republic of kazakhstan “ontustyk” sez
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Republic of Kazakhstan “Ontustyk” SEZ. A Competitive Base for Textile Investment. Content. Republic of Kazakhstan Stable business conditions Banking sector Textile industry Resource base Logistics Cotton-textile cluster “Ontustyk” Special Economic Zone Comparative analysis - PowerPoint PPT PresentationTRANSCRIPT
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I nvest in South
Kazakhstan
Republic of Kazakhstan“Ontustyk” SEZ
A Competitive Base
for Textile Investment
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I nvest in South
Kazakhstan
Content
• Republic of Kazakhstan
• Stable business conditions
• Banking sector
• Textile industry
• Resource base
• Logistics
• Cotton-textile cluster
• “Ontustyk” Special Economic Zone
• Comparative analysis
• Requirements for the investors
• To sum up
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I nvest in South
Kazakhstan
A strategic location in Central Asia A strategic location in Central Asia
IndiaPak
ista
n
Turkey
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Kazakhstan
• Political and Social Stability• GDP growth - 9% • Inflation level below 8%• Unemployment level below 7%• Increasing foreign investment• Increasing export • Long-Term State support
- Regulatory basis- Safety
- Infrastructure• Global support: EBRD, ADB, World bank, others.
Stable business conditions
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Kazakhstan
Banking sector
• Developed banking sector
• Local Banks have operating agreements with International
banks
• Accounts in Foreign currency
• Local currency fully convertible
• Computer banking is available
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Kazakhstan
Textile industry
• Joint Stock Company “UTEKS” is a cotton processing plant : 6 thousand tons of OE. Product range: Combed and cotton yarn. Machinery: Rieter.
• Joint Stock Company “MELANGE” : cotton plant producing 5 thousand tons of yarn annually. Product range: Cotton yarn and fabrics. Machinery: Dornier, Thies, Benninger.
• “Kazakh Russian Textile Alliance” LLP : joint venture with Russian holding. Production capacity is 45 million m2 of fabrics. Product range: Gray cotton cloth. Machinery:Rieter, Picanol, Benninger.
• Nimex Corporation – 2 ginning plants, the total annual production capacity of both plants is 120 thousand tons. Product range: Yarn and fabrics. Machinery:Rieter, Trutzschler.
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Kazakhstan
Resource base
• Availability of local cotton
• Proximity to regional cotton producers
• Low energy costs
• Availability of water supplies
• Attractive labor cost
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Kazakhstan
Resource base Technical characteristics of cotton
TypeStaple
length, mm, not less
Titer, mtex, not more
Strength gf/tex, not less than
First grade (I)
Second grade (II)
4 33,2 180 26,0 25,5
5 31,2 190 24,5 24,0
6 30,2 200 24,0 23,5
7 29,2More than
20023,5 23,0
Note: Kazakhstan cotton is considered to be medium-staple length and according to the above mentioned characteristics fits Ne 8 –30 yarn.
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I nvest in South
Kazakhstan
• South Kazakhstan - a strategic location in Central Asia- easy access to regional raw material - availability of auto and train networks - international airports - reputable national carrier • Established logistics - Russia, Turkey, ЕU and USA
Logistics
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Kazakhstan
Cotton-Textile cluster
Cotton-fiber
Yarn production
Fabric production
Fabricfinishing
and dyeing
Made up goods
Raw-cotton
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Kazakhstan
Cotton-Textile cluster
• The law of RK “On Cotton Industry Development”• Cotton research institute • Highest quality seeds production plant• Cotton quality rating laboratories • Ginning plants • Transportation-logistic centers, cargo-warehouses• State subsidies:
- 40% cost of original and highest quality seeds- 40% cost on water delivery services - 40% cost of mineral fertilizers, seed disinfectors, herbicides
- part of the cost of combustive-lubricating materials - part of the costs on irrigation and drainage of the irrigated area - 100% cost on combating agricultural pests
• Development of new areas under crop for cotton growing• “Ontustyk” Special Economic Zone
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Kazakhstan
“Ontustyk” Special Economic Zone
• 200 Hectares near Shymkent (South Kazakhstan) reserved for textiles
• Advantageous tax laws
• Free Customs Zone
• Infrastructure
• State support
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Kazakhstan
Corporate Income Tax
“Ontustyk” SEZPreferential conditions for 10 years
VAT
Property Tax
Land Value Tax
0%
0%
0%
0%
Customs Duties Exemption
Administrative support Managerial Board
SEZ Tax Authority
SEZ Customs Authority
Infrastructure Budget
Taxation and Customs Support
Infrastucture
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Kazakhstan
“Ontustyk” SEZMain manufactures
MAIN MANUFACTURE
TYPES
COTTON CONSUMPTION
ANNUALPEOPLE No INVESTMENT $
Denim Jeans production
19 500 2 100 105 000 000
Terry Towel Plant
17 400 2 700 90 000 000
Knitted products Plant
7 800 1 650 75 000 000
Work Wear, military & other
fabrics21 600 1 920 120 000 000
Bedsheets and home textiles
13 500 2 340 144 000 000
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Kazakhstan
“Ontustyk” SEZ Additional manufactures
ADDITIONAL MANUFACTURESCOTTON CONSUMPTION
ANNUAL
Non-woven fabric production 2 000
Medical and cosmetic cotton products 7 000
High quality paper production 1 000
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“Ontustyk” SEZ Service Facility
• Temporary storages
• Certification centers
• Bank departments
• Service companies (repair and maintenance of textile
equipment, spare parts delivery, training centers)
• Service companies (delivery of dyes, chemicals,
accessories, etc.)
• Alternative energy and industrial water suppliers
• Aid posts
• Fire station
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Kazakhstan
• NUMBER OF MANUFACTURING PLANTS :
– > 15 textile enterprises
• INVESTMENT VOLUME:
– > $ 500 millions
• USE OF LOCAL COTTON :
– > 100,000 tons/year
“Ontustyk” SEZMain indexes
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Kazakhstan
Requirements for the investors
• 100% cotton products
• Use not less than 30% of local cotton
• Vertically organized companies
• High quality products
• Modern technology
– new machinery
• Strong Market plan
• Input of technical know-how and people
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Kazakhstan
Comparative analysis Industrial costs
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Comparative analysis Industrial costs
GAS $/m3
TURKEY 0,24 0 INDIA 0,181 CHINA 0,122
KAZAKHSTAN 0,075
UZBEKISTAN 0,02 5
ELECTRICITY $/kW
TURKEY 0,089 INDIA 0,0 86
PAKISTAN 0,065 CHINA 0,06 0
KAZAKHSTAN 0, 047 UZBEKISTAN 0,02 5
LABOR COST $/h
TURKEY 2,88
KAZAKHSTAN 0,95 CHINA 0, 76 INDIA 0,67
UZBEKISTAN 0,40 PAKISTAN 0,37
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Kazakhstan
Comparative analysisTerms offered to investors
TURKEY
CHINA
PAKISTAN
INDIA
KAZAKHSTAN
UZBEKISTAN
INCOME TAX 0% 33% 39% 36,6% 0% 18%
VAT 0% 17% 15% 12,5% 0% 20%
FINANCIAL RATING B- A- B+ BB+ BBB+
MEMBERSHIP IN WTO 1995 2001 1995 1995 NO NO
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Kazakhstan
To sum up
• Favorable business conditions
• Political and social stability
• Long-term tax preferences
• Free customs zone
• Regional hub with low cost raw material
• Competitive production costs
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Kazakhstan
Republic of Kazakhstan
President of the Republic of Kazakhstan Nursultan Nazarbaev
«We stand for the mutually beneficial two-way relationship with the Eastern and Western countries… Kazakhstan considers them to be important trade and economic partners and we continue to adopt their advanced experience of creation high-technology productions with high value added cost».
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I nvest in South
Kazakhstan
State Authority
«Ontustyk» Special Economic Zone Directorate
Kazakhstan, South Kazakhstan Region,
Shymkent city, Lengerskoye highway, 7km.
Tel./fax: +7 (3252) 51-11-93
www.textilezone.kz
E-mail: [email protected]