The main aim of the investment is to supply finished products to the Chinese market, according to a statement from Kazakhstan’s first international meat industry forum KazMeat Astana 2016.
In January, Rifa Holding Group signed a memorandum of understanding (MOU) to invest US$11m in the construction of several beef and lamb farms, feedlots and meat processing plants in the East-Kazakhstan Oblast, with an overall capacity of 17,000 tonnes (t) of meat per year. The project will be implemented as a joint venture with local company Eurasia Holding.
Export focus
Wu Jie, chairman and CEO of Rifa Holding Group, said the companies planned to export at least 80% of the meat produced to China. Once all of the proposed projects are implemented, the company should export the equivalent of 1 million carcases of cattle and 100,000 carcases of lamb in finished products to the Chinese market.
“Kazakhstan is suitable for the cultivation and production of meat. We have very big geopolitical ties [between China and Kazakhstan]. China is currently the world’s largest importer of meat. So why should we not import meat from our partner, Kazakhstan?” said Wu Jie, adding that any proposed projects would probably be developed as joint ventures with local players.
“In the next three to five years we plan to invest about $200m in our projects. This money will be spent on the development of the meat and the meat processing industry in Kazakhstan and on establishing exports of finished products to China. We have well-established contacts with several companies. One or two of them are appropriate for us, so we plan to move forwards on this issue in June,” added Wu Jie.
The project has already been welcomed by authorities in Kazakhstan. In particular, the country’s deputy agriculture minister Gulmira Isaeva noted that Kazakhstan is a neighbour to both China and Russia – two of the world’s largest importers of beef – which purchase 1 million tonnes of beef a year from overseas. As such, said Isaeva, Kazakhstan has an excellent opportunity to exploit this situation and develop export supplies.
Similar project
Kazakhstan’s beef industry now seems to be attracting a number of foreign investors. Just recently, a similar project between Italian company Inalka Eurasia and local manufacturer JSC Aktep was announced. In this instance, the creation of a vertically integrated company, with several farms and meat processing facilities, is envisaged, with a total investment of US$100m. Almost all of the project’s total capacity of at least 20,000t of meat per year will be exported, primarily to European countries.
Kazkhstan’s cattle population currently amounts to 6.1 million head, but, according to numerous forecasts, thanks to the implementation of several major projects, it could grow to 10 million head by 2020.