Tag Archives: business

South Korean confectionery buys into Kazakh business

JULY 2 2013 (The Conway Bulletin) — Recognisable by its unreformed Soviet style packaging and logo, Rakhat chocolate is iconic in Kazakhstan; symbolism even laces the name. In Kazakh, Rakhat means “pleasure”.

Rakhat is a rare example of an established Kazakh retail brand and that makes its sale important.

According to a company announcement on July 2, Lotte Confectionery, a South Korean company, has agreed a deal to buy 76% of Rakhat from four shareholders for about $120m. On the Kazakh stock exchange website these shareholders were listed as Natalya Khilchuk (11% stake), BD Associates ltd (UK, 29% stake), Anatoliy Popelyushko (25.45% stake) and Sweet City LLP (12.2% stake).

The deal values Rakhat, which had sales of nearly $200m in 2012 and employs 4,000 people, at roughly $157m.

Rakhat is one of the most high profile Kazakh retail companies ever sold. This is not an oil and gas company nor a mining company, it is a chocolate maker and its sale highlights Kazakhstan’s growing appeal to consumer brands.

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(News report from Issue No. 142, published on July 8 2013)

Kazakhstan blocks Indian bid for Kashagan stake

JULY 3 2013 (The Conway Bulletin) — Kazakhstan disappointed India’s government by triggering its option to buy an 8.4% stake in the Caspian Sea oil field Kashagan. US energy major ConocoPhillips said last year that it was selling its stake to Indian state energy company ONGC Videsh for $5.5b. Kazakhstan, though, held the option to block this deal.

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(News report from Issue No. 142, published on July 8 2013)

Uzbekistan and China sign deals

JULY 6 2013 (The Conway Bulletin) — Uzbek and Chinese companies signed deals worth $100m at an investment forum, media reported quoting Uzbekistan’s ministry of foreign economic relations. Among these was a deal between Uzbeklegprom, an Uzbek state-run company, and Chinese textile companies. The deals show China’s increasing reach in Central Asia.

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(News report from Issue No. 142, published on July 8 2013)

Kazakhstan blocks India’s purchase of Kashagan

JULY 3 2013 (The Conway Bulletin) — The Kazakh government has a decent poker face, at least when it comes to bluffing its intentions on energy deals.

For months Kazakh officials had said that they would not use their pre-emptive right to block a deal between ConocoPhillips, a US energy firm, and India’s ONGC Videsh.

ConocoPhillips had decided that it wanted to cash in its 8.4% stake in the Kashagan oil field in the Kazakh sector of the Caspian Sea. In November last year it announced a deal to sell this stake to ONGC Videsh for $5.5b.

Kazakhstan holds the right to buy stakes in its energy fields if a foreign company wants to exit, but earlier this year government officials said they would not buy the ConocoPhillips stake. Instead, they said, they would decide between allowing India into Kashagan or letting China, an increasingly close economic partner, into the project.

China’s apparent interest now looks like a decoy.

On July 3, Lyazzat Kiinov, chairman of Kazakh state energy company Kazmunaigas, said the company would buy the 8.4% stake in Kashagan.

The deal is important for two main reasons.

It’s perhaps a coming of age for Kazakhstan which wants to retain more ownership over its energy resources. It’s also a blow for India’s energy policy. India had staked a lot on expanding into the Caspian Sea and securing a major foothold in Central Asia’s energy sector. It now has to look elsewhere.

Kazakhstan wants to become a top energy producer.

Before the sale of ConocoPhillip’s stake, the consortium developing Kashagan consisted of ENI (Italy), Total (France), ExxonMobil (US), Shell (Britain) and Kazmunaigas all with a 16.81% stake. Inpex (Japan) also owns a 7.56% stake.

After this deal, Kazakhstan will be the main shareholder.

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(News report from Issue No. 142, published on July 8 2013)

More protests in Kyrgyzstan over gold mine

JUNE 27 2013 (The Conway Bulletin) — Roughly 500 people protested near the Kumtor gold mine in east Kyrgyzstan, media reported, the latest in a series of protests against the Canadian owners of the mine. The protesters want the mine nationalised. Toronto-listed Centerra Gold owns Kumtor, the biggest industrial project in Kyrgyzstan. The Kyrgyz government owns a third of Centerra Gold.

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(News report from Issue No. 141, published on July 1 2013)

Israel sends first envoy to Turkmenistan

JUNE 24 2013 (The Conway Bulletin) — Highlighting Turkmenistan’s increasing importance as an energy supplier, Israel sent its first ambassador to Ashgabat, media reported. The arrival of Ruevan Daniel, a former agent of the Israeli intelligence services Mossad, as Israel’s ambassador may also sour Turkmenistan’s relations with neighbour Iran.

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(News report from Issue No. 141, published on July 1 2013)

David Cameron visits Kazakhstan

JUNE 30 2013 (The Conway Bulletin) — Whatever the deals signed between British PM David Cameron and Kazakh President Nursultan Nazarbayev, Kazakhstan will emerge as a winner.

Persuading Mr Cameron to visit Kazakhstan is a PR coup for Mr Nazarbayev and will have other countries in Central Asia and the South Caucasus looking on enviously.

Mr Cameron is the first serving British PM to visit Kazakhstan, although, as one of Mr Nazarbayev’s advisers, ex-PM Tony Blair is a relatively regular visitor to Astana.

Kazakhstan has spent deeply on a small army of Western lobbyists, including the well-connected London-based Portland, and tasked them with improving its image.

Most of Europe’s leaders had already made the journey east to Astana. The EU, France and Germany have develop strong ties with Kazakhstan. Britain, though, had stood aside.

It was only a matter of time, though, before this changed.

Wealthy Kazakhs increasingly look to London as a fulcrum for their international business and lifestyle ambitions. As well as multiple business links, the Kazakh elite are sending their children to top English boarding schools and the government has been sponsoring a new generation of lawyers and civil servants through British universities.

Travel connections between London and Almaty, Kazakhstan’s financial centre, have also improved this year when British Airways finally opening a direct flight from Heathrow.

For Mr Cameron, the trip is trickier. He will want to develop economic ties with Kazakhstan but will have to tread carefully around the inevitable human rights questions to avoid upsetting his hosts. Britain also needs help from Kazakhstan to pull its military kit out of Afghanistan.

(News report from Issue No. 141, published on July 1 2013)

Azerbaijan chooses Trans-Adriatic Pipeline

JUNE 28 2013 (The Conway Bulletin) — What has felt like a titanic battle between two competing proposals to link a gas transit route from the Caspian Sea to Europe is finally over.

At a press conference on June 28, the consortium of energy companies developing the Shah Deniz gas field in the Azerbaijani sector of the Caspian Sea said they had chosen the Trans-Adriatic Pipeline (TAP) to send their gas to Europe.

TAP route will carry the gas across Turkey, Greece and Albania and then under the Adriatic Sea to Italy. It is headed by Norway’s Statoil, Switzerland’s AXPO and E.ON Ruhrgas of Germany.

TAP’s victory means defeat for Nabucco West, its main rival headed by Austria’s OMV.

The decision, though, was hardly a surprise. While Nabucco West’s bid has slowly lost momentum its fate was sealed earlier this month when SOCAR, the Azerbaijani energy company, bought a 66% stake in DESFA, Greece’s natural gas distributor.

Now TAP has to be built. It will run for 520km and cost $2.2b. Once it’s up and running, Europe’s reliance on Russia for gas supplies will be reduced and Azerbaijan’s importance to Europe will be increased,

(News report from Issue No. 141, published on July 1 2013)

Fire damages factory in central Kazakhstan

JUNE 26 2013 (The Conway Bulletin) — A 90m-high chimney at Luxembourg-based ArcelorMittal’s steel factory in the town of Temirtau, central Kazakhstan, was damaged in an accident, media reported. The Temirtau factory is the largest steel making plant in Kazakhstan. There were no casualties in the accident although production will be slowed to repair the damage.

(News report from Issue No. 141, published on July 1 2013)

Kazakhstan to send more oil to Romania

JUNE 27 2013 (The Conway Bulletin) — Romanian PM Victor Ponta visited his Kazakh counterpart Serik Akhmetov in Astana to discuss the countries’ growing economic cooperation. Kazakh state energy company Kazmunaigas owns Rompetrol which controls an oil terminal on the Black Sea. Romania wants Kazakhstan to increase its use of the oil terminal.

(News report from Issue No. 141, published on July 1 2013)