Honorary Consulate of Kazakhstan in Venice 29th January 2013

KAZAKHSTAN Country Presentation

General info ……………………………………. 3

Economy …………………………………………. 4

Industry ………………………………………….. 5

Foreign trade ………………………………………. 7

Country Risk ……………………………………….. 8

Foreign Investments ………………………. 9

Special Economic Zones ………………… 11

Italy & Kazakhstan ………………………….. 12

Investing in Kazakhstan …………………… 14

Oil & Gas Industry ……………………. 17

Food & Beverage ……………………… 19

Textile & Fashion ……………………… 22

Wood & Furniture …………………… 25

Country Overview

Focus Sector

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 2

General info • 16.7 mln Total Population (2011)

• +12% Population growth 2001-2011

• 64.5% Kazakhs, 22.5% Russians

• 69 year average life expectancy

• 55% Urban population

• 2.72 mln sq km Area - 9 place in the list of biggest countries

• 14 region and 2 independent cities

• 210.8 mlrd. US$ GDP (2012)

• Currency - TENGE (1 US$ = 149 KZT)

• Political order - Presidential republic

• Basic law - the Constitution

• Capital - Astana

• State Language – Kazakh

• Official Language – Russian Flag of Kazakhstan Kazakhstan coat of arms

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 3

• 210.8 mlrd. US$ GDP 2012

• +5.5% GDP growth in 2012

• GDP per capital in 2012 12.500$ (11.200 US$ in 2011)

• Unemployment 5.3%

• Average wages 655 US$ per month

• Inflation 6% in 2012

• 43.1% share of goods production in GDP

• 51.9% share of services in GDP

• Industry is the biggest economic sector 31.3% in GDP

• Mining sector is the biggest in industry 18.3% in GDP

• Manufacturing industry 11.4% in GDP

• Trade and autorepairs 14% in GDP

43%

11%

23%

23%

households consumption

government consumption

Investment

Net exports

GDP structure In 2011

GDP growth (%)

Economy

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 4

13,5

9,8 9,3 9,6 9,7 10,7

8,9

3,3

1,2

7,3 7,5

5,5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Industry

17.8% in GDP The biggest and the most developed city of Kazakhstan •IT •Services •Leader in commerce activity, •Real Estate services, •Financial center of KZ •Transport & Logistic

8.7% in GDP One of more developed industry region in KZ •Metallurgy •Mining •Processing industry

8.4% in GDP Capital of KZ •Construction •Commerce •Transport & Logistic •Political

6.5% in GDP •O&G

12.2% in GDP •Leader in O&G •Construction

5.2% in GDP •Mining

4.7% in GDP •Agriculture

5.2% in GDP •Agriculture

5.05% in GDP •Processing industry •Energy & Water

5.68% in GDP •Processing industry •Agriculture

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 5

54%

12%

5%

5%

4% 4%

16%

Extraction of crude petroleum

Metallurgical industry

Food&drink production

Mining of metal ores

Production, transmission anddistribution of electricityMechanical engineering

• 10.7 mlrd. US$ Total industry production

• +3.8% Growth rate in 2011

• O&G and Metallurgy Main industries

Industry

OIL

OIL

OIL

OIL METALLURGY • ArcelorMittal Temirtau

• Kazcink

• ENRC

• Kazakhmys Plc

• Tengizshevroil

• PetroKazakhstan

• CNPC-Aktobemunaigas

• Mangistaumunaigas

O&G

Mining & metallurgy

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 6

• Russia – 31.1%

• China – 16.2%

• Germany – 6.7%

• Ukraine – 5.6%

• USA – 5.5%

• Italy – 3.7%

Others – 31.1%

15,1 16,3 21,3 32,9

45,2 61,9

80,5

109,1

71,6 91,4

126,2

0

20

40

60

80

100

120

140

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

mlr

d U

S $

93%

7% Export Import

Mineral products – 80%

Metals and metal products – 11.9%

Chemical products – 3.3%

Products of animal and vegetable

origin, food – 2.1%

Other goods – 2.8%

17.6% China

16.3% Italy

7.4% Russia

7.2% Netherlands

5.8% France

5.4% Switzerland

40.3% Others

Machinery, equipment, vehicles,

instruments and etc – 48.8%

Chemical products – 14.0%

Products of animal and

vegetable origin, food – 10.4%

Metals and metal products – 9%

Other goods – 18%

Foreign trade

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 7

47

70

77

81

120

147

152

166

Kazakhstan

Kyrgyzstan

average Eastern Europe & CA

Moldova

Russia

Tajikistan

Ukraine

Uzbekistan

• 1-st place among CIS for investment per capita - 622 USD$

• 1-st place among CIS in WOC* investment attractiveness rank World Organization of Creditors

• 47 place in Doing Business rank (Overall Ranking) 2012

(58 in 2011)

Doing business rank 2012

Country Risk

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 8

4,6 4,1 4,6 8,3 6,6

10,6

18,5 19,8 19,0 18,1 19,9

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

mlr

d U

S $

42%

7% 6% 5%

5%

4%

31%

Netherlands

France

China

Russia

USA

UK

Others

47%

12%

10%

7%

6%

5%

13%

Activities for geological exploration andprospecting

Metallurgical industry and metal processing

extraction of crude oil and natural gas

Trade

Activities in the field of law, accounting andmanagement consultancy activities

Mining of metal ores

Other industries

Foreign Investments

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 9

3.949 5.423 5.908

6.812 8.010 8.648 8.413 7.734

8.573 8.565 7.597

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Number of foreign companies in the Country

46%

15%

10%

7%

5%

17%

Wholesale and retail trade

Construction

Professional, scientific andtechnical activities

manufacturing industry

Transportation, logistic andwarehousing

Other industries

Foreign Investments

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 10

Special Economic Zones

Chemical and petrochemical

industry

Further benefits (from 2011)

SEZ Members previleges:

Focus Industries for the Government: Oil&Gas – Petrochemestry - Mining and Metallurgical - Chemistry, - Nuclear, Pharmaceutical - Processing, Agriculture.

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 11

Foreign trade turnover with Italy In 2011

• Petroleum and oils

products obtained from

bituminous minerals–

98.3%

• Other goods – 1.7%

• Building sectional units – 17.7%

• Taps, cocks, valves and similar

appliances for pipes, boiler

shells, tanks – 7.1%

• Air or vacuum pumps, air or other

gas compressors and fans – 5.6%

• Insulated cables, Fiber optic

cables made up of fibers – 4.9%

• Medicines – 2.8%

• Other aircraft – 2.3%

• Pipe fittings or pipes of iron or

steel – 2%

• Other goods – 9.6%

Import: 7% 1.1 mlrd USD

Export : 93% 15 mlrd USD

Italy & Kazakhstan

Italian companies in Kaz.

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 12

• Italy is one of the main investors involved in large-scale oil and gas projects in Kazakhstan.

• One of the important joint realized projects it is the creation of the Italian industrial and logistics park in the territory of FEZ "Seaport Aktau“ (sectors involved: transportation, logistics, building materials, tourism, electrical). The project is supported by the Italian Government and aims to diversify the structure of bilateral trade.

• Significant memorandum have been signed between the KazMunayGas and ENI referring to investments in oil and gas exploration and industrial infrastructure facilities in Kazakhstan; Samruk-Kazyna fund, West Kazakhstan engineering company, and General Electric Oil & Gas - Nuovo Pignone ; KTZ (Kazakhstan Temir Zholy) and the company Ansaldo STS.

Italy & Kazakhstan

Strategic Partnership Treaty (Rome, November 5, 2009):

• Enforced cooperation in military and military-technical

• cooperation in the field of nuclear energy, electricity, banking, finance and tax

areas, civil aviation; developing trade and economic cooperation,

• creating favorable conditions for entrepreneurship, encourage the creation

and development of joint financial and industrial groups

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 13

1. Success in overcoming the crisis and active development of the economy

2. Leader in Central Asia and one of the leaders in the CIS

3. Rich raw material base

4. Law convenient for business

5. Attractive business and investment climate

6. The low level of competition in many local markets

7. Convenient transit location

8. Single customs area with Russia and Belarus

9. The high level of political and social stability

10. The high level of investment attractiveness

Investing in Kazakhstan

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 14

STRENGTHS • A rich raw material base • Convenient transit location • Friendly for business law • The low level of competition in many local

markets • The active government support of many

sectors • Attractive business and investment climate • The high level of political and social stability

OPPORTUNITIES • The development of relations within the

Customs Union • Start of large oil & gas projects • The development of transport corridors,

China-Europe • The development of the country's

manufacturing industry

WEAKNESSES • Opacity of many aspects of the business • The high importance of personal

relationships in business • Lack of skilled workers in many industries • Lack of capacity in many markets • Insufficient level of quantity and quality of

R&D • low level of development of transport and

logistics infrastructure

THREATS • The collapse of the banking sector • A new wave of crisis • A further increase in the share of extractive

industries • The lag of the education system

Investing in Kazakhstan

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 15

Focus Sectors

KAZAKHSTAN Country Presentation

70% of oil

reserves

50% of oil

reserves

50.870 54.339 55.265 58.714 64.250 68.084 67.765 85.000

10.616 10.664 11.860 12.025 12.134 11.600 12.296

2005 2006 2007 2008 2009 2010 2011 2014

crude oil gas condensateplan, forecast

• O&G industry is the main economical sector

• 90% of O&G reserves: 15 largest fields

• 50% of O&G reserves: Kashagan and Tengiz

Volume of oil and gas extraction (thsd tons)

Main O&G companies in Kazakhstan

Oil & Gas Industry

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 17

THE BIGGEST O&G PROJECT IN KAZAKHSTAN

KASHAGAN is the largest Kazakhstan oil and gas field, located in the north of the

Caspian Sea. The beginning of the systematic extraction at Kashagan is expected in 2013.

By the end of the next decade, the volume of extraction at Kashagan are estimated

company ENI, can be increased to 75 million tons per year (about 1.5 million barrels per

day). Kazakhstan will be in Top 5 global oil producers after start of Kashagan.

TENGIZ is the giant oil and gas fields in the Atyrau region of Kazakhstan. Recoverable

reserves are estimated from 750 million to 1 billion 125 million tons of oil.

Reserves of associated gas are estimated at 1.8 trillion cubic meters.

UZEN Oil reserves are 1.1 billion tons. Production center - the city Zhanaozen. Total

recoverable reserves are estimated at 191.6 million tons of oil. The operator of field is

JSC "Exploration and Production NC" KazMunayGas ".

KARACHAGANAK is the oil and gas field, located in West Kazakhstan region. Initial

reserves are more than 1 billion tons of oil and gas condensate.

16,8%

16,8%

16,8%

16,8%

16,8%

8,4%

7,5%

20%

25%

5% 50%

20%

32.5% 32.5%

15%

Oil & Gas Industry

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 18

Volume of retail trade of food and beverages (mln. US $)

3.077 3.685 4.669

5.624 6.813 6.304 7.127

8.992

2004 2005 2006 2007 2008 2009 2010 2011

227,6

150,0

124,2

87,6

65,9

58,5

47,5

38,1

18,8

10,4

203,9

119,6

121,9

72,5

48,8

43,8

44,8

29,3

11,3

9,4

milk and milkproducts

Eggs (pcs)

bakery and cerealproducts

vegetables(excluding potatoes)

meat and meatproducts

fruit

potatoes

sugar, jam, chocolateand confectionery…

oils and fats (kg)

fish and seafood (kg)

0 100 200 300kg per year

2008 2011

Food consumption per capita

17%

16%

14% 13%

10%

9%

21%

Manufacture of grain millproducts, starches and starchproductsManufacture of beverages

Manufacture of bakery andpastry

Production of dairy products

Processing and preserving ofmeat and meat productsmanufacturingProcessing and preserving offruit and vegetables

Structure of Food & Beverages Industry

Food & Beverage

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 19

Meat and poultry meat, edible offal

Sausages Fruit and

vegetable juices Canned vegetables

and fruit Vegetable oils

liquid Milk and cream

Butter Cheese and curd Yogurt and milk products

Flour Grains Bakery and confectionery

products

Pasta, noodles, etc. Sugar Chocolate and confectionery Alcohol Beer Mineral water and soft drinks

Food & Beverage

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 20

Number of outlets selling consumer goods

15.980

52.100

52.901

829

universal stores

specialized stores

non-specialized stores

open markets

1.196.137

3.567.356

2.462.913

178.565

universal stores (sq.m)

specialized stores (sq.m)

non-specialized stores (sq.m)

open markets (number of retailplaces)

Trading capacity

THE LARGEST RETAIL CHAINS IN THE COUNTRY

Food & Beverage

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 21

769 785 881 954 1.141

840

1.362 1.599

2004 2005 2006 2007 2008 2009 2010 2011

Volume of retail trade of clothes (mln. US $)

Structure of clothes market in Kazakhstan

5%

95%

Import

Local production

42%

11% 7% 5%

3%

9%

23%

China

Turkey

Italy

India

Kyrgyzstan

Russia

Others

Kazakhstan's clothing market is still characterized by

a high proportion of Non-Branded Overstock goods

from China, Turkey and Kyrgyzstan.

The fashion industry is poorly developed.

Structure of clothes Import

Textile & Fashion

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 22

Outer clothing Underwear Sports suits

Hosiery goods Sweaters, pullovers, vest, etc

Textile & Fashion

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 23

A large number of foreign luxury clothes brand

is working in Kazakhstan (more than 60).

Luxury segment in Kazakhstan is very small but

still very interesting . Most of the brands are

sold in small shops operating only in Almaty or

Astana.

Textile & Fashion

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 24

31%

19% 13%

8%

6%

3%

20%

Russia

Ukraine

China

Italy

Turkey

Germany

Others

67%

33%

Volume of retail trade of furniture (mln. US $)

Structure of the furniture market

Import

Local production Structure of the furniture Import

135 145 187

252

380

318 389

425

2004 2005 2006 2007 2008 2009 2010 2011

• 505 mln US $ - furniture market size in 2011

• Main problems: Old technologies, High level of

competition, Lack of raw materials, Unavailability of

credit recourses

Wood & Furniture

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 25

Seating furniture

Wood office furniture

Wood trading furniture for retail outlets

Kitchen furniture

Wooden furniture for dining and living room

Mattresses

Wood & Furniture

H o n o r a r y C o n s u l a t e o f K a z a k h s t a n i n V e n i c e 26

Pierluigi Aluisio Honorary Consul of Kazakhstan in Venice pierluigi.aluisio@consolatokazakhstan.venezia.it Consulate +39.041.2525811 Italian Mobile +39.335.8108730 Kazakh Mobile +7.777.2977625

Thank you! Рақмет! Спасибо!