Transport and Logistics Business Development Tour Leads to Potential Partnerships

ASTANA – Fifteen small and medium-sized business owners, including four women, in the transport and logistics sector returned to Kazakhstan on June 20 from a business development tour through Washington, DC; Chicago, Illinois; Jacksonville, Florida and Atlanta, Georgia, where they met potential American partners, received general and sector-specific business training and learned about the American business climate. At least four of the entrepreneurs, who come from across Kazakhstan, have returned with specific plans to partner with an American company they met during the trip.

The business development tour, which ran from May 30 to June 20, was the 11th tour conducted by the Kazakhstan Business Connections Programme, a project co-funded by the government of Kazakhstan and USAID as part of the Kazakhstan-U.S. Programme for Economic Development and implemented by Volunteers for Economic Growth Alliance (VEGA) and the International Executive Services Corps (IESC). The programme is also part of Kazakhstan’s Business Roadmap 2020. This tour was the programme’s second transport and logistics tour. Other tours have been in the healthcare, information and communication technology, agriculture and livestock, construction and the food industry, all designated priority sectors of the Kazakh economy. Before the programme ends this December, two more tours, in the textiles and food industry sectors, will visit different American cities.

In feedback collected shortly after the trip, four of the entrepreneurs reported that they were planning to use products they had encountered, including American software for tracking and organising truck movements for trucking companies, American equipment for tire retreading and American concrete-road-building technology.

Zharilgap Kulchikov, owner of a trucking company from Aktau, plans to use American truck tracking software, as does Yevgeniya Rybakova of Kostanay. Yuliya Nurmukhamedova, owner of a tire-retreading plant in Ust-Kamenogorsk, reported that she plans to purchase technology she saw in action during the trip. Oleg Belyayev, director of Ridder TransStroi and Auto Fort in Ridder, is very interested in bringing the concrete-slab road technology he saw in the U.S. to Kazakhstan. Belyayev told Kapital.kz on July 4 that he planned to meet with Oblast Akim Berdybek Saparbayev to discuss the road-building technology and the American partners ready to invest in Kazakhstan.

“I will show that there is good technology available, there are American partners who are ready to come with funds,” he said. He also said that the Americans he met on the business development tour were attracted to the high returns possible in Central Asia, higher than in the U.S., where competition is fierce. “Americans like the idea that, having invested some money, they will receive high revenues. We are a reasonable investment for them to receive future income.”

Unfortunately, Belyayev said, his company won’t be able to benefit from the new incentives Kazakhstan is extended to foreign investors, because his project will come in under the $20 million threshold for benefits. “I believe this is not right, since $20 million is a big amount of money for an SME. If we were eligible for these incentives, I could have conducted negotiations with foreign investors in an absolutely different way,” he commented. Companies eligible for businesses development trips must fit the Kazakh classifications of small business (no more than 50 employees) or medium-sized business (no more than 250 employees).

Gaukhar Yessentayeva, chief of party of the USAID Business Connections Project in Astana, told The Astana Times on July 26 that in addition to getting training and meeting American partners, trip participants also strengthen ties among themselves. They also act as business ambassadors for Kazakhstan. Many are surprised that American companies are interested in the Kazakh markets at all, given that their country is still relatively unknown. “Sometimes [the American business owners] don’t know where Kazakhstan is. And we always tell our people, ‘When you go, don’t be surprised [if people don’t know Kazakhstan]; try to represent our country as best you can.’”

At a press conference in Almaty marking the return of the entrepreneurs on June 20, Gabit Lesbekov, managing director of Kazakhstan’s Damu Fund, which recruits entrepreneurs to apply for the programme, said, “Implementation of the project results not only in the development of entrepreneurs’ business skills, but also in expansion of business contacts. After the business development trip, participants apply the new knowledge in practice and introduce their managerial experience obtained abroad.”

Learning about different styles of doing business is one of the programme’s benefits. Because most participants on the tours don’t speak English, Yessentayeva said, they are provided with translators who accompany them to meetings and trainings. The directness of American business meetings is often surprising to the Kazakh business owners, who are used to preceding conversations about buying and selling with lengthy introductions and small talk.

“The most positive effect from the trip to me was to see how American companies work in action: management, methods in their offices. This also helped me to meet new partners not only in the U.S. but among the participants of my group,” said Anatoliy Romashko of Almaty in his feedback about the tour. “I really liked the experience of negotiations that I had during the trip. All the knowledge and experience will help me in expanding my business,” said Kairat Zhienalin in his trip feedback.

The Business Connections Programme keeps in touch with participants, contacting them every six months to see how their businesses are developing and track any contracts or other activities arising from the trip. So far, out of the 132 entrepreneurs from Kazakhstan’s 16 regions who have taken part in the programme over the past two years, 13 have concluded contracts totalling over $13 million with U.S. companies. The biggest contract so far is a three-year, $10 million contract between the city of Karaganda and an American IT company to supply mobile connection stations. The latest trip appears likely to add to this total very soon.

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