Download - Invest Kazakhstan

Meet Beibut, Rinat, Sasha, Nazym, Karina and Igor. They all have a stake in Kazakhmys because, like so many people in Kazakhstan, they benefit from our investment in the community. For example, their nursery in the city of Zhezkazgan is funded by Kazakhmys. We also finance the building of schools, hospitals and infrastructure: $88 million last year alone. Why? Because we believe in sharing our success with the nation that provides our resources. We are the world’s tenth largest producer of copper, and our processes are fully integrated from mining to finished metal. We also produce silver, gold and zinc. And with $2.7 billion worth of new finance in place, we’ve begun major growth projects to build on our success. Which is great news for Beibut and his friends. After all, what’s good for Kazakhmys is good for Kazakhstan. www.kazakhmys.com

Turning natural resources into national resources

CONTENTS

Forewords

Overview

Industrial Development

Banking and Core Services

FOREWORD

Nursultan Nazarbayev, President of the Republic of Kazakhstan

FOREWORD

FOREWORD

H.E. Erlan Idrissov, Ambassador of the Republic of Kazakhstan to the United States

FOREWORD

Kazakhstan’s symbolic Baiterek Tower in Astana. At the top of the viewing tower is a gold plate with the imprint of the hand of President Nazarbayev

FOREWORD

H.E. Richard E. Hoagland, U.S. Ambassador to the Republic of Kazakhstan

OIL & GAS

FOREWORD

H.E. Kairat AbusseitovAmbassador of the Republic of Kazakhstan to the U.K.

OVERVIEW: INVESTING IN KAZAKHSTAN

Kazakhstan has used the crisis to push forward ambitious reforms in banking and investments in infrastructure, writes Anthony Robinson

Kazakhstan’s central bank chairman, Grigory Marchenko, was rehired by President Nazarbayev to push through tough bank restructuring

OVERVIEW: INVESTING IN KAZAKHSTAN

OVERVIEW: THE ECONOMY

As Kazakhstan emerges from the economic slowdown, the country is moving from strength to strength and is working to diversify and industrialize its economy. Clare Nuttall reports

OVERVIEW: THE ECONOMY

OVERVIEW: INTERVIEW WITH THE PRIME MINISTER

The Triumph of Astana


Sheridan Prasso asks Prime Minister Massimov about foreign policy, diversification and investing in Kazakhstan

Chinese President Hu Jintao (right) with Kazakhstan Prime Minister Karim Massimov. Kazakh-Chinese relations are good. China and Kazakhstan have reached an agreement over the joint management of MangistauMunaiGas


OVERVIEW: INTERNATIONAL RELATIONS

U.S. President Barack Obama holds a bilateral meeting with President Nursultan Nazarbayev of Kazakhstan at the Blair House, April 11, 2010 in Washington, D.C.

Kazakhstan’s foreign policy promotes mutually beneficial economic and political cooperation with all its neighbors. Now, as chair of the OCSE, Kazakhstan’s international relations are being examined. Joanna Lillis reports


Kazakhstan is well-advanced in its World Trade Organization (WTO) accession talks, which have been under way since 1996, and hopes to make further progress this year. Three core issues remain in Kazakhstan’s multilateral negotiations with the WTO: intellectual property; sanitary and phytosanitary standards; and technical barriers to trade. The WTO is also seeking more information from Kazakhstan on domestic subsidies to agriculture.

In terms of the bilateral negotiations which are under way in parallel as part of the accession process, Kazakhstan has reached bilateral agreements with 22 member states and continues negotiations on access to markets with seven members: the United States, the European Union,

Ecuador, Mongolia, Taiwan, Saudi Arabia, and El Salvador.

Plans for Kazakhstan to enter the WTO as a bloc inside its new Customs Union with Russia and Belarus have been shelved after indications that it would complicate the accession process. The states of the Customs Union – which came into force on January 1 and aims to introduce a Single Economic Space in 2012 – decided to continue separate WTO accession talks but to synchronize their positions throughout the process.

DRIVE FOR WORLD TRADE ORGANIZATION MEMBERSHIP

ABOUT USAlex Stewart International Corporation Kazakhstan was formed 12 years ago and is part of the Alex Stewart International Group. During these past 12 years great strides have been made in establishing the business and our efforts have been rewarded with the opening of an independent laboratory in 2007 in Ust Kamenogorsk city. In addition, future expansion will move into the environmental businesses and laboratories will be opened in strategic locations. ASIC’s MISSIONASIC’s mission is to provide professional inspection services in quality control of products and conformance to international standards.This is achieved via comprehensive assistance to companies in the field of development and implementation of advanced technologies and management techniques oriented towards assurance of quality and safety of product.

TARGET MARKETSince being accredited in Kazakhstan and Central Asia, Alex Stewart International Corporation has gained significant recognition and now co-operates successfully with leading domestic procedures, their trade intermediaries and financial companies. At the present time representatives of ASIC are active in more than 20 cities of the Republic of Kazakhstan, as well as in the Republic of Uzbekistan, Tajikistan and Turkmenistan, where services provided by ASIC are in great demand from companies seeking to improve the reputation of their brands and enter the market with competitive products.

SERVICESAlex Stewart International Corporation (ASIC) bases its activity on the principles of responsibility, impartiality, professionalism and confidentiality.

MAIN ACTIVITIES£ Inspection services£ Company monitoring£ Radioactivity testing£ Sampling, sample preparation, analysis and product expertise£ Consultancy£ Certification£ Training

INSPECTION SERVICESASIC provides independent inspection services,which include:£ Quantity and quality control of products£ Inspection of condition of transport and reservoirs£ Photo inspection£ General analysis of a company (production)£ Port and survey services £ CMA Control of Warehouses

LABORATORY SERVICESThe Laboratory, Alex Stewart International Laboratory, in Ust-Kamenogorsk, Kazakhstan provides high quality analytical services for mining and geological companies and also for organisations on environmental protection. The Laboratory can offer the following services;£ Sample Preparation£ Geochemical Analysis£ Multi-Element Analysis£ Metallurgical Testing of Ore£ Environmental Analysis

Alex Stewart International Corporation World Leaders in Inspection, Sampling and Analysis

Metals ● Minerals ● Commodities ● Agriculture ● Environmental ● Coal and Coke ● Solid Fuel ● Oil & Petrochemicals

ASIC Operations

Argentina

Australia

Brazil

Bulgaria

Chile

China

Ecuador

Egypt

Estonia/Finland

India

Indonesia

Iran

Iraq

Japan

Kazakhstan

Korea

Latvia

Macedonia

Malaysia

Norway

Peru

Philippines

Portugal

Romania

Rwanda

Saudi Arabia

Singapore

Spain

Syria

Taiwan

Thailand

Turkey

U.K.

Ukraine

United Arab Emirates

USA

Vietnam

Zambia

Alex Stewart International 42V Ivanilov St., 050059 Almaty, KazakhstanTel: Fax: +7 (727) 2 717 127 Email: [email protected] [email protected]

Alex Stewart International CorporationHead Office, 20 Sefton Business Park, Netherton, Liverpool L30 1RD, U.K.

Tel: Fax: +44 (0)151 523 3760 Email: [email protected]

Please visit the Alex Stewart International Network www.alexstewartinternational.com


Chinese Premier Wen Jiabao meets Kazakhstan’s Prime Minister Karim Massimov during a welcoming ceremony for the Shanghai Cooperation Organization Summit, October 2009, Beijing, China

OVERVIEW: KAZAKH-U.S. RELATIONS

U.S. companies have stood by Kazakhstan through good times and bad. Peter Galuszka looks at the countries’ economic partnership and the role of U.S. investment

U.S. oil/gas production and refi nery engineers study a 3D map projection of oil reserves for an area near the Caspian Sea

WE HAVE THE ENERGY TO LEADThe RWE Group is one of Europe’s largest energy corporations and we continue to work hard on building

still further on that position. Some 20 million electricity customers and 10 million gas customers across

Europe already rely on the RWE Group. Our customers and partners benefi t from our extensive experience,

reliability and expertise in all activities related to energy.

We fi rmly believe that Kazakhstan, Azerbaijan and Turkmenistan, indeed the whole Caspian Region,

represent an attractive investment opportunity for RWE. Kazakhstan’s many years of experience in the gas

industry make it an excellent prospect for a long-term business partnership and investment. Kazakhstan and

its Caspian neighbours have vast energy resources and can make a signifi cant contribution to Europe’s drive

for energy security. The region will play a strategically important role, especially in the diversifi cation of

Europe’s gas supplies in the years to come. RWE’s expertise, investment capabilities and partnership values

in the upstream, midstream and downstream energy business provide the essential ingredients for the

development of a benefi cial long-term energy partnership with Kazakhstan.

One step in this direction is the memorandum of understanding with Kazakhstan’s state assets management

holding company, Samruk, for a joint study into the use of coal gasifi cation and synthetic natural gas in

Kazakhstan. This example shows that together we can further strengthen the mutual benefi ts entailed in gas

procurement activities. A successful study could provide Kazakhstan with an alternative usage of its vast

coal resources and also provide RWE with opportunities for gas procurement in Kazakhstan in the long term.


China is quietly investing more in Kazakhstan as it seeks energy, metals, cement, and transportation links to feed its hunger for resources at home. “China is growing very fast and is emerging as a very serious investor,” says Ambassador Erlan A. Idrissov.

Chinese foreign direct investment from 1993 to 2008 totaled about $3 billion – roughly the same as Canada, South Korea and Russia. That’s about to change in a big way. The U.S. government reports that China agreed to $13 billion in new investments in Kazakhstan in 2009.

The oldest major project – the Kazakhstan-China oil pipeline – was completed ahead of schedule. Commenced in 1997, the 1,384-mile pipeline links Kazakhstan’s major hydrocarbon fields near Atyrau across Kazakhstan to the Chinese border. The last phase of the project, owned by China National Petroleum Corporation and KazMunaiGas, opened ahead of schedule in mid-2009. The pipeline is producing 180,000 barrels per day and is expected to increase to 400,000.

In a related development, China’s sovereign wealth fund, the China Investment Corporation, bought 11 percent of KazMunaiGas, worth $939 million, in September 2009.

Keen interest is also evident in nuclear power. China has 20 new

nuclear units under construction. Kazatomprom, Kazakhstan’s chief uranium producer, has agreed to be China’s main supplier. Westinghouse, with its 10 percent ownership by Kazatomprom, is building four AP1000 reactors in China.

Working with the Kazakh National Welfare Fund, China is providing technology and equity financing for modernizing the Atyrau Oil Refining Plant, equity financing for a cast iron production facility, plus $10 billion in export financing by the Export-Import Bank of China.

And China is helping build the Zhetygen-Korgas railroad that will shorten the route between China and the Middle East, as well as construct the highway dubbed the “21st Century Silk Route” that will cut transport time from Europe to China from 45 to 11 days.

As Kazakhstan develops, relations between Beijing and Astana are likely to mature, especially as China’s energy demands continue to grow dramatically.

CHINESE INVESTMENT SURGES DURING CRISIS


November 2010 will witness the third Kazakhstan-U.S. Investment Forum, now an established part of the annual U.S. industrial investment event calendar

Bolat Zhamishev,minister of finance of Kazakhstan

Dr. Kairat Umarov, deputy foreign minister of Kazakhstan

Daniyar Akishev, deputy chairman of the National Bank of Kazakhstan

William Veale, executive director, U.S.-Kazakhstan Business Association

Ross A. Mauri, general manager, IBM

David M. Rubenstein, co-founder and managing director, The Carlyle Group

Olivier Sarkozy, managing director and head, Carlyle Global Financial Services

H.E. Erlan A. Idrissov, ambassador of the Republic of Kazakhstan to the U.S.

Prime Minister Karim Massimov

H.E. Richard Hoagland, U.S. ambassador to the Republic of Kazakhstan

OVERVIEW: MAP OF THE REPUBLIC OF KAZAKHSTAN

OVERVIEW: MAP OF THE REPUBLIC OF KAZAKHSTAN

Above 1,000,000 inhabitants

From 100,000 to 1,000,000

From 10,000 to 100,000

Less than 10,000 inhabitants

The capitals of the states

Region centers

Other towns

Settlements

Rural inhabited localities

District centers

COMMUNICATIONS

Railways

Republican automobile roads. Passes

Other automobile roads

Sea ports and piers. Lighthouses

BORDERS

State

Region

Scale 1: 3,000,000

INHABITED LOCALITIES

OVERVIEW: A TALE OF TWO CITIES


With such a harsh climate to contend with, greening-up Astana takes careful planning. Alima Bissenova reports

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Global AssetManagement

WealthManagement

InvestmentBankI I

Wealth management at UBS. It’s all about being well connected, with you.


Clare Nuttall and Serik Jaxylyk explore Almaty – Kazakhstan’s developing financial hub

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Full service EPC contracting

In house multidiscipline engineering &

architectural design

Project management

Complete project life cycle approvals

In Kazakhstan since 1995

Commitment to staff training &

development

International standards & quality

ISO 9001:2000 registered

Our Clients:

Caspian Services

Credit Suisse

Ernst & Young

McDermott

Procter & Gamble

Air Astana

Gallaher JTI

Aroma

Roxi Petroleum

Contact:

Nigel Croft - Business Director

[email protected] - www.datoba.kz

+7(727) 267 12 23/24/25/26/27

The Kazakh International Company

Office Fit-outs and Bespoke Facilities

Industrial + Manufacturing

Oil & Gas Support Facilities

Hospitality + Commercial

W H E N Y O U ’ R E S U R R O U N D E D B Y N O T H I N G …y o u m i g h t a s w e l l a s k f o r e v e r y t h i n g .

S o d e x o R e m o t e S i t e s t u r n s yo u r s i t e i n t o a h o m e aw ay f ro m h o m e , e ve n b y - 4 0 ° o r e ve n i n ro u g h s e a s , h e l p i n g yo u t o a t t r a c t a n d r e t a i n t a l e n t s a n d t o b o o s t yo u r s i t e p ro d u c t i v i t y. W i t h a p ro ve n e x p e r i e n c e i n 4 0 c o u n t r i e s , o u r t e a m s d e p l oy s k i l l s a n d i n g e n u i t y, d ay i n a n d d ay o u t , t o d e l i v e r Q u a l i t y o f L i f e s o l u t i o n s t h a t g o b e yo n d yo u r e x p e c t a t i o n s .

Удаленные объекты Содексо превратит ваше далекое от дома место в уютное и домашнее, даже при температуре -40 °, а порой и в самые жесткие климатические условия, мы поможем Вам привлечь и сохранить таланты и повысить Вашу производительность работы на участке. День за днем, с доказанным опытом в 40 странах наши команды развертывают навыки и изобретательность, чтобы реализовать решения для качественной жизни, которые превзойдут все Ваши ожидания.

Sodexo office in Atyrau - 116 A, Azzatyk Av. - P.O. Box 060011- Atyrau - Kazakhstan - Tel: +7 7122 456871

Sodexo office in Aktau - Microregion 2, blg 47 - Aktau - Kazakhstan - Tel : +7 7292 740090

For more information, please contact : hassene [email protected]

www.sodexo.com

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INDUSTRIAL DEVELOPMENT

Anthony Robinson looks at what the government’s new tax laws, plans to modify production-sharing agreements, and higher oil prices mean for Kazakhstan’s oil industry


Multinational oil companies, such as Italy’s ENI and the UK’s BG, have shares in the Karachaganak field

Central Asia North Africa Middle East North Sea

Canamens Energy Central Asia Limited Kazakhstan Branch Қазақстан Республикасы 050012, Алматы қ . Əл-Фараби даңғылы 13 «Нұрлы Тау» Бизнес-орталығы 1В блогы, 601 офис Телефоны: +7 727 311 1050/1051 Факсы: +7 727 311 1049

Canamens Energy Central Asia Limited Kazakhstan Branch Республика Казахстан 050012, г. Алматы пр. Аль-Фараби 13 Бизнес-Центр «Нурлы Тау» блок 1В, офис 601 Телефон: +7 727 311 1050/1051 Факс: +7 727 311 1049

Canamens Energy Central Asia Limited Kazakhstan Branch Suite 601, Block 1V Nurly Tau Business Center Al-Farabi Avenue 13 050012 Almaty, Kazakhstan Phone: +7 727 311 1050/1051 Fax: +7 727 311 1049

For further information: [email protected] www.canamens.com

About Canamens

Canamens is a private equity funded upstream oil and gas company.

Its aim is to acquire assets with existing or near-term production opportunities, field developments with related exploration potential and to build a small, but focused, exploration portfolio.

Sector Asset Management and Goldman Sachs are its two principal investors.

Over the next decade Kazakhstan will become one of the world’s largest hydrocarbon producers and exporters, allowing the country to expand and diversify its economy, stimulating growth and driving the continued prosperity of the country. Canamens believes it has a role to play in Kazakhstan’s future by applying leading-edge technology and operational expertise to Kazakhstan's vast hydrocarbon resources. Having acquired an initial asset base and commenced activity to develop these assets, Canamens is keen to expand its involvement in Kazakhstan. Along with our local team based in Almaty, we will continue to build relationships with local operators, contractors and service providers as we unlock the value of our assets and expand our portfolio.

Local partners. Local knowledge.

Operational success.


Demand for electricity is high, with the construction of new-generation capacity a priority. Clare Nuttall looks at the government’s plans to modernize Kazakhstan’s power sector and keep up with demand


As economic growth resumes in Kazakhstan, the demand for electricity is rapidly increasing


With its strategic investment plans and refinery modernization programs, KazMunaiGas is set to become one of the world’s major oil industry players. Birgit Brauer reports

The KazMunaiGas headquarters in Astana


An off-shore oil platform under construction in the Kashagan field in the North Caspian sea. The discovery of Kashagan’s commercial reserve of around 13 billion barrels of oil in 2000 was one of the largest finds in decades

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DOW has been operating in Eastern Europe for 50 years. That is a key component of the company’s business strategy and a signifi cant contributor to Dow’s corporate growth and profi tability. Dow operates nine commercial offi ces and eight production sites in the region and employs about 600 people in different businesses and functions across the region. Dow offers its customers in the region a variety of plastics and chemicals sold to a wide range of downstream industries. These include automotive, oil and gas, packaging, building and construction, furniture, wire and cable, large appliances, water treatment and agricultural products. Sales in 2009 were about USD 2.4 billion, growing to USD 3.2 billion by 2015 and to USD 5.5 billion by 2015.

General Manager for Dow in Russia and the CIS Marko Blagovic discusses the company’s activities in Kazakhstan and its future prospects.

What is Dow’s strategy in Kazakhstan? Kazakhstan is of strategic importance for Dow’s diversifi ed businesses and, specifi cally, it is a key growth market for Dow AgroSciences, Dow Oil & Gas and Dow Water & Process Solutions.

What is Dow Water & Process Solutions’ contribution to the 2009 boom in the Kazakh mining industry?Dow Water & Process Solutions is one of the leading suppliers in Kazakhstan of ion exchange resins for the mining industry. Since 2004, uranium-mining industry in Kazakhstan has been constantly developing and demonstrating growth potential for the local players, as well as for international companies like Dow. And we have secured our stable position in the local market, becoming the key supplier of ion-exchange resins developed by Dow Water & Process Solutions for subsidiaries of the state corporation Kazatomprom, which is one of the leading uranium production companies in the world. Today, Dow accounts for a relevant market share of resins supplied to mining and energy companies in Kazakhstan.

Mining and chemical industries are facing a series of issues when recovering valuable and precious

metals such as decreasing ore quality, environmental and health and safety concerns, as well as fi re issues linked to solvent extraction. Ion exchange technology can purify, concentrate and recover a great variety of precious and valuable metals such as gold, uranium, nickel and cobalt from leach liquors, electrolytes, wastes or solvent extraction raffi nates. Among the benefi ts of ion exchange resins are substantial waste volume reduction, minimal space, and easy recovery of process water. In addition, this technology is easily adapted to a great variety of processes including moving packed beds or resin-in-pulp, the latter process driving signifi cant capital expenditure reduction.

What are your plans for the future?We will continue to invest in innovative solutions, world-class resources and – most importantly - people. In 2009 Dow invested $1.6 billion globally. On April 1 we acquired Rohm and Haas which has allowed us to combine two best-in-class technologies, strengthen and broaden our market base and accelerate Dow’s transformation into the world’s leading specialty chemicals and advanced materials company.

The challenging times have not affected our plans for the Former Soviet Union. On the contrary the Dow Izolan joint venture’s state-of-the-art polyurethane manufacturing facility in Vladimir (Russia) opened on schedule in 2009 and is supplying the fast expanding Russian and CIS market.

In Kazakhstan as in the rest of Dow’s East Europe Growth Region, we focus on offering high quality services and building long term relationships with our customers, local communities and other national stakeholders, addressing their needs in a timely, innovative way with ecologically-friendly products manufactured in strict adherence to the criteria of sustainable development.

SPONSORED FEATURE

Dow Looks to Kazakhstan

For 30 years Cameron has maintained an established presence

in Kazakhstan. With facilities located in Astana, Almaty, Aktobe,

PerformanceMEANS LOCAL COMMITMENT

KazakhstanKazakhstanKazakhstan

Russia

China

Tengiz

Atyrau

Aktobe

Astana

Almaty

Uralsk/AksaiUralsk/Aksai

Tengiz

Atyrau

Aktobe

Astana

AlmatyAktauAktau

For 30 years Cameron has maintained an established presence

in Kazakhstan. With facilities located in Astana, Almaty, Aktobe,

Tengiz, Uralsk/Aksai and Atyrau, we provide a full range of field

service, engineering, storage, repair and maintenance service for

our customers.

Expanding on this successful operation, Cameron has

commenced building a new CAMSERV™ aftermarket facility

in Atyrau. The facility, due to open in late 2009, will enhance

our abilities and increase our capacity both for support of the

product and the customer. The facility will also provide a step

change in the training of our local Kazakhstan staff.

Cameron is committed to providing the highest quality

products and services using the latest technology increasing the

local Kazakhstan content – in both personnel and manufactur-

ing – and continually raising performance. Together.

www.c-a-m.com

RAIS ING PERFORMANCE. TOGETHER ™

©Cameron , TC9724

For leading oil and gas producers, Cameron is the Surface Systems wellhead and tree expert that helps you continuously raise performance through our proven technical expertise, comprehensive solutions, and global manufacturing and service network.

SURFACE SYSTEMS

2010


Bringing Caspian off-shore oil safely to shore is proving difficult and expensive, writes Anthony Robinson


As well as new pipes and pumping stations, cross-Caspian Sea oil tankers will be needed to cope with the sharply rising volumes of oil and gas from Kashagan

Mubadala Oil & Gas is a company with big ambitions

realizing opportunity

Algeria Bahrain Indonesia Kazakhstan Libya Malaysia Oman Philippines Qatar Thailand UAE Vietnam


The Caspian Sea, with its fl uctuating sea levels and winter ice, can be hazardous for the off-shore oil industry


Kazakhstan’s oil industry is booming and the country will need to expand its export pipelines to keep up with current oil production. Birgit Brauer reports


With the world’s second largest deposits of Uranium, Kazakhstan’s nuclear potential is clear. Opportunities abound for foreign investors. Sheridan Prasso reports


Kazakhstan has been increasing the number of uranium mines as well as developing its existing mines


Uranium pellets fill fuel rods in this display of a nuclear fuel assembly at the Ulba Metallurgical Plant in Ust-Kamenogorsk, Kazakhstan

Our energies have a future.A future without CO2.

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www.areva.com

World energy demand is increasing. Greenhouse gas emissionsmust be curbed. To meet this dual challenge, AREVA is innovating. As world leader in the nuclear energy business and as a groupcommitted to the development of renewable energies, AREVA offers itscustomers solutions for producing electricity, while protecting the planet.


Clare Nuttall and Serik Jaxylyk look at Kazakhstan’s alternative energy potential and current wind, solar and biofuel initiatives


Anthony Robinson looks at current and future investment initiatives to develop Kazakhstan’s chemicals and petrochemicals industry

Workers check pipelines at the Alashankou Oil Transporting Station, 2.5km from China’s Alashankou Port. The pipelines receive crude oil from Kazakhstan through the Kazakhstan-China Oil Pipeline in Bole, in western China’s Xinjiang province


Sulfur pellets for export to China to be used, primarily, as fertilizer. Large amounts of sulfur are being produced by the oil and gas operators in the Caspian Sea area of western Kazakhstan as a by-product of the oil they extract

INNOVATIVE AND SUSTAINABLE SOLUTIONS FROM A GLOBAL LEADER

Sustainability requires making every decision with the future in mind. It is our relationship with the world around us — creating economic prosperity and social value while contributing to the preservation of our planet. Dow focuses on developing products and solutions that make sustainable improvements in the world, significantly helping solve challenges such as alternative energy, affordable and adequate food supply, decent housing, clean water, and improved personal health and safety.

52,000 highly qualified employees worldwide 214 manufacturing facilities in 37 countries across the globe5,000 products that make the difference

For more information, visit www.dow.com and www.doweasterneurope.com E-mail: [email protected] Phone: +7 495 663 78 20

Dow has been present in Eastern Europe for already 50 years, offering a variety of base and performance plastics and chemicals for a wide range of downstream industries:

• automotive• oil and gas• packaging• building and construction• furniture• wire and cable• large appliances• water treatment• agricultural products

In Dow’s East Europe Growth Region, the Company employs about 600 people at eight manufacturing sites and nine office locations.

The recent new large and state-of-the-art polyure-thane systems manufacturing plant was built by the Dow Izolan joint venture company in Vladimir (Russia) on December 11, 2009.

Minova Kazakhstan100011, Kazakhstan, Karaganda

North prom zoneuchetniy block 018, building 014

Tel.: +7 7212 46 25 38Fax: +7 7212 46 13 97

[email protected]

Solutions from Materials Technology

We offer a wide range of products designed to increase safety and reduce costs to help increase mine productivity:

Polymeric resin capsules Rock bolts Polyurethane and phenolic resins (Bevedan-Bevedol, Geoflex) Cement Products

Using polyurethane resins for roof and pipeline insulation increases thermal efficiency.

For further information on our products or to find out how Minova can help solve your problems please visit our web site www.minova.kz

Minova Kazakhstan Your reliable partner

for the mining industry


Kazakhstan has some of the world’s richest mining resources. Anthony Robinson looks at how the industry is faring in the current economic climate

Rio Tinto is a leading international business involved in each stage

of metal and mineral production. From operations in more than

50 countries, we produce aluminium, copper*, diamonds, coal,

iron ore, uranium, gold and industrial minerals (borates, titanium

dioxide, salt, talc, zircon). Our diverse portfolio, high quality assets

and expertise in technology and marketing give us the capability

to supply a wide spectrum of customers and markets.

Safe working and sustainable development are at the heart of

everything we do. Our worldwide operations provide long term

local benefits, including employment and training opportunities

for our neighbouring communities.

We are already in Kazakhstan, having been working in mineral

exploration and business development here for more than 12 years.

We’re committed to growing our business in the region and seeking

large, long life mining projects at various stages of development.

We’re looking forward to a long and successful relationship with

Kazakhstan and to continuing to be a partner of choice in the

metals and minerals business.

A partner of choice in metals and minerals


Kazakhstan’s agriculture sector is seeing record harvests. Clare Nuttall and Serik Jaxylyk look at the government’s plans to increase the country’s farming, processing, and exporting productivity


Grape harvesting: southern Kazakhstan has good conditions for vineyards and orchards

Full Challenger line of equipmentFlexible finance solutions24/7 technical assistance

G4 City LLP is the initiator of the «Construction of four satellite cities of Almaty» project, the largest project in Kazakhstan and the Central Asia region. This project has been considered and was approved by the President of the Republic of Kazakhstan in 2007 and registered in the State-Run Program of Housing Construction in the Republic of Kazakhstan, 2008-2010.

The Master plans that have been realized within the framework of the «Construction of four satellite cities of Almaty» project were unanimously ratifi ed by the Cabinet members voting at the Government session of the Republic of Kazakhstan. The Operator of this project is the Akimat of Almaty region, the project monitor is the Ministry of Industry and Trade.

The Largest Development Project of the Central Asia region

Establishing itself as a leader in the social and economic development among the countries of the region and possessing considerable territorial

advantage, Kazakhstan can play a key role in the Central Asia region, converting itself into an attractive region of the civilized and secured world,

representing itself as a motive power, by making itself a place of interest for world investors in development of all regions of Central Asia

Dmitriy PakThe General Director of G4 City LPP

The «Construction of four satellite cities of Almaty» project has strong potential for private and institutional investors. The project has high investment appeal, as it solves problems of state signifi cance effectively and by means of a comprehensive approach.

The G4 City project involves the creation of four unique cities under the names of Gate City, Golden City, Growing City and Green City.

The total area of the project is 8006.7 ha. Four satellite cities will be located along the Republican Highway that links the City of Almaty with the lakeside town of Kapchagai and then continues north further into the Almaty region.

This large project, unprecedented in size in Central Asia, plans for the construction of satellite cities that will possess

great potential and will provide economic and social benefi ts both for the state and participants of the project, and for the fi nal consumer.

The project corresponds to world standards in its technical and economic features. Furthermore, the development area, building volumes, population and GDP of the cities were planned in accordance to those standards.

“Kojankus” residential area is the fi rst complex of the satellite city Gate City and is independently considered as a separate project. The conceptual basis of the project, to develop 181 hectares, lies in the north and is defi ned by a suburban part of Almaty.

The area is located in the environmentally friendly city district. The idea of the “Kojankus” project harmoniously combines urban and rural elements located in an ecologically advantaged district.

Considering that convenient public transportation connects “Kojankus” with the city of Almaty, many of the future inhabitants of the area could conveniently work in Almaty.

Kazakhstan has established itself as a leader in social, cultural and economic development among the countries of the region, and possesses a considerable territorial advantage, thus Kazakhstan can and does play a key role in the Central Asia region.

Recently, foreign investors have had a considerable interest in the Kazakhstan market. By expert estimations, more than eighty percent of all direct investments to Central Asia have been received by the Kazakhstan economy during recent years. Our country has been included in a list of twenty of the most attractive countries in the world, in terms of investments, by the World Bank. The investment mode of Kazakhstan can be characterized as liberal, providing access for foreign investors practically in all branches of the economy. The World Bank says Kazakhstan is one of the most attractive countries for investment.

The unprecedented size of this development project, in Central Asia, of the satellite cities provides great potential and economic and social benefi ts both for the state and project participants, and for the fi nal consumer. This unique large-scale project is especially interesting because the building of the infrastructure and social objects is partially fi nanced by the Government, providing proof of the project’s soundness and profi tability.

Thus, within the State-Run Program of Housing Construction, 2008-2010, in Kazakhstan the funds of 13.49 milliard tenge ($89.9 million) were allocated to the satellite cities project.

Besides, one of the most crucial trends in the state project is an innovative industrial policy and development of energy sources for 2003-2015. The project aims to develop industries and science potential in the Republic of Kazakhstan which would allow production of new hi-tech products for internal markets as well as for export, and provide an import substitution policy, which in general will help Kazakhstan to be

one of the fi fty most competitive countries of the world. First of all, this will motivate a reconstruction of current

production powers and a transfer of large production enterprises of Almaty into the industrial satellite city area. This will also facilitate establishment of new science-cum-education and science-cum-production complexes.

A lot of attention has been given to developing inter-regional and international relations in the framework of the industrial satellite city. This is being done in order to support competitive industries and exploit a transit potential of the region, as well as developing education and a highly-skilled personnel re-training system for industry on the basis of higher and secondary educational institutions located in satellite cities in the framework of the project.

Investing in this project will be profi table and investments

will have a high rate of return. Co-development and mutual participation in the project will establish a joint venture in Kazakhstan with equal shares.

In addition, the project covers a number of directions in which the development of the economy of the region can go: rental housing construction, building and transferring of the industrial enterprises from Almaty to the territory of the Growing City, and tourism development in the Green City.

Thus, the consumer base will be created, and its maximum concentration will be in the Almaty region at all stages of the project’s implementation.

Great attention is being given to creating an appealing investment climate by the development of the fi nancial structure, systems of investing formation of satellite cities on the basis of mechanisms of concession, public-private partnership, private investment and business development.

OurOurOur


The government’s “Road Map” program has made some valuable steps forward, but there is still room for improvement in Kazakhstan’s construction industry, says Alima Bissenova

New buildings mark the Astana waterfront. The government is seeking to create housing for Kazakhstan’s aspiring middle class


New houses in Astana: the construction of residential buildings is on the rise again and slowly recovering from the financial crisis

PASCHAL-Werk G. Maier GmbH

Kreuzbühlstraße 5 · 77790 Steinach

Phone: +49(0) 78 32 / 71-0 · Fax: +49(0) 78 32 / 71-209

[email protected] · www.paschalinternational.com

PASCHAL-Werk G. Maier GmbH · Representative Office

Dostyk av. 114, office 38 · 050051 ALMATY · Republik Kasachstan

Phone: 007-72 7 328 33 38 · Fax: 007-72 7 262 11 10

[email protected] · www.paschal.kz

The PASCHAL Group is a leading international company in the area of formwork and shoring. We offer solutions around the globe with service, formwork and shoring systems, as well as software. We support our customers with our experience and our know-how in more than 60 countries.

Service in Formwork + Shoring

Welcometo the new worldof concrete constructionwww.paschalinternational.com

BANKING AND CORE SERVICES

With reforms and financial regulation taking place, Kazakhstan’s banking sector has changed dramatically. Clare Nuttall reports


ISLAMIC BANKINGIn another development, the government also adopted new legislation in 2009 aimed at creating a market for Islamic financial services in Kazakhstan. It is the first CIS country to do so, and the project has strong support from President Nursultan Nazarbayev and other top officials.

When it obtains its banking licence, the United Arab Emirate’s Al Hilal bank is set to become the newest player on the Kazakh market. Al Hilal planned to invest $1 billion within its first four years in Kazakhstan, bank CEO Mohamed Jamil Berro announced in March. “There are strong ties at all levels between Abu Dhabi and Kazakhstan, vast investment opportunities in Kazakhstan, and an opportunity for us to contribute to the growth and prosperity of this country,” he said. The Kazakh government is also planning to launch its first sovereign sukuk – or Islamic bond – in 2010 for the amount of up to $500 million.


Investment in infrastructure is essential if Kazakhstan is to diversify its economy, writes Birgit Brauer


The European Bank for Reconstruction and Development (EBRD), the largest investor in Kazakhstan outside the oil and gas sector, plans to invest around $1 billion into projects furthering the diversification of the Kazakh economy.

The EBRD adopted a new strategy for Kazakhstan in February 2010, setting out the priorities for its work in the next three years. The bank aims to help the country to emerge from the crisis with a diversified economy and a more sustainable financial model. “Helping the Kazakhstan economy to diversify is a priority for us,” says Michael Weinstein, the EBRD’s country director for Kazakhstan.

It plans to support the government’s economic diversification program though equity and debt

investments, as well as help identify technical assistance. Projects will be identified in collaboration with the Ministry of Industry and Trade and the Samruk-Kazyna National Welfare Fund. “Momentum is building, and there is a window of opportunity post-crisis but before oil prices go through the roof again,” says Weinstein. “We are proactively looking for new projects in Kazakhstan.”

The EBRD has also shown its support for Kazakhstan by planning to hold its 2011 Annual General Meeting in Astana.

To date, the EBRD has invested more than €2.4 billion in 108 projects, mobilizing additional investment of more than €5.4 billion.

EBRD GROWS ITS ROLE IN KAZAKHSTAN BY CLARE NUTTALL

CASE STUDY

Since its formation almost 60 years ago, Energoprojekt has developed

into a complex business system operating today in 22 countries.

Founded as a consulting company for the design of hydro and thermal power plants, through decades of business activities, Energoprojekt entered many different fields and obtained a strong and respectable position in the fields of: Contracting, Industrial Engineering & Infrastructure including projects of administrative, commercial, public, apartment and other type of buildings, hotels, hospitals, industrial solutions, oil and gas processing and transportation; irrigation systems, water and sewage systems, highways, roads, subway stations, railway stations, tunnels etc. and Power, Ecology and Water Treatment including projects of power generation (Thermal & Hydro Power Plants), power transmission & distribution (transmission lines, substation, distribution systems & networks) telecommunication systems and networks, power control centers & SCADA systems, potable and waste water treatment plants .

Today, Energoprojekt can be found on the lists of Top International Design firms and International Contractors published every year by the renowned American magazine “Engineering News Record”.

Experience in Kazakhstan A geographically and business diversified portfolio has enabled Energoprojekt to avoid oscillations of the business cycle. Following this approach to business activities and anticipating promising Kazakhstan market possibilities, at the beginning of the new millennium Energoprojekt opened two branch offices in Kazakhstan – Energoprojekt Visokogradnja Branch Office in Aktau and Energoprojekt Niskogradnja Branch Office in Almaty, and at the beginning of 2010 we opened TOO Energo Kaz company based in Aktau.

“As many times before, this move proved to be the right choice,” said Mr.

Our positive experience in Kazakhstan’s booming Market

Vladan Pirivatrić, CEO of the Company. “Through highly professional and efficient execution of projects, Energoprojekt established good business relationships with major Kazakhstan Investors. We also obtained a strong market position, especially in the field of General Contracting with main sectors of activities in this area being the construction of hotels, office buildings, shopping malls, retail and commercial centers and infrastructure projects, such as roads and underground structures.”

In the last couple of years in Kazakhstan we executed projects

including design, project planning and project management, followed by construction, supervision, commissioning, training of client’s personnel, maintenance and other post-construction services.

Always maintaining the highest standards of technology and quality, Energoprojekt constructed the Commercial and Business Centre in Aktau (50.000 m2), the Commercial and Residential Building in Uralsk (16.200 m2), the Residential Building (35.000 m2) – an 18 storey building and Business and Commercial Centre (16.000 m2), both

Almaty and Abay Metro Stations Client: AO “ALMATIMETROKURILIS”, AlmatyContract period: 2006-07; 08-09

Almaly and Abay metro stations are underground structures within the first subway line of the city of Almaty in the Republic of Kazakhstan. They were constructed at the depth of 30 – 70 m in the city centre. The project included the construction of three tunnel tubes, (diameter cca 90-100 m2) 815m long, mutually connected by crossings with platform constructions and slope-sided passenger tunnels.

The project organization was very complex due to limited access through

the transport tunnels, as the works on the other 5 stations have been executed simultaneously. Beside applying the latest know-how and technology for the construction of underground structure, a significant number of experts were trained for this kind of structures.

Energoprojekt NiskogradnjaBranch office 144, Tchaykovskogo str. off. 253050000 AlmatyRepublic of Kazakhstan

Phone: 7 727 250 81 21Fax: 7 727 250 23 96E-mail: [email protected]

Your reliable partner

www.energoprojekt.rs

CEO Vladan Pirivatric

in Atirau, and Almaly and Abay metro stations within the fi rst subway line of the Metropolitan city of Almaty.

Kazakhstan, with its vast natural resources, current development of energy sectors as well as the potential of becoming one of the world’s major producers of hydrocarbons, metals and minerals, puts Kazakhstan into a position of becoming a profi table growth engine in the Region. As an international company, Energoprojekt is here to stay and contribute signifi cantly with its vast professional experience and know-how.

Energoprojekt

Bulevar Mihaila Pupina 1211070 Belgrade, Serbia

Phone: + 381 11 310 10 10Fax: + 381 11 311 42 00

Retail / Entertainment Complex,AktauClient: TOO “Oil Real Estate” LLC, AlmatyContract period: 2006-09

This Retail / Entertainment Complex of 50.000 m2 built area, consists of a basement and three fl oors and is situated at the north boundaries of the city of Aktau.

In its architectural form this Complex is a modern composition with elements of traditional Kazakh architecture. A modern fountain has been designed and constructed on the square emphasizing the main entrance of the Complex.

The complex integrates areas of various activities, such as sport, leisure and retail. It has a covered ice-skating rink, indoor recreation facilities for various types of exercise, such as aerobics, martial arts,

boxing, billiards, bowling, multifunctional sports hall, indoor swimming pools – one for public use and one for competitions – a SPA center etc. It also has a multiplex cinema, retail areas, various cafeterias, bars and restaurants, a central bakery and supermarket, signifi cant offi ce space, as well as all necessary storage and technical service areas. The complex also has underground as well as open-air parking and open-air sport facilities.

Energoprojekt VisokogradnjaBranch Offi ce Mikrodistrict 29a, ex “Vahtovaja avtostancia” 13 000 AktauRepublic of Kazakhstan

CA

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Phone: 8 (77292) 20 07 57 8 (77292) 20 07 56 Fax: 8 (77292) 20 33 70E-mail: [email protected]


Rail and road projects such as the 21st-Century Silk Route highway are boosting transit and promoting growth in Kazakhstan, says Anthony Robinson


Train carriages transport oil in the Caspian Sea region of west Kazakhstan. Ambitious railway upgrades will ensure quicker transit times for bulk transportation

A

Arup


Astana International Airport’s modern terminal. Air transport continues to grow, with many airlines expanding routes into Kazakhstan

Christopher Pala looks at the improvements being made to Kazakhstan’s air transport sector, and how it emerged relatively unscathed from the recession


Inside Astana International Airport’s modern terminal

V K А с т а н а – это многопрофильный поставщик архитектурных и инжиниринговых услуг, являющийся частью VK GROUP. Сферы деятельности – архитектура, специализированное техническое оснащение, инфраструктура и строительные конструкции. Компания работает как с государственными, так и с частными организациями.Более, чем 50-летний опыт VK GROUP в настоящее время включает внушительный перечень выполненных проектов наряду с такими крупными, как новая Штаб-квартира NATO (в сотруднитчестве с SOM-ASSAR) и Здание Судов города Антверпен (в сотрудничестве с известным английским архитектором Ричардом Роджерсом).Архитекторы и инженеры компании VK GROUP концентрируются на 4 целевых рынках: Здравоохранение, Гражданские Здания и Сооружения, Промышленность и Инфраструктура. VK GROUP является пионером в создании долговечных зданий и может выполнять сложнейшие анализы и обследования энергоэффективности объектов. Создайте Ваши проекты в Казахстане со специалистом международного уровня! Свяжитесь с нашим офисом в Астане.


3G technology has reached Kazakhstan, enhancing internet connectivity. Now the communications market is calling for further investment. Christopher Pala reports

A true love affair.True love can be hard to find. At Tele2, we had to travel all the way from our homeland Sweden to Kazakhstan to find Neo. Fortunately, feelings were mutual and we bought 51% of the shares in Neo.

Just as in any good relationship, the one between Tele2 and Neo is based upon common interest: We have the same vision of providing customers with affordable telecom services. With the power of marketing knowledge together with a low cost strategy, we intend to position the new Neo as the price leader in Kazakhstan.

Our main offers in Kazakhstan will be within the mobile voice market. Our primary focus will be to expand our network and increase capacity mainly in urban, but also in rural areas. In spite of our cost consciousness that

means considerable investments in Kazakhstan the years to come.

We hope all of this will make the people of Kazakhstan love Neo just as much as Tele2 does.

With 27 million customers in 11 countries, Tele2 is one of Europe’s leading telecom operators. We always provide our customers the best deal. Tele2 has been listed on the OMX Nordic Exchange since 1996. In 2009, we had net sales of SEK 39.3 billion and reported an operating profit of SEK 9.2 billion.

XXXXXXXX

I HAVE LIVED in Kazakhstan for nearly 16 years and witnessed incredible changes. Today, with my local partner, we own and manage a leading property brokerage and consultancy, with four offi ces and 50 staff. Our services cover all property types and we represent CB Richard Ellis, the global leader in our fi eld. I should also mention my role as a board director of the European Business Association of Kazakhstan, which represents 130 local and foreign companies. Eurobak supports our members by organizing forums, networking events, and industry committees, and lobbying government on investment climate issues.

The credit crisis hit Kazakhstan early, around August 2007, and had a dramatic effect on the construction industry and property market. Financing halted overnight, as did buyers. There was no liquidity, and thousands of people lost their jobs. However, the government responded quickly to support and stabilize the industry: $2 billion was distributed to banks and municipalities to buy apartments and fund problem projects to completion. Approximately $1.5 billion was invested during 2007-2008 to buy more than 40,000 fl ats and assist more than 25,000 buyers in Astana and Almaty.

Formalizing the program in March 2009, the Samruk-Kazyna property fund was set up with the goals of buying uncompleted residential and commercial projects and bringing them to completion; providing property management services; and fi nding solutions to various other property

Real Estate Market Recoveryissues. The fund is also actively developing the rental market and options for lease to buy, plus investing in the construction industry to help builders, banks and materials suppliers. By the end of 2010, the fund expects to have 1.5 million square meters of residential and commercial property under management, the majority of it residential and supporting lower-income groups.

On the consumer side, the Kazakhstan Mortgage Company (KMC) has also been playing an important and active role in implementing the state housing program with a special focus on affordable mortgages. KMC has been able to offer an effective annual interest rate as low as 10 percent and down payments of only 10 percent, compared to 30 percent at commercial banks.

Since the fourth quarter of 2009 we have seen a slow but steady recovery, increasing activity each month, new projects requesting feasibility studies, some older projects re-starting, overseas investors looking again, and prices starting to edge up. We sense an air of optimism and renewed confi dence. The future looks bright again.

SPONSORED FEATURE


International retail chains have been slow to enter the Kazakh market, but high-quality retail developments are providing new opportunities. Clare Nuttall and Serik Jaxylyk report

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Above: the impressive Mega Center shopping complex in Almaty is one of many successful mall developments in the city

Opposite page: the shopping demands of Kazakhstan’s emerging middle class has boosted the presence of international brands


With stunning, vast natural beauty, and a rich and varied history, there is huge potential for the tourism industry. Sheridan Prasso reports

Shymbulak is a popular ski resort in Almaty Province


Kazakhstan has much to offer the high-end tourist, such as the Palace of Peace and Harmony – designed by British architect Sir Norman Foster – which houses an opera theatre, concert halls and a museum of national culture


The Kazakh government is planning to improve its health service. Clare Nuttall and Serik Jaxylyk discover how it is seeking to develop healthcare and pharmaceuticals


Some 75 percent of Kazakhstan’s medicines are imported

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