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Samruk-Kazyna National Welfare Fund Investment opportunities July 2010.

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Presentation on theme: "Samruk-Kazyna National Welfare Fund Investment opportunities July 2010."— Presentation transcript:

1 Samruk-Kazyna National Welfare Fund Investment opportunities July 2010

2 Samruk-Kazyna Invest Samruk-Kazyna Overview National Welfare Fund consolidates key state assets in more than 400 subsidiary companies Key player of the industrial and innovation development program Effective tool in implementation of the Anti-crisis program: –primary role in stabilization of financial sector by means of direct participation in 4 largest commercial banks of the country –primary role in stabilization of the real estate market –direct support of the small and medium size businesses –manages mortgage refinance program Main objectives Achieving sustainable growth of state economy Promoting modernization and diversification of state economy Increasing the effectiveness of the holding and all of its affiliates Promoting and implementing large-scale investment projects 2

3 Samruk-Kazyna Invest Samruk-Kazyna Main assets 3 SectorParticipation in companiesDescription Assets, end of 2009 $ mln Oil & GasKazMunayGasNational oil & gas company TransportationKazakhstan Temir ZholyNational railway operator6 650 Air AstanaNational carrier211 CommunicationsKazakhtelecomNational telecommunication company2 316 KazPostNational post operator235 PowerSamruk-EnergyNational power generating company1 490 KEGOCNational electricity grid operating company1 282 FinancialDevelopment Bank of KazakhstanDevelopment bank2 519 Kazyna Capital ManagementEquity funding366 BTA, Kazkommertsbank, Halyk Bank, Alliance Bank Commercial banks MiningKazatompromNuclear industry2 614 Tauken SamrukMining industry8 000 Chemical & Pharmaceuticals United Chemical CompanyNational chemical company SK PharmacyNational medicine and medical equipment distribution company 3 240

4 Samruk-Kazyna Invest 4 Oil & Gas Overview Oil and gas sector – 30% of Kazakhstan’ s GDP Proved oil reserves bn tons Gas reserves – 7 trillion cubic meters (3.9% of world reserves) The production of oil in Kazakhstan has increased by 52% ( ) while the production of gas has increased by 37% in the same period Samruk-Kazyna participation in the sector KazMunayGas - vertically integrated national oil and gas company Development perspectives Production growth due to field developments (Kashagan, Khvalynskoye, Block N etc.) Transport infrastructure development – launch of Trans-Caspian Transportation System, “Kazakhstan-China” pipeline’s extension, construction of “Beineu-Shymkent” gas pipeline, Aktau port’s development Development of local refinery capacities up to 17 mln tons / processing upgrading Development of petrochemical branch Investment opportunities* Atyrau Oil Refinery - Oil deep processing Complex construction ($1.1 bn) Pavlodar Oil Refinery ($1 bn) Construction of petrochemical plant in Atyrau ($6.3 bn) *More information about investment projects – in annex

5 Samruk-Kazyna Invest 5 Power Current trends Considerable gap in electricity supply between energy excessive northern regions of Kazakhstan and energy-dependent southern regions of the country Local production capacities are depreciated by almost 70% Competitive advantage Access to low-cost fuel due to large local reserves of coal, oil and gas Opportunity to develop renewable energy resources Development perspectives Construction of 6 new thermal power plants (coal or nuclear) until 2030 Construction of new hydropower plants Samruk-Kazyna participation in the sector Samruk-Energy - operates major power plants in Kazakhstan KEGOC - operates the national power grid, owns and operates all main and interregional transmission lines and master substations across the country Investment opportunities Balkhash thermal power station ($2.4 bn) Electricity consumption in Kazakhstan (forecast), bn kWth +25%+60%+76% Pessimistic Basic Optimistic 98 78,

6 Samruk-Kazyna Invest 6 Overview Strategic geographical location High dependence of the economy on transport infrastructure Samruk-Kazyna participation in the sector Kazakhstan Temir Zholy - national company, monopoly railway operator Air Astana - leading domestic airline Kazakhtelecom - major player on the telecommunication market Investment opportunities Production of passenger rail carriers ($60 mln) Construction of the railway Zhetygen – Korgas (border with China) ($1.1 bn) Construction of the railway Uzen – border with Turkmenistan ($433 mln) Transportation & Telecommunications Freight turnover in Kazakhstan, bn tkm Passenger turnover in Kazakhstan bn pkm Routes in KZLength (thsd km) Railway14,2 Auto routes93,6 Air ways61 Water routes3,9

7 Samruk-Kazyna Invest 7 Overview Large reserves of Uranium, Lead, Zinc, Gold, Coal 2008: production of ferrous metals - $4.5 bn production of precious and non-ferrous metals – $ 4.4 bn Share of metals and mining sector in total industrial production of Kazakhstan – 20% Objective – production of high value added products Samruk-Kazyna participation in the sector Tauken-Samruk - national mining company Kazatomprom - national nuclear company, implements the industry development program of Kazakhstan aimed at creation of a vertically integrated complex of nuclear fuel cycle Investment opportunities Upgrade of cast iron plant ($457 mln) Steel rails production ($309 mln) Polycrystalline production ($388 mln) Metals & Mining Natural resource World Rank by reservesproduction Uranium23 Lead211 Zinc28 Chromium22 Manganese36 Gold (ore)410 Iron512 Copper510 Coal810

8 Samruk-Kazyna Invest 8 Chemicals Resources Kazakhstan is 11th in the world in mineral production Second largest proved supplies of sulfuric acid in the world Kazakhstan possesses 1/3 of proved phosphorite reserves in CIS and over 5% of world reserves Current trends Growing demand for fertilizers in Russia and China Annual chemicals production grew 2,6 times in years period Local companies produce phosphorus, sodium bichromate, phosphoric fertilizers, nitric fertilizers, chromic compounds, plastics, tires, general mechanical rubber goods There is a potential of products diversification (organic and nonorganic chemical products, special chemicals) Samruk-Kazyna participation in the sector United Chemical Company - consolidates state assets in chemical sector Investment opportunities Mineral fertilizers – Kok-Dzhon ($1.9 bn) Construction of phosphorite fertilizers plant ($600 mln) Sulphuric Acid production ($65 mln)

9 Samruk-Kazyna Invest Pharmaceuticals Current trends Market size – around $900 mln Growing local consumption – 20% average annual growth Local production is growing, but covers only 10% of domestic market 90% of consumed pharmaceuticals are imported Samruk-Kazyna participation in the sector SK Pharmacy - national medicine and medical equipment distribution company Key advantages Growth of domestic production Transparency in government purchases Demand for improved quality of products Investment opportunities Construction of pharmaceuticals plant in Astana and expansion of production in Shymkent ($81 mln) National medicine and medical equipment distribution company ($80 mln) 9

10 Samruk-Kazyna Invest Annex Investment projects 10

11 Samruk-Kazyna Invest SectorProjectCost, $ mlnInvestment opportunityPeriod/ launch Oil & GasAtyrau Oil Refinery Oil deep processing Complex construction 1 100Debt financing Pavlodar Oil Refinery1 000Debt financing Petrochemical plant in Atyrau6 300Debt financing / equity PowerConstruction of Balkhash thermal power station2 400Debt Financing TransportRail passenger carriers60Debt financing Construction of the railway Zhetygen – Korgas (border with China) 1 100Debt financing Construction of the railway Uzen (Western Kazakhstan) – border with Turkmenistan 433Debt financing Metals & MiningCast iron plant457Debt financing Steel rails309Debt financing Production of polycrystalline silicon388Debt financing / equity ChemistryMineral fertilizers (Kok-Dzhon)1 900Equity Debt financing 2018 Phosphorite fertilizers600Debt financing / equity / equipment / technologies 2010 Sulphuric Acid production6969Debt financing PharmaceuticalsPharmaceutical plant81Debt financing / equity / technologies National medicine and medical equipment distribution company80Debt financing / equity / expertise Total16273 List of projects for potential investors 11

12 Samruk-Kazyna Invest Atyrau Oil Refinery Oil deep processing Complex construction Background Total project cost: $1.1 bn Capital structure: equity - $1 mln, debt - $1,099 mln Implementation period: Key project advantages High value added production: –Increase in processing depth up to 82% –Production of high-octane refined products High ecological standards: Euro - V Domestic market’s share increase for high-octane oil products Manpower: construction – 2507, maintenance Investment Opportunities Debt financing 12

13 Samruk-Kazyna Invest Pavlodar Oil Refinery Background Reconstruction and modernisation of Pavlodar Oil Refinery to increase annual production capacity to: –motor fuel – 2 million tons –jet fuel – 132 thousand tons –diesel fuel – 2 million tons –fuel oil – 252 thousand tons Total project cost: $1 bn Implementation period: Key project advantages High value added production –Production of high-octane refined products High ecological standards: Euro - III, IV Domestic market’s share increase for high-octane oil products Manpower: construction – 3100 Investment Opportunities Debt financing 13

14 Samruk-Kazyna Invest Petrochemical plant in Atyrau Background Construction of a petrochemical plant with annual production capacity: –1 stage: polypropylene 800 thsd tons –2 stage: polyethylene 450 thsd tons Total project cost: $6.3 bn Capital structure: 27% equity, 73% debt Implementation period: Key project advantages High value added production High profitability margins (over 50% EBITDA, over 20% net income margin) Manpower: construction – 12000, maintenance – 800 Investment Opportunities Debt financing Equity 14

15 Samruk-Kazyna Invest 15 Balkhash thermal power station Background Construction of one 1320 MWt module is under consideration Possible further extension up to 4000 MWt Total project cost: $2.4 bn Capital structure: equity 30%, debt 70% Implementation period: 2010 – 2014 Key project advantages Meet the demand for electricity in Almaty region Low production costs Investment opportunities Debt financing

16 Samruk-Kazyna Invest Rail Passenger Carriers Background Production of rail passenger carriers Total project cost: $60 mln Quantity: 150 units per year Implementation period: Key project advantages Creation of carrier assembling line to meet the growing demand in passenger carriers on the domestic market Investment Opportunities Debt financing 16

17 Samruk-Kazyna Invest Construction of the railway Zhetygen - Korgas Background Construction of a railroad connecting Almaty region with the Chinese border in Korgas Total length – 293 km Passenger and freight transportation Total project cost: $1.1 bn Capital structure: 45,8% equity, 54,2% debt Implementation period: Key project advantages Strategic infrastructure concession project Risks shared with public authorities Investment Opportunities Debt financing (45%) 17

18 Samruk-Kazyna Invest Construction of the railway Uzen – border with Turkmenistan Background Construction of the new railway road near Caspian sea (Uzen-Gyzylgaya-Bereket-Etrek- Gorgan) with further link with Russian railroad network Total length – 670 km, Kazakhstan’ s part – 138,5 km Passenger and freight transportation Total project cost: $433 mln Capital structure: 47,2% equity, 52,8% debt Implementation period: Key project advantages Strategic infrastructure concession project Risks shared with public authorities Investment Opportunities Debt financing (31%) 18

19 Samruk-Kazyna Invest Cast iron plant Background Construction of metallurgy plant SBS Steel for production of cast iron in Aktobe region 500 thsd tons of granulated iron annually Total project cost: $457 mln Implementation period: 2010 – 2012 Key advantages Strengthening export potential of Kazakhstan Production of high quality iron based on the unique patented KOBE Steel technology Manpower: construction – , maintenance Investment Opportunities Debt financing 19

20 Samruk-Kazyna Invest Steel Rails Production Background Production of steel rails and rolled steel at KSP Steel metallurgy plant 200 thsd tons annually Total project cost: $309 mln Capital structure: 20% equity, 80% debt Implementation period: Key advantages Meet the growing local demand Manpower: construction – 1000, maintenance Investment Opportunities Debt financing $247 mln 20

21 Samruk-Kazyna Invest Production of polycrystalline silicon Background Creation of silicon cluster on manufacture of mono/poly crystal ingots and silicon plates: –2500 tons of polycrystalline silicon Total project cost: $388 mln Capital structure: 30% equity, 70% debt Implementation period: 2010 – 2013 Key project advantages Well-positioned to supply European and Asian markets Competitive advantage via long-term access to low-cost raw materials High value added production High profitability margins (sales of $594 mln a year) Competitive advantage due to low transportation costs Advanced stage of project planning Feasibility studies and technical specifications completed by leading consultants Development Bank of Kazakhstan commenced $150 mln loan guarantee for plant construction Investment Opportunities Debt financing $50 mln Equity 21

22 Samruk-Kazyna Invest Mineral Fertilizers Production Background Construction of mineral fertilizers producing plant combined with Kok-Djon (Aral-Tobe and Kisik-Tobe sites) and Gimmelfarbskoe deposits Production of mineral fertilizers -1 mln tones Products: potassium phosphate, NPK fertilizers, yellow phosphorus, phosphoric acid, reactive compounds Total project cost: $1.9 bn Expected launch: 2018 Key project advantages Availability of natural resources Low production costs Meeting 100% local demand on mineral fertilizers of high quality and exporting Manpower: 5000 Investment opportunities Equity Debt financing 22

23 Samruk-Kazyna Invest Phosphorite Fertilizers Production Background Construction of phosphorite tails and low-grade ore processing plant Production capacity of 1 mln tons of phosphorite fertilizers annually Total project cost: $600 mln Expected launch: 2010 Key project advantages Availability of unique technology to produce phosphorite fertilizers from low-grade ore Large reserves (over 500 mln tons) of low-grade ore Proximity and access to markets in China Strong competitive advantage – the lowest production cost Ability to produce highly-enriched fertilizers and develop production of NPK fertilizers jointly with KazAzot Investment Opportunities Debt financing Equity Equipment & Technologies 23

24 Samruk-Kazyna Invest Background Reconstruction of sulphuric acid plant on the base of SGHK Ltd aiming to provide Kazatomprom’s uranium producing entities with sulphuric acid 180 thsd tons annually Total project cost: $69 mln Capital structure: 31% equity, 69% debt Implementation period: Key advantages Low cost of raw materials Manpower: construction – 300, maintenance – 141 Investment Opportunities Debt financing Sulphuric acid production 24

25 Samruk-Kazyna Invest Background Construction of a pharmaceuticals plant in Astana and expansion of current production of ChimPharm (Shymkent) Total project cost: $81 mln Capital structure: $30 mln- equity, $51 mln – debt Implementation period: Key advantages Growing local demand Growing local production on the Kazakhstan’s pharmaceutical market from 10% to 25% Creating innovative, science intensive and export oriented production (turnaround) Manpower: construction – 1000, maintenance Investment Opportunities Equity Debt financing Technologies Pharmaceuticals plant 25

26 Samruk-Kazyna Invest Background Creation of integrated medicine and medical equipment distribution system Total project cost: $ 80 mln Expected launch: 2009–2010 Key project advantages Growing market Development of local pharmaceutical industry Transparency in government pharmaceutics procurement, effective system of transport and logistics Investment Opportunities Debt financing for a logistics system construction Medications supply to Kazakhstan National medicine and medical equipment distribution company 26

27 Samruk-Kazyna Invest Contacts: Republic of Kazakhstan Astana, Orynbor street 10, «Kazyna Tower»


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