According to the Italian ambassador in Astana, Italian companies, especially agribusiness ones, can find huge opportunities in the huge Asian country to produce and export to China, with which they have free trade agreements. There is also the possibility to obtain funds from large supranational banks, tax relief and aid from the local government.
The problem number one is filling the trains, those from Europe that return to China half-empty, after having crossed the Sino-Kazakh border at the Korghos freight terminal, with containers full of Chinese goods for the European markets.
"When they return to Korghos to come back to China, they transport no more than 10% of their capacity", explained Pasquale D'Avino, Italian ambassador in Astana, the capital Kazakhstan, 2.7 million square kilometers, big as half of the European Union, but only 18 million inhabitants with a per capita income of over 24 thousand dollars (at purchasing power parity) and a 3% growing economy.
"We Italians must have a strategy to fill with our goods those trains that return to China half-empty". Pasquale D'Avino moved a year ago in Astana, the capital of a country that wants to increase the impact of the Belt & Road strategy, realized in a 20 billion dollar program to modernize the basic structures, roads, railways, networks and public buildings.
The Korghos Pass, run by DP World, the global logistics group headed by Emir of Dubai and Eau Vice President, Al Maktoum, is very important for the Belt & Road. "Ten years ago there were no transits from Korghos, 5 years ago the first containers began to arrive, today hundreds of them, perhaps thousands, pass by each day" said D'Avino.
Those containers, after having passed the change of gauge between the Chinese and the Kazakh railways, take two different directions: one part goes to Moscow and from there it continues towards the Baltic republics to end in Northern Europe and Germany, the other one heads south towards the Black Sea and Iran, from which it is then redirected to Central Europe, via Baku in Azerbaijan or Turkey.
In order to let Europe and Italy breathe new life along these new Silk Roads, D'Avino, as ambassador in Astana, advises to bet on Kazakhstan, where, he said, opportunities for Italians companies are huge. In fact, that would not only satisfy the industrial and consumer needs of 18 million inhabitants, but above all it would open the huge Chinese market, which with Kazakhstan signed free trade agreements on all fronts.
"The model to follow is that of the Cremonini group," said D'Avino, referring to the initiative of Inalca (Cremonini group), the main Italian meat producer, which in Almaty -in the east of the country, two-hour flight from the capital, and near Korghos- is opening a center for the storage, processing and distribution of packaged meat, addressed to the Chinese market in the near future.
The choice of the Emilian group of over 4 billion turnover, founded and directed by Luigi Cremonini and his son Vincenzo, is supported by the fact that the raw material that will be worked in Almaty will mainly come from the farms and the slaughterhouse already in operation in the region of Oremburg, in southern Russia, near the western border of Kazakhstan.
Interesting opportunities could also come for agri-business companies interested in processing wheat. "There are huge wheat fields, which eventually provide feed for animals, instead of being used to make pasta and other products with greater added value" highlighted D'Avino, who contacted Italian producers, to encourage them to invest, explaining that local authorities give incentives on everything, such as buying land and tax exemptions for years.
Along with wheat, tomatoes could also be a good product for Italian interests, as Pomorete recognized, the association of producers promotes the supply chain in Italy and abroad.
But while the big groups like Cremonini or the French Lactalis, which has just launched the production of President butter in Kazakhstan, self-financing, the difficulty in finding small and medium-sized companies could be an unsurpassable barrier to start up investments.
However, Kazakhstan has more favorable aspects than other countries in the area. On one hand, in fact, the international agencies are active, the Asian Development Bank, the European Bank of Reconstruction and Development and the World Bank, and in particular the Asia Development bank is particularly active and a point of reference for Italian companies, Giovanni Capannelli, director of the Kazakh mission of Adb.
On the other hand, there are bilateral initiatives by the Kazakh sovereign fund Samruk Kazyna, $ 67 billion in assets, and the Cassa depositi e prestiti (the Italian Deposit and Consignment Office), which have agreed to co-finance new projects. CEO of CDP Equity Guido Rivolta said, "The construction of new plants is planned for the production of components for oil & gas and the distribution of food and agriculture 4.0. The possibility of placing future productions there which rely on Italian technology, both by Italian and Kazakh companies, will be evaluated, as they would provide work to the manufacturing and agricultural companies which CDP Equity has a stake in". But two years passed since the signing of that agreement and apart from the investment of Inalca-Cremonini, nothing has been done.
"The problem is that there is the availability to finance, but the projects do not arrive," said D'Avino, who insists on the opportunities for medium-sized companies, those that should fill trains departing for Korghos and China with their products, especially in the agribusiness chain.
(Source:Class Editori)
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