers of bitumen materials in Kazakhstan are: Aktau Bitumen Plant («SP Caspi Bitum» LLP), «Gazpromneft-Bitumen Kazakhstan» LLP, «Pavlodar Petrochemical Plant» LLP.Synthetic binders (phenolalcohols, phenol-formaldehyde, urea resins).Composite binders (binders consisting of several components)

Exemption from customs duties (0% up to 5 years for import); Tax benefits (VAT, corporate income tax, land tax, property tax - 0%);In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.




Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state);Guarantee (project amount up to 1 billion KZT for existing entrepreneurs, guarantee up to 50%);Infrastructure supplying.



State support measures for Kazakhstan manufactures through “Kazakhstan Industry and Export Center “QazIndustry” JSC

Reimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market; to promotion domestic processed goods, works and services in internal market.

TAX

%

KazakhstanBelarus

LithuaniaTurkey

GermanyChina

Poland

0,360,48

0,730,90

1,352,12

4,36

2017

2018

2019

53 308

99 821

121 607

RAW MATERIAL BASE

Tax preferences (corporate income tax, land tax, tax on property);Customs preferences (import of raw materials and equipment);Land with a ready-made infrastructure (free land plot rental); Simplified procedure for hiring foreign labor (attraction of foreign labor out of quotas).


Bentonite clay. Deposits in Kazakhstan:Taganskoe bentonite clay deposit (East Kazakhstan region); Deposit of bentonite clays of the Akkalkansky site (East Kazakhstan region);Andreevskoye bentonite clay deposit (South Kazakhstan region).

COMPETITIVE ADVANTAGESRaw material base availabilityHigh demand in the product;Potential import substitution and product export;State support for investors and entrepreneurs.

24

PRODUCTION OF CERAMIC PLATES General Classification of Types of Economic Activity 23.31 «Production of ceramic coatings and plates»


Establishment of production ceramic plates in Nur-Sultan city.GLOBAL MARKETOver the past 5 years, the level of demand for ceramic plates in the world has remained at the level of 17 billion US dollars, which means that this product is in demand PRODUCTION COST

The average price of Kazakhstan for the export of tiles is 225 dollars per ton, which is quite lower purchase prices of neighboring countries. This fact says about the low cost of our products which is advantage in comparison with the cost of production other countries.

Import prices, US Dollars per ton

Top 10 importer countries to the Republic of Kazakhstan, thousand US dollar

2014 2015 2016 2017 2018REGIONAL MARKET

Ceramic plates are one of the most popular decoration materials all over the world. China and Italy are leaders in the production of ceramic plates. Export of these two countries makes up 50% of total world exports.

17 766 171

KyrgyzstanArmenia

China

Russia

346

1296179

2015

111 225

57 051

23 064

9 6106 206 3 927 2 514 2 223 1 669 1 448 1 347

88 470 111 431

2 000

113 057

1 782

112 402

1 6631 274 1 244

2018 20192016 2017

Kazakhstan Nur-Sultan

Russia China Uzbekistan Belarus Azerbaijan

Import of neighboring countries, thousand US dollars. 376 775

165 337

18 854 15 525 13 633

Tajikistan

12 085



TAXExemption from customs duties (0% up to 5 years for import);Tax benefits (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.);Attracting foreign labor.




%Economics of simple things

Russia China Kyrgyzstan Belarus Spain

17 560 373

Uzbekistan Germany Turkey Italy Poland

MANUFACTURERSThere are 2 companies producing ceramic plates in Kazakhstan:

«ZERDE-Ceramics» LLP, Shymkent city;«Ceramics» JSC, Aktobe region.

RAW MATERIAL BASEClay, kaolin - Deposits in the Akmola region (Alekseevskoe, Yeltay, etc.).

Quartz sand – «Aktobe Glass» Company, Aisarinskoe field in the North Kazakhstan region, Zhar-As deposit in Akmola region, Kurgaldzhinskoye field in Akmola region, also there are deposits in West Kazakhstan, East Kazakhstan and Pavlodar regions.

Nepheline, slag, feldspar – Kokshetau deposits - 1 and 2, Zerendinskoye in the Akmola region, as well as deposits in East Kazakhstan and Karaganda region.

POTENTIAL SALES MARKETThe total demand for ceramic plates from neighboring countries in 2019 amounted to 602.2 million US dollars.The main buyers of these products are Russia (62%) and China (27%).

The proximity of raw materials; Lack of production in Nur Sultan city; High demand.

462


25

Kazakhstan imports, thousand US dollar

Global demand, thousand US dollar 16 731 947 16 556 703 16 838 389





PRODUCTION OF ELECTRODESGeneral Classification of Types of Economic Activity 23.90 «Production of carbon and graphite electrodes»

PROJECT DESRCIPTION:

Creation of an enterprise for the production of electrodes in Nur-Sultan city

GLOBAL MARKET

Over the past 5 years, the level of demand for electrodes in the world remains at the level of 1.1 billion US Dollars, which indicates that this product is a demanded product.

Silicates, ferroalloys – «Chemistry and Technology» LLP in Almaty city, «Kislotoupor Kazakhstan» in Almaty city.

POTENTIAL SALES MARKETSTotal demand on electrodes of neighboring countries in 2019 made 150 million US Dollars. Main buyers of this product are Russia (47%) and China (31%).

There are 3 electrode manufacturing companies in Kazakhstan:

«Electrode CK» LLP – Karaganda city ( 1000 tons per year);«Pavlodar electrode plant» LLP (1200 tons per year);«Bagul» LLP – Zhambyl region (1500 tons per year).

RAW MATERIAL BASE

Welding wire – metal base Nur-Sultan city, «Ulbinsky metallurgical plant» JSC in Ust-Kamenogorsk city, «ArcellorMittal» JSC in Temirtau city;Graphite – stocks are presented by deposits of East-Kazakhstan, Karaganda, West-Kazakhstan regions (Akmola, Aktasinskoye, Ayaguz group, Ayaqzhaylau, Baltatereq, Bugetysaiskoye, Kalgutinskoye, Qaraquduqskoye, Qaragailinskoye, Leninskoye, Sarytiganbai, Sya-Qezen, Shalqar);

Import of neighboring countries, thousand US dollars

PRODUCT COSTConsidering that China and Russia are the largest electrode consumers, Kazakhstan has transport advantage against other importer-countries of electrodes to these countries.

REGIONAL MARKETThe product is in steady demand due to the growing construction of reinforced concrete structures and other facilities where metal welding is required.

Import of Kazakhstan, thousand US dollars

ТОП-5 стран-импортеров электродов в Казахстан, тыс. долл. США

2014 2015 2016 2017 2018

2015

17 292 16 00519 533

3 044

26 398

4 635

20 028

1 3142 722

1 836

2016 2017 2018 2019

1 355 271Global demand, thousand US dollars1 115 624 1 047 080 1 064 687 1 158 363

Russia China Austria Belarus MANUFACTURERS

Japan

7 9186 723

1 695 1 594 909


71 06047 322

11 629 11 440 6 461

Tajikistan

1 716


Import prices per ton, thousand US dollars 8 437

1 738878

2 017 1 5592 033

Tajikistan

Republic of Kazakhstan Nur-Sultan



TAXExemption from customs duties (0% up to 5 years for import); Tax benefits (Value added tax, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.


COMPETITIVE ADVANTAGESHigh temps of construction in Nur-Sultan city; Lack of production in Nur-Sultan city; Proximity to the markets of China and Russia; Proximity to raw material base.


26





Rivets, washers and similar products without thread; Products manufactured on screw cutting machine; Bolts, screws, nuts and similar products.

PRODUCTION OF METAL FASTENERSGeneral Classification of Types of Economic Activity 25.94 «Production of fasteners and threaded products»

PROJECT DESCRIPTION: Fasteners products import of neighboring countries in 2018, thousand US dollars

Creation of an enterprise for the production of metal fasteners on the territory of Nur-Sultan city.

MANUFACTURED PRODUCT:

GLOBAL MARKET Import, thousand US dollars

43 493 252 40 722 067 39 654 811 43 161 252 48 170 521

TurkmenistanArmenia

TajikistanGeorgia

KyrgystanMongolia

AzerbaijanUzbekistan

IranBelarus

IraqUkraine

RussiaChina

5 382 6 246 6 993 13 076 13 482 22 082 32 801

38 610 42 347

71 421 83 808

116 204 886 236

3 8

58,2 1

2 05

0,6

12

050,

6

10

480,

7

1 9

23,3

7 4

79,6

3 2

98,4 11

356,

6

5 9

83,4

18

223,

6

3 237 594

108 650 93 065 93 833 112 030

129 529

2 056 1 268 4 912

961 1 878

2014 2015 2016 2017 2018 Dynamics shows that fastener products from metal are on stable demand.

REGIONAL MARKETKazakhstan has established production of various fasteners, but domestic production does not cover all the needs of the internal market.

Imports and exports of metal fasteners to Kazakhstan, thousand US dollars

2017 2018 2019

2014 2015 2016 2017 2018Import Export

2015 2016 Import tons (net weight) Export value, thousand US dollars



TAXExemption from customs duties (0% up to 5 years for import); Tax benefits (Value added tax, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.); Attracting foreign labor.



%


Wide range of implementation;Proximity to raw material base;Low cost.


27






Fastener products manufacturers:«Almatinsky metizny plant» LLP; «Studbolt Manufacturing», Atyrau city; «Semipalatinsky Metizny Plant» LLP; «Ferrum-Vtor», LLP, Shymkent city.

RAW MATERIAL BASEWire – metal bases of Nur-Sultan city, «ArcelorMittal Temirtau» JSC, «Ulba metallurgical plant» JSC Ust-Kamenogorsk city.

POTENTIAL SALES MARKETSThe largest consumers in the world market of fasteners are Russia and China. Kazakhstan has a geographical advantage for making deliveries to these countries. Also Nur-Sultan city is the most convenient place for the implementation of this project, as it is located close to sources of raw materials and well-developed infrastructure for exporting to neighboring countries.

Import of fastener products, thousand US dollars

20142015201620172018

5,7

5,55,75,7

6,1

2015

2016

2017

2018

2019

57 865,815,5

55 476,31,8

40 468,743

53 884,957,8

46 969,4102,9

2015

2016

2017

2018

2019

33 226,2

36 844,7

22 025,239,6

29 555,356,7

22 339,398,4

PRODUCTION OF ELEVATORSGeneral Classification of Types of Economic Activity 28.22.4 «Production of Elevators»

PROJECT DESCRIPTION

PRODUCT COSTThe average price of Kazakhstan for the export of elevators and lifts is 2,048 USD per ton, which is much lower than the purchase prices of neighboring countries. This fact indicates the low cost of our products which is an advantage in comparison with the cost of products from other countries.

STATE SUPPORT MEASURERSInvestment preferencesExemption from customs duties (0% up to 5 years for import);Tax benefits (VAT, corporate income tax, land tax, property tax - 0%); In-kind grants (land plots, buildings and structures, etc.);Attracting foreign labor.

Preferences of special economic zones;Tax preferences (corporate income tax, land tax, tax on property); Customs preferences (import of raw materials and equipment);Land with a ready-made infrastructure (free land plot rental); Simplified procedure for hiring foreign labor (attraction of foreign labor. out of quotas).




State support measures for Kazakhstan manufactures through «Kazakhstan Industry and Export Center «QazIndustry» JSCReimbursement of part of expenses to subjects of industrial and innovative activity:to increase labor productivity and territorial clusters development;to promotion domestic processed goods in foreign market;to promotion domestic processed goods, works and services in internal market.

Establishing Elevator production by building a plant with a capacity of at least 200 elevators per year

WORLD MARKETThe last 5 years, the level of demand for elevators and the lifts in the world remain at the level 5.7 billion USD, this fact indicates that this product is demanded goods. The main buyers are Russia (305.3 million USD), Great Britain (293.4 million USD) and Canada (249.8 million USD)

REGIONAL MARKETAccording to the Ministry of Industry and Infrastructure Development of the Republic of Kazakhstan data, there were 24,025 elevators, of which 1,684 are subject to repair, and 4,478 require replacement at the end of 2019 in Kazakhstan. 232 elevators were produced by Kazakhstan enterprises, 1 824 were imported. The capital occupied more than half of the import of elevators in the country in 2019 year (54.8%). Over the past 5 years, only in 2017 this indicator dropped below 50%, which suggests that Nur-Sultan city is the largest consumer of elevator building products in the republic. The main supplier of elevators in the end of 2019 was China (57.3% share in the import of elevators in Kazakhstan, and 53.4% share in the import of elevators of Nur-Sultan city

Foreign trade turnover, skip elevators and lifts, thousand USD

Kazakhstan Nur-Sultan

ImportExport

MANUFACTURERSThere are 6 elevator manufacturers in Kazakhstan, of which the largest are «Almatylift» LLP (Almaty), «LGS KAZAKHSTAN ELEVATOR GROUP» LLP (Almaty region) and «Sky express elevator kz» LLP (Akmola region).In Nur-Sultan in the 2nd quarter of 2020, it is planned to launch a plant for the production of construction lifting machines and mechanisms (self-lifting tower cranes, facade elevators, cargo lifts) «Lashyn Factory» LLP with a capacity of 110 units per year.

RAW MATERIAL BASEPotential supplier of metal parts:Metallurgical Complex «ArcelorMittal Temirtau» JSC (Karaganda region). Potential suppliers of electrical parts and safety systems:«Hengda FUJI Elevator Co. Ltd» is one of the leading manufacturers of elevators, escalators and travelators, as well as components;«Mogilevliftmash» OJSC produces more than 130 basic elevator models, spare parts and elevator upgrade kits;LGS Elevator Korea Co. Ltd - exports products to more than 50 countries.

POTENTIAL SALES MARKETSThe total demand for elevators and lifts in nearby countries in 2018 was us 550.9 million US Dollars. The main buyers of these products are Russia (55%) and China (25%).

16 04943 474

136 593305 291

15 65411 420 11 177

5 8393 571 1 850

RussiaChina

UkraineAzerbaijan

BelarusUzbekistan

MongoliaKyrgyzstan

ArmeniaTajikistan

5 3786 930

10 747102 778

5 0373 723 3 582

3 5553 241 3 125

Russia

China

Ukraine

Azerbaijan

BelarusUzbekistan

Mongolia

Kyrgyzstan

Armenia

Tajikistan

Import of elevators and lifts to nearby countries, thousand USD

Import of elevators and lifts to nearby countries, thousand USD

Main exporters of elevators to Russia, 2018Belarus

ChinaSwitzerland

101,82 290

59,33 110

56,612 180

Main elevators exporters to China, 2018

JapanSweden

71,315 012

36,99 122

Global import of skip elevators and lifts, billion USD

Low competitive environment;High demand in the product;Potential import substitution and product export; State support for investors and entrepreneurs.



28

OUTLET CENTER

Construction of the largest Outlet Center where brand stores of apparel, shoes, sport items, home products, cosmetics, jewelry etc. with 70% discounts will be located in the country.


200 000

0

№ Mall name

Totalarea

Openingyear

1 2017140 400Mega Silk Way

Khan Shatyr

Eurasia

Keruen

Astana Mall

Saryarka

Tulpar

Keruen City

Asia Park

Green Mall

Abu Dhabi Plaza

Aruzhan

127 000

80 000

64 000

51 000

39 000

36 000

34 500

34 000

27 404

26 000

20 000

2010

1998

2008

2012

2008

2009

2007

2009

2019

2019

2012

2

3

4

5

6

7

8

9

10

11

12

400 000

600 000

800 000

1 000 000

1 200 000

Per capita retail sales volume in Nur-Sultan city, KZT

Since 2014, clothing and shoes accounted for about 10% of the total retail trade in the Republic of Kazakhstan.

The share of clothing imports is 80%, and the presence of products from such brands as Calvin Klein, Emporio Armani, Giorgio Armani, Burberry, Valentino, etc. among these clothes indicates the demand for premium clothing.

20102011

20122013

20142015

20162017

2018

Since 2010, the volume of retail trade per capita in the city has grown rapidly, on average by 13% per year.

MARKET ANALYSIS

Over the same period, the total retail space increased by 1.5 times.

Retail space in Nur Sultan city, sq.m.1 000 000

900 000

800 000

700 000

600 000

500 000

400 000

300 000

200 000

100 000

0

20102011

20122013

20142015

20162017

2018

Active construction of these shopping centers began after 2007.Average time spent in the shopping center: more than 60 minutes.

The rent in them is higher than the national average; reaching 33,000 KZT per 1 sq. m., (~80 US dollars against 14 US dollars on average in the Republic of Kazakhstan, more than 5 times).


Lack of large outlet center in the capital and the country;

Lack of range of famous brands in the city and country markets.

PROJECT BENEFITS SUMMARY

High public awareness about international brands;

Relatively high income compared to other areas of the country;

Successful precedents of enter into the local market of such brands as McDonalds, Starbucks, Apple Corp products.

STATE SUPPORT MEASURES


29

Outlet Center - in the shopping center format

In the capital, retail outlets in the shopping center format are in great demand. So now there are about 15 shopping and entertainment centers in the city.Average area of such malls is 56 000 sq.m.


SMALL SOLAR POWER PLANTS

Production of electricity using solar power plants with a capacity of no more than 100 kW for own needs and sale of electricity at a retail price. The station area is 500 sq .m.


As part of a support for the development of renewable energy in the Republic of Kazakhstan, the «net-consumer», measure adopted, according to which energy supply organizations (ESO) are required to buy 100% of electricity received from private owners of renewable energy at retail prices. Power stations for legal entities – no more than 100 kW. Below is an analysis of the use of part of the electricity for the needs of the owner of small solar power plants (20%), and the rest – for sale (75%). Only solar panels considered in the analysis because the payback period of wind farms with a capacity of no more than 100 kW is relatively high.

Solar power plants generated electricity of 100 kW

Economic indicators of Solar power at 100kW

Unit of measurement

generated electricity in a year 142 405

ready for sale Electricity

Losses, 5% 7 120

107 231

KZT

16,87

1 808 986

23 310 000

21 098 127

44 582 453

1 783 298

13

Electricity for sale (75%)

Unit of measurementAmount of paid to energy supply companies for 1 kW per hour by legal entities

Price of energy supply companies taking into account devaluation

Energy supply companies’ paid sum per year

Net income (after payback period)

Income over 25 years

Average income per year (whole period)

Payback term, year

114 351

kW

MARKET ANALYSIS

30



Competitive advantage

Income of electric power sales of energy supply companies;

Electricity generating opportunity for own needs;

These solar power stations can be installed on different enterprises without binding to its activity.

Project summary

100% guaranteed realization of electric power according to the Republic of Kazakhstan legislation;

Electric power realization at a retail price of energy supply companies;

Opportunity to use free ecological pure energy;

Lowering electricity charges;

Additional income;

Cooperation with the Republic of Kazakhstan in achieving of «green economics»;

Comparatively low solar activity;

Wind power plants of the capacity are paid off during more than 20 years.

STATE SUPPORT MEASURESMandatory purchase of electricity from private producers with renewable energy (netto-consumers) is guaranteed by the Order of the Minister of Energy of the Republic of Kazakhstan dated July 8, 2016 № 309 «On approval of the Rules for the purchase and sale of electricity from netto-consumers».


OPTIMIZATION OF HEATING COSTS

Investments for 35 mln. KZT in the production of the «Volna 2.0» thermal energy saving system for the further implementation and reduction of the capital consumption by 10%

Thermal energy Electricity

MARKET ANALYSIS

Total coal supply for heat and electricity generation: 3.75 million tons

Saving coal for the city per year, ton

System application example

Relatively low price compared to foreign analogues

Relatively low system maintenance heating

Kazakhstan content over 60%

Experience in implementing the system, including in the capital of the Republic of Kazakhstan

Reducing city spending on energy purchases (coal, gas), their transportation and storage;

Reducing household spending on heat in heating period;

Reduced operating costs for manufacturers in the city;

Reduction of harmful emissions into the atmosphere.

3, 04 0, 71million tonsmillion tons

0,5

600 000

500 000

400 000

300 000

200 000

100 000

1 3 5 7 10 15 20 25 30 35 40 45 50 70 90 100

tons

of c

oal

0 20 40 60 80 100 120

City savings per year, tenge

2 500 000 000

2 000 000 000

1 500 000 000

100 000 000

500 000

Start time of the working day (hour)The end time of the working day (hour)Day off Saturday Day off Sunday

Nursery Garden

452,8758:00 a.m.19:00YesYes

Object name

Calculated tariff for heat energy without VAT (KZT/Gcal)

Gcal consumption for 2018-2019

17 712,14

by calculation (%)to Gcal in KZT

16,675,0111 328 606,19

EXPECTED ECONOMY OF ESCO VOLNA 2.0


SUMMARY OF PROJECT BENEFITS

STATE SUPPORT MEASURES

Tax preferences (corporate income tax, land tax, tax on property);

Customs preferences (import of raw materials and equipment);

Land with a ready-made infrastructure (free land plot rental);

Simplified procedure for hiring foreign labor (attraction of foreign

labor out of quotas).


31

OPTOCULUS INNOVATIVE SECURITY SYSTEM


Production of fiber-optic system sensors for protection of objects and detection of technical failures, including infrastructure ones (mines, pipelines, wells, KOIKI).

MARKET ANALYSIS

Age of oil pipelines by a length in Republic of Kazakhstan, %

5%

25%

32%9%

29%up to 10 years

from 11 up to 20 years



more than 40 years

More than 43% of Kazakhstan's oil pipelines are older than 20 years, which increases the possibility of leaks due to depreciation.

There are more than 10 large mining companies operating in Kazakhstan with their own mines, which is also a potential area of application of this system.

The capital's heating and sewerage systems also includes pipelines that can be serviced by a security system.

EXAMPLE OF USING THE SYSTEM

Project on prevention of potential collapses in the mines of «ArcelorMittal Temirtau» JSC and protection of fiber-optic communication lines;

Project on detection of concentrate congestion in pipes of aluminum plants of ERG group of companies.


Reliability;

Low cost;

Small weight and sizes;

Resistance to aggressive environments and difficult weather conditions;

Lack of susceptibility to electromagnetic fluctuations;

The sensor-cable does not require connection to power lines or additional means of communication and switching.

PROJECT BENEFIT SUMMARYService market of vibro-acoustic monitoring has been only formed. By 2025 the market will be more than 2 billion US dollars;

Domestic product;

Potential preservation of human life and health;

Savings by reducing response time to technical problems and other emergencies.


Subsidies (base rate of National Bank + 5%, of which 6% paid by the entrepreneur, and the difference is subsidized by the state); Guarantee (project amount up to 1 billion KZT for existing entrepreneurs, guarantee up to 50%); Infrastructure supplying.


32



Documents

INVESTMENT PROPOSALS OF NUR-SULTAN СIТУ