Latest news of Kazakhstan agricultural sector

We are offering you the latest news overview of Kazakhstan Agricultural sector which is the part of “Economic Newsletter on Kazakhstan”. The news from various Kazakhstani and foreign publications are summarized by the Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan.

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 totaled 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.

The minister emphasized 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 Organization” 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 Pavlodar Region 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 Almaty Region 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 Akmola Region

KazBeef Group opened a meat processing plant on 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. Deboning 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. “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 Chu 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. 

For more information, including macroeconomics & finance, water sector, exhibitions in Kazakhstan, etc., please refer to the July issue of the Economic Newsletter on Kazakhstan: