FOOD INDUSTRY OF KAZAKHSTAN
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1 FOOD INDUSTRY OF KAZAKHSTAN ALMATY, 2008
2 As of today the Kazakhstan s food industry is presented by 2330 functioning small, medium and large enterprises where the small business share is the largest one. It is represented by more than 2040 enterprises. In 2007 more than 72 thou. employees were engaged in the food industry, it means 10.5 % of the total industrial population. Within the food sector the beverage industry output makes up the major part 1.4 %, while other food production share is 1.2 %. The flour-and-cereals products output is 0,9 %, the vegetable oils and fats, as well as the dairy products % each, the meat and meat products - 0,5 %, the processed and preserved vegetables and fruit - 0,2 %, the processed and preserved fish and fish products, as well as the animal feed - 0,1 % each. Over the period from January to December, 2007, the food industry index volume as compared to the same period of 2006 has made 106,6 %. The share of the food sector is about 8 % within the manufacturing industrial structure, it ranks 2 nd after the metallurgy industry (16,9 %). Table 1. Production, import and export of the some products manufactured by the food enterprises in 2007 Products Production Import Export Consumprion 1 Meat and poultry meat, edible byproduct, ton , , , ,3 2 Prepared and preserved meat products, ton , ,0 24, ,4 3 Prepared and preserved fish, ton , , , ,3 4 Vegetables (except for potato), processed and preserved , , , ,6 mushrooms, ton 5 Fruits and nuts, processed and preserved, ton 3 479, ,2 222, ,2 6 Vegetable oils, ton , , , ,9 7 Dairy, ton , , , ,7 8 Flour, ton , , , ,2 9 Grit, including rice, ton , , , ,4 10 Bakery and confectioneries, ton , , , ,6 11 Sugar, ton , , , ,0 12 Chocolate, confectioneries made of chocolate and sugar, ton , , , ,9 Table 1 shows, that although the internal production potential exists, some food positions depend on import. First of all, it should be accounted for a low level of agricultural high added value production and its gradual reduction. Table 2. Agriculture comparative data (production, import and consumption of raw material and processed products), 2000 and 2007, in bln. tenge Raw material* Processing* * Production Import Consumption Production Import Consumption 402,0 10,9 333,2 1069,6 ( 266%) 218,4 47,0 262,0 314,7 ( 144%) 51,0 ( 468%) 229,2 ( 491%) 856,8 ( 257%) 530 ( 202%) * The dross agricultural output of the unprocessed products (1-2 processing stages; for example, meat of slaughter weight, grain crops, just produced milk, etc.) which are considered to be a raw material used for production of the end-final output; ** The raw material subjected to further processing (3 processing stage is the end-production products; for example, sausage, yoghurt, sugar, etc, including the beverage industry). 2
3 As far as the export operations are concerned, flour, grit, fish and fish products, as well as sugar form the major exporting share; vegetable oils, chocolate and confectionery products, meat and poultry meat, vegetables and dairy products form a rather small exporting part. Within the state aggregate food production structure, including beverage industry, Almaty city appeared to be a leader among other regions in Again, in January March, 2008 Almaty city took a premier place among the regions. manufacturing industry Almaty city held a leading position in 2007 and also in January - March, The South-Kazakhstan and Almaty oblasts were 2 nd and 3 rd respectively. Table 3. Share of food production, including beverage industry by regions of the Republic of Kazakhstan, %.. manufacturin g industry of the Republic January-December 2007, % January-March 2008, % Share of food production, including beverage industry state food production volume, including beverage industry total oblast producti on volume Share of food production, including beverage industry manufacturing industry of the Republic state food production volume, including beverage industry total oblast produ ction volum e Republic of х х Kazakhstan Akmola oblast Aktyube oblast Almaty oblast Atyrau oblast East-Kazakhstan oblast Zhambyl oblast West-Kazakhstan oblast Karaganda oblast Kostanai oblast Kyzylorda oblast Mangystau oblast Pavlodar oblast North-Kazakhstan oblast South-Kazakhstan oblast Astana city Almaty ciry Source: the RK Agency for Statistics, The food industry investments makes up 7.2 % of total manufacturing industry investments inflow. In 2007, the food enterprises capital investments, including beverage industry, made up about 360 mln.us$. (about 43 bln. tenge) while the metallurgy enterprises capital investments was approximately 1 bln.us$ (about 120 bln. tenge). Table 2.4 Direct foreign investments to the manufacturing industry, and also to the food industry, , in mln.us$ Total Manufacturing industry 832, ,7 520,6 303,6 644,1 867,7 4169,1 Agriproduct processing 64,9 43,4 37,5 61,0 51,6 40,2 298,6 3
4 Level of consumption of products manufactured by the food enterprises on the domestic market has been growing steadily, thus level of consumption considerably exceeds the internal production level. In 2007 the total food consumption level increased by % while internal production rate at the same period has increased only by % as compared to 2000 Diagram 1. Food output and level of consumption, , %, as compared to ,8 393, , , ,8 130,4 167,2 145,5 172,0 191,2 214,7 250, Производство Видимое потребление At the same time, although the total consumption level increased, the level of some food commodities consumption reduced to some extend. In 2007 the per capita consumption of some products had lowered: milk and dairy products - by 23,8 kg; oils and fats - by 3 kg; sugar and confectionery products - by 0,7 kg; vegetables (except for potato) - by 7,7 kg; potato by 19,2 kg as compared to The expenditure cross-section of food consumer preferences varies gradually. First of all it was caused by rise of prices for some products, raw material and resources required for their production, as well as changes of the consumer preferences and their tastes. Table 5. Household food spending cross-section, %. Total food spending Meat and meat products Grit and bread and flour products Dairy products Changes ,0 100,0 100,0 100,0 100,0 100,0-24,4 25,9 26,3 27,7 27,5 27,5 + 3,2 23,7 23,5 23,6 21,6 21,7 21,8-2,8 7,2 7,4 8,0 8,2 8,2 8,9 + 2,3 Sugar, confectionery products and 10,2 9,3 8,9 8,9 9,3 8,2-2,8 sweets Vegetables 6,8 6,9 6,8 7,4 7,6 7,4 + 0,4 Fats and oils 9,6 8,3 7,0 6,5 5,7 6,9-2,4 Fruits 4,5 5,1 5,7 6,2 6,4 6,5 + 2,4 Soft drinks 5,4 5,2 4,9 4,9 5,3 4,8-0,5 Fish and fish products 3,0 3,2 3,4 3,5 3,5 3,5 + 0,7 Eggs 2,0 2,2 2,3 2,1 1,9 2,0 0 4
5 In addition, when analyzing the food industry the geographical proximity of the major production participants should be taken into account. For example, East Kazakhstan, Almaty, Аkmola and Pavlodar oblasts may be considered as the meat production areas; Kostanai, Akmola and Almaty oblasts the dairy production; and southern regions of Kazakhstan, including Almaty and South - Kazakhstan oblasts the fruit and vegetable processing industry. Map of some processing enterprises. Fruit and vegetable processing Meat processing Dairy production Level of the food industry development may serve an indicator of the food security of the country which has been seriously shattered by drop in domestic food production and increase in importing the food. The domestic industry possessing an extensive experience in manufacturing the high quality products by using natural raw material, stands a good chance for accessing the foreign markets in future, thus, making its contribution to development of the economy of Kazakhstan. 5
6 For additional information please contact JSC Corporation for Export Development and Promotion KAZNEX Head office Republic of Kazakhstan, , Almaty, 5 th Floor, Bldg. 111 Gogol Str. Tel.: +7 (727) , Fax: +7 (727) , info@kaznex.kz web: Representation in Astana Republic of Kazakhstan, , Astana, Bldg.33 Tauelsizdik Str, 15 th Floor, Astanalyk Business Center Tel.: +7 (7172) , , Fax: +7 (7172)
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