January 2020 Highlights of Kazakhstan Agricultural Sector

Kazakhstan increases feed production. Fruit storage opens in Almaty region. Kazakh PM chairs meeting on development of livestock. EuroChem invests $1 billion in new fertilizer plant in Kazakhstan. KazAgro reduced the number of subsidiaries.  You are welcome to learn more about the latest news of Kazakhstan Agricultural sector introduced in January issue of the Economic Newsletter which is prepared by the Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan.

KazAgro reduced the number of subsidiaries

In connection with the reform and improvement of the company’s performance, the national managing holding KazAgro has reduced the number of subsidiaries to three. KazAgroGarant JSC was merged with the Agricultural Financial Support Fund JSC, KazAgroProduct JSC was merged with Agrarian Credit Corporation JSC, Kazagromarketing JSC was liquidated, their message says.


Food corporation transferred to the Ministry of Agriculture. Three specialized financing companies remain in the holding structure. The agrarian credit corporation will be engaged in lending to agribusiness entities, funding of credit partnerships, microfinance organizations, second-tier banks, leasing companies. The Fund for Financial Support for Agriculture will continue microcrediting small businesses, guaranteeing loans, and participating in the insurance system in the agricultural sector.

KazAgroFinance will provide leasing services for agricultural machinery and equipment. Last year, KazAgro paid off foreign currency liabilities and adopted a transformation program that envisaged breaking even at the end of 2020.

In 2019, KazAgro funded agribusiness entities in the amount of more than 477 billion tenge, of which more than 448 billion tenge and about 29 billion tenge were allocated for lending to agriculture and about 29 billion tenge for the purchase of grain. The loan portfolio of KazAgro amounted to 886 billion tenge, and the number of borrowers increased to 77 thousand. In 2019, 56 investment projects were funded with a total value of 84 billion tenge, of which 24 projects were commissioned with a total value of 21 billion tenge, in which more than 770 workers were created places.

In 2020, it is planned to commission 31 investment projects worth 56 billion tenge with the creation of about 3 thousand jobs, Kapital reported.

Fruit storage opens in Almaty region in Kazakhstan

Fruitteelt in Kazachstan

A modern fruit storage of a new generation has begun work near the village of Shelek in the Almaty region. A refrigerated warehouse for storing apples and other fruits was implemented with the financial support of Agrarian Credit Corporation.

“The total amount of the project is 6.5 billion, of which more than 4.5 billion tenge was provided by the Agrarian credit corporation, the remaining money is the investor’s own funds,” Murat Daribayev, chairman of the board of the Agrarian Credit Corporation said. The Alma Mater Fields project was funded by the Corporation in stages from 2017 to 2019 under the Agroexport program. The state supported the creation of two orchards on 120 and 90.5 hectares, and a fruit storage for 3,600 tons.

The refrigeration complex maintains freshness of products up to 12 months. This will allow delivering fresh fruits to domestic and foreign markets all year round. The fruit storage is equipped with 18 refrigerators with adjustable gas environment and humidity. The metal structures of the complex are of Kazakhstan production, the skin is Russian, and all equipment is Dutch.

Another promising export project has been launched in the Almaty region. At the site of an abandoned farm in the village of Kokpekty, which is near the city of Ushtobe, a new pig-breeding complex for 1200 animals was opened. In September last year, the Ministry of Agriculture of Kazakhstan signed a protocol on requirements for the export of pork to China. Every year, residents of China consume more than 57 million tons of pork, which is 52% of the global volume. This makes it possible for Kazakh agricultural producers to export products to a huge market.

In total, in 2019, financing of investment projects by the Agrarian Credit Corporation amounted to 290 billion tenge, Kapital reported.

Kazakhstan increases feed production


Over the past 3 years, Kazakhstan has managed to almost double its feed production, but this is not the limit. To become the largest exporter of meat in Central Asia, you will need a lot of animal feed.

“Feed production in Kazakhstan increased from 735 thousand tons in 2016 to 1.27 million tons in 2018. Of these, about 71% of the feed was sold to poultry breeders, 18% to livestock breeders, and 6% to pig farmers,” World-Grain quoted a new report from the ID-Marketing agency.

Increase production

In the future, the country will continue to increase livestock feed production. At the end of 2019, several new feed mills were opened in it, including Kazmeal, the design capacity of which is estimated at 360 thousand tons. Kazmeal plant is located in North Kazakhstan region. It was opened in May 2019. The governor of the North-Kazakhstan region Kumar Aksakalov called it not only the largest in the region, but also in the country.

An average of 5.5 million tons of grain is collected in the North-Kazakhstan region per year. The region has everything to build up its potential in feed production. Wheat and some oilseeds collected from the fields will be processed at a plant opened in May. Finished products are expected to be sold not only to Kazakhstan farmers, but also exported to other countries.

New feed mills will be opened in Kazakhstan, as the attractiveness of the Kazakh agricultural sector for investors is growing.

In recent years, the value of investment in the agricultural sector has been growing steadily from 167.1 billion tenge or $427 million in 2015 to 252.9 billion tenge or $647 million in 2016; 352.5 billion tenge or $902 million in 2017, and 395.6 million tenge or $1 billion in 2018. In the first half of 2019, the value of investment increased by 50% compared with the statistical data for the previous year up to 263.7 billion tenge or $673 million.

According to ID-Marketing, feed in the country is mainly produced in three regions. In 2018, 29% of the feed produced was produced in Almaty region, 15% in Akmola region, and 12% in North Kazakhstan region.

The growth of feed production in Kazakhstan is associated with the desire of the authorities to become the largest exporter of meat in Central Asia. It stimulates demand for them.

Long-term development plan

According to the chairman of the Union of Poultry Farmers of Kazakhstan, a long-term development plan was adopted in the country, suggesting a four-fold increase in poultry production from the current level to 740 thousand tons by 2027. To achieve this, we need our own compound feeds. A development plan is not a pipe dream, since four poultry farms are being built with workshops, where they will produce feed in order to reduce the cost of raising poultry. There are still few private feed mills in the state that could sell their products to large poultry farms.

If Kazakhstan increases the production of poultry, it will turn from a net importer through it into a net exporter. Import substitution in the domestic market continues, as new poultry farms are replacing cheap and low-quality imported products of American origin from the domestic market. Kazakhstani authorities have plans to enter the world market by arranging exports to Asian countries, including China, Turkmenistan, Tajikistan, and the Middle East.

Between 2018 and 2027 compound feeds will be produced in large quantities to supply them to all Kazakhstan poultry producers. Exports will grow, but gradually, due to continued high domestic demand.

The state is also increasing pork production. On September 25, Kazakhstani authorities signed a trade agreement with China regarding the export of pork and live pigs. According to the US Department of Agriculture, Kazakhstan is a predominantly Muslim country, in which pork demand has been steadily declining over the past 10 years. So that the surplus of production does not disappear, they adopted the experience of India. There is almost no demand for beef in India, but it is produced for export. Now it has already become the world's largest exporter of it.

According to the forecasts of the Union of Pig Breeders, the deal with China will increase the number of pigs in the herd by 2.5 times and sell up to 100 thousand tons of pork per year. Kazakhstan has everything necessary to achieve this goal. While their cultivation is favoured by an overabundance of grains and the absence of outbreaks of ASF.

The Union of Pig Breeders and the Ministry of Agriculture of Kazakhstan are against grain exports to other countries, where they are used for the production of animal feed and high value-added products. The net profit from the use of wheat and barley for their domestic production, and then the export of pork, is 19 times higher than from export sales of grain.

The government also subsidises livestock breeders to boost beef exports to the world market. In 2018, Kazakhstan shipped 20 thousand tons of beef to other countries, which is 4 times more than a year earlier. Now it is moving towards a new goal of 60 thousand tons of beef, Kazakh Zerno said.

Kazakh PM chairs meeting on development of livestock

Minister of Agriculture Saparkhan Omarov reported on measures taken to increase the number of cattle and increase beef production, the potential of the regions for the development of beef cattle breeding.

According to preliminary data, in 2019 the gross output of livestock products in the republic amounted to 2,306 billion tenge, which is 12.5% more than the level of the corresponding period of the previous year.

The number of cattle increased by 4% to 7.4 million heads, horses — 6.8% to 2.8 million heads, poultry — 2% to 44.3 million heads, sheep — 2, 7% to 16.9 million animals, camels — 3.5% to 214.8 thousand animals, pigs — 2.9% to 822.2 thousand.

Production in slaughter weight of poultry meat increased by 16% to 223 thousand tons, beef — by 5% to 501.4 thousand tons, horse meat — by 4.3% to 132 thousand tons, lamb — by 0.8% to 152 thousand tons, pork — by 0.3% to 86 thousand tons.

In 2019, 115.7 billion tenge was allocated to subsidize the development of livestock breeding and increase the productivity of the industry. 840 family farms received loans for the purchase of 82.2 thousand head of cattle.

The implementation of the agreement on the principles of participation in the development of the modern agro-multi-protein industry in Kazakhstan, signed in December 2019 with the American company Tyson Foods, will give a great impetus to the development of livestock farming. At the first stage, it is planned to build in Kazakhstan a modern meat processing complex with a capacity of about 2 thousand heads per day. The enterprise will not only meet the needs of the Kazakhstani market, but also export products to foreign markets, helping to ensure the country's annual agricultural profit of more than $1 billion.

The meeting participants discussed measures to increase the number of livestock, its productivity, ensure the loading of feedlots and strengthen the forage base.

The prime minister instructed to continue comprehensive work on the development of livestock in Kazakhstan, the press service of the Prime Minister of Kazakhstan reported. The draft document was positively agreed with industry expert organisations and region administrations, a positive conclusion was received from the Atameken NCE and approval of the Interdepartmental Commission on foreign trade policy and participation in international economic organisations. Currently, coordination is being carried out with interested government agencies.

“The introduction of changes to the said order will allow preserving and increasing the number of Kazakhstan livestock in the coming years, loading domestic meat processing plants with high-quality raw materials at affordable prices and increasing the production and export of finished processed products,” the Ministry of Agriculture said, Kapital reported.

EuroChem invests $1 billion in new fertiliser plant in Kazakhstan

The Ministry of Industry and Infrastructure Development, the Administration of Zhambyl region and EuroChem signed an investment agreement, according to which a plant producing mineral fertilisers will be built and launched in the region by 2021.

The future plant with an investment of $1 billion is designed to produce 1 million tons of phosphate fertiliser annually. Phosphorus for production will be extracted in the phosphorite basin of the Karatau. This will make it possible to establish the production of complex fertilisers, minimising the damage to the environment.

The annual production volumes of the enterprise will be 120,000 tons of calcium chloride and 400,000 tons of gypsum dehydrate, which will meet the needs of the main industries of Kazakhstan.

The launch of the plant is scheduled for 2021. It will employ about 2,000 people.

In addition, the project of Zhanatassky wind station was presented, the cost of which is about 50 billion tenge. During the first stage, the capacity of the enterprise will be at the level of 100 MW, during the second at 200 MW. By the end of the first quarter of 2020, 40 wind generators will be installed.

Also, Mamin got acquainted with the preparations for the construction of a plant producing a soda ash, Qazaqsoda. According to plans, the construction of the plant should be completed in 2022. The Turkish company Yildirim Group invested 127 billion tenge in the construction. During the first stage, annual production will amount to 400,000 tons of products with a further increase to 1 million tons.

The Prime Minister of Kazakhstan visited the fertilizer plant of Kazphosphate in Taraz. During the year, the enterprise produced products worth 142 billion tenge. Most of the products were sold in Kazakhstan, the rest was exported to Russia, China, USA, UAE and Germany.

Mamin also participated in the launch of the third production line of the Saule confectionery factory, which created 70 new jobs.

From January to November 2019, the volume of manufacturing in the region amounted to 319.5 billion tenge, which is 7% more than last year. Investments in fixed assets added 10.5% and amounted to 250.1 billion tenge. For the same period, 66 investment projects were formed for a total amount of about 2.7 trillion tenge with implementation periods of 2020-2025. They will create 11,000 new jobs, Kazakh Zerno reported.

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