Daniel Kunin of Kusto Group: Private-Public Cooperation is Key to The Successful Transformation of Kazakhstan’s Agricultural Sector
- (Photo : licensed) Prime Minister of Kazakhstan, Askar Mamin (center), attends a signing ceremony between Yerkin Tatishev, Chairman of the Board of Kusto Group (right), and Steve Kaniewski, President and CEO of Valmont Industries (left).
Kusto Group and the government of Kazakhstan share a common mission to promote sustainable growth within the country's agricultural sector, developing partnerships that provide for the adoption of new technologies and industry best practices.
Daniel Kunin, a managing director at Kusto Group, says that cooperation between the private sector company and the government of Kazakhstan has been and will continue to play a critical role in the growth of the company, the agricultural sector and that of the entire national economy.
Kusto Group, a multinational corporation based in Singapore with roots in Kazakhstan, has demonstrated its commitment to the modernization and development of Kazakhstan's agricultural industry through the expansion of its local operations, the advancement of new initiatives and through the formation of global partnerships.
Kusto Group signs landmark deal with Tyson Foods
Last month, Kusto Group, the government of Kazakhstan and US-based Tyson Foods, one of the world's largest food companies, signed an agreement to collaborate on a project that includes the construction of a modern beef processing plant in Kazakhstan with an anticipated 2,000 head per day capacity.
The deal, the largest in the agricultural sector since Kazakhstan's independence, is projected to benefit the county in excess of one billion dollars. The joint venture includes the construction of three different meat processing facilities in Kazakhstan over the next 5-10 years. Construction of the first plant is anticipated to begin in the spring of 2020.
Yerkin Tatishev, Chairman of the Board of Directors of Kusto Group, called the deal, "A huge step towards meeting Kusto's ambition of making Kazakhstan a global leader in agriculture through the use of modern technologies and world-best practices. Their investment is recognition of the enormous potential of Kazakhstan's agricultural sector and of the confidence in Kazakhstan's investment climate more broadly."
Realizing Kazakhstan's agricultural potential
The oil and natural gas sectors have long been the primary focus and foundation of Kazakhstan's economy. However, weak oil prices experienced over the last few years have forced the nation to pursue economic diversification with renewed fervor.
The agricultural sector has become a priority area for development for the Kazakh government and cooperation between the private sector and the public has become a crucial element in achieving growth and attracting foreign investment.
"Kusto Group's upcoming emphasis on building a sustainable protein export business and modern agricultural sector in Kazakhstan is a fascinating, supremely complex and interesting project," Kunin explained. "By definition, it requires long-term thinking, strategic planning, intensive stakeholder mapping and understanding, and the creation of a network of inter-linked partnerships that are both joint ventures but also intensive public-private partnerships."
In July 2019, Kusto Group signed a joint venture with US-based Valmont Industries and Global Beef to manufacture modern irrigation systems in Kazakhstan. The venture is backed by a $50 million investment and the planned manufacturing facility is expected to be able to produce 1000 systems per year.
Valmont Industries is a leading producer and distributor of agricultural infrastructure products. Currently, Kazakhstan's agricultural sector lacks modern equipment and infrastructure to support sustainable production growth. The introduction of modern irrigation systems is expected to have a transformative effect on the industry.
A comprehensive commitment to growth
Kusto Group has long been focused on achieving success beyond its own operations.
According to Kunin, "Thinking about how a project affects local stakeholders such as a town or community is very important. At Kusto, there is a deep sense of ethical responsibility to all stakeholders that goes beyond the usual slogans. In our partnerships, the operating principle is to treat a partner as if they were a team-member of Kusto. This ethic pays huge dividends in the medium to long term."
This year, KazBeef, a subsidiary of Kusto Group, opened a new meat processing facility in the Akmola region of Kazakhstan. The new facility has a storage capacity of up to 6,000 tons of beef per year. KazBeef's current operations cover 120,000 hectares of pastureland in the region alone, which supports 5,000 head of Angus and Hereford cattle.
Kusto Group was the first in the country to import pedigree breeding stock from the United States in order to ensure the best genetic foundation of its cattle. Kazbeef organized the first annual auction of pedigree breeding stock cattle in 2013 as a way to contribute to the development of the livestock breeding stock of the entire country.
Kusto Group's agricultural initiatives
Kusto Group's KazBeef operates a vertically integrated approach to livestock production, with a demonstrated concern for quality at every stage of production - from seed to table.
One of Kusto Group's early joint ventures in agriculture was with an American firm to develop and introduce high-yield, non-GMO seeds for feed crops to their operations.
KazSeed was developed in 2018 as a cooperative initiative between Kusto Group and Baumgartner Agriculture Science and Service (BASS), a Minnesota-based firm founded by a third-generation seed breeder.
The company is developing and producing world-class non-GMO seeds that are specifically selected for the climate and environment of Kazakhstan, providing high yields in the fodder crops needed for KazBeef's rapidly expanding livestock division. Through this initiative, the company has ambitions to transform Kazakhstan into a major seed hub of the region.
In looking to the future, Kusto Group hopes to extend KazSeed and KazBeef sales beyond the borders of Kazakhstan. It anticipates the prospect of supplying seeds and beef products to all of Central Asia, as well as entering the nearby Russian and Chinese markets. Joint ventures and private-public partnerships provide a solid framework for expansion and sustainable growth for the company and the entire national industry.
"Kusto Group is proud to be working with the Kazakh Government in the shared interest of advancing Kazakhstan's development," said Yerkin Tatishev. "We will continue our efforts to open up the Kazakh agricultural sector to the technological expertise and financial clout of US businesses at such an important time in the country's history."
