How Support From Baiterek Holding Helps Kazakhstan’s Producers Export
The pandemic has set some boundaries, from trivial movement of people to promotion of business processes. However, Kazakhstan’s entrepreneurs do not intend to sit around and wait indefinitely. They do their best to look for new ways to develop their businesses. And more and more often this path goes abroad. But exploring the market alone is not easy. Commercial risks are high.
Baiterek Holding helps build foreign sales to Kazakhstan’s producers safely and comfortably. In particular, Holding’s subsidiary, Export Insurance Company KazakhExport, which is also a subordinate organization of the Ministry of Trade and Integration of the Republic of Kazakhstan, has suitable support tools. Moreover, stake is placed is on non-resource exports.
List of company's projects includes unique production facilities, such as COOL INFINITY, which started assembling and exporting freight refrigerator wagons a year ago.
‘They are necessary to transport perishable foodstuffs - meat, fruits, vegetables. A freight refrigerator wagon can maintain a required temperature regime for a long time - about 10 days,’ says General Director of the enterprise Valentin Kargin.
This manufacture is unique because it is the first and only one in the CIS. Production of such wagons has been awaited for a long time. After all, the existing fleet of railway freight vehicles is outdated and can no longer cope with a current traffic volume. Therefore, both in the domestic and foreign markets, our ‘thermoses’ have a green light. Today, they are bought both in Kazakhstan and in Russia. North Kazakhstan machine builders are ready to produce about 20 wagons every month. Producers themselves believe that such a high-tech project has been implemented and developed further with the help of state support.
‘In 2020, we raised a bank loan for an amount of 500 million KZT under KazakhExport insurance coverage. Investments were used to buy raw materials and consumables for production of insulated wagons. Now the enterprise is expanding, we plan to purchase equipment, master production of new products. Therefore, we will approach them seeking help more than once,’ said Valentin Kargin.
Today, KazakhExport is a key operator for development of the country's export potential. But within Baiterek Holding, another subsidiary is also involved in supporting exporters.
‘An important mission for us is to increase an export potential of Kazakhstan’s business. Our subsidiaries, Development Bank of Kazakhstan and KazakhExport, focus on solving this problem. Volume of export earnings through DBK for 7 years from 66 implemented investment projects amounted to 4.1 trillion KZT,’ stated Aliya Murzagaliyeva, Director of the Asset Management Department of Baiterek Holding.
KazakhExport has 18 financial instruments in its arsenal. One of the most popular areas is insurance for loans and even receivables. Another domestic enterprise from Akmola Region, Novopack, which produces polymer packaging for any bulk cargo, has decided to use this service.
‘We have used instrument of insurance of short-term receivables as we are afraid for safety and return of funds of sold goods with a deferred payment. The Russian market is very saturated and marginality is not the highest one and we have decided not to compete with a price but to choose a strategy for providing extra services as a deferred payment,’ explained Serik Keruenbayev, Deputy Commerce Director of Novopack.
In addition to being attractive in terms of payment for goods, Kazakhstan’s enterprise has many other competitive advantages. One of them is a wide range of products. We produce wagon liners, big bags and sacks. In manufacture of all products, only primary polymer raw materials and high-quality foreign additives are used. Container is strong and durable. All this together led to successful sales in the CIS.
‘Now we sell our products not only to Russia and Kazakhstan but also to Belarus, Uzbekistan, Tajikistan, Armenia, Ukraine. In the future, we want to cover export to Eastern Europe - Poland, Moldova, Romania,’ says Serik Keruenbayev.
Business history of these enterprises shows how important it is to help a partner who guarantees commercial security. It should be noted that in the last three years alone, KazakhExport has increased volume of exporters' insurance by 3.4-fold.
‘Through this company last year we provided insurance support to 91 exporters for an amount of more than 134 billion KZT, carried out trade financing for 16.1 billion KZT and pre-export financing for 13.5 billion KZT,’ Aliya Murzagaliyeva clarified.
Tandem of business and the state proves its effectiveness: not in words but in numbers. Last year alone, value of export contracts amounted to 588 billion KZT. This trend suggests that it is becoming more real and easier to take your place шт the sun in the export market.
