WHY KAZAKHSTAN?
Kazakhstan has a variety of needs and projects that have attracted the services of these players, who are keen to explore opportunities and overcome challenges in partnership with locals.
Transport companies like us reflect the situation of the economy. We realize that people feel more stable this year as they have started to order things to bring into Kazakhstan. We found that even though the economy was declining last year e-commerce was growing. This year it is also growing and we are interested in this segment. What is important with e-commerce is that it is sensitive to the price of transportation because if you were buying something inexpensive, you would never send it with DHL because the cost of transporting it would be high. This is why we work in the premium segment with jewelry, watches, IT equipment, and telephones, which is a segment that is growing. It is a new thing for Kazakhstan but we have seen the sector growing for the last four years, so in the next few years I expect it to be the main market. Many companies now focus only on e-commerce and we also consider it an interesting, growing segment. Our main purpose is to keep our customers happy so we will do everything that they require from us. We will open some new destinations as we continue to do every year, expanding our network. We plan to open a new facility in Astana and are negotiating with Astana International Airport as well.
The real estate market in Kazakhstan has seen dramatic peaks and troughs since the early 2000s. We observed the booming market of mid-2000s, when speculative deals backed by a growing economy drove triple-digit price growth in the real estate market. But in the late 2000s, the bubble burst. Prices plummeted and have yet to recover fully. Yet, despite all the challenges of the past 10 years, real estate property remains one of the key investment tools for Kazakhstanis that is considered safe and secure amid low level of awareness of other types of investments, such as financial instruments available in the stock market. The real estate market in Kazakhstan provides investors with numerous opportunities. There is room to grow in almost every real estate sector. For instance, in the office market, suburban business parks with high-quality office buildings and landscaped public areas, which appeal to both large corporations and small and medium-sized businesses, can be in demand. The property market in Kazakhstan in 2017 will continue to be tenant/buyer driven. Competition for tenants and buyers among developers, landlords, and owners will be fierce, which is great for the market.
After serving clients in Kazakhstan for about a decade working from our offices in Moscow, Kiev, and London, we became the first top management consultancy to open an office in Astana in 2013 and later, in 2015, in Almaty. Given the rapid reforms and dynamic development of many companies we felt that we needed to be close to our clients in order to serve them best. We also recognized that an enormous pool of talented young professionals and graduates was seeking attractive career opportunities: we now have over 40 local consultants. By opening an office we wanted to express our commitment to Kazakhstan and our belief in its potential. Kazakhstan is an exciting place for all kinds of reasons. The country is in a strategic location at the crossroads between east and west. It has enormous natural and human resources and great ambitions. It has developed a robust long-term strategy to harness those resources to become one of the top 30 nations in the world. As such, Kazakhstan can be a role model for many other fast-growing countries. Kazakhstan's business, political, and cultural leaders are open and eager to apply best practices from other countries.
Our ambition is to spread more of our products into what we call the 1520 area. This is the width of the rail track, which is different from that in Europe or in Japan. It goes from Finland down to Ukraine across the Baltic countries, Caucasia, Central Asia, and Mongolia. It is one of the biggest networks in the world so we believe there will be many opportunities in the years to come and we have to be present and close to our customers. The first one is an electric locomotive manufacturing plant—EKZ in Kazakhstan, with which we launched a joint venture as part of Kazakhstan's industrialization program. We are pleased to be here to develop this aspect economically in Kazakhstan and to export to neighboring countries. Our first product from EKZ will be delivered to Azerbaijan at the end of 2017. In this region the market is mainly about the renewal of old fleets. Today, in Kazakhstan and all the other former Soviet Union countries, about 70% of the locomotive fleet has to be replaced by 2023. The market is there; it is just a matter of time and investment. Azerbaijan is our first step, then Georgia as there is a corridor being opened between the Caspian Sea and the Black Sea.
There are many opportunities here; Kazakhstan is an open market, but businesses have to know the local mentality in order to work in the Kazakhstani economy. The economy is in fact doing quite well in comparison to other countries. Many other countries are suffering in this current economic downfall environment. The economy will get over this bump and hopefully in the next year the whole country will be able to climb from there onwards. We would like to develop more residential units in the future. We will have to see how long the Orchard Residences Project takes, however. At the moment, we are doing well and we would love to do another project. We look for the land before thinking of the idea, as location is important. There is beautiful greenery here. We are open to different segments of real estate and are truly changing the landscape of residential real estate in Kazakhstan. We hope to set a new benchmark in Almaty and Kazakhstan. As more of such luxury developments appear, people will start to appreciate them more and demand will grow.
SK has been operating in Kazakhstan for 20 years, bringing our medicines, vaccines, and consumer healthcare products to the Kazakhstani population who need them. We are a reliable partner of the Kazakhstan government and are committed to supporting its goals for the health sector and the economy. Last year, we launched several new products for asthma, COPD treatment, and HIV treatment—Tivicay and Triumeq, which is a once-daily, single-pill dolutegravir-based regimen. GSK has also launched a new scientific program called “Trust in Science,” which allows Kazakhstani researchers to work in the biggest scientific R&D centers in Europe and the US for a year. We have launched several innovative products here and believe that they will provide added value to patients, fulfilling patients as well doctors' needs. Here, in Kazakhstan, the tender business is much bigger than in the Ukraine. If we compare the market proportion for tenders, in Kazakhstan the market is approximately 60% tenders and 40% retail sales because the government spends good portion of healthcare budget on reimbursement to provide medicine free of charge for people who need it.
McDonald's Kazakhstan celebrated its first anniversary in March 2017 with five restaurants already opened in Almaty and Astana. In the first year, we served 2 million customers including more than 300,000 cars via our drive-through. Kazakhstan being a progressive and modern country welcomed the global brand of McDonald's with high demand resulting in long queues in Astana and Almaty during the first several months of operations. We have friendly staff in our restaurants and the most modern technology that helped in delivering great service from day one in our restaurants. Our high-quality food at affordable prices and technological innovations, like self-ordering kiosks, digital menu boards, and free Wi-Fi definitely resonated with people in Kazakhstan and customers do respond and visit restaurants often, and we attract new customers at the same time. One of the fundamentals in providing great customer experience is our restaurant team of over 450 young, talented, and highly motivated professionals who successfully completed the diverse and leading-edge McDonald's training program in different countries.
WHY KAZAKHSTAN?
TABLE OF CONTENTS
Guest Speaker
Rt Hon Sir Alan Duncan, State for Foreign and Commonwealth Affairs, United Kingdom
TBY talks to the Rt Hon Sir Alan Duncan MP, Minister of State for Foreign and Commonwealth Affairs of the United Kingdom, on the importance of Kazakhstan for the UK as a strategic partner in Central Asia and the variety of ventures that are improving economic cooperation between the two.
read articleInterview
Doris Bradbury, Director, American Chamber of Commerce (AmCham) in Kazakhstan
TBY talks to Doris Bradbury, Executive Director of the American Chamber of Commerce (AmCham) in Kazakhstan, on strategies for supporting growth, developing supportive structures for SMEs, and creating a more sustainable agriculture sector.
read articleInterview
Ermek Sakishev, Chairman , Investment Fund of Kazakhstan (IFK)
Ermek Sakishev began his career in 2005 at the Ministry of Economics and Budget Planning as a Lead Specialist. From 2005 to 2007 he worked at various private companies. From 2008 to 2011 he worked in the Administration of the President in various roles, from expert up to sector leader of the Social and Economic Monitoring Department. In 2011, he became the Director of the Innovative Policy Department of Samruk-Kazyna. From 2012 up to 2014 he occupied managerial positions within the private sector, becoming Deputy Chairman of the Board at Baiterek Development in 2015.
read articleReview: Banking
A Crowded, but Orderly House
Imprudent business practice during boom times, volatile commodity prices, and currency turmoil have sent lasting shivers through Kazakhstan's banking sector. Yet bold remedial moves from the authorities have brought relative recovery to a listing economy.
read articleInterview
Alina Aldambergen, Chairman of the Management Board , Kazakhstan Stock Exchange (KASE)
TBY talks to Alina Aldambergen, Chairman of the Management Board of the Kazakhstan Stock Exchange (KASE), on the launch of commercial bonds, upgrading the image the exchange, and the strategy for achieving that.
read articleInterview
Davron Rustamkulo, Member of the Supervisory Board , RG Gold & Chief Investment Officer of Verny Capital
TBY talks to Davron Rustamkulov, Member of the Supervisory Board of RG Gold & Chief Investment Officer of Verny Capital, on RG Gold's goal of becoming a top mining player, future expansion plans, and the role of mining in Kazakhstan's development.
read articleFocus: Industrial Development
The Spiid Of Development
In 2014 Kazakhstan launched a five-year industrial development plan with the purpose of fostering growth of the industrial, mining, and manufacturing sectors. These areas, among others, were identified as being key to achieving the country's long-term vision of economic diversification.
read articleInterview
Aibat Akhmetalimov, Managing Director, Philip Morris Kazakhstan and Central Asia
TBY talks to Aibat Akhmetalimov, Managing Director of Philip Morris Kazakhstan and Central Asia, on introducing non-combustible products, remaining competitive in a health-conscious world, and the company's vision for a smoke-free future.
read articleFocus: ABU DHABI PLAZA
To The Steppes
A striking high-rise complex, funded and managed by UAE-based developers and constructors, will be launched in the heart of Astana in 2017, further contributing to the young capital's fascinating skyline and state-of-the-art architecture, as well as its growing status as an international hub.
read articleInterview
Arman Aldabergenov, General Director of Kazakhstan and Central Asia , Lactalis
TBY talks to Arman Aldabergenov, General Director of Kazakhstan and Central Asia of Lactalis, on the success of the company in the country, challenges in the agriculture sector, and expectations for 2017.
read articleFocus: Organic Growth
Soil & Grass
With vast natural pastures, Kazakhstan is extremely well positioned to become a major producer of organic agricultural products. As agriculture demonstrates increasing potential to become a driver of the economy, the government's new legislation on organic farming will boost the country's production and export of quality organic products.
read articleFocus: ECOTOURISM
So Good It Yurts
Kazakhstan is looking to make its mark as the region's main tourist destination. Out of the nine “stans," Kazakhstan is the largest and most topographically diverse, boasting miles of steppe, desert, and mountains, making it the perfect destination for an ecotourism industry.
read articleFocus: Mega Silk Way Mall
Mega Silk Way
A new iconic shopping mall incorporated in the state-of-the-art Expo architectural framework opens in 2017 and is set to be the symbol of the exhibition and of Kazakhstan's new flourishing retail industry, with positive effects on employment and the economy.
read articleReview: Doing Business
Sweet and Tenge Delight
Though Kazakhstan's macroeconomic outlook has suffered enormously in the past few years from the collapse in oil prices and currency devaluation, its political leadership strengthened long-term ties with the Russia, the West, and China and drastically increased the ease of doing business.
read articleReview: Accountancy
Precipitating A New Age of Oil & Gas Investment
Anthony Mahon, Partner of Caspian Energy and Resources Leader of Deloitte Kazakhstan, on the importance of creating a secure investment environment and updating the tax regime to attract investors to the extractive industry.
read article