INVESTMENT OPPORTUNITIES OF SOUTH-KAZAKHSTAN REGION. - презентация

1 INVESTMENT OPPORTUNITIES OF SOUTH-KAZAKHSTAN REGION

2 Kazakhstan Сapital: Astana Теrritory: 2,7 мln. square kilometers. (the 9th in the world) Population: 17,4 мln. people. (the 63rd in the world) It has borders with (clockwise from the north) Russia, China, Kyrgyzstan, Uzbekistan, Turkmenistan, and Iran through the Caspian Sea. Administrative divisions: 14 regions and two cities that have the status of State importance (Astana and Almaty) GDP 2014: bln. $ (43rd) GDP per capita 2014: 15,219 $ (47th) Currency: Tenge (1 $ – 185 tenge) Kazakhstan has the second largest uranium, chromium, lead, and zinc reserves, the third largest manganese reserves, the fifth largest copper reserves, and ranks in the top ten for coal, iron, and gold.

3 Eurasian Economic Union (EAEU) ЕAEU is: Market: 175,7 мln. people GDP: bln. US dollars The energetics: Gas production: 20,9% оf the world proportion (the 1 st) Oil production: 14,6% оf the world proportion (the 1 st) Coal production: 5,8 % оf the world proportion(the 6 th) Energy production: 11,2 % оf the world proportion (the 3 rd) Industry Steel production: 4,5% оf the world proportion (the 5 th) Min.fertilizer production: 10,8 % оf the world proportion (the 2 nd) Agriculture Potato: 11% оf the world proportion Wheat: 9% оf the world proportion Milk: 7% оf the world proportion Мeat: 3,5% оf the world proportion The movement of 4 Frees within EAEU : 1.Free traffic of goods 2.Free movement of services 3.Free movement of capital(fund) 4.Free movement of work force Infrastructure: STRETCH OF ROAD: 1601,4 тhd. км (the 5 th in the world) RAIL MILEAGE: 106,8 thd. км (the 2 nd in the world)

4 Market and Logistics In the territory 2 thd.km away from Kazakhstan there lives a population with 3,3 bln. people Three member-countries from BRICS are situated near Kazakhstan: Russia, China and India. The average time of the flight from many European cities amounts 5 hours. 33% (2787 км) of the transport corridor «Western Europe- Western China» passes through Kazakhstan, which is considered as the shortest cut in international transportation between Europe and China

5 More than 68 % of the total turnover and 57 % of passenger turnover make share of the countrys railways. Kazakhstan railways border with:Russia, China, Uzbekistan, Kyrgyzstan and Turkmenistan. Road infrastructure 33% (2787 km) of the transport corridor "Western Europe- Western China" held in Kazakhstan, which is the shortest route in international traffic between Europe and China There are 5 international automobile routes with a total highway mileage of 23 thd. km. 1. Аlmaty-Аstana -Коstanay with a way out to Tchelyabinsk (Russia); 2. Аlmaty-Petropavlovsk with a way out to Оmsk (Russia); 3. Аlmaty -Semey -Pavlodar with a way out to Оmsk (Russia); 4. Аlmaty-Shymkent with a way out to Tashkent (Uzbekistan); 5. Shymkent-Акtobe-Uralsk with a way out to Samara (Russia). Public roads: 96,000 km. Total extent of the rail mileage км, 6 thd. of which is double-track railway and around 5 тhd. electrified track.

6 Energetics of Kazakhstan Power consumption: industry - 68, 7% households - 9.3% service sector - 8% transport - 5.6% agriculture - 1.2%. Generation and consumption of electricity in 2013: Development: ,7 KWh Consumption: , 8 KWh The main producers of electricity: 1. "ECE" JSC 16% 2. "Ekibaztuzskaya GRES-1" LLP 15% 3. "Ekibaztuzskaya Station GRES-2" JSC 7% 4. "Kazakhmys Energy" JSC 5% 5. "Almaty Electric" JSC 4.4% 6. "Pavlodarenergo" JSC 3.8% 7. "Karaganda-Power Center" LLP 3.6% Production and consumption of natural gas in the Republic of Kazakhstan 2014: Production of gas bln. m3 Consumption in the Republic of Kazakhstan - 18 bln. m3

7 Rating of the Global Competitiveness index Global Economic Forum rated Kazakhstan 50-th of the 144 countries. «The efficiency of labor market» - 15 th place «The investors security rate» - 22 nd place «Macroeconomic environment» - 27 th place «Quality of the railway infrastructure» – 28 th place Running a business According to an authoritative rating - «Doing Business» rated Kazakhstan 77 -th of the 189 countries. «Taxation» - 17 th place «The property registration» - 18 th place «Investor protection scheme» - 25 th place The countrys business climate - a rather good one thanks to favourable investment laws and a number of measures taken to support investments made it possible to attract a significant number of investments to Kazakhstan and from 2005 gross income amounted more than 203 bln.US dollars. Investment climate

8 According to the annual Global Competitiveness Index for , Kazakhstan took the 22nd place on the degree of investor protection. Kazakhstan signed an agreement on mutual protection of investments with 47 countries. INVESTMENT OMBUDSMAN An investment ombudsman was set up in order to assist in protecting the rights and legitimate interests of investors. The main functions of the investment ombudsman are: consideration of investors appeals on issues arising in the course of carrying out investment activities in the RK, and to make recommendations for their resolution; to assist investors in addressing emerging issues in extrajudicial and pre-trial procedures; development and making recommendations to the Government of the Republic of Kazakhstan on improvement of the RK legislation. Investor protection

9 Investment preferences Tax exemption Corporate income tax for 10 years Land tax for 10 years Property tax for 8 years Investment subsidy Reimbursement up to 30% of actual costs of investors for SMP and purchase of equipment from the state after commissioning Exemption from customs duties Exemption from customs duties on import of equipment, accessories and spare parts, raw materials and supplies required for implementation of the investment project Kind grants Gratuitous use: land, buildings, installations, machinery and equipment, computer engineering, measuring and control instruments and devices, transport devices

10 Criteria for investment preferences:: 1.Match the list of priority activities: Metallurgy; Chemical industry; Petrochemical industry; Mechanical engineering; Building materials industry; Food processing industry. 2. The newly formed company (less than 12 months before the application for investment preferences) with investments of at least 2 million. MCI (monthly calculation index). 1 MCI = tenge /10,7 USD MCI = tenge / USD Simplification of the labor recruitment It does not require a work permit of foreign workers during the life of the investment project, and one year after the commissioning of the investment project Stability of the legislation the stability of the tax legislation for all tax rates, except VAT and an excise duties (subject to the conclusion of the investment contract)

11 Area: km2 Population: (1 place in Kazakhstan) Economically active population: 1 267,4 people. Unemployment rate: 5,3% The average monthly salary in SKR: tenge / 444,8 USD For reference: the average monthly salary in Kazakhstan tenge/ $643,8 Administrative center: Shymkent (3 rd largest city in Kazakhstan) The structure of the region: 4 cities (Shymkent, Kentau, Turkestan, Arys) and 14 regions. South Kazakhstan region Uranium reserves is ranked 1st in the country, phosphorite and iron ore reserves - 3rd place. Average statistical number of sunny days: 330 (3000 hours per year) Average temperature: January -2°C, July +29°C.

12 Economics 10 priority sectors of SKR Gross regional product in January-September 2014 amounted to million tenge (in january-september 2013 – ,7 mln.tenge). 1.Agriculture 2.Food industry 3.Light industry 4.Pharmaceutics 5.Mechanical engineering 6.Building materials industry 7.Petrochemistry 8.Energetics 9.Tourism 10.Logistics Name GRP, mln. tg Structure of GRP, % Share of SKR in the structure of GRP in the RK, % Total Agriculture, hunting and forestry ,212,8 Industry ,8 Mining and quarrying ,81,0 Manufacturing ,811,3 Building ,06,4 Wholesale and retail trade ,24,7 Transportation and warehousing ,36,6 Real estate transactions ,3 Other services ,86,6

13 SKO share of the total production in Kazakhstan by the end of % cottonseed oil 99,2% трансформатор 97,5% cotton fabric 67,2% kerosene 55,0% textile 53,4% pharm.preparations 44,9% windows and doors 37,3% petrol 30,1% fuel oil 26,9% gas oil 24,5% portland cement 21,9% flour 21,4% pasta 21,2% bread 17,4% building brick 13,8% bird meat 12,3% paper 10,4% lime In 2014 industrial enterprises of SKR have produced goods 649 bn.tenge or 3,5 bln. USD. 37% of investments in fixed assets of SKR in 2014 have been invested in the industrial sector 20% of credit investments in 2014 in South Kazakhstan second-tier banks were directed to the industrial sector Industry

14 In 2014, the volume of gross agricultural output amounted to 325 bln.tenge or 1,8 bln. US dollars. 10,3 мln.hectare or 87 % of the area is occupied by agricultural land 9095,8 thd. hectares of pastures, 779,0 thd. hectares of crop area, 442,3 thd. hectares of irrigated land 38%f the economically active population, or more than 500 thousand man employed in agriculture 87% of the republics greenhouses are located in the South Kazakhstan region 2.3 million tons of vegetables, melons and potatoes were harvested in thd. tons of vegetables and melons sent for export to the Customs Union, including in Russia thd. tons The government allocated subsidies of 23 billion tenge or 125 million USD to South Kazakhstan region in 2014 on the development of agriculture, which is 1.6 times more than in tenge or 350 USD is the average monthly salary in agriculture Agriculture 100% cotton 71% grape 66% gourds 51% safflower 42% fruit 25% vegetable SKR share of the total production in Kazakhstan by the end of 2014

15 One of the most visited tourist sites in Central Asia is the mausoleum of Khoja Ahmed Yasawi, which is included in the UNESCO World Heritage List. In 2014, the Mausoleum of Khoja Ahmed Yasawi had a more than million tourists. The resort "Saryagash" has 16 recreation centers. Every year it is visited by over 284,000 people. The region has 2 reserve ("Aksu Zhabagly" and "Karatau") and one National Park ("Sairam-Ugam") In order to develop tourism, there are originated 4 tourist zones: Tourist- recreational center "Kaskasu" Health-resort zone "Saryagash" Beach area on the reservoir "Shardara" Beach area on the reservoir "Badam For more information on tourism SKR you can find on this link: Tourism

16 Name Ski resort "Kaskasu" Health-resort area "Saryagash" Beach area "Shardara" Beach area "Badam" Dedicated area56 ha40 ha106 ha64 ha Required investments 230 mln $154 mln $192 мln $184 mln $ State support: - Ready-made infrastructure (water, electricity, gas, roads); - Assistance in obtaining permits; -Provision of marketing research from international consulting companies; -The ability to repurchase or lease land below market value. Tourist areas

17 Minerals Name of district or city Name of minerals 1c. ArysBentonite clay, limestone, clay, gypsum, sand for concrete and silicate products 2c. KentauBarite, limestone, copper, flasks 3c. TurkestanBarite, limestone, gypsum, clay, gypsum, flasks and opoka-like clay, bentonite clay 4r.BaidybekMineral paint, marble, facing stones 5r.KazygurtGypsum, clay, bentonite, clays, carbonate raw materials, perlite, obsidian 6r. MaktaaralGypsum 7r. OrdabasyMineral paint, bentonite clay 8r. OtyrarLoam, dolomite and dolomitic limestone, construction sand 9r. SairamBentonite clay and quartz sand 10r. SaryagashFlasks and opoka-like clay, bentonite clay, limestone, carbonate raw material and quartz sand 11r. SuzakBentonite clay, talc, chrysotile asbestos, loam, sand quartz and feldspar 12r. TolebiMineral colors, limestone, refractory clay, molding clay, wollastonite, marble, fluorspar, fluorite

18 Shymkent international airport operates regular flights to the following cities: Istanbul (Turkey), Moscow (Russia), Dubai(UAE), Sharjah(UAE), Urumchi (China), Astana, Almaty, Aktau SKR is bordered by: Republic of Uzbekistan Jambyl region Karaganda region Kyzylorda region. SKR is the Southern gateway in EAEC in international trade, to contribute to: Western Europe – Western China international transport corridor which is the shortest route in international traffic between Europe and China; автомагистраль «Шымкент- Ташкент», открывающий Казахстану южные страны; Shymkent-Tashkent highway which opens to Kazakhstan southern countries Trans-Asian Railway. Location and logistics Within a radius of 200 km from Shymkent live 10 mln.people Within a radius of 500 км – 25 mln. people. Within a radius of 700 км – 50 mln. people.

19 The map of industrial zones SKO Industrial Zones of the South Kazakhstan region 19 industrial zones Total area 1390 hectares 3 active industrial zones in the cities of Shymkent, Turkestan, Suzak district Total area 490 hectares 9 industrial zones, putting into operation in 2015 Total area 485 hectares 7 industrial zones at the design stage Total area 415 hectares 130 ongoing projects The area under the project 442 hectares 13,000 jobs 115 billion. tenge or 625 million. USD attract private investment

20 Endüstriyel bölgelerinin çekiciliği The attractiveness of industrial zones Ready Infrastructure: Supply of electricity, gas, water and other engineering and communication networks. Fares are cheaper by 30% Possibility to rent or purchase of land at below market value Convenient location logistics Maintenance of projects on the principle of "one window" Promoting the goods and services the participants of industrial zones Submit necessary documents to the Management Company Get the solution of the DCC Protect the project in DCC Sign a contract with the Management Company How to become a member of the industrial zone

21 More information Cost of land: Obtaining ownership rights tenge/m2 (4,8 USD / m2) For Rent tenge/m2 per year (7 cents/m2) Tariffs: InfrastructureCost in IZCost out IZ Electricity07:00-19:00 12 tenge / kWh (6.5 cents / kWh) tenge / kWh (11 cents / kWh) 19:00-23: tenge / kWh (27 cents /kWh) 23:00-07:008 tenge / kWh (4 cents / kWh) Gas 25 tenge /cube (13.5 cents /cube) Water Drinking 150 tenge /cube (81 cents /cube) Technical 50 tenge / cube (27 cents / cube) - Canalization 78 tenge / cube (42 cents / cube) Tax rates: CIT 20% VAT 12% Land tax tenge / m2 (7.5 cents / m2) Property tax 1.5% The cost of fuel: Gasoline (AI 92) - 99 tenge / liter (53 cents / liter) Diesel - 96 tenge / l (52 cents / liter)

22 Republic of Kazakhstan, South Kazakhstan Region, c.Shymkent St. Kapal-batyr w/n, Industrial zone «Ontustik» Tel: Mob: Call center: