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Project Name: "Development of production of horticultural crops within Food Belt of Astana city" "Astana Agro" Agro Firm" LLC.

 

I.                   Project background:

 

1.      Project value,

in million USD

2.   Project location

3.   Project documentation (design documentation, operating documentation, design estimate documentation, feasibility study, working program)

Yes/No, level of readiness

4,562 mln KZT

 

21, Tsentralnaya street, Mynbayeva village, Nurinskiy district, Karaganda Region

Feasibility Study as of 23/11/2011; Design Estimate Documentation for main pipeline was completed only in May 2015, with failure to meet terms specified in contract, i.e. November 2012, by the executor "BST Group" LLC. In this regard claim work is under process. Agro Firm's claim for core collection to the amount of 19,600 thousand KZT including state duty from "BST Group" LLC fulfilled. Works on recovery of debt sum are under process.

Design Estimate Documents for vegetable store are not completed due to comments of Republic State Enterprise "Gosekspertiza". Agro Firm conducts claim work. Agro Firm's claim for collection of debt amount and fee is fulfilled. Works on recovery of debt sum are under process.

 

II.                Project description

4.    Project description

Establishment of Food Belt around Astana city, provision of Astana residents with qualitative domestic organic products at reasonable price, improvement of food sustainability of the region by maintaining qualitative storage of products and sustainable reserves of fresh vegetables (potatoes, cabbages, carrots).

Vegetable store for 10,000 tons of vegetables, including 6 thousand tons of potatoes, 2 thousand tons of cabbages, and 2 thousand tons of carrots.

Main and distribution pipelines. For irrigation of fields, it is planned to construct main and distribution pipelines with total length of 8 km 483 m, pumping station, transformer substations and storage pond for 500,000 cubic meters in K. Mynbayev village, in Nurinskiy district, Karaganda region.

5.    Finished product (annual amount, tons etc.)

It is planned to grow 6 thousand tons of potatoes and 4 thousand tons of vegetables: 2 thousand tons of carrots and cabbages each.

6.    Source of raw materials (underground resources)

None

7.    Sales outlet (the Customs Union, PRC, etc.)

Domestic market

8.    Project implementation period (Road Map)

 

2012-2016

9.    Expected year of commencement of construction

2012 год

10.              Expected date of project commissioning

2016 год

11.              Availability of land plots

According to the agreement for the lease of land plot dated 15/06/2012 with State Enterprise "Department of property and land relations" of Nurinskiy district, Agro Firm was provided 6 land plots designated for agricultural use in Korganzhanskiy rural district in Nurinskiy district with the area of 651.4 ha, including 38 ha for construction of vegetable store facilities, pumping station, main and distribution pipelines for a period until 08/01/2017.

12.              Availability of transport infrastructure (railway, road transport)

Distance to Mynbayeva village – Karaganda city Highway is 220 km; to railway in Osakarovka settlement is 86 km.

13.              Utility connection access (power, water, sewage etc.)

Electric power supply is provided for in accordance with Technical Specifications dated December 2, 2011 No. 000616, issued by "Karaganda Regional Energetic Company" LLC from existing 35/10 kV substation; on-site lines will be supplied from 10/0.4 kV transformer substations. Water supply source is Nura river.

14.              Availability of facilities (please, indicate area and parameters of facilities)

Agro Firm rents an office facility with area of 37.5 m2, and store facility for machinery (hangar) with area of 290 m2. 

Opportunities for Kazakhstan companies to establish minimum registered capital (30% of total project value) for fundraising

The registered capital of Agro Firm is 1,132,450 thousand KZT. Outstanding balance of State Balance is 973,763 thousand KZT, which is on current account of second-tier bank according to Budget Program 043.

15.              Availability of necessary budget funds or necessity for budget financing

Remaining balance of undrawn funds of Republic Budget at the amount of 973 mln KZT is at current accounts in second-tier banks and Treasure House there is no need in budget financing.

16.              Total amount of new jobs

Staff number will be 180 persons, including 130 temporary workers and 50 seasonal workers

17.              Total amount of jobs for the construction period

25

18.              Labor force quota

 

None

19.              Investment preferences

Partial exemption from tax duties (-70 % of amount of tax levies).

20.              Other measures of state support

Subsidies are not provided due to the lack of operating activities.

21.              Current project state

 

Due to non-use of land plot with total area of 651.4 ha for intended agricultural production, according to Order Act No.02-14/1 dated 08.01.2016 г. Agro Firm was provided with extension of land lease terms until 08/01/2017 года. By virtue whereof search for potential investment for implementation of investment project is under process.

22.              Project implementation period. Action plan (further plan of actions on the project)

Executive board of Agro Firm searches for an investor in order to conduct spring field works on fields of Agro Firm on area of 651.4 ha for sowing agricultural crops (potatoes and carrots).

23.              Social and economic impact from project implementation

According to Feasibility Study: in Kazakhstan over 85% of potatoes are grown in private households and about 15% by agricultural enterprises. In average Astana city consumes 4% of the total national consumption of potatoes, which is over 70 thousand tons annually. In consideration of 4% increase of population of the capital city, being target consumer, over 5 years the market capacity will increase up to 100 thousand tons. In Karaganda region, potatoes are grown on area of 7,623ha. Main cultivation districts are: Abayskiy (3,500ha), Nurinskiy (750ha), Shetskiy (750ha), and Osakarovskiy (200ha).

Project implementation will allow creating 180 jobs, including 130 continuous jobs and 50 seasonal jobs.

 

III.             Project participants:

 

On behalf of the Republic of Kazakhstan

24. Company name:

"ExpAgro" LLC and "NurAgro" Agro Firm" LLC

25. Project participation form (JV's share in the capital, loan (credit), EPC (contractor)

"ExpAgro" LLC – 99.99866484%

"NurAgro" Agro Firm" LLC – 0.00133516%

26. Corporate profile

By the decision of of Board of Directors of NC Food Contract Corporation JSC (hereinafter referred to as Corporation) dated October 22, 2004, "Expert Agrarian Company" LLC (hereinafter referred to as "ExpAgro" LLC), the subsidiary enterprise of Corporation was established, which is its sole founder with 100% of shares in the registered capital. At the instruction of Corporation, since 2007 the company has implemented investment projects in the field of development of Agrarian Business: "Development of production of horticultural crops using drop irrigation in the southern regions of the country (South-Kazakhstan Region and Almatinslaya Region)". Company's activities are aimed to provide Kazakhstan' people with qualitative domestic organic food products and development of Kazakhstan's processing industry

27. CEO's contacts

Berik Tulyupergenovich TAKABAYEV, the director of "ExpAgro" LLC

Office phone: 8/7172/57-51-50

Kasymzhan Onlanbekovich ZHANZAKOV, the director of ""NurAgro" Agro Firm" Office phone: 8/7272/54-97-94

28. Contact person on the project

Aliya Orynbassarovna KUSATAYEVA, Head of Project Monitoring Department of "ExxpAgro" LLC, Aliya-tleubekova@mail.ru

 

IV.              Proposals on project implementation

 

29.  Financing scheme (investments to capital or loans)

30.     Process scheme (terms for delivery of equipment, technology transfer etc.)

31.    Other proposals (if any)

32.    Necessity in additional investments

Terms for sales of share of "ExpAgro" LLC in the registered capital of Agro Firm:

1.   provision of grace period up to 1 year  with instalment payment plant for at most 5 years;

2.   provision of bank guarantee at the amount of annual contribution, therewith guarantee amount must cover the total amount of annual contributions;

3.   initial installment at the amount of 10% of sale value within 30 days after signing contract for sales of "Agro Firm" LLC's share in the registered capital of Agro Firm.

None

Due to the fact that designers did not complete the design estimate documentation for construction of main and distribution pipeline, as well as incompleteness of design estimate documentation for vegetable storage the project is not implemented. However, executive body of Agro Firm continues to search potential investors for utilization crop lands. As for undrawn funds from Republic Budget at the amount of 973.7 mln KZT, it is planned to reorient them to activities of Asset Management Fund to be established as a part of "ExpAgro" LLC (there is a resolution of State Committee on establishment of Asset Management Fund).

Funds available are insufficient for implementation of the project.