Italy-Kazakhstan: Cremonini investments a game-changer for Agribusiness

Astana –  "Gruppo Cremonini is planning a considerable investment in Kazakhstan. They are going to build a very important meat processing plant. Cremonini being a leader in Europe and one of the most important food company. The italian group is present in Russia, Hong Kong and China. They can provide meat of high quality to China. Their launch of the plant will be a major gamechanger. Once a big company invests all other domestic and international companies will be interested in investing. They could make a change". The AGI had an interview with Salvatore Parano, the director of Italian Trade Agency in Almaty, Kazakhstan. The office of Italian Trade Agency in Almaty is responsible for the promotion and support of Italian trade and investment not only in Kazakhstan, but also in Uzbekistan, Tajikistan and Kyrgyz Republic. Mr. Parano previously worked in various Italian trade offices and embassies, including Mexico.

- What is the recent growth in Kazakh-Italian investment and trade? What sectors in Kazakh economy are the most attractive to Italian investors?

The presence of Italian companies in Kazakhstan is mainly in oil and gas sectors. We have historical presence of ENI and all the companies that are involved in supply of oil and gas sectors. There are around 200 Italian and Kazakh companies with Italian major investments creating many thousands of jobs. From my perspective after talking with Italian business in Kazakhstan that they find Kazakh business climate attractive and they want to stay in the country. The new priority is agribusiness sector in Kazakhstan. The country has really good competitive advantage nut just in production of cereals, but also meat production. Kazakhstan is strategically located close to the world’s biggest market, China. Any Italian or international company that wants to export meat or agricultural products to China should consider Kazakhstan as the best place to be. There are several Italian companies that consider investing in Kazakh agribusiness.

- Italy is interested in agribusiness of Kazakhstan. Could you provide a specific example of Italian company that plans to invest in Kazakh agrisector?

Yes, Gruppo Cremonini is planning a considerable investment in Kazakhstan. They are going to build a very important meat processing plant. Cremonini being a leader in Europe and one of the most important capitalist. The company has a strong presence in Russia, Caucasus and China. They can provide meat of high quality to China. Their launch of the plant will be a major gamechanger. Once a big company invests all other domestic and international companies will be interested in investing. They could make a change. 

- Are there any risks and barriers for Italian business and investors in Kazakhstan?

Specifically, the regulatory process in any country is very nervous about giving a quality inspection to a third party. The regulatory environment in Kazakhstan has to get coherent standards with the Eurasian Economic Union in order to export easier. Kazakh products need to get in line with the regulations of the Eurasian Economic Union and Customs Union.  

- There were plans to introduce direct Kazakh-Italian flights? Will it be opened? Is there a demand? Will the Italy and Schengen Visa regime eased to Kazakh citizens who want to travel or conduct business in Italy?

Now the market to connect Kazakhstan and Italy has been reduced. One of the players left the market, KLM airline. From my perspective, there is a room for one carrier to connect Kazakhstan and Italy directly. Together with the Italian ambassador we have recently had a meeting with the potential carrier in Kazakhstan and my feeling that there is an efficient space. The Italian Embassy in Kazakhstan issued more than 30 thousand visas for Kazakhs. The Kazakh business, tourists and students choose Italy. I think this flight could be opened to the financial capital of Italy-Milano and it will be economically sustainable. The issue of visa regime is decided by Brussels. Most of the visitors from Kazakhstan to Italy are businessmen or tourists with high spending power. So I have a positive feeling towards relaxation of visa regime and Kazakhstan has a good bilateral relations with most of European countries.

- Speaking about the Beijing-led Belt and Road Initiative, does it present a threat or competition to Italian/European investments? What do you think about increased Chinese investments in the region?

The strategic vision that China has is to create a logistic platform to better connect his part of this world with Europe. The benefit is that after construction of infrastructure you have shorter time to connect to European market. One train that leaves China and goes through Kazakhstan to enter Europe to bring Chinese goods. This train has to go back with European products. It means that once the transportation framework is in place in can go both ways. It event can help Kazakhstan to add value over here. I have a positive attitude towards the Chinese Belt and Road Initiative. I think it is a win-win-win situation for all. Kazakhstan is going to benefit from the Belt and Road since both of the roads would go through the country. If I were a head of European conglomerate that wanted to serve the Chinese market I would probably decide to invest in Kazakhstan because Kazakhstan is an Asian country with European attitude or European county with Asian form. For us it is easier to operate in Kazakhstan because we have so much in common.

- Do the sanctions that were put on Russia affect Italian investments in Kazakhstan? Do they pose a threat to Italian investments in Kazakhstan? What is the effect?

I do not know because I do not have data. What I can tell you that for us the Russian economy is extremely important. Last year the Itlaian-Russian trade increased by more than 30%. The connections between Italian and Russian economy is very strong. We have paid a very high price for the sanctions. We believe that trade and exchange of culture facilitate better understanding.  But Italy has an interest that the trade should be unhindered by sanctions with Russia and indirectly with all the economies that are linked to Russia.

- What can Italy give to Kazakhstan in terms of technologies and best practices?

Italy has a unique feature: together with the German economy it has the biggest industrial base in Europe. Italian economy is mainly formed from small and medium enterprises. I understand that Russian and Kazakh leadership is interested in making small companies more production and more efficient. Italy has a large basket of technologies to make companies more productive and not just in agri-business but other areas such as plastic machinery. We have many technologies that will make their companies more competitive.