TBY talks to Beibit Moldashev, Head of Bayer CropScience Kazakhstan, on the potential of both the local agricultural sector and the Customs Union.
TBY How long has Bayer been in Kazakhstan?
BEIBIT MOLDASHEV I’ve worked in the sector for around 18 years and Bayer has been in the market since Soviet times, since 1985 specifically. I joined Bayer in 2000. The best period for Bayer was from 2000 to 2010 as the whole country saw a period of rapid development—the agricultural sector in particular. It’s been growing ever since and the market just keeps getting bigger and bigger.
How is Bayer positioned in the sector?
There are many strong international brands in the country; Bayer isn’t the only one. However, in terms of turnover, it has been the market leader in Kazakhstan since 2003.
How have you seen the agriculture sector change?
In the post-Soviet era, the agriculture sector transformed dramatically, with small farming companies becoming big companies. Large private grain companies are very important in developing and introducing more advanced agricultural technology, machinery, and chemistry. The latest data shows that yields have been increasing, and also that crop protection has improved. The trend is now moving toward oil seeds. There’s also more interest in agro-technology on fallow land.
How has the government’s role changed in the sector?
The government has played a significant role by awarding subsidies to farming companies that use high-level technologies. The government continued to support the sector from 2008 to 2010 during the crisis.
We had a good yield in 2009, but unfortunately the prices were low. At that stage the government bought wheat at a higher price that it was on the market. This development period, through our innovative products, allowed us to adapt the latest pesticides to boost yields.
How do pesticides support the innovation strategy and contribute to the production of quality foodstuffs in Kazakhstan?
Pesticides in Kazakhstan are very innovative, very safe ecologically, and are easily used. In terms of spending on research in new technologies, Bayer is one of the agricultural sector’s biggest companies. At our headquarters in Germany there’s a lot of research being done on developing and adding new active ingredients to pesticides. We also put a lot of effort into educating farmers on technological and educational issues. It’s expensive, but worthwhile.
What sort of education do you provide?
During winter—the low season—we have large-scale seminars in planting regions where we give information on our products, technology, and experience. We teach farmers how to use and implement our products.
What is your product portfolio?
In cereals we have a full portfolio covering seed treatment, herbicides, fungicides, and insecticides. Our total product portfolio consists of more than 30 products.
What issues need to be addressed in the sector and what challenges stand out in terms of the development of the Kazakhstani agricultural sector, both in terms of livestock and grains?
By 2010, many farmers and big companies were able to re-equip. It was a difficult year nevertheless, because of the liquidity crunch, but they overcame that period and companies will continue to grow. As for livestock, it’s still developing, but there are strong efforts by the government to develop that sector.
What do you believe gives Kazakhstan’s agricultural sector a competitive advantage over other countries?
Quality. Our protein content in grain is the highest. There is an element of high-risk related to yield potential due to the rough climate conditions in our country, but our yield is very high quality. Canada has similar climate conditions to Kazakhstan.
In 2001, 2003, and 2008, Bayer organized trips for chief agronomists to exchange their experiences. When these chief agronomists came back they began to change their technology to comply with Canadian technology. Canada has extensive experience with crop production in harsh weather conditions, and its technology is suited to Kazakhstan.
Additionally, Kazakhstan is a multinational country. Different cultures and people live together quite happily here. Kazakhstanis are by nature very hospitable and friendly. This goes back a long way, I think. The steppe was enormous, but gossip traveled fast, which means you had to always treat your guests well, otherwise they wouldn’t treat you well when you needed it. This hospitality and friendliness is a part of our culture. Other strengths of Kazakhstan include the fact that the country is politically stable and investments are secured and guaranteed by the government. There is still a lot of land to be developed, especially in the central areas of the country, and so the sector still has plenty of room for real growth.
Do you import products from Germany?
Yes, we import products from factories in Germany and France in January, March, and May. In our 10 years of experience we’ve never had a delay in importing these products.
What options are available for foreign investors in the Kazakhstani agricultural sector?
There are a lot of options for investors in Kazakhstan. One is as a joint venture with existing companies that have a financing capital structure. If you are confident enough, then another way is to enter Kazakhstan alone and start a business.
Kazakhstan is a good place for production, and all the existing companies have been growing healthily over the years. A lot of machinery companies that made profits in their first years have created joint venture funds with which they have been investing in the agricultural sector.
What plans do you have for production?
Bayer in Kazakhstan has been producing pesticides with its partners since 2003, and we plan to expand that. Potentially, everything we import could be locally produced here in Kazakhstan. We would produce mainly for local consumption.
The Customs Union enacted between Russia, Belarus, and Kazakhstan is crucial, and we are waiting to see how that situation develops. After that we can build a platform on how to work for the buyer in terms of product price and marketing. That will all be synchronized between those three countries. We’re ready for any outcome.
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