Kazakhstan’s strategic geographic location, vast expanses of fertile land and the country’s current emphasis on the renewal of its agricultural industry have attracted the interest of foreign investors.
The government of Kazakhstan has launched an agricultural renewal campaign as part of a broader initiative to diversify the country’s economy away from a dependence on oil and gas. Kusto Group, an international multi-sector corporation led by Kazkahk entrepreneur, Yerkin Tatishev, has played an instrumental role in developing strategic public-private partnerships that aim to build a sustainable protein export business and modern agricultural sector in Kazakhstan.
“This is a project where the winners can include local farmers in rural and under-developed regions – it can include city dwellers looking for affordable, local sources of food and meat, and it can benefit exporters and foreign customers with a growing demand for healthy products,” said Daniel Kunin, a Managing Director at Kusto Group. “Many others who stand to benefit in the complex web that is agribusiness. I believe Kazakh agriculture will stand out because it will be sustainable – which is a very attractive way to generate income, reduce poverty and build lasting wealth.”
Kusto Group inks major deal with Tyson Foods
Kusto Group recently signed a landmark deal with Tyson Fresh Meats and the government of Kazakhstan that in the first phase will lead to the construction of a modern meat processing facility in Kazakhstan. Tyson Fresh Meats is a division of US-based Tyson Foods, one of the largest food processing companies in the world and a leader in the field of protein.
“We’re pleased to execute an agreement with the Government of Kazakhstan and partner with Kusto,” said group president Tyson Fresh Meats, Steve Stouffer. “This opportunity supports one of our growth strategies to expand Tyson’s global business, and we look forward to bringing our expertise and capabilities to the country of Kazakhstan.”
The deal is the largest in Kazakhstan’s agricultural sector since the country’s independence. It is projected to provide an annual agricultural economic benefit to the country in excess of one billion dollars. The investment by a large, leading American company represents a tremendous vote of confidence in Kazakhstan’s commitment to modernize its agricultural sector.
“We are delighted to welcome Tyson Foods to Kazakhstan,” stated Kazakhstan Prime Minister Mamin. “Tyson is a world-class company with the expertise necessary to help Kazakhstan jump-start the transformation of our agro-protein capabilities and help us create an ecosystem that will increase our beef herd size and establish conditions to support thousands of new high-quality jobs in the country. We look forward to a long and mutually beneficial collaboration.”
Through this deal to expand its beef operations internationally, Tyson Foods aims to boost its sales to Central Asia and the nearby markets of China, Russia and the Middle East.
Kusto Group’s joint venture with Valmont Industries and Global Beef
In July 2019, Kusto Group signed a partnership agreement with Valmont Industries and Global Beef to build a facility to manufacture modern irrigation systems in Kazakhstan. The Nebraska-based Valmont Industries specializes in producing innovative, high efficiency agricultural infrastructural solutions.
The project is backed by a $50 million investment, and the planned facility is projected to have the capacity to produce 1000 irrigation systems per year.
Kazakhstan’s agricultural sector lacks the modern infrastructure necessary to support sustainable growth. Currently, only 7% of arable agricultural land is irrigated and this land accounts for 40% of the country’s total crop yields. With 75% of Kazakhstan’s territory suitable for agricultural production, the introduction of modern irrigation will have a transformative effect on the industry.
It is estimated that the application of Valmont’s modern irrigation technologies will potentially increase crop productivity and reduce agricultural costs in Kazakhstan by 50%.
Modern irrigation systems can increase crop yields substantially. At the same time, these highly efficient systems reduce water usage, helping reduce environmental impact. The impact of efficiency savings across all kinds of crops, from rice to corn to cotton, will be substantial. Implementing modern irrigation methods will make it possible for Kazakhstan’s agricultural sector to compete on a global market.
“It is a tremendous honor to help lead the development of sustainable agriculture in Kazakhstan,” said Josh Dixon, the Vice President and General Manager of International Irrigation for Valley Irrigation, a Valmont company. “In tandem with the Kazakh government and our partner Kusto Group, we will transform the country and the region.”
Kazakhstan’s Prime Minister, Askar Mamin, recently said on a visit to Valmont Industry’s facilities in Nebraska that Kazakhstan plans to increase the area of irrigated land from 1.4 million hectares to 2 million by 2022 and to 3 million hectares (7.4 million acres) by 2030.
Expanding Kusto Group: KazBeef and KazSeed
Kusto Group’s local beef operation, KazBeef, has emerged as an innovative leader in the regional livestock industry. The company was the first to import pedigree Angus and Hereford cattle from the United States, establishing a strong genetic foundation for its herd.
KazBeef recently expanded its operations with the opening of a new meat processing facility in the Akmola region where they currently have 120,000 hectares of pasture that supports a 5,000 head heard of cattle. The new plant has increased the company’s storage capacity to 6,000 tons of produce per year.
The company has implemented a holistic approach to their operations with an emphasis on quality control from seed to table. To ensure the best quality, highest yield seeds for their fodder crops, Kusto Group established KazSeed, a joint venture with the US-based Baumgartner Agricultural Science and Service (BASS), to develop and produce non-GMO seeds bred specifically for the climate and soil conditions of Kazakhstan. Through the introduction of world-class seed production techniques, Kusto Group aims to produce sustainable and nutritious grain in volumes that can help the entire agro-economy and ultimately turn Kazakhstan into a seed hub of Central Asia.
“You can draw an analogy with human health – it is ideal when everything works in tandem: sleep, proper nutrition, physical activity, mental state,” says Kunin. “Also, in the agricultural business, quality inputs will result in a well-functioning system – from the production of high-quality feed, the use of the best seeds and irrigation technology to the sale of finished products.”
Building partnerships across borders
“For a country like Kazakhstan, with tremendous potential, it is essential to build partnerships across borders and not shy away from imitating successful innovations,” says Yerkin Tatishev, Chairman of the Board of Directors of Kusto Group.
According to Kunin, “In our partnerships, the operating principle is to treat a partner as if they were a team-member of Kusto. This ethic pays huge dividends in the medium to long term.”
“Partnerships with leading US companies enables us to combine the most advanced technologies and best practices in today’s industry with Kusto Group’s industry knowledge, experience and local expertise. It is crucial to take advantage of these invaluable opportunities for collaboration.”
For Kusto Group, the transformation of Kazakhstan into a global agricultural player is possible through the development of strong public-private partnerships that seek to provide first-class products for consumers around the world.