New Law Allows Foreign Agricultural Businesses to Lease Kazakh Land for 25 Years

ASTANA – Kazakh authorities recently amended the agricultural sector legislation, allowing the country to prolong land leases, facilitate tax administration and provide investment preferences for foreign investors, reported LS, the local web portal.pole_04

The land lease term for foreign companies has increased from 10 to 25 years, according to the Ministry of Agriculture. The Agribusiness 2020 programme will subsidise investments at the rate of 30-80 percent in priority areas. The volume of investments in the agricultural sector in 2015 was 167 billion tenge (US$457 million).

“Chinese companies are interested in establishing joint ventures in Kazakhstan for processing agricultural products (meat, oil, grains and tomato processing plants) and establishing feedlots, with further promotion of the Kazakh products for export,” noted the ministry.

The Ministry of Agriculture is working to attract Chinese companies to Kazakhstan, in particular such large multinational corporations as Rifa Holding Group, CITIC, AIJIU and COFCO.

Rifa Holding Group will invest in the construction of the East Kazakhstan region meat processing plant. The facility will have an annual capacity of 17,000 tonnes of lamb and beef feedlots, while simultaneously feeding 50,000 head of sheep and goats and 1,000 head of cattle.

In total, 80 percent of the companies will be focused on exporting to China. The total project cost is estimated at 7.9 billion tenge (US$21.5 million), with Rifa Holding Group’s share amounting to 49 percent. The company also intends to cooperate with a number of Kazakh companies in beef production.

CITIC, one of the leading investment corporations in China, is interested in investing in the livestock sector. The company recently signed an agreement with Baiterek National Holding to implement investment projects in the agricultural sector. The corporation intends to finance the construction of broiler poultry farm feedlots on an industrial scale.

Working jointly with Total Impex in the North Kazakhstan region, AIJIU, the Chinese industrial group, is advancing an oil and cereals deep processing investment project worth $58 million. The yearly capacity of the plant is 200,000 tonnes each of flour and fodder and 80,000 tonnes of vegetable oil.

Producing and processing Kazakh tomatoes has become a priority for COFCO. The company is seeking cooperation with Eurasia Agro to invest in projects to develop a cluster of tomato-growing and tomato paste production facilities in Kyzylorda, East Kazakhstan and West Kazakhstan regions. The projects are worth more than $80 million in the areas of tomato cultivation and products. Due to the joint projects, there are plans to increase tomato production to 120,000 tonnes.

Oriental Patron, a financial group from Hong Kong, and a partner intend to invest approximately $500 million to develop the Kazakh company Kazexportastyk. The funds will be used to develop the deep processing of agricultural products for further promotion in the Chinese market.

The Ministry of Agriculture will sign a joint action plan with the Chinese companies to implement the projects.