East-Kazakhstan region: brief description

/IRBIS, June 13, 01/ - The information presented below is published regarding admission of coupon bonds of local executive body of East- Kazakhstan region (EKR) into circulation at KASE. Announced volume of emission is KZT1bn, circulation term - 3 years. The information is prepared using document of the Listing Commission of KASE, which is in turn based on materials of the issuer (Regional authorities of EKR), financial consultants (DB SECURITIES OJSC and TuranAlem Securities LLP). All responsibility for reliability of information falls upon an issuer. GENERAL INFORMATION The region was founded in 1932 and was merged with Semipalatinsk region in 1996. The area is 283.3 th. sq. m. or 10.4% of the country's area. As of Jan.1, 2001 the population equaled 1,504.3 th people (10% of total population) including urban - 883.8 th people or 58.6%. Density of population is 5.3 people per sq. km. The regional center is located in Ust-Kamenogorsk. There are 10 cities and 900 rural settlements. The region is divided by 19 districts, 15 of which are rural. East-Kazakhstan region has a unique reserves of various metal ores containing zinc, copper, lead and some coal deposits. There are also deposits of gold, rare metals, raw materials for production of cement, slate, slug and other construction materials. The prime industry is non-ferrous metallurgy that produces more than half of total production. The region is the main producer of lead, copper, refined gold and silver, and the sole producer of zinc, titanium, magnesium, tantalite and nuclear fuel. Main economic and social indicators of East-Kazakhstan regions for last two years (KZT bn, unless otherwise indicated) --------------------------------------------------------------------------- 2000 Indicator 1999 2000 to 1999, % ------------------------------------------------- ------ ------- ---------- Industrial production including household sector 114.1 142.6 124.9 Industrial; production excluding household sector 101.1 130.6 129.1 including: mining industry 11.7 12.9 109.5 processing industry 72.7 100.4 138.0 production and distribution of electricity, gas and water 16.6 17.3 104.1 Gross production of agricultural sector 29.2 33.4 114.4 Foreign trade turnover (USD m) 834.7 1,058.9 126.9 including: exports (USD m) 470.8 571.2 121.2 imports (USD m) 363.9 487.7 134.0 Fixed assets investments 20.6 25.8 124.8 Transportation turnover (billion tons-kilometers) 5.1 6.4 125.2 Passenger turnover(billions of passenger- kilometers) 1.21 1.26 104.5 Total income of enterprises 5.5 19.6 356.0 Monthly average wage (KZT) 11,614 12,038 103.6 Official unemployment (%) 4.9 4.1 --------------------------------------------------------------------------- THE INDUSTRIAL PRODUCTION The East-Kazakhstan is one of the industrially developed regions in Kazakhstan. In 2000, industrial production equaled KZT142.6bn or 24.9% more than in previous year. Industrial production growth rate was higher than the country's average. Index of real production equaled 119.4% including: mining industry - 23.2%, processing industry - 32.6%, production and distribution of electricity, gas and water - remained unchanged. The basis for economic development is unique deposits of non-ferrous metals. The share of lead production takes 84.5% of the total, refined gold - 62.5%, refined silver - 38.7%, titanium, magnesium and zinc - 100%. The regions is the sole producer of fuel for nuclear power stations, Ulba-metallurgical plant OJSC. Non-ferrous metallurgy is the base industry taking 52.0% of the regional industrial production. Among leading companies are - Kazzinc OJSC that amount for 26.0% of budget receipts in 2000, Ust-Kamenogorsk Titanium and Magnesium plant, 1.8%, VostokKazmed - 6.5% (affiliated to Corporation Kazakhmys OJSC). Besides, there are several large companies producing commodity coal. Engineering industry takes 2.4% of the industrial production and is represented by Vostokmashzavod OJSC (mining equipment, metallurgical and technological equipment ), Semmashzavod OJSC (industrial transportation equipment), Ust-Kamenogorsk armaturnii zavod OJSC (pipeline equipment), Mashzavod LLP (electricity engines), Kazakhkabel LLP (cables). In 2000, industrial equipment production grew up 2.3 times, electricity equipment - 78%, textile and light industry - 1.6 times, chemical industry 1.9 times. Agricultural processing industry (8.6% of total industrial production) includes 80 companies. The food-stuff industry saw 32.4% growth of meet, canned meet - 1.6 times, liquors and beverages - 2.4 times, vine - 5.4 times. In the sectors production declined (from 15 to 50%). ENERGY SECTOR The sector is represented by several hydro and power stations with total capacity of 2,405.5 MWT producing 18bn kWh (30% of the total energy in the republic). Its share in the total industrial production equals 11.2%. the production volume grew up by 6.3%. In 2000, region imported 131m kWh. TRANSPORTATION AND COMMUNICATION Rail-road transportation links regional center with Leninogorsk, Ziryanovsk, Semipalatinsk and other cities. The total length equals 1,423 km. Transportation volume was 25.6m tons or 114.6% to 1999, turnover - 6,326.5m tons/km (124.9%), passenger turnover - 622.4m passengers per kilometer (111.6%). Sea routes are operated by two companies Irtishtrans LLP and Verhneirtishskoye rechnoye parohodstvo OJSC. There are two river ports. Some underdevelopment of the infrastructure impedes river transportation with Russia. Air-transportation is also operated by two companies Irtish-Avia OJSC and Semey-Avia OJSC. The passenger turnover grew up by 83.7% compared to 1999. Communications are represented by international telephone lines though Almaty. There are 369 automatic telephone stations of which 12 are digital. SMALL BUSINESS There are 15.3 th. legal entities registered as small-scale companies with total staff of 50 th. people. The production volume equaled KZT67.3bn including industrial production - KZT4.1bn (2.95 of the total volume). Retail trade turnover equaled KZT64.2bn (103.2%) of which small business takes 78.8%. AGRO-INDUSTRIAL SECTOR As of Jan.01, 2001 total of 7,576 agro-companies were registered in the region, of which 7,422 are private farms and 154 legal entities. In 2000, gross production increased by 44.6% compared to 1997 and totaled KZT33.4bn. The wheat production was 598.6 th. tons or 2.8 times higher. The livestock breeding industry recorded double growth of poultry and pigs production, 6% growth was reached in cattle farming. The sector produced 453.2 th tons of milk (135% to 1997), 207.4m eggs (155%). About 90% of total production in the sector falls on farmers and households. Expected growth of agricultural production would fully cover consumer demand in the region, including bread - 110%, vegetable oil - 156%, potato - 136%, vegetable - 128%, meet - 107%, milk - 119%. Production capacities of processing companies (84) and mini plants (999) are sufficient to process all agricultural production. DEVELOPMENT PROSPECTS In 2001, the planned growth rate of industrial production would equal 9.3% (including mining - 2.4%, processing - 12.9%, production and distribution of electricity, gas and water - 1.2%). The growth will be attributed to non-ferrous metals production. By year 2003, this sector would grow by steady 15.4% annually. The growth would be reached due to strengthening of internal raw material base: - construction of Maleev deposit will increase ore extraction up to 2.2m tons, sufficient level to cover demand of Kazzinc OJSC; - construction of Artemyev deposit with capacity of 150 th tons of ore per year; - completion of explorations over Bektemir deposit will provide Ust- Kamenogorsk Titanium-Magnesium plant with raw material base. There are plans to expand capacities of Ulbinsk-metallurgical plant in regarding production of beryllium, tantalum and uranium. Fixed capital investments reached KZT25.75bn and increased by 64.4%. The investment activity was concentrated in transportation sector and metallurgy complex. The biggest volume of funds (82%) was directed to mining and metallurgy industries. The same industries will maintain their attractiveness as an object of investments in future. Own funds of companies still maintains their importance as a main source of investments (Kazzinc OJSC plans to reconstruct and acquire Tishinks ore deposit, explore and develop Novo-Leninsk and Obruchevsk mines, technological modernization of equipment). The domestic and foreign investments (construction of rail road line from Tchar to Ust-Kamenogorsk, construction of Artemyevsk ore mine) take second position. The budget investments will be directed to construction of roads between Leninogorsk to Altai, modernization of water recycling facilities in Semipalatinsk. GOVERNMENT MANAGEMENT The regional government is represented by Akim, the governor of local executive body, who is directly controlled by the President of Kazakhstan. The regional government includes independent regional departments, each of them specializes in particular activity (financial department, economic department, educational department, health department, etc.). MANAGEMENT Governor of East-Kazakhstan region (Akim) - Mette Vitaliy Leonidivich. Deputy Governor - Shvaichenko Urii Petrovitch - in charge of industry, transportation, trade, communication and emergency. Deputy Governor - Bergenev Adylgasi Sadvokasovich - in charge of construction, municipal property, architecture, roads, trasport. Deputy Governor - Kaliyev Aldash Baibatshanovich - in charge of agriculture and processing. Deputy Governor - Abaidildin Talgatbek Zhamshitovich - in charge of ideology and social infrastructure. Deputy Governor - Kazhibayev Amangeldy Kazhibayevich - in charge of defence