Food Industry of Kazakhstan - RFCA .2 Food Industry of Kazakhstan Food industry plays one of the

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  • 1

    Tel: (727) 224 48 41

    (727) 224 48 44

    aigerim.k@rfcaratings.kz

    http://www.rfcaratings.kz

    Almaty 2015

    Food Industry of the Republic of

    Kazakhstan

    Analytical service

    Rating Agency of the RFCA:

    Head of the research:

    Dmitriy Sheikin

    Analyst:

    Aigerim Kulbayeva

    JSC Rating Agency of the Regional

    Financial Center of Almaty

    136 Dostyk ave., 9 th floor,

    office 904, 050051 Almaty,

    The Republic of Kazakhstan

    Any form of copying, reproduction, distribution and forwarding of texts, graphs and other types of materials posted on

    the website of the "Rating Agency of the RFCA" must be accompanied by a hyperlink to the website

    www.rfcaratings.kz and indication of the author of the material.

    Copyright JSC Rating Agency of the RFCA 2016

  • 2

    Food Industry of Kazakhstan

    Food industry plays one of the most significant roles in the economy of the Republic of

    Kazakhstan. According to the Committee on Statistics of the Republic of Kazakhstan, in 2014

    the food manufacturing contributed 6.0% to the total volume of the countrys industrial

    production, and 18.1% to the manufacturing sector.

    Source: Committee on Statistics of the Republic of Kazakhstan, RA RFCA

    Over the decade of 2004-2014 food production in Kazakhstan increased by 233.3%,

    reaching the volume of KZT 1 103.5 bln. in value terms. In comparison with 2013, production

    went up by 13.7%. The dairy industry, grain and starch mill industry, bakery industry and the

    meat industry are the largest (by production volume) in the structure of the countrys food

    industry. Their shares in Kazakhstans food production in 2014 were: 19.6% for the dairy

    industry, 19.1% for the grain and starch mill industry, 15.7% for the baking industry, 13.8% for

    the meat industry.

    Source: Committee on Statistics of the Republic of Kazakhstan

    331,1 370,2418,6

    490,8

    623,5 629,8695,2

    828,0 865,6970,1

    1 103,5

    0

    200

    400

    600

    800

    1 000

    1 200

    2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

    Food Production: 2004 - 2014

    Food Production, KZT bln.

    Meat processing and

    preservation, prepared

    meat products

    manufacturing

    13.8%

    Fish and shellfish

    processing and

    preservation

    0.9%

    Fruits and vegetables

    processing and

    preservation

    7.3%

    Vegetable oils and

    animal fats production

    8.1%

    Dairy production

    19.6%

    Grain and starch mill

    production

    19.1%

    Bakery production

    15.7%

    Other foods production

    13.5%

    Animal feeds

    production 2.0%

    Structure of the Food Industry of Kazakhstan (%)

  • 3

    Therefore, the leading industry in food manufacturing of Kazakhstan is the dairy industry. In 2014,

    its production amounted to KZT 216.4 bln. The largest output in the dairy industry was in milk and

    cream production - 427.9 thous. tons in volume terms, an increase of 7.4% versus 2013. The largest

    output in grain mill industry was observed in production of flour from grain and grain blends

    3 330.6 thous. tons, an insignificant increase of 0.1% versus 2013. In bakery industry the largest

    output was in production of fresh bread 726.1 thous. tons, 2.2% decrease versus 2013.

    Production of meat and edible offal amounted to 218.9 thous. tons that is 4.1% more than in

    2013. The largest contribution in amount of 82.2 thous. tons was made in production of fresh or

    chilled meat of swine, goats and horses, an increase of 9.4% compared to 2013. It is also worth

    noting the high volume in production of animal feeds, which amounted to 733.2 thous. tons in

    2014, a 10.5% increase versus 2013.

    By the end of 3Q2015, the specific weight of food industry in total industrial production of

    Kazakhstan was 7.5%, and 19.2% in total manufacturing industry, that is significantly higher

    than in the corresponding period of 2014. Thus, by the end of 2015 the industrys share may

    increase by no less than 1%.

    Table 1. Production of Kazakhstans Food Industry:

    2014-2015 (Jan-Sep), KZT bln.

    Production volume

    % change Jan-Sep 2015 Jan-Sep 2014

    1 Total Industrial production 10 329.3 14 044.4 -26.5%

    2 Manufacturing 4 003.9 4 258.5 -6.0%

    3 Food industry 769.7 762.8 0.9%

    3.1 Meat Processing and Preservation, Prepared Meat

    Products Manufacturing 110.5 104.4 5.8%

    3.2 Fish and shellfish processing and preservation 7.4 6.8 9.0%

    3.3 Fruits and vegetables processing and preservation 62.1 62.4 -.0.5%

    3.4 Vegetable oils and animal fats production 50.9 57.7 -11.7%

    3.5 Dairy production 137.9 138.8 -0.6%

    3.6 Grain and starch mill production 165.0 153.0 7.9%

    3.7 Bakery production 123.3 117.4 5.0%

    3.8 Other foods production 93.0 108.0 -13.9%

    3.9 Animal feeds production 19.5 14.3 36.3%

    Source: Committee on Statistics of the Republic of Kazakhstan

    Over 9M2015, the total volume of food production accounted for KZT 769.7 bln. in value

    terms that is 0.9% more than in the same period of the previous year. The largest volume was

    produced by the grain and starch mill industry for the amount of KZT 165.0 bln., a 7.9%

    increase compared with 2014. The dairy industry was the second best performer with the output

    of KZT 138.0 bln., revealing a 0.6% decrease versus 2014.

  • 4

    The production of bakery industry amounted to KZT 123.3 bln., a 5.0% increase versus

    2014.

    In 9M2015, there were produced 2 752.9 thous. tons of flour from grain and grain blends

    in grain and starch mill industry. There were produced 334.0 thous. tons of processed liquid milk

    and cream in the dairy industry. In bakery industry 540.4 thous. tons of fresh bread. The

    animal feed output increased by 33.3% versus 9M2014 and accounted for 678.7 thous. tons.

    Production and shipment balance analysis of the food industry in 2014 evidences that the

    volume of the shipped products exceeded the volume of food produced on the enterprises

    producing sausages, sunflower and cottonseed oil, rice, fresh bread and pasta.

    Analyzing the data of the Committee on Statistics of the Republic of Kazakhstan for 2014,

    we see that some items of food production do not meet domestic demand for them in full. Thus,

    an existing internal demand is compensated by imports. That may have a negative impact on

    countrys economy in future.

    Source: Committee on Statistics of the Republic of Kazakhstan

    Thus, lack of the meat (including poultry meat) and edible offal on Kazakhstans internal

    market amounted to 182.2 thous. tons in 2014, and it was compensated by imports from the US

    and the Russian Federation, which approximated 191.2 thous. tons. that year. Same situation is

    observed in dairy industry, where the difference between domestic production and domestic

    consumption equaled to 146.3 thous. tons. Local demand was satisfied by imports in total

    volume of 176.3 thous. tons. Among all types of food products made in Kazakhstan, the only

    one, the production of which could meet domestic demand, was the production of flour. It means

    that although Kazakhstan has its own food industry, some types of food are still import-

    dependent, and that, in our opinion, indicates to the low level of agricultural products

    processing.

    3 4

    96

    ,4

    89

    9,0

    82

    6 ,1

    71

    5,2

    37

    5,6

    32

    9,5

    19

    4,1

    1 6

    57

    ,5

    1 0

    81

    ,2

    90

    3,6

    86

    1,5

    53

    3,5

    39

    7,7

    23

    5,2

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    90%

    100%

    Flour Meat and

    poultry meat,

    edible offal

    Bakery products Dairy products

    (without fresh

    milk)

    Sugar Vegetable oils Fruit and

    vegetable juices

    Production and Consumption of several types of Food Products in

    Kazakstan in 2014, thous. tons

    Production Consumption

  • 5

    Table 2. Production and Consumption of several types of Food Products in 2014,

    thous. tons

    Products Production Imports Exports Consumption

    1 Meat and poultry meat, edible

    offal 899.0 191.2 9,0 1 081.2

    2 Prepared and preserved meat 69.9 39.1 1.9 107.1

    3 Fruit and vegetable juices 194.1 42.7 1.6 235.2

    4 Vegetable oils 329.5 115.8 47.6 397.7

    5 Sunflower oil 234.9 67.7 16.2 286.5

    6 Dairy products (without fresh

    milk) 715.2 176.3 30.1 861.5

    7 Processed liquid milk and

    cream 466.3 42.2 20.9 487.6

    8 Flour 3 496.4 5.6 1 844.6 1 657.5

    9 Bakery and confectionery

    products 826.1 84.9 7.4 903.6

    10

    Bread; fresh pastry goods and

    cakes (with sweetening

    additives)

    739.9 14.9 1.2 753.6

    11 Sugar 536.0 160.4 2.5 533.5

    12 Chocolate and chocolate

    confectionery 100.7 92.1 29.5 163.4

    13 Processed tea and coffee 21.5 40.3 2.6 59.1

    14

    Macaroni, noodles, couscous

    and similar farinaceous

    products

    150.6 28.4 20.5 158.4

    Source: Committee on Statistics of the Republic of Kazakhstan

    Imports of prepared foods and foods of animal and plant origin accounted for 10.5% in the

    structure of Kazakhstans imports;