Public-Private Partnership in Astana in Action

At an expanded government meeting on Aug. 6, the President stressed that the development of domestic businesses was a key priority.

2004131215The capital of our country, Astana, is the physical manifestation of entrepreneurship in Kazakhstan. Growth in this field is extremely visible. The number of registered legal entities as of July 1 in Astana was 44,843 and the number of small businesses among them exceeded 22,000.

In the first half of 2014, retail activity amounted to 282.7 billion tenge (US$1.6 billion) with an increase of 19.3 percent compared to the same period of 2013. The volume of industrial production in this period reached 119.169 billion tenge (US$655.3 million).

This trend to a large extent is promoted by Social-Entrepreneurial Coproration (SEC) Astana. Our organisation makes long-term projects possible. Our work, which we undertake with investors, provides advice on legal and financial issues and outsources non-core functions. Also, we provide assistance in the search for investors and long-term projects. We prepare relevant documents and share risks with entrepreneurs. It should be recalled that according to law, the SEC cannot control more than 49 percent of an organisation’s assets, which assures majority ownership by the entrepreneur.

Everything an entrepreneur needs to get started has been made available to them. The SEC partakes in entrepreneurial projects and puts forth financial assets including land, buildings and various types of equipment. The SEC welcomes innovative manufacturing, energy conservation and compliance with international standards of quality in export-oriented and import substituting manufacturing.

Thus, in February, we launched two projects, one was for the development, introduction and production of car filtration parts and special vehicles and a concentrated detergent for car wash systems. Mashstroi took part in the project. The other, no less promising project titled, “Energy Audit,” is aimed at improving energy efficiency and creating economically feasible measures to reduce energy consumption through creating a joint venture called Astana Energy Management, LLP.

SEC Astana is actively involved in efforts to create new jobs. Thus, with our assistance, more than 300 new jobs were created. The corporation contributes to reducing inflation. Among the corporation’s contributions is the construction of the Astana Agro centre, which has a capacity of 8,000 tonnes per year and a new vegetable store capable of holding 5,000 tonnes of crops. The company participates in Astana’s foodstuff stabilisation programme.  About 188.9 million tenge (US$1.038 million) of private investments were put into the construction of a fruit storage facility with a capacity of 500 tonnes.

It should be mentioned that Astana has a strategic location between Europe and Asia. Our SEC is actively developing two transport and logistics facilities, Saparzhai and Sayakhat. The Kazakh-Czech Technology Centre created under the State Programme of Accelerated Industrial-Innovative Development entails not only the highly precise production of metal, but training for personnel from all across Kazakhstan. Our main partners are the Association of Machine Tools of the Czech-Swedish company ESKAB.

In the spirit of the Fourth International Investment Forum titled Astana Invest 2014, which was held as part of the Sixth Astana Economic Forum, the corporation signed ten memorandums of mutual cooperation.

Currently, SEC Astana is planning to implement several projects with foreign partners. One of them, the Industrial Plant of Social Services , entails producing high quality meals for school students. The Cook and Chill process in which the meals are prepared assures that the food is cooked in a sterile environment . All equipment is compliant with international safety standards.

The project will be commissioned together with its logistics centre. Its preliminary cost is $35 million and it will be under construction from 2015 to 2017. The project will be very prosperous, not only because of strong sales in neighbouring cities, but because of its appeal in a wide array of sectors of the economy, such as air transport (in-flight catering,) health care and specialised Ministry of Internal Affairs correctional facilities, etc. Our wide array of potential clients significantly reduces our payback period.

There is another project underway that seeks to up insulin production through the construction of a biopharmaceutical production centre. Unique technology will cut production costs to the point where domestic insulin will be cheaper than imports. The project’s full cost is $187 million.

It should be noted that SEC Astana is open to all interested persons. In mid-September 2014, we will hold a round table and invite entrepreneurs. More information is available at our website astana-spk.kz.

The author is Chairman of SEC Astana.

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