Kazakhstan – Q2 2013
Following an estimated 5.3% expansion in 2012, we forecast Kazakh real GDP growth will reach 5.8% in 2013. A recovery in the agricultural sector combined with strong investment and consumer spending will drive growth higher this year. Kazakhstan remains an attractive destination for foreign investment due to its vast natural resources wealth, a good location to export to high growth markets in Asia, and a steadily improving business environment . We see a lot of room for growth across many sectors, particularly alcohol and food retailing. Multinationals led by Nestlé Turkey-basedÜlker and possibly a range of companies in neighbouring Russia, are likely to scale up investment, particularly with much of emerging Europe no longer as attractive on the consumer side following the global financial crisis.
Headline Industry Data (local currency):
- 2013 per capita food consumption: +8.8%; compound annual growth rate (CAGR) forecast to 2017: +10.1%
- 2013 alcoholic drink value sales: +9.7%; CAGR forecast to 2017: +11.5%
- 2013 soft drink value sales: +15.2%; CAGR forecast to 2017: +15.1%
Key Industry Trends And Developments:
Heineken and EBI to De-Merge Joint Ventures : At the beginning of 2013 Dutch brewer Heineken and Efes Breweries International (EBI), a subsidiary of Turkey’s Anadolu Efes, announced plans to de-merge their joint ventures in Kazakhstan and Serbia. The two companies will complete the deal by exchanging minority cross-shareholdings, which will result in a consideration to be paid by EBI to Heineken of US$161mn. Heineken will divest its 28% interest in Efes Kazakhstan to EBI, while acquiring EBI’s 28% stake in Central Europe Beverages, which is the holding company for the Serbian operations, giving Heineken full ownership.
Carrefour to Enter Kazakhstan? : In 2012 Majid Al Futtaim (MAF) Holding, the regional franchise holder for the Carrefour hypermarket chain, added Georgia, Kazakhstan, Armenia and Azerbaijan to the franchise agreement with Carrefour. No dates for a launch into Kazakhstan have been announced, but the arrival of Carrefour on the local market will undoubtedly provide a boost to the country’s underdeveloped retail sector and change the way consumers shop over the longer term.
Key Risks To Outlook:
Downside Economic Risks : Kazakhstan’s economic growth remains highly dependent on developments in the external environment. This is due to the economy’s high reliance on global commodity prices for growth. Indeed, strong consumer spending is underpinned by the government’s generous social, wage and welfare spending, which is in turn enabled by high revenues from the hydrocarbons and other commodities exports. In the event that global commodity prices fall further than we are currently forecasting, Kazakh economic growth would be squeezed.