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Opportunities in the Kazakh Greenhouse Industry

28 Jun 2022
Actual, Kazakhstan
expertise, Greenhouse, Kazakhstan, opportunity

 

 

The Dutch greenhouse industry sets the example for many regions around the world. With the leading position in the agricultural sector, Dutch expertise can be used to enhance greenhouse practices in the agricultural areas in Kazakhstan. In the regions of Nur Sultan and Almaty, hyper-modern greenhouses have been realised with sustainable growing methods and sustainability as a key aspect. However, the construction of Kazakh greenhouses surges and diffuses to less-developed parts of the country. Do you know how to use your expertise and management skills to capitalize on these new opportunities?

 

Introduction

The 1970s mark the era of the first development of greenhouses in the Republic of Kazakhstan. With (winter) greenhouses realised in the 1970s and 1980, the collapse of the soviet union halted these developments. The economic crisis decreased local and foreign investment, and by 1994 the production of greenhouse vegetables declined by more than 200%. The surge in greenhouse development in the 1970s covers the unique selling point of low energy prices. While the company had profitability of +70%-200%, the 1990’s increase in energy prices, abolishing subsidies, and the development of high-yielding crops led to a decrease in the initial 560 hectares of protected ground.

Since 2003, Kazakhstan sees a positive trend in the development, construction, and reconstruction of greenhouses. However, only in the last ten years has the greenhouse industry fully developed. From only 108 greenhouses with a total area of 59 hectares in 2008 to a total greenhouse area of almost 1.200 hectares in 2018. In 2018, the largest areas of greenhouses are concentrated on family farms (618 hectares – 53%). Agricultural enterprises have 180 hectares of area, whereas private farms are in the middle with 366 hectares.

 

Structure of production and yield

According to the market research by Ministerie van Landbouw, Natuur en Voedselkwaliteit, the structure of production can be categorised in three categories. Greenhouses mainly produce cucumbers (49%) and tomatoes (47%). Other vegetables (4%) include aubergine and types of salad. While there is no official data on the yield of vegetables, the calculated data for agricultural enterprises is 26kg/m2 for tomatoes and 23kg/m2 for cucumbers. For greenhouses owned by family farms, the yield is 50% of the agricultural enterprises.

Since Kazakhstan mainly produces tomatoes and cucumbers, other vegetables need to be imported from the bordering countries (e.g. China, Uzbekistan). Sweet pepper and tomatoes are the highest-demand vegetables (12.8 and 38.3 million euro), but also cucumbers (5.9mln. euro) and aubergine (3.5mln euro) are noteworthy import vegetables.

Government support

The Association of Greenhouses of Kazakhstan and the Ministry of Agriculture of the Republic of Kazakhstan developed rules for subsidizing greenhouse construction. Whereas funds initially were allocated per 1 hectare (3.500 euro) to compensate for the costs of greenhouses, nowadays this hectare subsidy is abolished. The producers of greenhouse vegetables have equal rights to government support with producers of other crops. These benefits include loans, subsidies for mineral fertilizer and herbicides, subsidizing the water cost for irrigation, reimbursement of (a part of) the cost for the expansion of greenhouse complexes and implementation of projects, and participating in leasing programs. In practice, only industrial greenhouses can apply for these subsidies. This entails that additional lighting systems and heating systems should be present and that the yield is comparably high.

 

Opportunities

State support including a preferential tax regime in the agricultural business is the main incentive for investment in the Kazakh greenhouse industry. Further, the export channel to Russia can be realised and is sustainable. The development of import substitutes (mainly bell peppers; aubergines; tomatoes) can be an opportunity to enter the local market. The export goods of tomatoes and cucumbers are also gaining foot in other markets such as the Middle East. Moreover, the rapid growth of the greenhouse sector in Kazakhstan (mostly in the south and the northwest of the country) includes the need for experts to lead the project. The Dutch knowledge is therefore required to share knowledge and supervise projects. Besides new greenhouses, reconstructing (older) models can be done to increase yield and apply sustainability principles. Moreover, with 14% of the Kazakh inhabitants working in the agricultural business, potential employees are abundant.

Dalsem argues that these hyper-modern greenhouses have risen in a relatively short period. In the case study of vegetable greenhouse BRBAPK LLP (2022) in Almaty (Kazakhstan) it is noticeable that Dutch knowledge and level of expertise are required. In this new greenhouse, the development of Dutch horticulture showcases a process in the form of “a step of 30 years”. On par, the openness for knowledge and the drive to learn are what make Kazakhs unique and “enables them to take fast steps”. With mutual respect, the Kazakhs learn from the Dutch and cooperate into making this a successful business.

The developments the Dutch can implement and bring to Kazakhstan are aspects such as optimizing production and quality, implementing process computers, and realizing the optimal greenhouse climate. This process computer is the competitive advantage in the Kazakh market. Utilizing the iSii computer, parameters such as the heating, humidification, screens, irrigation and lighting can be controlled and adjusted. With the competitive advantage, the Dutch knowledge goes hand in hand with the Kazakh mentality.

 

Conclusion

As this case study shows, the opportunities in Kazakhstan are evident in the constantly developing greenhouse sector and the aim to maintain expanding the agricultural business. Building these greenhouses is now only done in a couple of main areas (Almaty; Nur Sultan), but can be expanded to other locations. With the production of vegetables such as aubergine and bell peppers, you can enter the local market and fill the current import gap of these vegetables. that Dutch expertise and management can create a top competitor in the Kazakh market, this opportunity is one to keep in mind.

 

Sources

https://www.freshplaza.com/article/9437889/when-investing-in-a-kazakhstan-greenhouse-also-consider-the-most-advantageous-exchange-rate/

https://www.dalsem.com/en/Largest-Kazakh-glass-greenhouse-works-with-Dutch-knowledge-and-technology

https://www.agroberichtenbuitenland.nl/actueel/nieuws/2020/06/19/market-study-on-greenhouse-industry-in-kazakhstan

Market research on RF & KZ Greenhouse Growing

Non-Fungible Tokens (NFTs) in the Era of Online Investment: What are Your Opportunities?

15 Nov 2021
Actual, Investment
artworks, cryptocurrency, hype, Investment, NFT, non-fungible token, opportunity

 

Non-fungible tokens or NFTs are gaining momentum in contemporary society. These non-fungible coins or assets are often presented in the form of artwork as part of a whole collection (e.g. Bored Ape Yacht Club). The main question is if the insane price for acquiring an NFT is worth the benefits. In this article, we explore what NFTs are, the benefit of buying an NFT and the opportunities this purchase can have for your business. Moreover, we provide tips and risks needed when intrigued by this new investment phenomenon.

 

 

Introducing NFTs and the operational method

The NFT or Non-Fungible token is a token within a blockchain (digital ledger) connected from an account to a unique and digital item via a smart contract. Most NFTs are part of the Ethereum blockchain, a cryptocurrency, and are currently seen in the rise of buying and selling digital art using this blockchain technology for multiple reasons (e.g. investment). In simple words, the NFT is a unique link between an account and a digital item that assures that said item is uniquely yours. This blockchain technology is non fungible which means that the item or artwork is unique and cannot be replaced with something else. As the trading dynamic can be seen as investing just like is the case with bitcoins and altcoins, the difference is that the NFTs are one of a kind. Whereas you can trade a bitcoin for a bitcoin, the NFT is distinctive and can never be fungible for the same artwork.

 

 

The uniqueness and function of the NFTs

The NFT gets seen as the new era of art. Both art collection and art investment are considerable motives for buying an NFT. As mentioned before that every NFT is a unique piece of artwork including the corresponding blockchain entry (proof of authenticity) plus the fact that these tokens are limited and tradeable, making all the NFTs depend on the supply and demand principle. NFTs are nowadays often seen as pictures and videos, but can also cover the realm of music and other forms of art. The next paragraph will thoroughly explain the four motives for purchasing an NFT.

 

 

Four motives of buying an NFT

Knowing the technical information and the uniqueness of the NFT, the question might arise why someone wants to spend money on NFT artworks.

 

Firstly, the NFT is currently in a hyped-up phase. Newspapers, NFT creators and NFT purchasers are trying to start the momentum of this “new era” to get more recognition among the people. This triggers the Fear Of Missing Out (FOMO) effect that stimulates the demand of the NFTs – as these groups wish. This is noticeable in the fact that NFTs are sold from hundreds to millions of euros worth of Ethereum. Exemplifying the prices of

Figure 1. NFT properties of Bored Ape Yacht Club #9355

NFTs,  this video made by the famous creator Beeple got sold for 6.6 million dollars (5.8 million euro). Further, NFTs within a specific group like the TrendyTigers or Bored Ape Yacht Club have different characteristics that make them more special and more valuable to stand out from the crowd. Here we can think of background, clothes, eyes, fur, hat and mouth as depicted in figure 1.

 

 

Secondly, you get complete ownership of the work. Instead of downloading the video or picture, the purchaser owns the artwork including proof of authenticity. This can be seen in the way that copying (downloading) a Van Gogh painting is still possible, but only one person can have the original. However, on par with physical artwork, the artists can still retain copyright and reproduction rights.

 

Thirdly, the purchaser can show off their new asset and try to fan the flame for interest in NFTs and in particular the purchaser’s artwork. Owners of an artwork change their profile picture to their acquired NFT to show the everyone that they own an NFT, brag with their latest purchase, and show the world they are part of a particular niche or group. This phenomenon of showing-off is mostly visible on Twitter.

 

Lastly, and maybe the least concerned with investment, is that the purchaser can (financially) support the creator of the art.

 

 

Opportunities for you

As the hype is getting a boost by the media and the groups associated with the NFTs, the incentive to buy might seem bigger than it is. Knowing that an NFT can be an investment strategy – just like cryptocurrency – we should be careful with the post-hype stage, as this might be unpredictable. The NFT market including the price of the NFTs -without the hype- can collapse and result in loss after this high gamble. While this is part of investment in general, we should look at the other main benefit the NFTs give over for example cryptocurrencies: the community.

Pudgy penguins, CrytoPunks, TrendyTigers or Bored Ape Yacht Club are examples of NFTs with a community around the ownership of their NFTs. The latter is a project concerning, as the name suggests, 10.000 NFTs of Apes. Only 10.000 proud ape owners can be part of the clique. Important is that the Bored Ape Yacht Club functions like a family. The occasional networking events among the Apes are used to get to network and to get beneficial connections for the business. Furthermore, this nepotism is noticeable in the example of producer and songwriter Timbaland searching for Bored Ape Yacht Club owners to form an artist-owned entertainment company Ape-In Productions.

 

 

Conclusion

In short, the price for NFTs can be feasible when being able to network with celebrities, business leads, or new friendly contacts. In case you are intrigued by NFTs, please be aware that many individuals and/or corporations are trying to hop on the bandwagon of the NFT hype. This means that thorough research in this particular NFT community/club is absolutely necessary. Always look at the benefits, the listing date and amount of followers. Do not forget to analyse the follower-to-like ratio on social media to notice, as is often the case, fake and bought followers. NFTs are often listed on the trustable platform OpenSea.io where Ethereum is mostly used as currency to purchase the NFTs.

Finalizing, NFTs as investments bring the known risks of (heavy) value fluctuation just like cryptocurrencies and comparable investments. However, while NFTs can be pricey, these revolutionary blockchain technologies assure ownership and bring an additional opportunity to network and make contacts in the NFT clique or group. As mentioned before, when you are part of this community, the nepotism and proudness of the NFT ownership can possibly result in great opportunities.

 

For more information about personal advice regarding international business advice, tax situations or consolidation, Global Connect Admin B.V. can assist you with these challenges due to the rich experience and framework of connections.

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