Chinese market is large enough, but we should have the required volumes…

Source

APK-Inform

1572

 

 

Kazakhstan and China have been working hard on expanding and extending of the cooperation in different areas, including agribusiness – that led to many bilateral meetings, conferences, exhibitions on the governmental level and in terms of mere business. One of such latest events was Sunflower Oil & Meal Trade Conference organized by the APK-Inform Agency on July 27 in Shanghai. There was a delegation of Kazakh producers and exporters of vegoils to China aiming at expanding of the cooperation and increasing of the exports of its product to Chinese market. We asked some representatives of the Kazakh delegation about the level of their products being able to enter the Chinese market and the current problems.

The respondents were asked several questions:

  1. China is one of the largest importers of sunflower oil including of Kazakh origin. What prospects of the Kazakh exports growth to China can You see?
  2. In June 2018, You as the part of the Kazakh delegation visited Sunflower Oil & Meal Trade Conference in Shanghai. What Kazakh oilseeds product has the biggest prospects to be exported to China, taking into account the growing competition from Ukraine and Russia? Will Kazakhstan be able to provide the necessary volumes and quality of products?
  3. You presented the TM QazMai to Chinese partners. Have You succeeded to negotiate the further cooperation? If You did, please tell us in details, if not – what prevented it?
  4. What do You think to what extend the logistics between Kazakhstan and China allows to increase the trade, including vegoils export?
  5. What does Kazakhstan need to expand the cooperation with China in terms of agriproducers and the government?

 

Asel Ergalieva, the trade manager of LLP Bota-2015, which is part of LLP Logos Grain:

  1. China is large and prospective market for the distribution of the food products, including oilseeds. China always demonstrates good demand rates for the product, but we should find the required volumes to cover the demand. I can say that since the launch of our plant (in 2015) the volumes of the flaxseed and sunflower oils exports increase from year to year as more Chinese companies find out about our company.
  2. The Chinese market is large enough to cover the exporters needs. However, if we deliver the products via Alashankou/ Khorgas the Kazakh exporter wins in terms of logistics. If the product is delivered deep in to China Ukraine and Russia can provide another, more attractive routes. If we speak about the quality, the Kazakh product is equal to Ukrainian or Russian.
  3. At the stand of QazMai we presented such products as sunflower and linen oils, sunflower cake. There were partners on the conference so we had the opportunity to negotiate the delivery of the products for the future season.
  4. The majority of the oil producing plants in China are situated in the center and the sough-east regions thus the delivery must be provided deep into the country. But there is a problem of the oil delivery on the border. In particular, we supply oil in tanks by the railways that are wider than those in China. If we could increase the delivery of oils in containers on the railways of Kazakhstan perhaps the situation will change. Also, we should take into account that not all of the stations can adopt the planforms/containers and not all of the elevators can dispatch the products to containers.
  5. I believe that first of all we should regulate the requirements of the flow of documents between Kazakhstan and China.

LLP Bota-2015 is the plant processing oilseeds (mostly flaxseed and sunflower seed) with the capacity of 300 tonnes per day. The plant produces the crude cold or hot pressed oils. The storage capacities of oils totals 1923 m3 and of cake – 9 thsd tonnes. In 2016 it produced 8 thsd tonnes of oil and in 2017 – 18 thsd tonnes.

LLP Logos Grain produces wheat, barley, rapeseed, flaxseed, lentil, sunflower; flaxseed and sunflower oils, flaxseed and sunflower cakes; 1- and premium-grade flour.

During nearly 20 years the company delivers the grains and the products of processing to the Kazakh market and the near and far abroad market of Russia, Azerbaijan, Georgia, Ukraine, Belarus, Uzbekistan, Tajikistan, Kyrgyzstan, Turkmenistan, Baltic countries, Austria, Spain, Poland, Germany, Norway, Great Britain, Saudi Arabia, Tunisia, Livia, Egypt, Afghanistan, Iran, Turkey, China, South Korea, Vietnam.

The company’s annual export of grain amounts to 300-400 thsd tonnes and is performed in bulk, in  sacks via the railways to the point destination or to the sea ports for the further delivery via the sea.

 


Eugeniy Ibraev, manager of LLP K-Oil:

  1. The prospects of the Kazakh products export are always good. As 6-7 years ago as well as today it is possible to increase the export volumes but it all depends on the prices.
  2. I believe that it is easier to work in terms of rapeseed oil. However, the production of rapeseed in Kazakhstan is not as prospective as it is possible to grow only in a few regions. If speak about China sunflower oil is the most advantageous as well as in the world in general. In terms of competition I can say that it is absent with Ukraine. If we speak about Russia the plants in the Altai Territory dispatch the product to China. We also have the high competition with Uzbekistan.
  3. We presented sunflower and rapeseed oils. We had a pleasure to speak with the Chinese partners. We had the opportunity to meet new representatives of the market and to exchange business cards. Of course we hope to develop the partnerships.
  4. The work of developing the cooperation is under way. But in order to increase the export of oil it is necessary to increase the production of oilseeds. It is possible to do in the northern regions of Kazakhstan but here it is needed to expand the support of the agriproducers.

LLP K-Oil (Kostanay) is the modern plant of the oil production which successfully works in the processing area in Kazakhstan and produces the products of the TM “Made in Kazakhstan”. The company was founded in 2012.

It processes sunflower seeds, rapeseed and other oilseeds. The processing capacity totals 25 thsd tonnes. The plan has the modern equipment of EU, China Russia origin and of other countries. The storage capacity amounts to 200 thsd tonnes of rapeseed and 14 thsd tonnes of sunflower seed. Apart of the oil of TM K-Oil the company produces the granulated meal. The plant efficiency of the press is 150 tonnes per day.

The products (oil and meal) are distributed mostly on the domestic market. Sunflower oil is exported to China, meal is exported to Russia, Iran and the Middle Asia.

 

 Chingiz Urazbaev, the head of sales department of LLP Vostokselhozprodukt:

  1. Our company delivers the products for the Chinese market for nearly three years but during this time we could not surpass the delivery out of the Xinjiang province. First, in China many work in terms of bank guarantee and the Chinese partners do not wish to work on our contracts of payment. I suppose, but for the low trust, we could expand our sales significantly.
  2. As we mostly specialize in producing of sunflower seeds the most prospective product to sell is sunflower oil. This product is our priority.
  3. We presented the packed refined, deodorized and cooled sunflower oil of high grade. But China is more interested in purchasing of crude sunflower oil as it has its own refining capacities. Thus our product is new for this market and we did not see may possible buyers of our oil. I met some representatives of Chinese companies and they were mostly interested in crude sunflower oil.
  4. I believe that being the neighboring country with China we have the fine logistical resources, in particular the railways.
  5. I believe that it is needed to have more such meeting, exhibitions, where the Chinese colleague could get acquainted with our products. We should pursue the mutually beneficial cooperation.

LLP Vostokselhozprodukt since 2000 produces refined deodorize cooled sunflower oil of high grade. The production capacity of the plant is 100 tonnes per day. The plant has the equipment of China origin.

The products are exported to China, Uzbekistan, Afghanistan and Russia.

In 2012 the company started new floor for the production of refined deodorized sunflower oil. In 2014 the additional equipment was launched on the plant for the blowing of the polyethylene bottles for oil. The products are sold as the TM Altyn Mai, Solnechnoe, Nur.

 

 

Murat Dzhakibaev, the CEO of LLP Terekti mai kombynaty:

  1. The prospects of the development of our relations with the Chinese partners are rather good. The possibility for the Kazakh agriproducers to export goods to China is the diversification of the distribution channels, the export currency return, unlimited volumes of the supply, the high requirements to the products quality. But there are also some negative factors such as the price policy on the Chinese market, the logistical expenditures, and the currency volatility.
  2. For the Kazakh producers to represents their products under the unite TM QazMai was a great idea. But here is the question of the quality control of the product. Speaking about the competition I suppose that the Kazakh volumes of the product are not as large to compete as the Chinese market is wide enough. Moreover, Kazakhstan domestic market is not yet self-sufficient enough.
  3. There are potential buyers, but it is not possible to forecast the prices considering the upward prices trends on the market of vegoils and oilseeds. But such trend is seasonal.
  4. The logistics between the countries is developing but there are still many question.
  5. The part of governmental and controlling bodies affects all of the stages of the logistical chain – starting from the production and finishing with the delivery. Today, the government performs different types of support for the agriproduces (easy-term loan, subsidies for the produced products expenditures, etc.). However, there are some problems during the transportation of the goods – products quality proof, the provision of the rolling stock (rail cars), customs registration, the goods transshipment on the border-crossing, etc.

LLP Terekti mai kombynaty is part of GC Beles, since 2017 performs the oilseeds processing. The planned processing capacity for the current year is 45 thsd tonnes per hour. The plant has the floor of dehulling and separation has the capacity of 180 tonnes per day, the pressing floor, the floor of the filtration and hydration of oil, the floor of refining, the floor of cake extraction, the production line of margarine, spred, mayonnaise, the bottling line, the steam shop, that operates on the wastes – the seeds pods. The products are distributed as TM Beles-Mai.

 

Konstantin Nevzorov, the president of the association of legal entities Association Fat-and-Oil Union of Kazakhstan:

  1. First of all I would like to oilt out that the association Fat-and-Oil Union of Kazakhstan took an active part in the development of an umbrella brand QazMai. The work over its development and promotions continues but we can proudly say the companies that presents their products under this TM care about image of QazMai. They produce the high quality ecofriendly products that is highly competitive on both the domestic and the global markets.
  2. Of course, is the company presents its products on the Chinese market it should not believe that the 1.5 billion of Chinese suppliers wait for the Kazakh products. We should work hard in order to enter this market.
  3. I believe that the large market of China with its growing needs in food products is a highly prospective market for us to increase our export activity and for our economy in general.
  4. Herewith we should understand that in order to increase the production and the exports of oilseeds products we must clear the barriers. These are the lack of the production capacities, the high depreciation and the obsolescence authorized funds that lead to the low domestic competitiveness of the producers. Moreover, there is lack of financing and support of the exporters and the high cost of resources, the absence of governmental support mechanisms and state services for the exporters in terms of one-stop-shop principle, etc.
  5. At the same time, Kazakhstan has a high level of resource availability and relatively cheap workforce that together with the geographical position of the country give us the significant competitive advantage.

The association of legal entities Association Fat-and-Oil Union of Kazakhstan was founded in 2015. Today the association has 11 members, among which the largest plants of Kazakhstan and Middle Asia, that produce 200 items of fat and oil products, and the small plants that manufacture the specialized functional organic oils. The union of such plants combining the large including foreign experience gave the opportunity to make right and responsible decisions aimed at market development.

 

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