kazakhstan investment expo 2014

Attachment to the CONCEPT of

INTERNATIONAL EXHIBITION «KAZAKHSTAN INVESTMENT EXPO 2014»

The Astana Economic Forum and G-Global platform as one of

the most important mechanisms for enhancing investment

potential of Kazakhstan

2

Concept of Foreign

Policy of the Republic of

Kazakhstan for

2014 – 2020,

Approved by

the Presidential Decree of

the Republic of

Kazakhstan dated

January 21, 2014 № 741

«… Priorities and objectives of Foreign Policy of the Republic of Kazakhstan:

paragraph 6: To implement the priorities of the foreign policy of Kazakhstan:

6) is actively working to promote the Astana Economic Forum and international

initiatives developed on its basis…»

«…Today the idea of G-GLOBAL already has an institutional solution. The Secretariat

and the Board of Trustees have been established. Representatives of large companies

are invited to the Board of Trustees. Taking this opportunity I invite members of the

Foreign Investors Council to take an active part in its work…»

Speech of the President of

the Republic of Kazakhstan

N.A. Nazarbayev during

the 26-th Meeting of Foreign

Investors Council,

Astana, May 22, 2013

«…It is important to adjust and strengthen the trend of innovative industrialization. I gave

instructions to the Government on the drafting of the Second Five-Year Plan on Forced

Industrial and Innovative Development for 2015-2019. The number of priorities of

industrialization should be limited.»

Address of the President of the Republic pf Kazakhstan N. Nazarbayev to the people of

Kazakhstan.

January 17, 2014. Kazakhstan way – 2050:

Common goal, common interests, common future

«…Each five-year plan of industrial programs must address the specific tasks of creation and

development of several manufacturing areas…

…These sectors may be oil-and-gas and mining machinery, food industry and production of

construction materials, agroindustrial complex.»

Speech of the President of the Republic of Kazakhstan N.A.

Nazarbayev at the Day of Industrialization

December 20, 2013

«…We will fully involve foreign investments, technologies and innovations into our

economy. We will create favorable environment for investors.»

Potential of the Astana Economic Forum and G-Global

platform for international economic cooperation of

Kazakhstan

Address of the President of the Republic pf Kazakhstan N. Nazarbayev to the people of

Kazakhstan. January 17, 2014. Kazakhstan way – 2050:

Common goal, common interests, common future

3

«…Today's meeting is traditionally held on the eve of the Astana Economic Forum. It hosts a

number of significant events, including the conclusion of investment contracts. I encourage all

of you to actively participate in its work!

Speech of the President of the Republic of Kazakhstan N.A. Nazarbayev during the 26th

Meeting of the Foreign Investors Council, Astana, May 22, 2013

International economic cooperation of

Kazakhstan

4

1st level

Cross-border regions of Russia

2nd level

Russia

Ukraine

Belarus

3rd level Western regions of China

5-й уровень

Турция

Иран

Ирак

Азербайджан

4th level

China

Uzbekistan

Tajikistan

Turkmenistan

Kyrgyzstan

«We can use our geographic advantage as a country located at the crossroads of Europe and Asia. ... Openness and pragmatism should be infused in all areas of our trade relations with other countries. This also applies to the

Customs Union, and the WTO, and the Central Asian region.» Report of the Head of State N.A. Nazarbayev at the Eurasian Emerging Markets Forum «Accession of Kazakhstan into the 30 most developed states of the

world», 10.09.2013

high low

Level of macro-region integration

1 2

4

3

5

Priority sectors as part of the second Five-Year

Plan of the Industrialization Program for 2015-2019

(SPFIID-2)

80% of state support 20% of state support

5

Priority industry sectors of the second Five-Year

Plan for 2015-2019 (SPFIID): focus on

manufacturing industry

Priority sectors of the second Five-Year Plan may be conditionally divided

into the following major sectors:

Chemical industry

Mechanical engineering

Mining and smelting complex

Agroindustrial complex (foodstuff)

Construction materials

Oil-and-gas industry (refining)

The projects and priority directions (niches) in the long term which are jointly

implemented with investors will be presented as an example of development of

three sectors.

6

Consuming

industries

Value chain

1 передел

концентрат

Secondary production Primary production Enrichment, getting of primary concentrate Procurement Exploration

Industry of construction

materials

Mechanical engineering

Packing materials

Chemical industry

Light industry

AIC

Pharmaceutics

Metallurgy

Food industry

Light industry

MSC

Segments, projects in which have been implemented prior to the launch of SPFIID for 2010-2014.

Segments, projects in which have being implemented as part of SPFIID for 2010-2014 .

Segments, projects in which will be launched in the course of SPFIID implementation for 2015-2019 (there is an agreement with investors)

Pe

tro

ch

em

istr

y

Oil, natural gas

Ethan

Propan Propylene

Ethylene

Butane Butylene

Copolymers of propylene Acrylic acid

Butadiene, butyl alcohol

Methane Acetylene, acetic acid

Polyethylene of high and low

pressure, linear polyethylene

Synthetic fibers

Artificial rubber

Polymerized vinyl chloride

Polypropene,

MTBE

Hydrocarbon deposits

Phosphate rock Ground phosphate Phosphate rocks deposits

Potassium salt Sylvinite, carnallite Calcium chloratum

Potassium sulfate Potassium salt deposits

Carbamide

Explosive agents

Sulphuric acid

Sodium chloride

Hydrocarbon deposits Ammonia

Monoammonium phosphate (МАР)

Dibasic ammonium phosphate (DAP)

compound fertilizers (N-P-K)

Potassium saltpeter

Sodium cyanide

Ammonium nitrate

Phosphoric fertilizers

Double (triple) superphosphate

Herbicides (glyphosate)

Fungicides

Insecticide

Sanitizers

Caustic soda

Chlorum

Chlorhydric acid

Sodium hypochlorite

Phosphorus pentasulphide

Sodium chloride deposits Salt rock, sodium chloride, saline

lakes, sea-salt

Oil, natural gas

Hydrocyanic acid

Para-xylol Fine benzene dicarboxylic acid Polyethylene terephthalate

Bas

e ch

emis

try

7

Investment opportunities of chemical industry of

Kazakhstan

Segments for potential investors as part of implementation of SPFIID for 2015-2019.

Phosphate rock Phosphate rocks deposits

Sulphuric acid Nitrogen manure Ammonia Lubricating materials Phosphoric fertilizers Phosphorus Benzole Explosive agents Herbicides Hypochlorites Polypropene Caustic soda Chlorhydric acid Chlorine Methyl tertiary butyl ether (additive to

engine fuels, increases octane number) Reagents for petroleum industry Sodium hexametaphosphate p-xylene Sodium cyanide Biaxially-oriented polypropylene films And others

8

Segments, projects in which have been implemented together with investors as part of

SPFIID for 2010 – 2014

Polymerized vinyl chloride, not mixed with other components;

Polyether;

Polymers of ethylene in initial forms;

Carbonyl diamide, including in aqueous solution;

Ethyleneglycol (ethanediol);

Copolymers of propylene;

Acrylic polymers in initial forms;

Terephthalic acid and its salts;

Epoxide resin;

Di-sodium carbonate;

Vinyl acetate.

9

Investment niches of chemical

industry as part of SPFIID for

2015-2019

Passport of the project– «Production of vinyl

acetate»

10

Sectoral affiliation of the project: CCÅA 2014 – production of other main organic chemical substances

Product line: vinyl acetate – 200 thousand tons per year.

Preliminary cost of project: 54.2 million US dollars

Commercial section

Primary consumers – enterprises producing acetate fibers.

Import of RK + RF (2012): 14 028 tons or 17 mln US dollars.

Major exporters in the CU: Ukraine (93%).

Currently, there are no manufacturers of this product in the RK.

Raw material will be available after implementation of the project on IGHK construction.

Financial section

Financial indicators: revenues = 458.3 mln US dollars,

expenses = 657.9 mln US dollars.

Performance indicators: NPV = 44.6 mln US dollars, IRR =

49.8%, PBP = 2.4 years, DPBP = 3.7 years.

Sensitivity analysis: NPV = 0 if 1) revenues -7.7%,

expenses+15.5%.

Best scenario: lending in second-tier banks - NPV = 141 mln

US dollars.

Technical section

location: Atyrau (proximity to raw material).

Production process is divided into 3 stages.

Equipment: steam heater, tubular vertical reactor, steam

drum, cooler, absorber , circulatory compressor, block of

carbonate cleaning from CO2, system of rectification towers.

Socio-economic section

200 permanent work places – industrial personnel.

Annual tax deductions: 6.1 mln US dollars.

Annual volumes of export earnings: 122.2 mln US dollars.

Passport of the project – «Production of

terephthalic acid»

11


Product line: fine terephthalic acid – 400 thousand tons per year

Preliminary cost of project: 249 million US dollars

Commercial section

Primary consumers – enterprises producing polyethylene terephthalate.

Import of RK + RF (2012): 115 634 tons or 137.7 mln US dollars.

Major exporters in the CU: Poland (60%), Great Britain (23%), Belgium (16%).

Currently, there are no manufacturers of this product in the RK. Raw material will be available after implementation of the

project on production of aroma compounds at AOR.

Financial section

Financial indicators: revenues = 3 267 mln US dollars, expenses = 5379.2 mln US dollars.

Performance indicators: NPV = 37 mln US dollars, IRR = 17.6%, PBP = 5.2 years, DPBP = 9.9 years.

Sensitivity analysis: NPV = 0 if 1) revenues -1.9%, expenses +3%.

Best scenario: equipment to be leased under the program «Productivity-2020» - NPV = 84.6 mln US dollars.

Technical section

Location: Atyrau (proximity to raw material).

Production process is divided into 8 stages.

Equipment: reactor of combustion, buffer reservoir, filter, centrifuge, rectifier, column of dehydration




Annual volumes of export earnings: 198 mln US dollars.

Passport of the project – «Production of calurea

(carbamide)»

12

Sectoral affiliation of the project: CCÅA 2015 – production of fertilizers and nitrogenous mixtures

Product line: uramon – 300 thousand tons per year


Commercial section

Primary consumers – enterprises of agricultural sector. Import of RK (2012): 14 650 tons or 5.7 mln US dollars. Import of the CU (2012): 169 thousand tons or 62.9 mln US

dollars. Major exporters in the RK: Uzbekistan (90%). Currently, there are no manufacturers of this product in the RK. Raw materials and components are available in the local

market.

Financial section

Financial indicators: revenues = 556.9 mln US dollars, expenses = 227.1 mln US dollars.

Performance indicators: NPV = 29.4 mln US dollars, IRR = 22.98%, PBP = 3.9 years, DPBP = 7.1 years.

Sensitivity analysis : NPV = 0 if 1) revenues -13.4%, expenses +38%.


Technical section

Location: Aktau (proximity to raw material). Production process is divided into 7 stages. Equipment: converter, rectification towers, vacuum

evaporator, oil eliminator, absorber, desorber, granulation tower; transporter, apparatus of fluidized bed (granulator).





Passport of the project – «Production of calcined

soda (di-sodium carbonate)»

13

Sectoral affiliation of the project: CCÅA 2013 –production of other main non-organic chemical substances

Product line: calcined soda – up to 400 thousand tons per year


Commercial section

Primary consumers - enterprises of vitreous, metallurgic and mining industries.

Import of RK (2012): 434.8 thousand tons or 111 mln US dollars.

Import of the CU (2012): 1 018 thousand tons or 250.3 mln US dollars.

Major exporters in the RK: Russia (90%). Currently, there are no manufacturers of this product in the RK. Raw materials and components are available in the local

market.

Financial section

Financial indicators: revenues = 1 291.5 mln US dollars, expenses = 953.9 млн. USD.

Performance indicators: NPV = 12.6 mln US dollars, IRR = 11%, PBP = 6.9 years, DPBP = 12.7 years.

Sensitivity analysis : NPV = 0 is 1) revenues -1,8%, expenses+2,8%.


Technical section

Location: Ekibastuz (proximity to raw material). Production process is divided into6 stages. Equipment: gas scrubber, absorber, distillation column,

mixing machine, vacuum filter, refrigerator of ammonate brine solution, filled column, compressors, refrigerator-gas purifier, lime-roaster, liming apparatus, refrigerator-washer, black-ash furnace.



Annual tax deductions: 7,9 mln US dollars.

Annual volumes of export earnings: 12,6 mln US dollars.

Passport of the project – «Production of ethylene

alcohol»

14


Product line: ethylene alcohol – 200 thousand tons per year


Commercial section

Primary consumers – enterprises producing polyethylene terephthalate and antifreezes.

Import of RK + RF (2012): 41 923 tons or 49.7 mln US dollars. Major exporters in the CU: Saudi Arabia (90%). Currently, there are no manufacturers of this product in the RK. Raw material will be available after implementation of the

project on IGHK construction.

Financial section

Financial indicators: revenues = 1 350 mln US dollars, expenses = 1 166 mln US dollars.

Performance indicators: NPV = 17.9 mln US dollars, IRR = 18.3%, PBP = 4.7 years, DPBP = 7.9 years.

Sensitivity analysis : NPV = 0 if 1) revenues -1,9%, expenses +2,7%.


Technical section

Location: Atyrau (proximity to raw material). Production process is divided into 3 stages. Equipment: tubular mixing machine, steam-operated heater,

hydrator, dashpot, gas separator, condenser, rectification towers, pressure reducing valve, dephlegmator, heater, pump.





15

Assembly

Value chain

Production of components (including basic components)

R&D

Platform s for car series

Suspension

elements, tail

exhaust pipes

Passenger cars

Carts for cars

Components of locomotives

Detachable

equipment

Combine harvesters

Tractors

Truckers

Transformers

Accumulators

Electromotors

Drill units Fittings

Electric locomotives

Diesel locomotives

Freight cars

Cables and wires

Parts of vehicle

body (seats,

plastics detail)

Complex solutions (equipment

production technologies)

Components for

tractors and

complete

harvesters

Models of cars

Models of locomotives

Model s of agrotechnologies

with a glance to agroclimatic

features of the region

Solutions for energy supply Energy supply

management

system

Transport and logistics

Households

Consuming

industries

Agriculture

Electrical energy industry

Construction

Oil-and-gas

procurement

MSC

Transport and logistics

MSC

Mineral processing equipment

Spare parts and aggregates

Complex solutions

(equipment production

technologies)

Oil-and-gas

procurement

MSC

Conveyors

Auto

mobile

manufa

ctu

ring

Oil

and g

as

equip

ment

Min

ing

equip

ment

Railw

ay

technic

s

Agro

technolo

gy

Ele

ctr

ical

goods

All round cars

Pumps

Electric

conductors Static current

changer

Seeders,

sprinklers Semitrailers

Equipment for rail

tracks

Parts of trucks

Flanges Turbine

compressors

Elevators and lifts

Transmission gears Buses

Passenger cars

Segments, projects in which have been implemented prior to the launch of SPFIID for 2010-2014.

Segments, projects in which have being implemented as part of SPFIID for 2010-2014 .

Segments, projects in which will be launched in the course of SPFIID implementation for 2015-2019 (there is an agreement with investors)

Investment opportunities of mechanical

engineering industry of Kazakhstan

Segments for potential investors

as part of implementation of

SPFIID for 2015-2019.

Railway mechanical engineering

Freight cars

Locomotives

Electric locomotives

Passenger cars

Ball-type and tapered bearings

Automobile manufacturing

Passenger cars

Trucks

Buses

Agricultural mechanic engineering

Self-moving cereal combines

Tractors

Harvesters

Machine parts for agriculture

Mechanic engineering for MSC

Mine dump trucks

Oil-and-gas mechanic engineering

Taps, faucets, valves

Pipeline fittings

16

Segments, projects in which have been implemented together with investors as part of


Other fittings for pipe lines, boilers, storage reservoirs, cisterns, containers or analogous vessels

Carbodies for motor transport vehicles of commodity item 8703

Parts and accessories of carbodies (including cabins) Static converters Electric devices for commutation or protection of electric

circuits Electrical conductors with voltage not above 80 V Gear drives, ball-type or rolling screw motion drives, and

others Other furnaces; heating units, cooking appliances, steam

table, cooking electric boilers; grills and roasters Gear wheels, chain-wheels and others elements of

transmission Pneumatic rubber new tires and scrap tires for passenger

cars (including dual-purpose vehicle-vans and sports cars) Circuit changers with voltage not above 1000 V Patrons for lamps, plugs and sockets Refrigerant and freezing machinery, heat pump units Boards, panels, tables, brackets, distribution switchboards

and others

17

Investment niches of

mechanic engineering as part

of SPFIID for 2015-2019

Electric lamps and lighting equipment Multiphase alternating current motors with a capacity of

more than 75 kW All-round machines Multiphase alternating current motors with a capacity of

more than 750 W, but not more than 75 kW Pneumatic rubber new tires and scrap tires for buses or

motor transport vehicles for freightage Air-conditioners of window or wall type in single body frame

or 'split systems' Power plants and hydraulic engines of linear action (drums) Suspension bumpers Traversing wheels, their parts and accessories Foodstuff choppers and mixers; juice squeezers for fruit or

vegetables Machines for crushing and breakage Vacuum cleaners: with built-in motor, others. Liquid-filled transformers with a capacity of more than

10000 KVA Wheeled tractors for semitrailers Brakes and brakes with servo amplifier, their parts

18

Investment niches of

mechanic engineering as part

of SPFIID for 2015-2019

Passport of the project – «Production of refrigerant

and freezing machinery»

19

Sectoral affiliation of the project: CCÅA 2825 – production of industrial refrigerant and ventilating equipment,

mechanical engineering

Product line: industrial refrigerant and freezing machinery for fluid coolhouse (ice generators, dispensers, chillers,

coolers, etc.) – up to 3 000 tons per year.


Commercial section

Primary consumers – enterprises of food and agricultural industries, as well as service industry.

Import of RK (2012): 1 473 tons or 23.2 mln US dollars. Import of the CU (2012): 22 088 tons or 292.2 mln US dollars. Major exporters in the RK: China (18%), Russia (15%),

Germany (15%). Currently, there are no manufacturers of this equipment in the

RK. Raw materials and components are available in the local

market.

Financial section

Financial indicators over 10 years: revenues= 233 mln US dollars, expenses = 144 mln US dollars, money flow = 71 mln US dollars.


Sensitivity analysis: NPV = 0 if 1) revenues -19,8%, expenses +32,5%.

Best scenario: equipment to be leased under the program «Productivity-2020» - NPV = 24 mln US dollars

Technical section

Location: Almaty (proximity to consumer). Production process is divided into 7 stages. Enterprise produces cooling elements. Other components

shall be purchased. Equipment: programmably-controlled metal-working

machinery and press (TruMatic), sheet bending press (Trubend Serie 5000), рrobotized measuring machines. Hand assembling.


105 permanent work places , among them 77 – industrial personnel.



Passport of the project – «Production of high-

voltage motors»

20

Sectoral affiliation of the project: CCÅA 2711 – production of electromotors, generators and transformers,

mechanical engineering

Product line: polyphase motors of high power (more than 75 kW) – up to 600 pcs per year.


Commercial section

Primary consumers– railway mechanical engineering (locomotives) and other industries.

Import of RK (2012): 2 573 tons or 63 mln US dollars. Import of the CU (2012): 261 million US dollars. Major exporters in the RK: Mexico (59%), Russia (17%). Currently, there are no manufacturers of this equipment in the

RK. Raw materials and components are available in the local

market.

Financial section

Financial indicators over 10 years: revenues = 258 mln US dollars, expenses = 133 mln US dollars, money flows = 99 mln US dollars.



Best scenario: equipment to be leased under the program «Productivity-2020» - NPV = 17 mln US dollars

Technical section

Location: FEZ «Astana is a new city», Astana (proximity to consumer).

Production process is divided into 4 stages. Sizes and types depend on individual preferences of client. Equipment: dual-head laser cutting machines and oxygen

cutting machine, metal-working machinery and programmably-controlled machining center units, balancers. Hand assembling.





Passport of the project – «Production of caterpillar

excavators»

21

Sectoral affiliation of the project: CCÅA 2892 – production of equipment for mining industry, underground extraction

and construction, mechanical engineering

Product line: intermediate caterpillar swing excavator with drag shovel, with a mass of 20-40 tons – up to 380 pcs per

year.


Commercial section

Primary consumers - large construction and operating companies.

Import of RK (2012): 513 pcs or 132 mln US dollars. Import of the CU (2012): 9 108 tons or 1 324 mln US dollars. Major exporters in the RK: Japan (45%), South Korea (21%),

Russia (15%). Producer in the RK: JSC «Excavator». Over 2012 no

excavators were produced. Raw materials and components (common parts) are available

in the local market. More complicated nodes and detail shall be purchased at the participant of JV.

Financial section

Financial indicators over 10 years: revenues = 1 225 mln US dollars, expenses = 724 mln US dollars, money flows = 404 млн. USD.

Performance indicators: NPV = 10 mln US dollars, IRR = 24,6%, PBP = 3.4 years, DPBP = 8.4 years.


Best scenario: equipment to be leased under the program «Productivity-2020» - NPV = 53 mln US dollars.

Technical section

Location: monocity of Aksu(proximity to consumer and supplier).

Production process is divided into 7 stages. Kanban system and modular system.

Enterprise produces cooling elements. Other components shall be purchased.

Equipment: conveyor robots, laser and plasma cutting machines, milling machines, programmably-controlled turning, grinding, machining center units, welding sets.



Annual tax deductions: 12 mln US dollars.


Passport of the project – «Production of carbodies

for passenger cars»

22

Sectoral affiliation of the project: CCÅA 2920 – production of carbodies for vehicles, trailers and semitrailers,

mechanical engineering.

Product line: carbodies for passenger cars – up to 80 000 pcs per year (3-5 different options).


Commercial section

Primary consumers– car assembling enterprises (CKD method).

Market of the RK: by 2017 it is planned to produce 300 000 cars, localization of components of which will primarily require assembling of carbodies.

Major exporters in the RK: South Korea (75%), Slovakia (11%), Czech Republic (11%).

Currently, there are no manufacturers of this type of car components in the RK.

There are no moulded parts of carbodies in the local market (to be imported).

Financial section





Technical section

Location: Ust-Kamenogorsk (proximity to consumer). Production process is divided into 6 stages. It is proposed to create a robotized welding plant. Equipment: 180-200 industrial robots (robot-fitters and

assembly robots). Hand assembling is impossible.


245 permanent work places , among them 199– industrial personnel.


Transportation of carbody frame does not have any economic sense, therefore production is directed at internal market.

Passport of the project – «Production of ball plug

valves and other fittings»

23

Sectoral affiliation of the project: CCÅA 2814 – production of other taps and faucets, mechanical engineering

Product line: ball plug valves of different size for pipelines, boilers, storage reservoirs, cisterns, tanks or analogous

vessels – up to 6 000 tons per year.


Commercial section

Primary consumers – construction agencies and Housing enterprises; are also used while transportation of oil and chemical products.

Import of RK (2012): 8 152 tons or 82 mln US dollars. Import of the CU (2012): 53 230 tons or 703 mln US dollars. Major exporters in the RK: Germany (34%), Russia (26%),

Chine (17%). Producers in the RK: Ust-Kamenogosrk Valve Plant,

KazRosPromArmatura, Kazneftegasmash– less than 10% of import.

Raw materials and components are available in the local market.

Financial section


Performance indicators: NPV = 59 mln US dollars, IRR = 28,2%, PBP = 3.1 years, DPBP = 3.6 years.



Technical section

Location: FEZ «Saryarka», Karaganda (proximity to supplier).

Production process is divided into 7 stages. Enterprise produces almost all spare parts. Equipment: SMS Concast, molding machines, DISAMATIC,

programmably-controlled grinding units, industrial robots, CNC-mills, automatic welding sets, overhead cranes.





Investment opportunities of mining and smelting

complex of Kazakhstan

Ironstone; baking

coal; agglomerate

Non

ferr

ou

s m

eta

llurg

y

Iron-ore deposits Melted

steel

HBI

Cast iron Section

Slab, bloom,

rolled

planchet

Graded, flat steel

Corrosion-resisting alloys

Mechanic

engineering

Construction

Car construction

Electric engineering

and others.

Iro

n in

du

str

y

Consuming

industries Production of

finished goods

Production of rolled

product

Production of

primary metal Enrichment Extraction

Exploration and

rehabilitation

iron-ore concentrate;

coke; pellets

Bauxite deposits Aluminum wires, cables,

disks, radiators

Rolled aluminium, wire, strip, aluminum

shape, wire rod

Food industry

Aircraft industry Alumina Bauxite ore Primary aluminium – 125 - 250

thousand tons

Copper ore

deposits

Copper-base

alloys

Construction

Energetics Copper concentrate Copper ore Blister copper

Gold ore deposits Jewelers and technical products Affined gold–

7 - 35 tons

Jewelry industry

Electric engineering Gold in concentrate/black

sand Auriferous ore Cathodic gold (alloy) – 18,7 - 43,2

tons

Complex ore

deposits

Metal products made of lead

and zinc

Zinc ingots, zinc steel plates

Lead ingots, rolled products out of

alloys

Metallurgy

Chemical industry

Defence

Electronic industry

Zinc concentrate

Lead concentrate Complex ore

Zinc scoria

Lead oxide

Value chain

Chromic iron

deposits Chrome iron ore Chromic concentrate

High-carbon ferrochrome -

1,1 - 1,3 mln tons

Chromium carbide

Metallic chrome, ferrochrome

Coatings, special steel,

ferrocolumbium

Metallurgy

Shipbuilding

Defence

Energetics

Flat zinced rolled stock

Rods made of iron and alloy-

free steel

Copper wire

Unalloyed aluminium

Cathode copper

Electrolythic chrome, powder of

chrome

Ferroalloys – 1,6 mln tons

Hoop

Pipe rolling up to 270 thousand

tons

Railing, rail braces

Special coke – 350

thousand tons

Copper wire rod and

copper mill products

Segments, projects in which have

been implemented prior to the

launch of SPFIID for 2010-2014.

Segments, projects in which have being

implemented as part of SPFIID for 2010-

2014 .

Segments for potential investors as

part of implementation of SPFIID for

2015-2019.

Sheets

24

Segments, projects in which have been

implemented together with investors as part of


Bauxite extraction

Alumina production

Alumina processing

Copper ore extraction

Cathode copper production

Cathode copper processing

Production of-

- crude gold

- affined gold

Primary aluminium processing

Auriferous ores extraction

Iron ore extraction

Steel making

- sectional iron

- pipes

Ready metal products

And others

25

Ferrous metals products

Steel constructions made of

ferrous metals (besides assembly

building constructions of

commodity item 9406) and their

parts

Other screw and bolt made of

ferrous metals, threaded,

completed with screws or nuts or

without them

Unalloyed coarse aluminium

flat-rolled products made of iron or

alloy-free steel with a width of 600

mm or more, zinced otherwise

flat-rolled products made of iron or

alloy-free steel with a width of 600

mm or more, painted, varnished or

covered with plastic

26

Investment niches of MSC as

part of SPFIID for 2015-2019

Sectoral affiliation of the project: CCÅA 2410 – production of cast-iron, steel and ferrous-based alloys, metallurgy

Product line: polymer-coated flat-rolled products with a width of more than 600 mm – up to 200 000 tons per year.


Commercial section

Primary consumers - construction industry enterprises. Import of RK (2012): 1 473 tons or 107.6 mln US dollars. Import of the CU (2012): 22 088 tons or 192,5 mln US dollars. Major exporters in the RK: China (75%), Korea (25%). Currently the only producer of this products in the RK is

JSC «АМТ». Raw materials and components are available in the local

market.

Financial section

Financial indicators over 13 years: revenues = 1 784 mln US dollars, expenses = 1 489 mln US dollars, money flows = 305 mln US dollars.

Performance indicators: NPV = 62,8 mln US dollars, IRR = 14,25%, PBP = 6.6 years, DPBP = 8.45 years.



Technical section

Location: Karaganda (proximity to raw material base and consumer).

Production process is divided into 3 stages. Processing in solution strong oxidation material. Application of

liquid coating compositions. Hot drying. Equipment: rolling mills, continuous furnaces and aggregates

for cutting strip. Galvanizing plants.





Passport of the project – «Production of polymer-

coated flat-rolled products»

27

Passport of the project – «Production of iron rods

(building bar)»

28

Sectoral affiliation of the project: CCÅA 2410 - production of cast-iron, steel and ferrous-based alloys, metallurgy



Commercial section

Primary consumers – construction industry enterprises. Import of RK (2012): 1 473 tons or 86.3 mln US dollars. Import of the CU (2012): 22 088 tons or 642 mln US dollars. Major exporters in the RK: Uzbekistan (80%), Kyrgyzstan

(17%), China (4%). Currently the producers of this products in the RK are JSC

«АМТ» and LLP «Casting». Raw materials and components are available in the local

market.

Financial section

Financial indicators over 13 years: revenues = 1 784 mln US dollars, expenses = 1 489 mln US dollars, money flows = 305 mln US dollars.

Performance indicators: NPV = 620.4 млн. USD, IRR = 50.29%, PBP = 2.41 years, DPBP = 3.71 years.

Sensitivity analysis: NPV = 0 if 1) revenues -3%, expenses+5%.

Best scenario: equipment to be leased under the program «Productivity-2020» - NPV = 643,6 mln US dollars.

Technical section

Location: Karaganda (proximity to raw material base and consumer).

Production process –Midrex technologies (application of rotary hearth furnace with rotating bed– Fastmet, Fastmelt, ITmk3).

Equipment: mill for rolling sections (ferrous, intermediate, finishing train, system of thermal treatment of rolled products, refrigerator, cutting section).





Passport of the project – «Production of railings»

29

Commercial section

Primary consumers– JSC «NC KTZh», underground. Import of RK (2012): 1 473 tons or 149,1 mln US dollars. Import of the CU (2012): 22 088 tons or 584 mln US dollars. Major exporters in the RK: Ukraine (99,9%), Poland (0,1%). Currently, there are no manufacturers of this type of equipment

in the RK. Raw materials and components are available in the local

market.

Financial section

Financial indicators over 13 years: revenues = 3 547 mln US dollars, expenses = 2 526 mln US dollars, money flows = 1 048 mln US dollars.


Sensitivity analysis: NPV = 0 if 1) revenues -10%, expenses +10%.


Technical section

Location: Karaganda (proximity to raw material base). Raw material base: annual volume of cuttings in the

manufacture of rolled products - 600 thousand tons for melting of rail steel.

Equipment: continuous furnace, breakdown mill, hot cutting, isothermal exposure of railings, railing-finishing roll line, heat treatment bay.








Passport of the project – «Production of rail

fastening (cross and connection screw)»

30


Product line: polymer-coated flat-rolled products with a width of more than 600 mm – up to 66 000 pcs per year.


Commercial section

Primary consumers– JSC «NC KTZh», underground of Almaty and other enterprises.

Import of RK (2012): 1 473 tons or 27,6 mln US dollars. Import of the CU (2012): 22 088 tons or 1 202 mln US dollars. Major exporters in the RK: Germany (46%), Russia (28%),

China (5%). Currently the only producer of this products in the RK is

LLP «Fosslo Fastening Systems Kazakhstan» . Raw materials and components are available in the local

market.

Финансовый раздел

Financial indicators over 13 years: revenues = 513 mln US dollars, expenses = 105 mln US dollars, money flows = 89,6 mln US dollars.


Sensitivity analysis: NPV = 0 if 1) revenues -10%, expenses+15%.

Best scenario: equipment to be leased under the program «Productivity-2020» - NPV = 5,5 mln US dollars

Technical section

Location: Karaganda (proximity to raw material base). Production process: consists of 6 stages. Raw material: wire rod, hot-rolled sheet, graded construction

steel, square 16*16 mm, square 22*22





Passport of the project – «Production of rail brace

(spike fastening)»

31

Sectoral affiliation of the project: CCÅA 2410 – production of cast-iron, steel and ferrous-based alloys, metallurgy

Product line: rail brace (spike fastening) – up to 1 000 000 pcs per year.


Commercial section

Primary consumers– JSC «NC KTZh», underground of Almaty and other enterprises.

Import of RK (2012): 1 473 tons or 27.6 mln US dollars. Import of the CU (2012): 22 088 tons or 1 202 mln US dollars. Major exporters in the RK: China (22%), USA (12%), Italy

(10%). Currently, there are no manufacturers of this type of equipment

in the RK. Raw materials and components are available in the local

market.

Financial section

Financial indicators over 13 years: revenues = 189 mln US dollars, expenses = 88 mln US dollars, money flows = 103.9 mln US dollars.

Performance indicators: NPV = 25.7 mln US dollars, IRR = 22,58%, PBP 4.93 years, DPBP = 6.11 years.

Sensitivity analysis: NPV = 0 if 1) revenues -5%, expenses +5%.


Technical section

Location : Karaganda (proximity to raw material base). Technologies: Vossloh, Voest Alpin orThyssenKrupp

Gleistechnik Raw material: Chrombainit 1400 (СгВ 1400), which gives the

necessary plasticity and hardness by means of complicated heat treatment.





Existing measures of state support

32

Industrial regulation

Internationalization

Technologies and innovations

Human resources

Financial resources

Infrastructure

Government purchases

Enterpreneurship and SMB

Competition stimulation

Measures of state support: tools for attracting

investments

Measure of state support (name)

Operator providing measure of state support (state

body, national company)

Investment preferences

1 exemption from customs duties while import of equipment, components, raw materials and spare parts needed for

the investment project CI of MINT of the RK

2 state full-scale grants CI of MINT of the RK

3 tax exemptions for up to 7 years for investment strategic projects CI of MINT of the RK

4 incentives for industrial investment projects in strategic regions with low socio-economic development CI of MINT of the RK

5 exemption from taxes of SEZ participants (corporate income tax, property tax, land, fee for land use rights for 10

years, VAT) CI of MINT of the RK

Service support of investors

6 provision of information about investment projects CI of MINT of the RK, Kaznex Invest

7 rendering of assistance in choice of partner CI of MINT of the RK, Kaznex Invest

8 rendering of assistance in obtaining state support measures CI of MINT of the RK, Kaznex Invest

9 rendering of assistance in implementation of projects, as well as in obtaining state support measures CI of MINT of the RK, Kaznex Invest

10 support of foreign investors in the territory of the Republic of Kazakhstan CI of MINT of the RK, Kaznex Invest

11 Holding of information and presentation events for promotion of investment opportunities of Kazakhstan (business

forums, road show, brochures, billboards, press-conferences) CI of MINT of the RK, Kaznex Invest

12 Database of investment projects and foreign investors www.baseinvest.kz; national investment interactive website

www.invest.gov.kz CI of MINT of the RK, Kaznex Invest

Attracting investments into sectors of the RK economy by establishing Direct Investment Fund (DIF) together with major international investors

13 Direct investments and loans From 1500 to 7500 mln tenge

AL FALAH INVESTMENT MANAGEMENT

(KAZAKHSTAN) LIMITED

Up to 7500 mln tenge Macquarie Renaissance Infrastructure Fund

Up to 15 000 mln tenge Kazakhstan Hong Kong Development Fund

Up to 4500 mln tenge CITIC Kazyna Investment Fund I

From 300 to 1500 mln tenge Aureos Central Asia Fund

14 Direct investing, debt financing Up to 1800 mln tenge Falah Grous Fund

Up to 2250 mln tenge ADM Kazakhstan Capital Restructuring Fund

Up to 1147.5 mln tenge Russian-Kazakhstan Nanotechnology Fund

- Kazakhstan-Tajikistan direct investment fund

- Wolfensohn Capital Partners

- Kyrgyzstan-Kazakhstan Investment Fund 33

Measures of state support: tools for innovation

development

34

Measure of state support (name) Operator providing measure of state support

(state body, national company)

1 Direct project financing JSC “NATD"

2 Venture financing JSC “NATD"

3 Innovation grant for acquisition of technologies JSC “NATD"

4 Innovation grant for holding of industrial researches JSC “NATD"

5 Innovation grant for support of activities on high-tech production at the initial stage of development JSC “NATD"

6 Innovation grant for patenting in foreign countries and / or regional patent organizations JSC “NATD"

7 Grant for training of technical personnel abroad JSC “NATD"

8 Innovation grant for attracting highly-qualified foreign specialists JSC “NATD"

9 Innovation grant for involvement of consulting, design and engineering organizations JSC “NATD"

10 Innovation grant for implementation of managerial and industrial technologies JSC “NATD"

11 Innovation grant for commercialization of technologies JSC “NATD"

12 Technologic business-incubation technologies services JSC “NATD"

13 Services of international centers engaged in transfer of technologies JSC “NATD"

14 Contests of business plans «NIF $50 K» JSC “NATD"

15 Republican competition «RATIONALIZER.KZ» JSC “NATD"

16 Creation and development of technology commercialization centers on the basis of research institutes

and universities

JSC “NATD"

17 Services of industrial design bureaus JSC “NATD"

18 Competition «Orleu-Akparatty» JSC “NATD"

19 Innovation Technologies Park JSC “NATD"

Measures of state support: export support tools


Operator providing measure of

state support (state body, national

company)

Service support for export stimulation

1 Information and analytical support (issuance of handbooks and other specials literature to help the exporters) JSC "Kaznex Invest"

2 Expansion of markets and search for buyers (trade missions to foreign countries, Meetings of "buyers and sellers", participation

in international trade fairs, promotion of trademarks, participation in humanitarian purchases)

JSC "Kaznex Invest"

3 Holding of trainings JSC "Kaznex Invest"

4 Assistance in addressing problems that hinder the export (Council of Exporters) JSC "Kaznex Invest"

Reimbursement of expenses for certain types of expenses

5 Reimbursement of some part of expenses of industrial innovative activity entities, related to promotion (branding) of certain

products and service at the foreign market

JSC "Kaznex Invest"

6 Reimbursement of some part of expenses of industrial innovation activity entities, related to registration of trademarks and

certification of products for the purposes of export abroad

JSC "Kaznex Invest"

7 Reimbursement of expenses for services involving the training of staff working in the field of export control, including in the

sphere of production of export-oriented products, abroad, and inviting foreign experts, consultants on the enterprises of industrial

innovation activity

JSC "Kaznex Invest"

8 Attraction of franchise JSC "Kaznex Invest"

9 Reimbursement of some part of expenses for payment for services on creation and launch of Internet-resource of industrial

innovation activity entity

JSC "Kaznex Invest"

10 Reimbursement of some part of expenses for payment for services on marketing research JSC "Kaznex Invest"

Insurance for exporters

11 Insurance of provider’s trade credits

JSC “KazExportGarant"

12 Insurance of leasing and factoring operations


13 Insurance of documentary credits


14 Insurance of bank guarantee


15 Insurance of credits provided to exporters or importer


16 Insurance of guarantee of advance payment return


17 Insurance of tender guarantee


18 Insurance of pre-shipping risks


19 Insurance of investments (direct investment and loans)


20 Reinsurance of risks (new tool, no information is available on website)


21 Trade financing as part of SPFIID program in the form of conditional deposits in bank of the exporter for lending foreign

customers within the insurance scheme of documentary credits


35

Measures of state support: financial tools

36


Operator providing measure of state

support (state body, national

company)

Lending of non-oil sector of the economy

1 Medium- and long term lending of investment projects JSC “DBK"

2 Lending of export (pre-export) operations JSC “DBK"

3 Lending of the Borrower’s needs in working capital as part of the implementation of investment projects financed

by DBK

JSC “DBK"

4 Financing of infrastructure projects, in which the lender considers and assesses the flow of cash receipts and

revenues of this object as a primary source of repayment of the loan (project financing)

JSC “DBK"

5 Issuance of guarantees and other obligations by DBK for third parties providing execution in cash

JSC “DBK"

6 Participation of DBK in corporate equities as part of financing of investment projects, as well as for ensuring the

return of the loans previously issued by the Bank

JSC “DBK"

7 Leasing (classic, redemptive, turnkey leasing) JSC “DBK"

8 Mezzanine loan JSC “DBK"

9 Financial leasing

JSC “DBK-Leasing"

Lending of agrarian sector

10 Development of agricultural infrastructure

JSC «Agrarian Credit Corporation»

11 Agricultural production infrastructure development through lending of unions of agricultural producers JSC «Agrarian Credit Corporation»

12 Ensuring the availability of credit resources (concessional) to the general small and medium agricultural

producers, which are most approached by territoriality to the location of agricultural production


13 Renovation and modernization of outdated equipment, working capital financing and refinancing of second-tier

banks’ credits to help ensuring food security and reducing food imports


14 Support of AIC subjects by financing current assets, including for spring sowing and harvesting


15 Leasing of process equipment and machinery not requiring installation JSC “KazAgroFinance"

16 Leasing of process equipment and machinery requiring installation JSC “KazAgroFinance"

17 Leasing of equipment for processing of agricultural and fishery products JSC “KazAgroFinance"

18 Leasing of vehicles, attached, trailed agricultural machinery

JSC “KazAgroFinance"

19 Leasing of brood farm livestock JSC “KazAgroFinance"

20 Lending of working capital, fixed assets, investment objectives and other projects JSC “KazAgroFinance"


Operator providing measure of

state support (state body, national

company)

1 Interest rate subsidies on loans PMC MEDT

2 Grant financing of first-time entrepreneurs PMC MEDT

3 Development of industrial infrastructure PMC MEDT

4 Recovery of entrepreneurial sector. Interest rates subsidies on existing loans

PMC MEDT

5 Subsidization of some interest on loans JSC «EDF «Damu»

6 Partial guarantee on loans JSC «EDF «Damu»

7 Reduction of currency risks of entrepreneurs. Interest rates subsidies on existing loans

JSC «EDF «Damu»

8 Strengthening of entrepreneurial potential:

• Accounting, tax registration and reporting; • Statistical reporting;

• Customs procedures services; • Advising on the implementation of quality management systems;

• Legal advice; • Advising on marketing issues;

• Service in the field of information technologies

JSC «EDF «Damu»

9 Support of first-time entrepreneurs (start-up projects):

1) short-term training of people with entrepreneurial initiative and existing entrepreneurs («Business Advisor» project);

2) providing a standard package of documents necessary for entrepreneur;

3) information and analytical support and organization of free access of entrepreneurs to business portal;

4) providing marketing research results in the priority sectors of the economy.

JSC «EDF «Damu»

10 Training of top management of small and medium businesses ("Nazarbayev University") JSC «EDF «Damu»

11 «Business relations» project - Support for the modernization of production by establishing business relations with foreign

partners:

• internships at foreign enterprises of similar profile; • establishing business relations;

• technology transfer and acquisition of equipment • mutual supply of goods, works and services; • acquisition of franchises; •

receiving grants from international and foreign organizations; • creation of joint ventures.

JSC «EDF «Damu»

12 «Damu-Ondiris» Program - Refinancing of loans at the rate of 8% JSC «EDF «Damu»

13 Financing of leasing transactions of SMEs through leasing companies and second-tier banks

JSC «EDF «Damu»

14 «Senior senhors» project – strengthening of entrepreneurial capacity in collaboration with international and foreign

organizations

JSC «EDF «Damu»

15 BAS Program - provides non-repayable grants to solve business problems with the help of external consultants

JSC «EDF «Damu»

16 Payment for the development of a comprehensive plan or expertise of the investment project JSC “KIID"

Measures of state support: tools for support of

SME and big business

37

Exposition of mechanical engineering industry

Analysis of investment attractiveness of the sector

2-3 success stories

2-3 niche projects

Concept-scheme of Global Development Expo

Stand of SPFIID 2015-2019: Investment attractiveness of the RK

Exposition of MSC industry Analysis of investment attractiveness of

the sector 2-3 success stories

2-3 niche projects

Exposition of chemical industry

Analysis of investment attractiveness of the sector 2-3 success stories

2-3 niche projects

«KAZAKHSTAN INVESTMENT EXPO 2014»

- OFFLINE

38

Thank you for attention!

INTERNATIONAL EXHIBITION

«KAZAKHSTAN INVESTMENT

EXPO 2014»

kazakhstan investment expo 2014

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