SOUTH KAZAKHSTAN OBLAST

ABOUT THE REGION

Area Population Urban population The capital city GDP per capita Average salary Economically active population Higher education institutions Students

117,249 km2 2,642,700 people. 40% Shymkent $ 3,700 $ 488 1 158.8 thousand 12 77.7 million

100,0%

99,2% 48,0%

Share of SKO in total output of Kazakhstan

46,1% 22,9% 16,8% 16,7% 24,9% 15,0%

MAIN INDICATORS

Data

Measure

2006

2007

2008

2009

2010

2011

Consumer Price Index by SKO

%, end of period, in December last year

108, 8

123, 6

109, 1

106, 0

108,0

106,1

Average salary

tenge

27 586

36 707

41 679

48 610

57 545

64 399

Investments in to main capital -of which foreign investment

mln.tenge

84 542

127 175

203 213

319 043

262 595

171 270

mln.tenge

12 278

31 242

67 228

161 504

60 983

31 482

LIGHT INDUSTRY

The region is a center of implementing the cotton and textile cluster: More than 50 cotton-processing, textile and garment enterprises The volume of production of textile products in SKO - 9 300.00 mln. The share of SKO in the volume of textile products and garments produced in Republic of Kazakhstan - 51.8% The share of textiles in the industrial structure of SKO- 3.4%

The number of workers in the industry - 5,886 people

The level of labor productivity - $ 25.6 million Investments in fixed capital industry - 972.84 mln An increase in output by 1 tenge investments - 1.10 tenge

The large enterprises of cotton and textile industry: JSC "Utex"JSC "Melange

LLP SOUTH TEXTILINE KZ

LLP "ginneries"LLP Oxi Textile LLP "Garment factory" Gauhar LLP "Hlopkoprom-cellulose"

MINING INDUSTRY

The volume of production of mining in SKO - 10 070.50 mln The share of the mining industry in the industrial structure SKR - 24.1% The number of workers in the industry - 6,669 people. The major minerals SKO: Uranus Lead Zinc gas fields Gold-objects commonly occurring minerals Fresh and thermal water

Large mining companies of SKO: LLP JV" Betpak Dala LLP JV" Katko LLP Taukentskoe GHP LLP Stepnoe-RU LLP Mining Company LLP JV" Inkay LLP "Ferrum-Ftor"

PHARMACEUTICAL INDUSTRY

Dynamically developing industry at the regional level: 21 companies 106 86,6 million tenge Pharmaceutical manufacturers in SKO Production volume of pharmaceutical products in SKO

49,3%
3,5% 1300 people $36,6 thousand 405,52 million tenge 2,10 tenge

The share of SKO in the volume of pharmaceutical production in Kazakhstan

The share of pharmaceuticals in the industrial structure of SKO The number of workers in the industry The level of labor Investments in basic capital industry An increase in output by 1 tenge investments

Large companies in the pharmaceutical industry: JSC Khimpharm Zerde-phito LLP Rauan LLP

MECHANICAL ENGINEERING

Dynamically developing industry at the regional level:

35 companies
21 563,20 million tenge 4,2% 8,90% 3 500 people $ 12,4 thousand 1 268,1 million tenge 2,09 tenge

Manufacturers of the machinery sector in SKO

The volume of production of the engineering industry in SKO The share of SKO in the volume of engineering industry in Kazakhstan The share of mechanical engineering in the industrial structure of SKO The number of workers in the industry The level of labor Investments in basic capital industry An increase in output by 1 tenge investments

Large companies in the engineering industry : JSC Kentau transformer plant Ak Beren LLP JSC UKMZ JSC Excavator

AGRICULTURAL SECTOR

Agriculture - one of the key sectors of the economy of SKO: 2,5 thousand 69,5 thousand 246,2 billion tenge 8,4% (1place) 99 387,8 million tenge 112 574,1 million tenge Agricultural enterprises Farms The volume of production of the agricultural industry in SKO The share of SKO in the volume of agriculture in Kazakhstan The share of livestock in the industry The share of crop production in the industry

RENEWABLE ENERGY SOURCES

Baidibek and Tulkibas rayon (district) SKO Planned to install: 60 wind generators by 1MW each one Further it is planned to increase till: 150 wind generators by 1MW each one Solar potential of Suzak rayon (district: 2200-3000 Hours of sunshine annually 1000-1200 7,6 Geothermal energy : W/m2 of solar radiation energy density Payback period

24 hours 365 days per year 2 years

Ability to use Payback period

3 main reasons to invest in South Kazakhstan

Political and social stability 1. The favorable investment climate Government support and investment guarantees (Kazakhstan signed agreements on mutual protection of investments)

Ground resources 2. Resources Large reserve of mineral resources ( 1 uranium producer in the world) The location between 3 countries of BRICS (Russia, China and India) The growth of markets due to entry into the Customs Union of Kazakhstan, with the potential sale of 170 million people. Completion of construction of the international road corridor "Western Europe - Western China" The average annual population growth of SKO is 9%

3. Market

Investment projects
Name of the project Required investments

Construction of small hydropower plants

Construction of Solar Power Plant Construction of Wind Power Plant Construction of metallurgical plant Plant for production of base oils

USD 224 mln.

T 7,5 bln. USD 86 mln. T 15 000,0 mln. T 139 950 mln.

Tourist recreation center Kaskasu

Manufacturing of 110-220 kV voltage power transformers Special Economic Zone Ontustyk

USD 229,9 mln.

USD 30,0 mln. No restrictions

Construction of small hydropower plants

The purpose and idea of the project: The use of renewable energy sources and reducing capacity deficit Applicant: LLP Discover, LLP Aksu-Energo, LLP KazBelt, LLP Kelesgidrostroi, LLP Munay Investment Group The period of implementation: 2013-2019 years Place of implementation: South Kazakhstan Oblast The total cost of the project: 224 million dollars The financing scheme: Equity - 0% - 30% and necessary investments 70% - 100% Required investments: 156,8 million dollars The expected result: The production of electricity from renewable energy sources, employment, tax revenues Current state: There is a feasibility study, design estimates, available state act on land Payback period 7-10 years Sales market: domestic market 100% Creating jobs: 691 Availability of documentation: feasibility study, design estimates, state act on land Productivity: 44,73 MW Advantages: The use of renewable energy sources

Infrastructure and Resources: There is

Construction of Solar Power Plant

The purpose and idea of the project: The use of renewable energy sources and reducing capacity deficit Applicant: Promondis Kazakhstan The period of implementation: 2013-2014 years Place of implementation: South Kazakhstan Oblast The total cost of the project: 7,5 Billion dollars The financing scheme: Equity - 0% - 30% and necessary investments 70% - 100% Required investments: 5,25 Billion dollars The expected result: The production of electricity from renewable energy sources, employment, tax revenues Current status: There is a feasibility study, design estimates, available state act on land

Payback period 7-10 years Availability of documentation: feasibility study, design estimates, state act on land Productivity: 20 MW Advantages: The use of renewable energy sources Infrastructure and Resources: There is Sales market: domestic market 100% Creating jobs: 10

Construction of Wind Power Plant

The purpose and idea of the project: The use of renewable energy sources and reducing capacity deficit Applicant: LLP Ontustyk Zharyk Tranzit The period of implementation: 2015 year Place of implementation: South Kazakhstan Oblast The total cost of the project: 86 million dollars The financing scheme: Equity - 0% - 30% and necessary investments 70% - 100% Required investments: 60,2 million dollars The expected result: The production of electricity from renewable energy sources, employment, tax revenues Availability of documentation: estimates, state act on land Productivity: 40 MW Advantages: The use of renewable energy sources Infrastructure and Resources: There is Sales market: domestic market 100% Creating jobs: 10 feasibility study, design

Current state: There is a feasibility study, design estimates, available state act on land
Payback period: 9-15 years

Construction of metallurgical plant

Aim of project: Construction of a metallurgical plant Applicant: LLP Ferrum-Vtor

Period: 2011. 2015

Project location: South Kazakhstan oblast, Shymkent Total cost of the project: 15000,0 million tenge The financing scheme : Borrowings 12 000 mln.tenge Funding scheme: 3 000,0 million tenge. equity Investments required: 12000 mln. Expected result : Production of high quality metal products Current status: The business plan is prepared, negotiations with potential suppliers of equipment, carried out the selection of experts, held talks with investors and banks for raising funds. Payback period: 3 years Production capacity: 250,000 tons of metal Availability of documentation: Business plan is already prepared Advantages: virtually no competitors (there is only one company in the Republic implementing full production cycle from mining of iron ore to the production of metal products) Infrastructure and Resources: Located in the industrial zone "Ontustik" Market: Domestic market - 60%, export - 40% Job creation: 2000 permanent jobs, 1,000 people during construction

Plant for production of base oils

The purpose and the idea of the project: Investment project for the production of base oils Applicant: LLP HILL Period: 2013 2016 Project location: South Kazakhstan oblast, Shymkent city Total project cost: 139,950 million tenge Funding scheme: Borrowings - 110,840 tenge equity - 29,110 million tenge Investments required: 110,840 million tenge Expected result: Employment, payment of taxes, import substitution, increasing the proportion of local content in the production of motor and transmission oils Current Status: Work is underway on the preparation of project documentation and approvals, the land issues are removed Payback period: 6 years Production capacity: 750,050 tonnes a year of base oils Availability of documentation: business plan is being developed; preliminary negotiations have been conducted with potential suppliers of equipment, selection of specialists is being carried out, negotiations with investors and banks are taking place on the matter of raising funds.

Advantages: absence of a plant producing base oils Infrastructure and resources: all the basic utilities are available next to the selected land area Market: Domestic market - 50%, export - 50%. Creating jobs: 2,000 permanent jobs, 1,200 people during the construction

Tourist recreation center Kaskasu

Title of organization: Department of Tourism and physical culture and sport of South Kazakhstan region Address: Shymkent city, Madeli kozha 1 Head: Kyrykbayev Polat Nauryzbayevich Title of the project: Creation of mountain skiing in Kaskasu gorge The project location place: South Kazakhstan region, Tolebi Date of project start: 2013-2017 Cost: 229,9 mln $ USA Payback period: 10 years Short description: Tourist recreation center Kaskasu Land plot area-900 hectares Location of skiing pistes-from 1880 to 3155 m/(Shymbulak-from 2 260 to 3163 m.) Average bias-from 16 to 38% (Shymbulak from 12 to 28%) Direction of skiing pistes- northern and northern-western Net area of skiing pistes-130 hectares

Manufacturing of 110-220 kV voltage power transformers

Aim of the project: Manufacturing of 110-220 kV voltage power transformers Applicant: LLP Azia Trafo (LLP Alageum Group (Kazakhstan) and JSHP Transformer (China)) Period: 2013. 2015. Project: South Kazakhstan oblast, Sayram area (rayon) Total project cost: $ 60 million Financing scheme: LLP Alageum Group - 50% and JSHP Transformer - 50% Required investments: $ 30 million Expected outcome: Employment, payment of taxes, import substitution Current status: Feasibility study, the land issues solved Payback period: 7-8 years Productivity: 2200 transformers per year (at its full production capacity) Availability of documentation: The feasibility study, the memorandum between the LLP Alageum Group and JSHP Transformer Advantage: The absence of a plant for the production of transformers of this power in Kazakhstan Infrastructure: No Market: Domestic market - 50%, export 50%(CIS) Job Creation: 800

Special Economic Zone Ontustyk

The aim of project : accelerated development of the region to strengthen the economy of the RK entering into the global economic system; development of textile and sewing industry of the RK;

Implementation period: 2005 2030 years Place of implementation: the South-Kazakhstan oblast, Sairam region, Lenger highway, 7th km Funding scheme: The Republican and local budget
Expected result: attraction no less than 50 billion Kazakhstan tenge Home and foreign investments, creation more than 10 new enterprises, creation more than 5 thousand new workplaces. Current status: Within the framework of State Program on force industriallyinnovative development of the Republic of Kazakhstan for 2010-2014, next investment projects are realized in the territory of SEZ Ontustyk :

Khlopkoprom-Cellulose ; Oxy Textile LLP; Kagaz Shahary SEZ LLP; Production company AGF group LLP

Advantages: -Investors are fully exempted from corporate income tax, tax to property and land tax; - Profitable geographical position proximity to the largest marketsimporters of the light industry production (Russia, China, India); -The South Kazakhstan region is the unique one on the Customs Union area, where the cotton is grown up; -Expansion of commodity market to population of 170 million people at the expense of the entrance into the One Customs Union. Infrastructure and resources: - All necessary engineering infrastructure is brought (electric power, gas supply, telecommunication, water supply and sewerage system); -Availability of raw materials resources; -Availability of a transport and power infrastructure.

Contact details: Shymkent Innovation LLP Investors Service Center

invest_sk@shymin.kz
+7 7252 99 5503

Shymkent Innovation LLP www.shymin.kz