Vegetable oil production launches in East Kazakhstan region

ASTANA – Tag-Tin is the latest Kazakh company to use state financing to increase production to compete with foreign producers. The company is planning to build a sunflower and rape seed processing plant for export to China.

Photo credit: abctv.kz.

Photo credit: abctv.kz.

The new creamery will be the second in the country to process both crops. The facility, with a production capacity of more than 50,000 tonnes of raw material per year, is expected to launch in May.

Tag-Tin is a subsidiary of Vostok Agro, an agricultural and industrial holding specialising in crop production with a technologically interconnected production and distribution chain. One of the largest enterprises in the region, it plans to switch to production diversification and processing its own raw materials. The plant will use 50 percent of its raw materials and purchase the rest from farmers, according to Vostok Agro director Yerzhan Nurbayev.

“We plan to create a farm cooperative, which will include farms engaged in growing sunflower and rapeseed to guarantee the provision of a creamery with raw materials,” he said.

The cost of construction is estimated at one billion tenge (US$3.13 million).

“We received funding from the state. The project is implemented in two stages: the construction of the plant for processing agricultural products and bottling sunflower oil,” he added.

“Now, the plant owners aren’t interested in exporting sunflower seeds, but in processing them and receiving added value. The plant’s equipment can be easily switched to rape seed processing. That is, when the sunflower seeds are over or there is no need for it, the plant can start processing rape seeds,” said chamber of entrepreneurs agricultural and industrial department head Kairat Mamyrbaev.

He added rapeseed and sunflower oil are in great demand in the Chinese market. If sunflower oil can be sold in Kazakhstan, rapeseed will be processed and exported to China. The East Kazakhstan region is the second after the Almaty region where rapeseeds will be processed.

Many Kazakh farmers do not produce rape seeds, because it is not an easy process and they are more expensive than sunflower seeds. Last year, the price of rapeseeds reached 115,000 tenge ($360) per tonne, while the maximum price for a tonne of sunflower seeds was only 80,000 tenge ($250).

“This year, China had a crop failure of rapeseeds. But, unfortunately, we cannot export it in the form of raw materials. Kazakhstan is not included in the list of suppliers for this type of oilseed. We can export sunflower seeds, sunflower oil and rapeseed oil, but not rape seeds,” said Nurbayev.

Most Kazakh oil processing companies work for the domestic market, yet still can’t supply the demand. Russian companies are their main competitors. In 2017, domestic producers exported sunflower oil to Afghanistan, Tajikistan and Uzbekistan, but faced some challenges connected to increased railway tariffs and the unstable exchange rate.