Business News in Brief

The Hyundai AutoTrans company entered the Customs Union market. In 2012, about 250 trucks were exported to Belarus; this number will double in 2013. The company is supported by state programmes aimed at assisting small and medium businesses. The main goal of Kazakhstan’s State Programme of Industrial-Innovative Development is ensuring sustainable and balanced economic growth through diversification and increasing competitiveness. The programme has been instrumental in implementing new investment projects in traditional export-oriented sectors of the economy. The Business Road Map 2020 approved in 2010 works in four directions: supporting new business initiatives, recovering the spirit of entrepreneurship, reducing currency risks of entrepreneurs and strengthening the entrepreneurship sector. State support includes subsidisation of interest rates when receiving loans from the banks, partial guarantees of bank loans and development of necessary infrastructure. The Hyundai AutoTrans car assembly plant used some of these mechanisms. Director of the plant Shalkar Nurletov said thanks to subsidies allocated by the state, more than one billion tenge (about $6.5 million) was invested in production. In 2011, the plant has begun assembling buses, cars and trucks, which have been exported to Belarus.

An agreement to set up the United Transport and Logistics Company of Kazakhstan, Belarus and Russia has been signed at the St. Petersburg International Economic Forum. A source said the company would bring tangible financial gains to its shareholders and member states of the Common Economic Space. The agreement contains a feasibility study and a business plan. The business plan projects overall cargo turnover of 4.2 million standard units and approximately $1.6 billion in additional revenues for national railroad companies from using the infrastructure by 2020.

Kazakhstan has decided to increase its stake in the Kashagan oil field. ConocoPhillips will not be selling its 8.4 percent stake in the offshore Caspian Sea project to India’s ONGC Videsh, as planned since last year. Instead, Kazakhstan will use its pre-emption rights and put the stake in the hands of state-controlled KazMunayGas (KMG). The price of $5 billion is the same as ONGC Videsh would have paid. ConocoPhillips said it had been notified that the Kazakhstan Oil and Gas Ministry was exercising its rights to the 8.4 percent interest and had designated KMG as the buyer. The deal is expected to close in the fourth quarter of 2013. “The proceeds received by ConocoPhillips under the pre-emption will remain unchanged at approximately $5 billion, including customary adjustments,” said ConocoPhillips. “This is another important milestone in progressing our asset disposition programme. The decision by the Kazakhstan government to exercise its pre-emptive right demonstrates the value of this asset and moves us closer to completing this transaction.”

Three hundred ninety-six innovators have received state support through the new Industrialisation Programme in Kazakhstan. President Nazarbayev has called the innovation industry of science and knowledge a strategic resource of Kazakhstan in the 21st century. Over the period of implementation of the new Industrialisation Programme from 2010 through 2013, a variety of innovation infrastructure has been built in Kazakhstan, including eight technology parks, four development laboratories, 21 commercialisation offices, five regional commercialisation offices and two international centres of technologies transfer. The National Agency for Technological Development provides a range of support measures to innovators covering the idea stage to the final product. Support includes innovation grants, technological business incubation services, project and venture financing and commercialisation offices. From 2010 through 2013, 1,097 applications for innovation grants have been considered and 173 of them, totalling nine billion tenge ($59 million), have been approved for financing. In addition, 19 innovation projects amounting to five billion tenge ($32.9 million) were financed, seven Kazakh venture funds were established which financed 19 innovation projects and capitalisation of seven foreign venture funds. 96 projects making 650 million tenge ($4.3 million) were financed under the programme on business incubation. As a result, 177 new products are now being manufactured in the country.

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