Annual Report 2010 eng by KAZNEX INVEST

www.kaznexinvest.kz

Annual report

'10

www.invest.gov.kz

content Message from the Chairman of the Board of Directors............................................................................ 2 Message from the Chairman of the Board............................................................................................... 4 ABOUT KAZNEX INVEST............................................................................................................................ 7 History ..................................................................................................................................................... 8 Mission, goals and objectives.................................................................................................................. 8 Development strategy.............................................................................................................................. 8 corporate management................................................................................................................... 11 INTERNATIONAL COOPERATION............................................................................................................ 17 ANALYTICAL SUPPORT ACTIVITIES....................................................................................................... 21 2010 ACTIVITIES RESULTS ON EXPORT DEVELOPMENT AND PROMOTION . ................................. 27 Export development and promotion....................................................................................................... 28 Reimbursement of exporters’ expenses................................................................................................. 28 Organization of trade missions............................................................................................................... 31 Organization of «Buyers and Sellers» meetings.................................................................................... 34 Participation in international exhibitions................................................................................................. 36 Promotion of trademarks in foreign markets.......................................................................................... 38 Creation and promotion of collective trademarks (industrial brands)..................................................... 40 Publishing information about Kazakhstani products in specialized foreign catalogs............................. 41 Finding the optimal export routes........................................................................................................... 42 Promotion of humanitarian procurements.............................................................................................. 43 Export trainings for the enterprise specialists........................................................................................ 44 International tenders.............................................................................................................................. 45 «Buyers List». The list of perspective foreign buyers of Kazakhstani products..................................... 46 Customer's database on export............................................................................................................. 47 The Board of Exporters of the Ministry of Industry and New Technologies of the Republic of Kazakhstan............................................................................................................... 48 Publications . ......................................................................................................................................... 49 Creation of «export-oriented» ideology.................................................................................................. 51 2010 ACTIVITIES RESULTS ON ATTRACTING FDI................................................................................. 53 Information and presentation support of investment attraction activities............................................... 56 Kazakhstan’s investment website www.invest.gov.kz............................................................................ 57 Foreign investors and investment projects database www.baseinvest.kz............................................. 58 Business Forums................................................................................................................................... 59

Welcome message

Message from the Chairman of the Board of Directors Assylkhan Serikov

Dear ladies and gentlemen!

You are holding a report on the results of the first year of the National Export & Investment Agency «KAZNEX INVEST». The predecessor of the Agency was the Corporation for Export Development and Promotion «KAZNEX». In order to fulfill an additional function on investment attraction the Agency has established regional directorates for America, Europe, the Middle East, Asia and the CIS. The main goal of these directorates is to explore the markets, determine investment flows, and establish contacts with investors. While summarizing the results of 2010, the Agency has collected information on 151 initiatives in 21 countries. As of today, it is important to remedy the lack of information about our country in foreign markets. The Agency has developed a national investment interactive website www.invest.gov.kz. The portal contains all the information that is essential for decision-making at an initial stage. In 2011, we are planning to launch a video about Kazakhstan on international TV channels, with a total coverage of 300 million viewers. This makes it possible to inform potential investors about the special benefits of our country. We are planning to open representative offices of KAZNEX INVEST in targeted donor countries, following the best practices of the leading agencies. The first representative office will be opened in 2011 in China, after that in the U.S., Germany, Russia and the UAE. I would like to note that KAZNEX INVEST has already joined the World Association of Investment Promotion Agencies, WAIPA. It gives us an opportunity to learn and apply the best international practices to attract foreign investment to our country.

Sincerely, Assylkhan Serikov

Welcome message

Message from the Chairman of the Board Yerlan Arinov

Dear shareholders, partners and colleagues!

The year 2010 turned out to be eventful and informative for KAZNEX INVEST: a great and important work on export development and investment attraction has been done. For the first time in Kazakhstan, with joint efforts of the Ministry of Industry and New Technologies and KAZNEX INVEST, an instrument of financial support for exporters has been implemented. Forty three domestic enterprises were able to enjoy state-paid compensation of their expenses for entering foreign markets. Financial assistance will create equal opportunities for our exporters with respect to exporters from other countries, where such an instrument of state support has been operating for several decades. The Agency has completed research of donor countries and competitor countries on the attraction of foreign direct investment. This allowed us to identify priority sectors for FDI attraction and make a list of leading companies that the Agency will be working with directly. The findings allowed us to initiate a number of important changes to the legislation for this countryâ&#x20AC;&#x2122;s investment climate improvement. The current goal of KAZNEX INVEST, as a development institution, is to make every effort in order to put into practice these tools with the maximum benefit in the form of new contracts for exporters and new industries.

Sincerely, Yerlan Arinov

ABOUT KAZNEX INVEST

History In 2007, the Corporation on Export Development and Promotion «KAZNEX» was established. In 2010, the activity of the company was expanded by adding a new direction for direct foreign investment attraction to priority sectors of the economy. Since 2010, the company has been renamed to the National Export & Investment Agency «KAZNEX INVEST».

Mission, goals and objectives Mission – active assistance to the effective functioning of the national system of development and promotion of domestic non-mineral exports and the attraction of foreign direct investment to priority sectors of the economy. Vision – an authoritative organization participating in the process of country’s economy diversification, with well-organized working mechanisms and professional teams. KAZNEX INVEST is the operator of the system of state support for non-mineral exports and state-owned companies on dealing with foreign investors. KAZNEX INVEST plays a key role in the interaction between the Government of the Republic of Kazakhstan and domestic business in the area of trade and investment.

Development Strategy Strategic directions of the development for KAZNEX INVEST are as follows: 1. Export development; 2. Export promotion; 3. Matchmaking and support for foreign investors; 4. Promotion of domestic investment projects; 5. Promotion of the investment image of Kazakhstan. These directions include financial, service, and information-analytical support and define priority areas of the company’s activities.

Strategic directions of the development for KAZNEX INVEST for 2011-2015

Promotion of non-mineral export

Attraction of foreign investment

Matchmaking and accompanying foreign investors

Development of export Goals:

Goals:

• Providing informational and consulting services for the clients on export promotion • Release of specialized materials necessary for export development • Entrepreneurial training on export activity • Providing export grants • Building an «export-oriented» ideology

• Identification of target group of foreign investors • Organizational, informational and consulting assistance for potential foreign investors • Accompanying potential investors to regions

Promotion of domestic investment projects Promotion of export Goals: • Organization of export promotional events in the country and abroad • Promotion of trademarks to foreign markets • Promotion of Kazakhstani products to the humanitarian procurement market • Assisting with participation in international tenders • Compiling a list of potential buyers of Kazakhstani products (Buyers’ List) • Identification of potential markets (brief analysis) • Identification of optimal export routes

Goals: • Informational and consulting assistance for domestic initiators of investment projects • Compiling a database of investment projects

Promotion of investment image of Kazakhstan Goals: • National investment interactive website support • Agitation of favorable conditions for investing in Kazakhstan

corporate management

KAZNEX INVEST considers corporate management as a tool to improve its efficiency and strengthen our clientsâ&#x20AC;&#x2122; confidence. Corporate management of KAZNEX INVEST is based on generally accepted principles.

Government bodies of the Agency

Industry Committee MINT

Committee for Investments MINT

General Meeting of Shareholders

Board of Directors

Internal auditing service

Governing Board

General Meeting of Shareholders The supreme body of the Agency is General Meeting of Shareholders consisting of the Industry Committee and the Committee for Investments of the Ministry of Industry and New Technologies of the Republic of Kazakhstan.

Board of directors Board of Directors of KAZNEX INVEST consists of 6 members, including two independent directors:

Chairman of the Board of Directors Assylkhan Serikov

Chairman of the Committee for Investments of the Ministry of Industry and New Technologies of the Republic of Kazakhstan

Members of the Board of Directors Yerzhan Karibayev

Deputy Chairman of the Industry Committee of the Ministry of Industry and New Technologies of the Republic of Kazakhstan

Yerlan Arinov

Chairman of the Board of «National Export & Investment Agency «KAZNEX INVEST»

corporate management

Irina Fisher

Head of the Department to work with non-state entities with state participation, the Committee of State Property and Privatization of the Ministry of Finance of the Republic of Kazakhstan

Independent members of the Board of Directors Anatoliy Popelyushko

President of the Union of Commodity Producers of food and processing industry of Kazakhstan

Serik Sultanov

President of the Association ÂŤPharmmedindustry KazakhstanÂť

Governing Board Chairman of the Board

Yerlan Arinov

Deputy Chairman of the Board Botagoz Alimbayeva Deputy Chairman of the Board Alen Iskakov Deputy Chairman of the Board Meyerzhan Maikenov

INTERNATIONAL COOPERATION

Since 2008 KAZNEX INVEST is a member of the International Network of Trade Promotion (TPO Network) of the International Trade Centre (ITC), operating under the auspices of the United Nations Conference on Trade and Development and the World Trade Organization (UNCTAD / WTO), including 192 countries.

Currently, KAZNEX INVEST is also a full member of the World Association of Investment Promotion Agencies (WAIPA), which consists of 244 organizations from 162 countries.

In 2010, KAZNEX INVEST continued the work on making partnerships with similar agencies in other countries and international organizations in the field of international trade and investment. The main direction of such cooperation is the exchange of practical experience and information on export promotion and FDI attraction, as well as mutual support in carrying out various activities overseas and in Kazakhstan.

Memorandum of Understanding In 2010, 10 memorandums of understanding and cooperation were signed with foreign partners as a result of implemented work: Partnership Organizations

Austria

Austrian Business Agency (ABA Invest)

Turkey

Foreign Economic Relations Board (DEIK)

Japan

Japan Association for Trade with Russia & NIS (ROTOBO)

Jordan

Jordan Enterprise Development Corporation (JEDCO)

Russia

Moscow Agency for Export and Investment Promotion

Ukraine

The State Agency of Ukraine for Investments and Development

Germany

On establishment of Kazakhstani-German Business Council for Strategic Cooperation

European Union

European Business Association of Kazakhstan

Great Britain

Khaznah Strategies Ltd.

Ukraine

Ukrainian Union of Industrialists and Entrepreneurs

ANALYTICAL SUPPORT ACTIVITIES

KAZNEX INVEST is implementing analytical work on a continuing basis for the effective promotion of domestic products to foreign markets and the attraction of foreign direct investment. In 2010, the Agency carried out monitoring of the tendencies of world commodity market development, as well as the condition of foreign trade of the Republic of Kazakhstan. Manufacturers of processed products and existing and potential exporters get information from the Agency using the methodological recommendations of the International Trade Centre on the calculation of the trade performance index. This technique allows assessing the degree of exports diversification of any country, both by commodity and by country. The Trade Performance Index allows defining the most appropriate directions for the expansion of export supplies’ commodity list. The Agency prepares reviews on the condition of bilateral trade of the Republic of Kazakhstan with partner countries (country reviews) and identifies potential commodity groups for export expansion. The country review provides information on the current economic situation in the partner country and a list of commodities in demand of the reviewed country’s markets. This allows identifying potential markets for Kazakhstan’s exports and obtaining information on conditions of access to a specific market, including measures of tariff and non-tariff regulation of foreign trade. In 2010, the Agency has prepared 15 country reviews for Afghanistan, Azerbaijan, Belarus, China, Georgia, India, Iran, Kyrgyzstan, Malaysia, Singapore, Tajikistan, Turkey, Ukraine, USA, and Uzbekistan. KAZNEX INVEST also makes a brief-analysis, which determines potential markets for the domestic product’s promotion. This brief analysis is a market research abstract containing basic parameters of the specific commodity’s trade development in the world markets. The review is a fundamental guideline to foreign markets for domestic exporters in view of the world supply and demand. The information provided in the brief-analysis can be useful for exporters in developing or optimizing their export strategies for significant improvement of the quality of their work. The brief-analysis provides an analysis of a commodity item by HS 6-digit level and three countries – «one commodity – three countries». During 2010, 20 brief analyses had been prepared for 20 domestic companies and organizations.

Analytical support on attracting investment KAZNEX INVEST provides analysis of the investment climate and makes proposals to improve conditions for FDI attraction in Kazakhstan on a continuous basis.

The dimensions of FDI towards countries investing in basic industries in 2003-2010, billions of dollars

Metallurgical industry USA England Luxembourg South Korea Japan Germany

1 2 3

46,4 40,3 34,4 31,1 30,3 25,9

A number of proposals were initiated to the Ministry of Industry and New Technologies of the Republic of Kazakhstan based on the research of world FDI flows and advanced measures on the improvement of FDI attraction conditions.

Production of oil industry

Priority sectors for foreign investments were identified as follows.

Food Industry

First priority â&#x20AC;&#x201C; the chemical industry, rubber and plastics production, agro-food industry, metallurgy and metal products, machinery and equipment, production of petrochemicals, hydrocarbon energy;

USA England Switzerland Germany Netherlands Japan

Second priority - financial services, pharmaceuticals, information technology, transportation, construction, consumer electronics, alternative energy. In each of the priority sectors, we have identified major investor countries, taking into consideration FDI flows from these countries to the priority sectors. The list of major investor countries are: United Kingdom, Germany, Spain, Italy, Canada, China, Luxembourg, Netherlands, UAE, Saudi Arabia, USA, Turkey, France, Switzerland, South Korea, Japan, India, Brazil, Sweden, Malaysia. In accordance with the priority areas, we have identified 20 investor countries of interest in FDI attraction that are essential for the economic development of Kazakhstan.

USA Germany France South Korea Brasil

1 2 3

16,0

9,1 8,5

5,4 5,3

9,5 9,2 6,7 6,1

31,3

13,9

Hydrocarbon Energy Japan Germany France USA Canada Spain

1 2 3

18,2 16,4

28,7 26,7 26,6

45,0

Machinery and equipment USA Germany Japan Switzerland France Italy

1 2 3

7,1

3,4 3,1 3,0

9,6

13,1

Chemical industry USA Germany Japan Netherlands France England

1 2 3

16,4 15,8

23,4

38,9 36,9 35,4

Source: FDI Markets

ANALYTICAL SUPPORT ACTIVITIES

According to priority directions of the Governmental Program on Forced Industrial-Innovative Development for 2010-2014, 20 investor-countries, whose investments are required for development of Kazakhstanâ&#x20AC;&#x2122;s economy, have been revealed:

1. Great Britain

11. USA

2. Germany

12. Turkey

3. Spain

13. France

4. Italy

14. Switzerland

5. Canada

15. South Korea

6. China

16. Japan

7. Luxembourg

17. India

8. Netherlands

18. Brasil

9. UAE

19. Sweden

10. Saudi Arabia

20. Malaysia

The potential investors in each priority sector of investment source countries were identified, primarily from the Forbes Global 2000 list. The analysis of potential investors strategies on investing abroad was conducted. The Action plan and recommendations on attracting potential investors for 2010-2014 and 20152020 were developed. KAZNEX INVEST has identified major countries as an example of the FDI attraction policy, based on the analysis of the foreign country’s level of economic development, their structures, market size and other macroeconomic parameters (United Arab Emirates, Australia, Czech Republic, Saudi Arabia, Croatia, Lithuania, Poland, Chile, etc.). At the same time, the analysis helped to detect the country’s competitors for FDI. KAZNEX INVEST participated in developing programs to attract investment with the development of special economic zones and export promotion in the Republic of Kazakhstan for 2010-2014 aimed at creating an attractive environment for direct investment in non-export oriented and high technology industries and integration into the global trading system through the promotion of exports of processed goods. In 2010, a study was conducted on the development of SEZ in the Republic of Kazakhstan, with the result that a Law «On the free economic zone» was drafted. Working in collaboration with the Organization for Economic Cooperation and Development (OECD) within the project «Diversification of Kazakhstan's FDI resources and building industries’ competitiveness», a report on industry competitiveness was prepared. The report helped the Government of the Republic of Kazakhstan indicate priorities during reforms, which are aimed at FDI diversification and economic efficiency increases. In 2011-2012, the Government of the Republic of Kazakhstan (jointly with the OECD) will take practical steps to implement reforms in accordance with given recommendations to improve the investment climate of the country.

2010 ACTIVITIES RESULTS ON EXPORT DEVELOPMENT AND PROMOTION

ACTIVITIES RESULTS

Export development and promotion As a result of the research on the identification of domestic exporters’ problems

Organizations whose services are of particular exporters’ interest (the top five) The number of responders, who have noted the importance of an organization

conducted by the National Economic Chamber «Atameken «Union», KAZNEX INVEST has become the absolute leader among all organizations in attracting domestic exporters for its services. On the basis of obtained data, the vast majorities of respondents have an idea of KAZNEX INVEST activity, while 57% are familiar with the Agency and consider it as a prospective one. Additionally, about one-third of the respondents would like to learn more about its activities. Interest in the Agency’s activity is defined by a list compiled by the respondents containing 42 services of the exporters’ interests. Key services in this list are the reimbursement of export promotion expenses, information and analytical support, and the financing of participation in international trade exhibitions.

0 2 4 responders %

KAZNEX INVEST Technical Regulation and Metrology Committee of the RK Ministry of Industry and New Technologies «Soyuz Atameken» National Economy Chamber of Kazakhstan «Nur Otan» People’s Democratic Party Rostpotrebnadzor Source: «Soyuz Atameken» NECK

Reimbursement of exporters’ expenses

(from the article «Barriers to merchant», «Expert Kazakhstan», № 16, 25.04.2011)

For the first time in Kazakhstan (beginning in 2010), financial support is being implemented for exporters of processed products in the form of partial reimbursement of costs related to foreign markets entry. Expenses are reimbursed for the following activities: 1) trademark registration and products certification abroad; 2) participation in foreign exhibitions; 3) advertising of domestic products abroad; 4) maintenance of representation (office, warehouse, retail outlet abroad); 5) training of employees of enterprises in charge of export management; 6) marketing research; 7) franchise; 8) creation and launch of websites.

Distribution of approved proposals by sectors (in % terms)

9,3

In 2010, KAZNEX INVEST received 66 requests from domestic exporters to reimburse expenses related to domestic products entries into foreign markets. Forty three requests were approved, and about 141 million

7,0

2,3 37,2

20,9 23,3

tenge were reimbursed to exporters. Twenty three requests were

Food industry and agriculture

rejected due to untimely delivery of the documents, non-compliance with

Chemical industry

the list of required documents.

Engineering Pharmaceutical industry Textile industry Metalworking

Regional scope of approved requests № п/п 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Region Almaty region Kyzylorda region West Kazakhstan region Astana Aktobe region Pavlodar region Akmola region Mangystau region Karaganda region Kostanay region North Kazakhstan region South Kazakhstan region East Kazakhstan region Almaty TOTAL:

Number of requests 1 1 1 2 1 2 2 1 4 4 3 3 5 13 43

The amount for reimbursement (KZT thousands) 195.0 273.4 398.2 448.3 854.9 2 240.2 2 498.7 2 874.5 3 162.1 5 729.0 6 016.6 14 792.0 23 683.3 77 822.7 140 989.2

The most active participants in the program for reimbursement of exporter expenses came from entrepreneurs from Almaty, who received more than half of all compensations. Exporters in East Kazakhstan, Karaganda and Kostanay regions also demonstrated a high level of activity in receiving state support: more than a third of total requests are from these regions.

A significant proportion of reimbursed expenses by the Agency belong to products of the food and agricultural industries, which make up 16 requests from domestic exporters in the amount of 70 million tenge. Nine requests were approved for expenses reimbursement on products of the machinery industry in the amount of 33.6 million tenge. Also, 10 requests were reimbursed in the chemical industry in the amount of 25.9 million tenge.

ACTIVITIES RESULTS

The main share of the exporter expenses reimbursement is comprised of domestic products advertising (61.8 million tenge) and certification (59 million tenge). In addition, the expenses of domestic exporters for product registration are covered in the amount of 8.1 million tenge, on exhibition organization in the amount of 8.1 million tenge and training for organizations – 3.9 million tenge.

Distribution of approved proposals by tools (mln. KZT) 3,9 8,1 8,1

59,0 61,8

training exhibitions product registration certification of products advertising products

«...«Kentau Transformer Plant» JSC expresses its gratitude for the cooperation with «National Export & Investment Agency «KAZNEX INVEST». An offer from «KAZNEX INVEST» on the reimbursement of expenses related to exhibitions, developing websites, and products promotion to foreign markets has significantly increased the volume of exports and expanded its geography. Over the recent years, consumers of our products became energy companies in Central Asia, Azerbaijan, Ukraine, Russia, Afghanistan, etc. Thanks to the Agency’s support, we are planning to open representative offices in all the capitals of the CIS countries in 2011. For the first time in the history of Kazakhstan, in 2010, a new export-oriented product - transformers with a voltage class of 35-110 kV have been mastered. Over the past year, the volume of exports made up 12 % of the total production due to cooperation with «KAZNEX INVEST», and for the first quarter of 2011 this rose to 20%. We hope that fruitful cooperation with the Agency will increase the annual volume of exports of «KTP» JSC up to 30%...». Kuntuarov S.N., General Director of «Kentau Transformer Plant» JSC.

Organization of trade missions The organization of trade missions abroad - is one of the Agency’s key instruments of service support, where domestic companies have the opportunity to establish direct contacts with potential foreign buyers, make a presentation of their products, participate in a dialogue with the government authorities of countries where the mission is taking place, conclude export contracts and open a representative office. Countries to conduct trade missions are formed on the basis of analysis of the foreign markets’ imports structure for 5 years, as well as on the basis of the request of domestic entrepreneurs interested in exporting to specific countries or regions. KAZNEX INVEST shares the expenses for the organization of trade missions (rental of space, translation services, transfers within the country of the mission, accommodations) as well as assistance in obtaining a visa and booking tickets.

In 2010 KAZNEX INVEST organized six trade missions to the following countries:

Turkmenistan (Ashkhabad), 26-27 May 2010

India (Delhi), 22-25 September 2010

Kazakhstan delegation: 30 participants, 25 companies.

Kazakhstan delegations: 13 participants, 8 companies.

Result: 7 domestic enterprises signed export contracts and agreements on supplying flour, confectionery, dairy products, rice, metal pipes, and transformers to the total amount of more than 1 billion tenge (US $7.9 million). Another 15 Kazakhstani companies agreed to supply their products to the market of Turkmenistan. Moreover, during the trade mission domestic company «Korona Exports» LLP opened its representative office in Turkmenistan.

Result: 2 domestic companies made an agreement on supplies of mineral water and leather products to India.

ACTIVITIES RESULTS

Tajikistan (Dushanbe), 27-30 September 2010

China (Yenning), 16-18 October 2010

Kazakhstan delegations: 25 participants, 18 companies.

Kazakhstan delegations: 20 participants, 17 companies.

Result: 4 domestic companies signed a treaty / protocol on the intention to supply building materials and construction chemicals, fat-and-oil products and flour in the total amount of 1 billion tenge (US $7.4 million).

Result: 3 domestic companies signed a treaty and protocols of intention to supply domestic products to China to the total amount of more than 90 million tenge (US $605 732).

Russia (Barnaul), 9-12 November 2010

Iran (Tehran), 27-30 November 2010

Kazakhstan delegations: 15 participants, 13 companies.

Kazakhstan delegations: 10 participants, 9 companies.

Result: business contacts have been established with the participating companies, and work is being carried out on the development of further mutually beneficial cooperation. In addition, a contract for the supply of children's furniture was signed to the amount of 150 million tenge (US $1 million).

Result: «Korona Export» LLP concluded a contract with the Iranian company «Ashraf Davod Trading Company» for supplying flour and pasta in the amount of 150 million tenge (US $1 million).

As a result of these six trade missions, export contracts and agreements for the supply of Kazakhstani products (transformers, metal pipes, building materials, chemicals, confectionery, dairy and fat products, flour, rice) were signed, for a total amount of US $17.9 million.

«...«The company» ArcelorMittal Aktau» expresses special thanks to the Agency «KAZNEX INVEST» for organizing the trade mission to Turkmenistan in 2010, and for the support of our company in entering foreign markets. As a result of visiting Ashgabat and meetings with the Turkmen companies, our company agreed to the supply of our products to this country and signed a contract in the amount of US $70 thousand. In addition, «ArcelorMittal Aktau» plans to open a representative office in Turkmenistan in 2011-2012. We look forward to further cooperation with the Agency and are happy to take part in trade missions organized by you ...». Mulvya R., Director of «ArcelorMittal Aktau»

«...Turkmenistan - is one of the closed countries, and it is very difficult to enter this market. With the assistance of KAZNEX INVEST, we’ve managed not only to take part in the trade mission plans to Ashgabat, but also to attain success in the first stage of this market development. Now, the company «KORONA EXPORT» has an office in Turkmenistan, and we signed a contract on supplying our products in the amount of US $10 million. This is a mutual achievement of our company and the Agency...». Sincerely, Tretiak A.P., Director of LLP «KORONA EXPORT»

ACTIVITIES RESULTS

Organization of «Buyers and Sellers» meetings KAZNEX INVEST annually organizes and conducts «Buyers and Sellers» meetings in the regions of Kazakhstan on the basis of preliminary studies of demand for Kazakhstan's specific products, matchmaking of buyers and sellers, and defining the participants of the meetings. For Kazakhstani producers, it is an opportunity to present their products to foreign entrepreneurs, enter into cooperation and find new partners as well as new markets for their products. KAZNEX INVEST covers the following costs: - rent of conference halls; - translation services; - rental of equipment; - coffee breaks; - lunch.

In 2010, KAZNEX INVEST held 2 «Buyers and Sellers» meetings in Aktobe and Almaty. The meeting in Aktobe was attended by 28 producers of Kazakhstan, and 15 potential foreign buyers: 7 companies from Russia, 7 trading-purchasing companies from Afghanistan headed by the representative office in Afghanistan for the Chamber of Commerce and Industry of Tajikistan, and 1 company from China. «Buyers and Sellers» meeting was held in a B2B format. Forty two Kazakhstan producers of processed products in the mechanical engineering, light and food industries, construction, manufacturing machinery, equipment and vehicles, agricultural equipment, consumer goods and clothing industries participated in Almaty’s «Buyers and Sellers» meeting. Twenty nine companies from 12 foreign countries – representatives of business society, trade missions of foreign countries in Kazakhstan, international business associations and the trade attachés of the diplomatic missions in Kazakhstan took part in the meeting as potential buyers of domestic products. As a result of the meetings, export contracts were signed in the amount of US $9 million.

«...«Buyers and Sellers» meetings organized by the National Export & Investment Agency «KAZNEX INVEST», demonstrated their value by bringing fruitful results. We participated in the Almaty meeting in 2010, and it was a good dialogue platform for us as producers. During the meeting, we enjoyed the chance to negotiate with representatives of the Chambers of Commerce and Industry of Russia, Uzbekistan, and the representative officer in Afghanistan for the Chamber of Commerce and Industry of Kazakhstan, along with businessmen of these countries. We discussed a number of issues, including legislation, as well as supplying our confectionery products to these markets. We are grateful to the Agency and hope to get further support from the Government, which is very essential for domestic producers…». Gordienko O., Marketing Director of «Rahat» JSC

«...The «Buyers and Sellers» meeting is an opportunity to conduct negotiations with potential foreign buyers without leaving the territory of Kazakhstan. Taking advantage of the «Buyers and Sellers» meeting in Aktobe last year organized by KAZNEX INVEST, we conducted a number of meetings with Russian buyers of rice. As a result, negotiations are being conducted for the supply of our products to Russia…». Yeraly A., Director of «Abzal and K» General Partnership

ACTIVITIES RESULTS

Participation in international exhibitions An important instrument of state support for exports is the organization of Kazakhstan's enterprises participating in international exhibitions, where domestic companies can demonstrate their products to potential foreign buyers, find new customers, partners and expand the business. Exhibitions are selected on the basis of careful study of the needs of Kazakhstan's business by country, specialization, seasons and scales. The Agency covers the following expenses of the enterprises participating in international exhibitions: • registration fee; • rent of exhibition area, not more than 12 sq. m for each participant; • standard advertising in the exhibition’s catalog; • additional equipment (design, showcases, stands, furniture, etc.); • labor costs for the construction of the stand; • installation of electricity, telephone, water, lighting, basic furniture.

In 2010 KAZNEX INVEST organized a participation of 30 domestic companies in 19 international exhibitions. As a result, 9 domestic companies signed protocols of intentions and agreements to the total amount of US $17.5 million.

Russia

Belarus

Uzbekistan

Tajikistan

Turkmenistan

«...Last year, with KAZNEX INVEST assistance, the following domestic textile enterprises - «Kazakhstan Text Line» JSC, a garment company «Semiramide», factory «KazSPO-N»LLC, hat producing salon «SEHEleGant» and company for bed linen production «Diana-plus» took part in the 35th Federal wholesale fair of goods and equipment for textile and light industry «Textillegprom» in Moscow for the first time. It is the largest exhibition among similar ones in Russia and the CIS countries. As a result of the exhibition, Kazakhstan's textile companies signed export contracts in the amount of approximately US $500 thousand for supplying finished clothes to Russian retail centers. We can confidently say that Russian textile companies have a new competitor. Kazakhstani companies, with state support, presented themselves as manufacturers of quality clothes. Those presented at the exhibition from «Textillegprom» were not inferior in quality to products from Russia, Turkey, Lithuania, Italy and other countries. We believe that our manufacturers deserved an award with medals and a diploma «For the modern design and high quality of the collections...». Lyubov Khudova, President of the Association of Light Industry Enterprises of Kazakhstan

«...Business needs such an instrument of support as assistance for participation in international exhibitions, which is provided by the national agency KAZNEX INVEST. It is an opportunity to identify potential buyers of Kazakhstani products here and now, solve problematic issues and find common interests. In 2010, 5 Kazakhstani companies-members of our organization participated in the «PeterFood» exhibition in St. Petersburg. And I must say that the assistance of the Agency - registration fee payment and rental of the exhibition area in particular – was a great help for them...». Nina Bezrukova, Deputy President of «Union of Producers of food and processing industry of Kazakhstan»

ACTIVITIES RESULTS

Promotion of trademarks in foreign markets KAZNEX INVEST is working to develop and promote Kazakhstani brands to enter the world market of processed products. The Agency conducts presentations of trademarks abroad, places image articles on high-quality products of Kazakhstani brands in foreign official media, develops and demonstrates presentation video to potential foreign buyers, prepares and distributes catalogs of Kazakhstani products, organizes negotiations of domestic producers with potential foreign buyers, trading networks, and wholesale purchasing centers.

In 2010, KAZNEX INVEST conducted activities promoting 21 trademarks of domestic producers, among them - batteries of «ZHERSU POWER», agricultural equipment «DONMAR», garments for adults and children «Zibroo», wheat and rye flour and pasta «KORONA», snack products «Sipan», mineral water «Asem-Ai», etc. As a result of such activities export contracts and agreements were signed in the amount of US $101.3 million.

«...2010 was a significant year for the machine factory «ZHERSU POWER» LLP. We entered the EU market, thanks to the active support of the National Export & Investment Agency «KAZNEX INVEST». The Agency held the presentation of our products – batteries - in Berlin (Germany). As a result, we signed a contract with the German company «iQ Power AG» to supply our products to Germany in the amount of US $ 2 billion. Entering the European market, which is characterized by high competition, is a great victory for us, and we express our gratitude to all the staff of the Agency for their outstanding service...». Kadyrbaev E., Director of «ZHERSU POWER» LLP

«... «Don Mar» LLP would like to express its appreciation for the assistance in participating in the exhibition's presentation, which took place in Volgograd on the territory of «Volgograd plant» JSC. «Participation in this exhibition has allowed our firm to find the consumers of our products in different regions of the Russian Federation, such as Volgograd, Saratov, Tambov and the Republic of Tatarstan. «Don Mar» LLP concluded an agreement with two companies: «Yugzheldormash» LLC (US $ 20 million) and «Agromash plus» LLC (US $10 million). In the near future, our company is also planning to conclude an agreement with «October» JSC and «Agrotehsnab» JSC. We are currently negotiating for the supply of our products with all of these organizations, and during these negotiations some specific dates already have been outlined. We hope for further cooperation and, once again, thank you for your help in promoting our company in the Russian market...». Strigina Y.B., Director of «Don-Mar» LLP

ACTIVITIES RESULTS

Creation and promotion of collective trademarks (industrial brands) Brands, which incorporate several different products or companies under the one name, are so-called «umbrella» or «industry» brands. The use of umbrella brands lets the company save its funds by using the name of an already well-promoted trademark, while exporting a new product to external markets. The use of umbrella brands helps to promote Kazakhstani products in foreign markets not only by individual producers, but also by a strong team of experts, supported by the state. KAZNEX INVEST works on the development and promotion of collective trademarks (industrial brands).

Turkmenistan (Ashkhabad) May 26, 2010. KAZNEX INVEST held a presentation of the collective trademark «KAZNAN», bringing together 35 major Kazakhstani producers of flour and pasta. Also, a video on collective trademarks was presented as part of this event. More than 200 prospective foreign buyers have received the Kazakhstani Grain Processors catalog. In 2010, work began on the definition and development of collective trademarks. Meetings have been held with Kazakhstan's Industrial Groups (associations) manufacturers on the development of collective trademarks for export-oriented industries. With the assistance of the Association, the Chamber of Commerce of the Republic of Kazakhstan and the National Economic Chamber «Atameken» Union» four pilot sectors for the creation and promotion of collective trademarks were specified as follows: the food industry, light industry, machinery and pharmaceuticals. For these collective trademark logos, text names and brand book, plans for the promotion of collective trademarks have been developed.

Publishing information about Kazakhstani products in specialized foreign catalogs Specialized foreign catalogs â&#x20AC;&#x201C; are an effective way to bring information about Kazakhstani exporters to foreign audiences. By posting information in such publications, KAZNEX INVEST provides information to the target group of potential customers (importers, distributors, wholesalers, retailers, etc.) of goods produced in Kazakhstan.

In 2010 information about 275 Kazakhstani exporters has been placed in three specialized foreign catalogs: 1. Golden key to the market of CIS countries. Investment-attractive companies of Kazakhstan, Russia and Ukraine; 2. Importers and exporters of CIS countries. Export-oriented enterprises of Kazakhstan, Russia, and Ukraine; 3. The locomotive of the economy of CIS leading countries. The best 5000 enterprises of Kazakhstan, Russia and Ukraine. These directories are published in Russian and English languages with circulation of 3,000 copies and distributed through the international wholesale network in Russia, Ukraine, Belarus, Iran, India, Asia and the European Union.

ACTIVITIES RESULTS

Finding the optimal export routes Domestic enterprises always look for the most profitable option to deliver the goods abroad. To optimize producers’ expenses in the delivery of goods KAZNEX INVEST, calculates the best export options, providing information on transportation - logistical procedures, delivery of goods, their value, the list of accompanying forms and the cost of cargo insurance.

In 2010, the Agency created an interactive calculation system of optimal export routes, a so - called «logistic calculator» by means of which 120 applicant companies have been assisted. The calculations were performed on 200 commodity items in HS 6-digit, such as: aluminum profile, sealing tires, radiators, leaf tea, sodas, cotton yarn - paper, meat products, bricks etc.). Thirty five foreign countries in total were covered (Russia, China, South Korea, Tajikistan, Turkmenistan, Ukraine, Belarus, Germany, Turkey, Azerbaijan, UAE, Japan, Canada, Belgium, Italy, Afghanistan, Latvia, etc.).

Promotion of humanitarian procurements Today, the opportunity to succeed and progress in the humanitarian procurement market appeared before Kazakhstan. Despite the fact that, in recent years, companies from the developed countries have been dominating in the supply and distribution of humanitarian aid, countries such as Russia, Ukraine and Uzbekistan are also successfully represented in this market. Kazakhstan supplies a minimum number of items (wheat, flour), but this country has every chance to expand its presence, since the range, quality and volume of products produced by Kazakhstani enterprises today meet the basic requirements of the market. KAZNEX INVEST actively works on facilitating the entrance of Kazakhstani enterprises, specialized in non-mineral products, to the humanitarian procurement markets and provides Kazakhstani producers with information about possibilities at this direction. In the framework of International Exhibition Aid and International Development Forum 8 products of Kazakhstani enterprises had been presented on July 22-23, 2010 in Washington DC (USA). KAZNEX INVEST covered the following expenses: 1) housing; 2) travelling; 3) rental of exhibition space (30 sq. m.); 4) additional equipment (construction, stand, furniture, etc.).Kazakhstani enterprises have been included into the humanitarian organizationsâ&#x20AC;&#x2122; list of perspective suppliers. In particular, by KAZNEX INVEST: 1) based on the analysis of International procurement market the list of International Organizations, which conduct humanitarian procurements has been made; 2) analytical information on the legal and legislative base, according to the rules and regulations of the humanitarian UN procurement has been prepared; 3) local companies have been informed on participation in the UN procurement ; 4) through the integrated site of UN procurement United Nations Global Marketplace (www.ungm.org) 50 Kazakhstani companies have been enrolled in the potential suppliers register. The Concept of entering Kazakhstani export-oriented companies on the humanitarian procurement market has been developed.

ACTIVITIES RESULTS

Export trainings for the enterprise specialists It is worth to note, that the majority of Kazakhstani companies do not possess the necessary knowledge and experience on export business. KAZNEX INVEST offers customized training sessions for local companies in major cities of Kazakhstan. This tool is on high demand among domestic enterprises. The target audiences are specialists, company managers and decision makers in the field of foreign trade.

In 2010, specially developed training seminars were conducted in the course - «Developing export strategy of the company». The training was conducted by qualified experts from LLP «Centre for training and professional enhancement of specialists in foreign economic activity» in five cities of Kazakhstan, and was attended by 56 experts from 41 companies representing food, mining, chemical, pharmaceutical and construction industries: Astana (August 23-27, 2010) - 14 companies, 18 participants; Shymkent (15-21 September, 2010) - 9 companies, 16 participants; Aktobe (September 27 - October 1, 2010) - 7 companies, 10 participants; Almaty (11-15 October,2010) - 6 companies, 7 participants; Ust-Kamenogorsk (18-22 October, 2010) - 5 companies, 5 members. Participants in the course were taught how to identify promising segments, analyzing the features of country development and trends in commodity markets, how to make a diagnosis of the readiness of the enterprise to conduct foreign trade and export potential of the company, bearing in mind the peculiarities of the organization, its level of competitiveness and competitive advantages.

International tenders In the conditions of dynamic development of international e-commerce in public and corporate sectors, providing assistance to Kazakhstani enterprises in participation in international tenders appeared to be prospective direction in promoting domestic processed export. In developed countries, about 30% of procurements are made through specialized electronic trading platforms. KANZEX INVEST activities in this area focuses on organizing trainings and providing information on international tenders, as well as providing consulting services to Kazakhstan enterprises, participating in international tenders (notification on upcoming tenders, assistance in preparing the necessary documentation and Internet consulting at all stages of participation in the tender).

In 2010, the Agency distributed informational materials on international tenders and electronic trading platforms among its clientele base (export-oriented Kazakhstani enterprises). Under the framework of the republican exhibition contest ÂŤBest Product of KazakhstanÂť held in Astana in December 18th, 2010, the Agency conducted a seminar for its participants on the improvement of the performance of enterprises, while participating in international tenders. 145 companies with high export potential participated in the exhibition - companies that have passed the regional competitions to determine the best representatives of the business areas of Kazakhstan. Producers received recommendations on international tenders, while participants were able to get answers to questions on international trade and certain aspects of tenders (regulations, procedures and rules of trading). As a result, a list of 59 export-oriented companies has been formed to participate in international tenders.

ACTIVITIES RESULTS

«Buyers List». The list of perspective foreign buyers of Kazakhstani products The list of perspective foreign buyers of Kazakhstani products (Buyers List) includes information about the companies interested in buying Kazakhstani products, and is an important source of information, when using direct instruments for promoting export. Formation of the List is implemented in three stages: –– identification of countries for further promotion of Kazakhstani products; –– search and exploration of overseas buyers; –– distribution of an electronic catalog and conducting a survey among its beneficiaries to determine the interest in the Kazakhstani products represented in the catalog. In 2010, Belarus, Iran, Italy, Poland, Russia, Turkey, Germany and China were selected as countries for the promotion of export-oriented goods. The following actions were taken in the search for new importers: –– informational newsletters on current activities both in English and Russian languages were distributed among the chambers of commerce of different countries; –– a database of importers of the Russian Federation was acquired; –– an international database (COMPASS) was used; –– an international database of B2B buyers and sellers (www.alibaba.com) was used. Thus, an initial database has been drafted, which includes 2673 foreign companies in 8 countries. A survey revealed that 185 importers from this database after familiarization with the catalog showed interest in Kazakhstani products. The final results allowed the creation of a list of potential buyers of 115 foreign companies.

Customer's database on export Establishing close contacts with producers is an essential part of KAZNEX INVEST work. The Agency constantly provides companies with the latest updates on all events in the development and promotion of Kazakhstani products taking place both inside and outside of the country. In turn, businesses always have the opportunity to obtain support in their foreign economic activity.

As of December 31, 2010 the KAZNEX INVEST database of clients (in the export direction) consisted of 1561 companies. This figure increased by more than 40%, compared with 2009 - 1430 of those are companies in non-mineral sector, 131 companies of that total are in logistics and consulting. From the total number of clients, the category «active exporters» stands out, consisting of 328 exporters (in 2009 there were 264 exporters). In 2010, the Agency sent to its customers 67 messages involving such topics as the «Procedures for the participation of exporters in the «Roadmap for Business2020», «To the attention of protein seed meal producers», «Calculation of optimal export routes», «The calendar of business events», «Reimbursement of exporters' expenses» and many others. The database contains detailed information on the exports of each enterprise, the proportion of exports to production volumes, export geography and the use of marketing tools in promoting exports.

ACTIVITIES RESULTS

The Board of Exporters of the Ministry of Industry and new technologies of the Republic of Kazakhstan The «direct line» of the Agency operates to provide assistance in solving the problems of KAZNEX INVEST customers in foreign trade activities, to make recommendations and provide clarification on issues. The Board of Exporters operates with the Ministry of Industry and New Technologies of the Republic of Kazakhstan to protect the interests of domestic exporters. It coordinates government actions on matters of export promotion, as well as addressing the system, administrative and bureaucratic barriers in trade.

During 2010, KAZNEX INVEST processed 57 requests on the problems of Kazakhstani enterprises. On November 12, 2010, KAZNEX INVEST held its first meeting of the Board of Exporters under the chairmanship of the First Deputy Minister of Industry and New Technologies, Mr. A. Rau. Eleven problematic issues of domestic enterprises such as LLP «Kazphosphate», JSC «Rakhat», LLP «Kaynar AKB», JSC «Ust-Kamenogorsk Condenser Plant», JSC «Waterproofing», LLP «Tulpar-INTECH», Federation of Associations of carriers and forwarders CAREC, LLP «PC «Blessing», LLP «Kazakhstan Rubber Recycling», LLP «KazAzot», JSC «Locomotive Kyrastyru Zauyty» were discussed.

Publications In 2010, the Agency published a guide «Export Products 2010», with a circulation of 2000 hard and 3,000 soft copies. This guide contains information on 404 domestic exporters and 800 types of commodities and is distributed through the Embassies of Kazakhstan in 35 countries. A «Guide for export» was published, which includes full and timely information on the regulations of orders for the export of Kazakhstani products, as well as the regulation of orders for importation of products in 7 countries (Ukraine, Belarus, Poland, Mongolia, Uzbekistan, Turkmenistan and Azerbaijan). These country choices were made based on the international transport corridor «Western China - Western Europe» and B2B free trade zones, designed as effective economic instruments to stimulate international transit traffic through the territory of the Republic of Kazakhstan. The publication includes the requirements for conducting trade and investment in a foreign country, in particular, import procedures and customs laws of the country. The questions on the measures of non-tariff regulation, the licensing system of the country (licensing and certification), and the list of goods prohibited for import / export, preferential and nonpreferential rules of the country, types of state control, including parts of veterinary and phyto-sanitary control. The «Guide for export» contains information on the system of currency regulation, tax laws, types and tax rates in each country.

ACTIVITIES RESULTS

The Agency has issued guidance material «In Help to exporter» in Russian and Kazakh languages with a circulation of 7000 copies on the following seven topics: • preparation of the company to enter international markets; • export pricing; • checking the credit standing of foreign partners; • administrating export risk management; • communication management in export transactions; • use of databases on foreign countries and their markets; • purchasing of humanitarian assistance. Instructional materials are distributed among the Kazakhstani enterprises and business associations in Kazakhstan.

Creation of «export-oriented» ideology One of the objectives of government in the development of exports is the active promotion of the idea among domestic businesses of entering into foreign markets and demonstrating the importance and need for increased foreign trade. The role of KAZNEX INVEST - is not only to provide assistance to exporters, current and potential, but also to shape «export-oriented» ideology, to introduce the national idea of turning Kazakhstan into a country, that exports processed products. A TV program, «Direction-Export! », was launched in 2010 on the republican TV channel - «Channel 7». The program was aired once a week (from August until November 16 series were presented). The project actively involved the representatives of government agencies and independent experts. As a result, the authors of the program were able to identify underlying problems of exporting, to show the potential for export development, to inform on measures exercised by the state in support of local exporters and to demonstrate successful experiences. Similar themes were highlighted on the pages of newspapers and magazines. Five national and 14 regional periodicals in the Kazakh and Russian languages have highlighted the theme of development and export support. In the national business weekly, «Kursiv», a constant headline on the related matter was created. The Agency ordered a promotional video, which focused on the development of export potential, and was broadcast on national television channels «Khabar» and «Kazakhstan» from November 19 to December 31, 2010. Four issues of the specialized magazine «Exporter» in Russian and English were printed (editions of 1800 copies each) based on the disclosure of the export potential of Kazakhstan. The publication is addressed to a wide audience: the representatives of diplomatic missions and international organizations in Kazakhstan, development institutions, government agencies, export companies, as well as employees of the Kazakhstani diplomatic corps abroad. In December 9, 2010, in Almaty, a roundtable was held with representatives from the business community (28 companies) and government officials on the issues of development and export promotion. The agenda included a broad range of issues on foreign economic activity such as: problems and difficulties in the organization of exports, the development of Kazakhstan's exports through the establishment of national packaging and trading organizations and the participation of local exporters in international humanitarian procurements.

2010 ACTIVITIES RESULTS ON ATTRACTING FDI

ACTIVITIES RESULTS

Attracting FDI In April 2010, the Agency’s authority was extended by adding a new function, which is to attract foreign direct investment in priority sectors. Today, 30 similar national organizations function around the world that combine both features – the promotion of exports and the attraction of foreign investments (i.e. AUSTRADE in Australia, UKTI in the UK, JETRO in Japan, KOTRA in South Korea, IES in Singapore, etc.)

The work of the investment block is structured by region, and as a result, regional offices for Europe, America, Asia, Australia and Oceania, Middle East and South-East Asia and the CIS and Eastern Europe have been opened. The main activity of the investment block is to accurately work with targeted investors. They are assisted all the way from the initial stage to further support of the investment process. This work includes assistance in the implementation of the necessary formalities for launching and conducting business in Kazakhstan; arrangement of meetings with key political leaders and mainstream companies in Kazakhstan; providing consulting services or trade-related analytical information (both at the development stage of the project and at the stage of its implementation); assistance in finding a suitable partner from Kazakhstan or in choosing the best site for the location of production and assistance in obtaining government support measures. Following the best examples of the most successful investment promotion agencies, the Agency plans to open representative offices of KAZNEX INVEST abroad for more active and effective searches for investors in targeted donor-countries and countries competing with the Republic of Kazakhstan for investment. For example, it is planned to open «KAZNEX INVEST» representative offices in China, USA, Germany, Russia and the UAE. In 2011, work began on the establishment of a representative office of KAZNEX INVEST in China (Beijing). Currently, the representative office is undergoing registration procedures with the official organs of the People’s Republic of China. In 2010, KAZNEX INVEST began, and continues to pursue, 151 investment initiatives with companies from 21 countries.

It should be noted that there is an increased interest in Kazakhstan on the part of foreign investors. The Agency worked out more than 100 requests of prospective investors on the investment climate, business conditions, sites for the construction of factories, manufacturers and consumers, markets and priority areas of development, etc.

America Total Initiatives: 8 (USA, Canada)

Europe Total Initiatives: 75 (Turkey, France, Italy, Germany, Slovakia, Sweden, Finland)

CIS Total Initiatives: 16 (Russia)

Asia Total Initiatives: 43 (China, Korea, Japan, Malaysia, Singapore)

Near East Total Initiatives: 9 (UAE, Bahrain, Lebanon, Kuwait, Jordan, Qatar)

ACTIVITIES RESULTS

Information and presentation support of investment attraction activities The establishment of a positive investment image of Kazakhstan in the international community is one of the key directions the Agency works on, which focuses on the positioning of Kazakhstan as a country with favorable conditions for investments. It is important for the publicity and promotion of favorable conditions for investment of capital into the country. This includes the support of the National Investment interactive website for foreign investment, production and distribution of specialized publications, systematic work with foreign and Kazakhstan mass media to promote a positive investment image of Kazakhstan as well as conducting press conferences to familiarize the public with the activities and services of the Agency. In 2010, the Agency issued 7000 copies of a booklet presenting investment opportunities in Kazakhstan, «Investors' Handbook», which was aimed at providing foreign investors with useful information while considering making and investing in the non-mineral sector of Kazakhstan. The brochure contains the following information: • benefits of Kazakhstan as a profitable region for investment; • measures of state support for investments in Kazakhstan; • procedures required to open and doing business in Kazakhstan; • guarantees for protection of foreign investment; • information on the procedures required to start a business; • fees for municipal services; • visa applications and other useful information for foreign investors. In addition, 3,000 copies of brochures with information on investment projects in Kazakhstan were issued. Two press conferences on FDI were conducted in Almaty and Astana, after which 14 materials were published and aired.

Ministry of Industry and New Technologies of the Republic of Kazakhstan

Kazakhstan’s investment web-site www.invest.gov.kz A significant event of 2010 was the development and implementation of a national investment interactive website www.invest.gov.kz www.invest.gov.kz - is an integrated information resource on all aspects of investment activities in Kazakhstan in 12 languages: Kazakh, Russian, English, German, French, Korean, Japanese, Italian, Spanish, Turkish, Arabic and Chinese. The main goals of the site are: to supply foreign investors with relevant and useful information on doing business in Kazakhstan, to promote and improve the investment attractiveness of Kazakhstan and to motivate investment in Kazakhstan. Website content: • general information on

Kazakhstan and its regions (economic and geographic features,

infrastructure and resource costs for production (land, labor) and public utilities; • benefits and advantages in investing in Kazakhstan; • procedures for the arrival of foreign citizens in Kazakhstan; • information on the priority sectors of the economy and investment projects and state measures in support of investments in priority sectors; • investment activity procedures in Kazakhstan. One of the features of the site is the online processing of investors requests. The investor can pose any question of his interest, if he plans to begin investment activities in Kazakhstan, and get a prompt response. In addition, the site regularly covers all news related to the implementation of investment activities, as well as planned and past events with the participation of foreign investors and businessmen.

ACTIVITIES RESULTS

Foreign investors and investment projects database www.baseinvest.kz A database of foreign investors and investment projects was developed in 2010 (www.baseinvest.kz) for the purposes of system monitoring and providing a unified account of all the work with foreign investors. The database allows posting information on the meetings held and on the projects implemented with participation of foreign investors in online mode. As a result, the system will allow tracking the chronology of cooperation with each investor. Information on the projects requiring investments are represented in the database in 11 languages: Kazakh, Russian, English, German, French, Korean, Japanese, Italian, Spanish, Turkish, and Arabic. Moreover, based on the Branch program on the development of industries for 2010-2014 and master plans developed by the Government of Republic of Kazakhstan, niche projects needed to attract foreign investors in 11 sectors were defined. KAZNEX INVEST identified 85 niche projects, worth 43 billion U.S. $, in these industries. Proposed niche projects include the application of advanced technologies with a high level of labor productivity (at the level of their foreign counterparts), and high added value.

Business Forums In 2010, KAZNEX INVEST organized 14 business forums, including 5 abroad. Kazakh-German Business Forum, March 19

Kazakh-Slovak Business Forum, March 30

Kazakh-Korean Business Forum, April 21-23

The Kazakh-Austrian Economic Business Forum took place on May 11

Kazakh-Turkish Business Forum, 23-26 May

Participation on the German side included 32 representatives of the German business community, and 2 representatives of government officials. From Kazakhstan there were 62 representatives of the domestic business community and 6 representatives of government officials. Companies represented industries such as chemicals, pharmaceuticals, energy, metallurgy and the agricultural sector.

In total, 38 representatives participated from the Slovak side, with 112 representatives from the Kazakh side. More than 10 bilateral meetings were conducted. As a result of these contacts, a Declaration on Principles of Relations between the countries were signed, including intergovernmental and interdepartmental agreements that have formed a solid legal base and ensures the development of trade and economic cooperation.

The forum was attended by more than 60 Kazakhstani companies and about 80 Korean companies.

In the business forum, 15 representatives of business delegations participated from the Austrian side and 69 representatives from the Kazakh side.

In the KazakhTurkish business forum, 134 Turkish and 307 Kazakh businessmen, government officials, national companies and development institutions of Kazakhstan and Turkey participated.

In the framework of the forum, 23 meetings were held between representatives of Kazakhstani companies and representatives of Korean companies and organizations. As a result of the forum, 17 agreements and memorandums were signed.

As a result of the Kazakh-Austrian business forum, a memorandum on cooperation between the Engineering Unions of Kazakhstan and Austria was signed. Also, the opening of the representative office of the Economic Chamber of Austria in Almaty in the near future was announced.

At the end of the business forum, over 30 business contracts were signed, worth more than $ 330 million.

ACTIVITIES RESULTS

Kazakh-German Economic Forum, July 18

Kazakh-Jordanian Business Forum, September 17

Kazakh-Korean Business Forum, October 12

Kazakh-Belgian Economic Forum, October 12

Kazakh-French Business Forum, October 27

The forum was attended by over 600 businessmen from both countries, 180 of which were participants from Germany. At the end of the forum, 42 bilateral documents were signed worth more than 2.344 billion Euros.

The forum was attended by 15 business representatives from Jordan and 59 participants from Kazakhstan

The forum was attended by 130 representatives of business circles of both sides, 85 of which were representatives of Kazakhstani companies.

The Business Forum, which was attended by more than 65 Belgian participants, aimed at establishing and improving the economic and trade relations between Kazakhstan and Belgium.

178 French and 123 Kazakh business足men took part in this busi足 ness forum between govern足ment officials, national companies and development institutions of Kazakhstan and France. Companies representing industries such as chemicals, pharmaceuticals, construction, consul足 ting, education and science, aerospace, nuclear industry, biotechnology, energy, trade, infrastructure, real estate, environment, finance, transport and logistics, engineering, agriculture and textiles attended. At the end of the business forum, 23 business contracts were signed worth more than 1.913 billion Euros.

Within the forum a memorandum of understanding between KAZNEX INVEST and the Corporation for Enterprise Development Jordan JEDCO was signed.

As a result of the forum, 8 bilateral cooperation documents were signed.

At the end of the business forum, 7 documents were signed worth 32.2 million Euros.

Kazakh-Czech Business Forum, November 23

Kazakh-Tajik Economic Forum, November 24

Kazakh-Indian Business Forum, December 6

Kazakh-Finnish Business Forum, December 14

The forum was attended by 15 representatives of business in the Czech Republic. From Kazakhstan, over 10 representatives of local business and government bodies were in attendance.

The forum was attended by 67 representatives of business circles of both countries, including 30 participants / representatives of Kazakhstani companies.

More than 30 business representatives from India and 10 representatives from local companies and government bodies from Kazakhstan attended the forum.

Over 10 representatives of business from Finland and 15 representatives of local companies and government bodies from Kazakhstan attended the forum.

At the end of the business forum a memorandum of cooperation was signed.

«National Export and Investment Agency «KAZNEX INVEST» JSC Ministry of Industry and New Technologies of the Republic of Kazakhstan

Head office: 25 Syganak street, «Ansar» Business Centre 2nd floor, Republic of Kazakhstan, 010000 Tel.: +7 (7172) 79 93 93, fax: +7 (7172) 79 93 92 Representative office in Almaty: 111 Gogol street, 5th floor, office 502/505, Almaty, Republic of Kazakhstan, 050004 Tel.: +7 (727) 259 06 90, fax: +7 (727) 258 21 51