Temat: "Ontustik" Special Economic Zone Kazakhstan

"Ontustik" Special Economic Zone is created by the Decree of Kazakhstan President N. Nazarbayev in July 2005. This is one of the first initiatives on creation of cotton-textile cluster in South Kazakhstan region of the Republic of Kazakhstan. "Ontustik" SEZ is created to attract investors to textile industry which is very promising and gainful for our region and for Kazakhstan as a whole. It is expected to attract nearly 500 million dollars of private investments for the development of "Ontustik" SEZ.

"Ontustik"SEZ is located in an enclosed land space near Shymkent city which is the administrative center of South Kazakhstan region. The territory of 200 hectares allocated to "Ontustik" SEZ is advantageously located close to transportation and energy infrastructure. It is supposed to build up here more than 15 new spinning, weaving and garments production units. Processing up to 100 thou. tons of cotton in a year is supposed at enterprises of SEZ that will provide creation from above 5 thou. workplaces in region.

Activity of SEZ assumes growth of the home consumer textile market and also export-oriented manufacture, where the main activities of SEZ enterprises will be as follows:

* Production of cotton threads and all kinds of yarn
* Weaving manufacture
* Finishing and dyeing manufacture
* Production of finished textile items
* Production of knitted goods and hosiery
* Production of knitted pullovers, cardigans and this and the like goods
* Production of uniforms
* Production of outerwear
* Production of underwear
* Production of other garment and accessories
* And also the activity on forming SEZ companies' infrastructure

Successful development of "Ontustik" SEZ is promoted by such factors as preferential economic conditions, access to source of raw materials, markets, human resources, infrastructure, low level of costs, stable investment climate.

Advantages of SEZ

Cooperation proposition

"Ontustik"SEZ provides to potential investors the following key advantages:
Privileged economic conditions
Textile companies working within "Ontustik" SEZ are exempt from corporate income tax, land and property taxes, and also from VAT up to 10 years.There are also significant preferences for investors in custom payments and other.
Availability of raw materials
In 2004 the total cotton-wool harvest was 402 thousand tons, which was produced to 138,9 thousand tons of cotton fibre. Practically all the cotton is cultivated in the South Kazakhstan region. Currently the main part of the cotton fibre produced is exported (more than 90% in 2004). Within next 3 years we expect increase of cotton wool harvest up to 700 thousand tons.

Textile cluster development program supposes consolidation of peasant proprietors, implementation of modern grading system, building up of modern warehouse terminals and launching of freely circulated warehouse receipts mechanism which will permit to purchase easily cotton fibre for internal market needs.
It is supposed that textile companies located in "Ontustik" SEZ would process up to 100 thousand tons of locally produced cotton.
Proximity of sales markets
Kazakhstan is located between regions with significant demand for cotton yarn. Thus, Asian-Pacific countries' annual demand is more than16,5 million tons of cotton yarn, Europe -1,6 million tons annually, CIS countries -0,6 million tons annually. Based on a industry experts' data the annual increase of textile and garments world consumption is in average 2,2% and will be equal to 62 milion tons in 2010.
Availability of human resources
South Kazakhstan region is the most densely populated region in Kazakhstan with more than 2 million people (out of 16 million of total Kazakhstan population).

Textile cluster development program in South Kazakhstan will, among other objectives, enhance professional education of technical and highly qualified personnel.

Even now Shymkent citizens successfully work on new textile manufacturing facilities using cutting edge equipment of leading European textile machinery producers.
Low production costs
Apart from low cost of cotton fibre, Kazakhstan has very low tariffs for electric power and natural gas. Average monthly salary in Kazakhstan is approximately 300 US dollars
Access to infrastructure
Kazakhstan has a ramified net work of automobile and railway roads connecting Kazakhstan with Russia, China, Uzbekistan and other countries.

There is a railway road near "Ontustik" SEZ territory, electric power and natural gas supply systems will be set up soon. "Ontustik" SEZ territory will also have customs and fiscal authorities' offices . There are already in Shymkent city several spinning and weaving projects currently being realized with participation of leading machinery producers such as Rieter, Picanol, Visman and other. Textile machinery producers are highly interested in further development of the region and will be actively involved in "Ontustik" SEZ development as well. Kazakhstan textile and cotton companies have already expressed their interest in new projects within "Ontustik" SEZ.

World Bank has declared the intention to invest 3 million US dollars in development of Kazakhstan cotton and textile industry within 4-year program providing Kazakhstan producers with access to market research data of global textile industry. World Bank plans to build up in Kazakhstan a national laboratory for cotton quality evaluation. World Bank has already a successful experience in enhancing cotton industry development in Uzbekistan where it has realized a similar 7-year program.
Sound investment climate
In 2002 Kazakhstan has obtained for the first time investment credit rating from world leading rating agencies and keeps to justify this every year.

Kazakhstan has an adequate legal base aimed to protect investors' rights, an efficiently working tax code. State authorities are impermanent interaction with foreign investors and national business to create better conditions for business development in Kazakhstan.

Work of EZ is regulated by the law of the Republic of Kazakhstan "On Special Economic Zones" and other legal acts which clearly specify mechanism of obtaining preferences, investors' protection from changes in legislation and other important issues.

To sum up all the above said we can say with confidence that "Ontustik" SEZ provides quite attractive environment for realization of investments projects.

http://www.textilezone.kz/index.php?status=show_html&l...Marcin Nowak edytował(a) ten post dnia 23.12.07 o godzinie 20:08