Kazakhstan is little known about over here in the west – it is a place we have all heard of, but maybe not realised that it is the ninth largest country in the world, has the lowest population density and, more importantly still, is sitting on vast reserves of oil, gas and minerals.
Why then, should it be seeking foreign cooperation in building a a farm machinery manufacturing infrastructure in a country labelled arid to semi arid by geographers?
It is also important to note that to the north it has Russia as a neighbour while to the south it has a border with China, both countries having a huge interest in Kazakhstan’s mineral wealth.
Combine production
Back in 2021, Agriland reported on a deal struck with Claas to build an assembly plant for harvesters in the country, the assumption being that as part of China’s Silk Road policy communication and logistics within the region and beyond would be opened up to both the east and west.
This is still a valid assumption and it was underlined by Claas’s announcement of a further deal to expand its its investment in Russia soon after, plans which were dramatically curtailed within a year by the conflict in Ukraine.
The German company does appear to have suffered from geopolitical events and it is not entirely clear as to quite how far the Kazakhstan harvester assembly plant has progressed since.
At a further meeting in October 2024 between Claas and Baiterek, the investment and holding company of the Kazakhstan government, it was noted that the two sides “explored opportunities for launching the production and assembly of CLAAS agricultural machinery in Kazakhstan”, some three years after the assembly plant was reported to have been inaugurated.
Horsch partners with Kazakhstan
At the same time, Horsch also signed up to work with the government with both agreements aiming to produce high-tech agricultural machinery in Kazakhstan and so enhance the country’s agricultural sector generally.
The government of Kazakhstan is determined to modernise its agricultural sector and it is not just machinery that is being looked at, money is being made available as credit for farmers and agricultural businesses to update their operations.
The total sum agreed at a meeting between Baiterek and three banks was 400,000,000 Tenge, an impressive figure but it converts to just €745,000. There will not be many combines purchased with that.
John Deere is the latest company to have sat down with the government to discuss future cooperation and it has “reaffirmed its commitment to supporting Kazakhstan’s government initiatives to foster industrial growth and increase the localisation of agricultural machinery production”.
Technology to the fore
In all three cases, there is an emphasis on technology, both mechanical and digital, as the government insists on bringing the country’s agriculture sector up to date.
The reason for doing so may seem a little obscure, given the general belief that the country is little more than a desert, yet the statistics paint a rather different picture.
According to the International Trade Administration (ITA) over a third of livelihoods within the country depend in some form on the extensive rangelands for food, fodder, fuel, and medicinal plants.
Animal husbandry is also important economic activity with around 75% of all agricultural land used for grazing, mainly sheep, but cattle, camels and even pigs are produced, for the country’s population is 17% Christian.
Huge potential
The ITA also notes that approximately 75% of the country’s territory is suitable for agricultural production, but only about 30% of the land is currently being utilised for farming.
When it comes to machinery the reason why western companies are happy to sign up to deals becomes a little more obvious.
Nearly 90% of machinery currently in use in Kazakhstan is at the end of its lifecycle and needs to be replaced. Tractors in use for more than 10 years account for 94% of the entire fleet, while harvesting combines in similar condition make up 77%.
The machinery sector is said to be worth $500 million, of which $300 million is imported, Russia having a 40% share of the market.
Despite sharing a border with China the Kazakhstan government is looking to the west to update its agriculture, which is reassuring, but it is small beer when compared to the projects with which it is partnering with China in a bid to upgrade its infrastructure – $700 million was pledged by China for such ventures last July.
Kazakhstan is the filling in the Russian-Sino sandwich and it needs to tread with care, keeping on good terms with these two countries, along with the west is going to be tricky act to carry out.
Being sited on a vast mineral wealth and with its ambitions to expand it agricultural output it is likely that we will be getting to hear a lot more about the country over the next few years.
