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Kazakh President tours Europe to meet exporters

Kazakhstan’s president Nursultan Nazarbayev has been touring Europe to raise awareness of the huge potential the Kazakh market offers to exporters, including in the construction and interiors market. French and British companies met the president at recent events in London and Paris, with $5 billion worth of contracts signed during each visit.

Firstly, the president arrived in London to meet the British government and businesses, hoping to increase the $27 billion of British investment in Kazakhstan over the past 20 years. While most of the value of the deals lies in the energy sector, agreement was reached to build a steel production facility in Kazakhstan with British investment. However, it is not just direct investment where the opportunities in Kazakhstan lie – the country imported $700 million of building materials in 2014 alone, a figure that does not include the enormous quantity of metal ($4.2 billion) and plastics ($5.8 billion) brought into the country that year.

“We value as well the major role that British companies, big and small, have played in helping modernise our economy and drive our prosperity,” said Mr Nazarbayev ahead of his UK visit. “With our partners, we will continue to face relentlessly outward and encourage modernisation, investment, trade and co-operation.”

After presenting Kazakhstan’s business potential in London, Mr Nazarbayev travelled to Paris to meet the heads of 24 French companies. The agenda focused on how these firms and other exporters can take a slice of and grow the $6 billion Franco-Kazakh trade turnover. “France is among the leading economic partners of Kazakhstan. In spite of the difficult external conditions, our mutual trade turnover in recent years remains at $6 billion,” said Mr Nazarbayev. “One-hundred and thirty French companies are operating in various industries of Kazakhstan’s market.”

One company succeeding in Kazakhstan’s growing construction sector is Cleia. The brick and tile firm from Eastern France signed a $17 million contract this year to supply high-tech equipment for a new brick factory near Almaty, which will supply 40 million bricks and insulating blocks per year to meet massive demand in the Kazakh building market.

A third country finding joy in Kazakhstan is Italy. As well as cracking the Azeri building market, Italian firms are broadening their horizons in Central Asia – trade between Kazakhstan and Italy is worth over $16 billion, and the President's visit to Italy earlier this year resulted in $500 million worth of deals between the two countries being signed.

It’s no surprise that so many of these new deals and contracts are focused on the building sector. Traditionally heavily dependent on oil exports, Kazakhstan has been following a Dubai-style policy of economic diversification in recent years, and like the emirate, construction is key to this plan. Housebuilding is growing year by year, with the latest figures showing a 24% rise in houses built so far in 2015 compared to last year, and $700 million was taken from Kazakhstan’s sovereign wealth fund earlier this year to fund new schools, houses and infrastructure projects.

A solid proportion of these funds will be spent on imports – Kazakhstan is a heavy importer of cement, industrial glass, ceramics, insulation and sanitary ware, among other products. For a full picture of the opportunities available for exporters, read our guide to the import structure of Kazakhstan’s building market.

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