Interview of the chairman of the Executive Board of "KazAgro" Holding" JSC Aitzhanov D. N. for "Kazakhstan capitalist" magazine
Question: Please, tell us about the Holding activities.
Answer: Strategic mission of the Holding is implementation of the state policy on stimulation of industrial-innovative development of agribusiness complex on the principles of effectiveness, transparency and effective corporate management of the Holding structures.
"KazAgro" National management holding includes 7 joint stock companies:
"Food corporation" NC" JSC
"Agrarian credit corporation" JSC
"Fund for financial support of agriculture" JSC
The Holding and its subsidiaries activities include wide range of financial, service and information and marketing services for agents of agribusiness complex. The Holding group of companies implements financing of agricultural production and processing, purchasing of modern agricultural machines, special machines, technological and processing equipment including on leasing terms, union of agricultural producers and rural population for joint business, microlending of households with medium and low income in rural areas.
In addition, lending terms on these programs are the most advantageous compared with other financial institutions in the country.
The Holding companies play important role in regulation and stabilization of domestic food markets, for this goal "KazAgro" to support agricultural producers continues work on formation and effective management of state resources of grain, implements purchasing operation of livestock products.
Question: Recently "KazAgro" attracted investments by placing Eurobonds. What does it give to agriculture?
Answer: $1 billion attracted to agrarian sector of Kazakhstan in result of Eurobonds issue by "KazAgro" Holding besides investment component has a range of other key meanings both for households and agriformations and for the country in the whole.
At first, profitable deal drew attention of large west investors to agriculture of Kazakhstan. For the first time the company from agricultural sector of the republic was evaluated at the level of the sovereign and recognized the industry as perspective to invest. In addition, the issuance of international bonds of the Holding provides an additional opportunity for agricultural business to diversify its sources of funding.
The deal has recorded a record low cost of debut debt issue of Kazakhstan issuer in such a long circulation period. Placing by "KazAgro" is the first in the history of the issuance not from financial, oil and gas, energy and steel sectors of the republic, which opens up significant opportunities for other potential issuers from agricultural and food sectors of the economy of Kazakhstan.
Assets from placement will be directed to implementation of priority long-term projects within Agro-industrial development program "2020".
Question: Please, tell us about plans of the Holding for implementation of investment projects in the village.
Answer: Key tool of production increase support in agribusiness complex is lending and investment activity.
As you know, investment project is meant a set of measures providing creation of new, expansion and renewal of existing facilities, including the acquisition by agribusiness complex agents of fixed assets with their necessary modernization, as well as acquisition in leasing of production facilities in agricultural sector for their further development.
Thus, the investment portfolio of the Holding consists of 300 investment projects worth KZT 215 billion. "KazAgro" during 2013-2014 plans to put into operation 76 projects worth KZT 59.1 billion in the agro-industrial complex of the republic. It should be noted that today 223 projects worth KZT 151.01 billion are introduced.
It is assumed that this year production will be launched on 8 large-commercial dairy farms, 13 greenhouses, 5 vegetable stores 5, 21 breeding reproductive farms, and 5 poultry plants. In addition, the plans of "KazAgro" national holding include construction and modernization of 7 grain stores and introduction of drip irrigation in 4 households.
During the period of construction and commissioning of these plants more than 10.3 thousand jobs will be created.
However, "Agribusiness 2020" program provides new support tools to subsidize interest rates on loans and investment subsidies that are targeted to develop agricultural business in such areas as development of dairy and meat livestock, sheep breeding, etc.
The Holding has funds to finance investment projects in these areas.
In addition, according to the Agribusiness - 2020 program in the current year it is planning to subsidize interest rates for leasing of agricultural machinery. The Holding within this subsidizing program intends to provide the necessary funds to agribusiness to update agricultural machines. The following year, also it is planning to launch programs of investment subsidies and interest rate subsidies on loans, which will also help to increase the availability of financial services in the agribusiness sector.
Question: What tasks are set before the Holding?
Answer: It should be noted that one of main tasks of the Holding for 2013 is improvement of lending and business procedures aimed at expansion and simplification of availability to finance agents of agribusiness complex.
To speed up the process of collecting the documents the transfer of documents required for the loan will be carried out to an electronic format and integration of the credit process in e-government public services. The borrower will be able to watch the course of consideration of its application on the information portal of the Holding online.
Work is carried out on organizing services rendering by the Holding on the principle of "one window" through the placement of branches and representative offices of subsidiary companies in the same building at the regional level and the establishment at district level of farmers service centers in order to reduce financial and labor expenses of agricultural producers.
Also currently the issue is developing on expanding range of financial products to meet the needs of agribusiness.
Question: To what extent are the Holding has financed spring field works this year?
Answer: This year the Holding will direct for spring field and harvesting more than KZT 77 billion, of which KZT 51 billion are already brought to households and agriformations. At present, 3 891 applications worth more than KZT 71.9 billion are received from domestic agricultural producers. Including by this time 2 898 applications for KZT 51.2 billion are financed. 609 applications for KZT 16.4 billion are on consideration in the Holding subsidiaries.
In addition, to support the farmers during the planting campaign the subsidiary company of the Holding – "KazAgroFinance" has signed an agreement of agricultural machines leasing for the purchase of 1,070 pieces of agricultural machines totaling KZT 10 billion.
In this area there are no issues of concern, the work goes on.
To support small-scale agricultural producers engaged in the cultivation of cotton at the expense of the Fund for financial support of agriculture through microlending organizations, loans are given for up to 10 months at the rate of 8% for end-borrowers.
Question: Tell, please, about implementation of projects in meat animal husbandry.
Answer: According to the Project "Development of an Export Potential of the cattle meat" the Kazagro Holding carries out financing in several directions connected with development of domestic animal husbandry. Speech is about financing of creation of a network of farms loud-speakers with import of a breeding livestock, crediting of agricultural producers for acquisition of a uterine livestock and breeding bulls, financing of creation of feedlots with the developed infrastructure.
For expired two years to Kazakhstan over 30 thousand heads of breeding cattle, including 7,3 thousand heads at the expense of own means of agricultural producers were delivered. Execution of planned volumes of import of 2011-2012 made 136%.
For ensuring adaptation of the imported animals the special attention is paid to existence of strong food supply. Monitoring of the forages prepared by loud-speakers for wintering of 2012-2013, carried out by Holding shows sufficiency of available fodder resources, both on volume, and on structure.
On the average security of food supply made 120% at the standard of 23,5 fodder units. In structure of fodder resources, the specific weight of the rough, juicy and concentrated forages makes 55, 16 and 28% respectively.
During 2011-2012 implementation of the plan on financing country and farms within the Sybaga program made 140% on a uterine livestock and 163% on breeding bulls. In total acquisition of 115 thousand heads of the cattle was financed at the plan of 82 thousand. High activity of implementation of the program is observed practically in all areas of the republic.
For forage production support to 15% of borrowed funds provided to peasants it is provided for development of own food supply.
The main objective of the current year is the conclusion of domestic meat to the export markets, in particular to Russia. For this purpose the Kazagro Holding in the current year began implementation of the project on creation of a livestock cluster on the basis of state-private partnership.
Its main objective to unite resources of all interested participants of the Project and decrease in transaction expenses by production and realization of the Kazakhstan meat for export.
The mechanism of work of Consortium assumes long-term, till one and a half years, financing of the meat-processing enterprises and modern feedlots with the obligatory requirement of commission of forward transactions with cattle farms suppliers.
Differently, under future volume of young growth with accurately stipulated price of purchase feedlots and meat-processing plants will advance peasants, and they, in turn, can use the received money for the production needs, for example, on preparation of forages, acquisition of an additional uterine livestock.
The mechanism of work of Consortium received a positive assessment from producers and 7 regional clusters are created now in Kazakhstan. The participation in work of Consortium 166 enterprises, including 21 enterprises for processing, 36 loud-speakers and feedlots confirmed 109 farms suppliers of cattle.
Many thanks for interview and successes to you