Economic Newsletter on |July 2019

CONTENTS MACRO-ECONOMICS & FINANCE ...... 2 ENERGY & NATURAL RESOURCES ...... 4 TRANSPORT & COMMUNICATIONS...... 6 AGRICULTURE ...... 8 WASTE MANAGEMENT SECTOR ...... 10 MEDICAL SECTOR ...... 11 EXHIBITIONS IN KAZAKHSTAN (September - October 2019) ...... 12 CONTACTS ...... 14

The Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan intends to distribute this newsletter as widely as possible among Dutch institutions, companies and persons from the Netherlands. The newsletter summarises economic news from various Kazakhstani and foreign publications and aims to provide accurate information. However, the Embassy cannot be held responsible for any mistakes or omissions in the bulletin.

ECONOMIC NEWSLETTER, July 2019 Embassy of the Kingdom of the Netherlands MACRO-ECONOMICS & FINANCE Kazakh government adopts roadmap to double foreign direct investment by 2025 The Coordination Council adopted a roadmap to attract investment to Kazakhstan at the July 10 council meeting chaired by Kazakh Prime Minister . The task for the Ministry of National Economy is to increase the annual gross inflow of foreign direct investment from $24 billion in 2018 to $34 billion by 2025. The recently established council seeks to increase investment in fixed assets up to 30% of Kazakhstan’s gross domestic products (GDP). “The development of the economy is directly related to attracting investment. It is necessary to look for new niches, create mechanisms to attract investments and provide all measures of support. The main task is to increase the volume of investment in the economy by two times,” said Mamin. The council approved legislative and institutional measures that support more public- private partnerships (PPPs) to make it the main tool to attract investments in transport and logistics, energy, tourism, infrastructure modernisation of public utilities, healthcare and education, among others. An important driver of economic diversification will be the focus of investment on projects that provide vertical integration of existing enterprises, the prime minister’s press service reported. The government hopes attracting investment across industries will increase the technological complexity of the country’s export base. Key performance indicators (KPIs) to attract investments and to achieve the target ratio of investment to GDP will be developed for central and local executive bodies. Mamin instructed central government agencies, regional akims (governors) and holding companies to intensify work with national and foreign investors, as well as international financial organisations to attract investments to the country’s economy and search for new large-scale projects. The council also considered developing a network of wholesale distribution centres to expand the logistics capacity in Kazakhstan by 2023. The plan is to create a network of eight regional distribution centres in Nur-Sultan, , , Aktobe, Semey, Kokshetau, Atyrau and Aktau. The centres will make early product purchases from farmers and create stored capacities with the sale of products in retail chains at reduced prices during the off-season from December to April. The project will ensure price stability and eliminate the seasonal speculative mark-up on socially important food products. The total socio-economic effect of the project from one invested tenge ($0.003) will be over 30 tenge ($0.08).

EU and Kazakhstan launched High-Level Platform of dialogue on economic and business matters The EU-Kazakhstan High-Level Platform of dialogue on economic and business matters held its first meeting in Nur-Sultan on 1 July, chaired by Kazakhstan Prime Minister Askar Mamin. The event brought together leading European companies and EU Heads of Mission led by the EU Ambassador to the Republic of Kazakhstan, Sven-Olov Carlsson. EU is Kazakhstan’s first trading partner and represents more than half of foreign direct investment in Kazakhstan. With the EU-Kazakhstan Enhanced Partnership and Cooperation Agreement, the EU and Kazakhstan have developed a framework for further strengthening trade and economic relations. The EU supports Kazakhstan’s ambitious reform and modernization processes, including the improvement of the business climate. During the first meeting the parties discussed issues of common interest to EU and Kazakh businesses, including cooperation on reducing technical barriers to trade, notably in the agro-food sector. Other issues discussed related to tax legislation in particular prospects for decriminalization of tax offences.

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In his opening speech EU Ambassador Sven-Olov Carlsson highlighted the importance of the High-Level Platform for regular exchange of views between the European Union, its businesses and the Kazakh Government. The Platform of dialogue at high level will complement the technical dialogue between the EU and Kazakhstan within EPCA, in particular the Cooperation Committee in Trade Configuration. The next meeting is preliminary scheduled for autumn this year. The EU is Kazakhstan’s first trade partner representing over one third of its external trade and over half of total foreign direct investment in Kazakhstan. With over 75% of oil exports going to the EU (representing approx. 6% of total EU imports), Kazakhstan is already the third largest non-member of the Organization of the Exporting Countries supplier for the EU. From the EU, Kazakhstan imports machinery, transport equipment and pharmaceuticals, alongside chemical products, plastics, medical devices and furniture. The EU-Kazakhstan Enhanced Partnership and Cooperation Agreement, signed in Nur-Sultan on 21 December 2015 and provisionally application since 1 May 2016, aims at creating a better regulatory environment for businesses in areas such as trade in services, establishment and operation of companies, capital movements, raw materials and energy, intellectual property rights. It is a tool of regulatory convergence between Kazakhstan and the EU, with some “WTO plus” provisions, notably on public procurement, a press-release of the Delegation of the European Union to Kazakhstan stated.

National Bank of Kazakhstan fines microfinance organizations and second-tier banks

for financial violations As a result of an inspection the National Bank of Kazakhstan imposed administrative fines BANKING on microfinance organizations (MFO) and on second-tier banks for the amount of about 2 million tenge and 4 million tenge, respectively. The inspections revealed that some MFOs and second-tier banks did not fully comply with the regulatory and legal requirements when approving and servicing loans for individuals. Earlier, the National Bank said it will evaluate the asset quality of 14 largest banks of the country to attract investors and boost trust to the banking system of Kazakhstan, Interfax-Kazakhstan reported.

National Bank of Kazakhstan talks digital developments’ support measures Competing for clients, banks of Kazakhstan constantly improve and offer new services with usage of modern IT-technologies in accordance with the chosen development strategy, the spokesperson for the National Bank of Kazakhstan told Trend. With an idea of further development, the National Bank of Kazakhstan is implementing measures in order to support those who work on developing IT-technologies. “Taking into consideration that implementation of any innovation is related to uncertainty and that testing of such projects may bear the risk for financial market and customers, the National Bank of Kazakhstan has developed a ‘Regulatory Sandbox’,” the spokesperson said. The spokesperson further stated that within the special regimen, the participants of Sandbox’ can be partially or completely free of regulatory normative requirements for testing innovative services, technologies and solutions within confined environment. “Currently, corresponding regulatory legal framework exists for allowing approbation of developed solutions and products by financial organizations and fintech companies in safe environment,” the spokesperson said. According to the bank, the potential market players can apply now for participation in the Regulatory Sandbox for testing new services or products on the market of financial services, including payments. “The existence of such platform will provide for creation of new products and solution, as well as for development and automation of financial services,” the spokesperson concluded.

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ECONOMIC NEWSLETTER, July 2019 Embassy of the Kingdom of the Netherlands ENERGY & NATURAL RESOURCES Kazakhstan signs agreements on Abai, Dunga oil fields with foreign investors Kazakhstan recently signed agreements on the Abai and Dunga oil fields with foreign oil and gas companies, reports Primeminister.kz. Kazakh Prime Minister Askar Mamin met July 4 with President of Total Exploration and Production Arnaud Breuillac to discuss cooperation in the oil and gas sector. They discussed oil and gas production, technology transfer, renewable energy and the North Caspian Project in Kazakhstan, with Mamin emphasising the importance of social projects and job creation. Following the meeting, Kazakh Minister of Energy Kanat Bozumbayev, Total Vice President of Exploration and Production for the Southern Europe and Caspian Region Bernard Clément, Oman Oil Company Joint Ventures Director of Exploration and Production Abdulwahab Al Bulushi and Partex Oil and Gas Board Member Fernando Alves signed an agreement on the Dunga oil field in the , which has an estimated 106 million barrels of total proven reserves. The terms of the production sharing agreement for the Dunga field, signed in 1994, will be extended for 15 years from 2024 to 2039, which will allow production of an additional nine million tonnes of oil. The launch of the $300 million third phase of the field’s development will increase the production capacity from 600,000 tons to 850,000 tons of oil per year and create 400 jobs in the region at the peak of construction activity, reports Total.com. Kazakhstan’s share within the product sharing agreement will increase from 40% to 60% by 2025. Companies will be obliged to partially supply extracted oil to Kazakhstan’s market and finance social infrastructure projects with at least $1 million per year. Also, Kazakh First Vice Minister of Energy Makhambet Dosmukhambetov, KazMunayGas Deputy Chairman of the Management Board for Geology and Exploration Kurmangazy Iskaziyev and Eni Executive Vice President for the Central Asian Region Luca Vignati signed a protocol of direct negotiations to grant the subsoil use right for the exploration and production of hydrocarbons within joint operations in the Abai field. The field is in the northern part of Kazakhstan’s sector of the Caspian Sea, approximately 50 kilometres from the coast in a water depth of less than 10 metres. It is estimated to have significant potential for hydrocarbon resources, reports Eni.com. The 700-kilometre two-dimensional seismic exploration and drilling of a 2,500-metre exploration well in the field will cost more than 14 billion tenge ($36.4 million).

Total Eren breaks ground on 128 MW of solar capacity in Kazakhstan The Kazakh solar market is steadily growing amid investment from regional development banks and independent power producers. Total Eren said the 128 MW of generation capacity is just the first of its projects in central Asia. Renewable energy company Total Eren – spun out of French oil and gas major Total – is entering the Kazakh solar marketplace with a 128 MW portfolio. The company announced it has started construction of the 28 MW Nomad PV farm in the and of the 100 MW M-KAT project in Zhambyl. Total Eren anticipates reaching commercial operation on both sites by the end of the year. The developer expects cumulative project costs to reach 59.7 billion tenge ($157 million) and financing, which Total Eren said was almost complete, includes an agreement with the European Bank for Reconstruction and Development (EBRD) to provide 9.8 billion tenge for the Nomad project. The developer has been able to secure loan financing for the M-KAT project from the Asian Development Bank, which has provided 11.3 billion tenge, with the EBRD lending another 21.5 billion tenge on top. The agreements have been signed and financial close is expected within weeks. Kazakhstan’s Financial Settlement Center for Renewable Energy Sources will buy the electricity generated by both plants for 15 years under a power purchase agreement (PPA) for which contracts were signed in September 2016 for the M-KAT project and in

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February 2017 for the Nomad facility. The Financial Settlement Center – owned by national grid operator the Kazakhstan Electricity Grid Operating Company – was established in 2013 to facilitate the retail of renewable energy. Greek company METKA EGN will provide engineering, procurement and construction services on the projects, which will be the first in Kazakhstan to feature single-axis trackers. “We are delighted to enter the Kazakh renewable energy market with the M-KAT and Nomad projects, which also mark our first steps in central Asia,” said Fabienne Demol, executive VP and global head of business development at Total Eren. In January, German developer Goldbeck Solar said it had finished a 100 MW solar project in Kazakhstan near the town of Saran. That project also operates under a 15-year PPA, which secured a price of 34.61 tenge/kWh ($0.091) for the power generated. The Kazakh solar market has experienced a significant push in the last two years with the nation’s total installed PV capacity jumping from just 59 MW at the end of 2017 to around 210 MW at the end of last year, according to statistics published by the International Renewable Energy Agency. Consultancy Bloomberg New Energy Finance published a report in February examining how cheap finance has unlocked solar potential in non-OECD countries. The report stated Clean Technology Fund (CTF) investments significantly helped jump-start Kazakhstan’s renewable energy market by providing policy support that resulted in feed-in tariffs being introduced in 2013. That policy reportedly attracted $1 billion of clean energy investment to the country. Without affordable CTF finance, investors would have faced limited-term loans, high inflation, substantial currency fluctuation and high interest rates, according to the BNEF report. However, CTF investments of $55.5 million helped leverage a further $200 million of finance from multilateral development bank joint financing, and another $412 million in follow-up funding. Now, around 85% of Kazakhstan’s PV fleet – and 40% of its wind capacity – has received financial support from the CTF, which has the World Bank as its trustee. After the feed-in tariff, the country had help holding its first competitive clean energy tenders, with development banks and the CTF again playing a critical role in ensuring successful bids became projects that were built on time and budget, PV Magazine reports.

Suntech Enters Kazakhstan PV Market with its First Project Suntech, as a leading solar photovoltaic manufacturer in the world, Suntech’s first project in Kazakhstan has been successfully connected to the grid and formally put into operation. Suntech successfully entered the energy market of Kazakhstan through cooperation with Goldbeck Solar GmbH, As the first major project for Suntech to access to the market of Kazakhstan, the Agadyr project has adopted Over 150,000 pieces High-efficiency polycrystalline modules, with its aggregate capacity reaching up to 50MW. Agadyr solar power station is sited in Karaganda, Kazakhstan, a location featuring flat terrain, arid climate, and excellent light conditions, with direct solar radiation duration of about 2,600 hours per year. However, the rainfall and humidity in this area are not stable and temperature variation in a year reaches up to about 80°C, which impose great challenges on the operation and maintenance of the power station. Therefore, the key for the project to succeed lies in the quality and service life of modules; Suntech’s modules of 12-year product warranty and 25-year linear warranty perfectly match the requirements of the project. According to Paris Climate Agreement, Kazakhstan promises to reduce its carbon emission in 2030 by 15% compared to that in 1990. Moreover, Kazakhstan plans to make the renewable energy account for half of its total energy consumption by 2050. The completion of Agadyr solar power station symbolizes an important step made by Karaganda and the whole Kazakhstan in pursuing self-sufficiency in energy and

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development of renewable energy; Suntech will continue to cooperate with Goldbeck Solar and help Kazakhstan and surrounding markets to update and transform their energy industry from traditional energy to green energy, PV Magazine reports.

Kazakhstan to increase coal extraction According to the strategic plan of the Ministry of Industry and Infrastructural Development of Kazakhstan for 2017-2021, the planned volume of coal extraction for CHEMICALS 2019 is 107.1 million tons, the ministry told Trend. & MINERAL “The fuels and minerals base of Kazakhstan’s coal industry is sufficient enough and RESOURCES notwithstanding large volumes of extraction, the coal stockpiles are still significant,” the source in the ministry said. However, in order to reach the planned volume a number of projects on modernization of

coal ventures is underway in Kazakhstan. “Projects on implementation of cyclic-and-соntinuous technology on stripping complex №2 of Vostochny Coal Mine, as well as implementation of high-performance mining equipment and technologies in mines of Karaganda basin have already been realized. Furthermore the coal extraction capacity on Karazhyra Coal Mine has also been increased,” the source said. The source further stated that a number of modernization projects are still in the process of realization. “Among them is a project on reconstruction of transport patterns of Bogatyr Coal Mine and the switch to new automobile-conveyor technology which will allow to extract up to 48 million tons of coal a year. The technology of dry enrichment of coal is also being implemented here. Another project aimed at the increase of extraction is a complex project of Schubarkol field further development,” the source said. The source also stated that first and foremost the ministry is facing the goal to maintain the current volume of coal extraction. “The ministry considers necessary to expand work on maintaining coal extraction volume by expanding projects on complex deep coal processing, manufacturing diesel fuel and other liquid synthetic products from coal, as well as diversification of export,” the source concluded. Currently, technical capacities of coal ventures in Kazakhstan allow to meet the demand on the local market, including provide for energy security of the country in solid fuel, Trend reports.

TRANSPORT & COMMUNICATIONS Roscosmos and Kazakhstan to develop base of Cosmodrome Issues on further cooperation with Roscosmos and activities aimed at development of Baikonur city were discussed in Kazakhstan, Trend reports with reference to press office of akimat (administractive center) of Kyzylorda region. The discussion took place within the working visit of the Governor of the region Iskakov Kuanyshbek to Baikonur city, where he held a meeting with Director General of Roscosmos Dmitry Rogozin. Parties discussed issues suggested by the governor of the region to be included in the agenda of the fourth meeting of -Kazakhstan Intergovernmental Commission on Baikonur Complex to be held in Moscow in late July. They include signing of long-term Baikonur development program, creation of special economic zone within the territory of the complex, privatization of housing by citizens, simplification of admission to the city and decrease of municipal services tariffs. At the end of the meeting, the parties agreed to implement such visits more often. Baikonur is a city of republic significance in Kazakhstan on the northern bank of the river, rented and administered by Russia. It was constructed to service the Baikonur

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Cosmodrome. The rented area is an ellipse measuring 90 kilometeres east to west and by 85 km north to south, with the cosmodrome situated at the area’s center, Trend reported.

Kazakhstan to renovate local passenger terminal in co-op with major company The renovation of a passenger terminal in Kazakhstan’s Shymkent city is planned within the Nurly Zhol program for 2015-2019, the Ministry of Industry and Infrastructural Development told Trend. “According to the program, the terminal reconstruction is to be carried out with the help of private investments,” the ministry said. The project is to be realized within the public-private partnership. Recently, a memorandum of cooperation between akimat (administrative center) of the city and SCAT Airlines has been signed on joint implementation of the project. The feasibility study was developed and submitted for the state review. Following the results of the review, the cost of the project will be defined. Nurly Zhol is a State program for infrastructure development of Kazakhstan, Trend reported.

Kazakhstan aims to increase production of, reduce prices for locally-produced electric cars Kazakhstan wants to increase production of and lower prices for electric cars in the country, said Vice Minister of Industry and Infrastructure Development Amaniyaz Yerzhanov at a July 10 government press conference. “Foreign automakers believe that, by 2022, the sale of electric cars will reach 89%, and we should not lag behind,” he said. “Today, the prices of electric cars produced by Kazakh manufacturers are 1.5 times higher than those produced by Tesla and other car manufacturers. Tesla has released its third generation of electric cars, which are available in Kazakhstan and studied by our automakers. At the moment, this electric car costs $28,000.” The configuration of the electric car ultimately determines its price. “This is due to the characteristics of the car’s battery, and our manufacturers are working on it. Scientific institutes were tasked with manufacturing lithium batteries in Kazakhstan because we have a lot of raw materials. We can even export the batteries to other countries in the future,” said Yerzhanov. Kazakhstan unveiled in 2018 the iEV7S electric car, produced with China’s JAC Motors. Costing $18,054 to $31,258, it is equipped with a 113-horsepower engine and a fast- charge mode. “Several units of (locally-produced) electric cars were released and put up for sale. If they are in demand, our automakers are ready to produce more of these electric cars. But we cannot simply sit and wait, so we are working to lower the cost of electric cars and cooperating with foreign automakers,” he said. More than 1,000 electric cars may be found on Kazakhstan’s roads, of which approximately 200 are locally-produced. “In Kazakhstan and on the territory of the Eurasian Economic Union as a whole, today, there are a number of privileges for electric car buyers – zero import duty, a 50% utilisation rate for primary registration and exemption from transport tax,” KazAvtoProm Board Chairman Oleg Alferov told Asiaavto.kz in a 2017 interview. While Kazakhstan’s electric cars are designed primarily for movement within the city, an expanding network of fast-charging stations will accommodate longer trips of several hundred kilometres. Consequently, infrastructural development in Almaty, Nur-Sultan and the Nur-Sultan-Shchuchinsk highway is underway, said Yerzhanov. “There are electric charging stations there,” he said. “Infrastructure will develop in more cities and regional centres as the number of electric cars increases,” The Astana Times reports.

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KazAvtoProm increases car sales, number of domestically-assembled cars hikes KazAvtoProm, the Kazakh Union of Automotive Enterprises, sold 24,700 new passenger and light commercial vehicles in the country from January-May, a 19.9% increase year-on- year. More than half of the cars, or 13,745 vehicles, were assembled domestically. The share increased from 47.1% in 2018 to 55.6% this year, reported ranking.kz. The number of imported cars increased only 0.6% to 10,971, a yearly decline in share from 52.9% to 44.4%. LADA continues as the leader in new passenger car sales. The company has sold 6,013 vehicles since the beginning of the year, a 28.1% increase. Toyota sales rose 30.1% with 5,413 cars, followed by Hyundai with 4,647 cars, a 76.2% hike. The top three brands account for 65% of all sold cars in the last five months. LADA is also the leader for new cars assembled in the country. The company sold 5,925 domestically-produced vehicles, a 30.6% increase year-on-year. LADA Granta (2,119) and 4×4 (1,358) were the most popular made in Kazakhstan models. Its Vesta (1,225), Largus (889) and XRAY (331) also made the top ten list. Hyundai supplied 4,598 domestically-produced cars to the market, an 87.4% increase year-on-year. Kazakh plants mostly produce the Hyundai Tucson (1,616), although the top ten also includes its Accent (1,072), Creta (776) and Elantra (765). KIA sold 1,560 domestically-assembled cars, an annual growth of 54.9%. Nine out of ten domestically-produced models sold were either LADA and Hyundai.

AGRICULTURE Gross output in farming grows 10.5% in six months, reaches $2.76 billion The Kazakh farming sector grew 10.5 percent in its gross output in the first six months of 2019 and produced 1.063 trillion tenge ($2.76 billion) worth of products, Kazakh Minister of Agriculture Saparkhan Omarov announced recently. Beef production totalled 477,000 tons meeting 98% of the country’s demand. Lamb production reached 150,000 tons and pork reached 86,000 tons. There are 7.2 million heads of cattle, 18.7 million heads of sheep, 2.6 million heads of horses and 44.3 million birds, he added. The country’s national agriculture development programme envisions measures to create long-term sector development programmes in farming. In the next ten years, the plan is to create 80,000 family farms in beef cattle and sheep farming that will work with meat processing and feedlots. The programme is designed to boost the export potential of the Kazakh beef and lamb. In 2018, Kazakhstan exported 19,900 tons of beef, 3,000 tons of lamb and 400 tons of pork. This year, the government plans to double the pork production, particularly targeting the Chinese market. The target also is to facilitate import substitution of dairy products. The ministry seeks to bring milk production to 1 million tons. Omarov said the construction of industrial dairy farms will facilitate progress. “As part of the agriculture development programme, the ministry is implementing long- term sector programmes to develop farming. Each programme is decomposed into indicators across the regions to create production capacity,” said the minister. The ministry, he noted, is also working to remove restrictions and disagreements in veterinary and sanitary requirements for processed products in the export priority countries for Kazakhstan. “The measures will help increase the volume of beef exports to 37%, lamb to 32% and pork to 43%. Competitive advantages of the Kazakh products, environmental friendliness can help boost agriculture growth,” said Omarov.

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The minister emphasised the need to establish the system to process and certify organic and Halal products. “The law on the production of organic products was adopted in 2015, but there is no plan of the measures to implement the law. It is also problematic that there is no legislation for Halal production in Kazakhstan, though Kazakhstan initiated the creation of the Islamic Food Security Organisation [of the Organisation for Islamic Cooperation,” he said. The sector is also looking for strategic investors and seeks greater involvement of transnational companies. Among the recent projects involving foreign investors is a camel production plant in the Turkestan Region with Chinese Golden Camel Group company and a dairy plant in the run by the French Lactalis company, the second largest dairy producer in Europe. Iranian Empire Food launched the construction of a meat processing complex in the this year with a capacity of 100 heads of cattle and 1,500 heads of small cattle. Another meat processing plant with a capacity of 5,000 tons per year will be launched this year in Nur-Sultan. The work is ongoing to attract such investors as Chinese Grand Pharm, German Baumann, Italian Inalca and Cremonini in the meat processing sector. Omarov said the U.S. transnational companies will also invest in a modern meat processing complex to produce beef. The group of American experts has audited the current market and prepared an analytical report for the American companies. The World Bank and the Asian Development Bank will assist the Kazakh government in preparing the programme to support the development of the field. In 2018, Kazakhstan’s KazAgro Holding, the country’s key lending institution in agriculture, increased the volume of finance up to 400 billion tenge ($1 billion). Of this, 114 billion tenge ($296.5 million), 30% of the total loan volumes, went to lending in farming. In 2019, the holding plans to allocate nearly 134 billion tenge ($348.5 million) to the development of farming, The Astana Times reported.

Meat processing plant opens in KazBeef Group opened a meat processing plant July 11 in Schuchinsk in the Akmola Region, reported the Kazakh Invest press service. The company is the country’s only producer of marbled beef using U.S. technologies, with a full production cycle of high-quality meat products from feed cultivation to packaging finished products. Dozens of small farms near the plant supply meat. KazBeef’s meat has a unique taste due to using wheat as fattening feed for 180 days. The food is main difference from meat produced in Argentina or Brazil, which mainly use herbal feed. “I think Kazakhstan should become the leader in the region for the production of all types of meat. We have the potential so that the Kazakh agro-industry should occupy half of the country’s economy. The agro-industry should become more important than the oil and gas industry, because it is renewable. New technologies are also of great importance. It is important that the agro-industry is environmentally friendly,” said Kusto Group Board of Directors Chairperson Yerkin Tatishev. The reconstructed plant has increased capacity from 2,000 to 6,000 tons of product per year. De-boning and packaging equipment was installed and Skin Pack, a process to vacuum seal steak in portions, was launched in June. Meat grading equipment and a second deboning line have subsequently been installed and a Metro Cash and Carry distribution centre with the capacity to store up to 1,000 tons of product was built. Opening the facility is an important milestone for KazBeef, noted General Director Beibit Yerubayev.

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“Now, 70% of meat on the domestic market is supplied from bazaars and subsidiary farms. We want to change the situation by giving better quality for a good price. Food safety is a priority for us. The consumer should purchase meat without the use of hormones and antibiotics. Our products are certified by the GFSI international food safety system. This certificate is recognised worldwide and we will be able to export our products. We are proud to open the plant and at the same time, we are ready to share our experience with other entrepreneurs of the country,” he said. Fifty people presently work at the plant, but the number of jobs may increase three-fold. The company has 120,000 hectares of area with more than 5,000 head of Angus and Hereford kept on a beef cattle pedigree reproducer farm in the Akmola region. The company is also engaged in wheat feeding 5,000 head of cattle in the Zerenda District. The feedlot, which will be launched at the end of July, will accommodate up to 15,000 head and provide more than 6,000 tons of high-quality marbled beef annually, The Astana Times reported.

Kazakhstan to build two sugar plants, seeks to reduce dependence on imported sugar The Ministry of Agriculture seeks to reduce the nation’s dependence on imported sugar by building two sugar plants by the end of 2021. The plants will be in the Zhambyl and Pavlodar regions and cost $775 million. The plants will have a capacity of 100,000 tons per year and will use local raw materials. Sugar production in Kazakhstan fell 45.4% in the first five months of this year compared to 2018. Total production the first five months of 2019 was 91,100 tons. The largest volumes of production are traditionally concentrated in the Zhambyl region at 67,200 tons. Production volumes fell 48.7% in the region. The Zhambyl region has two plants called Tarazsky and Merkenskiy. Both plants belong to the Central Asian Sugar Corporation. The sharp production decline is due to the suspension of the activities of the Central Asian Sugar Corporation. The Shusky, Tarazsky and Merkensky sugar factories were stopped for several months. Another 24.8% of local production was provided by manufacturers of the Almaty region, where the following corporation’s plants operate: Koksu, Aksu, Burundai, Eskeldi and Alakol sugar factories. Officials hope the two new plants will combat the decline. The plant in the Zhambyl region will cost $208 million while the Pavlodar region plant will cost $568 million. In the Zhambyl region, the plant will get sugar beet from the district. According to the Ministry of Agriculture, in Kazakhstan, the average sugar consumption per year is almost 500,000 tons. Of that, 90% of the domestic market demand is provided by processing imported cane raw sugar and importing ready-made sugar. Only 10% of finished products are obtained from local sugar beet. The main suppliers of sugar for Kazakhstan are Russia and Belarus, The Astana Times reported.

WASTE MANAGEMENT SECTOR Kazakhstan to develop state programme to better manage municipal solid waste The Kazakh Ministry of Ecology, Geology and Natural Resources, government agencies and organisations are developing a state programme to better manage municipal solid waste (MSW), reports the Nur-Sultan Akimat (city administration) press service. State and local government funds as well as private investment will be used to develop the waste management industry and the government will encourage people to separate waste. The state policy on waste management is defined in the Concept on Transition towards Green Economy until 2050 and aims to introduce separate waste collection and develop a waste recycling sector through public-private partnerships. The concept was developed by

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the former Kazakh Ministry of Environmental Protection and the United Nations Development Programme to address environmental concerns by increasing resource use efficiency and modernising existing infrastructure. Kazakhstan will prioritise optimising resource use, increasing the efficiency of environmental protection activity and establishing green infrastructure until 2020, after which it will begin transforming the national economy, implementing renewable energy technology and developing rational water use until 2030. In 2030-2050, the country will transition to using natural resources according to renewability and sustainability. Kazakhstan produced 4.3 million tons of municipal solid waste in 2018, approximately 100,000 fewer tons than in 2017. Its share of municipal solid waste recycling was 11.5% in 2018, 9% in 2017 and 2.6% in 2016. It is expected to increase with the ban on dumping paper, plastics, cardboard and glass waste into landfill that came into force January 1 and the ban on construction and food waste scheduled for 2021. Since 2016, the government has also prohibited disposing scrap metal, mercury lamps and batteries, waste oils and liquids and electronic product waste in landfills. Separate waste collection has been implemented in 51 cities and districts, and sorting has been implemented at 30 sites, where more than 1,000 jobs have been created. Researchers at Nazarbayev University’s (NU) School of Engineering and National Laboratory Astana’s Laboratory of Green Energy and the Environment found that 30% of municipal solid waste in the capital has the potential to be recycled and another 10% has the potential to be sorted to derive solid fuel for the city’s energy needs, reports the NU press service, The Astana Times reports.

MEDICAL SECTOR National Oncology Research Centre construction to be completed by 2021 Construction of the National Oncology Research Centre in the capital is scheduled for completion by March 2021, reported primeminister.kz following Prime Minister Askar Mamin’s July 27 visit to the site. The centre is being built at the direction of First President of Kazakhstan, Nursultan Nazarbayev. Mamin reviewed the report regarding the construction roadmap and layout design. The 16,000-square foot facility, with six floors including the basement, is being built on a more than 49,000-square metre parcel. To date, installing temporary buildings and structures, demolishing existing administrative and residential buildings, digging pits, dewatering and pile driving has been completed and work has begun on laying the foundation. Mamin’s visit also included a discussion on transferring the tract from Nazarbayev University to state ownership. The new centre will use advanced technologies to diagnose and treat cancer, including laser, radiation and cell immune therapies, using the experience of established cardiological and neurosurgical clinics. The Ministry of Healthcare and Varian Medical Systems International AG signed a memorandum of cooperation Dec. 17 to equip the country’s medical centres with modern tools. The agreement involved outfitting the national cancer centre and 10 regional centres with radiation and proton therapy devices. Last year, the Kazakh government adopted the 2018-2022 Comprehensive Plan for Combating Oncological Diseases, which aims to improve the quality of medical services and purchase new equipment for oncology clinics. More than 35,000 new malignant tumour cases are reported in Kazakhstan each year. Approximately 170,000 individuals have registered malignant tumour-related diseases, reported elorda.info.

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ECONOMIC NEWSLETTER, July 2019 Embassy of the Kingdom of the Netherlands EXHIBITIONS IN KAZAKHSTAN (September - October 2019) KazBuild International Exhibition Construction and Interiors, Windows, Doors and Facades, Ceramics and Stone 4 – 6 September 2019, Almaty Organizer: Iteca www.kazbuild.kz

Aqua-Therm Almaty Kazakhstan International Exhibition for Heating, Ventilation, Water Supply and Swimming Pool Equipment 4 – 6 September 2019, Almaty Organizer: Iteca

www.aquatherm-almaty.com

TransKazakhstan / Translogistica Kazakhstan International Transport and Logistics Exhibition 18 – 20 September 2019, Almaty Organizer: Iteca www.transkazakhstan.kz

Mining and Metals Central Asia Central Asian International Mining Exploration and Mining Equipment Exhibition 18 – 20 September 2019, Almaty Organizer: Iteca www.miningworld.kz

KAZCOMAK Kazakhstan International Road and Heavy Construction, Communal Machinery Exhibition 18 – 20 September 2019, Almaty Organizer: Iteca www.kazcomak.kz

Kazakhstan Security Systems International Security and Civil Protection Exhibition 1 – 3 October 2019, Nur-Sultan Organizer: Astana Expo KS www.astana-expo.com

PromStroiAstana Kazakhstan International Construction Exhibition 2 – 4 October 2019, Nur-Sultan Organizer: Atakent Expo www.buildexpo.kz

Powerexpo Almaty Kazakhstan International Energy, Electrical Equipment and Machine Building Exhibition 23 – 25 October 2019, Almaty Organizer: Iteca

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ECONOMIC NEWSLETTER, July 2019 Embassy of the Kingdom of the Netherlands

www.powerexpo.kz

KAZTYREEXPO International Exhibition of Tyres and Tyre Fitting Equipment 17 – 19 October 2019, Astana Organizer: Iteca www.kaztyre.kz

KazAgro Kazakhstan International Exhibition and Forum for Agriculture and Food Industry 23 – 25 October 2019, Nur-Sultan Organizer: Expo Group www.expogroup.kz

KazFarm Kazakhstan International Exhibition for Cattle Breeding, Meat and Dairy Sectors 24 – 26 October 2018, Astana Organizer: Expo Group www.expogroup.kz

Astana Zdorovie 2019 Kazakhstan International Exhibition on Healthcare 30 October – 1 November 2019, Nur-Sultan Organizer: Iteca www.astanazdorovie.kz

Exhibitions dates are subject to change. For a complete overview and more information on exhibitions in Kazakhstan, please visit: www.iteca.kz www.expocentralasia.com www.tntexpo.kz www.atakentexpo.kz http://10times.com/

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ECONOMIC NEWSLETTER, July 2019 Embassy of the Kingdom of the Netherlands CONTACTS

Embassy of the Kingdom of the Embassy Office in Almaty Netherlands

62, Kosmonavtov Str. 41, Kazybek Bi Str. Chubary mcrd, 3rd floor 050010 Almaty 010000 Astana T: +7 727 2503773 T: +7 7172 555450 [email protected] [email protected]

Comments and subscriptions The Economic Newsletter on Kazakhstan appears every month and is distributed by e- mail. Back issues can be downloaded from our website: https://www.netherlandsandyou.nl/your-country-and-the-netherlands/kazakhstan.

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